Singapore shares fall 3% as Covid restrictions tighten, journey bubble with Hong Kong possible delayed

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A woman jogs past a cordoned off Merlion Park on June 12, 2020 in Singapore.

Suhaimi Abdullah | Getty Images

SINGAPORE — Singapore’s benchmark Straits Times Index fell 3% after the government announced further tightening in Covid-19 restrictions and the likelihood that the air travel bubble with Hong Kong may be delayed again.

Aviation-related stocks were hit hard. Singapore Airlines dived 6.7% while SATS, an aviation catering and airport ground handling firm, fell 6.5%.

The Singapore government said Friday it’s “very likely” that the travel bubble with Hong Kong will not begin on May 26 as planned. It comes as the Southeast Asian country further tightened measures to curb rising local Covid cases, including stopping all dine-in services and capping public gatherings to two.

The Singapore-Hong Kong air travel bubble would have allowed travelers to skip quarantine. It has faced multiple delays from its initial launch date on November 2020 as Hong Kong reported resurgence in Covid-19 cases.

Both Singapore and Hong Kong are major Asian business hubs without domestic air travel markets. Their tourism and aviation industries, heavily reliant on international travel, have been badly hit by the pandemic.

Singapore’s Transport Minister Ong Ye Kung said Hong Kong is “a very safe region” now, with few new Covid cases detected daily. However, infections in Singapore have been climbing and the city-state likely won’t meet the threshold to start the travel bubble, he added.

Singapore and Hong Kong have previously agreed that the travel arrangement will be suspended if the number of unlinked local Covid cases in either cities exceed five on a seven-day moving average basis.

Singapore’s health ministry said Thursday that it confirmed 24 new cases of locally transmitted Covid-19 infections, four of which were not linked to previous cases. New cases in the community have increased to 71 in the past week — up from 48 in the week before, said the ministry.

Cumulatively, the city-state has confirmed 61,453 Covid infections and 31 deaths as of Thursday, health ministry data showed.

Meanwhile, Hong Kong on Thursday identified three potential cases, bringing its total of confirmed or probable infections to 11,818 since the outbreak, official data showed. The city has reported 210 deaths, according to the data.

Ong said he’s spoken with Edward Yau, Hong Kong’s secretary for commerce and economic development, about the Covid situation in Singapore. Both sides will make a decision early next week on whether to go ahead with the air travel bubble launch, said Ong.

Singapore tightens restrictions

The Singapore government also announced there will be more Covid-19 restrictions starting this weekend following a rise in local infections. The measures will take effect from this Sunday until June 13.

The new measures include:

  • No dining-in at food and beverage establishments;
  • Smaller social gatherings: A maximum of two people are allowed, from five previously;
  • All workers who can work from home will have to do so.

The government will review the measures at the mid-way point — or around two weeks later — to see if there’s a need to adjust them, said Lawrence Wong, Singapore’s education minister and co-chair of the Covid taskforce.

Before Friday’s announcement, Singapore already tightened restrictions since last weekend. Those measures included pre-event testing for large gatherings and the closure of some indoor gyms.