Southeast Asian stock markets rose on Wednesday on increasing confidence about economic prospects in the region and the outlook for corporate earnings, with energy and banks leading the way. Foreign inflows into Southeast Asian bourses and upward revisions to GDP growth forecasts in the region bode well for more earnings revisions, justifying higher market valuations, analysts said.
The World Bank raised its forecast for economic growth in East Asia to reflect reviving global demand, sustained fiscal and monetary stimulus in the region and a rapid rebound in consumer spending. "The key would be economic outlooks and rising corporate profits, which are factors to consider in putting more money in. I don't think all of them look expensive," said Shane Oliver, chief economist at AMP Capital.
Indonesia, Asia's second-best-performing bourse, trades at the highest price-to-book ratio (PBR) in the region of 3.5 times, according to data from Thomson Retuers StarMine. Jakarta's rally has been due in part to its strong economy compared with the region. Thailand is trading at a relatively low price-to-book ratio of 1.8 times but offering a high dividend yield of 3.0 percent, ahead of the Philippines, which trades at two times price-to-book, with a dividend yield of 3.1 percent.
Indonesia gained 0.6 percent on Wednesday, at one point hitting a record high of 2,916.11, after its central bank kept its policy rate unchanged as expected. Among actively traded stocks, Bank Central Asia rose 2.6 percent, Adaro Energy was up 2.4 percent and Unilever Indonesia gained 2.03 percent.
Singapore added 0.4 percent to a 21-month high and Malaysia rose 0.05 percent, coming off its early gain to a 25-month high. Thailand finished up 0.55 percent, erasing some of its early gains as political tension mounted, but still hovering around 22-month highs. The Philippines added 0.5 percent to 26-month highs and Vietnam, the region's smallest bourse, inched up 0.1 percent. In Singapore, commodities firms were among top actively traded stocks, with Wilmar International gaining 0.4 percent, Olam International climbing 4.6 percent and Noble Group up 0.9 percent as it offered to buy out Australia's Gloucestor Coal.
Energy and banks led gains in Bangkok, with the biggest energy firm PTT rising 2.2 percent, Krung Thai Bank shooting up 7.03 percent and Kasikornbank jumping 4.9 percent on their upbeat loan growth forecasts.
In Kuala Lumpur, Tenaga Nasional and Petronas each gained over 1 percent. The Philippine index rose 0.5 percent to hit a 26-month high, led by a 3.8 percent rise in property developer Ayala Land and a 2.2 percent gain in conglomerate Ayala Corp. Vietnam rose for a fifth session, adding 0.1 percent, led by 4.8 percent gain in rubber producer Phuruco.
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