Singapore, Malaysia shares slip ahead of US rate decision
SINGAPORE (NewsRise) - Shares in Singapore and Malaysia fell on Wednesday, as investors braced for a near-certain U.S. Federal Reserve rate increase and awaited clarity on the future pace of monetary tightening in the world's largest economy.
Singapore's FTSE Straits Times index slid 0.2% to 3,137.43 and the FTSE Bursa Malaysia KLCI declined 0.3% to 1,717.36. Most other Asian markets also fell Wednesday, tracking losses on Wall Street overnight. The Fed, which has raised rates only twice in the last decade, previously signaled it could increase U.S. borrowing cost thrice in 2017, but investors are now readying for possible indications of a faster pace of tightening. The Nikkei Asia300 index was flat at 1,140.80.
"A U.S. rate rise is now baked in to the market cake, with a small number of analysts now suggesting 0.5% is a risk," said Michael McCarthy, chief market strategist at CMC Markets. "Any increase on the current indications of a further three hikes this year could disrupt equity markets."
Real estate-related stocks were among losers in Singapore, with City Developments falling 0.8% to S$10.23, UOL Group slipping 0.6% to S$6.83 and Ascendas Real Estate Investment Trust shedding 0.8% to S$2.47. Property developers received a shot in the arm last week after the city-state's government announced measures to ease property cooling measures.
Data released by the Urban Redevelopment Authority on Wednesday showed developers in Singapore sold 977 private homes last month, more than two and half times the 382 units they sold in January and the 367 units transacted in December 2016. UOL's Clement Canopy in western Singapore, which moved 207 units at a median price of 1,343 Singapore dollars ($951) per square foot, was the top-selling project for the month.
Rig builder Sembcorp Marine fell 0.8% to S$1.85 as U.S. crude prices slipped overnight for the seventh straight day. The benchmark U.S. oil contract was last up 1.7%.
Hutchison Port Holdings Trust reversed Tuesday's entire advance to slide 2.5%. Yangzijiang Shipbuilding Holdings slipped 0.5%, but remains up 19% for the month so far.
Struggling oilfield services company Ezra Holdings, which has lost almost four-fifth of its value this year, requested a trading halt earlier Wednesday. The stock was unchanged at S$0.11 prior to the halt.
Oversea-Chinese Banking Corporation advanced 0.3%. The lender said its 500 million euro ($532 million) covered bonds will bear a fixed interest of 0.25% and are expected to be listed on SGX-ST on March 22.
The benchmark KLCI index, which is headed for a fourth straight monthly advance, is facing some selling pressure around 1728 levels, Loui Low Ley Yee, an analyst at Hong Long Investment Bank said. If "it violates below the 10-day simple moving average at 1718, a further pull back may be seen towards the 1,700 level," he added.
SapuraKencana Petroleum, hurt by the fall in crude prices, slipped 1.1% to 1.80 ringgit. After markets closed Wednesday, the oil and gas major said its unit SapuraKencana Onshore sold 60% of its equity interest in King Hang Engineering for five million Hong Kong dollars ($643,600).
UMW Oil & Gas advanced 3.2% after saying late Tuesday that it was awarded a contract to provide a jack-up drilling rig to British oil company Petrofac.
"The announced contract will help UMWOG to achieve higher year-on-year rig utilization. However, the contribution from the contract is expected to be minimal and not material to turnaround the group's expected loss making in 2017 given its short tenure," said Lim Sin Kiat, an analyst at Hong Leong Investment Bank.
--Kevin Lim and Nimesh Vora