SE Asia Stocks-Rangebound, Philippine weak ahead of rate decision

Thu Mar 27, 2014 1:30am EDT

BANGKOK, March 27 (Reuters) - Southeast Asian stock markets
remained rangebound amid weakness in Asian and U.S. stocks while
the Philippine benchmark dropped to a one-month low after a
wider January budget deficit and ahead of the Philippine central
bank's meeting on interest rate policy.
    Selling in interest rate-sensitive banking stocks such as
BDO Unibank and Metropolitan Bank & Trust,
with traders staying defensive due to the rate outlook, sent the
key Philippine index down 0.5 percent to 6,318.34.
    The central bank is expected to keep its policy rate steady
at a record low of 3.5 percent on Thursday, but hawkish comments
from the governor reinforced views interest rates may be raised
as early as in the second quarter. 
    For the Philippines budget balance, click
 
    Economists at Daiwa Capital Markets said the Philippine
central bank may normalise policy interest rate, with the risk
of capital flow reversals from the emerging economies likely.
    "We expect Bangko Sentral ng Pilipinas (BSP), which has kept
its overnight borrowing rate unchanged at 3.5 percent for the
eleventh straight meeting since September 2012, to begin
normalising its monetary policy by raising policy interest
rates," they wrote in a report dated March 24.
    Sentiment in the region was broadly subdued, with stocks in
Singapore, Thailand, Indonesia trading
cautiously higher while Malaysia and Vietnam 
hovered in negative territory. 
    In Jakarta, investors bought shares with favourable dividend
payouts, including shares of Indonesia's Perusahaan Gas Negara
 which jumped 2.5 percent on expectations of a 50
percent dividend payout, a trader said.
    In Bangkok, the SET index traded a tad higher while cautions
remained over the domestic political situation. 
    "The SET downside risks are however limited with the
quarterly 'window dressing' and the ex dividends of the big cap
stocks this week," strategists at broker Maybank Kim Eng
Securities.
    MSCI's broadest index of Asia-Pacific shares outside Japan
 eased 0.1 percent. U.S. stocks fell on Wednesday
as geopolitical concerns rose after the United States and the
European Union agreed to work together on tougher sanctions on
Russia. 
        
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SOUTHEAST ASIAN STOCK MARKETS
 Change at 0443 GMT
 Market             Current     Prev Close    Pct Move
 TR SE Asia Index*   403.48        403.13       +0.09
 Singapore          3154.97       3143.32       +0.37
 Kuala Lumpur       1839.48       1839.14       +0.02
 Bangkok            1361.92       1360.44       +0.11
 Jakarta            4747.62       4728.24       +0.41
 Manila             6318.34       6348.50       -0.48
 Ho Chi Minh         587.16        588.06       -0.15
 * The Thomson Reuters South East Asia Index is a
highly representative indicator of stocks listed in Indonesia,
Malaysia, the Philippines, Singapore, Thailand and Vietnam.   

 (Reporting by Viparat Jantraprap; Editing by Anupama Dwivedi)