Singapore shares in the red amid mixed regional showing; STI down 0.3%
SINGAPORE – Shares here declined on June 20 amid concerns over a possible US strike on Iran and the resulting dangers to oil supplies.
US equity markets were closed for the Juneteenth holiday overnight, so investors here had to look elsewhere for leads and they didn't like what they saw.
While news that the US has delayed any Iranian intervention for two weeks slightly eased tensions, the looming uncertainties still pushed stocks lower.
'The worsening global geopolitical weather keeps investors in a cautious mode, and will likely prevent them from taking too much risk before the weekend,' said Swissquote Bank senior analyst Ipek Ozkardeskaya.
The wary mood helped send the Straits Times Index (STI) down 0.3 per cent or 10.75 points to 3,883.43 but gainers beat losers 253 to 203 on solid trade of 1.3 billion securities worth $2.2 billion.
The geopolitical uncertainty did not take much of a toll on regional indexes.
While Japan's Nikkei 225 and Australia's ASX 200 both slipped 0.2 per cent, the Kospi in South Korea climbed 1.5 per cent, Hong Kong's Hang Seng added 1.3 per cent and Malaysian stocks edged up 0.1 per cent.
The Hang Seng Index is now nearly back to its March 2025 highs following the announcement of the trade war truce, noted Morningstar equity market strategist Kai Wang.
He added that 'tariffs may again rear its ugly head' in the second half of the year, noting: 'We could see their consequences and whether earnings are under pressure as there are still headwinds to consumer confidence.'
The STI's top gainer was conglomerate Jardine Cycle & Carriage, which advanced 3.3 per cent to close at $24.45, while Frasers Logistics and Commercial Trust led the blue-chip losers, falling 2.4 per cent to 81.5 cents.
The three local banks were mixed: UOB edged up 0.5 per cent to $34.89; OCBC fell 0.6 per cent to $15.90; and DBS slipped 0.1 per cent to $43.88. THE BUSINESS TIMES
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Straits Times
5 hours ago
- Straits Times
China offers to be peacemaker in Iran-Israel war, but is unlikely to intervene
China's permanent representative to the UN Fu Cong, addresses during a meeting of the United Nations Security Council, on June 13. PHOTO: REUTERS China offers to be peacemaker in Iran-Israel war, but is unlikely to intervene BEIJING - As the conflict between Israel and Iran stretches beyond a week, China has found itself sidelined in developments that could yet have far-reaching consequences for its interests in the Middle East. While Beijing has offered itself as a peacemaker, it is unlikely to wade into the conflict directly, or to supply arms to Iran, say analysts . This is because it wants to avoid confronting the United States, for which military intervention against Iran remains a real possibility. Chinese President Xi Jinping, in a phone call with Russian President Vladimir Putin on June 19, said China is willing to continue to strengthen communication with all parties and 'play a constructive role in restoring peace in the Middle East'. Hours later, US President Donald Trump effectively gave Iran two weeks to return to the negotiating table to discuss the future of its nuclear programme, by saying he would decide whether the US would attack Iran in that time frame. With Iran seriously weakened by the latest hostilities - its top military commanders have been killed and key nuclear facilities damaged - observers believe the initiative remains with Israel and the US. At stake for China is energy imports. China is the largest buyer of Iranian oil. Iran has also threatened to block the Strait of Hormuz, which lies between Iran and Oman and is a major route for oil and gas shipments from the Gulf states to China, including from Saudi Arabia, China's biggest supplier of crude after Russia. Even so, beyond issuing diplomatic statements, China is unlikely to intervene, said analysts. While some have touted China's growing influence in the Middle East, particularly after it brokered a landmark normalisation deal between arch-rivals Saudi Arabia and Iran in 2023, it has little appetite to be embroiled in the region's conflicts. Associate Professor Jonathan Fulton, an expert in China's relations with the Middle East, said China's interests in the Middle East are primarily economic, noting also that it buys much more oil from countries such as Saudi Arabia and Oman than Iran. 'When China looks at Iran, I think they see a partner of limited economic value,' he said. 'They also see a country that, through its proxies or its own aggressive behaviour, has destabilised a lot of the Middle East.' Another major reason for China's inaction is that it does not want to antagonise the US, said Prof Fulton, who is nonresident senior fellow at the Atlantic Council, a US think tank. 'Much like the logic with Ukraine - if China gives weapons to Russia and Russia uses them to attack Ukraine, this is going to provoke Nato and make China an enemy in the eyes of countries that it wants to have good economic and political relations with,' he added. Chinese officials have repeatedly called for a ceasefire since Israel began a major offensive against Iran on June 12 to cripple Tehran's ability to develop nuclear weapons, seen by Israel as a threat to its security. Since that first salvo, there have been tit-for-tat air strikes between the two countries, an ongoing conflict that could yet lead to the overthrow of the leaders of the Islamic republic. China's Foreign Minister Wang Yi has suggested through phone calls to his counterparts in the Middle East - Iran and Israel, as well as Egypt and Oman which are involved in mediation efforts - that China is willing to coordinate with regional countries for peace. Dr Clemens Chay, a research fellow from the Middle East Institute at the National University of Singapore, said: 'Beyond the perfunctory statements and calls by Chinese officials, it is unlikely Beijing will stick its hand in - certainly not militarily - in the ongoing tit-for-tat strikes between Iran and Israel.' Given that China has energy interests in the region, including in Iranian oil, the logical approach for it would be to call for de-escalation, he said. 