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Equities

Singapore, Malaysia stocks rise to two-week high on US jobs data

Banks, real-estate firms pace gains

KUALA LUMPUR (Nikkei Markets) -- Stocks in Singapore and Malaysia rose to two-week highs on Monday as muted U.S. wage growth triggered a broad-based rally in markets across the world.

The Straits Times Index in Singapore rose 1.6% to 3,540.19. Malaysia's benchmark FBM KLCI index advanced 0.9% to 1,861.22. Both the gauges are at their highest since Feb 27.

The S&P 500 Index jumped by the most in a month on Friday after data showed that the U.S. economy added more jobs than economists expected in February. The country added 313,000 jobs last month, while growth in average hourly earnings slowed to 2.6% from 2.8% in the previous month. The decline in year-on-year growth of hourly earnings was of particular relief to markets. Last month, the wage growth had accelerated at its fastest pace in eight years, setting off fears of a quicker pace of U.S. monetary tightening.

Michael McCarthy, chief market strategist at CMC Markets, described Friday's data as "a beautiful set of numbers" with jobs surging but wage growth moderating, indicating "an ideal higher growth, lower inflation scenario."

On the STI, 25 out of 30 companies closed higher. United Overseas Bank paced a rally in banking shares, adding 2.6%. In interest rate-sensitive property names, CapitaLand Commercial Trust rose 1.7% and CapitaLand advanced 1.4%. Keppel Corp. added 1.8% after securing a contract worth about $425 million to construct a drilling rig.

Singapore Exchange added 1.1%. On Friday, a South China Morning Post report, quoting an SGX official, said a couple of "multibillion-dollar market cap" companies from Hong Kong are planning to list in Singapore in July and August.

Singapore Technologies Engineering rose 1.5%. Maybank Kim Eng Research said it is positive on the shares, citing its growth catalysts. "The aerospace landscape is improving, recent acquisitions hold growth promise, and the rationalization at its land systems and marine divisions is largely completed," it said.

BreadTalk Group lost 0.5%. On Monday, it announced a deal with Taiwanese baker Wu Pao Chun Food to operate the Wu Pao Chun line of bakeries in China, Hong Kong, and Singapore.

Meanwhile, the Department of Statistics said total retail sales in January declined 8.4% on-year due to the effect of the Chinese New Year. Chinese New Year holidays fell in January last year but were celebrated in February this year.

On the KLCI, banks were the top performers. CIMB Group Holdings, Malaysia's second-biggest lender by assets, rose 1.7%. Hong Leong Financial Group and its lending unit, Hong Leong Bank, rose 2.4% and 1.9%, while RHB Bank and AMMB Holdings climbed at least 0.8% each.

Simon Chen, a senior analyst at Moody's Investors Service, said that loan demand is expected to recover further in 2018, strengthening profitability.

Hartalega Holdings, Malaysia's largest glove maker by market capitalization, advanced 7.1% after shareholders approved its plan to issue bonus shares. The stock may be included in the FBM KLCI index by June if its market capitalization is among the 25 biggest stocks on the Bursa Malaysia, Affin Hwang Investment Bank said in a note to clients. Hartalega, currently the 26th biggest company listed on Bursa Malaysia, is already on the KLCI's reserve list.

Gamuda, MMC Corp., and George Kent (Malaysia) rose 2%, 4.2%, and 0.5%, respectively after The Edge newspaper reported, citing unidentified sources, that the three firms had been shortlisted for Malaysia's Mass Rapid Transit Line 3 turnkey contract.

MBM Resources, an automotive parts maker, jumped 11.5% after industrial conglomerate UMW Holdings said it offered to buy a 50.07% stake in the company for 501 million ringgit ($128 million) in cash. The move forms part of UMW's plan to raise its stake in Perusahaan Otomobil Kedua, Malaysia's largest carmaker by market share, from 38% currently. MBM owns a 22.58% stake in Perusahaan Otomobil.

Information technology company IRIS Corp. rose 5.6% after The Star newspaper reported it planned to bid for a government road tax-related project.

--Alexander Winifred & Joannah Perez

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