SINGAPORE (Thomson Financial) - Singapore shares were lower at midday on Friday after Wall Street slumped overnight as uncertainties over the global economy continued to weigh on sentiment.
The Dow shed nearly 225 points on Thursday as further troubles in the financial sector, higher unemployment and lackluster retail sales touched off fresh concerns about the U.S. economy.
Investors worried that weakness in the world's biggest economy would drag down growth in export-driven economies, analysts said. Asian economies count the U.S. as a major export market.
'Investors are watching if the government would revise its 2008 growth forecast for Singapore tonight during the National Day rally speech,' said United Overseas Bank analyst Jimmy Koh in a note.
DBS Bank economist Irvin Seah expects the city-state's growth estimate to be adjusted to 2.1 percent in the second quarter from the government's advance estimate of 1.9 percent.
Lacklustre earnings from Singapore blue chips and expectations of further deterioration in corporate earnings drove investors to the sidelines.
At midday, the benchmark Straits Times Index was down 14.58 points or 0.5 percent at 2,820.13.
Decliners outnumbered gainers 241 to 134, with 1,012 stocks unchanged.
There were 521.5 million shares traded, valued at S$616.0 million.
Banking shares were weaker, following analyst downgrades.
DBS Group eased 0.6 percent to S$18.68 after Citigroup cut its target price for the stock to S$20.85 from S$22.35 as it expects the bank's 2008 earnings to be lower than previously expected. Citigroup kept its 'buy' rating on DBS.
Oversea-Chinese Banking Corp, the smallest of the three Singapore banks, fell 1.1 percent to S$8.15 after Citigroup cut its investment rating on OCBC to 'sell' from 'buy' and lowered its target price to S$8.35 from S$9.30.
United Overseas Bank was 1.2 percent lower at S$19.82.
Singapore Exchange was steady at S$6.75. The bourse operator reported on Thursday a worse-than-expected 49 percent plunge in fourth-quarter net profit as stock trading volumes fell.
The operator of Asia's third largest bourse by market capitalisation said the outlook for markets remains volatile.
Property shares were lower, with CapitaLand down 1.6 percent at S$5.02, City Developments off 1.3 percent at S$10.44 and Keppel Land 1.3 percent lower at S$4.44.
Beverage and property conglomerate Fraser & Neave fell 0.9 percent to S$4.19 after DBS Vickers cut its price target to S$5.44 from S$5.80.
'We lowered our year to September 2008 net profit estimate by 10 percent after inputting slower launches for its (residential) development properties amid a cautious market,' DBS Vickers said.
Among other blue chips, Singapore Airlines slipped 0.4 percent to S$15.12, while ST Engineering was down 0.4 percent at S$2.84.
Neptune Orient Lines (NOL) was flat at S$2.51. The company posted a 19 percent fall in second-quarter net profit to $76 million, and warned that business will be much more difficult in the second half of 2008.
UBS cut its rating on NOL to 'sell' from 'neutral' and lowered its 12-month target price to S$2.20 from S$3.30, citing higher costs from a potential Hapag-Lloyd acquisition.
After the morning session closed, NOL said it has been invited to continue into the next phase of the bidding process for Hapag-Lloyd.
($1=S$1.39)
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