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CIMB-Principal Weekly Updates
1 – 7 May 2017
Market Snapshot
UNITED STATES
The S&P 500 rose 1% to a record high, driven by a continuing healthy job market. The jobs report for April
showed a 211,000 increased, against the expectations for 185,000. The unemployment rate fell to 4.4%, near it’s
10 year low. The US Fed left its interest rate unchanged as expected but remains hawkish on the economy, with
expectations of another 2 rate hikes in 2017. The Fed is expected to do a rate hike in June. On Thursday, the
American Health Care Act backed by Donald Trump and Republican leaders has passed the House of
Representatives by a 217–213 vote. The bill will now be taken up by the Senate.
EUROPE
Euro stocks rose 2% to a 21-month high, as investors priced in Emmanuel Macron winning the French
Presidential election. On Sunday, Marine Le Pen and Emmanuel Macron kicked off for the second round of
France's presidential election. As forecasted by majority voters, Emmanuel Macron cruises to victory in France to
be the next president, winning by 66.06% to 33.94% to become, at 39, the country's youngest president.
Emmanuel Macron is a liberal centrist, pro-business and a strong supporter of the European Union. Emmanuel
Macron’s campaign pledges included a 120,000 reduction in public-sector jobs, a cut in public spending by €60Bil,
reducing unemployment rate to below 7%, and vowed to ease labour laws and give new protections to the selfemployed. Eurozone GDP grew by an annualised rate of 1.8%, from +1.9% in 4Q16. Britain’s manufacturing PMI
rose to 57.3, a three-year high (54.2 in March). Greece cut a deal for a third bailout by pledging austerity
measures.
JAPAN
Japan and China had the first bilateral financial dialogue in two years. Japan and China agreed to bolster
economic and financial cooperation amid the US' protectionist stance and tension over North Korea weighing on
Asia's growth outlook. The Nikkei rose 1%, amid a weaker JPY.
CHINA
Chinese stock indices continued to be sold down on Friday on China’s campaign to cut leverage and clamp down
on irregularities. The banking regulator started spot checks on lenders’ investment, wealth management and
interbank businesses. China's factory sector lost momentum as Caixin/Markit manufacturing Purchasing
Managers’ Index (PMI) in April fell to seven-month low of 50.3 from March's 51.2 and the Caixin/Markit services
PMI fell to 51.5 from March's 52.2. The official Purchasing PMI fell to a six-month low of 51.2 in April from a near
five-year high of 51.8 in March. The official non-manufacturing PMI stood at 54.0 in April, compared with the
previous month's reading of 55.1. While China’s economy remains robust, momentum is expected to cool as
authorities step up their battle to cool the overheated property sector and as the central bank and other regulators
tighten credit conditions to rein in rising financial risks. Meanwhile, China’s foreign exchange reserves rose for the
third consecutive month in April with an increase of $2Bil to $3.03Tri due to balanced foreign exchange supply
and demand and the appreciation of currencies against the dollar.
Disclaimer: This document is provided to you for information purposes only and it may not be reproduced, distributed or published by
any recipient for any other purpose. It should not be construed as an offer or a solicitation of an offer to purchase or subscribe. The
information contained herein has been derived from sources believed to be reliable and is current as at the date of publication. No
representation or warranty is made nor is there acceptance of any responsibility or liability made as to the accuracy, completeness or
correctness of the information contained herein. Expressions of opinion contained herein are subject to change without notice. Potential
investors should seek independent advice before making investment decisions.
CIMB-Principal Weekly Updates (1 – 7 May 2017)
Page 1 of 2
NORTH ASIA
KOSPI advanced 2% reaching a record high on strong 1Q earnings and foreign buying. South Korean exports
grew at the quickest pace in six years by surging 24.2% in April due to robust demand for high-tech memory
chips. Taiwan stocks finished modestly lower on Friday on profit-taking after a nine-session winning streak. The
HSI closed 1% lower, tracking weaker Chinese shares and commodity prices. Hong Kong’s regulator orders
suspension of trading in China Huishan Dairy Holdings on concerns about its finances and most of its board had
quit.
ASEAN
Singapore’s STI gained 1% to a 21-month high, on stronger financial stocks as DBS and UOB reported better
than expected results. Indonesia’s Gross Domestic Product (GDP) grew 5% in 1Q, inched up a little from 4.95%
in 4Q16, supported by higher exports and stronger public consumption. The JCI Index barely moved. Malaysia’s
exports maintained at a robust pace of 24.1% in March. Trading in shares of Iskandar Waterfront City Bhd was
suspended after the MYR1.7Bil Bandar Malaysia development agreement between Iskandar Waterfront Holdings
(IWH) and China Railway Engineering Corp (CREC) had been terminated as the consortium failed to meet
payment obligations. Malaysia palm oil inventories were estimated to have increased 5.2% in April from a month
earlier, a 2nd monthly increase, as palm oil supplies from Malaysia and Indonesia rebounded from drought. The
KLCI fell slightly for the week. Philippines stocks advanced 2%, led by mining stocks after the Philippines
environment minister was ousted over her anti-mining rhetoric.
OIL
Crude oil prices slumped to the lowest level of 2017 after falling below $45/bbl for the first time since November
last year, on expectations of recovery in Libyan production along with rising US output. Libya’s production rose
above 760,000 barrels per day, its highest since December 2014. According to Baker Hughes report, the total
th
count of US active drilling rigs increased by 7 to 877 for its 16 consecutively weekly increase.
Disclaimer: This document is provided to you for information purposes only and it may not be reproduced, distributed or published by
any recipient for any other purpose. It should not be construed as an offer or a solicitation of an offer to purchase or subscribe. The
information contained herein has been derived from sources believed to be reliable and is current as at the date of publication. No
representation or warranty is made nor is there acceptance of any responsibility or liability made as to the accuracy, completeness or
correctness of the information contained herein. Expressions of opinion contained herein are subject to change without notice. Potential
investors should seek independent advice before making investment decisions.
CIMB-Principal Weekly Updates (1 – 7 May 2017)
Page 2 of 2