SE Asia Stocks: Firmer; foreign inflows drive Malaysia, Indonesia

March 30, 2012

KUALA LUMPUR, March 30 — Southeast Asian stock markets mostly gained today to end the first quarter on a strong note, with Malaysian equities closing at a record high on strong foreign inflows and shares in Indonesia climbing to an eight-month top.

Despite volatility in the markets on concerns over slowing economic growth in China and the United States, the region witnessed strong foreign inflows for the week with Malaysia leading, followed by Indonesia.

Malaysia gained 0.7 per cent to hit its record closing high of 1,596.33 today, with foreign inflows at RM373.8 million, the country’s Stock Exchange data showed.

Malaysia, the worst performing bourse in the region so far this year with a 4.29 per cent return, saw RM1,339.97 million in foreign inflows for this week.

Foreign investors in the past have been interested mostly in Malaysia’s government securities, but now are turning their attention to equities, said Gerald Ambrose, managing director, at Aberdeen Asset Management in Malaysia.

Indonesia climbed to a fresh eight-month high before closing the day up 0.4 per cent with a net foreign buying of US$130.1 million (RM390.3 million), Reuters data showed, extending the week’s inflows to US$319.1 million.

Analysts in Jakarta said the market had been boosted mainly by expectations of a credit rating upgrade by Standard & Poor’s in the near future.

“I see some foreign houses upgrading Indonesia on speculation the S&P might upgrade our credit rating to investment grade soon after a cut in subsidy for fuels,” said Jemmy Paul, equity fund manager, at Jakarta-based Sucorinvest Central Gani.

Indonesia’s parliament is set to vote on a 33 per cent fuel price hike today, to reduce a swelling subsidy bill that threatens to undermine the budget discipline that led rating agencies to lift the country to an investment grade status.

The region’s other markets also gained with Singapore rising 0.6 per cent, the Philippines ending 0.4 per cent firmer and Vietnam edging 0.3 per cent up.

MSCI’s broadest index of Asia Pacific shares outside Japan was trading 0.6 per cent firmer at 1021 GMT (1721 Malaysian time).

Thailand bucked the trend to drop 0.6 per cent, after 196.5 million in foreign inflows in the first four days of the week.

For the quarter, Hanoi was leading with a more than 25 per cent gain. Bangkok and Manila have risen over 16 per cent, while Singapore has gained more than 13 per cent and Jakarta 7.8 per cent. — Reuters

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