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Nikkei Markets

Singapore shares rebound, Malaysia slips

Investors still cautious as dollar denominated assets preferred

KUALA LUMPUR (Nikkei Markets) -- Singapore shares rebounded Monday, tracking gains in other Asian stock markets after data showed faster U.S. job growth while the jobless rate fell to an 18-year low. Malaysia shares slipped.

The Straits Times Index closed 1.2% higher at 3467.48, snapping a three-session losing streak, after 26 out of 30 index stocks advanced. The FBM KLCI meanwhile edged 0.1% lower at 1755.17 as decline in telecom and plantation stocks offset a rally in the banking sector.

"The outlook does not look very exciting" in Singapore despite the gains, said Jake Damien Chow, a market strategist at CIMB. "Global funds also appear to have their hands-tied as for every dollar of assets, half of that allocation is going to the U.S."

Equities jumped across the region on Monday, taking cues from Wall Street, where all three U.S. equity benchmarks recorded solid gains on Friday after the release of monthly government jobs data. The May report showed that the number of jobs increased by 223,000, with hourly wages also edging higher and the unemployment rate dropping to an 18-year low. The strength of the U.S. labor market helped lift investor sentiment even as the data bolstered expectations that the Federal Reserve will raise interest rates later this month.

Investors are more cautious in Malaysia as "it will take some time for investors to get up to speed" with the new administration, said Saxo Bank's global macro strategist Kay Van-Petersen. "I'm expecting short-term pain, but medium to long term gain." In Singapore, most blue chips rose, led by banks. DBS Group Holdings and United Overseas Bank closed 1.8% and 1.7% higher, respectively. Oversea-Chinese Banking Corp. climbed 1.9%. CapitaLand, which said Friday that president and group chief executive Lim Ming Yan will retire effective Dec. 31, rose slightly by 0.3%.

Manufacturers Venture Corp and Hi-P International also climbed 2.5% and 2.9%, respectively, ahead of the release of manufacturing PMI data for May.

Home-grown technology hardware maker Creative Technology rallied 11.2%.

In Malaysia, banking stocks rose for a second consecutive session helped by better-than-expected April loans data. AMMB Holdings rose 4.4% while RHB Bank added 3.0%.

Software company My E.G. Services plunged 20.4% amid news reports that Malaysia's Immigration Department will terminate the company's rehiring service by June 30.

Econpile Holdings added 5.3% after securing a piling works contract from KL Gateway for an apartment project.

--Alexander Winifred and Joannah Perez

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