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Nikkei Markets

Malaysia shares trump post-poll jitters, end at 2-week high

Singapore shares edge lower as StarHub, Yangzijiang Shipbuilding drag

KUALA LUMPUR (Nikkei Markets) -- Malaysian shares shrugged off initial jitters from a shock poll verdict to rally Monday to a two-week high as investors drew comfort from a smooth transition of power. Singapore stocks ended lower.

The benchmark FBM KLCI ended 0.2% higher at 1850.42, led by gains in Press Metal Aluminium Holdings and PPB Group, while the Malaysian ringgit rose 0.1%. The Straits Times Index edged 0.2% lower to 3562.46, dragged by 1.8% loss in StarHub and 1.7% loss in Yangzijiang Shipbuilding (Holdings).

"I expect foreign investors to look at Malaysia with renewed interest," said Areca Capital's Chief Executive Danny Wong. "We have seen the new government has been quick to come up with basic policies that have resulted in a lot of confidence for the market."

Malaysia's financial markets, including banks, were shut on Thursday and Friday after the Alliance of Hope led by former premier Mahathir Mohamad wrested power with a simple parliamentary majority in Wednesday's stunning electoral rout.

Outside Malaysia, stock markets in Asia were largely higher tracking Wall Street's Friday gains on the back of robust U.S. corporate earnings and expectations that the U.S. Federal Reserve will raise rates at a slower pace.

Sentiment was also boosted by potential thawing in Beijing-Washington trade tensions after U.S. President Trump pledged to prevent telecom company ZTE from going out of business following his ban on American suppliers to continue business with the Chinese company.

Emerging Asia could take at least 18 months before "markets get back to where they were at the end of January 2018," Morgan Stanley said in a regional equity strategy mid-year outlook.

"The continued sideways and volatile market... is the price to be paid for overly bullish earnings expectations and valuations at the start of this year," Morgan Stanley said.

Consumer-related stocks in Malaysia rose on expectations of higher retail spending as investors brace for the new government to scrap the unpopular goods and services tax as part of its election campaign pledge. Nestle (M), the local unit of Swiss food and drink giant Nestle SA, added 4.2% while PPB Group gained 4.3%.

Genting, which operates the popular Highlands resort casino, rose 4.2%.

However, YTL plunged 12.8%. Malaysia's new government has pledged to re-evaluate major infrastructure projects in a move that analysts warned could jeopardize YTL's contracts.

Oil-and-gas transporter MISC dropped 0.9% after its first-quarter net profit plunged 54.1% from a year earlier on lower revenue from petroleum and liquefied natural gas shipping business.

In Singapore, lender DBS Group Holdings, which lost 0.9%, weighed on the index, while Jardine Cycle & Carriage fell 1.3%. The auto distributor, which went ex-dividend on May 10, had announced a final dividend of $0.68 per share.

UOL Group closed 1.3% lower after the property developer reported 8% decline in first quarter net profit. City Developments, another real estate company, also fell 1% after it reported its first quarter net profit plunged 16.3% to S$80 million on Friday.

Intel test handling machine supplier AEM Holdings added 10% to its second straight day of gains.

Casino and resorts operator Genting Singapore, which had reported a 19.92% rise in net profit in the first quarter last week, rose 1.6%. Singapore Exchange on Monday said the stock was a top institution net buy for the week started May 7.

--Alexander Winifred and Joannah Perez

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