EMERGING MARKETS-Malaysia stocks rebound, fading dollar props up Asian currencies

Malaysia shares climb more than 1% State of emergency, lockdowns to be better implemented, less

Malaysia shares climb more than 1%

State of emergency, lockdowns to be better implemented, less harmful on economy – analysts

Indonesia launches vaccination drive; shares rise

Jan 13 (Reuters)Malaysian shares rebounded on Wednesday after two sessions in the red as investors looked past new COVID-19 curbs in the country, while Asia’s emerging currencies regained footing as the dollar nursed losses.

Stocks in Taiwan .TWII, Thailand .SETI and Malaysia .KLSE climbed more than 1%, while gains elsewhere in Asia were more modest and Shanghai’s Composite index .SSEC dipped 0.4%. China reported the biggest daily jump in COVID-19 cases in more than five months with four cities in lockdown.

Analysts reckon Malaysia’s nationwide state of emergency announced on Tuesday to combat rising infections cases may improve the implementation of measures, while also reducing political risks to a government facing a power struggle.

“We think the impact of the current MCO (movement control order) would be less severe than the initial phase last year given that the containment measures should be less disruptive to companies and households,” economists at UOB said.

Stocks in Kuala Lumpur nearly recovered all of the losses over the last two sessions, while the ringgit MYR= has shed around 1% this year to Tuesday.

Tee Sze Chiah, head of retail research at Maybank Investment Bank, said the vaccine rollout and accommodative fiscal and monetary policy would keep equities favourable despite the “knee-jerk” reaction of the last two days.

Investors are hoping for a quick economic recovery in the United States from a large fiscal stimulus and faster rollout of coronavirus vaccines, boosting prospects for trade-reliant Asia.

A pullback in U.S. Treasury yields sapped momentum from the dollar’s recent rally, supporting emerging currencies in Asia. Indonesia’s rupiah IDR=, favoured by foreign investors seeking to tap the country’s high-yielding debt, climbed 0.4%.

Indonesia also kick-started its vaccination drive on Wednesday, aiming to inoculate 181.5 million people. Shares in Jakarta scaled to their highest since July 2019 in early trading.

Singapore shares .STI hovered around 10-month highs, while Bangkok .SETI equities touched nearly a year’s high.

In Taiwan, the central bank has asked banks dealing in foreign exchange to exercise restraint as it seeks to rein in the soaring local dollar, sources told Reuters.

HIGHLIGHTS:

** Indonesian 3-year benchmark yields are up 7.7 basis points at 5.146%

** Banks in Malaysia rebounded, with Public Bank up 5.4% and CIMB Group Holdings CIMB.KL up nearly 3%

Asia stock indexes and currencies at 0644 GMT

COUNTRY

FX

RIC

FX

DAILY %

FX

YTD %

INDEX

STOCKS

DAILY %

STOCKS

YTD %

Japan

JPY=

+0.06

-0.43

.N225

1.04

3.69

China

CNY=CFXS

+0.13

+1.14

.SSEC

-0.44

3.44

India

INR=IN

+0.15

-0.11

.NSEI

-0.05

4.11

Indonesia

IDR=

+0.43

-0.14

.JKSE

0.61

7.62

Malaysia

MYR=

+0.36

-0.51

.KLSE

1.05

0.10

Philippines

PHP=

-0.17

-0.08

.PSI

-0.21

1.44

S.Korea

KRW=KFTC

+0.44

-0.81

.KS11

0.71

9.56

Singapore

SGD=

+0.01

-0.15

.STI

0.33

5.04

Taiwan

TWD=TP

+1.91

+1.92

.TWII

1.74

7.04

Thailand

THB=TH

+0.47

-0.03

.SETI

1.10

7.41

(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Sam Holmes and Ramakrishnan M.)

(([email protected]; Twitter: @NikhilKurianN; +91 806 182 2724))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.