South East Asian markets: Singapore posts biggest drop in two months

Most Southeast Asian stock markets fell on Thursday, with Singapore posting its biggest drop in two months, as investors sold commodity and resource stocks. Concern about the impact of inflation on corporate margins added to the selling pressure in the coal and plantation sectors, which have been in favour of late, while consumer stocks extended recent losses.
Singapore's Straits Times Index slid more than 1 percent to its lowest in more than two weeks, with palm oil firm Noble Group and Golden Agri-Resources losing more than 2 percent. J.P. Morgan said Golden Agri stock looked fully valued for now and there was limited scope for crude palm oil prices to rise. The Singapore drop came in an active session, with volume at twice its 30-day average, in contrast to Thailand and Indonesia at 0.9 times their average and Vietnam at 0.7 times.
Franklin Templeton's emerging markets head, Mark Mobius, said he expected his fund's investment in Vietnam to increase, but he added that regulatory hurdles and slow market reforms would limit the pace. He was speaking after the ruling Communist Party unveiled its new leadership. Foreign fund flows were mixed in the region, with Indonesia seeing a small $4 million in outflows on the day, after $24 million in inflows in the previous two days, Thomson Reuters data showed.
Philippine stocks saw $55 million in foreign money flow in, reversing $22 million in outflows in the previous two sessions. Thai stocks saw $86 million in foreign selling after tiny inflows the day before, the stock exchange said. Institutions were sellers in Singapore, a local trader said. Malaysia was closed for a holiday. Sentiment in Asia weakened, in part due to poor earnings from US firms. The MSCI index of Asia and Pacific shares excluding Japan fell 1.4 percent by 1006 GMT, retreating from a two-month peak tested on Wednesday.
Investors in Indonesia are concerned about the possibility of fund flow reversals this year, with money flowing from South to North Asia, plus the possibility of outflows from emerging markets in general back to the United States, said Harry Su, a senior analyst at PT Bahana Securities in Jakarta.