SINGAPORE - Singapore shares ended mostly flat on Monday, starting the fourth quarter of the year on a weak note amid a range of uncertainties, including the Deutsche Bank woes that raised questions of impact on the local banks.
Investors were further spooked by the news of bribery allegations affecting Keppel Corp, even though the oil and gas sector may be in for some relief soon as talks of crude production cut continued to move forward.
As a result, the benchmark Straits Times Index stumbled through most of the day before ending with a marginal gain of 1.37 points or 0.05 per cent at 2,870.84. The overall market volume was very thin - only S$566.6 million worth of shares were traded.
This set the tone for what analysts believe will be a tepid few months ahead.
"We see a choppy and modestly volatile October as sentiment for the Singapore equity market is likely to remain fragile heading to the November United States presidential election, ongoing corporate earnings recession and rising technical recession risk… Expect the STI to trade within a range from 2,750 to 2,950 through the rest of the year," DBS analyst Yeo Kee Yan said in a note.
One of the wild cards that may freak out the global money markets is whether the trouble-laden Deutsche Bank is heading towards another Lehman Brothers crisis.
However, the extent of impact on DBS, OCBC and United Overseas Bank should be limited, Moody's vice president and senior credit officer Eugene Tarzimanov told the Straits Times.
The top losing blue chip stock was Keppel Corp, which was sold down after investors heard that its Brazilian agent may have bribed for Petrobras contracts. It dropped nine cents or 1.67 per cent to S$5.30.
Sembcorp Marine, which is outside the STI, was off 2.5 cents or 1.92 per cent to S$1.28. Ezra Holdings ended flat at 5.7 cents, but Vard Holdings put on half a cent or 3.25 per cent to 15.9 cents.
Meanwhile, Northeast Asian markets including Shanghai, Shenzhen and Seoul were closed for holiday. Hong Kong was up 1.23 per cent, while Tokyo rose 0.91 per cent.