In today’s briefing:
- Launch of Korea Value Up Index in September
- Singapore: Signs of ‘Dutch Disease’ as Cyclical NODX Slumps Amid Property Surge
- EM Watch: China FLOODS global copper markets amidst the plenum
- Actinver – Macro Daily: Manufacturing Industry
- Heard From Fortress Hill: Weekly Market Observations
- Actinver MX Local Flavor: In line with U.S. indices, Mexican stocks have a negative day
- HEW: Rate Cuts Not Boxed-In
Launch of Korea Value Up Index in September
- Korea Value-Up index is finally expected to be launched in September 2024 which is likely to include at least 100 companies in KOSPI and KOSDAQ.
- There are expectations that Korea’s Value Up index could resemble JPX Prime 150 index which is a Japanese version of the value up index launched last year.
- We provide 70 stocks in Korea that could be included in the Korea Value Up index. These 70 stocks could outperform the market in the next several months.
Singapore: Signs of ‘Dutch Disease’ as Cyclical NODX Slumps Amid Property Surge
- Productivity has declined 0.95%YoY on average over the latest 8 quarters, with Singapore’s economic growth depending entirely on rather rapid 4.85%YoY average growth in employment.
- Jun’24’s 6.7%YoY decline in real NODX indicates real GDP growth for Q2CY24 will be revised down to 2.5%YoY (from the 2.9% advance estimate); strong re-exports also suggest manufacturing’s declining competitiveness.
- Fiscal policy has returned to its contractionary norm, with this year’s surplus likely to be over 1% of GDP, reining-in RGDP growth to 2% for 2024 (and 1.3%YoY for H2CY24).
EM Watch: China FLOODS global copper markets amidst the plenum
- Good Afternoon from Europe. It’s incredibly hard for me not to begin this weekly EM blog by emphasizing how bearish I am becoming on Copper, given the current developments out of China.
- Chinese trends are diverging rapidly both internally and externally—the export sectors are performing well, while internal consumption growth is far from firing on all cylinders.
- Ahead of the conclusion of the CCP Plenum, we noted that China Daily posted several upbeat stories on the GDP outlook following the release of a slightly disappointing Q2 report.
Actinver – Macro Daily: Manufacturing Industry
- The manufacturing survey shows that the stagnation in manufacturing production in May stems from a combination of slowing external demand and stagnation in domestic demand.
- At the sectoral level, there is great heterogeneity in the capacity used.
- Last week, the National Institute of Statistics and Geography (INEGI) informed that manufacturing production stagnated in May (0.01% MoM) and accumulated a contraction of -1.8% so far this year (https://bit.ly/MXDAILYESP_2024_07_12).
Heard From Fortress Hill: Weekly Market Observations
- US stock market is diverged in the past week, as DOW breaks new time height and NASDAQ retreats. S&P500 declines likewise.
- Hong Kong Hang Seng is down but is still within our forecast range of 16000 level to 18000 level.
- We suffer huge loss as our long call bets on Nvidia, Apple, Microsoft went sour. We are still keeping the positions in the hope that the trades will turn around.
Actinver MX Local Flavor: In line with U.S. indices, Mexican stocks have a negative day
- Once again, Mexican stocks had a negative day in line with the pessimistic sentiment observed in the North American stock markets.
- In particular, the IPC index fell 1.31% to trade slightly above 53 thousand units. At the end of the session, 27 of the 35 companies included in the main local index had falls in their share prices
- The mining company Industrias Peñoles (PE&OLES * -4.65%) and the financial company Regional (R A -4.43%) had the largest share price declines at the end of the session.
HEW: Rate Cuts Not Boxed-In
- UK economic data was mostly as expected, but increased services inflation tipped the balance towards a hawkish stance. The ECB maintained flexibility but is likely to cut rates in September, and the BoE may need to reassess previous data to avoid a rate cut in August.
- The Bank of Canada may respond to rising unemployment and low inflation with a likely consecutive rate cut, rather than adhering to the Fed’s hold position.
- Key data to watch include the flash PMIs, US GDP for Q2, and core PCE inflation for June.
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