Singapore share prices closed 1.00 percent lower on Thursday as investors continued to be cautious on heightened risks that the US economy will head into recession, dealers said. They said the revamp of the Straits Times Index (STI), re-launched Thursday, had little impact given the generally depressed mood of the market.
The blue chip STI fell 33.46 points to 3,311.07 on volume of 1.91 billion shares worth 2.11 billion dollars (1.47 billion US). Decliners led rising issues 508 to 243 with 952 stocks unchanged. Kenneth Ng, of CIMB-GK Research, did not see a major impact from the STI rebalancing, saying international fund managers typically prefer other indices.
The STI has been reduced from 47 stocks to 30 blue chips ranked by market capitalisation, with the included shares also evaluated on free float and liquidity, the Singapore Exchange said. "A US recession is now a 50-50 call," said Shane Oliver, head of investment strategy at AMP Capital Investors.
"Given the uncertainty hanging over the US economy, the risk of further sharp declines in shares is clearly high. It is wise for investors to be a bit more cautious than normal over the next six months," Oliver said.
United Overseas Bank fell 20 cents to 18.80 Singapore dollars and Oversea-Chinese Banking Corp slipped 14 cents to 8.10, while DBS Group fell 22 cents to 20.08. Property stocks were mixed, with CapitaLand up 12 cents at 6.07, Keppel Land down four cents to 6.92 and City Developments down eight cents to 12.52. Among other blue chips, Singapore Telecommunications gained eight cents to 3.86 while bourse operator Singapore Exchange shed 40 cents to 11.70. Singapore Airlines fell 48 cents to 16.38. Singapore agribusiness and palm oil giant Wilmar International, a new addition to the STI, gained four cents to 5.64.