Asian markets mostly lower


Only China outperforms regional peers
Chief Investment Office14 Nov 2017
Photo credit: AFP Photo


CHINA & HONG KONG

China’s markets rose while Hong Kong stocks ended mixed on Monday (13 November). The Shanghai Composite Index added 0.44% to 3,447.84, the Shenzhen Composite Index lifted 0.29% to 2,045.18, and the blue-chip CSI 300 Index gained 0.39% to 4,128.07. Hong Kong’s Hang Seng Index rose 0.21% to 29,182.18 and the Hang Seng China Enterprises Index slipped 0.52% to 11,684.51.

China’s aggregate financing and new loan growth data fell in October to the lowest in a year, raising concern that economic growth will decelerate as President Xi Jinping shifts his focus to containing financial risks after stoking output in the runup to last month’s 19th Party Congress.

While the data came at a time when global investors have shown increasing anxiety that global growth will not justify elevated asset valuations, seasonal and technical factors make the numbers difficult to interpret.

The lending slump was partly caused by government-ordered production cuts at factories so the air around Beijing would not be polluted for the Party Congress, according to Bloomberg Intelligence. And calendar timing played a role, according to analysts, with this year’s mid-Autumn Festival holiday falling in October as opposed to September. Adjusted for that, broad credit flowing to the real economy was a “touch higher” than in September and remained at a level supportive of growth, said some economists Monday (13 November).

Meanwhile, China’s sovereign bonds tumbled, pushing 10-year yields to a three-year high, as a debt slump that started in the US and the UK spread to the world’s second-largest economy.

Yields on notes due in a decade climbed five basis points to 3.98% in Shanghai, the highest since October 2014. The gain follows a 32 basis points surge over the past seven weeks. Five-year Chinese bond yields also jumped, crossing 4% for the first time in more than three years.

In Hong Kong, fundraising from tech-related initial public offering in the city, led by ZhongAn Online P&C Insurance Company, has hit a record USD4.2b this year, according to data compiled by Bloomberg. That’s more than five times the amount raised in Hong Kong during the global dot-com boom in 2000.

This year’s haul beats the previous record of USD2.9b set in 2004, when now-dominant Chinese Internet company Tencent Holdings Limited first sold stock to the public. The next major deal to begin trading will be Yixin Group Limited, a car-financing website to that raised HKD6.8b (USD867m) after pricing at the top of a marketed range, according to people with knowledge of the matter. – Bloomberg News.

 

REST OF ASIA

Australian equities skidded 0.91% on Tuesday (14 November) morning to 5,967.00, extending Monday’s (13 November) losses. The S&P/ASX 200 Index retreated 0.13% to 6,021.77 on Monday.

Aurizon Holdings Limited, Australia’s biggest rail freight operator, is in talks to acquire the Wiggins Island Coal Export Terminal (WICET) as part of a deal that would help it secure long-term volumes and boost cargoes from one of the country’s mining heartlands.

Brisbane-based Aurizon would acquire the WICET facility in Queensland state as part of a wider deal that would see consortium partners seek to add one or more of the port’s source coal mines, the company said Monday  in a statement.

Acquiring WICET would be a potential positive for Aurizon in allowing the company to diversify its rail haulage business given the terminal’s “strategic fit, potential growth profile and quality of infrastructure asset,” an analyst said. – Bloomberg News.

The Kospi Index was little changed at 2,528.84 on Tuesday morning, it lost 0.50% the previous session at 2,530.35.

Meanwhile, the Taiwan Stock Exchange Weighted Index (Taiex) was 0.45% lower at 10,683.92 on Tuesday.

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