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Equities

Singapore and Malaysia shares rise on Trump tax plans

SINGAPORE (NewsRise) - Shares in Singapore and Malaysia climbed to multi-month highs Friday after U.S. President Donald Trump's comments about upcoming tax reforms spurred a rally in global risk assets.

Singapore's FTSE Straits Times index rose 0.7% to 3,100.39 points, to extend its rally this week to 1.9%. The city-state's stocks are up 7.6% this year, ranking among the best performers in the region, as optimism about a rising interest rate environment boosts heavyweight lenders and hopes of a rebound in home prices supports property developers.

The FTSE Bursa Malaysia KLCI advanced 0.6% to 1,698.94 points Friday. The 30-stock gauge rose 0.8% this week and is up 3.4% in 2017 so far. Data released Friday showed Malaysia's industrial production expanded at a faster-than-expected pace in December. The industrial production index - a measure of output from factories, mines, and power plants - rose 4.7% for the month, the Department of Statistics said in a statement.

Gains in Asian markets on Friday came after U.S. indexes scaled fresh record highs overnight following comments from the White House about major tax reforms in the coming weeks. During a meeting with airline industry officials Thursday, Trump promised a "phenomenal" tax plan "over the next two to three weeks." The comments helped reignite investor enthusiasm about his economic policies, which had waned in recent sessions as the U.S. President seemed to focus more on his protectionist trade stance and immigration reforms.

"The long-awaited tax reforms plans appear to be seeing some light, and it is no surprise to see the markets cheering," said Jingyi Pan, market strategist at IG markets. "With this latest comment, the markets could see sustained support in the timeline of the next two or three weeks as the anticipation builds for the tax plans."

The Nikkei Asia300 index rose 0.4% to 1,114.09 points Friday, on track for gains of over 1% this week.

In Singapore, lenders were among the best performers on Friday, as banks extended this year's rally after U.S. yields advanced on the back of Trump's taxation plans.

DBS Group Holdings, which reports earnings next week, rose 0.8% to S$18.97.

"Potential trading gains could surprise on the upside on non-interest income to beat our estimate and the Bloomberg consensus forecast. We expect earnings growth to remain resilient, as the bank is the prime beneficiary of higher interest rates," Nomura said.

United Overseas Bank added 0.6% to S$20.91. Oversea-Chinese Banking Corp rose 0.6% Friday.

Asia's biggest airline caterer SATS was down 0.2% S$4.97. Late Thursday, the company said net profit rose over 7% in the fiscal fourth quarter to S$65.1 million, but cautioned that the operating environment remained challenging with airline margins under increasing pressure.

"We believe the street has fully factored in most of the positives from cost control, and SATS' ability to generate positive jaws in coming quarters will be challenged, given the high base and the likely normalization of cargo volumes," said K. Ajith, an analyst at UOB Kay Hian. The brokerage has a 'hold' rating on the stock with target price of S$4.60.

Singapore Airlines' shares slipped 1% to S$9.84 Friday. The city-state's flag carrier said Thursday it has agreed to buy 39 long-range Boeing aircraft that have a list price of $13.8 billion.

Keppel Corp. added 1.6% to S$6.36 as crude oil prices were up for a third day. Singapore Telecommunications extended advances for a second day after announcing earnings. The stock rose 0.8% to S$3.91 Friday, ending the week 1.6% higher.

Global Logistic Properties slipped 0.7% to S$2.76, a day after it reported weaker third-quarter earnings. During the earnings conference call, the warehouse operator, which is undergoing a strategic review, said no definitive transaction had been entered into and there is no assurance that a transaction will materialize. The stock is up almost 25% this year, as it seeks bidders for a possible acquisition.

In Malaysia, MISC advanced 2.7% to 7.60 ringgit ahead of its earnings later today.

Banks, the heaviest weighted sector on the KLCI, were among the major winners on Friday. Index heavyweight and Malaysia's largest lender Malayan Banking rose 1.2% to 8.33 ringgit and Public Bank added 0.6% to 20.10 ringgit. CIMB Group Holdings and RHB Bank were up at least 1.6% each.

Westports Holdings slipped 1.2% to 4.13 ringgit, after it reported fourth-quarter earnings earlier Friday. The port operator said net profit rose 17% to 155 million ringgit ($34.8 million).

--Nimesh Vora and Kevin Lim

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