Singapore share prices are expected to remain under pressure from the spillover impact of turmoil in the US housing market sparked by loans to low-quality borrowers, analysts said.
Like other regional stock exchanges, the local market succumbed to a sell-down Friday, despite news that the city-state's economic growth came in better than expected in the second quarter to June. The Straits Times Index closed at 3,359.19 on Friday, down 76.86 points or 2.24 percent, from the previous week.
In the week ending August 10, average daily volume for four days totalled 2.44 billion shares worth 2.70 billion Singapore dollars (1.78 billion US), compared with 3.38 billion shares valued at 3.23 billion dollars last week.
There was no trading on Thursday due to a public holiday. "I suspect we will continue to see the impact ripple through financial institutions around the world," Song Seng Wun, a regional economist at CIMB-GK in Singapore, said of the US fallout.
"It is a bit early to tell whether this is contained or the beginning of something more serious as far as the credit markets are concerned."
DMG and Partners senior dealing director Gabriel Yap expects market volatility to continue for a few more days before stabilising, if no more funds report any major fallout from exposure to the US subprime sector.
Stock markets world-wide plummeted Friday, a day after France's BNP Paribas suspended three funds open to the US subprime market, which involves lending to borrowers with poor credit histories.