Oct 02 2020 0
Here are the most important news to the financial market today.
Tighten Hong Kong
On Thursday, hours after Hong Kong leader Carrie Lam announced stability had returned to the city, riot police flooded the streets, checked IDs and backpacks, as well. such as confronting passersby in an attempt to stop any National Day protests. With around 70 arrests and a few crowds, the date was a significant departure from the massive protests that crippled Asia's financial center a year ago. About 6,000 policemen were on duty on Thursday and small protests broke out in waves, with protesters chanting: "Liberating Hong Kong, the revolution of our time" - one shot Popular branding has been banned by the government for months.
According to a poll published in August, support for some of the protest movement's goals has increased this summer. Just over half of respondents said they were "very opposed to" the national security law and the rate of support for Ms. Lam's resignation increased to 58%.
Investors are expecting trading on the Tokyo Stock Exchange to resume trading after Thursday's shutdown. Futures markets in Japan fell along with the Australian market, while markets in China and Hong Kong remained closed for the holiday season. Before that, US stocks rose as traders weighed the chance of reaching an agreement on the US financial stimulus package. The Nasdaq 100 index hit its highest level in nearly a month as shares of Amazon.com, Microsoft and Tesla rose. The rise in the S&P 500 Index was limited by a drop in energy producers' stocks. Oil fell due to concerns about the market oversupply. Gold rose, while yields on Treasury bills fell.
The next choice
Investors are turning to Asian high-yield bonds and technology stocks in search of higher returns. Asia's high-yielding credit is very attractive, such as China's real estate debt from solid businesses with good access to capital, according to Pictet Asset Management. Meanwhile, the Taiwanese technology stocks are very popular with JPMorgan Asset Management and Principal Global Investors. The "income hunters" are looking beyond safer debt and traditional dividend-paying stocks that have been affected by the pandemic. Nearly $16 trillion in bonds globally provided negative yields after central banks lowered interest rates to combat economic losses from the pandemic. Credit spreads have declined around the world, including in Asia, but the region's investment-grade dollar bonds yield about 40 basis points higher than U.S. bonds earned. In the same way, high yield seekers want yields to more than 200 basis points, according to the Bloomberg Barclays Index.
The Yuan’s performance
The best quarter of the Chinese yuan in 12 years is attracting new international attention to the currency. The CNY gained 3.8% in the three-month period ending September 30, the highest level since early 2008, while the CNH rose more than 4%. That's more than the gains in G-10 currencies, including traditional haven havens like Swiss francs and Japanese yen. China's success in fighting the corona virus and its economic slowdown has garnered both praise and investment cash flow, while prompting some speculation that the yuan could eventually turn out to be. into a new haven for risk-averse. Of course, the country still tightly controls its exchange rate against a basket of currencies and determines how much money can cross its borders - taboo for many nation's wealth managers. But those measures also stabilized the currency even as price volatility increased elsewhere.
Competition in medicine
Australia's largest stock in the benchmark index is facing price pressure in the face of increasing competition in the global healthcare sector.
Biotechnology company CSL, which makes therapies from human blood, has become the highest share of the S&P/ASX 200 Index this year. However, according to analysts, company valuations can be challenged by a wide range of international firms bringing competitive products to market. “As there is more volatility, the future of CSL faces much more potential results and investment uncertainty, which often leads to lower multiples for stocks,” wrote Morgan Stanley in a September 29 note, adding that 45% of a company's revenue could be threatened by therapies from peers like Roche, Sanofi and Takeda.