Almost all markets under our coverage registered declines for the week ended June 17, 2016. The MSCI AC World index closed the week in the red, recording a fall of 1.4 per cent, its largest weekly decline since April 1, 2016. Meanwhile, the MSCI Emerging Markets and MSCI Asia ex Japan indices, which previously recorded weekly gains, saw a 1.73 and 2.09 per cent decline respectively.
Amongst developed markets, the US lost the least ground, as the S&P 500 index closed with a 0.78 per cent decline, while Japan’s Nikkei 225 index slumped over the week, ending the week with a 3.03 per cent drop. Meanwhile, Europe’s Stoxx 600 index recorded a decline of 1.83 per cent over the week.
Across the straits of East Asia, Taiwan’s TWSE and South Korea’s KOSPI indices recorded declines of -0.64 per cent and -2.97 per cent respectively. Meanwhile, China’s onshore equity markets, represented by the Shanghai Composite Index and the Shanghai Shenzhen CSI 300 Index, fell slightly by 0.03 and 0.3 per cent respectively. China’s offshore equity market, however, performed significantly worse, as the HSML 100 Index closed the week with a 3.36 per cent decline. Recording the largest decline amongst markets under our coverage was Hong Kong’s equity market, as the HSI index fell 3.73 per cent week-on-week.
Over in Southeast Asia, weekly performances displayed relative strength, as Indonesia’s JCI index led the pack with a 0.06 per cent gain. This was followed by Thailand, Malaysia, and Singapore’s equity markets, with weekly declines of 0.15 per cent (SET index), -1.04 per cent (KLCI index), and the 1.08 per cent (STI index) respectively. Also showing better weekly performances are equity markets in the other emerging markets, as Brazil’s Bovespa index recorded a gain of 0.6 per cent in MYR terms, emerging the strongest performer of markets under our coverage. Trailing closely behind is India’s SENSEX index, which recorded a 0.1 per cent increase, while Russia’s RTSI$ index performed less positively, as the index witnessed a 1.15 per cent weekly decline.
Singapore: Surge in motor vehicle sales drive headline retail sales
On a year-on-year basis, retail sales for April grew by 3.8 per cent, estimated at S$3.5 billion compared to the S$3.3 billion recorded in the same period last year. On a month-on-month basis, retail sales for April recorded an increase of 1.1 per cent, up from prior month’s upward revised 1.3 per cent decrease.
This is largely due to the surge in motor vehicle sales, the largest contributor to the headline figure, which saw a 43 per cent increase year-on-year (up from the 41.3 per cent increase in the prior month), as well as a 5.2 per cent increase month-on-month (up from the 4.8 per cent decrease in the prior month) as loan restrictions for motor vehicles were eased. At the same time, sectors that saw the largest annual decline include the telecommunications and computers (17.1 per cent), as well as the watches and jewellery (11.3 per cent) sectors. In addition, core retail sales recorded a three per cent decrease year-on-year, down from last month’s 2.1 per cent. Looking forward, it seems too early to celebrate April’s increase in headline retail sales, as Singapore’s core retail sales was negative. In addition, on a broader basis, the Monetary Authority of Singapore has recently downgraded their GDP forecast to 1.8 per cent from 1.9 per cent (according to their latest survey of professional forecasters) in view of the CPI-All Items inflation which is expected to come in at 0.4 per cent in 2016.
China: Industrial Production and Retail Sales Firm
May’s industrial production climbed six per cent year-on-year, unchanged from previous month’s expansion and in line with economist estimates. Year-to-date, industrial production has risen by 5.9 per cent compared to a year ago, matching consensus estimates and coming in slightly above a prior reading of 5.8 per cent in April.
While industrial production met expectations, retail sales slightly missed estimates. Retail sales grew by 10 per cent in the month of May, missing estimates and coming in below April’s 10.1 per cent reading.
Year-to-date, retail sales rose by 10.2 per cent from a year earlier, matching estimates although slowing slightly from a 10.3 per cent reading in April. With the Chinese economy continuing to face headwinds from its rebalancing efforts, bumps are to be expected given the huge task of restructuring the economy towards a consumption-led model.
To read more about activities in the market, log on to www.fundsupermart.com.