South East Asian markets: Indonesia, Philippines rebound

Indonesian and Philippine shares rose on Tuesday, regaining a little of the ground lost recently as some investors looked for bargains in banks and other big-cap stocks, but others in the region failed to hold on to early gains. Several Southeast Asian indexes are around multi-month lows, but that has taken some to what are seen as oversold areas, including Indonesia, the Philippines and Thailand.
Trade was generally more active on Tuesday, with volume in Singapore at 1.4 times its 30-day average. Volume in Indonesia was lower at 0.83 times its average, but foreigners returned, with net inflows of $37 million, after outflows of $146 million in the previous three sessions, Thomson Reuters data showed. The Philippines saw $7 million in inflows and Thailand also enjoyed small inflows of about $20 million.
Although inflation in Thailand is fairly mild at the moment, some investors seemed worried that prices would rise more quickly and prompt the Bank of Thailand to raise rates faster than expected, he said. Thailand's central bank is widely expected to raise its policy rate again at its next review in March. Goldman Sachs lowered its forecasts for the Indonesian rupiah and said it expected Indonesia's central bank to raise interest rates in the first half of the year to stem rising prices.
The Thai market has suffered larger outflows than its peers like Indonesia and the Philippines, with nearly $1 billion in foreign selling since the start of the year, about half of it in the past three trading days. The selling this year was already equivalent to half the net inflows in 2010 when the market was the second-best performer in Southeast Asia.
However, there are technical signals that suggest the Thai market could bounce back. The market's 14-day relative strength index was at 29 at the close on Tuesday, below the 30 level at which a market is considered oversold. Indonesia's 14-day relative strength index is just above that level now at 39, having fallen to 30 on Monday. The Philippines' index rose to 38 from around 30 on Monday. Banks recouped some of their recent losses across the region, with PT Bank Rakyat Indonesia, the country's second-largest bank by assets, rising 5.6 percent and Thailand's third-largest, Kasikornbank, up 1.8 percent.