Most Southeast Asian stock markets posted limited gains on Monday as selective buying in growth stocks such as Indonesian cement firms and institutional buying of Thai large caps helped offset weak sentiment elsewhere in Asia. News of the death of North Korean leader Kim Jong-il raised fears of regional instability, while the eurozone's debt crisis continued to keep investors away from risk assets.
Asian equities in general and US stock index futures fell, with South Korean shares tumbling as much as 5 percent, while the dollar gained on safe-haven appeal. The MSCI's broadest index of Asia Pacific shares outside Japan was down 2.14 percent by 0904 GMT. Southeast Asian markets seemed to focus more on local factors, plus better recent economic data from the United States.
"Our long-held view of no US double-dip recession is holding firm with recovering momentum in the United States," said CIMB Research regional strategist Chang Chiou Yi. The Indonesian market was poised for a strong gain in 2012 following a recent credit rating upgrade by Fitch to investment grade that reflected structural improvements, Chang said. In a choppy session, Jakarta's Composite Index ended up 0.05 percent. PT Bank Mandiri Tbk gained 1.5 percent as it was among eight banks also upgraded by Fitch.
Faring worst on the day, Singapore fell 1.55 percent to its lowest in more than two months. The city-state, seen as having greater exposure to global markets, fell 1.3 percent last week, the worst performance among the main Southeast Asian stock markets.
Stocks of banks and commodity firms such as Noble Group in Singapore were amongst the worst hit. Noble shares dropped 3.5 percent. Malaysia's main index ended up 0.8 percent while Thailand's SET index ended flat. Philippine shares inched up 0.31 percent and Vietnam's Ho Chi Minh Stock Exchange index edged up 0.37 percent amid buying in bank stocks.
Shares in Philippine National Bank shot up 9.4 percent. Manila Standard Today newspaper reported that the boards of Philippine National Bank and Allied Banking Corp had approved a merger that would create the country's fourth-largest bank with combined assets of 540 billion pesos ($12.32 billion).
In Jakarta, top cement maker PT Semen Gresik Tbk surged 4.8 percent after data showed that domestic cement sales, a key indicator of economic growth in Southeast Asia's top economy, rose 26 percent in November. In Bangkok, big banks, among the top listed stocks held by most investment funds, gained, led by a 0.4 percent rise in Kasikornbank Pcl. Fund managers bought shares to meet demand at the year-end for retirement mutual funds (RMF) and long-term equity funds (LTF) that offer tax breaks. "There's good inflows from the LTFs and RMFs. Foreign participation in the market was weaker because of the holiday season," said Viwat Techapoonphol, senior strategist of broker Tisco Securities.
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