Singapore shares hit their lowest level in more than two years on Wednesday, with investors worried about the local economy after key exports shrank for the fourth straight month in August, dealers said. The blue chip Straits Times Index lost 1.71 percent, dropping 42.14 points to 2,419.29 - its lowest close since July 2006.
Volume totalled 1.14 billion shares worth 1.38 billion Singapore dollars (961 million US). There were 194 gainers, 355 losers and 786 issues unchanged. Worries of a possible technical recession hitting Singapore were triggered after key exports tumbled 14.0 percent in August from a year ago.
A technical recession is defined as two consecutive quarters of quarter-on-quarter contractions in gross domestic product. "This fourth straight month of export contraction will certainly weigh on the domestic manufacturing sector's third-quarter 2008 growth outlook, and reaffirms our call for a manufacturing-led technical recession this year," said Alvin Liew, an economist with Standard Chartered Bank.
About 70 percent of last year's GDP growth was driven by external demand, Liew said. National carrier Singapore Airlines lost eight cents to 14.92 Singapore dollars, Singapore Telecommunications was down one cent to 3.29, and ST Engineering was off six cents to 2.54.
Banks were also hit. DBS retreated 24 cents to 16.14, United Overseas Bank sank 60 cents to 16.50 and Oversea-Chinese Banking Corp fell eight cents to 7.36. Among property stocks, CapitaLand sank 14 cents to 3.96, City Developments dropped 16 cents to 8.86 and Keppel Land was five cents lower at 3.19.
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