Global equity markets on aggregate continued its decline for the fourth consecutive week, with the MSCI AC World Index receding 1.05 per cent over the week ended January 29, 2016. The US equity market, as represented by the S&P 500 Index, was down by 1.21 per cent, while the European and Japanese equity markets also notched losses of 1.51 and 1.72 per cent respectively.
On the other hand, Asian and emerging markets turned in positive performances over the week, with the MSCI Asia ex Japan Index and the MSCI Emerging Markets Index ending the week higher by 0.02 per cent and 1.43 per cent respectively.
Over in East Asia, Taiwan and Hong Kong saw their respective equity indices gain 1.27 and 0.26 per cent respectively while South Korea’s KOSPI Index posted a 2.4 per cent decline.
The Chinese equity markets did not fare well, with the HSML 100 Index, Shanghai Composite Index and the Shanghai Shenzhen CSI 300 Index incurring losses of 0.3, 8.78 and 8.04 per cent respectively. In Southeast Asia, Indonesia’s JCI Index, Malaysia’s KLCI Index and Thailand’s SET Index advanced by 1.35, 2.62 and 0.65 per cent respectively, while Singapore’s Straits Times Index posted a 0.63 per cent loss over the week.
Thailand’s customs exports shrink in December
Closer to home in Southeast Asia, Thailand’s customs exports fell by 8.7 per cent year-on-year (y-o-y) in December 2015, worse than the consensus forecast of a 5.8 per cent y-o-y decrease and was down from a prior 7.4 per cent y-o-y decrease.
The contraction in exports growth in December was mainly due to a 9.8 per cent y-o-y decline in exports of agricultural goods, which have been in contractionary territory since January 2015.
Exports of rice, rubber and tapioca products suffered double-digit y-o-y decreases in December, down by 22.5, 25.2 and 25.2 per cent respectively. In terms of trade volume, rice and rubber, the two major agricultural exports in Thailand, also contracted by 17.5 and 6.7 per cent y-o-y. Industrial exports were not spared as well, as it was down by 6.7 per cent y-o-y in December.
Thailand’s overall exports in 2015 fell by 5.8 per cent, weighed down by diminishing demand from the nation’s top three export destinations: China, Japan and the US.
With anaemic global demand and declining export prices, exports growth for the kingdom is not likely to see a strong rebound, and is likely to miss the Commerce Ministry’s 2016 target of a five per cent exports growth.
Going forward, the Bank of Thailand, which adopts an accommodative stance in its monetary policy, is expected to be relatively more lenient in having a weaker local currency, which will be supportive of the nation’s exports growth as well as economic growth.
Sluggish global demand weighs on Singapore’s manufacturing sector
Industrial production in Singapore slumped 7.9 per cent y-o-y in December 2015, after a downward revised 6.4 per cent decline in the prior month and was below market expectations for a 7.2 per cent decrease. Industrial production has been trending downward since February 2015, with December’s data representing the eleventh consecutive month of decline.
On a month-on-month seasonally-adjusted basis, however, industrial production increased two per cent, reversing from a downward-revised 3.9 per cent decrease in November.
Industrial production fell in five out of six clusters, with the transport engineering cluster registering the sharpest decline in output of 26.4 per cent y-o-y, while the electronics and precision engineering clusters also saw their respective outputs fall 12.4 and 6.8 per cent y-o-y respectively.
The biomedical manufacturing cluster, which tends to be volatile, was the sole bright spot in this month’s report, with output increasing 16.2 per cent y-o-y in December.
With the export sector also struggling to find its footing in December last year, the weaker-than-expected manufacturing data has increased the likelihood of a downward revision in the advanced estimate of 4Q15’s GDP.
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