Most Southeast Asian stock markets edged down in moderate to light volume on Friday as investors worried about the possible outcome to the US debt problems and some big caps retreated as results failed to attract fresh buying interest.
Despite the bearish session, foreign investor appetite for the region appears to be growing. Indonesia, the Philippines, Vietnam and Thailand all enjoyed inflows on Friday. Optimism about the emerging Southeast Asian economy and corporate earnings helped send the region to new highs this month, including a record high in Indonesia, Thailand's 15-year highs and Singapore's three-month highs.
The Thai stock market outperformed in July, gaining 8.8 percent, Asia's best performer, ahead of second-ranked Indonesia's 6.2 percent gain. In Bangkok, generally strong economic data in June reaffirmed the pace of growth for the year and investors in Thailand were looking to the formation of a new government and economic policies which could boost consumption and investment.
Broker Citi Investment Research maintains a bullish bias towards Thailand. "The SET continues to shine after the election, driven by upbeat second-quarter bank earnings. Although the cabinet formation is slow, the visibility on policy direction is improving," said head of Thai research Suchart Techaposai. Asian equities slipped on Friday as investors braced for more volatility after US lawmakers failed to make progress in breaking the deadlock over raising the debt ceiling and avoiding a default.
The MSCI index of Asia Pacific stocks outside Japan was down 1.1 percent by 0952 GMT. Indonesia gained $32 million in inflows on Friday and $576 million on the month, the Philippine market had $8 million in inflows on Friday and Vietnam reported $0.4 million inflows, Thomson Reuters data showed. Thai stocks gained $42 million in inflows on Friday and $1.26 billion in July, reversing the $884 million in outflows in June before the general election, the exchange said.
Some big-caps fell after they missed earnings estimates, led by a 3.7 percent drop in shares of Singapore Airlines after it posted disappointing earnings. Leading Indonesian lender Bank Mandiri eased 0.6 percent although it posted strong second-quarter net profit growth, reflecting buoyant domestic demand for loans in Southeast Asia's biggest economy. Among bright spots, Bank Rakyat Indonesia, the world's biggest micro lender, climbed 1.5 percent after it had a 67 percent rise in second-quarter net profit, driven by strong domestic demand that boosted loan growth. PTT Chemical rose 0.3 percent after it almost tripled its quarterly earnings on Friday, driven by higher production and sales volumes due to rising utilisation of its PTT Polyethylene (PTTPE) plant.