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Asia300

Singapore, Malaysia near flat ahead of Fed rate call

SINGAPORE (NewsRise) - Shares in Singapore and Malaysia ended little changed on Tuesday, as investors stayed on the sidelines ahead of the Federal Reserve's two-day policy meeting.

Singapore's FTSE Straits Times Index fell 0.1% to 3,143.40 points. The index is up more than 9% in 2017 so far.

"Our view remains for the current year-to-date rally to pause. We peg a short-term range from 3050 to 3150," said Yeo Kee Yan, an analyst at DBS Equity Research. "Any attempt to break above 3150 will not sustain in the short-term as resistance at the 3200 level is formidable. Equity markets may have to get past the March FOMC meeting and the April French elections before resuming their climb."

The FTSE Bursa Malaysia added less than 0.03% to 1,722.47 after trading in a narrow range Tuesday. Most other Asian markets posted modest gains, with the Nikkei Asia300 Index rising 0.9% to 1,140.72.

The U.S. central bank is widely expected to raise rates by 25 basis points at its policy review that concludes Wednesday. Investors keenly await any indications about the future pace and timing of tightening. The Fed raised rates in December and signaled the possibility of three increases this year.

"The progressive improvement in labor market conditions and the lift in inflation rates in the U.S. certainly validate the Fed's move this week," said Jingyi Pan, market strategist at IG. "Concerns are of acceleration in the Fed's path to normalization, where the likelihood of four fed hikes have been raised, up from the current projection of three."

In Singapore, City Developments, up 9% in the last two sessions after the government eased property cooling measures, fell 1.8% to S$10.31. CapitaLand slipped 0.8%, while UOL Group shed 1%.

Huge crowds that gathered at property showrooms over the weekend did not result in a significant increase in sales amid likely caution ahead of the Fed's interest rate decision this week, The Straits Times newspaper reported.

Interest rates in Singapore tend to follow direction set in the U.S. as the Monetary Authority of Singapore does not set benchmark rates, but targets the exchange rate instead.

Rig builder Keppel Corp. extended Monday's 1.6% slide to fall 2.2% to S$6.60 after U.S. crude prices dropped to fresh three-month lows overnight.

Capitaland Mall Trust ended 0.5% lower. Late Monday, the company said its unit had issued S$100 million ($70.6 million) fixed rates notes due 2023 to institutional and sophisticated investors.

Yangzijiang Shipbuilding Holdings ended unchanged at S$1.1, after falling 1.4% intraday. Nomura downgraded the stock to Reduce from Neutral. Yangzijiang shares are up 20% in March so far, supported by robust fourth-quarter earnings and expectations the company will benefit from China's plans to strengthen reform in state-owned enterprises.

In Malaysia, construction company IJM Corp fell 1.8% to 3.35 ringgit. Petronas Dagangan shed 1.6%, while SapuraKencana Petroleum ended 1.6% lower.

IHH Healthcare snapped a three-session losing streak to close 0.5% higher at 5.87 ringgit.

Genting rose 1.8% to extend year-to-date gains to more than 20% amid optimism over Genting Malaysia and Genting Plantations' earnings.

POS Malaysia slid 3% to 4.50 after Nomura cut its target price on the stock to 5.16 ringgit from 5.58 earlier.

TRC Synergy jumped 5.8% after it said late Monday that a unit was awarded an 858.2 million ringgit ($192.9 million) contract from Mass Rapid Transit Corp.

The ringgit slipped 0.1% against the dollar to 4.448. Malaysia's central bank said earlier Tuesday that it expects a net bond issuance of 80 billion ringgit this year.

--Kevin Lim and Nimesh Vora

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