SE Asia Stocks-Subdued as Fed minutes awaited; Philippines edges higher

By Shanima A

Oct 10 (Reuters) - Southeast Asian stock markets trod water

on Tuesday as investors steered clear of riskier assets ahead of

the release of the Federal Reserve's September meeting minutes

on Wednesday, awaiting clues on the pace of future U.S. rate

increases.

Expectations that improved prospects for the U.S. economy

would prompt the Fed to raise interest rates later this year

have led to the strengthening of the dollar over the past month.

Interest rate futures are now pricing in a near 90 percent

chance that the Fed will raise rates again in December.

"The sentiment what we see now is the shift of funds from

the emerging markets back to the developed countries,

particularly to U.S. as the U.S. economy is showing signs of

recovery," said Lexter Azurin, an analyst with Manila-based AB

Capital Securities.

Singapore shares fell 0.2 percent, with financials

driving the losses. Lender Oversea-Chinese Banking Corp

dropped as much as 1.1 percent, while DBS Group

Holding declined more than 1 percent, set to extend

losses to a second session.

Indonesia's main index was little changed, as gains

in financials and energy stocks offset losses in consumer

staples and telecom.

Mining contractor United Tractors was the top

gainer on the index, climbing 1.7 percent, while clove-cigarette

maker Gudang Garam's 2.4 percent drop made it the

worst performer.

Philippines was the only gainer in the region, set

for a seventh winning session in eight, as expectations of a tax

overhaul continued to underpin sentiment.

The country's Senate will discuss on Wednesday the tax

reform proposal, which is crucial to President Rodrigo Duterte's

ambitious plans to foster higher, sustainable growth.

The tax measures, approved by the lower house of Congress in

May, seek to expand the value-added tax base, raise excise taxes

on fuel and automobiles, and slap levies on sugar-sweetened

beverages among other changes.

The country's trade deficit widened to $2.41 billion in

August from the previous month's $1.65 billion, data showed on

Tuesday.

Security Bank, the top gainer on the index,

climbed 2.4 percent.

Malaysian shares fell 0.2 percent as the telecom and

consumer sectors declined, with Hong Leong Financial

giving up 0.7 percent and Telekom Malaysia dropping 1

percent.

SOUTHEAST ASIAN STOCK MARKETS AT 0403 GMT

Market Current previous Pct Move

close

Singapore 3284.46 3291.56 -0.22

Bangkok 1692.66 1692.22 0.03

Manila 8382.06 8367.38 0.18

Jakarta 5914.084 5914.933 -0.01

Kuala Lumpur 1760.39 1764.03 -0.21

Ho Chi Minh 807.08 808.96 -0.23

Change so far

this year

Market Current End 2016 Pct Move

Singapore 3284.46 2880.76 14.01

Bangkok 1692.66 1542.94 9.70

Manila 8382.06 6840.64 22.5

Jakarta 5914.084 5296.711 11.66

Kuala Lumpur 1760.39 1641.73 7.23

Ho Chi Minh 807.08 664.87 21.4

(Reporting by Shanima A in Bengaluru; Editing by Amrutha

Gayathri)