Singapore's Prime Minister Lee Hsien Loong indicated more work may be needed for the country's ruling party to regain support after it lost a by-election in the Hougang district on Saturday, according to Bloomberg News.

Desmond Choo, 34, a trade-union official bearing the banner of Lee's People's Action Party, was soundly beaten by Png Eng Huat, 50, a businessman carrying the flag of the opposition Workers' Party.

This year, Png won 62.1 percent of the votes in northeastern suburb for the seat vacated by Yaw Shin Leong. Last year, Yaw won 64.8 percent of the votes. Yaw was expelled by the Workers' Party in February for indiscretions in his private life, Bloomberg News reported.

Reaction to the by-election result is muted in equity trading at the Singapore Exchange on Monday, with the Straits Times Index bobbing just above and just below the flat line in the early going.

However, the by-election result may be more significant than appears to be believed by financial-market participants.

Michael Montesano, a visiting research fellow at the Institute of Southeast Asian Studies in Singapore, told Bloomberg News, One of the things about by-elections is that they sometimes send signals that are relevant to general elections and they often assist parties in preparing for them.