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Nikkei Markets

Malaysia shares gain as banks advance, Singapore also rises

Investors pick up dividend stocks to weather trade disputes

KUALA LUMPUR (Nikkei Markets) -- Malaysia shares climbed Thursday led by banks although lingering concerns over escalating U.S.-China trade tensions capped sharp gains. Singapore stocks also rose slightly.

The FBM KLCI ended 0.9% higher at 1703.57 as Malayan Banking (Maybank) advanced 3.9%. In Singapore, the Straits Times Index was up 0.1% at 3253.01 with Genting Singapore and Jardine Strategic Holdings leading gainers.

Investors should buy dividend-yielding stocks in sectors such as telecom and banking, said Danny Chang, head of managed investments at Standard Chartered. "Dividend yields are fairly attractive in Malaysia compared to the rest of Asia" to ride out trade tension and the strong U.S. dollar, he said.

Despite Thursday's gains in Asia, investors remain worried about fallout from the escalating trade war that shows no signs of easing. The U.S. Department of Commerce on Wednesday said it was starting a new anti-dumping investigation on imports of steel racks from China.

That comes after Washington earlier this week threatened to impose tariffs on an additional $200 billion of Chinese goods after a public consultation period due to end on Aug. 30. China has vowed to retaliate against any new tariff that could be imposed.

Investors recognizes the fact that the latest U.S. tariffs still have to go through a consultation period, said IG Asia Market Strategist Jingyi Pan. "Nevertheless, participation appears to remain low in Asian markets with a strong sense of caution guiding investors."

IHH Healthcare rose 1.2% ahead of Friday's decision by takeover target Fortis Healthcare that's weighing offers from IHH and Manipal Hospitals-TPG. The Economic Times reported late Wednesday, citing unidentified people, that IHH was likely to win the bid.

Hartalega Holdings and Kossan Rubber rose 5.7% and 3.8% after the U.S. said it plans to impose tariffs on Chinese medical glove imports.

George Kent (M) and Malaysian Resources Corp. surged 30% and 28%. The two companies are project delivery partners for Malaysia's Light Rail Transit 3 project, which the government allowed to progress after sharp cost cuts.

Bucking the trend, power producers fell after Malaysia announced a review of independent power production contracts. While the government didn't identify the contracts involved, Tadmax Resources plunged 8.3% while YTL Power International declined 0.9%.

In Singapore, most finance stocks extended gains. United Overseas Bank rose 0.3% while Singapore Exchange added 0.7%.

Real estate developer-and-investor Capitaland rose 1.3% amid report that it has pulled out of talks to buy tech parks in India backed by US-based Blackstone. The size of the deal between the two was expected to be around $320 million, the Business Standard reported.

Oil and gas services firm Keppel Corp. slipped 0.5% amid broader concerns over oil prices as incoming supply could grow faster than global demand. In Malaysia, Sapura Energy fell 0.8%.

- Alexander Winifred and Joannah Perez

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