SINGAPORE (NewsRise) - Shares in Singapore rebounded Wednesday, led by robust gains in Thai Beverage after it reported strong quarterly earnings, and as Wall Street scaled record highs for a fourth consecutive session following Federal Reserve Chair Janet Yellen's congressional testimony. Malaysian shares eked out marginal gains.
Singapore's FTSE Straits Times index rose 0.5% at 3,088.48, recovering from yesterday's 1.3% fall. Thai Beverage added 6.8% to 94 cents after it reported a 28% jump in net profit for the December quarter. Ascendas Real Estate Investment Trust slipped as much as 0.8% intraday before ending unchanged at S$2.47 and CapitaLand Mall Trust dropped 0.5% to S$1.98, weighed down by a rise in U.S. bond yields.
CapitaLand rose 0.9% to S$3.49. Earlier Wednesday, the company reported an over 70% jump in profit after tax and minority interest to S$430.5 million on revenue of S$1.85 billion. However, the real-estate developer warned it faces an uncertain and unpredictable operating environment, and economic headwinds in Singapore and China, its core markets.
The FTSE Bursa Malaysia KLCI added less than 0.1% to 1,709.79. The 14-day Relative Strength Indicator (RSI), a closely followed momentum indicator, is trading near 70, a level which indicates overbought conditions. The 30-stock gauge is up 4% this year after declining for three consecutive years amid optimism over U.S. economic policies and stability in the ringgit. The ringgit was little changed against the dollar Wednesday at 4.447. The Southeast Asian currency is up 0.8% for the year so far.
"KLCI's short term uptrend is intact, but (is) overbought," said Loui Low Ley Yee, an analyst at Hong Leong Investment Bank. "Both the RSI and Stochastic oscillators are suggesting that the key index is overbought. The KLCI's resistance is envisaged around 1,730."
Most Asian indexes rose Wednesday, tracking overnight gains on Wall Street as U.S. financial stocks gained on rising interest rate expectations. On Tuesday, Yellen told the U.S. Senate Banking Committee that it would be "unwise" to wait too long to raise interest rates amid accelerating inflation. The dollar index and U.S. Treasury yields also rose. The Nikkei Asia300 index was up 0.8% at 1,123.12 points.
"Overall, the reaction in the interest rates space is relatively muted. With no clear indication that the Fed will raise rates again in March, the market is still comfortable pricing in two hikes for 2017 and another two for 2018," DBS Group said in note.
On the KLCI, Genting reversed yesterday's decline to rise 2% to 8.78 ringgit. British American Tobacco Malaysia extended its rally ahead of its earnings, rising for the fourth day to end 2.1% higher at 49 ringgit.
Kuala Lumpur Kepong was down 0.4% to 25 ringgit, trimming its advance this month to 3.7%. Late Tuesday, the plantation major reported a 55% decline in first quarter net profit to 361 million ringgit.
"Excluding all one-off items, core net profit was up 76% to 385 million ringgit, supported by a better performance from its plantation division," said Ooi Mong Huey, an analyst with UOB Kay Hian. "Nevertheless, we expect a weak 2QFY17 performance as FFB production is likely to slow down on seasonality. Meanwhile, we are expecting a stable but lower contribution from the manufacturing division."
Malaysian glove maker Hartalega Holdings rose 0.6% to 4.78 ringgit despite reporting a weaker-than-expected fiscal third-quarter net profit. Analysts expect earnings to rebound in the current quarter on the back of higher selling price and more output. Rival Top Glove jumped 1.6% to 5.16 ringgit.
--Kevin Lim and Nimesh Vora