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Equities

Malaysia shares fall for third straight session, Singapore steady

Rising U.S. bond yields, lower global palm oil, cheaper metal prices weigh

KUALA LUMPUR (Nikkei Markets) -- Malaysia shares fell on Tuesday for the third straight session amid decline in global metal and palm oil prices, while Singapore stocks held steady as investors assess the impact of rising U.S. bond yields.

The FBM KLCI fell 0.8% to 1865.34 led by decline in Press Metal Aluminium Holdings, while the Straits Times Index closed marginally higher at 3584.56 as gains in manufacturing and finance stocks helped cushion losses in the property sector.

Most Asian currencies weakened against the U.S. dollar, while oil prices gained, stoking concerns over inflation in the broader economy. The yield on the 10-year U.S. treasury was near the 3.0% mark for the first time in more than four years.

"There's concern that the rise in yields could lead to a drastic sell-down in global equities, similar to what we saw earlier this year," said Areca Capital's Chief Executive Danny Wong. "Foreign funds may want to go risk off for now."

In Malaysia, a decline in aluminium prices pushed Press Metal Aluminium down 6.1%. The three-month aluminium futures on the London Metal Exchange fell some 7.0% after the U.S extended the deadline for sanctions on Russian producer Rusal.

The most-traded crude palm oil futures for July delivery fell 0.3% on Bursa Malaysia Derivatives. Sime Darby Plantations, one of the world's largest palm oil producers, fell 0.5% while Singapore-listed Olam International lost 1.3%.

Brent, the global benchmark for crude oil, rose 0.4% to three-year high of $75.

"Previously, a rise in oil prices used to motivate investors as it indicated more demand and growth," Hussein Sayed, FXTM Chief Market Strategist. "Now, it's becoming a source of concern."

Banking stocks recovered in Singapore. DBS Group Holdings and United Overseas Bank rose 1.2% and 0.2%, respectively. Oversea-Chinese Banking Corp added 0.3%.

Temasek-controlled Singapore Technologies Engineering dropped 3.9% after one of its subsidiaries filed a bankruptcy petition in China to avoid further cash outlay. The company said it was unable to dispose of land and building assets "despite best efforts for more than a year to secure buyers".

CapitaLand Commercial Trust, an STI component stock, lost 0.8%. On Tuesday, its manager reported a distribution per unit of 2.12 Singapore cents for the first quarter, up 7.6% on-year on distributable income of S$76.6 million ($57.9 million).

Timber extractor Priceworth International jumped 10.8% in Malaysia after inking a pact to supply container flooring to China-based Foshan Zhengsen Woodworking Co.

Malaysian construction WCT Holdings advanced 6%. AllianceDBS said the company could secure "sizeable jobs" from major shareholder Desmond Lim. Lim controls the Malton real estate group, the developer of the Pavilion Mall that sits along Kuala Lumpur's Golden Triangle.

Borneo Aqua Harvest rose 3.8% after RHB Investment Bank highlighted the planned capacity expansion of its gold-mining business, tipping a valuation of up to 3.10 ringgit a share.

--Alexander Winifred and Joannah Perez

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