Singapore shares falter despite Wall Street gains

SINGAPORE shares on Monday failed to sustain gains inspired by last week's Wall Street rally, amid nagging concerns over the US and China tension and the uncertainty following Japanese Prime Minister Shinzo Abe's shock resignation.

Even China's better-than-expected official manufacturing Purchasing Manager's Index, which expanded for the sixth straight month in August, failed to boost the market.

Alicia Garcia Herrero of Natixis, said: "While China has given important signs that its economy is recovering from the Covid-19 shock, doubts remain on the speed due to the lingering uncertainties regarding new waves of Covid-19 globally as well as the still-hesitant consumption and poor labour market condition."

The Straits Times Index opened at 2,557.44 and hit an intra-day high of 2,560.43 before closing at 2,532.51, down 7.12 points, or 0.28 per cent from Friday's close.

Upside for the three local banks was capped after Fitch Ratings said it aimed to review the banks in the next month or so. The potential outcomes are a downgrade of the issuer default ratings to "A+" and the viability ratings to "a+", or an affirmation at "AA-" and "aa-", with either a negative or stable outlook. It had factored in falling profitability through thinner margins, higher credit costs and lower credit growth.

SBI Offshore, a cash company with no operations, resumed trading on Monday after its proposed acquisition of Berlitz group failed to meet the completion deadline. The company must now make a "fair and reasonable" cash-exit offer and appoint an independent financial adviser to advise it and give an opinion.

Trading will continue until 5pm on Sept 30, 2020, to provide an opportunity for shareholders to exit their investment if they decide to do so.

Trading will be suspended from Oct 1, 2020.