Australian shares rebounded on Tuesday, boosted by materials and healthcare, after Federal Reserve Board Governor Lael Brainard’s comments on the US economy strengthened the view that the central bank would leave interest rates unchanged next week.
Ms Brainard said she wanted to see a stronger trend in US consumer spending and evidence of rising inflation before the Fed raises rates, reducing prospects of a near-term interest rate hike.
The dollar was nursing losses against its peers after Brainard reiterated her dovish views.
“The rally that we saw in US trading after those (Brainard’s) comments is one of the reasons why we are seeing such a positive performance today across the Asia-Pacific region,” said Michael McCarthy, chief market strategist with CMC Markets.
STOCKS to watch on Tuesday include:
Global Logistic Properties (GLP): The second-largest owner of US industrial real estate agreed to buy US$1.1 billion of warehouses from Hillwood Development Co. It expects to complete a US$700 million deal for fully leased properties in December, the company said. On Monday, GLP also said it will develop a 27,000-square-metre modern logistics property in Osaka at a development cost of around five billion yen (S$66.8 million).
CWT: The logistics company said a subsidiary under its financial services arm, Straits Financial Group, has been granted the full capital market services licence for trading in futures contracts by the central bank.
This allows the subsidiary, Straits Financial Services Pte Ltd (SFSPL), to offer a full and complete suite of financial and commodity derivatives, including centrally cleared over-the-counter contracts and contracts-for-differences. SFSPL will also be able to expand its customer base beyond the “accredited investors” and “corporate expert investors” category.
The currency market has shifted to signal expectations the Monetary Authority of Singapore will refrain from easing next month, with a measure of the local dollar’s potential direction sliding to a four-year low.
Six-month forwards stumbled to minus 15.64 points on Thursday, the least since July 2012, data compiled by Bloomberg show. The rate touched 32.23 points on June 28, days after the UK vote to exit the European Union caused a global financial rout.
Futures contracts show the likelihood for the US Federal Reserve to raise interest rates at the Sept 20-21 meeting has gone down to 22 per cent after recent disappointing US economic data.
“The market is not looking at Singapore dollar depreciation at this point because of what’s happening in the US,” said Irene Cheung, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd in Singapore.
Taiwan stocks fell to about a one-week low on Friday as TSMC and other Apple Inc suppliers tracked losses in Apple shares after the iPhone 7 failed to impress Wall Street.
As of 0326 GMT, the main Taiex index fell one per cent to 9,169.69, after closing at 9,262.89 in the previous session.
Taiwan Semiconductor Manufacturing Co (TSMC), the world’s biggest contract chip maker, dipped 1.4 per cent. Hon Hai Precision was off 0.9 per cent.
The electronics subindex sank one per cent, while the financials subindex lost 1.2 per cent.
The Taiwan dollar softened NT$0.094 to NT$31.380 per US dollar.
Asian stocks fell as investors weighed the outlook for monetary policy in the US and Japan after the European Central Bank downplayed the need for more economic stimulus. South Korean shares dropped amid concern North Korea may have conducted a nuclear test.
The MSCI Asia Pacific Index dropped 0.7 per cent to 141.03 as of 10:49am in Tokyo. The measure is heading for a 2.1 per cent advance this week as traders pared bets the Federal Reserve will raise rates at its September meeting while speculation swirled over whether the Bank of Japan will add to already record stimulus.
Shares in the US and Europe fell after ECB chief Mario Draghi played down the prospect of an increase in asset purchases at a time when concern over the impact of Brexit on the euro area is mounting.
“While the ECB disappointed, we could still expect additional stimulus later in the year as there’s so much uncertainty in Europe,” James Woods, a strategist at Rivkin Securities in Sydney, said by phone.
SINGAPORE stocks opened 0.82 per cent lower on Friday, with the Straits Times Index losing 23.78 points to 2,870.7 as at 9.05am.
About 105.1 million shares worth S$74.8 million in total changed hands. Losers outnumbered gainers 88 to 63.
Some of the top traded stocks were Singapore Exchange, CapitaLand and Singtel.
THE following stocks made announcements after Thursday’s market close that could affect its trading on Friday:
Yoma Strategic said its subsidiary, Convenience Prosperity Company Ltd (CPCL), has been appointed by J C Bamford Excavators as the exclusive distributor for the Myanmar market. The partnership is important at a time when infrastructure and construction activities are accelerating across the country, said its CEO Melvyn Pun.
Seafood supply chain manager Oceanus Group has signed a binding term sheet with two of three of its key creditors for a proposed debt restructuring, which may greatly reduce its total outstanding debt balance. The total debt balance, including accrued interest, held under the two key creditors, Ocean Wonder International and BW Investment, amounts to S$71.85 million, representing 82.8 per cent of Oceanus’s outstanding debts.
Del Monte Pacific narrowed its first quarter loss to US$8.7 million, from US$10.7 million a year ago, on lower operating expenses as a result of a restructuring that started last year. The group’s revenue shrank 2.8 per cent to US$465.5 million from the preceding year.