'But to deploy its forces will be too much of an ask.' Dr Andrea Ghiselli, a lecturer in international politics at the University of Exeter who focuses on Chinese foreign policy in the Middle East, said Mr Wang's phone calls should be read as a way for China to get a better read of the situation. China is probably seeking to understand how regional powers and countries like Russia are preparing for a possible collapse of the regime in Iran and the consequent emergence of Israel as a regional hegemon, said Dr Ghiselli, who also heads research at the ChinaMed Project of the Torino World Affairs Institute, an Italian think tank. A possible regime change in Iran - which Israeli Prime Minister Benjamin Netanyahu has said could happen, even if his government does not aim to bring it about - would also not likely to be welcomed by China, not least because the next leadership may be less predictable. Dr Gedaliah Afterman of Reichman University in Israel said a quick collapse of the regime or power vacuum would threaten China's investments, infrastructure and strategic access across the region. 'Beijing prefers continuity and predictability, particularly given Iran's current economic dependence on China,' he added. He said the best-case scenario for China is a swift de-escalation that avoids direct US-Iran confrontation, preserves the existing regional order in which Beijing feels increasingly comfortable, and enables it to continue balancing relations with Iran, the Gulf and Israel. 'China may also seek to present itself as playing a role in any renewed nuclear agreement, even if only symbolically, especially if this comes at the expense of US influence in the region,' said Dr Afterman. Lim Min Zhang is China correspondent at The Straits Times. He has an interest in Chinese politics, technology, defence and foreign policies. Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
5 hours ago
- Straits Times
US navy eyes options if Iran grips Strait of Hormuz choke point
In meetings at the White House, senior US military officials have raised the need to prepare for the possibility of Iran shutting down the Strait of Hormuz. PHOTO: REUTERS WASHINGTON – Iran retains the naval assets and other capabilities it would need to shut down the Strait of Hormuz, a move that could pin any US Navy ships in the Persian Gulf, US military officials say. In meetings at the White House, senior military officials have raised the need to prepare for that possibility, after Iranian officials threatened to mine the strait if the US joined Israel's attacks on the country. Pentagon officials are considering all the ways Iran could retaliate as President Donald Trump cryptically hints at what he might do, saying on June 19 that he had not made a final decision. In several days of attacks, Israel has targeted Iranian military sites and state-sponsored entities, as well as high-ranking generals. It has destroyed many of Iran's ballistic missiles, though Iran still has hundreds of them, US defence officials said. But Israel has steered clear of Iranian naval assets. So while Iran's ability to respond has been severely damaged, it has a robust navy and maintains operatives across the region, where the US has more than 40,000 troops. Iran also has an array of mines that its navy could lay in the Strait of Hormuz. The narrow 90-mile waterway connecting the Persian Gulf to the open ocean is a key shipping route. A quarter of the world's oil and 20 per cent of the world's liquefied natural gas passes through it, so mining the choke point would cause gas prices to soar. It could also isolate US minesweepers in the Persian Gulf on one side of the strait. Two defence officials indicated that the navy was looking to disperse its ships in the gulf so that they would be less vulnerable. A navy official declined to comment, citing operational security. The officials spoke on condition of anonymity because they were not authorised to speak publicly. Iran has vowed that if attacked by US forces, it would respond forcefully, potentially setting off a cycle of escalation. 'Think about what happened in January 2020 after Trump killed Soleimani and times that by 100,' said senior fellow at the Middle East Institute Brian Katulis . A powerful Iranian general, Qassem Soleimani, was killed in a US drone strike in Baghdad during Mr Trump's first administration. Iran then launched the largest-ever ballistic missile barrage at US bases in Iraq, leaving some 110 troops with traumatic brain injuries and unintentionally hitting a Ukrainian passenger jet, killing all 176 people aboard. 'Iran is strategically weaker but operationally still lethal across the region,' Mr Katulis said, 'and Americans still have troops across that part of the world.' Iran has mined the Strait of Hormuz before, including in 1988 during its war with Iraq, when Iran planted 150 mines in the strait. One of the mines struck a US guided missile frigate, the USS Samuel B. Roberts, nearly sinking it. General Joseph Votel, a former leader of U.S. Central Command, and Vice-Admiral Kevin M. Donegan, a former commander of US naval forces in the Middle East, each said on June 18 that Iran was capable of mining the strait, which they said could bring international pressure on Israel to end its bombing campaign. But such an action would probably invite a major US military response and further damage Iran's already crippled economy, Vice-Admiral Donegan added. 'Mining also hurts Iran; they would lose income from oil they sell to China,' he said. 'Now, though, Iranian leadership is much more concerned with regime survival, which will drive their decisions.' Military officials and analysts said missile and drone attacks remained the biggest retaliatory threat to US bases and facilities in the region. 