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Equities

Malaysia shares fall on foreign sell-off

Singapore shares rebound ahead of Tuesday's closure

KUALA LUMPUR (Nikkei Markets) - Malaysia's shares buckled on Monday as foreign funds continued sell-off following mounting concerns over policy uncertainties, while Singapore shares rebounded.

The FBM KLCI started the week by shedding 1.2% at 1775.84, dragged lower by Astro Malaysia Holdings and Sime Darby. Singapore's STI, meanwhile was up 0.2% at 3,518.48 thanks to gains in Venture Corp. and Genting Singapore. Both markets will be shut on Tuesday for public holidays.

"My clients are staying on the sidelines as foreign outflow from the market has been non-stop," said Chong Woon Woo, a broker at Malacca Securities. "Sentiment remains weak partly due to the national debt issue and investors are also cautious in earnings season."

Foreign investors have sold more than 3.3 billion ringgit ($846.6 million) worth of Malaysian equities since the May 9 elections, according to stock exchange data. Prime Minister Mahathir Mohamad had pledged to trim the federal government debt and liabilities that is estimated to have topped 1 trillion ringgit last year.

Still a state-run fund manager downplayed the debt concern, saying Malaysia is only one of the markets that have been bruised by wider foreign outflows.

"Basically all the regional markets have witnessed a little sell-down because of flight from emerging markets," said Shahril Ridza Ridzuan, the chief executive of Malaysia's Employees Provident Fund. "This happens quite regularly."

However, across Asia investors were buoyed by potential easing in geopolitical tensions after President Trump said a U.S. team is preparing for a proposed summit between him and North Korean leader Kim Jong Un.

China's better-than-expected industrial profits also added to the optimism, said IG Asia Market Strategist Jingyi Pan.

Data on Sunday showed profits earned in April by Chinese industrial firms rose 21.9% on year, the fastest pace in six months, on the back of higher prices and strong demand.

But "prices remain in broad consolidation with low volumes amid a light start to a data-packed week," she said.

Apart from a slew of economic data from the U.S. and China, markets are also awaiting release of the U.S. Federal Reserve's Beige Book this week.

In Malaysia, Sime Darby and IHH Healthcare were among top losers, declining 7.6% and 4.3% each on weak quarterly earnings.

Malayan Banking, the nation's largest bank by assets, dropped 2.5%. Net profit for the three months ended Mar. 31 totaled 1.87 billion ringgit compared with 1.70 billion ringgit in the same period last year, while net interest income fell 0.5% on-year to 3.02 billion ringgit. The lender said it expected to make higher allowances for impaired loans and financing in 2018.

Pay TV operator Astro Malaysia Holdings slumped 8.1%, after Communications and Multimedia Minister Gobind Singh Deo said he would back a proposal to broadcast the 2018 World Cup on national television.

In Singapore, ComfortDelGro Corp rose 1.7%, after reporting Friday that it had terminated last year's agreement to acquire a 51% stake in Lion City Holdings, Uber Technologies' car rental subsidiary in Singapore.

Intel test handling machine supplier AEM Holdings fell 0.7%. On Saturday, it said the Suzhou court has ruled in favor of subsidiary AEM Microtronics (Suzhou) Co over the transfer of assets from one entity to another.

Crude oil prices continued to soften following news that Saudi Arabia and Russia are nearing a deal to ramp up production.

Rig-builders Keppel Corp and Sembcorp Industries dropped 2.5% and 1.3%, respectively. Malaysian oil-and-gas exploration companies Sapura Energy and Hibiscus Petroleum lost 10.1% and 7.9%.

--Alexaner Winifred and Joannah Perez

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