Equity markets worldwide declined over the week ended August 1, 2014, with the MSCI AC World Equity index declining by 1.51 per cent. News of Argentina announcing that it would default on its sovereign debt spooked financial markets, and developed markets’ equities dipped as market participants digested the news. US equities (as represented by the benchmark S&P 500 index) incurred a loss of 1.85 per cent over the week, while European equities (as represented by the Stoxx 600 index) fell by 2.08 per cent. On the other hand, the Japanese equity market remained almost unchanged, with the Nikkei 225 index crawling up by 0.68 per cent over the week.
Emerging markets also followed their developed counterparts, with the MSCI Emerging Markets index falling by 0.87 per cent over the week. Asian markets on aggregate however, did not fall as much as the rest mentioned above, with the MSCI Asia ex Japan index gaining by a mere 0.24 per cent. Performances of individual Asian markets were mixed, with South Korea posting gains of 2.11 per cent over the week (using the KOSPI index) while the Taiwanese TWSE equity index declined by 1.17 per cent. Southeast Asian markets were mixed too, with Indonesian equities remaining unchanged but Thailand (represented by the SET index) and Malaysia (represented by the KLCI index) incurring losses of 2.96 and 0.75 per cent respectively. Brazil was the bottom performing equity market under our coverage over the week, with the Bovespa index falling by 4.2 per cent.
The Chinese equity market was the top performer over the week, with the local equity market outshining every other market under our coverage. The Shanghai Composite index rallied by 3.88 per cent while the CSI 300 index posted a gain of 4.17 per cent over the week – as investors turn more optimistic about the country following releases of better-than-expected economic data.
Thailand: Customs exports improved more than expected in June
Thailand’s customs exports increased 3.9 per cent year-on-year (y-o-y) in June, beating consensus estimates of a 3.1 per cent y-o-y increase and improving from a previous 2.14 per cent y-o-y decline. Customs imports fell by 14.03 per cent y-o-y in June, falling more than consensus estimates of a 3.35 per cent decline and down from a previous 9.32 per cent y-o-y decline. Consequently, the customs trade balance recorded a surplus of US$1.79 billion in June, improving from a deficit of US$809 million recorded in May. Both agriculture and industrial goods exports increased in June, with the former increasing by 2.6 per cent y-o-y (led by rice and tapioca exports) and the latter by 3.9 per cent y-o-y. Exports of industrial goods in June increased across the board, with key exports like electronics and vehicle and parts increasing by 3.4 and 3.2 per cent y-o-y respectively. June’s better-than-expected data will contribute positively to the second quarter of 2014 (2Q14) gross domestic product (GDP), and in their release of the latest customs data, the Thai Commerce ministry also stated that “imports contracted because of reduced purchases of crude oil, gold and raw materials.”
China: Manufacturing pmi better than expected
China’s manufacturing PMI for July recorded a reading of 51.7, up from a prior reading of 51 and beating consensus forecast of a 51.4 reading. July’s manufacturing purchasing managers index (PMI) reading is the fifth consecutive month where PMI readings have continued to increase (since February this year), suggesting some form of stabilisation in the economy. Additionally, July’s manufacturing PMI reading is at a level not seen since early 2012. With positive and better than expected economic data from China throughout the month of July, the Chinese equity markets have greeted these developments with much optimism, rallying throughout the recent weeks.
To read more on activities in the market, log on to www.fundsupermart.com.my