Southeast Asia stocks: Malaysia up on policy hopes, Indonesia cement shares fall

[BANGKOK] Most Southeast Asian stock markets were flat to higher on Monday, with Malaysian index hitting a two-week high a day before the government's announcement of policy changes, but Indonesian cement shares fell after a cut in cement prices.

Prime Minister Najib Razak will announce policy changes, including likely budget revisions, on Tuesday to help Malaysia adjust to the impact of reduced oil and gas earnings due to the slump in global crude prices.

Shares in oil and gas firm Sapurakencana Petroleum Bhd jumped 5.2 per cent to a more than two-week high, the biggest per centage gainer on Malaysia's stock index. The index rose 0.6 per cent to 1,753.31, the highest since Jan. 5.

Hopes about global monetary easing lifted broad regional sentiment, brokers said, citing the European Central Bank meeting on Thursday considered almost certain launch a government bond-buying campaign in a bid to fight off deflation.

Expectations of a likely delay of US interest rate hike after US consumer prices recorded their biggest drop in six years in December favourable for the outlook of regional inflows, brokers said.

"Overall, the macro backdrops remain supportive to equity markets, at least this week," it said in a report.

Bangkok's SET index gained 1 per cent to 1,532.71, erasing last week's 0.8 per cent fall. Broker KGI advised traders to trading buy shares, with the SET index target for this month seen at 1,565.

Singapore's index was up 0.2 per cent after Friday's fall to an over one-week closing low and Indonesia's index was a tad lower, erasing early gains and after Friday's a near 4-week low.

Shares of cement firms fell after Indonesian President Joko Widodo said last Friday that state-run cement producers should reduce prices by 3,000 rupiah per bag to make the construction material more affordable, local media reported.

Broker Bahana Securities cut its rating on cement sector to'underweight'.

"On the index, while we remain positive on the market, policy risks remain on the forefront of things. Point in case would be Jokowi's announcement on lower cement prices by SOE companies which spells bad news for cement sector," said Harry Su, head of research of Bahana.

Shares of Indonesia's biggest cement producer PT Semen Indonesia Tbk dropped 5.7 per cent, the biggest percentage loser on the 45 large cap index, and shares of PT Indocement Tunggal Prakarsa were down 2 per cent.

REUTERS