SINGAPORE, Feb 15 – Stocks in Singapore and Thailand joined those in East Asian markets in rising today in the belief central banks will boost economies through cash injections, though other Southeast Asian bourses slipped.
Indonesia was an underperformer, ending flat on the day, as funds balanced portfolios and rotated out of over-owned positions in favour of some of last year’s laggards.
Large-caps such as chemicals major Indorama Ventures, which rose 7.2 per cent, and mobile operator Advanced Info, up 3 per cent, led the move higher in Thailand which was the top performer in the region.
Bangkok’s SETI rose 1.8 per cent. Singapore’s Straits Times Index closed up 0.8 per cent at a six-month high.
Singapore is the best performing market this year among members of the Association of Southeast Asian Nations (ASEAN).
Comments from People’s Bank of China Zhou Xiaochuan that Beijing remains confident in the euro and in the ability of euro zone members to solve their debt problems lifted many Asian markets today.
“The question on everyone’s mind now is ‘Should I chase the rally?’,” said Kenneth Ng, Singapore research head at CIMB, who attributes the current rally to cash injections by global central banks.
“Our bearish view on an eventual major market sell-down has not changed but we do realise that another dose of QE has again postponed the day of final reckoning,” said Ng in a note that raised Singapore stocks to a “trading buy” from “underweight”.
Investors in Singapore piled into shares of companies that were reporting strong earnings such as offshore vessel builder STX OSV Holdings Ltd. It soared 12 per cent to a record high after reporting its fourth quarter net profit doubled.
Stocks in Indonesia were on the backfoot, however, with the benchmark stock index flat on the day as investors continue to rotate out of some of 2011’s winners.
On the year, Indonesian stocks are up just 3.4 per cent compared with a 14.1 per cent rally for the MSCI Asia-Pacific ex-Japan index.
According to analysts at Morgan Stanley, a key concern among investors was that Indonesia had become highly owned after last year’s stark outperformance and hence a crowded trade.
Automotive equipment-maker Astra International, which surged more than 35 per cent last year, fell 1 per cent today and dipped into negative territory on the year.
Broker Credit Suisse maintained its “underperform” rating on the stock earlier this week largely on valuations.
Elsewhere in the region, stocks in the Philippines, another of last year’s outperformers, fell 0.1 per cent.
Malaysian stocks, considered the most defensive among regional markets due to its reliance on the domestic consumption and low foreign ownership, fell 0.3 per cent extending their underperformance this year. – Reuters
