Emerging Markets-Indonesia, Singapore outliers among weaker Asian equities this week

Singapore equities .STI advanced 1.1% to a one-week peak, with major lenders DBS Group DBSM.SI and Oversea-Chinese Banking Corp OCBC.SI hitting record highs. The FTSE Straits Times index was headed for a 1.2% weekly rise, also its sixth straight week in the green. The banks, alongside smaller peer United Overseas Bank UOBH.SI, account for about 32% of Singapore's benchmark. OCBC, Singapore's No. 2 lender, has raised its annual loan-growth forecast and reported record quarterly profit. Other markets in emerging Asia were on the back foot as crude rose amid rising concerns over the reopening of the crucial Strait of Hormuz. O/R Stocks in Thailand fell .SETI as much as 0.5% before clawing back some losses, while Malaysian shares .KLSE ticked 0.3% lower. South Korea's KOSPI .KS11 reversed early gains to close down 0.6%, while shares in Taiwan .TWII swung between gains and losses to finally settle 0.4% lower. For the week, Seoul was down 5.1%, while Taipei eked out a 2.3% gain, as investor concerns about the durability of hefty AI capital expenditures persisted. MSCI's EM Asia equities index .MIMS00000PUS, with its heavy exposure to South Korea and Taiwan, slipped 0.2% to stay on course for a 1.1% weekly decline. Regional currencies were steady. The South Korean won KRW=KFTC was an outlier on Friday and appreciated 1.2% week-on-week. Reuters reported last week that Japan and South Korea both stepped in to buy their currencies in a rare coordinated intervention. Next week, investors will watch for economic growth figures from Singapore and Malaysia, as well as South Korea's monthly employment report, among others. Shares in Indonesia and Singapore advanced and were on course to outperform their Asian peers this week, as investors focussed on AI spending and valuation concerns while an upswing in crude prices dented regional risk appetite. MSCI's gauge of ASEAN equities .MISU00000PUS jumped 6% to its highest in more than five months. Singapore makes up more than half of the index, while Indonesia accounts for around 8%. The Jakarta Composite index .JKSE rose as much as 1% to a two-week high and was on track for its sixth straight weekly gain. "Indonesia's recent outperformance is largely a valuation-and-positioning story as investors rotate from crowded AI-related markets into cheaper, under-owned opportunities," said Gary Tan, portfolio manager at Allspring Global Investments, flagging a stronger-than-expected quarterly GDP print. "Whether the rally can extend will depend on improving confidence in fiscal discipline, rupiah stability, foreign fund flows and progress in addressing market governance concerns that have weighed on sentiment."

Emerging Markets-Indonesia, Singapore outliers among weaker Asian equities this week

Singapore banks hit record highs

Other Asian markets weaken as crude rises

Currencies steady ahead of next week's data

Indonesia and Singapore lead regional outperformance

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