Most Southeast Asian stock markets bounced back on Friday as investors searched for bargains after heavy selling in recent sessions, but worries over the health of global economy and Europe's debt crisis left emerging market equities vulnerable to further losses in coming weeks. Singapore stocks lost as much as 9.2 percent at one point during the week, skidding to a 14-month low amid a global market rout before clawing its way back from Thursday's lows.
The Straits Times index rose 1.9 percent on Friday, helping paring losses for the week to 4.8 percent. Indonesia fell 8.4 percent at one point but managed to recoup almost all of the losses, ended the week just 0.8 percent lower. Thai stocks ended 2.9 percent lower on the week, after sinking as much as 5.5 percent. Malaysia lost as much as 6.6 percent before closing 2.7 percent down and Philippines fell 6.9 percent but ended the week 2.6 percent down.
On Friday, Jakarta added 0.6 percent, while Manila and Kuala Lumpur rose 0.3 percent and 0.5 percent respectively. Vietnam, the region's smallest bourse was down 0.1 percent. Thailand was closed for a holiday. Despite the bounce in some centreson Friday, Singapore, Malaysia, and Vietnam remain in oversold territory with their Relative Strength Indexes (RSI) below the 30 level. Bangkok, Jakarta, and Manila are hovering around 40.
"This is just an oversold rebound, but I doubt if it could be sustained," a Singapore-based analysts said. "This is mainly due to pull back in other assets like treasuries and gold. But the sentiment is still negative with concerns over a double dip recession remains, though there is insufficient data to prove it. Until these fear elements are cleared, investors will not be convinced that the markets have reached their bottom."
Commodities boosted Singapore with palm oil producers Golden Agri-Resources and Wilmar International gaining as much as 3.2 percent and 2 percent, respectively, after reporting strong quarterly earnings. Singapore's third-largest lender, United Overseas Bank , closed 2 percent firmer before posting a 5.6 percent rise in second-quarter net profit.
A strong bounce-back in financials helped boost the overall Jakarta market with 1.3 percent rise in the second largest lender Bank Central Asia and a 3.1 percent gain in the fourth biggest lender Bank Negara Indonesia.
Lanang Trihardian, an Investment Analyst at Syailendra Capital said the gains in the past two days cannot be sustained as they were mainly due to external factors. Despite Friday's gains, Indonesia saw a foreign outflow of $39.4 million, extending its weekly net foreign outflow to $390 million, Thomsonreuters data showed. Thailand suffered outflows of $620 million this week, but Manila saw net inflows of $39.5 million, despite a $10.3 million outflow on Friday.