Equities Weekly: Global equities rebounded amid good corporate earnings and possible business-friendly adjustments over in the US

Global equities, as represented by the MSCI AC World Index, rose 0.96 per cent, as equities broadly ended the week in the black. In the past week, equity investor sentiments were supported by the possibility of businessfriendly tax adjustments over in the US in the near term, as signalled by the economy’s newly elected president. Furthermore, upbeat corporate earnings over in the US and Europe had further supported the equity markets in the said economies, while the stabilisation in China’s economy continued to support sentiments over in the Asian equity markets.

Amongst developed markets, Japan’s Nikkei 225 Index and US’s S& P 500 Index rose 2.07 and 1.19 per cent respectively, while Europe’s Stoxx 600 Index fell by 0.12 per cent over the week. Over in Asia and emerging markets, the MSCI Asia ex Japan and the MSCI Emerging Markets Indices saw weekly gains of 1.89 and 1.61 per cent respectively. Amongst East Asian equities, China’s offshore equity market, as represented by the HSML 100 Index, ended the week as the top performing of markets under our coverage with a 3.67 per cent weekly gain. Meanwhile, China’s onshore equity markets, as represented by the Shanghai Composite Index and the Shenzhen CSI 300 Index, rose 1.43 per cent and 1.09 per cent over the week respectively. Hong Kong’s HSI and Taiwan’s TWSE Index posted strong weekly returns as well, as they gained 2.29 and 2.17 per cent respectively. Meanwhile, Korea’s KOSPI Index slided by 0.55 per cent for the week ended 10 February 2017. In Southeast Asia, Singapore’s STI led the pack with a 1.34 per cent weekly gain, while Malaysia, Indonesia, and Thailand gained 0.83, 0.57 and 0.4 per cent respectively when the week ended. Amongst other emerging markets, performances were less similar to one another, as Brazil’s Bovespa Index gained 2.21 per cent while India’s SENSEX Index gained 1.10 per cent and Russia’s equity market, as represented by the RTSI$ Index, ended the week with a -1.84 per cent decline.

Malaysia: December 2016’S exports improved for second consecutive month

Malaysia’s exports grew 10.7 per cent year- on-year in December 2016, outperforming prior month’s 7.8 per cent year- on-year growth and the consensus estimates of a 9.6 per cent year- on-year increase. The higher exports were largely attributed by that to China, Singapore and the European Union, which registered a surge of 22 per cent, 13.5 per cent and 5.8 per cent year- on-year respectively. In terms of product type, growth in exports was led by the refined petroleum products (accounts for around 6.5 per cent of the total exports) which grew 71.9 per cent year- on-year to RM4.9 billion. Additionally, the exports of palm oil and palm-based products (which form around 8.5 per cent of total exports) grew 24.5 per cent year- on-year to RM6.4 billion. Electrical and electronic products, which form the largest component of total exports (around 35.8 per cent), grew a smaller nine per cent year- on-year to RM 27 billion. Liquefied natural gas was the only export component which registered a drop of 0.5 per cent year- on-year, largely due to the fall in its average unit value. We expect Malaysia’s exports to pick up moving forward amid improvement in the global economy and in view of the stabilisation in commodity prices.

Indonesia: 4Q16 GDP growth missed expectations

Indonesia’s economy expanded by 4.94 per cent year-on-year in 4Q 2016, narrowly missing consensus forecasts of a five per cent year- on-year growth and the downward-revised 5.01 per cent year- on-year growth in the previous quarter. While the economy’s exports and private investments had increased on a year- on-year basis, private consumption had moderated in 4Q16, growing a smaller 4.99 per cent year- on-year, compared to prior quarter’s 5.01 per cent year- on-year growth.

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