Overall, global equities closed on a positive note for the week ended 22 April 2016, with the MSCI AC World Index recording a 1.19 per cent gain. As a whole, developed markets outperformed Asian and Emerging Markets, with Japan’s Nikkei 225 Index, Europe’s Stoxx 600 Index, and US’s S&P 500 Index rising by 1.88, 1.34 and 0.88 per cent respectively.
In contrast, the MSCI Emerging Markets Index and the MSCI Asia ex Japan Index recorded tepid gains of 0.18 and 0.16 per cent respectively, dragged down by East Asian equities, which closed on a lower note. China’s onshore equity markets, represented by the Shanghai Composite Index and the Shanghai Shenzhen CSI 300 Index, declined 3.87 and 2.99 per cent respectively, while the offshore equity market, represented by the HSML 100 Index, fell a lesser 0.42 per cent. In addition, Taiwan equities closed 1.69 per cent lower.
Of East Asian equities, only Hong Kong’s Hang Seng Index and Korea’s KOSPI Index rose to end the week with gains of 1.04 and 0.07 per cent. In Southeast Asia, the best performer was Thailand, as the SET Index rose 3.01 per cent over the week.
Indonesia’s JCI Index rose 2.1 per cent, while Singapore’s Straits Times Index rose 1.06 per cent. Malaysia’s equity market was the sole Southeast Asian market that recorded a drop, closing with a fall of 0.58 per cent last week. Other emerging market equities, such as that from Russia and India, recorded a rise of 3.28 per cent (RTSI$ Index) and 1.36 per cent (SENSEX Index) respectively, while Brazilian equities recorded a decline of 1.19 per cent (Bovespa Index).
Economic Calendar: It was a lacklustre week on the data front for US The sales of newly built homes fell 1.5 per cent to a seasonally adjusted annual rate of 511k in March, which was lower than the 520k estimated by the consensus. US consumer confidence also fell to 94.2 in April from a downward revised 96.1 in March. The latest reading was worse than the consensus estimates for a reading of 95.8. In addition, the prelim market US manufacturing PMI also came in at a lower than expected reading of 50.8, following a 51.5 reading in the previous month.
On the other hand, Japan’s all industry activity index dropped 1.2 per cent year-on-year (y-o-y) in February, returning back to the red after recorded a 1.2 per cent expansion in the previous month. However, the latest reading was better than the market consensus for a 1.3 per cent y-o-y contraction in February.
Closer to home, Singapore’s industrial production declined 0.5 per cent in March from a year ago, which was better than the consensus estimates for a two per cent contraction and an upward revised 3.8 per cent in February. On top of that, Singapore’s consumer prices dropped 1 per cent y-o-y in March, accelerating from a 0.8 per cent y-o-y contraction in February but was largely in line with the consensus estimates.
Singapore: March exports grounded as sluggish external demand persists
Singapore’s non-oil domestic exports (NODX) sank 15.6 per cent y-o-y in March 2016, reversing from February’s downward-revised two per cent increase, as shipments of both electronic goods and non-electronic goods fell during the month. The headline figure was also lower than market expectations for a 12.3 per cent y-o-y decrease.
Electronic exports fell 9.1 per cent y-o-y, after a 0.6 per cent y-o-y expansion in the prior month, mainly due to a decline in integrated circuits, personal computers (PC) and PC parts. Shipments of non-electronic goods plunged 18 per cent y-o-y, following a 2.6 per cent y-o-y rise in the previous month, led by declines in exports of ships and boats, pharmaceuticals and petrochemicals. NODX to the top ten markets also declined in March, with the exception of Japan and Hong Kong.
Global headwinds are expected to keep the trade-dependent Singapore on a modest growth trajectory, although the recent easing stance by the Monetary Authority of Singapore and the Budget announced last month have alleviated some of the downside risks to growth for this year.
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