Southeast Asian stock markets fell on Monday as fears of an escalation in the Sino-US trade war loomed after news that Washington was considering de-listing Chinese companies from US stock exchanges. The US administration is considering de-listing Chinese companies to limit US investment in Chinese companies, Reuters reported on Friday quoting sources briefed on the matter.
But on Saturday Bloomberg quoted Treasury spokeswoman Monica Crowley as saying the White House was not contemplating such a move at this time. "It appears that China's resumption of US farm purchases is still short of eliciting quid pro quo of comprehensive de-escalation in US' commercial aggression," Mizuho Bank said in a note to clients. "Against this backdrop, Asian equities are on the back foot, taking a leaf out of losses in US equities on Friday."
Data showing China's factory activity shrank for a fifth straight month also kept buying in check, as Southeast Asia's biggest trading partner continued to face persistent pressure from the trade tiff. Indonesia, Thailand, Singapore and Philippine markets concluded their worst third quarter since 2015, when a major Chinese stocks sell-off had set off a worldwide downturn.
Philippine stocks fell the most in Southeast Asia on Monday, weighed down by consumer and industrial sectors. The index fell nearly 3% for the quarter. Lender SM Investment Corp lost 2.9%, while conglomerate JG Summit Holdings dropped 1.4%. Thai shares were dragged down by financial and communication stocks. The index fell over 5% for the quarter.
Thailand's central bank governor said on Monday the economic growth forecast of 2.8% for the year was below potential and that the bank was ready to review monetary policy if conditions worsen. Thailand's August exports dropped 2.1% from a year earlier, after rising 3.8% in July, while current account surplus widened to $3.99 billion from $1.77 billion in the previous month.
Financials sent Indonesian stocks lower. Investment holding company Sinar Mas Multiartha lost over 19% after Fitch Ratings Indonesia revised its outlook on company unit Sinar Mas Multifinance to "negative" from "stable".
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