Most Southeast Asian stock markets gained on Wednesday, with Indonesia outperforming due to a technical rebound after its recent fall sparked by eurozone debt problems. Investors, who had been selling for the past two weeks, seemed to set the eurozone worries to one side, even though Standard & Poor's put Portugal's credit rating on review for a possible downgrade.
Indonesia, the region's best performer this year, gained 2.5 percent in high volume, the Philippines jumped 1.2 percent from its lowest since September 9, and Thailand gained 1.3 percent despite an increase in interest rates. "Bargain-hunting helped the recovery," said Kevin Scully, executive chairman at Singapore-based NRA Capital. "Overall, the equity outlook for the region is still positive. Concerns over the eurozone crisis is not a problem as the market is gradually pricing that in. If there is a crisis, investors know those countries will have access to funds."
Singapore rose 1.2 percent and Malaysia closed flat, erasing its early losses. Bucking the trend, Vietnam closed 0.3 percent weaker on profit-taking after gains for eight straight sessions. Trading volumes picked up in Jakarta and Kuala Lumpur compared to their 90-day daily average volume, while Singapore and Bangkok recorded low volumes.
Despite an outflow of $60.5 million in Jakarta, financials led by 5.8 percent rise in Indonesia's second largest lender Bank Central Asia and 4.7 percent gain in the top lender Bank Mandiri helped the recovery of the overall market. "We see a technical rebound in the overall market and the european debt problem has resulted in a sharp fall on banking shares," said Harry Su, head of research at Jakarta-based Bahana Securities.
In Bangkok, energy and banking shares led the gain after the Bank of Thailand surprisingly raised its benchmark interest rate by 25 basis points to 2 percent to curb inflation. The bourse saw a net inflow of $39.7 million on Wednesday, after recording an outflow of $208 million in November, Reuters data showed.
Property and banking shares boosted Manila stocks after the Philippine Stock Exchange said it would reinforce an existing 10 percent minimum public float rule but would give companies one year to comply, without facing penalties. Property developer Ayala Land Inc closed 3.4 percent firmer before it announced an approval to issue 10 billion pesos ($230 million) of fixed and/or floating rate notes, with proceeds to partly finance capital expenditure in 2011.