BANGKOK, June 29 – Southeast Asian stock markets climbed today as investors piled into financial stocks towards the end of the quarter and sentiment was buoyed by optimism that a Greek austerity plan would go ahead and a sovereign debt default would be averted.
Late buying boosted trading volume in the region to the 30-day average, pushing Singapore up 1 per cent to the highest in almost three weeks and Malaysia up 0.3 per cent to five-month highs.
Thai shares surged 2 per cent to two-week highs and Vietnam rose 0.5 per cent. But Philippine shares fell 1 per cent, led by a 3 per cent drop in Philippine Long Distance Telephone amid foreign ownership concerns.
Indonesia was shut for a market holiday and trading will resume on Thursday.
Indonesia and Malaysia, Southeast Asia‘s best performers so far in 2011, are close to their all-time highs set earlier in the year.
That performance has been helped by foreign inflows. A Kuala Lumpur trader said buying interest in laggard sectors such as construction, consumer goods and plantation stocks could push Malaysia up higher.
By 0958 GMT, the MSCI index of Southeast Asia had risen 1.1 per cent, led by a 2.3 per cent rise in the MSCI index for Thailand.
Asian stocks rose as investors bet on the ability of Greece’s government to pass austerity measures designed to prevent the country from going bankrupt. The MSCI index of Asia Pacific stocks outside Japan rose 1.3 per cent.
In Bangkok, the market reported US$69 million in inflows after the US$320 million in outflows seen over the previous five sessions and US$1.58 billion in outflows since the start of May, reflecting political uncertainty ahead of the general election in Thailand on Sunday.
Market players appeared optimistic about the strong domestic economy, however, and snapped up banks.
Andrew Yates, head of international equity sales at broker Asia Plus Securities in Bangkok, was maintaining an ‘overweight’ stance on Thai equities.
“It’s the underlying economy which drives earnings that in turn should be the main determination for share prices,” he said.
“We believe that Thailand is in the process of transition from a niche value play to a more mainstream Asian growth market and thus deserves a re-rating.”
Analysts recommended bank stocks this week due to expectations of good quarterly earnings and underperforming stock prices. The quarterly results are due to be announced next month.
Top lender Bangkok Bank and second-ranked Krung Thai Bank surged nearly 3 per cent.
Banks advanced elsewhere in the region, too. Southeast Asia’s biggest, DBS Group Holdings , rose 0.7 per cent, Malaysia‘s largest lender, Maybank , edged up 0.5 per cent and the Philippines‘ second-largest, Metropolitan Bank & Trust , gained 0.9 per cent. – Reuters
