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Nikkei Markets

Malaysia, Singapore shares edge up

Analysts caution earnings risks, falling crude prices will cap gains

KUALA LUMPUR (Nikkei Markets) -- Malaysia and Singapore shares edged higher Thursday as gains in other Asian stock markets lifted sentiment, although analysts cautioned of risks ahead that may limit further upside.

The FBM KLCI ended 0.3% higher at 1694.21. Gainers outnumbered losers in Malaysia though most plantation companies slipped. Palm oil producer Kuala Lumpur Kepong fell 0.2% in Malaysia after a 58% plunge in fourth-quarter net profit. The Straits Times Index closed up 0.4% at 3054.53.

"The market appears to have priced in most negative factors, including Trump's policy, higher interest rates, and China is addressing the trade war issue," said Areca Capital's Chief Executive Danny Wong. "I think we are near the bottom in terms of downside."

The Nikkei Asia300 Index rose 1.4%. Gains in Asia were led by Hong Kong stocks as confidence over policy support from mainland authorities trumped weak cues from Wall Street. The Dow Jones Industrial Average lost 0.8%, while the Nasdaq Composite fell 0.9%. S&P 500 declined 0.8%.

The U.S. dollar's retreat from 16-month peak against a basket of comparative currencies also aided in boosting sentiment in Asia. Further, China has written to the U.S. responding to its demands for wide-ranging trade reforms and the letter included some concessions, according to a Bloomberg report.

"The market is facing headwinds from a softer earnings season, falling crude oil prices and the ongoing trade stand-off," CMC Markets Analyst Margaret Yang said in Singapore. "For the STI, the upside is capped by tepid growth prospect, whereas the downside is cushioned by cheap valuation."

In earnings news, UMS Holdings lost 3% after the precision engineering firm's third quarter result showed a 44% on-year fall in net profit.

Singapore Airlines fell 1%, its third straight day of loss, after its second-quarter net profit plummeted 81% year-on-year. The flag carrier will trade ex-dividend from Nov 21.

The Straits Trading Company, involved in real estate, hospitality and resources, climbed nearly 4% after posting a 17% gain in third quarter net profit. Construction firm KSH Holdings added 0.9% after its second-quarter net profit grew 11.6% on-year.

In Malaysia, poultry producer LTKM rallied 19.4% after reporting a six-fold jump in net profit helped by higher egg prices. Rivals Teo Seng Capital and Lay Hong rose 2.4% each.

Daibochi, which manufactures packaging products, plunged nearly 15% in Malaysia after larger rival Scientex announced acquisition of 42.41% stake for 222.50 million ringgit ($53.07 million). The deal was at more than 18% discount to previous closing price. Scientex added 2%.

- Alexander Winifred and Joannah Perez

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