June 27, 2016 / 4:51 AM / 2 years ago

SE Asia Stocks-Struggle to ward off Brexit aftershock

By Krishna V Kurup
    June 27 (Reuters) - Most Southeast Asian stocks opened lower
on Monday, in line with broader Asian peers, as markets
struggled to contain the fallout of Britain's decision last week
to leave the European Union.
    Among many questions the British exit has triggered are just
how much the UK and European economies will slow, how they will
negotiate their new relationship and how European leaders will
try to boost the crumbling European Union. 
    Britain is likely to enter a recession within the year as a
result of the leave vote, a decision that will stunt global
economic growth as well, Goldman Sachs' top economists said on
    MSCI's broadest index of Asia-Pacific shares outside Japan
 dropped 0.6 percent at 0355 GMT in volatile
trade as companies with UK exposure in particular came under
more pressure. 
    Concerns over Brexit however could prevent the U.S. Federal
Reserve from raising rates in coming months, which would be a
big comfort for Asian markets. 
    Malaysia fell, dragged down by healthcare stocks.
IHH Healthcare Bhd lost 2.8 percent.
    Financials, the biggest constituent of the index by market
capitalisation, were also down, with Malayan Banking Bhd
 falling 0.2 percent, and CIMB Group Holdings 
losing nearly 2 percent.
    While Asia's response to the unexpected Brexit vote is
likely to be for central banks to step into forex (FX) markets
to provide liquidity, "based on past experience, perhaps the BNM
(Malaysian Central Bank) may be relatively reluctant to
intervene," Siddharth Mathur, Citi Asia FX & Rates strategist
said in a note.
    Singapore shares were down 0.4 percent, with DBS
Group Holdings and City Developments Ltd 
among the biggest losers on the index.
    "After Friday's sell-down on the back of the Brexit
referendum, we expect the developers to remain subdued in the
subsequent fallout. This is on the back of a more geographically
diversified asset base," Citi said in a note.
    Vietnam fell 0.6 percent, with technology and industrial
stocks amongst the biggest losers.
    "Investors are overreacting to Brexit," said Duong Manh
Dung, trader at VnDirect Securities. 
    "The market needs two to three sessions to rebalance." 
    Sacom Development and Investment Corp lost 2.2
percent, while Cotec Construction JSC dropped 2.6
    Bucking the trend, Thailand rose 0.4 percent, with consumer
cyclicals and basic materials leading the gainers.
    For Asian Companies click;  

  STOCK MARKETS                                           
  Change at 0402 GMT                                      
  Market              Current       Previous     Pct Move
  Singapore           2725.41       2735.39      -0.36
  Bangkok             1418.63       1413.19      0.38
  Manila              7629.03       7629.72      -0.01
  Jakarta             4814.444      4834.569     -0.42
  Kuala Lumpur        1624.6        1634.05      -0.58
  Ho Chi Minh         617.37        620.77       -0.55
  Change on year                                 
  Market              Current       End 2015     Pct Move
  Singapore           2725.41       2882.73      -5.46
  Bangkok             1418.63       1288.02      10.14
  Manila              7629.03       6952.08      9.74
  Jakarta             4814.444      4593.008     4.82
  Kuala Lumpur        1624.6        1692.51      -4.01
  Ho Chi Minh         617.37        579.03       6.62

 (Reporting by Krishna V Kurup in Bengaluru; Additional
reporting by My Pham in Hanoi; Editing by Biju Dwarakanath)
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