MSCI AC World Index, a broad measure of equity-market performance throughout the world, was up by 1.71 per cent over the week. European equities, as represented by the Stoxx 600 Index, up by 1.03 per cent despite weaker than expected PMIs figures announced. The US and Japanese equity markets fared much better, as they gained 2.86 per cent and 2.42 per cent respectively over the week.
Asian and emerging markets bourses gave up last week’s gains, with the MSCI Asia ex Japan Index and the MSCI Emerging Markets Index declining 0.46 and 0.83 per cent respectively. In North Asia, Taiwan’s TWSE Index and South Korea’s KOSPI Index slipped 2.22 and 0.72 per cent respectively, while Hong Kong also saw its equity market gain 0.79 per cent over the week. The offshore Chinese equity markets, as represented by China’s HSML 100 Index registered a tepid gain of 0.5 per cent over the week. The local Chinese equity markets rallied strongly, with the Shanghai Composite Index gaining four per cent and the Shenzhen CSI 300 Index up by 3.57 per cent respectively over the week. In Southeast Asia, Malaysia’s KLCI Index and Indonesia’s JCI Index plunged 3.26 and 1.84 per cent respectively, while Singapore and Thailand saw their respective equity markets increased 0.52 and 1.55 per cent respectively. Amongst emerging economies, Brazil’s Bovespa Index fell 2.5 per cent, while Russia’s RTSI$ Index and India’s SENSEX Index up 0.71 and 2.25 per cent respectively over the week.
Economic calendar: While it only comes out at the end of the week, investors will be keeping tabs on the US non-farm payrolls report due this Friday, as an improvement in the labour market could add to the pressure on the Federal Reserve to kick-start its rate hiking cycle. Eyes will also be on Japan’s industrial production and retail sales report to give investors a handle on the strength of its economic recovery.
Singapore: Consumer prices post largest decline in six years, industrial production fall for seventh straight month
In Southeast Asia, Singapore’s consumer prices in August 2015 registered the largest year-on-year decline in six years, mainly due to the lower cost of private road transport, according to the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI). Inflation eased to 0.8 per cent year-on-year (y-o-y) in August from the 0.4 per cent decline seen in the prior month and was lower than market expectations for a 0.6 per cent price inflation. The cost of private road transport fell for the second consecutive month by 2.9 per cent y-o-y, while accommodation costs extended its decline by 2.9 per cent y-o-y following a 2.8 per cent drop in the previous month, reflecting the continued softening of the housing rental market. The MAS core inflation, which excludes the costs of accommodation and private road transport, moderated to 0.2 per cent y-o-y from 0.4 per cent in June, reflecting lower services and retail goods inflation. The MAS and MTI have maintained their forecast of headline inflation and MAS core inflation to come in at the lower half of 0.5 to 0.5 per cent and 0.5 to 1.5 per cent respectively for the whole of 2015.
Industrial production in Singapore sank seven per cent y-o-y in August 2015, after a 6.4 per cent decline in the prior month and was lower than market expectations for a 5.3 per cent decrease. Industrial production has been trending downward since February 2015, with August’s data representing the seventh consecutive month of decline. On a month-on-month seasonally-adjusted basis, industrial production fell 3.7 per cent, reversing from the 0.7 per cent increase in July 2015. The contraction was broad-based, with industrial production falling in five out of six clusters. The transport engineering cluster registered the sharpest decline in output of 14.5 per cent y-o-y, while the electronics and precision engineering clusters also saw their respective outputs fall 10.9 and 9.2 per cent y-o-y respectively.
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