Most Southeast Asian stock markets rose on Wednesday with optimism around Bank Indonesia’s measures to boost the economy there lifting select shares, but Thai banks fell as investors weighed in the impact of interest rate cuts.
The benchmark Jakarta composite index was up 0.7 per cent at 5,304.44, its highest since April 27 and heading for a third straight day of gains.
Indonesia’s central bank governor had said on Tuesday that it will support economic growth by loosening some lending requirements for banks, a move analysts expected to give a boost to auto and property sectors.
“Relaxation on automotive financing will help the weak auto volume as about 65-70 per cent of the car buyers and up to 85 per cent of motorcycle buyers purchased using the financing scheme,’’ broker Citi said in a report.
The Thai SET index eased 0.4 per cent, reversing from Tuesday’s near three-week high.
Banks were the top large-cap losers, with Kasikornbank, Siam Commercial Bank and Krung Thai Bank all down more than 2 per cent.
Kasikornbank said it would cut its key lending rates on Thursday after the country’s central bank cut its policy rate to boost the economy in late April. Other big banks are expected to follow, brokers said.
“The lower interest rates will pressure net interest margins of the banking sector in the second quarter. Banking shares are likely to lag the market going forward,’’ broker Thanachart Securities said.
Singapore eased on profit-taking, while Malaysia and the Philippines were little-changed, in line with broader Asia and ahead of the release of the minutes of the Federal Reserve’s policy meet expected later in the day. Vietnam’s key index rose more than 2 per cent on bargain hunting in blue-chips.