Shares in Singapore's Straits Times Index are expected to follow the other regional markets to the downside when trading opens Wednesday, according to analysts. Most of the other local markets finished lower on Tuesday, and most are called to do so again on Wednesday on renewed concerns in the U.S. credit market and soaring oil process. Singapore shares were down on Tuesday as the STI declined 51.30 points or 1.3 percent to close at 3,810.72 after trading between 3,788.88 and 3,856.36. Volume was 3.4 billion shares worth 3.4 Singapore dollars. There were 721 stocks that saw decline and 206 that posted gain, with 1,609 stocks unchanged. Many of the big names were down, including financial institutions DBS Group, United Overseas Bank and Oversea-Chinese Banking Corp. Also down were property stocks CapitaLand, Keppel Land, Wing Tai and Allgreen. There were a few gainers, including oil refiner Singapore Petroleum, Ezra Holdings and Indonesian oil tanker operator Berlian Laju. Also, shares of Mermaid Maritime, a Thai provider of sub-sea drilling and engineering services for the oil and gas exploration industry, were sharply above their initial public offering price on their trading debut. The market gets more negative momentum from Wall Street, which fell for a second consecutive session on Tuesday as the markets reacted to pessimistic remarks from Federal Reserve Chairman Ben Bernanke and a sharp spike in the price of oil. The major averages spent the majority of the session in a tight daily range below the unchanged line, and closed just shy of their intraday lows. The Dow fell 69.34 points, or 0.50 percent, to close at 13,915.46. The Nasdaq fell 15.47 points, or 0.56 percent, to end at 2,764.58, while the S&P 500 declined 9.56 points, or 0.62 percent, to close at 1,539.15. In economic news, interest rates may face a big drop in the near future as the Singapore dollar continues to soar, with the benchmark three-month Singapore Interbank Offered Rate (SIBOR) seen falling to 2.2 percent by the end of the year from the current figure of 2.45 percent, according to Citigroup. The Singapore dollar hit to a fresh record of 1.4605 in trade with the U.S. dollar after the Monetary Authority of Singapore said it would tolerate a further appreciation in order to control inflation. The exchange rate is expected to hit 1.39 to the U.S. dollar by the end of 2008, while the SIBOR is seen falling further to 2.1 percent by March 2008. In corporate news, Oculus has initiated a reverse takeover agreement with waste recycling firm Aretae in a deal worth 600 million Singapore dollars, Oculus said Tuesday in a statement. Oculus will issue 1.2 billion shares at 0.50 Singapore dollars each to key Aretae shareholders, who will provide a guarantee of at least 50 million Singapore dollars in total earnings for 2008 and 2009. Aretae has waste recycling projects in China, Singapore, Malaysia, Indonesia and Vietnam. The move had an immediate effect in the stock market as shares of Oculus took off as soon as the market opened.
October 16, 2007 8:04 PM