SINGAPORE, (PNA/Xinhua) — Singapore shares closed 0.21 percent lower Friday, as the U.S. budget standoff dragged on, heightening fears it could become embroiled in the likely struggle later this month to raise the U.S. borrowing limit.
U.S. President Barack Obama met with Republican and Democrat leaders in Congress but reiterated in a speech that he would not give in to Republican demands to roll back his healthcare program in exchange for reopening the government. The debt ceiling is far more important than a partial U.S. government shutdown, since it could lead to an unprecedented default by the U.S., an outcome the market assumes is unthinkable.
CIMB Research said “closing sharply below the 3,120 points and 3,154 points gap would likely signal that there is more downside to come, probably targeting the 2,990 points low once more.”
DBS Group Research said “we adopt a contrarian view on the latest alarm raised by the U.S. Treasury — putting pressure on the lawmakers increases the likelihood of a last minute resolution in time to avoid default. While near-term stress lines are appearing, we maintain our view that Straits Times Index should find support at around 3,100 points.”
Phillip Securities Research said “investors are concerned that the lack of progress on the U.S. government federal budget talks may increase the risk of debt ceiling talks failing, leading to the U.S. government defaulting on its debt.”
Singapore’s benchmark Straits Times Index shed 6.71 points to 3, 138.08. Trading volume was 4.59 billion shares worth 1.23 billion Singapore dollars. Decliners outnumbered advancers 395 to 91, while 472 stocks did not move.
Blumont Group halted trading. It has reached agreement on the commercial terms of a proposed takeover bid for the entire stake of a foreign-listed coal mining company for up to approximately 145.9 million Singapore dollars. The consideration is to be satisfied by issue of up to approximately 72.2 million new shares at an issue price of 2.02 Singapore dollars per share.
ARA Asset Management fell 0.3 percent to 1.685 Singapore dollars. DBS Group Research said “backed by a strong cash-flow generating and scalable business that is growing steadily, we believe that ARA offers an attractive investment proposition at current levels.”
Among top gainers, Jardine Matheson rose 0.7 percent to 53.90 U. S. dollars, while Asiasons became one of the top losers by diving 61.5 percent to 1.04 Singapore dollars. (1 U.S. dollar equals to 1. 26 Singapore dollars)