Bursa climbs while most South-east markets slip

Malaysian shares climb up to 0.4 per cent as Genting Malaysia (pic) and Petronas Gas post solid gains. — Reuters pic
Malaysian shares climb up to 0.4 per cent as Genting Malaysia (pic) and Petronas Gas post solid gains. — Reuters pic

SINGAPORE, May 18 — Most South-east Asian stock markets slipped today as investors kept a watchful eye on Sino-US trade negotiations.

Wall Street ended slightly lower yesterday as investors grappled with US-China trade tensions after US President Donald Trump said that China “has become very spoiled on trade.”

But helping ease some of the tension, Beijing has offered Trump a package of proposed purchases of American goods and other measures aimed at reducing the US trade deficit with China by some US$200 billion (RM792 billion) a year, US officials familiar with the proposal said.

MSCI's broadest index of Asia-Pacific shares outside Japan was 0.1 per cent higher.

In South-east Asia, Philippine stocks declined 0.5 per cent, hurt by industrials and financials, while Singapore shares were down for a fourth session in five with financials being the top losers.

Indonesian shares rose as much as 0.5 per cent after the central bank raised interest rates late yesterday, in an attempt to curb capital outflows and support the rupiah which is wallowing at a more than 2-1/2-year low.

Rising oil prices and US bond yields amid the Federal Reserve's posited rate hike pace forced Bank Indonesia (BI) to raise the benchmark rate, by 25 basis points to 4.5 per cent, for the first time since November 2014.

“BI also gave a hawkish tone signalling further rate hike is possible, but by next month we will have a new BI governor, so investors may not be willing to price in this hawkish tone yet,” Trimegah Securities said in a note.

Unilever Indonesia and Bank Mandiri were biggest boosts with a gain of 1.4 per cent each.

Malaysia shares climbed up to 0.4 per cent with consumer stock Genting Malaysia rising 2.9 per cent and Petronas Gas gaining 1.5 per cent.

The new government had promised the reintroduction of fuel subsidies, which along with the removal of the Goods and Service tax had made investors worry that fiscal deficit could widen.

However, DBS said in a note that domestic sentiment remains positive of the fuel tax re-introduction which places Malaysia in a better position than its peers to weather the current market.

“Until more details become available (on the new government's fiscal and monetary policy), rising energy prices is considered positive for this net oil exporter amidst confidence that growth will hold up above 5 per cent this year,” DBS said. — Reuters