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Asia ETF Roundup (Market) – November 2018

Markets rebounded somewhat.

Jackie Choy 06/12/18

For the latest ETF industry news, please refer to our “Asia ETF Roundup (Industry) – November 2018”.

Major Markets Performance

Global markets rebounded in November. The S&P 500 gained 1.8%, while Hong Kong’s Hang Seng Index, Japan’s Nikkei 225 and Korea’s KOSPI rose 2-6%. The Chinese equity markets also rebounded, but we saw slightly different paths for the offshore (HSCEI +5.0%) and the onshore markets (CSI 300 +0.6%; Shanghai Composite -0.6%). This increase in the offshore Chinese equity market was fueled in part by Tencent (00700, listed in Hong Kong), as the firm’s shares climbed 16.9%. The performance of emerging- and frontier-markets was mixed. Stocks in India and Indonesia rebounded strongly, rising 10.2% and 12.2%, respectively. Meanwhile Brazilian stocks took a breather. After jumping 17.8% in October Brazilian shares retreated 2.1% in November (all figures proxied by the respective MSCI country indices in U.S. dollar terms).

The U.S. dollar appreciated 0.1% in November (as measured by the ICE Spot Index). Asian currencies generally rebounded against the dollar, in particular, the Indian rupee and Indonesia rupiah appreciated 6% against the dollar. The Chinese Yuan strengthened 0.4% against the greenback, putting its year-to-date depreciation at 6.2%.

Precious metals’ performance was mixed in November. Gold price rose 0.2%, while the price of platinum and silver dropped 3.5% and 0.7%, respectively. 

Economic and Market News

U.S. Keeps Rates on Hold; Philippines, Indonesia, South Korea Hike Rates

  • U.S. Keeps Rates on Hold – The U.S. Federal Reserve decided on 8 November to maintain the target range for its federal funds rate at 2% to 2.25%. The next FOMC meeting will be held on 18-19 December 2018.
  • Philippines Hikes Rates by 25bps – On 15 November, the Philippines central bank announced it would increase interest rates by 25bps to 4.75%. The bank has increased its key rate by 175 bps in total in 2018.
  • Indonesia Hikes Rates by 25bps – Indonesia’s central bank raised its policy rate by 25 bps to 6%. The bank has increased its key rate by 175 bps in total in 2018.
  • South Korea Hikes Rates by 25bps – On 30 November, the Bank ofKorea raised its Base Rate by 25bps to 1.75%. The Bank last raised interest rate in November 2017.

Chinese Economic Data: Inflationat 2.5% in October; Official PMI Fell to 50.0 in November; Caixin/Markit PMI at 50.2

  • China’s inflation rate registered at 2.5% in October, same as September’s reading.
  • China’s official PMI reading for November fell to 50.0, compared to October’s reading of 50.2. Meanwhile, the Caixin/Markit PMI for November registered at 50.2, slightly higher than October’s reading of 50.1.
About Author Jackie Choy

Jackie Choy  

is the director of ETF Research for Morningstar Investment Management Asia