Singapore, Malaysia stocks fall as U.S. politics may hurt Trump's economic agenda
SINGAPORE (Nikkei Markets) - Stocks in Singapore and Malaysia fell Wednesday amid investor concerns that yet another political turmoil in the U.S. could hobble President Donald Trump's economic agenda.
U.S. stock futures fell and the dollar index dropped to a six-month low after the New York Times reported that Trump asked former Federal Bureau of Investigation director James Comey to close down an investigation into his previous national security advisor's links with Russia. Comey was leading an investigation into Trump campaign's ties with Russia before being fired by the President last week. The latest revelations follow a report the President may have revealed classified information to Russia, adding to concerns that his economic agenda may now take a backseat amid the political backlash.
"The political development could certainly be an unwelcoming distraction for a market waiting for further policy updates from the new administration," said Jingyi Pan, a market strategist at Melbourne-based IG.
Singapore's FTSE Straits Times Index fell 0.1% to 3,224.10. The nation's core exports declined in April after five straight months of gains, hurt by a slump in pharmaceuticals that offset the strength in electronics. Trade agency International Enterprise Singapore said Wednesday that non-oil domestic exports dipped 0.7% in April from a year earlier to a seasonally adjusted SG$13.6 billion ($9.75 billion).
United Overseas Bank lost 0.5% and Oversea-Chinese Banking Corp. fell 1.1%, amid broader market losses and as the U.S. 10-year bond yield slipped to a two-week low. The fall in U.S. borrowing costs helped CapitaLand Commercial Trust and Capitaland Mall Trust gain by at least 0.9% each.
Genting Singapore, up 7.5% over the last two sessions amid upbeat earnings, fell 0.4%. Sembcorp Marine slipped 0.9% as Brent crude oil prices were poised to fall for a second day on Wednesday.
The FTSE Bursa Malaysia KLCI lost 0.1% to 1,775.65. Petronas Gas dropped 3.4%, paring its over 6% rally on Tuesday following earnings. IOI Corp. lost 0.9% after fiscal third-quarter net profit declined by 58% on forex losses.
MISC ended unchanged at 7.62 ringgit. The shipping major signed a pact with ENGIE, Mitsubishi Corp. and Nippon Yusen Kabushiki to explore potential collaboration in promoting liquefied natural gas as the preferred marine fuel.
Iskandar Waterfront City fell 4.5%. Prime Minister Najib Razak said Wednesday that state-owned company TRX City will announce a request for proposal shortly to invite pitches for the role of master developer of Bandar Malaysia. The termination of the previous agreement is final and will not be reinstated, he said. Earlier this month, TRX City ended an agreement to sell 60% stake in the project to local developer Iskandar Waterfront Holdings and its Chinese partner China Railway Engineering.
Inari Amertron, an electronic equipment manufacturer, ended 0.5% lower, erasing its 2.7% gain earlier in the day. The company's third-quarter net profit more than doubled to 51.18 million ringgit ($11.9 million).
HeiTech Padu rose 4.5% to a 1-month high, adding to Tuesday's over 4% advance, on potential benefit from Alibaba's plan to setup a regional data center in Malaysia. Malaysia has been chosen as Alibaba Cloud's South-East Asian data center, Prime Minister Najib said during his China visit last weekend.
Earlier Wednesday, official data showed that Malaysia's consumer prices rose at a slower-than-expected pace in April. The consumer price index rose 4.4% in the month, according to a statement from the Department of Statistics. That compares to a median 4.5% increase predicted by nine economists in a Nikkei Markets poll and March's 5.1% year-on-year gain.
"Barring a surge in oil prices, Malaysia's headline inflation has likely peaked in March as retail pump prices continued to decline in May," ANZ Research's Economist Weiwen Ng wrote in a note. "At this juncture, growth dynamics do not point to the emergence of strong demand-pull inflationary pressures."
Core inflation will remain relatively modest, allowing Bank Negara Malaysia to maintain its policy rate at 3.00% this year, Ng said.
--Nimesh Vora and Kevin Lim
--Nikkei Markets is a real-time financial news service for South East Asia's markets published by Nikkei NewsRise Asia Pte Ltd, a Nikkei and NewsRise joint venture company. Nikkei Markets provides wide companies coverage in the region, including the Nikkei's Asia300 companies.