Most Southeast Asian stock markets gained in thin volume on Wednesday, led by Singapore, which rose over 1 percent as transport shares advanced and on strong economic growth expectations ahead of a central bank policy meeting. Investors looked for fresh opportunities in risky assets in emerging markets, a day after crude oil prices dropped over 3 percent, but most of them waited for further direction from upcoming company earnings reports.
"Investors are still looking for guidelines, perhaps from the earnings," Song Seng Wun, a regional economist at Singapore-based CIMB-GK Research told Reuters. "All other concerns like rising inflation, debt issues in the EU and US still remain. Earnings will explain the impact of the high prices in the first quarter," Wun said referring to sharp rise in oil and commodity prices in the first quarter.
Singapore's Straits Times Index (STI) rose 1.1 percent, its biggest gain in a day since March 30, but the day's volume was 0.83 times of its 30-day average volume. Ng Kian Teck, an analyst at Singapore-based SIAS Research said the gain was 'probably due to the positive outlook' on the country's first-quarter economic growth figure, expected to be released on Thursday.
"The market is also downplaying Japan's nuclear crisis severity and investors are looking to buy stocks at a cheaper price," Ng said. Singapore central bank will also announce the results of its latest policy review on Thursday. Economists expect it to tighten policy further to curb imported inflation, allowing the Singapore dollar to continue to appreciate. Such a move could draw further inflows into Singaporean assets.
The pullback in oil prices gave some relief to transportation stocks in Singapore, though fuel prices remain well above their levels at the end of last year. Singapore Airlines, the world's second most valuable carrier by market capitalisation, jumped 4.9 percent and the world's sixth largest container shipping firm Neptune Orient Lines gained 3.1 percent on hopes of benefiting from the declining crude oil prices.
Chinese shipbuilder COSCO Corp (Singapore) surged 3.6 percent after it said one of its unit had won a contract with Seadrill to build a drilling rig valued at $66 million. Indonesia main stock index gained 0.4 percent in strong volume while Malaysia and Philippines rose 0.6 percent and up 0.1 percent respectively, but in thin trade. Bucking the trend, Vietnam closed 0.7 percent weaker.
Thailand , the best performer in the region for this year was closed for a long holiday and will resume trading on Monday. Jakarta and Kuala Lumpur saw foreign outflows of $2.7 and $6.3 million. In Jakarta, mining and finance shares helped boost the index with 7.1 percent gain in top minor Bumi Resources and 1.4 percent rise in the country's second largest lender Bank Central Asia.
"We see some foreign buying, but investors are taking cue from the regional markets and commodity prices," said Harry Su, head of research at Jakarta-based brokerage Bahana Securities. "Crude oil price will be the driving factor in coming days." In Kuala Lumpur, petrochemical producer Petronas Chemicals Group gained 4.4 percent after a sharp drop in the previous day due to the fall in global oil prices. In Manila, The Philippine Stock Exchange suspended trading of common and preferred shares of San Miguel Corp from Wednesday to the close of business on May 4, ahead of a share and bond sale by the company to raise about $850 million.