South East Asian markets: Jakarta gains on foreign inflows

Indonesian stocks rose on Friday, led by financials, while worries about further policy tightening in China weighed on shares in Singapore and North Asia. Indonesia's main benchmark index ended 0.6 percent, buoyed by a spate of late buying and $9.3 million of net foreign inflows.
-- Philippines at over 5-month high
-- Chinese tightening fears drive Singapore down
Banks were among the top blue chip gains, with the country's top lender Bank Mandiri and Bank Central Asia, rising 1.5 percent and 2.1 percent, respectively. "Investors think Indonesia's inflation is very much under control and that banking stocks to do well," Harry Su, head of research at Jakarta-based Bahana Securities. Su said shares in Southeast Asia's largest economy may extend gains despite volatility in other regional markets.
"We expect investors to shift funds to this market as valuations still seem to be attractive." Indonesia's central bank on Tuesday kept its interest rate steady, while letting the rupiah rise as part of its efforts to contain inflationary pressures caused by strong domestic demand and high commodity prices.
However, further policy tightening by China's central bank could pressure emerging markets in Southeast Asia and riskier assets in general if investors feel it will slow China's insatiable demand for raw materials and other goods. Singapore Strait Times Index (STI) fell 0.2 percent. "The market remains cautious of further tightening policies from China," said Ng Kian Teck, an analyst at SIAS Research.
Southeast Asia's biggest lender, DBS, which has a Chinese operations, closed 1 percent weaker, before announcing its plan to open eight new branches and sub-branches this year and to have 50 outlets in China by 2013. Malaysia, which saw a foreign outflow of $18.7 million, closed 0.3 percent weaker to a more than two-week weaker with a day's volume recording 0.93 percent of its 30-day average. Bucking the trend, the Philippines main index rose 0.4 percent to its highest in more than five months before its central bank said it was ready to act as required to contain inflation, while the region's smallest bourse Vietnam gained 0.1 percent.