Most Southeast Asian markets ended flat on Wednesday after the World Trade Organization cut its 2019 trade growth estimate and the Asian Development Bank trimmed regional economic growth forecast, while Singapore closed at a near eight-month high. World trade shrank by 0.3 percent in the fourth quarter of 2018 and is likely to grow by 2.6 percent this year, below a previous forecast of 3.7 percent, the World Trade Organization said.
This year's growth forecast for Southeast Asia was trimmed to 4.9 percent from an earlier estimate of 5.1 percent, as the Manila-based lender Asian Development Bank expects Malaysia, Singapore, Philippines and Thailand to grow slower than previously estimated.
Singapore stocks, however, shrugged off worries of a soft growth forecast as local lenders boosted the index by 1 percent to its highest close since Aug. 9, 2018.
"Local catalysts for Singapore financials are the rising SIBOR (Singapore Interbank Offered Rate) and resilient loans growth.
Both will be supportive for bank earnings this year," said Paul Chew, head of research, Phillip Securities Research.
Ongoing loans repricing for non-corporate loans continue as repricing typically lags movements in SIBOR, making the banks privy to wider margins in that period, Lim Rui Wen, an equity research analyst in DBS Bank, said in a note.
The dividend yields of about 4.1 to 4.7 percent also supported the valuations of the banks, the analyst added.
The city-state's top-listed lenders DBS Group Holdings, Oversea-Chinese Banking Corp and United Overseas Bank Ltd jumped between 1.4 percent and 2.5 percent.
Malaysian stocks ended 0.6 percent higher, posting their second consecutive session of gains on the back of healthcare and financials.
IHH Healthcare Bhd and Public Bank Bhd climbed 3.3 percent and 1.3 percent, respectively. The Indonesian stock market was closed for a holiday, while Philippines, Vietnam and Thai indexes were rangebound.
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