September 5, 2018 / 10:08 AM / a month ago

SE Asia Stocks-Indonesian shares plummet on slump in rupiah

    * Indonesia posts worst one-day drop in nearly 2 years
    * Philippines falls as inflation accelerates
    * Malaysia down for fifth straight session

    By Sumeet Gaikwad
    Sept 5 (Reuters) - Indonesian stocks plunged on Wednesday
and the rupiah held near a 20-year low as fears of contagion
from Argentina and South Africa hurt emerging markets, while
Philippine shares slumped as the annual inflation rate hit its
highest in nearly a decade in August.
    Indonesian shares closed 3.8 percent lower, their
steepest one-day percentage drop since November 2016, after
sinking as much as 4.8 percent earlier in the session. 
    "If you take a look at the current account balance of
Indonesia, this is where investors are a little bit concerned.
Indonesia's current account balance was at negative 3 percent of
total GDP (in the second quarter)," said Taye Shim, head of
research at Mirae Asset Sekuritas.
    "There is a structural deficit in the income balance,
meaning more and more Indonesian households, but mostly
corporates borrow money outside and that's causing the current
account balance to go further negative."
    Indonesian regulator Financial Services Authority (OJK) has
intensified monitoring of foreign exchange trading to make sure
it is based on real transactions, it said on Wednesday.

    Financials and consumer staples stocks dragged down the
Jakarta index to a two-month closing low. 
    The country's top lender Bank Central Asia fell 3
percent, while Consumer products maker Unilever Indonesia
 declined 5.4 percent. 
    "President Trump is at the centre of this turmoil and the
upcoming trade dispute between the U.S. and China is causing
much concerns in the investment community, especially in the
emerging market space," Shim added.
    The index of the country's 45 most liquid stocks was down
over 4 percent. 
    Emerging markets have been pressured by rising U.S. interest
rates and worsening Sino-U.S. trade relations, while economic
woes in Turkey, Argentina and South Africa have exacerbated
market jitters.
    The South African rand joined the Turkish lira and Argentine
peso in a relentless sell-off, falling 1.5 percent and
adding to the previous day's 3 percent slump. South Africa
entered recession in the second quarter for the first time since
2009, data showed on Tuesday. 
    
    Philippine shares fell 1.6 percent to their lowest
close in two weeks, dragged down by financials and real estate
stocks. BDO Unibank dropped over 5 percent while SM
Prime Holdings shed 2.5 percent. 
    The country reported a steep rise in its annual inflation
for August, its highest rate in nearly a decade, exceeding
expectations and raising the chances of a fourth interest rate
hike this year.
    The central bank will weigh the need for further monetary
policy action, Governor Nestor Espenilla said.
    Singapore closed 1.7 percent lower while Thai shares
 dropped 1.6 percent.     
    Malaysian shares dropped nearly 1 percent in their
fifth straight session of losses. Financial services provider
CIMB Group Holdings fell 3.8 percent.
    The central bank on Wednesday held its key interest rate
unchanged as expected, saying the economy should stay on a
"steady" growth path but heightened trade tensions are
contributing to "immediate term" downside risks.
    
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SOUTHEAST ASIAN STOCK MARKETS
 Change on the day                            
 Market             Current   Previous close  Pct Move
 Singapore          3156.28   3210.51         -1.69
 Bangkok            1686.37   1714.41         -1.64
 Manila             7752.27   7881.82         -1.64
 Jakarta            5683.501  5905.301        -3.76
 Kuala Lumpur       1795.5    1812.76         -0.95
 Ho Chi Minh        968.44    975.94          -0.77
                                              
 Change on year                               
 Market             Current   End 2017        Pct Move
 Singapore          3156.28   3402.92         -7.25
 Bangkok            1686.37   1753.71         -3.84
 Manila             7752.27   6840.64         13.33
 Jakarta            5683.501  6355.654        -10.58
 Kuala Lumpur       1795.5    1796.81         -0.07
 Ho Chi Minh        968.44    664.87          45.66
 
    
 (Reporting by Sumeet Gaikwad in Bengaluru; Editing by Amrutha
Gayathri)
  
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