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Singapore, Malaysia stocks post weekly gains as global equities rally

Markets in positive territory on bets of upbeat world economic growth

KUALA LUMPUR (Nikkei Markets) -- Shares in Malaysia and Singapore rose this week, as a global equity rally amid upbeat growth outlook showed no signs of slowing.

The Straits Times Index in Singapore rose 0.9% this week and the FTSE Bursa Malaysia KLCI index added 0.3%. On Friday, the benchmark indexes rose 0.2% to 3,520.56 and 0.3% to 1,822.67, respectively.

The weekly advance in the Southeast Asian markets came alongside gains on Wall Street. The upbeat economic data from China and the U.S. last week prompted investors to bet on another good year for risk assets. The S&P 500 Index is already up 3.5% this year through Thursday, while the Nikkei Asia300 Index of companies outside Japan has rallied 3.8%.

Despite the upbeat growth prospects, inflation in major economies remains quite modest, providing additional support to risk assets. Earlier this week, China's consumer prices increased less-than expected, and data released overnight revealed that producer prices in the U.S. unexpectedly declined month-on-month.

"We see 'stronger for longer' economic backdrop and absence of inflationary pressures should support the recovery running beyond our standard forecast horizon to, at least, 2020," Morgan Stanley said in a research note.

KLCI's sixth consecutive weekly advance was helped by robust foreign fund inflows and speculation over the national elections. Foreign investors have bought a net 1.5 billion ringgit ($377.7 million) worth of Malaysian stocks so far this year through Thursday.

Plantation stocks were among the top performers this week after Malaysia announced it would suspend duty on export of palm oil for three months beginning Jan. 8 in a bid to halt the dip in prices of the commodity. Kuala Lumpur Kepong and Hap Seng Consolidated have advanced 1.2% and 1.4% since last Friday.

AMMB Holdings rose 3.5% this week after the lender announced a restructuring that analysts said could involve up to 2,000 job cuts.

On Friday, Kepong added 0.2%, Hap Seng advanced 1.4%, and AMMB rose 3.2%.

RHB Bank rose 0.8% on Friday after Bloomberg reported that the lender may see the exit of substantial shareholder Mubadala Investments Co.

Oil-and-gas company Sumatec Resources jumped 7.7%. Its joint venture partner Markmore entered a long-term deal to sell natural gas to a Kazakhstan state entity, according to a report in the Focus Malaysia newspaper.

In Singapore, United Overseas Bank was among the week's top performers, rallying 3.6%. Keppel Corp. has added 2.8% since last Friday, supported by the rise in Brent crude oil prices to three-year highs.

Real Estate Investment Trusts underperformed this week with CapitaLand Mall Trust leading losses, with a fall of 1.9%. The current valuation of REIT's is the least compelling over the past two years, according to Credit Suisse.

On Friday, UOB rose 0.6%, Keppel Corp. advanced 1%, and CapitaLand Mall Trust slipped 1%.

--Alexander Winifred and Joannah Perez

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