Global equity markets were mostly up over the week ended June 26, 2015, with the MSCI AC World Index gaining 1.41 per cent. The US equity market (as represented by the S&P 500 Index) edged up 0.86 per cent, while the Japanese equity market (as represented by the Nikkei 225 Index) went up by 2.91 per cent. The European equity market also performed well over the last week, with the benchmark Stoxx 600 Index adding 2.52 per cent. All eyes are on Greece as investors brace themselves for a potential Greek debt default after a collapse in negotiations forced the debt-stricken nation to impose capital controls and keep its banks shut. In other regional markets, both the emerging and Asian equity markets managed to gain ground, with the MSCI Emerging Markets Index and MSCI Asia ex Japan Index rising 1.9 and 1.73 per cent respectively.
The gains in Asian equity markets were led by Taiwan, whose benchmark TWSE Index rallied 3.73 per cent. Hong Kong and South Korea also saw improvements in their respective equity markets, with the Hang Seng Index and Kospi Index gaining 0.89 and 1.59 per cent respectively. Southeast Asian equity markets were mostly up, with Thailand being the best performer in the region as the SET Index added 2.61 per cent. The exceptions were Malaysia and Indonesia, as their respective equity markets lost 0.66 and 0.02 per cent respectively. India led the gains in emerging equity markets, with the SENSEX Index advancing 2.92 per cent. Brazil’s Bovespa Index remained flat with a slight gain of 0.4 per cent, while Russia’s RTSI$ Index declined 1.23 per cent.
China’s local equity market took another beating last week, with the Shanghai Composite Index and the Shanghai Shenzhen CSI 300 Index sliding by 5.14 and 5.29 per cent respectively.
Southeast Asia: Singapore may see CPI falls for the seventh straight month
Consumer prices in Singapore fell by 0.4 per cent year-on-year (y-o-y) in May 2015, moderating from the 0.5 per cent decline seen in the prior month, on account of the higher cost of private road transport, according to the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI). The cost of private road transport rose by one per cent y-o-y, rebounding from April’s 2.1 per cent decline. Accommodation costs fell by 2.5 per cent y-o-y, similar to the previous month, reflecting the soft housing rental market. The MAS core inflation, which excludes the costs of accommodation and private road transport, slowed to a 0.1 per cent y-o-y increase from 0.4 per cent in April. This was mainly due to the impact of budgetary measures on cost of services, as well as a softer food inflation. Headline inflation is expected to ease further, as car prices fall amid the expected increase in supply of COEs, and rentals are weighed down by newly-completed housing units. The MAS and MTI has maintained their forecast of headline inflation and MAS core inflation to an average of 0.5 to 0.5 per cent and 0.5 to 1.5 per cent respectively for the whole of 2015.
Taiwan: Slump in May’s export orders
Growth in Taiwan’s export orders registered a 22-month low of 5.9 per cent y-o-y in May 2015, down from the previous month’s four per cent decline, and was a big miss from market expectations for a 0.1 per cent fall. The slump in export orders was broad-based, with information & communications products being the only sector to register positive growth y-o-y. Export orders for wood saw the greatest decline of 42.4 per cent y-o-y, while other traditional manufacturing sectors such as plastic & rubber, as well as chemical, saw exports shrink by 16.7 and 11.7 per cent respectively.
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