Download Weekly insight for the Week Ended January 13

Weekly Digest
2017/1|17 January 2017
Weekly Factsheet ended 13 Jan: Markets end mixed on weak China trade
6-Jan
13-Jan
1,675.49
1,672.50
-0.18
1.87
Dow Jones
19,963.80
19,885.73
-0.39
0.62
Nikkei 225
19,454.33
19,287.28
-0.86
0.90
DAX Index
11,599.01
11,629.18
0.26
0.02
Global indices ended the week on a mixed note.
Despite some positive economic data releases such as
Eurozone growth and rising U.S. retail sales, the
market continued to remain cautious due to weakening
China’s trade data, which could be dampened further
by anticipated Trump’s anti-trade policy. In addition,
the Fed officials showed concerns on long term risk to
the economy such as high inflation and debt issue in
spite of short term economic boost. Meanwhile, ECB is
seen to maintain its monetary policy in 2017 due to
expected subdued core inflation.
UK FTSE100
7,210.05
7,337.81
1.77
2.37
STOCK MARKET HIGHLIGHTS
AUS ORD 30
5,808.98
5,776.80
-0.55
-0.14
STI Index
2,962.63
3,025.07
2.11
4.63
22,503.01
22,937.38
1.93
3.67
3,154.32
3,112.76
-1.32
-0.74
TABLE 1: WEEKLY CLOSING IN MAJOR MARKET INDICES
KL Composite
Hang Seng
SSE Index
%wow
%ytd
13-Jan
13-Jan

KLCI ends in the red as BAT, HL Bank and Genting sold.
Blue chips capped a volatile Friday on a downbeat note on selling
of BAT, Hong Leong Bank and Genting Bhd due to the absence
of strong follow-through buying from foreign funds while crude
oil prices slipped. At 5 p.m., the KLCI was down 5.26 points or
0.31% to 1,672.50 snapping three days of gains, of which two
days were supported by foreign buying. (The Star)

Nasdaq ends at a fresh record, banks gain; Dow retreats
from 20,000. U.S. stocks rose moderately Friday on the back of
quarterly earnings from some of the country’s biggest banks.
The Dow Jones Industrial Average DJIA, slipped 5.27 points to
close 19,885.73. For the week, the blue-chip index is off 0.4%.
The S&P 500 index SPX, added 0.2%, to end at 2,274.64 for a
weekly loss of 0.1%, and the Nasdaq Composite Index COMP,
climbed 0.5%, to finish at 5,574.12. (Marketwatch)

Fiat rebound helps send European stocks higher into the
weekend. European stock markets shook off recent weakness
and marched higher on Friday, with Fiat Chrysler setting an upbeat tone for car makers just a day after being accused of cheating on emissions tests. The Stoxx Europe 600 index SXXP, advanced 1% to close at 365.94, easily erasing a 0.7% loss from
Thursday. (Marketwatch)

Asia stocks trade mixed as China export data disappoints. Chinese shares slid on Friday as investors digested China's underwhelming exports for December and disappointing fullyear trade figures. The Shanghai composite wavered for most of
the session, and closed down 0.22% at 3,112.3. In South Korea,
the Kospi lost 0.5% at 2,076.8, after the Bank of Korea left
benchmark rates unchanged at 1.25%. The Nikkei 225 finished
in the green, up 0.8% at 19,287.3. Australia's ASX 200 finished
down 0.79% at 5,721.1. Hong Kong's Hang Seng advanced
0.4% by the afternoon. (CNBC)

Dollar jumps after jobs report, erasing the week’s losses.
The dollar rallied against its major rivals on Friday, turning firmly
higher for the week as the latest reading on the labor market
underscored the belief that inflation could be poised to return to
the market. The ICE Dollar Index DXY, added 0.7% to 102.26,
trading near its highs of the session. (Marketwatch)
Source: Bloomberg
CHART 1: KLCI DAILY PERFORMANCE
Points
1685
Volume (mil)
330
280
1680
230
1675
180
1670
130
1665
80
1660
30
-20
9-Jan
10-Jan
11-Jan
12-Jan
13-Jan
1655
Source: Bloomberg
CHART 2: MAJOR STOCK INDICES (DAILY % CHANGE)
Dow
%dod
3.0
Nikkei
FTSE100
2.0
Nikkei
0.80
1.0
FTSE100
0.62
-1.0
Source:
Bloomberg
-2.0
13-Jan
12-Jan
11-Jan
10-Jan
9-Jan
8-Jan
7-Jan
6-Jan
5-Jan
4-Jan
3-Jan
2-Jan
0.0
Dow
-0.03
Bumiputera Development | Development Gap | Human Capital | Macroeconomics & Market | Technology & Innovation
ECONOMIC HIGHLIGHTS
CHART 3: REGIONAL STOCK INDICES (DAILY % CHANGE)
1.5
%dod
STI
HSI
Shanghai

