by Donavan Lim
Singapore shares closed lower on Monday, chalking up its third day of consecutive losses.
Growing doubts on whether European leaders could announce constructive plans to address the region’s debt crisis at a summit this week kept most investors on the sideline.
The benchmark Straits Times Index (STI) tumbled 12.83 points, to close at 2,815.26 on Monday.
Commodity counters were among the biggest losers. Olam International fell 2.4 per cent to S$1.84 Wilmar International retreated 1.4 percent to close at S$3.570 while Noble Group surrendered 0.9 per cent to S$1.110.
Financials also came under selling pressure. DBS Group lost S$0.010 and its counterparts Oversea Chinese Banking Corporation and United Overseas Bank fell 1 per cent and 0.2 per cent respectively.
On situational plays, Aussino Group lost a staggering 4.8 per cent as doubts grew over its reverse takeover plan. Earlier, the company has announced plans to enter the petrol kiosk business via a reverse takeover with Max Strategic Investments. It was reported that the latter is linked to a Myanmar businessman on a US blacklist.
CapitaLand, Singapore’s largest property company by capitalisation, ended flat at S$2.640, as investors paid scant attention to Friday’s announcement that its Chief Executive Liew Mun Leong would be retiring in June 2013. CIMB has maintained its “Outperform” rating on the company and does not view the departure as negative.
Meanwhile, investors are expected to stay on the sideline to await the result of an EU summit at the end of the week. EU leaders expected to discuss firmer fiscal integration and the creation of a banking union.
Justin Harper of IG Markets stated that “the pressure is likely to continue to build on Germany to give in to the other indebted nations. The likelihood however, is that Merkel will remain strong as the pressure from the home front to keep steady with the current approach is just as likely to sway her as the euro pressure to change the current course of action.”
Around the region, the worst performer was the Shanghai Composite which shed 1.6 per cent in part as it played catch-up after Friday’s holiday. The Nikkei fell 0.7 per cent, while the Hang Seng and ASX both fell by 0.5 per cent.