<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>BULLS AND BEARS
</TR><!-- headline one : start --><TR>STI sinks to 2-year low as bailout stalls
</TR><!-- headline one : end --><TR>Investors jittery as US rescue plan hits snag; Europe, HK shaky too </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Alvin Foo, Markets Correspondent
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->WHILE the bailout battle takes place in the corridors of power in Washington, Singapore investors are left to lick more wounds.
Uncertainty over the United States government's massive rescue package for the ailing financial sector and bearish American stock futures in Asian trading hours continued to weigh heavily on investors' minds.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story -->RELATED LINKS
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MARKET SUMMARY-SINGAPORE
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</TD></TR></TBODY></TABLE>The result was not surprising - the Straits Times Index (STI) plunged another 32.78 points, or 1.3 per cent, to 2,411.46 - its lowest close in two years.
The STI is down 5.8 per cent for the week, and has collapsed 30.4 per cent this year.
'Hopes were high that a US bailout agreement had been reached but now it appears to have been stalled, so investors were jittery,' said a local dealer. 'It didn't help that both Hong Kong and Europe were shaky as well.'
Although US stocks surged 1.8 per cent overnight, Asian markets retreated quickly in the wake of the bailout problems.
Japan's Nikkei 225 Index dipped 1 per cent, Hong Kong's Hang Seng dropped 1.3 per cent and Taiwan stocks sank 2.2 per cent. It was no better in South Korea with equities retreating 1.7 per cent.
Shares here opened slightly weaker before losing further ground as Hong Kong and Europe retreated.
As on Thursday, it was a blue chip-led sell-down. The likes of CapitaLand, OCBC Bank and Keppel Corp were the top drags on the STI.
CapitaLand dropped 18 cents to $3.40, OCBC sank 16 cents to $7.16 while Keppel Corp lost 26 cents to $8.23.
UBS trimmed its price target for OCBC from $9.20 to $8, citing concerns about higher provisioning.
DBS Group Holdings gained two cents to $16.92, but United Overseas Bank shed 16 cents to $16.80.
Morgan Stanley noted that the recent hike in short-term interest rates here and in Hong Kong is not helping Singapore banks as it may hurt their asset quality.
'Singapore banks, in particular, appear to have over-lent into an over-built property bubble. The credit cycle has now clearly turned and higher rates will exacerbate inevitable asset quality issues,' it said.
There was no cheer for SingTel either, which continued its decline in the wake of several bearish analyst calls. The telco lost another cent to $3.21, ahead of the result of its bid to build a new Internet network in Singapore.
Commodity players suffered a similar fate, after wheat and corn futures fell on concerns that a slowing global economy will hurt demand. Palm oil giant Wilmar International fell as much as 8.3 per cent to $2.53, before closing down three cents at $2.73. Fellow commodity player Olam International sank a cent to $1.85, while Noble Group declined 10 cents to $1.45. [email protected]
</TR><!-- headline one : start --><TR>STI sinks to 2-year low as bailout stalls
</TR><!-- headline one : end --><TR>Investors jittery as US rescue plan hits snag; Europe, HK shaky too </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Alvin Foo, Markets Correspondent
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->WHILE the bailout battle takes place in the corridors of power in Washington, Singapore investors are left to lick more wounds.
Uncertainty over the United States government's massive rescue package for the ailing financial sector and bearish American stock futures in Asian trading hours continued to weigh heavily on investors' minds.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story -->RELATED LINKS
<!-- Audio --><!-- Video --><!-- PDF -->
<!-- Photo Gallery -->
</TD></TR></TBODY></TABLE>The result was not surprising - the Straits Times Index (STI) plunged another 32.78 points, or 1.3 per cent, to 2,411.46 - its lowest close in two years.
The STI is down 5.8 per cent for the week, and has collapsed 30.4 per cent this year.
'Hopes were high that a US bailout agreement had been reached but now it appears to have been stalled, so investors were jittery,' said a local dealer. 'It didn't help that both Hong Kong and Europe were shaky as well.'
Although US stocks surged 1.8 per cent overnight, Asian markets retreated quickly in the wake of the bailout problems.
Japan's Nikkei 225 Index dipped 1 per cent, Hong Kong's Hang Seng dropped 1.3 per cent and Taiwan stocks sank 2.2 per cent. It was no better in South Korea with equities retreating 1.7 per cent.
Shares here opened slightly weaker before losing further ground as Hong Kong and Europe retreated.
As on Thursday, it was a blue chip-led sell-down. The likes of CapitaLand, OCBC Bank and Keppel Corp were the top drags on the STI.
CapitaLand dropped 18 cents to $3.40, OCBC sank 16 cents to $7.16 while Keppel Corp lost 26 cents to $8.23.
UBS trimmed its price target for OCBC from $9.20 to $8, citing concerns about higher provisioning.
DBS Group Holdings gained two cents to $16.92, but United Overseas Bank shed 16 cents to $16.80.
Morgan Stanley noted that the recent hike in short-term interest rates here and in Hong Kong is not helping Singapore banks as it may hurt their asset quality.
'Singapore banks, in particular, appear to have over-lent into an over-built property bubble. The credit cycle has now clearly turned and higher rates will exacerbate inevitable asset quality issues,' it said.
There was no cheer for SingTel either, which continued its decline in the wake of several bearish analyst calls. The telco lost another cent to $3.21, ahead of the result of its bid to build a new Internet network in Singapore.
Commodity players suffered a similar fate, after wheat and corn futures fell on concerns that a slowing global economy will hurt demand. Palm oil giant Wilmar International fell as much as 8.3 per cent to $2.53, before closing down three cents at $2.73. Fellow commodity player Olam International sank a cent to $1.85, while Noble Group declined 10 cents to $1.45. [email protected]
