Singapore shaare prices could turn bullish as fears of a global liquidity crunch begin to ease, dealers said. For the week ending August 31, the Straits Times Index ended 23.46 points or 0.70 percent higher at 3,392.91.
Average daily volume totalled 2.20 billion shares valued at 2.07 billion Singapore dollars (1.36 billion US), compared with 2.19 billion shares worth 2.54 billion Singapore dollars the previous week. Global markets have taken a beating in recent weeks due to concern about the US subprime mortgage market, in which housing loans were extended to borrowers with patchy pasts who are now defaulting.
The market woes have triggered fears of a global liquidity crunch as exposed investors scramble to cover their losses. But Najeeb Jarhom, head of research at Fraser Securities, said fears of a wider contagion are beginning to ease. "It's not as bad as initially feared," he said, voicing a hunch that the market could now turn bullish.
Asian markets picked up momentum Friday after The Washington Post reported that President George W. Bush would announce for the first time a series of measures to ease the mortgage crisis. Traders were also going to watch a key-speech on the housing market and monetary policy later Friday, in Asian time, by United States Federal Reserve chairman Ben Bernanke.
In a letter to a US senator last week, Bernanke said the Fed "is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets."
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