By Aaron Saldanha
    Sept 29 (Reuters) - Most Southeast Asian stock markets
traded flat to higher on Friday, but were on track to close the
week lower on capital outflows as rising possibilities of a U.S.
rate hike lifted Treasury yields toward nine-year highs and
boosted borrowing costs across the region.
    "People's expectation of a rate hike last month was below 50
percent and now it is almost close to 70 percent based on the
implied probability of futures. But I think I would say Asia had
a good rally over the last two weeks," said Joel Ng, an analyst
with Singapore-based KGI Securities.
    "Looking at the data, we have seen an ETF flowback, maybe to
the United States or Japan, so those are the two major moves
over the last two weeks."
    MSCI's broadest index of Asia-Pacific shares outside Japan
 rose 0.2 percent, but was down 2.1 percent for
the week. 
    Philippine shares were Southeast Asia's biggest
gainers on Friday, rising 1 percent on the back of strong gains
in the industrial and real estate sectors. 
    Power generator First Gen Corp and index
heavyweight SM Investment rose over 3 percent each.
    For the week, Philippine shares were down 0.5 percent after
three consecutive weeks of gains.  
    Indonesian shares climbed 0.8 percent, driven by
gains in financials and consumer staples such as Bank Rakyat
Indo and Unilever Indonesia Tbk.
    Shares were on course to end the week 0.4 percent lower.
    Thai shares were flat ahead of a slew of trade data
releases later in the day, with analysts expecting the monthly
production index rising to 2.8 percent on year.
    On the other hand, Singapore shares were Southeast
Asia's biggest losers, hurt by financials. DBS Group Holdings
 was the biggest drag, declining as much as 1.6
percent.
    "Singapore banks have still relatively held up pretty well,
they have had a good run with 25 percent gains over the last
year," Ng added. 
    For the week, Singapore shares have fallen 0.3 percent.
    Malaysian shares were flat after hitting their
lowest in two months. Financial and telecom stocks were the
biggest losers.   
    
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SOUTHEAST ASIAN STOCK MARKETS: Change as at 0354 GMT
  Change on day                                        
  Market          Current      Previous Close  Pct Move
  Singapore       3209.59      3227.14         -0.54
  Bangkok         1666.84      1666.36         0.03
  Manila          8239.37      8156.04         1.02
  Jakarta         5887.794     5841.047        0.80
  Kuala Lumpur    1758.53      1758.06         0.03
  Ho Chi Minh     805.38       804.82          0.07
                                               
  Change on year                               
  Market          Current      End 2016        Pct Move
  Singapore       3209.59      2880.76         11.41
  Bangkok         1666.84      1542.94         8.03
  Manila          8239.37      6840.64         20.45
  Jakarta         5887.794     5296.711        11.16
  Kuala Lumpur    1758.53      1641.73         7.11
  Ho Chi Minh     805.38       664.87          21.13
 
 (Reporting by Aaron Saldanha in Bengaluru; Additional reporting
by Sumeet Gaikwad; Editing by Subhranshu Sahu)