Southeast Asian stock markets mostly gained on Friday to end the first quarter on a strong note, with Malaysian equities closing at a record high on strong foreign inflows and shares in Indonesia climbing to an eight-month top. Despite volatility in the markets on concerns over slowing economic growth in China and the United States, the region witnessed strong foreign inflows for the week with Malaysia leading, followed by Indonesia.
Malaysia gained 0.7 percent to hit its record closing high of 1,596.33 on Friday, with foreign inflows at 373.8 million Malaysian ringgit ($121.86 million), the country's Stock Exchange data showed. Malaysia, the worst performing bourse in the region so far this year with a 4.29 percent return, saw 1,339.97 million ringgit ($436.83 million) in foreign inflows for this week.
Foreign investors in the past have been interested mostly in Malaysia's government securities, but now are turning their attention to equities, said Gerald Ambrose, managing director, at Aberdeen Asset Management in Malaysia. Indonesia climbed to a fresh eight-month high before closing the day up 0.4 percent with a net foreign buying of $130.1 million, Reuters data showed, extending the week's inflows to $319.1 million. Analysts in Jakarta said the market had been boosted mainly by expectations of a credit rating upgrade by Standard & Poor's in the near future.
"I see some foreign houses upgrading Indonesia on speculation the S&P might upgrade our credit rating to investment grade soon after a cut in subsidy for fuels," said Jemmy Paul, equity fund manager, at Jakarta-based Sucorinvest Central Gani. Indonesia's parliament is set to vote on a 33 percent fuel price hike on Friday, to reduce a swelling subsidy bill that threatens to undermine the budget discipline that led rating agencies to lift the country to an investment grade status. The region's other markets also gained with Singapore rising 0.6 percent, the Philippines ending 0.4 percent firmer and Vietnam edging 0.3 percent up.
MSCI's broadest index of Asia Pacific shares outside Japan was trading 0.6 percent firmer at 1021 GMT. Thailand bucked the trend to drop 0.6 percent, after 196.5 million in foreign inflows in the first four days of the week. For the quarter, Hanoi was leading with a more than 25 percent gain. Bangkok and Manila have risen over 16 percent, while Singapore has gained more than 13 percent and Jakarta 7.8 percent.