Equities Weekly: Best weekly market performance in 6 weeks

The MSCI AC World Index, representing global equity markets, closed 2.25 per cent higher for the week ended May 27, 2016, making this the strongest weekly performance since 15 April 2016.

Emerging markets outperformed developed markets last week, with the MSCI Emerging Markets and the MSCI Asia ex Japan indices closing 2.91 and 3.44 per cent higher respectively.

Amongst the developed markets, Europe’s Stoxx 600 index emerged the best performer over the week, marking a 2.71 per cent increase from the week before.

This was followed by the US as measured by the S&P 500 Index which closed 2.25 per cent higher, and Japan’s Nikkei 225 Index which posted a 1.08 per cent gain.

Taiwan’s TWSE Index recorded the leading weekly performance among East Asian equity markets as it closed 4.55 per cent higher.

Hong Kong’s HSI Index and South Korea’s KOSPI Index followed, recording a 3.65 per cent and 1.41 per cent weekly increase respectively.

While China’s offshore equity market represented by the HSML 100 Index closed 3.56 per cent higher, China’s onshore equity markets closed on a negative note as the Shanghai Composite and the Shanghai Shenzhen CSI 300 Indices recorded a decline of 0.3 and 0.65 per cent respectively.

In Southeast Asia, Indonesia’s JCI Index emerged a better performer, with a 2.17 per cent weekly increase which was closely followed by Thailand’s SET Index and Singapore’s STI Index which closed 1.61 and 1.9 per cent higher respectively. Meanwhile, Malaysia’s KLCI Index saw a slight increase of 0.52 per cent week-on-week.

More divergent performances were witnessed in the other emerging market equities, as India’s SENSEX Index rose to be the top performer of markets under our coverage, recording the largest weekly increase of six per cent, while Brazil emerged as the worst performer of markets under our coverage for the second week in a row as the Bovespa Index declined 3.26 per cent week-on-week.

Other emerging markets such as Russia’s equity market (represented by the RTSI$ Index) closed 2.71 per cent higher. Singapore: GDP growth forecast to remain muted amid weak global demand

On a year-on-year basis, 1Q16 GDP growth came in at 1.8 per cent, unchanged from that recorded in the prior two quarters and in line with advance estimates.

Of particular interest was the manufacturing sector which saw a slight drop of 0.2 per cent year-on-year (y-o-y), making this the smallest decline to be witnessed in the past five quarters since 4Q14.

On a quarter-on-quarter, seasonally adjusted annualised basis, 1Q16 GDP grew 0.2 per cent, surpassing advance estimates of a zero per cent growth, largely due to the 23.3 per cent expansion of the manufacturing sector.

Adding to that was the construction sector which expanded 10.5 per cent, and in aggregate both sectors had offset the 15 per cent drop in the finance and insurance industry and the 10.3 per cent drop in wholesale and retail trade.

Looking forward, overall growth for the trade dependent economy is expected to continue remaining muted due to sluggish global demand with the Ministry of Trade and Industry (MTI) maintaining its 2016 GDP growth forecast at between 1 to 3 per cent. Taiwan: Industrial production lumbers lower than expected

On a y-o-y basis, Taiwan’s April 2016 Industrial Production fell by 4.06 per cent compared to economist estimates of 1.6 per cent and down from prior month’s upward revised 2.92 per cent.

Although utilities saw a general pick-up where output from Water Supply increased 4.35 per cent and output from Electricity and Gas grew a marked 16.11 per cent yo-y, a greater significant decline in output was witnessed in Building and Construction which saw a 23.01 per cent decline y-o-y.

Analysed based on products, petroleum and medical goods saw a 3.26 per cent and 3.55 per cent y-o-y increase in output respectively while large declines in output were witnessed in leather and fur (27.98 per cent), apparel (23.21 per cent) and other transport equipment (24.64 per cent).