KUALA LUMPUR (Nikkei Markets) -- Singapore stocks rose to the highest in two months on Thursday, as banks gained ahead of the monetary policy decision and Singapore Press Holdings advanced after earnings. Malaysia shares fell for a third day.
Singapore's FTSE Straits Times index advanced 0.7% to 3,303.09, the highest since August 14. Oversea-Chinese Banking Corp., United Overseas Bank, and DBS Group Holdings rose by 0.7% or more. Singapore Press Holdings added 1.1% after reporting a 32% increase in net profit for 2017 fiscal year ended Aug. 31.
The Monetary Authority of Singapore will hold its semi-annual policy review on Friday. The central bank, which uses exchange rate as its main tool, is widely expected to stick to its neutral policy stance. The main focus for investors will be whether MAS maintains its guidance to keep the stance for an extended period of time.
"In contrast to some market participants, we do not see the urgency to abandon this guidance," DBS Group Research said in a note. While the economy is recovering from a prolonged slowdown, it is not staging a `V-shaped' rebound and consumer price inflation has been soft since the last MAS review in April, DBS said in a note.
The advance estimate of third-quarter gross domestic product growth will also be released on Friday. DBS pegged Singapore's economic growth at 4.7% for the September quarter.
In economic data released on Thursday, Singapore retail sales rose by 3.5% in August, according to the Department of Statistics.
The Bursa Malaysia KLCI declined 0.2% to 1,754. Hospital operator IHH healthcare was the day's top loser, declining 2.4%, as it reversed most of Wednesday's advance.
"Persistent foreign selling on blue chips may continue to drag the local benchmark lower," TA Securities said in a note. "Immediate support for the index will be at the recent low of 1,750, while the crucial 200-day moving average support is at 1,740."
On Wednesday, foreign investors pulled out 21.3 million ringgit ($5.1 million) from Malaysian equities. They have pulled out more than $350 million in the three weeks through last Friday, according to data by MIDF Research.
Zhulian Corp. climbed 9% after the costume jewelry company said net profit doubled in the third quarter. Key Asic, engaged in the application-specific integrated circuit (ASIC) design services, jumped 63% after saying that it's carrying out a corporate exercise. The company did not elaborate.
Perak Transit, a provider of transportation services in Malaysia, advanced 1.7% to 0.29 ringgit. TA Securities initiated the stock's coverage with a "buy" call and a target price of 0.44 ringgit, citing expected increased in its core earnings for the financial year 2018 and lower valuations as compared with its peers.
George Kent (Malaysia) added 1.9% to 3.29 ringgit. RHB Investment Bank said the company's bid for East Coast Rail Link work was progressing well. RHB maintained its "buy" call and target price of 3.78 ringgit for the stock.
Dialog Group fell 1.8% to 2.16 ringgit after Maybank Investment Bank cut its rating on the engineering services company's stock to "hold."
Malaysia's largest glove makers Top Glove Corp. and Hartalega Holdings rose about 5% each on hopes of better-than-expected earnings. Top Glove is due to announce its fourth-quarter earnings on Friday.
In economic news, Malaysia's industrial production rose 6.8% in August, faster than the median forecast of a 5.5% increase in a Nikkei Markets' poll of seven economists.
--Alexander Winifred and Nimesh Vora