Southeast Asian stock markets pushed higher in moderate volume on Wednesday as optimism over earnings helped lift appetite for financial stocks and big-caps although the deadlock in the US debt talks remained a worry. Stocks in Indonesia set fresh all-time highs and Thailand scaled another 15-year peak amid fund inflows and as emerging market currencies strengthened against the dollar.
Indonesia climbed 1 percent and Thailand rose 0.8 percent. Singapore and Philippine shares edged up slightly. Malaysia bucked the trend, erasing early gains to end a tad lower. Cautious sentiment in the region will probably prevail this week before an August 2 deadline for the US debt ceiling to be raised, and brokers cited hopes that some kind of compromise would be found.
"Inflows came along with strong regional currencies. There's also an air of hope prevailing in the market over a resolution of the US debt ceiling crisis," said Viwat Techapoonphol, a strategist at broker Tisco Securities. Foreign investors bought $50 million of Indonesian shares on Wednesday, adding to $9.6 million in net foreign buying on Tuesday, according to Thomson Reuters data. The Thai market reported $91 million in foreign inflows on Wednesday, adding to $737 million in the previous eight sessions.
By 0938 GMT, the MSCI index for Southeast Asia was up 0.73 percent, led by a 1.4 percent rise in MSCI Indonesia. Banks outperformed in Indonesia, with Bank Negara Indonesia, the fourth biggest lender by assets, surging 7.2 percent to around eight-month highs. Bank Negara has gained nearly 12 percent so far this week after it reported strong first-half earnings thanks to loan growth and amid expectations of strong earnings in the future.
Among actively traded stocks in the region, Thailand's Siam Commercial Bank climbed 2.4 percent to 14-year highs and Singapore's DBS Group Holdings gained 1.5 percent to its highest in more than a year.
Analysts raised forecasts for Thai banks after results. "Following strong first half of 2011 results we revised up fiscal 2011-2012 year estimates for earnings for Kasikornbank, Siam Commercial Bank and Krung Thai Bank," said broker Citi Investment Research and Analysis. In Singapore, casino operator Genting Singapore surged 6.1 percent after rival Las Vegas Sands reported strong earnings from its Marina Bay Sands casino in the city-state. Shares in Thai refiners gained on expectations they would report favourable earnings for the second quarter due in coming weeks. PTT Aromatics and Refining, the country's largest integrated aromatics refinery, rose 3.1 percent.