Philippine shares closed at a more than 16-month high on Monday, after a local daily reported the central bank may look at further rate cuts, while Indonesia rose after the government said it was looking to relax laws and taxes to boost investment. Most other Southeast Asian stock markets were subdued as they traded in a tight range.
A bright domestic inflation outlook, alongside dovish comments from the US Federal Reserve chief last week meant the Bangko Sentral ng Pilipinas had greater freedom to further ease monetary policy, the Philippine Star quoted Governor Benjamin Diokno as saying. The investor sentiment was further sweetened after the central bank said May remittances rose 5.7% year-on-year to $2.609 bln, beating ING estimates of a decline of 1.7%. Remittances are generally also a steady stream of foreign currency into a market.
Real estate and industrial stocks gained the most on the Philippine benchmark. It ended at its highest closing level since March 13, 2018. Property developer SM Prime Holdings rose 3.3%, while conglomerate SM Investments Corp was up 4.9%.
Indonesian stocks benefited the most from gains in financials, with lender Bank Central Asia rising 1.6%.
Indonesia's recently elected President Joko Widodo on Sunday promised a slew of measures like increased infrastructure development to prop up growth in the country.
Widodo had hinted at a possible bid to cut the corporate tax to 20% or below, in an earlier interview with Bloomberg.
"Implementation (of the reforms in Indonesia) will be what matters, but if tangible progress is made, we are likely to see an acceleration in direct investment inflows next year, which should provide BI with flexibility to further cut rates." HSBC Global Research said in a note to clients. Singapore's index fell slightly, hurt by losses in consumer services stocks. Singapore Airlines fell about 0.7%, while conglomerate Jardine Cycle & Carriage was down 0.9%. The Malaysian benchmark ended slightly up, while Vietnam index closed slightly lower.
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