March 20, 2017 7:15 pm JST

Malaysia extends gains to 22-month high after Fed, Singapore slips

SINGAPORE (NewsRise) -- Malaysian shares rose for a third day straight Monday as the U.S. Federal Reserve's dovish stance continued to support regional sentiment. Shares in Singapore edged lower, weighed down by weakness in heavyweight financial stocks.

The FTSE Bursa Malaysia KLCI added 0.2% to 1,749.41, a third consecutive advance that propelled it to 22-month highs. The KLCI, which rose 1.6% last week, is up more than 3% so far in March and on course for its best monthly performance in a year.

"With the overheated trading in local bourse, we opine that the investors may lock in some profits after a strong rally last week," Hong Leong Investment Bank said in a note.

Foreign investors bought 1.76 billion ringgit ($398 million) in local shares last week, marking the biggest weekly inflow since May 2013, according to MIDF Research.

"While the index is likely to follow suit on a strong buying tone and it may revisit 1,770 in the coming week, we would prefer to remain cautiously bullish in the near term as traders might sell into strength if the index rallies further," CIMB said.

Regional sentiment received a fillip after the Fed's policy review last week as investors looked passed the central bank's 25 basis-point rate increase on Wednesday, focusing instead on expectations that U.S. borrowing costs will only increase gradually. The Nikkei Asia300 Index, which rose more than 4% last week, added 0.3% to 1,171.50.

"As investors digested the interest rates hike move by the Fed, next investment focus would be on European elections, coupled with U.S. reporting season during April. Both the factors may trigger some wariness in the stock markets," Hong Leong Investment Bank said.

Singapore's Straits Times Index, which advanced 1.2% last week after the Fed's decision, slipped 0.1% to 3,165.70 Monday. Heavyweight lender DBS Group Holdings slid 0.7%, while United Overseas Bank and Oversea-Chinese Banking Corp fell at least 0.3% each.

The city-state's banks, which have significant exposure to the oil and gas services industry, came under renewed pressure after offshore oilfield services group Ezra Holdings' filed for bankruptcy protection in the U.S. Ezra shares, suspended from trading since March 15, last traded at 1 Singapore cent a share.

While the banks have increased provisions for bad debts, analysts have said it is unclear whether the provisions are sufficient.

In Malaysia, Axiata Group was the biggest gainer, ending 2.2% higher at 5.08 ringgit after rising as much as 3.8% following a media report suggesting the mobile operator is considering a merger with Telekom Malaysia. Telekom Malaysia shares rose 1.3%.

Late Friday, Axiata said it along with Singapore Press Holdings and Keppel Telecommunications & Transportation are jointly undertaking a strategic review of their stakes in Singaporean telecom player M1. Axiata has an around 29% stake in M1.

Singapore's Starhub, which competes with M1, rose 1.4%. Singapore Press Holdings, which holds a 13% stake in M1, ended 0.6% higher.

--Kevin Lim and Jason Ng

Asia300

United Overseas Bank Ltd. (Singapore)

Singapore

Market(Ticker): SES(U11)
Sector:
Industry:
Finance
Regional Banks
Market cap(USD): 25,745.35M
Shares: 1,646.96M
Asia300

Oversea-Chinese Banking Corp. Ltd.

Singapore

Market(Ticker): SES(O39)
Sector:
Industry:
Finance
Regional Banks
Market cap(USD): 28,831.53M
Shares: 4,193.72M
Asia300

Axiata Group Bhd.

Malaysia

Market(Ticker): KLS(6888)
Sector:
Industry:
Communications
Wireless Telecommunications
Market cap(USD): 10,131.08M
Shares: 8,973.45M
Asia300

Telekom Malaysia Bhd.

Malaysia

Market(Ticker): KLS(4863)
Sector:
Industry:
Communications
Major Telecommunications
Market cap(USD): 5,435.46M
Shares: 3,757.93M
Asia300

Singapore Press Holdings Ltd.

Singapore

Market(Ticker): SES(T39)
Sector:
Industry:
Consumer Services
Publishing: Newspapers
Market cap(USD): 4,070.56M
Shares: 1,600.64M
Asia300

StarHub Ltd.

Singapore

Market(Ticker): SES(CC3)
Sector:
Industry:
Communications
Wireless Telecommunications
Market cap(USD): 3,557.80M
Shares: 1,731.65M

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