Singapore shares close lower, led by banks and oil stocks

WEAKNESS in Hong Kong and in the Dow futures meant the Straits Times Index (STI) started the week off with a 26.11-point loss at 2,880.69 on Monday, led mainly by the banks. In the second line, the stunning 80 per cent crash in the shares of property developer OKH Global grabbed most of the attention, coming as it did on volume of 247.4 million, making it the session's most active counter.

Overall volume came in at 1.5 billion units worth S$1.04 billion, down sharply from Friday's S$1.7 billion. Excluding warrants, there were 149 rises versus 253 falls.

At the start of Monday's trading the STI had bounced 368 points or 14 per cent in about five weeks, thanks to aggressive interest rate cuts in Japan, China, Europe and an announcement by the US Federal Reserve last week that it was keeping rates unchanged because of economic uncertainties.

Banks and oil-related stocks such as Keppel Corp and SembCorp Marine had been among the biggest gainers, so it came as no surprise that Monday's fall was led by these stocks.

OKH's spectacular S$0.279 collapse to S$0.071 was one of the major talking points of the session. The company had been queried by the Singapore Exchange (SGX) last week prior to halting trading. It then announced that it is in discussion with holders of its redeemable convertible preference shares to vary the terms of the instrument, and that it is planning to sell certain assets.

It replied to SGX saying other than these developments, it did not know of reasons for the activity in its shares.