Asian equities experienced a dip overnight, with Japan closing almost -2% lower, mainly due to light volumes in the region resulting from market holidays. However, countries like India, Indonesia, Malaysia, Pakistan, the Philippines, and Singapore celebrated Eid al-Adha, indicating varied market activity. In the US, May aggregate financing and new loan data missed expectations, impacting the performance of US-listed China ADRs on Friday. Despite mixed economic data being released mid-morning in Mainland China and Hong Kong, markets displayed resilience, with growth stocks outperforming value stocks in both regions.
Industrial production in May increased by +5.6% year over year, slightly lower than April’s figure of 6.7%, while retail sales saw a YoY increase of +3.7%, surpassing April’s result of 2.3%. The online retail sector saw significant growth, with a +12.4% increase in year-to-date online retail sales. Hong Kong’s most traded stocks included Tencent, Meituan, Alibaba HK, China Mobile, and BYD, with Mainland investors buying $483 million worth of Hong Kong stocks and ETFs. Additionally, China’s potential retaliation against the EU’s preliminary EV tariffs on EU pork received media attention.
The EU’s largest pork exporter, Spain, has exported 20% of its pork to China, sparking concerns over China’s potential retaliation against EU tariffs. However, vehicle stocks in Mainland China and Hong Kong saw positive returns, with Brilliance Auto gaining +18.79% after announcing a special dividend. The real estate sector experienced a decline in both markets, attributed to lower May home sales and decreased housing loan rates. Premier Li’s visit to Australia following New Zealand is seen as a positive sign in the market.
In the US, 173 trade associations have requested an extension of the public comment period on proposed increased tariffs, spanning a wide range of industries. The Hang Seng and Hang Seng Tech index in Hong Kong reported mixed results, with turnovers declining from Friday. Shanghai, Shenzhen, and STAR Board in Mainland China also experienced mixed performances, though growth sectors showed positive returns. Last night’s exchange rates, prices, and yields remained relatively stable, with minor fluctuations recorded in copper and steel prices.
Looking ahead, investors are seeking high-yield opportunities in Asia’s high yield bond market, considering the current market conditions and economic data trends. Despite the challenges faced by various sectors, there are opportunities for growth and investment in the region. As global markets continue to fluctuate, monitoring key indicators and trends will be crucial for investors to make informed decisions and navigate uncertainties in the market.
