Global equity markets ended the week of November 14, 2014 broadly higher as represented by the MSCI AC World index gaining 1.2 per cent.
The developed markets ended the week in positive territory, with Japan, Europe and the US gaining 2.8, 1.4 and one per cent respectively over the course of the week.
Japan’s gains were largely a result of the possible delay to the implementation of the sales tax hike to April 2017 and a depreciating yen.
The emerging and Asia ex Japan equity markets broadly followed gains in the developed realm, with the MSCI Asia ex Japan index gaining 1.8 per cent and the MSCI Emerging Markets index delivering a more muted 0.9 per cent over the week.
Driving most of the gains in the Asia ex Japan space were the Hong Kong equity market (2.9 per cent) and Chinese equities (HSML100, 2.5 per cent), both rising on anticipation of the Hong Kong – Shanghai stock connect link.
Other single countries in the Asia ex Japan space saw more muted gains, with Indonesia’s Jakarta Composite index rising 1.6 per cent and Singapore equities rising one per cent over the week.
Brazil was the worst performing market under our coverage, with the Bovespa index declining by 3.3 per cent over the week on uncertainty over the new finance minister and weak showing from banks and oil giant Petrobras.
Crude oil prices (represented by WTI Crude) continued their freefall, with prices falling by USD 2.83 per barrel to reach US$75.82 per barrel, declining by three per cent in ringgit terms.
Malaysia: Industrial production slightly below estimates
Malaysia’s industrial production posted a 5.4 per cent year-on-year (y-o-y) increase in September 2014, slightly below consensus expectations of 5.5 per cent year-on year gain.
The latest reading was also lower than the 6.5 per cent y-o-y gain in the preceding month.
On a month-on-month basis, industrial production increased by 0.9 per cent after a two per cent gain in August.
Industrial production moderated mainly due to the slowdown of manufacturing and electricity production, with the former posting a 4.7 per cent y-o-y increase as compared to a rate of 7.4 per cent in August 2014.
With business sentiment (as measured by the Business Confidence Index) declining to a reading of 95.9 in 3Q 2014 as compared to a prior reading of 112.9 in previous quarter, coupled with lacklustre exports growth in recent months, industrial output in Malaysia could see some softness in the near future.
Japan: Machine orders jump
Japan’s core machinery orders rose by 7.3 per cent on a y-o-y basis in the month of September, beating estimates of a 0.3 per cent contraction and August’s decline of 3.3 per cent.
The rise in machinery orders was its largest since April 2014, when the measure hit 17.6 per cent.
On a month-on-month basis, core machinery orders rose for a fourth month running, with orders growing by 5.6 per cent on a quarter-on-quarter basis in 3Q14.
The latest figures implies corporate investment is increasing, a scenario that will benefit the local economy and aid GDP growth.
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