For the week ended July 15, 2016, global equities rallied amid easing Brexit concerns, expectations of global policy stimulus, and better than expected macroeconomic data, particularly from the US and China.
The MSCI AC World Index closed the week with a 2.02 per cent gain, while the MSCI Emerging Markets and MSCI Asia ex Japan indices closed the week by 4.16 and 4.04 per cent respectively.
Meanwhile, gold, a perceived safe-haven asset, saw prices falling -2.11 per cent in US dollar terms over the week, to end the week at US$1,337.50 per ounce.
Amongst developed markets, Japanese equities outperformed its peers as the Nikkei 225 Index ended the week with a 3.61 per cent gain, surpassing European and US equities for which the Stoxx 600 and S&P 500 indices recorded a 2.76 per cent and 0.97 per cent (bottom performer of markets under our coverage) weekly gain respectively.
Over in East Asia, Hong Kong led the region as the HSI Index closed the week 4.83 per cent higher to emerge as the top performer of markets under our coverage, with China’s offshore equity market, represented by the HSML 100 Index, trailing closely behind with a 4.77 per cent weekly gain.
Meanwhile, China’s onshore equity markets, represented by the Shanghai Composite and the Shanghai Shenzhen CSI 300 indices, ended the week with a smaller 1.63 per cent and 2.05 per cent higher respectively, as the better than expected 2Q16 GDP results released on Friday dampened expectations of further stimulus by the Chinese policymakers.
At the same time, Taiwan’s TWSE and Korea’s KOSPI indices ended the week 3.37 per cent and 3.17 per cent higher respectively.
Over in Southeast Asia, performance were less varied, with Thailand’s SET Index emerging the top gainer amongst Southeast Asian equities, closing the week with a 2.66 per cent gain, while Singapore, Indonesia, and Malaysia came in quite similarly, as the STI, JCI, and KLCI indices closed 2.06, 2.26, and 1.45 per cent higher respectively.
Over in other emerging markets, Brazilian equities, represented by the Bovespa Index, stood out from the crowd with a 4.58 per cent gain while Russian and Indian equities closed with a smaller gain as the RTSI$ and SENSEX indices closed the week 2.61 and 2.13 per cent higher respectively.
Malaysia: Industrial production growth slowed but beat expectations in May
Over in Southeast Asia, Malaysia’s industrial production grew 2.7 per cent year-on-year (y-o-y) in May, decelerating from a prior three per cent y-o-y expansion but was above the market estimates for a 2.5 per cent y-o-y expansion.
The increase in May was supported by positive growths in two sub-indices, which saw Manufacturing and Electricity sectors grow by 3.6 and 9.6 per cent respectively, while Mining sector fell into the negative territory (1.1 per cent) following a minor pick-up in April.
Electricity output continued to hold up well as hot and dry weather continued to drive usage for electrical appliances.
While the “weather effect” has contributed positively to the industrial production growth recently, it remains to be seen whether this momentum is going to persist moving forward given a subdued growth outlook for the economy.
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