Southeast Asian markets: Singapore, Malaysia post biggest weekly loss in almost nine months

Most Southeast Asian stock markets fell on Friday, with Singapore and Malaysia posting their biggest weekly loss in almost nine months, as growing tension in Egypt eroded appetite for risk among emerging market investors. Foreign funds fled the region just as domestic investors in most markets stayed on the sidelines. The Indonesian and Thai markets saw subdued trading, with volumes falling to about 0.8 times their 30-day average.
The pullback sent most markets to multi-month lows at one point, with the main Philippine share index and Thailand's SET index hovering around five-month lows. Malaysia's index touched its lowest in more than two months. Malaysia, along with Thailand and the Philippines, recorded outflows on the day and the week, amid persistent concern over inflation and as central banks in Asia moved to tighten monetary policy, including interest rate rises by China and Indonesia.
Strong capital inflows into emerging markets last year has lost steam and the region has seen outflows since January. Dealers expect inflation fears to ease later this year as a result of policy tightening while a recovery in the US economy should shore up global oil prices, luring investors to the resource- and commodity-driven region again.
"We believe the story of US recovery would continue to floor the downside on the price of oil and would be a long-term positive to emerging economies including Thailand," said Bangkok-based Rakphong Chaisuparakul at broker KGI Securities. Singapore's Straits Times Index ended down 0.8 percent, with a 4.2 percent loss for the week, the biggest weekly loss since May. Malaysia eased 0.6 percent on the day.
Vietnam edged down 0.05 percent after the devaluation of the dong as authorities start to try to address festering economic problems that critics say have been brushed aside in the pursuit of growth. Thai SET index, Indonesia's main index and the Philippine index all recouped early losses to finish up 0.05 percent, 0.54 percent and 0.29 percent, respectively. Across the region, investors remained on guard for geo-political risks following Egyptian President Hosni Mubarak's plan to relinquish powers but not step down, which did little to boost hopes of a quick solution to the Egyptian crisis.
"With no end in sight to potential Mid-East upheaval markets are likely to remain jittery if the series of crises which had dogged the Arab-Israeli world since the '50s return to haunt the world," said Singapore-based Najeeb Jarhom, head of research at AmFraser Securities.
Singapore-listed DBS Group, Southeast Asia's biggest lender, inched down 0.1 percent, as weak sentiment outweighed its better-than-expected quarterly earnings, traders said. In Jakarta, shares in PT Garuda Indonesia, the national flag carrier, plunged as much as 23 percent on its trading debut as buyers were scared off by a high valuation, a sign that investors might have turned cautious on Indonesian markets.
Thai top mobile phone operator Advanced Info Service rose 0.3 percent, gaining back early lost ground after it reported better-than-expected quarterly earnings and expected to pay out a dividend of at least 100 percent of earnings. For the week, Malaysia racked up $572 million in ouflows, followed by Thailand's $365 million outflow, the exchange said. The Philippine market saw $50 million outflows, while Indonesia saw a $3.8 million inflow, Thomson Reuters data showed.