Most SE Asian markets fall as risk appetite remains fragile

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BENGALURU (Aug 16): Most Southeast Asian stock markets tracked broader Asia to end lower on Thursday, as Turkey's currency woes and concerns of slowing economic growth in China weighed on investor risk appetite.

However, news that Beijing will hold trade talks with Washington late this month helped markets cut some losses.

A Chinese delegation led by Vice Minister of Commerce Wang Shouwen will meet with US representatives led by Under Secretary of Treasury for International Affairs David Malpass, the Ministry of Commerce said.

But it is unclear whether it will take place before or after Aug 23, when Washington is due to activate additional tariffs on US$16 billion of Chinese goods.      

Asian shares saw sustained sell-offs over the past few sessions, driven by a slew of lukewarm Chinese economic data. MSCI's broadest index of Asia-Pacific shares outside Japan fell to a one-year low on Thursday, having plunged about 4 percent since last week.

Investors also remained wary of a shock sell-off in emerging-market currencies, as seen in Turkey's lira, after trade tensions flared between Ankara and Washington.

"The trade war between the US and Turkey, which resulted in a free-fall of the Turkish lira, has affected emerging markets, especially Asia," said Manny Cruz, an analyst at Asiasec Equities.

In Southeast Asia, Singapore stocks closed at a more than one-month low, dragged by financials. The city-state's top lenders led the decline, with Oversea-Chinese Banking Corporation Ltd and DBS Group Holdings Ltd shedding 1.4% and 0.5%, respectively.

Singaporean banks reported record profits last year but their prospects have been clouded this year by curbs on property investment imposed in July and a slowdown in economic growth due to international trade tensions.

Indonesian shares declined for a third session in four, with financials and telecom stocks weighing the most. They gained in the previous session after Bank Indonesia hiked its key interest rate for the fourth time since mid-May.

The central bank flagged slowing economic growth in 2018, stemming mainly from weakening economic fundamentals.

"Weakening growth will continue to drag market sentiment, and it should compel fund managers and foreign investors to continue selling," Cruz said.

Bank Negara Indonesia ended 4.1% lower, while Telekomunikasi Indonesia shed 2.3 percent.

An index of the country's 45 most liquid stocks ended 0.8 percent lower.

Malaysian shares fell, dragged by telecom and utility stocks, ahead of second-quarter GDP data on Friday.

The economic growth pace likely slowed again in the second quarter of 2018, a Reuters poll showed.

Meanwhile, Thai and Vietnam stocks gained slightly.

Change on the day

Market             Current   Previous close  % move
Singapore          3211.93   3234.12         -0.69
Bangkok            1680.96   1676.29         0.28
Manila             7517.36   7540.92         -0.31
Jakarta            5783.798  5816.59         -0.56
Kuala Lumpur       1777.27   1785.94         -0.49
Ho Chi Minh        964.28    961.37          0.30

Change on year

Market             Current   End 2017        % move
Singapore          3211.93   3402.92         -5.61
Bangkok            1680.96   1753.71         -4.15
Manila             7517.36   8558.42         -12.16
Jakarta            5783.798  6355.654        -9.00
Kuala Lumpur       1777.27   1796.81         -1.09
Ho Chi Minh        964.28    984.24          -2.03