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Singapore shares close weaker on US rate hike worries; telcos hit
THE possibility that US interest rates may be raised sooner rather than later and the possible entry of a fourth telco weighed on sentiment this week, dragging the Straits Times Index (STI) 54 points or 1.9 per cent down to 2,803.92.
These fears arose after comments last week by US Federal Reserve chair Janet Yellen at Jackson Hole, Wyomming and have kept a lid on Wall Street stocks and bonds.
Here, Singtel was the index's main loser following developments that have raised the likelihood of a fourth telco entering the segment. On Friday, the stock plunged S$0.10 to S$3.87 on volume of 55.4 million, the largest contributor to the STI's 12.55 points loss that day. For the week, Singtel lost S$0.35 or 8.3 per cent.
Other telcos were similarly hit - on Friday M1 dropped S$0.15 to S$2.51 on volume of 7.2 million while Starhub ended S$0.16 weaker at S$3.47 with eight million done.
"News that bidding has opened for the fourth telco has given short sellers a nice shorting opportunity," said a dealer.