EMERGING MARKETS-Indonesia stocks lag after govt's bond sale deal with c.bank

  • 8/24/2021
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* Malaysia stocks jump 1.5% * S. Korea shares at over 3-month high By Shashwat Awasthi Aug 24 (Reuters) - Indonesian equities trailed regional stocks on Tuesday after the government extended its fiscal deficit financing scheme with the central bank, which has led to simmering worries around the bank"s independence since last year. Other emerging Asian stock and currency markets advanced, helped by vaccine optimism in the United States and easing concerns around the Federal Reserve"s policy settings ahead of a symposium this week. Stocks in Jakarta fell 0.5% by 0302 GMT after Bank Indonesia (BI) said late on Monday it would buy government bonds worth up to 439 trillion rupiah ($30.5 billion) to finance COVID-19 relief measures. The scheme is similar to an agreement BI had with the finance ministry last year to fund ballooning healthcare and welfare bills amid the pandemic. Economists had earlier raised concerns about the scheme"s effects on inflation, the rupiah and BI"s independence. The rupiah traded 0.2% higher, however, as the news coincided with a weaker U.S. dollar and Indonesia"s decision to relax some COVID-19 curbs, while the yield on the 10-year benchmark bonds fell 6.1 basis points to 6.32%. The lack of a volatile reaction in the rupiah was also "perhaps an indication that the market still sees this (bond buying) programme as one-off," analysts at OCBC said. "The extension of the BI bond buying program is likely to be of a pre-emptive nature cushioning against any potential volatility as and when the Fed tapers, while there may also be increased needs to support healthcare spending," they said. Broader sentiment was supported by full approval of the Pfizer/BioNTech COVID-19 vaccine in the United States which raised the prospect of accelerating inoculations and drove Wall Street indexes to record highs. In Malaysia, where the new Prime Minister took charge over the weekend, stocks jumped more than 1.5% to their highest since June 30. South Korea"s KOSPI was on track for its best day since May 10 and the won climbed for a second straight session, ahead of a Bank of Korea policy meeting on Thursday. HIGHLIGHTS: ** Indonesian 3-year benchmark yield down 4 basis points at 4.746%. ** Top gainers on the FTSE Bursa Malaysia Kl index include Sime Darby Plantation up 5.6%, Sime Darby Bhd up 3.2%, and Hong Leong Financial Group up 3.1%. Asia stock indexes and currencies at 0350 GMT COUNTRY FX RIC FX FX INDE STOCK STOCK DAILY YTD % X S S YTD % DAILY % % Japan -0.05 -5.91 <.N2 0.91 1.09 25> China EC> India +0.00 -1.54 <.NS 0.00 17.99 EI> Indones +0.16 -2.41 <.JK -0.45 1.73 ia SE> Malaysi +0.19 -4.65 <.KL 1.47 -5.07 a SE> Philipp +0.02 -4.25 <.PS 1.00 -6.75 ines I> S.Korea 11> Singapo -0.05 -2.65 <.ST 0.68 9.31 re I> Taiwan +0.15 +1.93 <.TW 0.51 14.22 II> Thailan +0.27 -9.58 <.SE 0.79 10.02 d TI> ($1 = 14,385 rupiah) (Reporting by Shashwat Awasthi; editing by Richard Pullin) Our Standards: The Thomson Reuters Trust Principles.

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