In the past two months, both Singapore and Malaysian equities performed rather poorly as Trump’s trade war and the change in Malaysia’s leadership were among the reasons impacting the stock markets adversely. On 9 May 2018, the political coalition Pakatan Harapan – led by former Malaysian Prime Minister Mahathir Mohamad – brought down the ruling Barisan Nasionals in the 14th General Election. Mahathir, 92 at the point in time, was re-elected Prime Minister once again.
The US Commerce Department finally lifted the sales ban on ZTE Corp (763.HK), allowing it to resume operations. Shares of ZTE rebounded 25 percent on 12 July 2018.
The lull in the market kicks off with the start of FIFA World Cup 2018. Instead of stock screeners, punters and speculators turn to their TV screens as the World Cup tournament divert attention away from the stock market. Not surprisingly, as historical volatility data from past tournaments would suggest, fund flow tends to be net negative as die-hard fans and punters bet on soccer matches instead.
Hong Kong public utilities stocks tend to buck the trend each time the Hang Seng Index sees a drastic fall. Amidst geopolitical tensions and uncertainties, top tier safe haven stocks the likes of CLP Holdings Ltd (002.HK), HK Electric Investments Ltd (2638.HK), Power Assets Holdings Ltd (006.HK), and Hong Kong & China Gas Co Ltd (003.HK) are able to attract funds.
nternational geopolitics is indeed mercurial. Before the US and China can resolve their trade dispute, a number of emerging markets showed signs of a currency meltdown. Meanwhile, over in Italy, the recently elected populist government has incited some strong anti-EU sentiments while the highly-watched G7 Summit in Canada ended up in disarray. Right now, the whole world will be watching the historic Trump-Kim Summit that is being hosted in Singapore.
Mexico has officially launched retaliatory tariffs on US pork but the US stock market was wholly unaffected. The Dow Jones Industrial Average had only dipped slightly, while the Nasdaq Index continues to make new highs.
After securing a victory in Malaysia’s general election, the new ruling party – Pakatan Harapan (PH) – kept its promise and announced a two-day holiday. PH Chairman Tun Dr. Mahathir was elected as the new Prime...
Recently, the internet has been propagating some negative news that about the coal industry. As a result, on 23 May 2018, China Shenhua Energy Co Ltd (1088.HK), China Petroleum & Chemical Corp (386.HK), CNOOC Ltc (883.HK), and PetroChina Co Ltd (857.HK) became the top four Hang Seng index constituents that fell.
In previous columns, I pointed out that the US-China trade spat has a limited impact on the Singapore stock market in the long term. The initial weakness arising from the trade fallout between the world’s two largest economies was more sentiment-driven, coupled with the fact that stock valuations inflated too quickly during the start of the year.
Tencent Holdings Ltd (700.HK)’s stock price fell before it announced its first-quarter results. Perhaps, speculators are betting that results fell below expectations.