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Nikkei Markets

Malaysia shares buck regional decline, Singapore also gains

Investors look to corporate earnings for cues as Sino-US trade tension ebbs

KUALA LUMPUR (Nikkei Markets) -- Malaysia shares rose Tuesday, bucking decline in most Asian markets, as investors racked up finance and telecom stocks. Singapore shares posted mild gains after a relatively quiet trading day.

The FBM KLCI ended 0.6% higher at 1737.28 thanks to sharp gains in DiGi.com and Public Bank. Singapore's Straits Times Index meanwhile edged up 0.2% to 3239.64 with Golden Agri Resources leading advancers.

"We have been overweight on cash prior to the general election," said Wan Kamaruzaman Wan Ahmad, the chief executive of Kumpulan Wang Persaraan, Malaysia's second-biggest pension fund. "Now we are utilizing our cash to take advantage of the downturn in the equity market."

Wall Street equity benchmarks ended mixed overnight with declines for energy stocks overshadowing gains by financial plays. The main focus is now on U.S. corporate earnings as concerns eased over potential escalation in trade disputes between Washington and Beijing.

S&P 500 profits are expected to grow 20% in the second quarter with the number of companies issuing negative earnings guidance below the five-year average, according to FactSet.

Still, investors are watching how U.S.-China trade relations evolve after they slap import tariffs on one another late last month. While the U.S. has threatened to impose duties on an additional $200 billion of imports from China, Beijing has yet to detail how it will respond.

Investors may have chosen to stay on the side lines ahead of the earnings season for "a clearer picture of market outlook," said CMC Markets Analyst Margaret Yang.

Telecom stocks gained in Malaysia led by DiGi.com that climbed 7.5% while rivals Axiata Group and Maxis added 1% and 0.4% respectively. Public Bank meanwhile rose 2.5% and CIMB Group Holdings was 0.2% higher.

In Singapore, Golden Agri Resources was the biggest index gainer, rising 3.7% followed by Singapore Airlines that advanced 3.6%.

In corporate news, GHL Systems rose 0.6% after the Malaysian electronics payment company said late Monday it has been appointed as a direct merchant acquirer for Chinese financial services firm UnionPay International in Malaysia.

Singapore offshore services firm Keppel Corp. closed 0.5% higher while Sembcorp Marine was unchanged. A local newspaper reported speculation over a possible merger between Keppel Offshore & Marine and Sembcorp Marine.

ST Engineering, meanwhile, edged 0.6% higher after announcing on Monday that its aerospace business had secured new contracts worth about S$510 million ($375.1 million) in the second quarter of the year for services including plane servicing and engine washing.

UOL Group rose 0.9% following announcement of acquisition of 180 apartments and ancillary facilities at Jakarta's Thamrin Nine Tower 2 for $56.3 million from Indonesian developer PT Putragaya Wahana.

- Alexander Winifred and Joannah Perez

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