It was a mixed week last week, as gains in growth stocks had offset the losses in energy counters. Dow Jones marginally declined to 32,803.47 (-0.13%), the S&P 500 was higher at 4,145.19 (+0.36%), while Nasdaq ended higher at 12,675.55 (+2.2%).
Out of the 16 major indices that MIDF tracks, 14 were in the green territory last week, led by Singapore’s STI (+2.2%), Jakarta’s JCI (+1.9%) and Korea’s KOSPI (+1.6%). The only 2 indices that saw weekly losses were Dow Jones (-0.13%)
and China’s CSI 300 (-0.32%).
China’s exports grew by +18.0%yoy in Jul-22 (Jun-22: +17.9%yoy), which is the fastest pace this year hence beating market expectations for a +15.0%yoy growth. However, imports rose +2.3%yoy (Jun-22: 1.0%yoy) during the same
period. This was weaker than expectations as market was anticipating a +3.7%yoy increase and suggests that China’s domestic demand remains soft.
The US job data showed that the level of employment has risen above its pre-pandemic level. Nonfarm payrolls were higher by 528,000 in Jul-22, the largest rise since February this year. Economists were expecting for an increase of only
250,000 jobs. June job data was revised higher to 389,000 from the previously reported 372,000.
A United Nations index of world food costs declined by almost -9.0% in Jul-22, falling the most since 2008 as concerns over supplies of gains and vegetable oils have eased following Ukraine’s decision to restart imports. Although the index had fallen for four consecutive months, prices were seen to remain elevated.
Indonesia’s 2Q GDP grew by +5.4%yoy on the back of the rise in exports, underpinned by rising commodity prices. This was the fastest rate this year, beating the median forecast for a +5.2% rise based on Reuters poll. Exports grew by about +20.0%yoy in 2Q (1Q: 16.2%yoy). The country’s central bank said last month that it expects GDP for 2022 to be at the lower end of the range of 4.5%-5.3%.
The Reserve Bank of India has raised its key policy repo rate by 50 basis points to 5.4% last week. The Standing Deposit Facility rate and the Marginal Standing Facility Rate were accordingly adjusted higher to 5.15% and 5.65% respectively. This came in after its retail inflation hit +7.0% in Jun-22, higher than the central bank’s 2%-6% tolerance band. Based on Reuters, economists are expecting another rate hike, but the expectations of the quantum were split between 25 and 50 basis points.
The Bank of England (BoE) had raised its interest rate by 50 basis points to +1.75% – its largest hike in 27 years as the bank warned that the UK is heading towards more than a year of recession on the back of soaring inflation. The BoE had raised its forecast for the peak of inflation to +13.3% in Oct-22 amid the surge in gas prices.
South Korea’s exports grew by +9.4%yoy to USD60.7b in Jul-22, supported by the robust d e m a n d from the US which had offset weak sales to China. Meanwhile, imports rose by +21.8%yoy to USD65.4b (Jun-22: +19.4%yoy), higher than the month before and the +20.7%yoy gain seen in the survey.
Indonesia’s inflation rate of +4.94% in Jul-22 was the highest level in 7 years and it came in above the central bank’s target range, while core inflation remained to be within target. This has reflected the rise in prices of food, household fuel and airfare as well as the hikes in some electricity tariffs.
