Equities Weekly: Russia rebounds over the week

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Global equity markets had a decent performance over the week ended February 13, 2015, with the MSCI AC World index increasing by 2.1 per cent.

Developed markets were all in the black, with the US equity market (represented by the S&P 500 index) posting a 2.39 per cent gain over the week. European equities (as represented by the Stoxx 600 index) also rallied alongside its US counterpart, posting a 2.14 per cent gain over the week. Over in Japan, the Nikkei 225 index recorded a gain of 2.27 per cent over the week.

Emerging and Asian markets as a whole followed their developed counterparts and recorded gains over the week, with the MSCI Emerging Markets index and the MSCI Asia ex Japan index increasing by 1.19 and 0.57 per cent respectively over the week.

East Asian markets like Taiwan, China and South Korea saw gains in their respective equity markets, increasing by 2.13, 1.28 and 0.45 per cent respectively over the week. Hong Kong’s Hang Seng index also inched up slightly by 0.33 per cent over the week.

Local Chinese equities rebounded from the previous week’s decline, with the Shanghai Composite index posting a 4.59 per cent gain over the week.

In Southeast Asia, Thai and Indonesian equities crawled slightly higher by 0.68 and 0.47 per cent respectively. Singapore’s STI index also posted a slight gain of 0.09 per cent while Malaysian equities, as represented by the KLCI Index, suffered a loss of 0.68 per cent over the week.

The top performing market over the week was Russia, with the benchmark RTSI$ index surging by 11.01 per cent over the week as the announcement of a ceasefire spurred Russian equities higher on hopes that sanctions would be gradually rolled back.

Energy prices remained above US$50 per barrel over the week, with the WTI crude oil price increasing by 2.48 per cent in ringgit terms to end the week with a price of US$52.78 per barrel.

 

Southeast Asia: Malaysian industrial production exceeds expectations

Over in Southeast Asia, Malaysia’s industrial production posted a 7.4 per cent year-on-year (y-o-y) increase in December 2014, exceeding consensus expectations of 4.1 per cent y-o-y gain.

The latest reading was also higher than the upward revised 4.8 per cent y-o-y gain in the preceding month. Industrial production growth was led by gains in manufacturing and mining output.

Manufacturing production climbed 7.8 per cent y-o-y, which is the 21st consecutive month that manufacturing output recorded year-on-year growth, since the minor slowdown in March 2013.

In addition, mining production rose 6.9 per cent y-o-y to continue its recovery from the slowdown during late 2013 and early 2014. Malaysia’s manufacturing and mining sector have been helped by a resilient domestic economy and improvements in global demand.

 

Japan: Machine orders increased more than expected

Over in Asia, Japan’s machine orders increased at the fastest rate in eight months by 11.4 per cent year-on-year in December 2014, up from a prior 14.6 per cent y-o-y decline and beating consensus estimates of a 5.6 per cent y-o-y increase.

On a month-on-month (m-o-m) basis, Japan’s machine orders increased by 8.3 per cent, up from a prior 1.3 per cent increase and also beating consensus estimates of a 2.3 per cent m-o-m increase.

Surveyed companies expect orders to grow 1.5 per cent in the first quarter this year, better than the 0.4 per cent increase in the previous quarter, indicating that capital expenditure may continue to increase and accelerate, contributing to economic growth.

Subsequently, the Cabinet Office has upgraded their assessment of the outlook of machine orders to “in the process of gradual recovery.”

 

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