Southeast Asian markets: optimism on Europe deal extends gains

Southeast Asian stock markets extended gains in strong volumes on Friday as the appetite for risky assets remained high on optimism that the eurozone deal to lower Greece's debt burden would aid the global economy. Commodities and banks were major gainers, and foreign investors bought widely into the region's stocks.
Indonesia enjoyed a net foreign inflow of $92.9 million, Malaysia $59.2 million, Manila $23.6 million, and Thailand witnessed $119.8 million net offshore buying. MSCI's broadest index of Asia Pacific shares outside Japan was up 1.3 percent by 1012 GMT and MSCI's world index was 0.4 percent firmer.
Singapore rose 2 percent to a near three-month high, taking its weekly gain to 7.1 percent, the highest since May 2009. Despite flood woes, Thailand gained 1.4 percent to close at a five-week high, and recorded a weekly gain of 6.2 percent, the most for any week in more than two years.
Indonesia edged up 0.4 percent to a six-week high, Malaysia added 0.7 percent to close at a more than two-month high, the Philippines gained 1.6 percent to a near three-month high. Vietnam, the region's smallest bourse, was up 1.8 percent to a one-month high. All markets saw trading volumes that were more than their 30-day averages. Analysts said the strong volumes suggest that the markets were optimistic on the eurozone deal to reduce Greece's debt burden.
"We have bought time for everyone and that's why the markets have cheered," said Singapore-based CIMB-GK Research's Regional Economist Song Seng Wun. "The bandage is a little bit thicker, but any bandage is better than no bandage. That's why the markets have surged. The day of reckoning has been postponed." However, Song said the markets were far too optimistic on the eurozone plan as the real solution requires structural changes in the way the economy is handled in countries such as Greece and Italy.
In Singapore, casino operator Genting Singapore surged as much as 5 percent after strong third-quarter performance of rival Marina Bay Sands, boosting sentiment about the overall gambling market in the city-state. In Bangkok, PTT Exploration and top oil firm PTT gained 4.2 percent and 2 percent respectively.