Singapore share prices closed barely lower on Friday following losses on Wall Street as concerns fallout from the US subprime mortgage crisis persisted, dealers said. While the market has recovered from its losses last week, concerns over the extent of the fallout from the US subprime mortgage crisis will keep trading volatile in the coming weeks, they said.
The Straits Times Index fell 1.46 points or 0.04 percent to 3,369.45 on volume of 1.60 billion shares worth 1.68 billion Singapore dollars (1.11 billion US). Losers led gainers 465 to 296, with 876 stocks unchanged.
Caution is likely to dominate after the head of Countrywide Financial, the biggest mortgage lender in the United States, said problems in the US housing market are far from over and could tip the world's biggest economy into a recession. "The risk of a US recession is always there," CIMB GK Research regional economist Song Seng Wun said.
"We won't be immune to the effects of an economic slowdown in the US but we (in Asia) are able to absorb it a bit better now." Property heavyweights recovered in late trading after Citigroup reiterated its "buy" call for the sector. CapitaLand rose 10 cents to 7.35, City Developments added 10 cents to 15.00 and Keppel Land gained five cents to 8.00.
Citigroup said the prevailing shortage of residential apartments in Singapore bodes well for developers. "We expect rentals to continue to rise, thereby supporting property price increases," it said. Real estate investment trusts (REITs) were weaker however on concern that funding costs for property acquisitions will rise as a result of risk aversion in global credit markets.
Ascendas REIT was down eight cents at 2.39 and CapitaMall was 14 cents lower at 3.36. Banks were mixed, with DBS Group Holdings down 30 cents at 20.30, United Overseas Bank off 10 cents at 20.60 and Oversea-Chinese Banking Corp up five cents at 8.65. COSCO Corp (Singapore) added six cents to 5.00 after winning shipbuilding contracts worth 708.1 million US dollars.