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Nikkei Markets

Malaysia stocks eke out weekly gains, Singapore equities fall

Investors remain cautious amid US-China trade talks

KUALA LUMPUR (Nikkei Markets) -- Malaysia shares held onto weekly gains while Singapore stocks slipped as investors remained cautious amid ongoing trade disputes between the U.S. and China.

The FBM KLCI index ended relatively unchanged at 1,854.50 on Friday, but gained 0.4% for the week. The Straits Times Index lost 1.2% this week after closing 0.2% lower at 3,529.27 for the day, dragged down by industrial stocks.

"I still expect some volatility in the market," said Yap Pin Keat, head of portfolio management at Fortress Capital Asset Management. Next week, investors will be "back to basics" on longstanding issues such as U.S. monetary policy and China-U.S. trade talks, he said.

The U.S. and China are trying to resolve a tariff standoff that has seen each side threatening duties on billions of dollars' worth of goods which the world fears could spark a damaging trade war.

On Thursday, President Donald Trump said he doubted high-level U.S.-China trade negotiations would be successful even as a delegation was in Washington for the second and last day of talks. China will offer Trump a trade deficit reduction package close to US$200 billion annually, Reuters reported.

Crude oil prices hit $80 a barrel on Thursday for the first time in about four years, easing concerns about Malaysia's fiscal health at a time when the new government is planning to dish out a slew of populist measures that includes abolishment of toll and consumption tax.

"Rising energy price is considered positive for this net oil exporter amidst confidence that growth will hold up above 5% this year," DBS equity strategist Joanne Goh wrote in a note on Friday. "We see the KLCI pushing higher to 1,950 by year-end."

Toll concessionaires plunged Friday, weighed by a 26.9% drop in Lingkaran Trans Kota Holdings that led to a freeze on short-selling activities for the stock. Lingkaran's major shareholder Gamuda dropped 5.5%, while Ekovest lost 5.1%.

Consumer stocks rose for a second day. Nestle (M), a unit of the Swiss food and beverage giant, rose 2.1%, while Dutch Lady Milk Industries added 1%. Brewers also rose, with Carlsberg Brewery Malaysia and Heineken Malaysia adding 3% and 2.6%.

Singapore Airlines, which reported on Thursday that it swung to a net profit for the fourth quarter, rose 3.8%. On Friday, the flag carrier also said its wholly owned regional carrier SilkAir will be merged into the main company after an upgrade in the cabins of a number of aircraft.

STI component CapitaLand Commercial Trust edged down 0.6% after the largest Singaporean commercial trust by market value and CapitaLand announced acquisition of a commercial property at an agreed property value of 356 million euros ($420.5 million).

Yangzijiang Shipbuilding and Hutchison Port Holdings Trust fell 4.5% each.

Oversea-Chinese Banking Corp. dropped 1.4%. The bank's stock went ex-dividend on Friday, paying 19 Singapore cents per share as final dividend for the full year ended December 2017.

-- Alexander Winifred and Joannah Perez

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