KUALA LUMPUR (Nikkei Markets) -- Malaysia shares Monday slipped amid sharp losses in the gaming and aviation sector following last week's budget announcement, while Singapore stocks declined as DBS Group Holdings led banks lower.
The FBM KLCI ended 0.3% lower at 1708.80. Genting Malaysia plunged over 20% on higher casino tax while Malaysia Airports Holdings fell 7.8% due to a new passenger levy. The Straits Times Index closed 1.8% lower at 3060.62 as DBS Group fell 2.7% following its weaker-than-expected earnings.
"Strong economic data from the U.S. is not helping either," said FXTM Chief Market Strategist Hussein Sayed. "For those investors hoping that the Federal Reserve may slow down the tightening of monetary policy, the non-farm payrolls report just doesn't help."
In broader Asia, the Nikkei Asia300 Index fell 1.6%. The U.S. Federal Reserve is expected to keep the benchmark interest rate unchanged on Wednesday but is widely expected to signal an increase in December following robust non-farm payrolls report.
Apart from rising U.S. interest rates, investors remain on the edge over U.S.-China trade tensions after White House economic advisor Larry Kudlow said President Donald Trump has not asked his Cabinet to put together a trade deal with China.
Still, a decade-high trade surplus helped to take some weight off Malaysia that has come under pressure from the new government's fiscal slippage. The government set this year's fiscal deficit target at 3.7% of gross domestic product, widening sharply from the initial aim of 2.8%.
"Malaysia is already one of the most vulnerable" emerging markets in a risk-off environment, Nomura Securities said, cautioning potential negative ratings action. "Overall, details of the 2019 budget show us that at this stage the risk of further fiscal slippage next year still looks high."
Apart from Genting Malaysia, shares of parent Genting also slumped and finished 6.4% lower after government raised gaming tax by 10 percentage-points to 35% of gross revenue along with other tax hikes such as annual license fees and dealer licenses.
Budget carrier AirAsia and its long-haul affiliate AirAsia X fell 1.8% and 1.9% respectively after Malaysia introduced a levy on international passengers departing the country.
In earnings news, Venture Corp. plummeted 9.3% in Singapore after disappointing results. The electronic manufacturing services firm reported a 27.5% on-year decline in third quarter net profit at S$80.8 million. Revenue dropped 27.4% to S$770.4 million.
United Industrial Corp. fell 4.4% after the residential property manager reported a 36% on-year fall in third-quarter net profit to S$59.31 million. Revenue declined 63% to S$151.91 million.
Bucking the trend, SLP Resources advanced 7.9% on upbeat results. The industrial product company more than doubled its third quarter net profit to MYR8.3 million. Revenue rose 13.7% to MYR52.2 million.
George Kent and Malaysian Resources Corporation gained 3.5% and 2.6% respectively after their 50:50 joint venture secured a contract worth MYR11.86 billion ($2.84 billion) to build light rail transit line connecting Bandar Utama and Johan Setia.
- Jason Ng and Joannah Perez