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Asia300

U.S. equity rally lifts Singapore and Malaysia stocks this week

SINGAPORE (NewsRise) -- Singapore and Malaysia shares ended higher this week, as U.S. stock indexes resumed gains to scale fresh records amid optimism over newly sworn-in President Donald Trump's policies and upbeat economic outlook.

Singapore's FTSE Straits Times Index rose 0.4% to 3,064.85 on Friday, ending the Chinese Year of the Monkey at a fresh 15-month high. The 30-stock gauge ended the week with gains of 1.8%, led by property stocks amid optimism that the government may reconsider the property cooling measures as soon as the budget in February. CapitaLand added 4.7% this week, while City Developments and UOL Group advanced at least 3% each.

Gains in Singapore this week comes amid an advance in U.S. stocks to record highs as investors focus on bets that Trump's infrastructure spending and taxation cuts will mean higher growth for the world's largest economy. Markets this week largely shrugged off uncertainty posed by Trump's protectionist policies, which some analysts say may cap further gains.

Camilia Goh, senior analyst, equity research at Bank of Singapore, recommends caution over the coming months. "While the current upbeat mood may continue to support equity markets near term, our underweight stance on the asset class is maintained ahead of policy uncertainties as the new U.S. administration swings into action, which is likely to bring higher market volatility amidst extended valuations."

Other Asian markets also rose this week, with the Nikkei Asia300 Index adding 2.5%. The FTSE Bursa Malaysia KLCI rose 1.3% for the week, but fell 0.4% to 1,686.36 points Friday.

Sime Darby was the week's best performer with an over 8% rally as it jumped 4.7% to 9.23 ringgit Friday after it announced plans to spin off its plantation and property segments in separate listings on the local stock exchange.

"We are positive on the latest development, as the planned spin-offs allow Sime to crystalize values of its businesses. Besides, the spin-offs allow each business to take advantage of potential growth and opportunities," said Chye Wen Fei, an analyst at Hong Leong Investment Bank.

Axiata Group, down 3% to 4.84 ringgit on Friday, still closed the week 3.9% higher. An announcement by the company last week that it will trim its stake in tower operator edotco helped gains.

Genting Malaysia added 5.6% this week, rising to lifetime highs amid continued optimism over its Genting Integrated Tourism Plan. The stock ended 0.2% higher at 5.06 ringgit Friday.

In Singapore, index heavyweight DBS Group Holdings rose nearly 5% this week as a rise in U.S. yields continued to support expectations of expansion in net interest margin for the lender. Oversea-Chinese Banking Corporation and United Overseas Bank added over 1% each this week.

Shares of engineering and property conglomerate Keppel Corp fell 1.9% to S$6.27 on Friday, a day after it posted weaker-than-expected fourth quarter earnings and said that it will shut three shipyards in Singapore. The company reported a 65% drop in fourth-quarter net profit to S$143 million as weak demand for oil rigs and impairment charges hurt its bottom line. Rig builder Sembcorp Marine also slipped 1.3% to S$1.51 on the news.

Despite the setback, RHB Securities maintained its "buy" recommendation on Keppel and raised its target price to S$7.39 from S$6.52, citing the firm's strong property and infrastructure businesses and diversification into other specialized vessels that are less dependent on oil exploration and production.

Markets in Singapore and Malaysia will remain shut on Monday for Lunar New Year.

--Kevin Lim and Nimesh Vora

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