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Stocks

Singapore, Malaysia stocks little changed on slowdown in China services

Mixed jobs data in the U.S. also damps investor sentiment

KUALA LUMPUR (Nikkei Markets) -- Shares in Singapore and Malaysia ended little changed on Monday after services activity in China, the largest trading partner of the two nations, declined to a near two-year low, damping investor sentiment.

The China Caixin-Markit services purchasing managers' index (PMI) fell to 50.6 in September from 52.7 in the previous month. The private survey reading was at the lowest in 21-months and in contrast to last week's official data, which showed that services activity rose to the highest since May 2014. The Caixin survey concentrates more on small and medium sized companies, while the official one is more focused on large firms.

The cues out of the U.S. were tepid with benchmark indexes closing almost unchanged on Friday after a mixed September jobs report. While official data showed that the U.S. economy lost 33,000 jobs last month, the unemployment rate dropped and hourly wage growth picked up.

Singapore's FTSE Straits Times index ended little changed at 3,291.56. Engineering and financial services conglomerate Jardine Matheson Holdings was the day's top loser, declining 1.4% while Sembcorp Industries was the best performer with a 3% gain.

"The STI clearly broke above various top side resistances last week and upside towards 3,308 is being eyed," said Jingyi Pan, a market strategist at Melbourne-based broker IG. "The focal point for markets this week will be Friday's third-quarter gross domestic product and MAS (Monetary Authority of Singapore) meeting decision."

The city-state's monetary authority is widely expected to leave its exchange rate policy unchanged. Moody's Analytics expects Singapore's GDP growth to increase to 3.4% in the September quarter from 2.9% in the previous three months.

Sembcorp Marine jumped 4.6% after saying late Friday that its unit agreed to sell nine jack-up drilling rigs for $1.3 billion. Shares of Sembcorp Industries, parent of Sembcorp Marine, advanced 3%.

City Developments rose 1.2% after saying on Monday that it had reached an agreement with the independent directors of its U.K.-listed subsidiary Millennium & Copthorne. As per the pact, the Singapore developer will make a possible offer of 552.5 pence a share for the stock it did not own, valuing the U.K. hotelier at 1.79 billion pounds ($1.38 billion). Shares of Millennium & Copthorne were trading up 21% to 554.5 pence on Monday in London trading.

SIA Engineering Co. ended unchanged. It inked a pact with Air India Engineering Services, a unit of India's state-owned carrier, to provide maintenance, repair and overhaul (MRO) services in the south Asian nation.

The FTSE Bursa Malaysia KLCI ended little changed at 1,764.03. Leisure and hospitality company Genting Malaysia, up 1.7%, was Monday's top performer, while gaming conglomerate Genting suffered the day's biggest fall of 1.2%.

Global investors sold 53.6 million ringgit ($12.68 million) of Malaysian equities on Friday, bringing total net outflows during last week to 82.6 million ringgit, compared with about one billion ringgit in the previous week. 

DRB-Hicom advanced 1.7% after the conglomerate said late Friday that its automotive unit had received a research and development grant of 1.1 billion ringgit from the government.

Media Prima climbed 4.2% amid speculation that the upcoming budget and general elections would provide a boost to company earnings. Malaysia's government will likely announce its 2018 fiscal budget by the end of this month, the last before a general election seen as critical for the ruling party.

Straits Inter Logistics rose 1.7% to 0.28 ringgit. Rakuten Trade started the coverage of the stock with a "buy" rating and a 0.31 ringgit target price. The broker said it expects Straits' earnings per share to grow 130% in financial year 2018 as the company positions itself as the provider of premium oil bunkering services to bulk transporters, oil and gas vessels, cruise ships and ferries. 

Superlon Holdings, which makes components for heating and air-conditioning systems, dropped to 2.21 ringgit, its lowest since July. Shares of Superlon have fallen 21% since it reported a 41% on-year drop in net profit on Sep. 27.

-- Alexander Winifred and Nimesh Vora

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