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Stocks

Singapore, Malaysia stocks fall after Wall Street selloff

STI falls for fifth day, KLCI slumps to eight-month low

KUALA LUMPUR (Nikkei Markets) -- Singapore shares fell to three-week lows and Malaysian equities hit their lowest in eight months, tracking overnight losses on Wall Street.

Global risk appetite has wobbled in recent sessions amid uncertainties over U.S. corporate tax rate cuts and concerns over how global growth would hold up next year. China's economic data released earlier this week missed expectations, and doubts remain over whether U.S. Republicans can manage to cobble up necessary support for the tax bill.

Singapore's Straits Times Index slid for the fifth consecutive session, closing down 0.8% at 3,341.30. Heavyweight Singapore Telecommunications fell 0.8%, extending losses to 3.2% since last Friday, as the mobile phone operator remained under pressure after announcing a lower-than-expected special dividend. Wilmar International slipped 2.2%, taking losses this week to 4.8%, after reporting a decline in net profit for the September quarter.

Property developers outperformed after latest data from the Urban Redevelopment Authority showed that sales of new private residential homes (excluding executive condominiums) rose 15% in October from the previous month to 758 units.

"The primary sales momentum continues in October, despite no major launches," Credit Suisse said in a note, adding that it estimates primary sales to rise 38% in 2017 to 11,000 units.

City Developments added 0.6% and CapitaLand ended little changed. Earlier on Thursday, CapitaLand said it is developing a residential project for $177 million in Vietnam's Ho Chi Minh City.

Jardine Cycle & Carriage ended little changed after the conglomerate said it had bought another 36 million shares in Vietnam's largest dairy group Vietnam Dairy Products, increasing its stake to around 8%. Shares of Vietnam Dairy Products closed up 0.8% in Ho Chi Minh.

Singapore Airlines dipped 1.2% despite reporting a 4.1% increase in load factor and a 9.3% rise in passengers carried in October.

Singapore Post rose 1.6% to S$1.30, reversing Wednesday's losses. OCBC Investment Research raised its fair value estimate to S$1.26 as it rolled forward its valuations.

The Bursa Malaysia KLCI index lost 0.3% to 1,718.11, marking its fifth consecutive day of decline.

"We see regress to a foreign selloff, which could wipe out the KLCI's gains since the beginning of last year," said Pong Teng Siew, director at Inter-Pacific Securities in Kuala Lumpur. "Sentiment has been dragged by poor earnings growth, amid a prolonged slow recovery in oil prices."

Mobile network operator Axiata Group was the worst performer on the index, falling 2.6% ahead of third-quarter earnings due on Nov. 23. On Wednesday, CIMB Investment Bank said it expected Axiata to report a 46% drop in net profit, dragged by weak earnings at units Robi, Ncell and Idea.

Rival Digi.Com dropped 0.9% on concerns it would be removed from the Securities Commission's list of stocks that meet Sharia-compliant investment guidelines. Though such a removal won't affect the company's fundamentals, it "may exert some selling pressure on the stock," Hong Leong Investment Bank analyst Tan J. Young wrote in a note.

Sime Darby, the world's largest palm oil producer by acreage, ended unchanged despite saying that its first-quarter net profit nearly tripled. The jump in net income was aided by the sale of 40% in one of its property units and an industrial asset in Australia.

Petronas Dagangan, a state-owned gasoline retailer, rose 1.2% after Malaysia's second financial minister said the government does not plan to re-introduce fuel subsidies despite this year's 13% rise in pump prices. Analysts say a subsidy could heighten risks of impairments for Dagangan, affecting the company's cash flow, as was the case in the past. The government scrapped blanket fuel subsidy at the end of 2014 as global crude oil prices plunged.

Outside of the benchmark index, Sapura Energy climbed 1.4% after saying it won contracts worth a combined value of about 1.47 billion ringgit ($351 million).

Privasia Technology added 3.1% after receiving a contract worth 2.05 million ringgit from Lumut Maritime Terminal. Omesti dropped 6% after the information technology service management company said it planned to raise up to 25.70 million ringgit via a 10% private placement.

Kossan Rubber, a glove manufacturer, rose 5.7% to near two-year highs ahead of its earnings due on Nov. 24. Maybank Investment Bank analyst Yen Ling Lee upgraded the rating on the stock to `buy,' citing capacity growth and tight supply of gloves.

--Alexander Winifred and Nimesh Vora

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