Markets fall as Singapore implements the most stringent COVID-19 restrictions since the lockdown

Singapore announced the strictest restrictions on social gatherings and public activities since lifting a COVID-19 lockdown last year, amid an increase in locally acquired infections and the formation of new coronavirus clusters in recent weeks.

The health ministry has announced new measures that will go into effect from Sunday to mid-June, including limiting social gatherings to two people and prohibiting dining in restaurants. “This is clearly a setback in our fight against COVID-19,” said Lawrence Wong, Singapore’s education minister and co-chair of the coronavirus taskforce.

The new developments, which dashed hopes that Singapore would reopen, sent the Straits Times Index and Singapore Airlines’ stock price to their lowest levels in more than two months.

“Quick reopening hopes have been dashed, particularly for the travel and leisure sectors,” said Bank of Singapore analyst Moh Siong Sim. “Manufacturing should hold up as it has for the past year.” Working from home will also become the default arrangement under the new policies.

Shopping malls and cinemas will be allowed to continue operating, albeit with reduced capacity, and events and weddings will be permitted under the new arrangements. The authorities stated that they will review the measures in two weeks to see if any changes are required.

Before a recent spike in cases, the Asian trade and financial hub had been reporting almost zero or single-digit daily local infections. It confirmed 24 locally transmitted COVID-19 cases on Thursday, the highest daily number since mid-September, owing in part to a cluster at Changi Airport.

The Singapore stock exchange (.STI) fell about 3%, led by falls in retail-exposed shares and travel-related companies. Singapore Airlines (SIAL.SI) shares dropped more than 6%. Following the announcement, the Singapore dollar fell a fraction.

From June 4–5, Singapore will host the annual Shangri-La Dialogue, which attracts top-level military officials, diplomats, and weapons manufacturers from around the world.In addition, the city-state will host the World Economic Forum’s annual summit in August.

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