Malaysia: U.S. dollar correction may boost ringgit rebound. A U.S. dollar correction, if it happens, may slightly
boost the ringgit for which the rebound, based on mainly on
fundamentals, will likely be gradual. Amidst that general view,
some economists see the U.S. dollar to potentially not
strengthen too much in the long-term, especially in view of,
among other factors, export competitiveness. It should provide a boost although I would caution against forecasting the
level,” said Hor Kwok Wai, Chief Operating Officer, Hong
Leong Bank. “It is possible that the ringgit may move towards
the RM4.30 level to the U.S. dollar but that is as far as I
would go,’’ said Chris Eng, Head of Research, Etiqa Insurance
& Takaful. (The Star)

Malaysia: Foreign workers’ levy payment deferred to
2018. Widespread relief was felt among industry employers
after the government postponed the mandatory imposition of
foreign workers’ levy payment on employers until 2018.
Transport Minister Datuk Seri Liow Tiong Lai said yesterday
that the deferment was necessary in the absence of a proper
ecosystem under the newly introduced Employer Mandatory
Commitment (EMC) to resolve issues involving foreign workers. Liow said it was also agreed that employers be given the
right to source and employ workers for any industry, thus
cutting red tape. (The Edge)

Malaysia: Malaysia among most exposed to Fed rate
hike – World Bank. Malaysia is one of three large, financially integrated economies in the East Asia and Pacific region
most exposed to an adverse reaction to the US Federal Reserve’s (Fed) anticipated hike in interest rates or an increase
in global risk aversion which could also slow growth, the
World Bank said. Malaysia, Indonesia and Thailand are economies with sizeable external, foreign currency denominated
and/or short-term debt, it added. The World Bank said Malaysia’s GDP is expected to accelerate to 4.3% from an anticipated 4.2% in 2016, as the adjustment to lower energy prices
eases and commodity prices stabilise. (The Edge )

Malaysia: Government to collect RM42 bil in GST this
year. The government, via the Royal Malaysian Customs Department, expects to collect RM42 bil in goods and services
tax (GST) this year compared with RM41 bil last year, said
Deputy Finance Minister Datuk Othman Aziz. Othman said the
target could be achieved through the cooperation of all parties in the face of the worldwide economic slowdown, which
Malaysia was not spared. He said although there were companies which failed to follow the GST directive, this was small
at about 5%. (The Edge )

Malaysia: FBM KLCI to trend higher in 2017. Market
analysts are optimistic about a continued uptrend in the FBM
KLCI following its recent winning streak, after registering a
3% decline in 2016 and starting 2017 on a bearish note. “We
see the 1Q17 to be positive although it is still difficult to time
the market,” said Chris Eng, head of research at Etiqa Insurance & Takaful. The FBM KLCI closed at 1,667.90 yesterday.
Eng noted that a stronger economic is expected this year with
a 4.5% GDP growth forecast, with ongoing infrastructure and
construction projects. Better market performance and economic data from China have also contributed to the positive
sentiment. (The Edge )
STI
1.07
1.0
0.5
HSI
0.21
13-Jan
12-Jan
11-Jan
10-Jan
9-Jan
8-Jan
7-Jan
6-Jan
5-Jan
4-Jan
3-Jan
2-Jan
0.0
Shanghai
-0.35
-0.5
-1.0
-1.5
CHART 4: RINGGIT vs MAJOR CURRENCIES (% W-O-W)
%wow
USD/MYR
EUR/MYR
Yen(100)/MYR
2.8
1.8
2.00
0.8
13-Jan
6-Jan
30-Dec
-1.2
23-Dec
16-Dec
9-Dec
2-Dec
0.13
-0.2
-0.21
-2.2
CHART 5: RINGGIT vs REGIONAL CURRENCIES (% W-O-W)
2.4
%wow
SGD/MYR
Baht100/MYR
KRW100/MYR
1.9
1.4
1.32
0.9
0.65
0.23
13-Jan
6-Jan
30-Dec
23-Dec
-0.6
9-Dec
-0.1
16-Dec
0.4
-1.1
-1.6
-2.1
Source: Bloomberg
CHART 6: CRUDE OIL vs CRUDE PALM OIL
55
$ per barrel/
Crude oil
Crude oil
CPO
RM per tonne/ CPO
3300
54
53
52
3200
51
50
13/1/2017
11/1/2017
9/1/2017
7/1/2017
5/1/2017
3/1/2017
1/1/2017
30/12/2016
28/12/2016
26/12/2016
24/12/2016
22/12/2016
20/12/2016
18/12/2016
16/12/2016
3100
14/12/2016
49
DISCLAIMER: This report is for information purposes only. We have based the data and information in these reports from sources we believe to be reliable. However, we do not guarantee
as to the accuracy or completeness of the information provided. Any recommendation or opinion that is provided in this document, if any, does not have regard to the investment objective
and particular needs of any specific addressee. No parts of this publication may be reproduced or redistributed in any form or any means without a prior written permission of the publisher.




