Indonesia climbs ahead of central bank decision, Malaysian stocks up

Indonesian traders walk in front of an Indonesia Stock Exchange board in Jakarta. ― Reuters pic
Indonesian traders walk in front of an Indonesia Stock Exchange board in Jakarta. ― Reuters pic

JAKARTA, May 17 ― Indonesian shares edged higher today ahead of the central bank's decision on interest rates due later in the day, while consumer and utility stocks drove Malaysian stocks up.

Jakarta's main index climbed 0.7 per cent with Telekom Indonesia gaining over 3 per cent and mining contractor United Tractors rising as much as 4.1 per cent.

A Reuters poll showed that Bank Indonesia would raise benchmark interest rates to support the rupiah, which has lost more than 5 per cent against the dollar since late January.

In Malaysia, the Tun Dr Mahathir Mohamad-led government said it will introduce a sales and service tax to partly offset the shortfall in revenue from effectively scrapping GST (general sales tax) from June.

Kuala Lumpur's main index rose as much as half a per cent with Genting Bhd gaining as much as 5.4 per cent. Gas processor Petronas Gas Bhd  was up as much as 2.5 per cent.

“Earnings wise, this (zero-rating of GST) will be positive for consumer, automotive, banking and finance sectors via either higher volumes or margin expansion as these businesses would no longer have to absorb the GST,” analysts at Malaysia's Maybank IB Research said in a note.

Gross domestic product data released by the central bank was weaker than expected in the first quarter.

Elsewhere in Southeast Asia, Singapore shares snapped three sessions of losses and rose as much as 0.5 per cent.

Thai Beverage gained as much as 1.3 per cent while Singapore Telecommunications climbed 0.6 per cent.

The city-state's non-oil domestic exports rose sharply in April, beating expectations, thanks to a surge in pharmaceuticals sales.

Meanwhile, Philippines shed as much as 0.9 per cent, hurt by losses in industrials and financials.

Ayala Corp fell over 3 per cent, while SM Investment Corp was down as much as 1.7 per cent.

Vietnamese shares slid 0.9 per cent with real estate stocks leading the losses. Vingroup Joint Stock co, down 4.6 per cent, was the biggest drag. ― Reuters