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Asia300

Singapore, Malaysia edge higher ahead of Fed

SINGAPORE (NewsRise) - Shares in Singapore and Malaysia eked out small gains Tuesday, even as investors remained focused on a likely rate increase by the U.S. central bank next week.

The FTSE Bursa Malaysia KLCI rose 0.1% to 1,728.66 and Singapore's FTSE Straits Times index advanced 0.3% to 3,130.44.

Marginal advances in Asia came after U.S. markets declined Monday as upbeat factory orders further cemented expectations of a Federal Reserve rate increase next week. Sentiment was rattled after President Donald Trump on Monday signed a revised executive order to ban citizens from six Muslim-majority nations from travelling to the U.S., excluding Iraq this time. The Nikkei Asia300 index rose 0.4%.

"In an overnight trading session really devoid of any major market moving news, resonating in very low ranges in prices across multiple financial markets, there has been some focus on Trump's second attempt at pushing through the controversial travel ban," Chris Weston, chief market strategist at IG, said in a note.

The U.S. central bank is now widely expected to raise rates at its March 14-15 meeting, with some participants expecting Fed Chair Janet Yellen to signal a faster pace of rate increases this year after her hawkish comments last week.

In Malaysia, lenders remained supported by robust December quarter earnings, with some analysts expecting gains to persist near-term. RHB Bank rose 1.6% to 5.20 ringgit and AMMB Holdings added 1.8% to 4.99 ringgit. Hong Leong Financial Group ended 0.6% higher.

"Overall 4Q16 earnings outperformed. However, impairments continued to rise while revenue growth was modest at 1% year-on-year," UOB Kay Hian said in a note. "That said, the positive sentiment on government-linked banks will persist in the run-up to the expected general elections."

The KLCI is trading at its highest level in over 10-months, helped by persistent foreign inflows. General elections in Malaysia are due by mid-2018, but may be called earlier.

Foreign investors net purchased 79 million ringgit ($17.7 million) in Malaysian shares yesterday, according to BIMB Securities, following inflows of nearly $250 million in the previous four weeks.

In Singapore, Capitaland rose 2.3% to S$3.64. Late Monday, the property developer proposed divesting its interest in serviced residence properties in Germany to Ascott Residence Trust for 65.4 million euros ($68.7 million).

Singapore Post slipped 1.5% to S$1.36 after saying yesterday that Marcelo Wesseler had resigned as chief executive officer of SP Commerce and Paul Demirdjian has been appointed interim CEO of U.S. businesses, effective immediately.

China Everbright Water jumped 4.8% to 44 cents after an announcement late Monday that it had secured three waste water treatment upgrading projects worth 210 million yuan ($30.4 million).

Lian Beng Group jumped 4% to 52 cents after saying late Monday that its unit had secured a building contract worth S$435 million from Housing & Development Board, which houses over 80% of Singapore population.

China's Yangzijiang Shipbuilding Holdings rose 5.4% to S$1.18, extending its rally this month to nearly 28%. Robust fourth-quarter earnings and expectations the company will benefit from China's plans to strengthen reform in state-owned enterprises have been supportive of the stock.

--Nimesh Vora and Kevin Lim

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