E.U.: S&P sees ECB staying in support mode until
2018. Rating agency Standard and Poor's said it did not
expect the European Central Bank to switch away from
its supportive monetary policy before 2018, despite signs
that inflation pressures are beginning to return. A report
by S&P's chief European economist and a colleague said
2017 was likely to mark the return of inflation in the eurozone, though core readings that strip out more volatile
goods such as crude oil should remain subdued and give
the ECB leeway to maintain support. (Reuters)
Star)

U.S.: Producer prices rise as energy costs push
higher. U.S. producer prices rose for a second straight
month in December amid rising costs for energy products,
leading to the biggest YoY gain in just over two years.
The Labor Department said its PPI for final demand increased 0.3% last month after advancing 0.4% in November. That lifted the YoY increase in the PPI to 1.6%, the
largest gain since September 2014. The PPI rose 1.3% in
the 12 months through November. Economists polled by
Reuters had forecast the PPI rising 0.3% last month and
surging 1.6% from a year ago. (Reuters)
E.U.: German economy surges at fastest rate in
five years. The German economy expanded at the fastest pace in five years in 2016 and the growth momentum
is expected to continue this year as rising private and
state spending help Germany cement its position as the
locomotive of the eurozone. Europe's largest economy
expanded by 1.9% last year, a preliminary estimate from
the Federal Statistics Office. Economists had expected
growth in GDP of 1.8% for 2016 after an expansion rate
of 1.7% in the previous year. The growth rate of 1.9%
matched the highest forecast in the poll. (Reuters)

U.K.: Inflation to hit a two-year high. Inflation is set
to hit its highest level in more than two years this week,
according to economists, as the sharp drop in sterling
since the referendum fuels a rise in the cost of living.
Official figures due to be published on Tuesday are expected to show that fuel, food, air fares and clothing
prices have driven the headline rate to 1.4% in December, from 1.2% in November. If economists polled by
Reuters are correct, the rate would be the highest since
August 2014, when the consumer prices index was 1.5%.
Malaysia: Positive start for Bursa on foreign fund
inflow. Bursa Malaysia saw net inflow of foreign funds
amounting to RM101.8 mil in the first week of 2017, up
from RM31.2 mil in the prior week, said MIDF Research.
This could be attributable to the general inflow into Asia
last week and supported by Malaysia’s encouraging trade
numbers, which saw an uptick in exports by 7.8% yoy in
November 2016, it added. In its weekly fund flow report
yesterday, the research house said on a net daily basis,
foreign investors were seen buying last Tuesday and Friday, with the bulk on the latter day of RM136.4 mil. (The
U.S.: Retail sales boosted by auto demand; producer prices climb. U.S. retail sales rose in December amid
strong demand for automobiles and furniture, providing
further evidence that the economy ended the fourth quarter with momentum and is poised for stronger growth this
year. The Commerce Department reported that retail sales
increased 0.6% last month after rising 0.2% in November.
Sales were up 4.1% from December 2015. They rose
3.3% for all of 2016, up from 2.3% in 2015. (Reuters)

U.S.: Consumer sentiment in U.S. hovers near highest in 12 years. Consumer confidence was little changed
in January from its highest level since the start of 2004,
showing Americans are still optimistic that fresh economic
policies will spur growth. The University of Michigan said
that its preliminary index of sentiment was 98.1, after
98.2 in December. (Bloomberg)

U.S.: Fed officials see quick economic boost from
Trump, risks to follow. Federal Reserve officials cautioned on Thursday that the fiscal and tax plans sketched
out by the incoming Trump administration could trade a
short-term economic boost for longer-run inflation and
debt problems they might have to counteract. Fed regional bank presidents agreed in principle that the policies
President-elect Donald Trump is likely to pursue will increase economic growth - through direct spending, the
consumption and investment spurred by tax cuts, and the
boost to business from lighter regulation. (Reuters)

