S-E Asia stocks subdued as Fed minutes awaited, Philippines edges higher
SINGAPORE, Oct 10 — South-east Asian stock markets trod water today as investors steered clear of riskier assets ahead of the release of the Federal Reserve’s September meeting minutes tomorrow, awaiting clues on the pace of future US rate increases.
Expectations that improved prospects for the US economy would prompt the Fed to raise interest rates later this year have led to the strengthening of the US dollar over the past month.
Interest rate futures are now pricing in a near 90 per cent chance that the Fed will raise rates again in December.
“The sentiment what we see now is the shift of funds from the emerging markets back to the developed countries, particularly to US as the US economy is showing signs of recovery,” said Lexter Azurin, an analyst with Manila-based AB Capital Securities.
Singapore shares fell 0.2 per cent, with financials driving the losses. Lender Oversea-Chinese Banking Corp dropped as much as 1.1 per cent, while DBS Group Holding declined more than 1 percent, set to extend losses to a second session.
Indonesia’s main index was little changed, as gains in financials and energy stocks offset losses in consumer staples and telecom.
Mining contractor United Tractors was the top gainer on the index, climbing 1.7 per cent, while clove-cigarette maker Gudang Garam’s 2.4 per cent drop made it the worst performer.
Philippines was the only gainer in the region, set for a seventh winning session in eight, as expectations of a tax overhaul continued to underpin sentiment.
The country’s Senate will discuss tomorrow the tax reform proposal, which is crucial to President Rodrigo Duterte’s ambitious plans to foster higher, sustainable growth.
The tax measures, approved by the lower house of Congress in May, seek to expand the value-added tax base, raise excise taxes on fuel and automobiles, and slap levies on sugar-sweetened beverages among other changes.
The country’s trade deficit widened to US$2.41 billion (RM10.2 billion) in August from the previous month’s US$1.65 billion, data showed today.
Security Bank, the top gainer on the index, climbed 2.4 per cent.
Malaysian shares fell 0.2 per cent as the telecom and consumer sectors declined, with Hong Leong Financial giving up 0.7 per cent and Telekom Malaysia dropping 1 per cent. — Reuters
Source: The Malay Mail Online