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Nikkei Markets

Malaysia, Singapore shares slip on weak financial, palm oil plays

US rate hike, trade worries dominate investor sentiment, crude price edges higher

KUALA LUMPUR (Nikkei Markets) -- Malaysia and Singapore shares slipped Monday as plantation and financial services stocks declined, while worries over rising U.S. interest rates and trade tensions weighed on broader sentiment.

The FBM KLCI ended 0.7% lower at 1696.14. Hong Leong Financial Group fell 2.6%, while Sime Darby Plantation was down 1.7% in Malaysia. The Straits Times Index closed down 0.3% at 3068.15. Golden Agri-Resources fell 2%, while DBS Group Holdings shed 0.9% in Singapore.

"We're looking for opportunities, but we're not in a rush to get in the market," said Zahid Siddique, portfolio manager at Saturna Capital in Malaysia. There's concern that the U.S.-China trade war "could have a spillover impact on ASEAN, including Malaysia."

The Nikkei Asia300 Index was down 0.5%, largely tracking decline of U.S. shares on Friday. The Dow Jones Industrial Average fell 0.8%, the S&P 500 index lost 0.9% while the Nasdaq Composite index was off 1.7%.

Investors are also digesting commodity news. Stockpile in Malaysia, the world's second-largest palm oil producer after Indonesia, expanded 7.5% in October from a month earlier as production surged while exports fell. Palm oil futures for January delivery was down 0.3% at 2,034 ringgit.

Meanwhile, oil prices snapped a 10-day losing streak after Saudi Arabia's energy minister announced a 500,000-barrel per day reduction in oil supply. Brent crude rose 1.3% to $71.08 a barrel.

"For forward-looking investors, the anticipation over October's U.S. CPI, which could keep the Fed on a tightening path if it has a strong showing, also appears to be a factor causing the market to be dragging its feet," said IG Asia Market Strategist Jingyi Pan.

In Malaysia, Eco World Development Group and Sime Darby Property fell 3.7% and 1.5% respectively. The government will review the guidelines on ownership of properties by foreigners and is considering capping foreign ownership at 10% in real estate projects, the federal housing minister told Nikkei Markets.

Sapura Energy rose 1.3% after the oil-and-gas firm agreed to sell a 50% stake in its upstream unit to Austria's OMV AG for up to $975 million in cash.

Dufu Technology, which makes components for the hard disk drive industry, jumped 17.6% after reporting net profit more-than-tripled in the third quarter helped by better product mix and foreign exchange gains. Industry peers Notion VTec and Genetec Technology added 5.4% and 17.8%.

In Singapore, Keppel Corp. added 1% after the company announced that its unit Keppel Offshore & Marine had secured a contract worth S$30 million ($21.7 million) for the modification and upgrade of a production barge.

StarHub rose 2.1% as investors shrugged off a 13% year-on-year decline in third-quarter net profit to S$57 million on revenue of S$582.2 million. ComfortDelGro also advanced 1.4% despite a 2% fall in third quarter net profit to S$78.5 million on the back of S$967.9 million revenue.

- Alexander Winifred and Joannah Perez

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