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Nikkei Markets

Malaysia, Singapore shares hold steady

Caution runs high as investors monitor Trump-Kim summit

KUALA LUMPUR (Nikkei Markets) - Singapore and Malaysia shares were barely changed Monday as caution runs high amid arrival of American and North Korean officials ahead of the historic summit between Donald Trump and Kim Jong Un.

The Straits Times Index eked out 0.2% gain to end at 3441.69, while the FBM KLCI edged 0.1% lower at 1775.80. The Singaporean dollar and Malaysian ringgit held relatively steady against the U.S. dollar.

"The meeting between the two leaders could greatly improve political relations around the world," said David Madden, an analyst at broker CMC Markets. Nikkei's Asia300 index of prominent regional firms rose 0.4%.

Asia markets closed mixed ahead of a highly anticipated meeting between Trump and Kim scheduled for Tuesday in Singapore. Trump, who arrived in the city-state on Sunday, said talks over North Korea's denuclearization could "work out very nicely."

Meetings between world leaders are typically not considered market events, analysts said. Still, the historic meeting is an "event that investors will not be able to ignore," said Jameel Ahmad, global head of currency strategy at FXTM.

Emerging market currencies closest to North Korea geographically could rally, he said. "This includes the Korean Won, Chinese Yuan, Thai Baht, Indonesian Rupiah, and Malaysian Ringgit. The Singapore Dollar could also benefit."

Palm oil producers gained after data showed a 0.5% month-on-month decline in May inventory in Malaysia. In Singapore, Wilmar International and Golden Agri-Resources rose 0.6% and 1.6% respectively. In Malaysia, Sime Darby Plantation climbed 2.9% while IOI Corporation was up 0.9%.

Among the most active in Singapore, Thai Beverage Public Company rose 3.2% while Yangzijiang Shipbuilding Holdings dropped 1.5%.

Lum Chang Holdings rose 1.4% after securing a contract worth S$147.5 million for the construction of a new industrial development in city-state's Woodlands North Coast.

In Malaysia, local investors continued to pick up counters beaten down by a persistent selloff by foreign funds that's topped 5 billion ringgit ($1.25 billion) since the nation's general election on May 9.

"Foreign investors are uncertain because they don't actually know what's going on," said Muamalat Invest Chief Executive Mohd Faruk Abdul Karim. "We're also quite nervous at the moment, but we're slowly going into stocks that dropped quite low," he said.

Industrial conglomerate DRB-Hicom dropped 6.1%. Malaysia's Prime Minister Mahathir Mohamad said he plans to establish a new national car company - barely a year after the sale of a 49.9% stake in DRB unit Proton Holdings to China's Zhejiang Geely Holding.

Semiconductor-related stocks fell for a second session, following a Nikkei report that Apple has warned suppliers of a 20% drop in new iPhone parts orders. Inari Amertron lost 5.1%, while Globetronics Technology dropped 0.5%.

- Alexander Winifred

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