SE Asia stocks tepid, all eyes on central bankers’ meet

Southeast Asian stock markets were sluggish on Friday as investors waited for directions on monetary policy from a meeting of top central bankers in the United States, with any hawkish comments likely to prompt selling of regional equities.

The world’s top central bankers are meeting in Jackson Hole, Wyoming, with concerns over the significance of a recent slide in inflation renewing questions about whether a global tightening of monetary policy can proceed.

Both US Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are not expected to deliver any fresh policy messages in the conference.

“We believe Yellen is unlikely to rock the boat, but because valuations and price are reaching historical highs, I think the market is taking a conservative approach in making investment decisions,” said Taye Shim, head of research at Jakarta-based Mirae Asset Sekuritas.

In Southeast Asia, Malaysian stocks hit a two-week closing low as disappointing earnings from sector heavyweights dragged down the benchmark index. It lost about 0.4% on week.

Sime Darby Bhd, the world’s largest oil palm planter by land size, closed at its lowest in more than five months after fourth-quarter profit more than halved.

Resort operator Genting Malaysia Bhd closed 4.3% lower after its second-quarter profit fell more than 50%.

Singapore ended 0.4% lower, hurt by financials and real estate stocks.

United Overseas Bank Ltd ended down 0.7%, while Ascendas Real Estate Investment Trust closed at its lowest in more than one month.

The index however posted a marginal weekly gain. 

The Indonesian index closed at a record high, on strength in industrials and consumer staples. It rose about 0.4% this week.

Unilever Indonesia ended at a record high, while hotelier Plaza Indonesia Realty closed up 12.2%.

Indonesia’s central bank unexpectedly cut its benchmark policy rate earlier this week, and said it expects the rupiah to remain stable and rupiah-denominated assets to continue to be attractive.

“Following the rate cut…markets have been positive now that the central bank and the president have a synchronised growth agenda,” said Taye Shim of Mirae Asset Sekuritas. “But on the other hand, markets will have to embrace the fact that foreign exchange volatility is going to be a little more elevated.”

Southeast Asian stock markets

 

 

Current

Previous

% change

Indonesia                

5,915.36

5,894.11

+0.36

Malaysia       

1,769.17

1,775.50

-0.36

Philippines                 

8,015.14

8,004.93

+0.13

Singapore                 

3,259.57

3,272.16

-0.38

Vietnam        

771.63

769.77

+0.24

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