KUALA LUMPUR (Nikkei Markets) -- Singapore stocks posted their best weekly performance in more than a year, as optimism over earnings boosted heavyweight lenders.
Malaysian equities rose for the second week, as banks advanced before their December quarter earnings.
Singapore's Straits Times Index climbed 1.3% to 3,533.22 on Friday. For the week, the gauge advanced 2.6%, its biggest jump since the first week of January 2017. DBS Group Holdings and Oversea-Chinese Banking Corp. were up 4.6% each this week, and United Overseas Bank rose 3.8%.
Morgan Stanley said earlier this week that the current environment remains conducive to upside earnings surprises for banks. Banks are expected to enter a period of low credit cost following the one-off adjustments they made in the fourth quarter for their exposure to the offshore support services and vessels sector, it said in a note. An improving macro environment is expected to provide additional support.
Singapore's market this week weathered a hawkish U.S. Federal Reserve minutes and an increase in taxes for buyers of high-value homes. The minutes of Fed's January meeting revealed that policymakers were upbeat on U.S. economy's growth prospects and that they saw inflation rising to their target levels in the medium term. The minutes once more raised fears of faster Fed rate increases and pushed U.S. bond yields to fresh four-year highs.
In addition to concerns over U.S. interest rates, property developers had to contend with a 1% increase in tax paid by buyers of high-value homes. CapitaLand and UOL Group, while underperforming the STI, did not fare too poorly considering the double whammy. Both the stocks rose at least 0.5% each this week.
On Friday, DBS, OCBC and UOB rose 2% each. CapitaLand and UOL both advanced by 1.1%.
Industrial conglomerate Sembcorp Industries declined 0.9% on Friday after it reported an 85% fall in fourth-quarter net profit, hurt by losses at its offshore and marine business and lower contribution from its utilities arm. Meanwhile, it announced a plan to list its India energy business.
Singapore Technologies Engineering closed 0.3% higher. It reported fourth-quarter net profit of S$168.5 million ($127.7 million) compared with S$170.4 million a year before. Wilmar International rose 3% after its fourth-quarter earnings topped projections.
Meanwhile in economic data, Singapore's consumer prices were unchanged from a year ago. Core inflation edged up to 1.4% in January from 1.3% in previous month.
In Malaysia, the FBM KLCI index rose 0.4% on Friday and by 1.3% this week. RHB Bank added 4.4% this week, Hong Leong Financial Group 2.4%, and heavyweight CIMB Group Holdings gained 2.6%. All these lenders are scheduled to report fourth-quarter earnings by next Wednesday.
On Friday, RHB rose 1.1%, Hong Leong Financial Group fell 1%, and CIMB advanced 0.8%.
Public Bank, the highest weighted stock on the KLCI, rose 2.3% on Friday to a record. Its fourth-quarter earnings rose 0.2%, boosted by higher net interest income, net fees, and commission.
State-run palm oil producer Felda Global Ventures Holdings fell 2.5% after posting a 32% drop in fourth-quarter earnings amid a companywide reorganization exercise. Rival IOI Corp. rose 0.2% after net profit surged 38% in the second-quarter, boosted by foreign exchange gains.
Petron Malaysia Refining & Marketing, a unit of the Philippines' Petron Corp., slumped 4.3% after reporting a fall of 11.6% in fourth-quarter profit. Newspaper publisher Media Prima dropped 11.3% to a 14-year low after the company swung a net loss in fourth-quarter.
--Alexander Winifred & Joannah Perez