Thursday 28th July 2016
NEWS TICKER: JULY 28TH 2016: As a slug of generally positive data emerges from the UK this week, and commenting on today’s corporate results, Richard Marwood, senior fund manager at Royal London Asset Management, says, “Today’s flurry of corporate earnings suggests that as yet the outcome of the EU referendum has not had a major impact on many UK listed companies, outside of the movements in currencies. Without a clear financial picture of the impact, many CEOs are at pains to highlight the resilience of their business and their willingness to take strong action if required. I would expect the bid for ARM to herald a period of heightened corporate activity. The increased offer for Premier Farnell is another clear example of overseas bidders taking advantage of a depressed pound to snap up UK assets.” -- Singapore Exchange (SGX) today welcomed EC World REIT to Mainboard under the stock code “BWCU”. EC World REIT is the first Chinese specialised logistics and e-commerce logistics REIT to be listed on SGX. With an initial geographical focus on the People’s Republic of China (PRC), the REIT invests in a diversified portfolio of income-producing real estate primarily used for e-commerce, supply-chain management and logistics purposes. Peter Lai Hock Meng, Chief Executive Officer of EC World Asset Management Pte. Ltd., the Manager of EC World REIT, said, “We are pleased to celebrate EC World REIT’s successful listing and trading today and we would like to extend our sincere appreciation to all investors for making this milestone possible. Our IPO portfolio of six quality properties offers investors unique exposure to the logistics and e-commerce sectors in Hangzhou - one of the largest e-commerce hubs in China.” – Emerging markets assets benefitted in the Asian session today as the dollar retreated following the US Fed’s decision yesterday to do nothing. Yields on US government bonds declined slightly in the hours following the release of the monetary policy statement. The fall on the long end was with 6 basis points and was more pronounced than the drop on the short end of 3 basis points (bps). The dollar lost 3/4 of a cent vs the euro and stood this morning at 1.107 EUR/USD. The Federal Reserve stopped short of signalling a near-term increase in US interest rates, and while a December move is seen as likely, markets are focusing instead on the extra stimulus Japan's government is expected to deliver tomorrow. A subsequent retreat in the retreat boosted emerging assets in the Asian session with stocks at new 11-month highs despite fresh wobbles on Chinese equity markets. The Straits Times Index meantime (STI) ended 23.88 points or 0.81% lower to 2917.61, taking the year-to-date performance to +1.21%. The top active stocks today were DBS, which declined 2.34%, Singtel, which declined 0.46%, UOB, which declined 1.27%, OCBC Bank, which declined 0.57% and Wilmar Intl, with a close unchanged. The FTSE ST Mid Cap Index gained 0.04%, while the FTSE ST Small Cap Index declined 0.88%. MSCI's emerging equity index rose 0.25% despite pullbacks in Asian markets, where some concern is rising over volatility in China and the weakening yen. Elsewhere in Asia, Chinese shares fell as much as 3% at one point before recovering as new regulations are expected to prompt wealth managers at small banks to bail out of stocks and into bonds. Elsewhere, the Turkish lira continues to recover, firming to one-week highs. In emerging Europe, Turkish assets continued their post-coup recovery, shrugging off a worsening crackdown on alleged plotters. Stocks jumped 1 percent to one-week highs while the lira was flat, also near one-week highs. Turkey's economic confidence index hit also touched its highest level so far this year in July, rising 14.9% to 95.7. In Africa meantime, the temperature is different. the Nigerian naira hit new record lows against the dollar on Wednesday, shrugging off a rate increase of 200 basis points (bps). Traders are also waiting to see if Egypt will announce plans to devalue its pound at a central bank meeting. Cairo stocks pulled off three-month highs hit after news the government was in loan talks with the International Monetary Fund. The government’s 2025 dollar bond, which rose 4% after the news, eased half a percent. Poland too is in the spotlight today as the European Commission's statement yesterday gave Warsaw three months to address rule of law concerns. In early trading today Polish stocks extended losses, falling 0.7% and the zloty lost 0.2.%.

Latest Video

Better inflation outlook in Asia, says SC corporate sentiment study

Wednesday, 11 January 2012
Better inflation outlook in Asia, says SC corporate sentiment study A survey of leading Asian corporations by Standard Chartered says Indonesian corporations and energy companies are the most optimistic and inflation has a better outlook in 2012 for most Asian economies. http://www.ftseglobalmarkets.com/

A survey of leading Asian corporations by Standard Chartered says Indonesian corporations and energy companies are the most optimistic and inflation has a better outlook in 2012 for most Asian economies.

Standard Chartered has issued the first of a series of quarterly surveys,  based on the views of 529 C-Suite executives from 7 Asian economies and 12 industry groups, 99% of whom are clients of Standard Chartered and business contacts of the equity research team.

According to the bank, the survey differentiates itself by structuring questions that draw out important links between economic variables such as corporate order books, costs and margins, as opposed to focusing on single-issue variables. Responses help build a more comprehensive  picture of the outlook for industry sectors and economies.



Analysis of the responses to the survey highlights a number of nuanced conclusions, says Clive McDonnell, chief equity strategies at Standard Chartered, with specific implications for investors. These include, the observation that buoyant new orders are centered on economies that are more domestically oriented, including Indonesia, India and Thailand. Capex and hiring plans are also biased towards these economies, whereas cyclical economies (with the exception of Korea) and sectors are less positive.

Equally, the RMB is gaining traction as a settlement currency, with 37% of the respondents using or intending to use it. Moreover, the biggest challenges faced by corporates are: the demand outlook (selected by 28% of respondents), cost pressures (25%) and regulation (19%).

 The energy sector is also expected to benefit from a wave of new capital in 2012, with 44% of respondents indicating their plan to tap into the debt market for raising new capital.  

Key challenges facing corporates in 2012 have also been identified in the survey. 28% of respondents see demand as their greatest challenge, closely followed by cost pressures, at 25%. Regulatory uncertainty took the third spot, with 19% of respondents indicating it as their biggest challenge. 

 “A likely recession in the West in 2012, as judged by our respondents, has failed to dampen bottom-up corporate sentiment in Asia. Our Aggregate Index signals a slight improvement in the lead indicators for business prospects in the year ahead, despite challenges of demand, cost pressures and regulatory obligations,” says  McDonnell. He adds:

“Investment implications from the survey support our recommendation for continued emphasis on companies that focus on domestic demand, particularly in Indonesia. We also expect margin pressure to ease in 2012, reflecting improvement in inflation expectations.”

Related News

Related Articles

Related Blogs

Current Issue

TWITTER FEED