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Asia300

Singapore, Malaysia shares end week lower as Trump uncertainty weighs

KUALA LUMPUR (NewsRise) -- Shares in Singapore and Malaysia ended the week lower, as U.S. President Donald Trump’s moves during his first fortnight in office renewed concerns about the impact of his protectionist policies on global trade, rattling risk appetite.

   The FTSE Bursa Malaysia KLCI rose 0.7% to 1,685.01 points Friday, but ended the holiday-truncated week 0.1% lower. Malaysian markets were closed Monday and Wednesday. The ringgit added 0.1% Friday and for the week, but remains close its lowest level since 1998.

   “Unless positive local catalysts emerge to reverse the negative trend from foreign outflows and weak ringgit,” the KLCI will likely trade within 1590-1729 in February, TA Securities said in a note, adding that the range could persist throughout 2017. TA Securities noted that the “adverse external sentiment” due to the new Trump administration was the main reason for foreign fund outflows.

   Malaysian conglomerate Sime Darby shed 2.2% this week, giving up a part of last week’s over 8% jump. On Friday, Moody’s Investors Service placed the plantation major’s Baa1 rating on review for downgrade, citing uncertainty stemming from its plans to list its plantation and property businesses.

   Mobile operator Axiata Group, which rose almost 4% last week, added another 2.3% this week. The stock jumped 3.1% to 4.95 ringgit.

   In Singapore, lenders and telecommunications stocks led the Straits Times index 0.7% lower for the week. On Friday, the benchmark gauge slipped 0.1% to 3,041.94 points.

   Risk appetite took a hit this week after President Trump last Friday closed U.S. borders to refugees and put in place a ban on citizens from seven predominantly Muslim nations. The move came shortly after Trump, who assumed office on Jan. 20, signed an order to pull the nation out of the Trans-Pacific Partnership (TPP) agreement and voiced his intention to press forward with building a wall along the nation’s border with Mexico.

   The dollar remained under pressure amid concerns the U.S. may move to weaken the currency, especially after Trump on Tuesday accused China and Japan of engineering weak local currencies to gain a trade advantage. All three U.S. benchmark indexes moved away from recent record highs this week.

   The Nikkei Asia300 Index was slightly higher this week. Many markets in region, including China, Hong Kong, Taiwan and South Korea, were closed for part of the week for Chinese New Year.

   On Friday, a surprise move by the Chinese central bank to raise short term interest rates weighed on sentiment. The Shanghai Composite Index fell 0.6%, as trading resumed after a week-long break for Lunar New Year.

   In Singapore, sentiment was subdued on Friday amid renewed concerns about smaller players in the local marine and offshore industry after Ezra Holdings said it may have to write off as much as US$170 million due to problems at its EMAS Chiyoda Subsea joint venture.

   "Despite some returning interest in the sector in fear of losing out during an oil price rally, we also get the sense that investors in general are still cautious about entering the sector in a big way, due to conservative company guidance and the continued flow of some negative news,” OCBC Securities said. “Looking ahead, investors are advised to be nimble amidst the uncertainties."

   The brokerage said investors have focused primarily on larger companies like Keppel Corp and Sembcorp Industries that are better placed to ride out the slowdown in the sector.

   Shares of rig-builder Keppel Corp fell 0.3% to S$6.25 Friday, while Sembcorp Marine shed 0.7% to S$1.50.

   Heavyweight lender DBS Group Holdings slipped 0.6% to S$18.66 Friday, ending the week 2.7% lower. United Overseas Bank slumped 1.2% today, taking the week’s losses to 3%, while Oversea-Chinese Banking Corp shed 0.3% this week.

   Singapore Telecommunications, the heaviest weighted stock on the nation’s benchmark gauge, lost 1% this week. It was down 0.5% to S$3.85 Friday. StarHub extended last week’s 2.6% slump to slip another 0.7% this week. Shortly after markets closed Friday, the mobile operator reported a 33% decline in fourth quarter net profit to S$54 million.

   --Kevin Lim and Jason Ng

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