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EMERGING MARKETS – Malaysian stocks fall as deadline to form government approaches

By Himanshi Akhand

November 22 (Reuters)Malaysian stocks weakened for the second day and the ringgit traded on Tuesday as two major coalitions scrambled to meet the deadline to form a government, while most other emerging Asian currencies rebounded from losses of Monday.

Actions in Kuala Lumpur .KLSE fell 0.8% ahead of the 0600 GMT deadline for parties to form the alliances needed for a majority as they vie for get out of a dead endthree days after the election resulted in an unprecedented parliament.

The standoff risks delaying policy decisions and complicating any fiscal repair, with the world’s second-largest palm oil producer vulnerable to swings in commodity prices and manufacturing competition from regional rivals.

“The situation has remained fluid and since the of the market point of view, any government could be better than having no government… even as there is some caution when it comes to having religion-based PAS in the ruling federal government,” the OCBC bank analysts wrote.

Shares of casino operator Genting Malaysia GENM.KL and the holding and investment management company Genting Berhad GENT.KL fell this week as investors feared the strong performance of the Islamist party PAS could lead to a crackdown on gambling.

Other regional currencies edged higher as the US dollar pared some of its gains overnight, even as China’s COVID-19 cases have increased further away. USD/

South Korea won KRW=KFTCsingaporean dollar CAD=and Thai baht THB=TH added between 0.1% and 0.3%.

Philippine peso PHP= also gained 0.2%, and Manila stocks .PSI strengthened by 0.8%.

The central bank Bangko Sentral ng Pilipinas (BSP) reiterated on Tuesday that it adjust key rates in December to deal with a 50 basis point rate hike planned by the US Federal Reserve. BSP raised rates by 75 basis points last week.

“The peso has been under pressure…so there’s pressure on the BSP to hold or follow the Fed,” said Wei Liang Chang, FX and credit strategist at DBS Bank.

“There might be some influence (from BSP) in terms of trying to stabilize the exchange rate for (the) peso.”

Major regional stock indexes were mixed. Stocks in Singapore .STI gained 0.5%. Thailand actions .SETI rose 0.2% in their third straight session of gains, while South Korean stocks .KS11 fell 0.4%.

STRONG POINTS

**Malaysia’s benchmark 10-year yield is down 0.3 basis points to 4.398%

** FTSE Bursa Malaysia Kl Index Top Losers .KLSE include Top Glove Corporation Bhd TPGC.KL and Maxis Bhd. MXSC.KL

** Top winners on the Singapore STI .STI include Sembecorp Industries Ltd SCIL.SI and Yangzijiang Shipbuilding Holdings Ltd. YAZG.SI

Asian stock indices and currencies at 0402 GMT

COUNTRY

FXRIC

DAILY FX %

FX YTD%

INDEX

DAILY STOCKS %

INVENTORY YTD %

Japan

JPY=

+0.26

-18.81

.N225

0.66

-2.30

China

CNY=CFXS

+0.20

-11:15 a.m.

.SSEC

0.75

-14.60

India

RNI=IN

+0.18

-9.01

.NSEI

-0.02

4.62

Indonesia

RDI=

+0.00

-9.29

.JKSE

0.00

7.32

Malaysia

MYR=

+0.02

-8.96

.KLSE

-0.67

-8.25

Philippines

PHP=

+0.14

-11.04

.PSI

0.85

-9.33

South Korea

KRW=KFTC

+0.13

-12.14

.KS11

-0.38

-19.06

Singapore

CAD=

+0.12

-2.25

.STI

0.51

4.59

Taiwan

TWD=TP

+0.13

-11.16

.TWII

0.62

-20.20

Thailand

THB=TH

+0.30

-7.67

.SETI

0.18

-2.16

Graphic: world exchange rates https://tmsnrt.rs/2RBWI5E

Asian scholarshipshttps://tmsnrt.rs/2zpUAr4

(Reporting by Himanshi Akhand in Bengaluru; Editing by Ana Nicolaci da Costa)

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