Southeast Asian stocks: Malaysia scales new record; most extend gains

Southeast Asian bourses gained on Wednesday as investors piled into banking stocks, expecting them to gain in a rising interest rate environment, but palm oil shares dropped, tracking a fall in global commodities. Malaysian shares scaled another record intra-day high, ending 0.9 percent higher, with market volume more than double the 90-day average on the back of demand from both local and foreign investors, particularly for financial shares, a Kuala Lumpur dealer said.
HSBC Global Research said it had upgraded Malaysia and Singapore to overweight and maintained its overweight stance on Indonesia, seeing these as markets where earnings might be higher than anticipated. It put Thailand and the Philippines at underweight. Differing inflation pressures were one factor. "Monetary tightening is at a different stage in various countries. Some markets, such as Malaysia, normalised rates early and so can afford to pause now," it said.
Indonesia's central bank kept its benchmark interest rate at a record low 6.5 percent on Wednesday, as expected, but some analysts expect it to raise the rate later this year. Indonesia's main share index rose 0.6 percent to its highest in four weeks, recouping a loss of almost 1 percent in early trade.
Stocks in Singapore and Thailand hovered around eight-week highs, rising 0.12 percent and 0.8 percent respectively. Bucking the trend, the Philippines, which approached eight-week highs in the previous session, eased 0.14 percent and Vietnam fell 0.8 percent, coming off a two-week high on Tuesday.
Across Asian markets, a sudden drop in commodity prices prompted investors to take profits on Wednesday, although the bull market in raw materials was seen as far from over. The MSCI index of shares excluding Japan was 0.63 percent lower by 0939 GMT.
Palm oil stocks fell across Southeast Asia, with Singapore's Golden Agri-Resources down 1.8 percent, Malaysia's Sime Darby off 0.9 percent and IOI Corp down 0.5 percent. Banks outperformed on Wednesday. Singapore's DBS Group Holdings, Southeast Asia's biggest bank, rose 0.7 percent, Malaysia's top lender, Maybank, jumped 2.7 percent and Indonesia's top bank, Bank Mandiri, added 3.8 percent.
Bank of the Philippine Islands, the country's top lender by market value, rose 0.3 percent. Thailand's bank subindex gained 2.4 percent, with third-biggest Kasikornbank climbing as much as 2.4 percent to the highest since May 1996 on expectations higher interest rates would boost earnings.