SGX among index stocks to weaken; market sentiment also hit by expectations of Wall Street fall
NEWS of fresh anti- speculative property measures such as banning property developers from absorbing interest payments for customers yesterday sent property stocks into a tailspin and added to the generally weak sentiment in the overall market.
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With Wall Street expected to open weaker yesterday, the Straits Times Index ended a nett 41.29 points lower at 2,639.74. It had risen 58 points last week and is up almost 50 per cent for 2009 so far.
Most of the pressure came after lunch when news circulated that the government will, with immediate effect, disallow the Interest Absorption Scheme and Interest Only Housing Loans.
According to the government’s press release, the reason is because both schemes ‘could encourage property speculation in a buoyant market where prices are rising rapidly as they are forms of housing loans that entirely eliminate or substantially lower instalment payments for property purchasers . . .’.
As a result, the FT-ST Real Estate Index lost 3.3 per cent. It wasn’t all property-related selling though – a weak Europe opening suggested Wall Street might slide later yesterday. Continue reading
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