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Singapore shares fall as key lenders decline, Malaysia stocks gain

OCBC, UOB drop after earnings, GDP data buoys KLCI

KUALA LUMPUR (Nikkei Markets) -- Singapore shares fell Wednesday, dragged down by United Overseas Bank and Oversea-Chinese Banking Corp. after quarterly earnings.

Malaysian equities edged higher after better-than-expected economic growth data.

Singapore's Straits Times Index dropped 0.4% to 3,402.86. OCBC shed 2.5% and UOB fell 2.2%.

Earlier in the day, OCBC reported a better-than-expected 31% increase in net profit for the December quarter. UOB, the smallest of the three lenders on the STI, reported a 16% increase for the same period, slightly below expectations of analysts polled by Reuters. Both the banks continued to be cautious on their exposure to oil and gas companies, saying they made further allowances for their exposure to the sector.

DBS Group Holdings continued its outperformance following last week's proposed increase in dividend payout. The city-state's biggest lender rose 1.5%.

Singapore Airlines was the day's top performer on the STI, rising 5% after its third-quarter net profit increased by about 62% on year.

"Singapore Airlines should benefit from strong travel demand, thanks to the synchronized global economic recovery," DBS Equity Research said in a note. "With full-year earnings poised to more than double, we see room for the airline to raise its dividend payout to 40 Singapore cents from 20 Singapore cents a year ago, which implies a dividend yield of 3.8%."

ComfortDelGro Corp. edged higher by 0.5% after falling earlier in the day. The transport operator reported a 4.9% decline in net profit for 2017, weighed by weak contributions from all core businesses except the public transport segment.

Ground handler SATS lost 1% after third quarter group net profit rose 2.3%.

Meanwhile, earlier Wednesday, a report by the country's trade ministry showed that Singapore's economy expanded 3.6% last year, a tad faster than the earlier estimate of 3.5% and higher than the 2.4% in 2016. For the current year, the report forecasts economic growth in a range of 1.5% to 3.5%.

Over in U.S., markets continued to recover with the S&P 500 Index rising for the third day. The U.S. January consumer price index data is due for release later Wednesday and will be closely watched in the wake of recent volatility in long-term Treasury yields.

In Malaysia, the FBM KLCI closed 0.1% higher at 1,834.93. Earlier in the day, data showed that the third-largest Southeast Asian economy grew 5.9% between October and December, faster than the median estimate of 5.55% predicted in a Nikkei Markets survey of economists. Growth in the fourth quarter was powered by domestic demand and private consumption.

Genting and Genting Malaysia, considered a proxy for global fund inflows by virtue of their large foreign shareholding, rose 0.7% and 1.5%, respectively. Malaysia's stock exchange recorded foreign fund inflows of 112.7 million ringgit ($28.7 million) on Tuesday, ending a six-session streak of outflows.

Axiata Group, the nation's largest telecommunications company by market capitalization, fell 0.2% after saying it expects to book a loss of 151.5 million ringgit due to the dilution of its stake in India's Idea Cellular.

British American Tobacco (Malaysia) slumped 10% to a seven-year low. The cigarette maker had reported a 74% drop in fourth-quarter earnings late Tuesday, dragged by a tax-related impairment charge.

Oil-and-gas exploration firm Hibiscus Petroleum jumped 16.9% after Managing Director Kenneth Pereira told Bloomberg that earnings could "more or less" double, following the acquisition of a 50% stake in a North Sabah oilfield.

Steel companies advanced for a second day after CSC Steel, a unit of Taiwan's China Steel Corp., said its earnings more-than-doubled in the fourth quarter. Ann Joo Resources, Malaysia's largest steelmaker by market capitalization, added 0.8%, while trading rival Hiap Teck Venture rose 5.3%.

--Alexander Winifred & Joannah Perez

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