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Singapore, Malaysia stocks edge higher as regional markets advance

SINGAPORE (Nikkei Markets) -- Singapore shares rose for a fifth straight day on Wednesday, aided by a rally in real estate stocks following a decline in U.S. bond yields. Malaysia stocks edged higher along with most regional markets.

U.S. stocks ended mixed on Tuesday as the defeat of U.S. Republican healthcare bill, which could potentially complicate President Donald Trump's economic agenda, did not elicit much of a response from investors. The bond and the currency markets took more notice of the development, with the dollar index falling to its lowest level since August and the 10-year U.S. borrowing cost dropping to three-week lows.

Singapore's FTSE Straits Times Index advanced 0.6% to 3,325.07 , marking yet another two-year high.

"A decisive close above 3,300 is setting up the index for a further rally, though policy woes from the U.S. on healthcare could put a lid on further advance. Resistance is seen ahead at 3,352," said Jingyi Pan, a market strategist at Melbourne-based brokerage IG. Pan added that the unsuccessful attempt to overhaul U.S. healthcare, may affect the "administration's effectiveness to deliver other key reforms."

Singapore Exchange said late Tuesday that equities market will break from 12.00 p.m. to 1.00 p.m., starting Nov. 13, following feedback received during the public consultation process. It also said that the minimum bid size for relevant securities in the S$1.00 to S$1.99 price range will be increased to S$0.01 from the current S$0.005, and the forced order range for relevant securities will be widened to +/- 30 ticks from +/- 20 ticks.

CapitaLand Commercial Trust increased 2.1% after reporting a 3.2% rise in distribution per unit for the second quarter, helped by higher contribution from one of its properties in the central business district. Ascendas Real Estate Investment Trust advanced 1.1% and Capitaland Mall Trust added 0.3%. Amongst developers, CapitaLand rose 0.8% and UOL Group added 1%.

Rowsley, resuming transactions after calling for a trading halt on Monday, jumped 93% to S$0.14 after the company said it will buy the entire stake in Sasteria for up to S$1.9 billion ($1.39 billion). Sasteria's subsidiaries include Thomson Medical, one of Singapore's leading providers of healthcare services for women and children, and Bursa Malaysia-listed TMC Life Sciences, a healthcare company. As many as 469 million shares changed hands, the highest since 2007.

Telecom operator M1 slumped 7.8% to S$1.93 following a 21% decline in second-quarter net profit and after major shareholders Keppel Telecommunications & Transportation (Keppel T&T), Singapore Press Holdings, and Malaysia's Axiata Group dropped a plan to sell a controlling stake in the company. Shares of Keppel T&T fell 3.2%, while SPH rose 1.4% after falling over 5% in the previous two sessions. Axiata rose 0.7% in Kuala Lumpur.

NetLink NBN Trust, a unit of Singapore Telecommunications, closed unchanged from its initial public offer price of S$0.81. The broadband company sold 2.9 billion units to raise S$2.3 billion in Singapore's biggest IPO in six years.

The FTSE Bursa Malaysia KLCI rose 0.1% to 1,757.27. CIMB Group Holdings climbed 1.4%. Its Thai unit reported a 30.1% increase in net profit for the first half of the year. Genting Malaysia advanced 1.2%, while AMMB Holdings was the top loser, down 1.8%.

Malaysia's consumer prices rose 3.6% in June, driven mostly by costlier fuel and food, official data showed Wednesday. The rate was less than the 3.8% increase predicted by seven economists in a Nikkei NewsRise poll and May's 3.9% year-on-year gain. Core inflation, which excludes most volatile items such as fresh food and energy prices, rose 2.5% in June from a year earlier.

"Overall, the evolution of the inflation is consistent with Bank Negara Malaysia's anticipated trajectory," said Sanjay Mathur, an economist at Australia and New Zealand Banking Group. "June's inflation print does not make a case for a change in the overnight policy rate."

Rohas Tecnic advanced 1.7% to 1.16 ringgit after Hong Leong Investment Bank initiated coverage with a "buy" call and a target price of 1.39 ringgit. "We like Rohas for its exposure to ASEAN which is one of the fastest growing economic regions in the world. Infrastructure investment needs are expected to be robust in the foreseeable future and this will generate steady demand for the products of the company," Hong Leong said in an investor note.

Prestariang fell 8% to 2.19 ringgit. AmInvestment Bank downgraded the stock to "hold" from "buy" and lowered the target price to 2 ringgit from 2.60 ringgit after company confirmed SKIN (National Immigration Control System) concession with the government at a 70% stake, lower than AmInvestment's expectation of 100%.

"We estimate that the project would require a capex of 900 million ringgit ($210 million). This means that the group may have to raise 180 million ringgit in equity," AmInvestment said in a note. The issue of new shares is expected to lead to earnings dilution, it said.

O&C Resources added 1.7% after securing a 324 million-ringgit housing development contract from Damansara Realty (Johor).

--Nimesh Vora and Kevin Lim

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