BENGALURU: Singapore shares scaled a near 17-year peak on Monday and were among stock markets to gain in emerging Asia, as the city-state’s biggest banks touched all-time highs on strong investor inflows owing to their attractive dividend yields.
Currencies in emerging Asia were rangebound, slipping against the US dollar, which remained above the one-year low it hit last week after the US Federal Reserve’s super-sized rate cut.
Indonesia’s rupiah and the Philippine peso were the top losers of the day.
Singapore’s bank and property heavy Straits Times index advanced 0.7% to its highest level since early November 2007, with top banks DBS Group, OCBC, and UOB trading at their record-high levels.
“Given potential market volatilities ahead, such as the upcoming US Presidential election, it is possible that investors may be seeking refuge in stocks with qualities such as attractive dividend yields and defensive earnings,” said research analysts at RHB Singapore.
“We believe the Singapore banks possess these qualities.”
The Singapore dollar, which hit a near 10-year high last week, shed as much as 0.3% to 1.293 per US dollar.
Singapore’s key consumer price gauge rose 2.7% in August from a year earlier, data showed on Monday, exceeding economists’ expectations.
Analysts at Barclays do not expect the Monetary Authority of Singapore (MAS) to turn “materially dovish” and predict its foreign exchange policy settings to remain unchanged through 2025.
In the Philippines, stocks rose as much as 2.3% to top their February 2022 level, helped by a broad-based rally across sectors. The peso slipped 0.4%, coming off a near six-month high scaled in the previous session.
Thai stocks slipped 0.5% while the baht was down 0.2%.
Thailand’s stock index is set to break a six-quarter losing streak, rising almost 11% so far in the September quarter, and is on track to clock its best quarter since December 2020, helmed by strong foreign inflows partly aided by the establishment of government-backed mutual fund Vayupak.
The Thai baht is also likely to outperform in the near term, driven by equity inflows and elevated gold prices, Goldman Sachs said in a note.
Malaysia’s ringgit was flat on Monday but was set for a blockbuster quarter, appreciating around 12% so far in the September quarter, making it the currency’s best three months since January 1973, if the trend continues.
“Malaysia remains in pole position to attract investors and that is generating significant support for the MYR,” analysts at Maybank said in a note.
Elsewhere, the South Korean won fell around 0.2%. Stocks in Indonesia were largely flat, while those in Malaysia were down 0.2%.
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