DJ Singapore Shares End Down; Further Falls Likely This Week
SINGAPORE (Dow Jones)--Singapore's benchmark Straits Times Index closed lower Wednesday, dragged down by losses in property stocks, with analysts predicting the fall may extend to the end of week.
The STI closed down 67.1 points, or 1.8%, to close at 3583.97.
In the broader market, losers beat gainers 931 to 132. Volume was 9.1 billion shares, up from 6.4 billion shares traded Tuesday.
One analyst said further falls may be seen in the coming days.
"That will depend very much on what happens in the U.S. tonight," she said. "If the U.S. market isn't doing well, the correction could continue."
Among the 49 STI component stocks, three rose, three were unchanged and 43 ended lower.
Analysts had already forecast Tuesday that a looming market correction would bring the index back to the 3580-3600 range.
Property stocks fell Wednesday on news the government will raise the land-development charge levied on developers.
In a statement, the Ministry of National Development said its rates will be raised to 70% of the increase in a piece of land's valuation, up from 50%.
Nicholas Mak, research director at property consultancy Knight Frank, said the move could lead to higher land costs, squeezing developers' profit margins.
City Developments fell 2.5% to S$15.90, CapitaLand was down 1.9% to S$7.55 and Keppel Land lost 1.7% to close at S$8.55.
Neptune Orient Lines saw one of the day's biggest losses, falling 5.9% to S$5.60 on speculation the company's upcoming earnings report would fall below expectations.
Volume among penny stocks was heavy.
"Penny stocks are all the rage now," a dealer at foreign house said, though another dealer said the recent rally in these shares may not be sustainable.
"The way they have been going up is too frightening. It's without solid and material fundamentals...I am quite concerned and wary that a substantial correction for penny stocks may set in sooner or later," he said.
Among penny stocks, Ban Joo rose 4.3% to S$0.25, while Equation dropped 14.5% to S$0.27.
HLH shares fell 5% to S$0.10 after yesterday's announcement of a new share issuance.
-By Andrew Cedotal, Dow Jones Newswires; +65 6415 4154;
andrew.cedotal@dowjones.com
-Edited by Matthew Oakley
(END) Dow Jones Newswires
July 18, 2007 06:15 ET (10:15 GMT)
Copyright (c) 2007 Dow Jones & Company, Inc.
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