'These would be shorter-range variants, not what they were launching against Israel,' Vice-Admiral Donegan said. 'That Iranian capability remains intact.' Vice-Admiral Donegan also expressed concerns about the possibility that the Quds Force, a shadowy arm of Iran's military, could attack US troops. 'Our Arab partners have done well over the years to root most of that out of their countries; however, that Quds Force and militia threat still remains in Iraq and to some extent in Syria and Jordan,' he said. Iranian officials are seeking to remind Mr Trump that, weakened or not, they still can still find ways to hurt US troops and interests in the region, said Iran expert and a professor at Johns Hopkins University Vali Nasr . Striking Iran, he said, 'gets into such big unknowns.' He added, 'There are a lot of things that could go wrong.' Much is at stake for Iran if it decides to retaliate. 'Many of Iran's options are the strategic equivalent of a suicide bombing,' said Mr Karim Sadjadpour, an Iran policy expert at the Carnegie Endowment for International Peace. 'They can do enormous damage to others if they mine the Strait of Hormuz, destroy regional oil facilities and rain a missile barrage against Israel, but they may not survive the blowback.' But Iran can make it hugely expensive and dangerous for the US Navy to have to conduct what would most likely be a weeks-long mine-clearing operation in the Strait of Hormuz, according to one former naval officer who was stationed on a minesweeper in the Persian Gulf. He and other navy officers said that clearing the strait could also put American sailors directly in harm's way. Iran is believed to maintain a variety of naval mines. They include small limpet mines containing just a few pounds of explosives that swimmers place directly on a ship's hull and typically detonate after a set amount of time. Iran also has larger moored mines that float just under the water's surface, releasing 100 pounds of explosive force or more when they come in contact with an unsuspecting ship. More advanced 'bottom' mines sit on the seafloor. They use a combination of sensors – such as magnetic, acoustic, pressure and seismic – to determine when a ship is nearby and explode with hundreds of pounds of explosive force. The Navy has four minesweepers in the Persian Gulf, each with 100 sailors aboard who have been based in Bahrain and are trained to deal with underwater hazards. Should Iran place mines in the Strait of Hormuz or other parts of the Persian Gulf, a small navy contingent in Bahrain called Task Force 56 would respond. Usually led by a senior explosive ordnance disposal officer, the task force would take advantage of technologies like autonomous underwater vehicles that can scan the seafloor with sonar much more quickly than the last time Iranian mines threatened the strait. And while the navy has been experimenting with underwater robots to destroy mines, the task force will still need to deploy small teams of explosive ordnance disposal divers for the time-consuming and dangerous task of approaching each mine underwater and carefully placing charges to destroy it. NYTIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
11 hours ago
- Business Times
Europe: Shares edge up as US stalls its Middle East moves
[BENGALURU] European stocks snapped a three-day losing streak and closed higher on Friday (Jun 20), as investors' nerves eased following a stall in US involvement in Middle East tensions. The pan-European Stoxx 600 closed 0.1 per cent higher. As Israel and Iran's air conflict entered its second week, European officials worked to bring Tehran back to diplomatic negotiations as Iranian Foreign Minister Abbas Araqchi arrived in Geneva for talks. The White House signalled US President Donald Trump will decide within two weeks whether to throw US support behind Israel in the ongoing conflict, a move that buoyed market sentiment and reignited some appetite for risk assets, which had been battered earlier in the week amid uncertainty over the conflict's duration. Despite Friday's modest gains, European stocks logged a second consecutive week of losses, as investors continued to fret over the potential global fallout from unrest in the Middle East. 'The uncertainty around the conflict means the risk of energy prices being higher,' said Franziska Palmas, senior Europe economist at Capital Economics. She added that higher energy prices could prompt the European Central Bank 'to keep rates at their current level rather than cutting them further'. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up With the Jul 8 US tariff-pause deadline looming, movement on trade deals with Washington has shown little progress, save for a formal agreement reached with London. European Commission President Ursula von der Leyen remains hopeful for a broader deal by Jul 9. Meanwhile, BofA Global Research raised its year-end target for the Stoxx 600 to 530 from 500 on resilience in global growth following a US-China trade deal. Travel and leisure stocks were up nearly 1 per cent, led by a 6.5 per cent gain in Europe's largest travel operator TUI after Barclays upgraded the stock to 'overweight' from 'underweight'. Energy shares lagged 0.6 per cent as oil prices retreated, though the sector was the week's second-biggest gainer due to Middle East tensions that had boosted crude prices earlier. On the day, the insurance sector emerged as the top sectoral gainer, up 1.3 per cent. Among other stocks, London's Berkeley was the biggest percentage decliner, down 8.1 per cent. The homebuilder named current finance chief Richard Stearn as its new CEO, but reported an annual pre-tax profit slightly ahead of market expectations. Stora Enso jumped 14.7 per cent to the top of the Stoxx 600 after the Finnish forestry group announced a strategic review of its Swedish forest assets worth EUR 5.8 billion, including potential separation and public listing. Markets in Sweden and Finland were closed for a public holiday. REUTERS
