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SINGAPORE: Investors had reasons to cheer at the start of a new trading week –Singapore shares rallied 6.57 per cent, posting their biggest gain in nine years on Monday.
Sentiment was lifted by news over the weekend that European governments are taking steps to prop up the banking sector.
An analyst whom Channel NewsAsia spoke to said Monday's market rally was due to the joint response from European policymakers to a systemic problem.
But in the long term, it is unclear how the massive bailout across the US and Europe will pan out.
Kwok Chern Yeh, investment manager, Aberdeen Asset Management, said: "This is positive for the market, at least in the short term, until the recessionary fears come on again."
Aberdeen believes that investors will also be watching out for the upcoming third quarter earnings season for some guidance on how they should be investing in banks.
"You'll start seeing some of the strains in the economy starting to show through – slowdowns for banks in this loan growth, possibly maybe even a rise in non-performing assets for some of the banks," Kwok said.
- CNA/so
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