Singapore and Malaysia shares rise on US-China trade talk hopes
SINGAPORE (Nikkei Markets) - Shares in Singapore and Malaysia advanced with the rest of the region on Friday after comments from U.S. President Donald Trump ignited bets that Sino-American trade tensions may be set to ease.
Singapore's Straits Times Index rose 1.8% to 3,116.39 on Friday, while Malaysia's benchmark KLCI added 0.4% to 1,713.87. The indexes rose 4.9% and 1.8%, respectively, for the week.
The Nikkei Asia300 Index jumped 3.9% after U.S. President Donald Trump said on Twitter that trade discussions with China were "moving along nicely" and that he had "had a long and very good conversation" with his Chinese counterpart Xi Jinping. Bloomberg on Friday reported, citing four people familiar with the matter, that Trump is interested in reaching a trade agreement with Xi at the upcoming G-20 summit and has asked key U.S. officials to begin draft ing potential terms.
Still, uncertainties over the impact of the U.S.-China trade war and a rising interest rate environment prompted DBS Group Research to lower its year-end target for Singapore's STI to 3,200 from 3,550.
Investors in Malaysia digested the new government's first annual budget announced in the last hour of trading on Friday. Finance Minister Lim Guan Eng said Malaysia aims to narrow its budget deficit to 3.4% of gross domestic product in 2019 after widely missing this year's budgeted 2.8% aim. The government said budget deficit will be 3.7% this year. Still, Malaysia aims total expenditure at 314.55 billion ringgit ($75.6 billion) for 2019, maintaining an expansionary budget.
"Today's budget announcement contained no surprises, but I'm advising clients to hold on to cash first," said Sam Ng, a dealer at Inter-Pacific Securities. "Investor attention will shift to the China-U.S. trade talks. If there's con crete progress like we saw on Thursday, we could see a bull market for stocks."
Malaysian banking stocks CIMB Group Holdings and RHB Bank fell 0.4% and 1.1% in Kuala Lumpur on Friday, respectively. Malayan Banking ended unchanged at 9.40 ringgit after rising as high as 9.52 ringgit earlier.
Malaysia's economic growth pace is expected to edge higher next year after decelerating in 2018, according to the finance ministry's economic report for 2018-2019 released Friday. GDP for 2019 is expected to come in at 4.9%, compared with this year's estimated 4.8%.
Gaming operator Genting fell 2.7% after the government's budget proposed to raise casino license fees and duties.
Project management and engineering company KNM Group rose 3.7% after securing a contract worth 40 million yuan ($5.76 million) from China National Chemical Engineering.
Machinery and equipment maker Pentamaster added 3.4% in Kuala Lumpur following a near-doubling of it s third-quarter net profit.
Lenders paced gains in Singapore on Friday, with Oversea-Chinese Banking Corp. rising 2.9% after a 2.8% advance Thursday following its better-than-expected third-quarter earnings.
DBS Group Holdings, scheduled to report quarterly earnings on Monday, advanced 3%, while United Overseas Bank added 2.3%.
Singapore Post rose 2% even as fiscal second-quarter net profit fell 12.9% on year.
China Aviation Oil Singapore declined 2.9% in Singapore after the jet fuel trader reported an 8% decline in third quarter net profit. The earnings missed expectations, dampened by weaker performance of associates and higher expenses, analysts at UOB Kay Hian wrote in a note.
--Joannah Perez and Alexander Winifred
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