Major Southeast Asian stock markets edged higher on Wednesday despite continuing worries over Japan's nuclear problems, with investors buying companies that depend on the domestic economy and selected power firms. The potential impact of the Japanese earthquake on regional economies meant trading was generally moderate, with turnover on most markets slightly lower than the 30-day average.
Singapore's share index climbed 0.9 percent. It had suffered losses of more than 4 percent in the previous three sessions, among Southeast Asia's worst hit markets. "There has been just a minor pull-out of foreign funds from equities to bonds in this region. On our side, we actually had programme buys from foreigners this morning," said an equities trader in Kuala Lumpur.
Broker Citi also said in a research note that the risk of portfolio outflows and repatriation to Japan looked low for Asia, with the region taking only a very small share of Japan's outward portfolio investment in the past few years. Asian financial markets in general rallied on Wednesday, with Tokyo stocks rebounding 5.7 percent after a steep two-day sell-off. The MSCI index of Asia Pacific shares outside Japan was up 1 percent by 0929 GMT and the MSCI index of emerging market stocks 0.90 percent.
Among advancers, Thai PTT Aromatics and Refining, an integrated complex refinery and aromatics producer, rose 1.4 percent, Malaysia's Shell Refining gained 0.8 percent and Indonesian coal miner Harum Energy climbed 1.7 percent. Casino operator Genting Singapore rose 1.6 percent, with investors taking the view that visitors from Malaysia, China, Thailand and India would cushion any loss of Japanese clients.
Harry Su, head of reseach at PT Bahana Securities in Jakarta, was optimistic on the Indonesian stock market as the local economy had a large contribution from domestic consumption.
"This can act as a shield against external volatilities. We advise investors to seek shelter in domestic stocks," he said. Among his top picks, pharmaceuticals firm PT Kalbe Farma rose 1.7 percent and PT Indofood CBP Sukses Makmur, the world's top noodle maker, surged 3.7 percent.