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=ASIA MARKETS: Malaysian Stocks Advance, Fueled By Energy, Telecom Firms

KUALA LUMPUR (Apr 16) -- Malaysian equities rose Monday, led by energy and telecommunication companies. Singapore shares edged lower, paced by property firms.

Malaysia’s FBM KLCI index rose 0.6% to 1,878.76. Singapore’s Straits Times Index declined 0.1% to 3,497.19.

Investors’ risk appetite was not particularly upbeat following weekend strikes by the U.S., France, and U.K. on Syria in response to a suspected chemical weapon attack by President Bashar al-Assad on a rebel-held town earlier this month. The Nikkei Asia300 Index of companies outside Japan fell 0.6%.

The KLCI could experience “volatile swings” in the aftermath of the U.S.-led strike on Syria’s chemical weapon capabilities, said Kaladher Govindan, head of research at TA Securities. While this could undermine the ongoing rally in the KLCI, “any correction is a selective buying opportunity and is expected to be well absorbed by buying support from local institutional funds” ahead of Malaysia’s national election on May 9, he said.

Energy companies were in focus on Monday. Brent crude prices, up more than 8% last week, are hovering near their highest level in more than three years.

Petronas Dagangan added 2.4%. Higher oil prices typically translate to inventory profits for the company, which sells fuel through Malaysia’s largest network of gas stations. Sapura Energy and UMW Oil & Gas, among Malaysia’s biggest energy companies, advanced 3.4% and 5%, respectively.

Telecommunications service provider DiGi.Com rose 1.3% as CIMB Investment Bank, Hong Leong Investment Bank, and TA Securities upgraded the stock after its more-than-11% drop this year. Service revenue of the company could rise between 2.6% to 4% over 2018 to 2020, CIMB analyst Foong Choong Chen said.

Rival Telekom Malaysia advanced 3.9%.

IHH Healthcare, Asia’s largest hospital operator, lost 0.3% after saying India’s Fortis Healthcare indicated it was not able to engage with the company regarding a proposed takeover. IHH had launched a non-binding offer for Fortis valuing it at 160 rupees a share after Manipal Hospitals raised its offer for Fortis to 156 rupees a share from 121 rupees a share.

Real-estate developer UEM Sunrise rose 1.1% on plans to buy and develop a project in Kuala Lumpur with an estimated gross development value of 15 billion ringgit ($3.9 billion). The venture could help UEM reduce its dependency on projects in Iskandar Malaysia, which had been a core earnings contributor for several years.

On the STI, UOL Group led real-estate companies lower, falling 1.4%. CapitaLand and City Developments declined at least 1.1% each. The losses came after the city-state’s central bank on Friday tightened its monetary policy for the first time in six years.

DBS Group Holdings and United Overseas Bank rose 0.4% or more and Oversea-Chinese Banking Corp. advanced 0.2%.

Nomura Global Research is positive on the lenders, saying Monetary Authority of Singapore’s increase in the slope of its policy band for the Singapore dollar on Friday “displays confidence on the macroeconomic situation of Singapore and the region.”

Moreover, it pointed to advance estimates that showed Singapore GDP grew 4.3% year-on-year in the March quarter, compared with 3.6% in the previous quarter, which “should support a stronger loans growth narrative for the Singapore banks.” Its average loans growth estimate for financial year 2018 for the banks stood at 7.9% as against consensus of 6.2%.

- By Alexander Winifred and Joannah Perez;; +60320267363
- Edited By Nimesh Vora
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