SE Asia Stocks-Higher on MSCI's decision on China shares; Fed move awaited
By Anusha Ravindranath June 15 (Reuters) - Most Southeast Asian stocks rose on Wednesday as index provider MSCI's decision to not add domestic Chinese stocks to one of its key benchmarks boosted sentiment, even as investors waited for a signal from the U.S. Fed on interest rate increases this year. U.S. index provider MSCI Inc on Tuesday declined to add domestic Chinese stocks to its Emerging Markets Index, delivering a blow to Chinese policymakers hoping to broaden the appeal of their currency. "It seems that it is a welcome development that China's domestic equities were denied entry to MSCI," said Manny Cruz, an analyst with Asiasec Equities Inc. "If ever that will push through, most of the regional funds would be hurt, as they would be repositioned from other Asian markets towards China." The U.S. Federal Reserve is expected to keep interest rates unchanged on Wednesday and signal if it still plans to raise rates twice in 2016 amid concerns about a U.S. hiring slowdown and Britain's possible exit from the European Union. Investors were also keeping an eye out for Britain's June 23 vote to leave the 28-member bloc, dubbed Brexit, which could tip Europe back into recession and throw global financial markets into turmoil. "I think cautiousness is still there in the markets, and may be a little bit of bargain-hunting. There could be some relief after the Fed meeting, assuming they would keep the rates unchanged," said April Lee-Tan, an analyst with COL Financial. The Philippine index was the biggest gainer in the region, recovering from Tuesday's losses to end more than half a percent higher. Utilities led the gainers, with Metro Pacific Investments Corp climbing 2.9 percent. "China's MSCI decision can be favourable for markets like Philippines," Lee-Tan said. The Philippine share market's six-year bull run ended in 2015 as investors withdrew funds from many emerging markets. Singapore and Vietnam rose marginally, while Thai stocks closed nearly 0.5 percent higher. Indonesia bucked the trend to drift lower, led by consumer non-cyclicals. "Indonesian market is down mainly because of the cigarette sparks today," said Harry Su, an analyst with Indonesia-based Bahana Securities, referring to local media reports that said the government may soon raise tobacco taxes. "There is concern that there could be traditional policy risks related to excise tax." Shares of clove cigarette maker Gudang Garam Tbk PT dropped 5.4 percent, while Hanjaya Mandala Sampoerna Tbk PT lost 5.7 percent. The government has raised excise taxes for big cigarette companies including Sampoerna by an average 15 percent this year, higher than the average 10-11 percent in previous years. Tobacco taxes account for almost 10 percent of government revenues, official data shows. For Asian Companies click; SOUTHEAST ASIAN STOCK MARKETS STOCK MARKETS Change on day Market Current Previous Pct Move Close Singapore 2774.25 2768.33 0.21 Bangkok 1434.89 1428.1 0.48 Manila 7501.65 7460.12 0.56 Jakarta 4814.824 4821.59 -0.14 Kuala Lumpur 1627.96 1626.11 0.11 Ho Chi Minh 627.02 625.43 0.25 Change so far this year Market Current End 2015 Pct Move Singapore 2774.25 2882.73 -3.76 Bangkok 1434.89 1288.02 11.40 Manila 7501.65 6952.08 7.91 Jakarta 4814.824 4593.008 4.83 Kuala Lumpur 1627.96 1692.51 -3.81 Ho Chi Minh 627.02 579.03 8.29 (Reporting by Anusha Ravindranath in Bengaluru; Editing by Biju Dwarakanath)
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