Global equity markets continue their rally over the week ended August 22, 2014, with the MSCI AC World Equity index gaining by 1.66 per cent. The US equity market was the clear winner among the developed markets, with the S&P 500 index posting a gain of 2.16 per cent over the week.
European equities (as represented by the Stoxx 600 index) increased by 1.47 per cent over the week, while Japan lagged behind its developed peers, with the Nikkei 225 index recording a 0.27 per cent gain over the week.
Emerging and Asian markets also followed their developed markets counterparts, with the MSCI Emerging Markets index posting a gain of 1.24 per cent and the MSCI Asia ex Japan index increasing by 1.16 per cent over the week.
Chinese equities were in the black over the week, with the HSML 100 index inching up by 0.7 per cent, while the local market (as represented by the Shanghai Composite index) posted a gain of 1.12 per cent over the week. Hong Kong equities (represented by the Hang Seng index) were up 1.08 per cent, while Taiwanese equities across the Straits outshined their peers in East Asia, with the TWSE index posting a gain of 2.23 per cent over the week.
In Southeast Asia, Indonesia (JCI index) posted a gain of 1.35 per cent, while Thai equities climbed higher and increased by 0.67 per cent over the week. Over in the lion city, the STI index trailed its neighbours and inched up by 0.46 per cent.
Russia was the top performing equity market under our coverage over the week, with the RTSI$ index posting a gain of 2.7 per cent. Prices of crude oil slumped over the week on news of oncoming supply into global energy markets, with the WTI Crude price falling by 3.51 per cent, from US$97.35 to US$93.65 per barrel when the week ended August 22, 2014.
Thailand: economy expanded in 2Q
Thailand’s economy grew by 0.4 per cent year-on-year (y-o-y) in the second quarter of 2014 (2Q14), rebounding from an upward revised 0.5 per cent y-o-y contraction in 1Q and surprising consensus forecasts of zero per cent growth. On a quarter-on-quarter (q-o-q) basis, the Thai economy grew by 0.9 per cent in 2Q, rebounding from a prior upward revised 1.9 per cent q-o-q contraction and beating consensus forecasts of a 0.7 per cent q-o-q increase.
Notably, consumption in the second quarter increased by 0.5 per cent y-o-y, with private consumption rising by 0.2 per cent y-o-y – expanding for the first time in four quarters. Investment fell by 6.9 per cent y-o-y, improving from the previous 9.3 per cent y-o-y decline while goods and services exports declined by 0.7 per cent y-o-y.
The Thai state planning agency has lowered its 2014 growth forecast to a range of 1.5 to two per cent, which means that gross domestic product (GDP) growth (on a y-o-y basis) for subsequent quarters have to average 3.2 to 4.1 per cent per quarter in order to achieve the target. Going forward, an increase in exports growth and a continued recovery in investments would contribute positively to GDP in the second half.
Taiwan: July’s export orders falls short of estimates
Taiwan’s export orders in July rose by 5.7 per cent y-o-y, down from a previous 10.6 per cent y-o-y increase and falling short of consensus forecasts of a 7.3 per cent y-o-y increase in July. July’s export orders’ increase was the slowest rate of increase in 2014, weighed down by slowing increases of orders of electronics and information and communications products.
The Ministry of Economic Affairs remains optimistic on the outlook for exports, and expects that orders for IT and communication products will stabilise following the current trend of device replacement. More electronic products are expected to be pushed out by international brands for the rest of the year, which would lend support for growth in electronic export orders.
To read more about activities in the market, log on to www.fundsupermart.com.