SE Asia Stocks-Cautious ahead of ECB meet; BOJ keeps rates steady

By Ambar Warrick
July 20 (Reuters) – Southeast Asian stock markets were
sluggish on Thursday ahead of a meeting by the European Central
Bank, with investors looking for cues on how it will unwind
unconventional policy that has kept borrowing costs at rock
The ECB meeting later in the global day is expected to lay
the groundwork for an autumn policy shift, after President Mario
Draghi last month opened the door to tweaks in a speech that was
viewed as unexpectedly hawkish.
“The authorities are expected to prepare the ground for a
gradual tapering exercise, which implies slower pace of stimulus
rather than reversing course to tighten policy,” DBS Bank said
in a research note, referring to the ECB meeting.
Most analysts polled by Reuters expect no change in policy,
but a sizable minority predicted a tweak in the bank’s guidance.

Separately, the Bank of Japan kept monetary policy steady on
Thursday, as widely expected, and pushed back by a year the
timing for achieving its ambitious 2 percent inflation target,
reinforcing expectations it will lag well behind other major
central banks in scaling back its massive stimulus programme.

“I think what’s important is their (the central banks’)
statements on the health of their respective economies,” said
Lexter Azurin, a senior analyst with Manila-based AB Capital
In Southeast Asia, Philippine shares rose marginally,
led by financials and real estate stocks. Metropolitan Bank and
Trust rose as much as 1.2 percent, while Ayala Land
gained 0.7 percent.
“Philippine markets are rising because most investors are
anticipating favourable second-quarter earnings,” Azurin said.
Indonesian shares rose as much as 0.3 percent, with
consumer staples and industrial stocks leading the gainers.
Unilever Indonesia rose as much as 1.1 percent,
while Waskita Karya saw its biggest intraday
percentage gain in over one month.
Indonesia’s real GDP growth is expected to rise to 5.2
percent in 2017 and 5.6 percent in 2018, from 5.0 percent in
2016, Fitch Ratings said.

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Change on day
Market Current previous Pct Move
Singapore 3320.48 3325.07 -0.14
Bangkok 1577.22 1575.85 0.09
Manila 7979.16 7972.9 0.08
Jakarta 5819.843 5806.69 0.23
Kuala Lumpur 1755.3 1757.27 -0.11
Ho Chi Minh 767.73 771.3 -0.46

Change so far in 2017
Market Current End 2016 Pct Move
Singapore 3320.48 2880.76 15.26
Bangkok 1577.22 1542.94 2.22
Manila 7979.16 6840.64 16.64
Jakarta 5819.843 5296.711 9.88
Kuala Lumpur 1755.3 1641.73 6.92
Ho Chi Minh 767.73 664.87 15.47

(Reporting by Ambar Warrick in Bengaluru; ; Editing by Biju