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Singapore shares close lower after window undressing

Friday, April 1, 2016 - 17:45

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THIS week was all about two events - US Federal Reserve chair Janet Yellen's comments on Tuesday about US interest rates and window-dressing of key blue chips as the end of the first quarter on Thursday drew closer.

As it turned out, Ms Yellen's dovish statements about the need to proceed cautiously with rate hikes could not have been better-timed as it gave funds the perfect opportunity to push the Straits Times Index up almost 54 points on Wednesday.

That rise was viewed almost universally with scepticism by market observers, so it came as no surprise that there was no follow-through on the two days. Thursday's 31-point fall followed by Friday's 22.41-point loss at 2,818.49 meant that Wednesday's rise was wiped out; over the week, the index lost 29 points or just over one per cent.

Turnover has fluctuated throughout the week, from Monday's week-low S$773 million to Wednesday's week-high of S$1.2 billion. On Friday, 1.4 billion units worth S$973 million were traded and, excluding warrants, the advance-decline score was 145-235.

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There was a third, albeit less significant, factor at play this week - Moody's downgrade of the outlook for Singapore banks from "stable" to "negative" to reflect "a more challenging operating environment for banks in Singapore in 2016, and possibly beyond" that will pressure the banks' asset quality and profitability. No surprises then that all three counters came under pressure on Friday, closing lower on the day.

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