KUALA LUMPUR (Nikkei Markets) -- Singapore shares climbed to fresh 10-year highs, led by mobile phone operators and Genting Singapore. Malaysian stocks ended little changed as investors awaited the central bank's monetary policy review.
The Straits Times Index advanced 0.5% to 3,609.24, the highest since November 2007. Singapore Telecommunications advanced 0.8% and StarHub rose 0.7%. The city-state's third mobile operator M1 ended almost unchanged at S$1.87 after reporting that December-quarter net income was little changed from a year earlier. Nomura upgraded M1 to `neutral' and raised its target price to S$1.78.
Casino operator Genting Singapore added 4.5%, making it the top performer on the benchmark gauge.
"Positive earnings from its regional peers are likely behind the rally in Genting Singapore, ahead of the release of its own results next month," said Jingyi Pan, a market strategist at broker IG Asia. "The stronger-than-expected fourth-quarter earnings by Wynn Macau is probably inspiring bullish sentiment."
Shares of Hong Kong-listed Wynn Macau closed up 0.7%, adding to Tuesday's more than 6% gains after its December operating earnings exceeded expectations.
City Developments lost 0.2%. The property developer said late Tuesday it will provide minority shareholders an additional three days to accept its takeover offer for the U.K.-listed Millennium & Copthorne Hotels.
Capitaland Mall Trust advanced 1.5% after reporting a distribution per unit (DPU) of 2.90 cents for the December quarter, 0.7% higher from a year earlier. Property income rose 2.6% in the period.
Suntec Real Estate Investment Trust dropped 0.9%. It reported a DPU of 2.604 cents, 0.3% higher than a year ago. Net property income declined 2.1%.
In Malaysia, the FBM KLCI ended little changed at 1,837.04. Petronas Gas was the top loser with a fall of 2.5%, while leisure and hospitality company Genting Malaysia advanced 2%.
Analysts are advising investors to be cautious as the benchmark index is poised for the ninth consecutive weekly advance. The gauge is hovering near its highest level in more than two-and-half years.
"Prepare to average down if you invest in today's environment," Affin Hwang Asset Management Managing Director Teng Chee Wai said in Kuala Lumpur. "At current level, it's probably not the most ideal time to buy in."
Loui Low, the head of retail research at Hong Leong Investment Bank, wrote in a note that technical indicators suggested that the `key index is overbought.'
CIMB Group Holdings, Malaysia's second-biggest bank by assets, rose 0.7%.
UOB Kay Hian Securities expects the lender's earnings to rise 15.3% in 2018, compared with 7.2% for the rest of the sector.
"Considering the rise in provisions and moderating earnings growth, banks with strong asset quality traits like Public Bank and BIMB Holdings, and above-sector growth outlook like CIMB should outperform," analyst Keith Wee said in a note to clients.
Shares of Public Bank and BIMB ended little changed on Wednesday.
DiGi.Com, one of Malaysia's largest telecommunication companies, fell 0.2%. TA Securities analyst Wilson Loo downgraded the stock to `hold,' lowering his estimate for DiGi's earnings in 2018 by 1.5%. The mobile operator on Tuesday had reported a 3.9% drop in net profit for the December quarter.
On the economic data front, Malaysia's headline inflation rose 3.5% year-on-year, in line with expectations.
"With both external and domestic demand conditions supportive of growth and inflationary pressures set to remain, we expect Bank Negara Malaysia to increase the overnight policy rate by 25 basis points to 3.25% tomorrow," ANZ economists Radhika Piplani and Sanjay Mathur wrote in a note on Wednesday.
ANZ's expectations on the rate increase are concurred by a majority of participants in a Nikkei Markets poll. The central bank has kept the benchmark interest rate unchanged at 3% since lowering it by 25 basis points in July 2016.
Hartalega Holdings, Malaysia's largest glove maker by market capitalization, dropped 3.4%. The company's current valuations "have largely priced in its strong earnings growth and the favorable operating environment," CIMB Investment Bank analyst Walter Aw wrote in a note.
GFM Services jumped 4.6% amid speculation the company was going to announce an acquisition as early as this week. Company officials weren't immediately available for comment.
Samchem Holdings, a distributor of chemical products, rose 20.8%. The company said Tuesday it is considering listing of one of its units in Vietnam's stock exchange.
--Alexander Winifred and Joannah Perez