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Singapore stocks rise to two-month highs, Malaysia shares edge higher

Faster-than-expected economic growth in city-state boosts STI

KUALA LUMPUR (Nikkei Markets) -- Singapore stocks rose Friday to new two-month highs after the city-state's third-quarter economic growth beat estimates. The index also clinched its second consecutive weekly gains, helped by property developers.

Malaysia stocks edged higher for the day, but posted weekly losses.

Singapore's FTSE Straits Times index rose 0.5% to 3,319.11, its highest since Aug. 7, on Friday. For the week, it gained 0.8%.

The economy expanded 4.6% in the third quarter from a year earlier on the back of a strong showing by the manufacturing sector, advance estimates released by the Ministry of Trade and Industry showed. The growth was faster than the 3.8% estimated by economists in a Reuters poll and quicker than 2.9% in the prior quarter.

"The manufacturing sector remains in the driving seat," DBS Group Research said in a note. "Yet, the main story behind the GDP numbers is that recovery is broadening out. This can be seen from the turnaround in the services sector."

According to the data, services expanded 2.6% on-year in the quarter, up from 2.5%.

Also on Friday, the Monetary Authority of Singapore maintained its neutral stance in the half-yearly policy review, as widely expected. The slope, center point, and width of the MAS's policy band were all kept unchanged. Singapore manages its monetary policy by letting its currency rise or fall against the currencies of its main trading partners within an undisclosed trading band.

The Singapore dollar was last trading down 0.2% to 1.3545 against the U.S. currency.

Real estate developers were the best performers on the STI on Friday and for the week.

City Developments advanced 3.7% on Friday, taking its rally this week to 9.1%. It was the best weekly performance since 2011, prompted by a buyout bid for its U.K. subsidiary Millennium & Copthorne Hotels, and continued favorable outlook for the residential market.

On Friday, Macquarie raised its estimates for residential prices and sales.

"We raise our residential price forecast to 3-5% p.a. over the next two years versus a flat outlook previously. We estimate annual demand of about 11,000 units this year, 45% higher than the 3-year average of 7,600 units," it said in a note.

UOL Group rose 2.2% and CapitaLand added 1.4%. For the week, the stocks were up 4% and 1.4%, respectively.

Keppel Corp., with business interest ranging from property to rig building, jumped 4.1% to S$7.07 to take its advance this week to 5.8%. CIMB Investment Bank upgraded the stock to "add" and raised its target price to S$8.58.

"Keppel is a safe stock to own to ride the bottoming offshore & marine cycle and the upcycle of Singapore's residential market, thanks to its early land bank inventory," it said.

The Bursa Malaysia KLCI rose 0.1% to 1,755.32 on Friday. For the week, it lost 0.5%. Gaming conglomerate Genting was among the week's worst performer, down 2.5%.

The Bursa Malaysia Technology index climbed 0.8% on Friday to multiyear highs. RHB Investment Bank reiterated its "Overweight" call on the sector, saying the current bullish sentiment will likely persist.

Rubber glove producer Top Glove Corp. climbed 1.3% on Friday after its net profit surged 51% in the fourth quarter and the company said it planned to acquire a packaging material firm to improve its supply chain.

Perak Transit, a provider of transportation services, jumped 12% amid speculation that it will soon announce a listing transfer from the ACE market to the main board. The company's Chief Finance Officer John Loh told Nikkei Markets last month that Perak Transit aims to transfer its listing to main board of Kuala Lumpur stock exchange by mid-2018.

--Alexander Winifred and Nimesh Vora

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