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Asia300

Singapore, Malaysia stocks post weekly gains as Macron's win spurs risk appetite

SINGAPORE (Nikkei Markets) - Stocks in Singapore and Malaysia posted weekly gains as Emmanuel Macron's French presidential election win allayed concerns over France's future with the European Union, boosting investors' risk appetite.

The victory by Macron against his far-right, anti-EU rival Marine Le Pen was seen by investors as lending stability to the common bloc. The Nikkei Asia300 index rose over 1.5% this week.

"Macron's win represents an important victory in Europe's search for a durable expansion," Dave Lafferty, chief U.S. market strategist at Natixis Global Asset Management, wrote in an e-mail. "The French election represents a win for E.U. continuity and integration."

Singapore's FTSE Straits Times index rose 0.8% this week. However, it fell 0.5% on Friday to close at 3,255.29 after disappointing earnings by City Developments and as lenders came off multi-month highs.

In spite of Friday's fall, banking stocks led the advance on the index for a second consecutive week on the back of better-than-expected earnings. Oversea-Chinese Banking Corp. rose 3.2% this week after a 14% rise in March quarter net income. DBS Group Holdings and United Overseas Bank, after reporting upbeat earnings last week, added at least 1% this week. DBS fell 1.2% on Friday and UOB fell 1.6%, while OCBC edged lower by 0.1%.

Singapore Technologies Engineering slipped 1.3% on Friday after posting a 6% drop in first quarter profit. ST Engineering said on Friday it earned S$103.4 million ($73.4 million) in the three months ended in March, down from S$110.2 million in the same period a year ago.

City Developments fell 2.5% on Friday after the property and hotel group said late Thursday that profit for the March quarter fell 19% to S$85 million. It was the lowest net profit since the same quarter in 2009, as its hotel operation continues to struggle.

Wilmar International jumped 9.6% on Friday after its quarterly net income rose 51%. The world's largest palm oil company said it is restructuring its operations in China, and considering a separate listing.

In economic data from of the city-state, retail sales rose 2.1% on a year-on-year basis in March primarily due to an increase in motor vehicle and fuel sales, according to the department of statistics.

The FTSE Bursa Malaysia KLCI has added 0.7% since last Friday. Heavyweights Axiata Group and CIMB Group Holdings gained 2.4% each since last Friday, the biggest contributors to this week's advance on the benchmark index. The increase was broad-based with 25 shares in the 30-stock gauge posting gains this week.

The index rose less than 0.1% on Friday to 1,775.87. Malaysia's central bank Friday kept the benchmark policy interest rate unchanged at 3% as expected as it expects the recent rise in inflation to moderate in the second half of 2017. Bank Negara Malaysia has kept interest rates unchanged since July 2016 when it unexpectedly cut the policy rate by 25 basis points.

PPB Group added 0.4% on Friday. Kenanga Investment Bank raised the stock to "outperform" from "market perform" on 18.6%-owned Wilmar International's restructuring plan, which could potentially work on a separate listing in China.

"In view of Wilmar's proposed China restructuring, we think the positive investor sentiment could extend to both PPB and Wilmar, while PPB as a shareholder may well reap additional rewards from a possible listing," Kenanga 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.

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