Singapore shares closed 2010 with a whimper, underperforming other Asian bourses as losses in DBS Group and United Overseas Bank pushed the benchmark index 0.7 percent lower on Friday. Based on preliminary data, the Straits Times Index (STI) closed 22.42 points lower at 3,190.04. The total value of shares traded during Friday's half-day session was S$725 million, up from S$474 million as at midday Thursday.
The STI has risen about 10 percent since the start of the year. "We've already seen some window dressing in the last week, so it's no surprise that trading in the STI is pretty muted today," said Gabriel Gan, senior vice president of sales at AmFraser Securities.
He expects the STI to rally in January to test the 3,280-3,300 points level, with sentiment boosted by Chinese markets that have been oversold this year. "I expect we will see more positive economic data coming out from the US in the next few weeks, which will help underpin a rally in equities," he added.
Shares of Singapore banks were amongst the underperformers, with the FTSE ST Financial Index ending 0.7 percent lower as investors unwound some positions after a good run this week, traders said. DBS fell 1.2 percent to S$14.32 with about 2.3 million shares changing hands, while smaller rival UOB retreated 1.3 percent to S$18.20.
"Although net interest margins remain compressed, it cannot go any lower and once Singapore's interbank rates readjust, the banks will benefit," said an institutional sales trader at a local bank. Shares of Singapore-listed fabric maker China Gaoxian rose as much as 5 percent to its record high after it said it hoped to price its Korea depository receipts at a premium to its Singapore stock price. China Gaoxian shares ended up 2.6 percent at S$0.40, with over 24 million shares changing hands.
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