BANGKOK, July 28 — Major Southeast Asian stock markets posted small gains today, supported by favourable quarterly earnings against a background of strong regional growth.
However, broker Citi said the earnings outlook for the second half was not as good in several Asian countries as export markets weakened and some stock markets could suffer if profit forecasts were revised down.
“Indonesia remains most vulnerable to poor revisions. The market has been re-rating as the next India but the earnings story is beginning to look less robust,” the broker said.
But it added: “India, the Philippines, Singapore and Thailand have all seen their earnings outlook improve versus the prior month.”
Singapore’s main share index pushed 0.2 per cent higher and hovered around three-month highs, while Malaysia inched up 0.2 per cent, to just below a 29-month peak hit the previous day.
Indonesia, Asia’s second best performer after Sri Lanka, finished up 0.5 per cent, at one point touching a record high of 3,064.79. The Philippines was up 0.5 per cent, extending gains to two-week highs.
Thailand, Asia’s third-best performer, ended flat, coming off an intra-day peak of 860, a 26-month high. Vietnam bucked the trend and fell 1.34 percent.
In Singapore, big banks gained ahead of their quarterly results. DBS Group, Southeast Asia’s largest lender, was up 0.6 per cent ahead of its results on Friday. Oversea Chinese Banking Corp, which is due to release its quarterly earnings next week, rose 0.8 per cent.
Financial firms outperformed in Kuala Lumpur, with Hong Leong jumping 2.1 per cent and CIMB Group up 1.2 per cent. In Jakarta, dominant car seller Astra International, rose 1.4 per cent to a record high.
Optimism over the second-half performance boosted Thai shares further, following a slew of quarterly results, although the market is seen as overbought on some indicators.
The SET index’s 14-day relative strength index (RSI) was at 77.15 at the close today. Others were below 70. An RSI level of 70 and higher indicates the market is overbought.
Top industrial conglomerate Siam Cement, a bellwether of Thai economic health, gained 1.1 percent to a three-week high after its quarterly profit beat forecasts and it raised its sales target for the year.
Thai Union Frozen Products fell 2.1 percent after the owner of the “Chicken of the Sea” canned tuna brand said it would buy MW Brands Holdings SAS for US$884 million (RM2.82 billion) to become the world’s biggest seafood firm. The funding for the deal raised worries about its debt-to-equity ratio.
Among other weak spots in the region, Astra Agro Lestari, Indonesia’s biggest listed palm oil plantation firm, dropped 3.7 per cent after it said first-half net profit fell 17 per cent.
In Manila, shares in San Miguel surged 10 per cent after the Philippine conglomerate said it could raise around US$1.6 billion by selling shares and would pay a special dividend. — Reuters
