SE Asian stocks set for steep quarterly losses; Malaysia rallies from 1½-yr low

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BENGALURU (June 29): Malaysian shares bounced back on Friday from their lowest close in one-and-a-half years, on strong gains in power utility Tenaga Nasional, the index's third largest stock, while most other Southeast Asian stock markets firmed in the final trading session of the quarter.

Asian share markets rallied from nine-month lows, after China eased foreign investment limits, but underlying sentiment was dampened by worries over trade frictions a week before initial US and Chinese tariffs were set to take effect.

"Asian bourses may see a small reprieve into the monthend amid more positive overnight cues from Wall Street. Key to watch today is the Bank of Indonesia rate decision," OCBC said in a note.

Wall Street rose overnight, lending some support to sentiment in Asia. MSCI's broadest index of Asia-Pacific shares outside Japan rose about 1%.

However, Southeast Asian stock markets were set to log substantial quarterly losses, as trade tensions between the two largest economies in the world took their toll. A volley of tariffs between the United States and China had prompted a mass exodus from the region's risky assets.

Malaysian stocks jumped as much as 2.2%, their biggest intraday percentage gain since September 2015. The market fell to a 1½-year closing low on Thursday.

Tenaga Nasional Bhd surged 8.4% and was the biggest boost to the Malaysian benchmark. The company revised its tariffs on Friday and said that it would charge non-domestic customers an additional surcharge for the July-December period.

The index was on track to post a 9% loss for the second quarter.

Indonesian shares rose about 0.9%, with financials and consumer staples taking the lead. Bank Mandiri rose 2.3%, while Unilever Indonesia gained 0.9%.

Bank Indonesia, which increased its key interest rate twice during May, is likely to raise it again when it meets on Friday, a Reuters poll showed. The bank has been struggling to stabilise a plunging rupiah.

Indonesian stocks were on track to post a more than 7% decline for the quarter.

SOUTHEAST ASIAN STOCK MARKETS
Change as at 0340 GMT

Market                 Current   Previous close  % move
Singapore              3276.03   3257.57         0.57
Bangkok                1592.32   1599.54         -0.45
Manila                 7140.22   7066.57         1.04
Jakarta                5716.183  5667.319        0.86
Kuala Lumpur           1700      1665.68         2.06
Ho Chi Minh            954.12    957.35          -0.34

Change on year

Market                 Current   End 2017        % move
Singapore              3276.03   3402.92         -3.73
Bangkok                1592.32   1753.71         -9.20
Manila                 7140.22   8558.42         -16.57
Jakarta                5716.183  6355.654        -10.06
Kuala Lumpur           1700      1796.81         -5.39
Ho Chi Minh            954.12    984.24          -3.06