E.U.: Eurozone economy registering surprisingly
strong growth spurt. Industries across the eurozone
cranked up output in November and Germany ended the
year with its strongest growth in five years, pointing to an
economic spurt that may be arriving earlier than some
ECB policymakers expect. Eurozone industrial output in
the 19-country currency bloc surged 1.5% MoM and 3.2%
YoY as firms stepped up production before Christmas.
Both figures were far better than expected. (Reuters)
(Guardian)

U.K.: Pound slides as much as 1.6% as May reported to seek hard Brexit. The pound slid below
$1.20 for the first time since October’s flash crash, after
reports that U.K. Prime Minister Theresa May will signal
plans to quit the European Union’s single market to regain control of Britain’s borders and laws. The currency
has slumped 19% against the dollar since the U.K. opted
to leave the EU in June’s referendum, with declines since
the initial aftermath of the vote mainly sparked by concern May would pursue a so-called hard Brexit.
(Bloomberg)

U.K.: 'Brexit tourists' exploit weak pound to boost
U.K. high street sales. Legions of “Brexit tourists”
flocked to the U.K. to take advantage of the weak pound
over Christmas, triggering a huge rise in spending on
foreign credit cards. Foreign shoppers spent more than
£725m on the British high street during December, up
22% or an extra £130m compared to the previous year,
according to payments processing firm Worldpay. Bargain
-hunters from Hong Kong were the biggest spenders,
closely followed by visitors from the United States, United
Arab Emirates and mainland China. (Guardian)

Japan: Core machinery orders fall as demand uncertainty sets in. Japan's core machinery orders fell in
November at the fastest pace in seven months in a sign
that some companies may be turning cautious about capital expenditure because of uncertainty over domestic
and overseas demand for goods and services. Core or-
DISCLAIMER: This report is for information purposes only. We have based the data and information in these reports from sources we believe to be reliable. However, we do not guarantee
as to the accuracy or completeness of the information provided. Any recommendation or opinion that is provided in this document, if any, does not have regard to the investment objective
and particular needs of any specific addressee. No parts of this publication may be reproduced or redistributed in any form or any means without a prior written permission of the publisher.
ders, a highly volatile data series regarded as a leading indicator of capital expenditure, fell 5.1% in November from the
previous month, more than the median estimate for a 1.7%
decline. (Reuters)





China: Beijing will 'take off the gloves' if Trump continues on Taiwan: China Daily. China has shown restraint
in the face of provocations by U.S. President-elect Donald
Trump over Taiwan, but if he continues after assuming office
Beijing will "take off the gloves", an official Chinese state-run
newspaper said on Monday. (Reuters)
China: China posts worst export fall since 2009 as
fears of U.S. trade war loom. China's massive export engine sputtered for the second year in a row in 2016, with
shipments falling in the face of persistently weak global demand and officials voicing fears of a trade war with the United States that is clouding the outlook for 2017. The world's
largest trading nation posted gloomy data with 2016 exports
falling 7.7% and imports down 5.5%. The export drop was
the second annual decline in a row and the worst since the
depths of the global crisis in 2009. (Reuters)
China: Foreign direct investment to China rises 4.1%
in 2016 on year. Foreign direct investment (FDI) to China
increased 4.1% on the year to CNY813.22b in 2016, the
country's commerce ministry said. FDI to China in December
rose 5.7% YoY to CNY81.42b, the Ministry of Commerce said
in a statement on its website. FDI in services increased 8.3%
in 2016 and made up 70.3% of all FDI, it added. (Reuters)
China: Credit growth exceeds estimates as lending
remains robust. China’s broadest measure of new credit
expanded faster than expected, bringing the total of new
loans extended last year to roughly equal the size of Italy’s
USD1.8t economy. Aggregate financing remained robust at
CNY1.63t ($236b) in December, compared with a median
estimate of CNY1.3t in a Bloomberg survey. New yuan loans
stood at CNY1.04t, exceeding all 37 estimates in the survey.
The broad M2 money supply increased 11.3% from a year
earlier after climbing 11.4% in November. (Bloomberg)
Global: Trump tax cuts could jump-start global economy, World Bank says. President-elect Donald Trump’s
tax cuts and spending plans could deliver a shot in the arm
to the U.S. economy, lifting growth around the world, although uncertainty about his trade policies adds to the risks,
according to the World Bank. The Trump administration
could squander the economic gains of fiscal stimulus if it imposes new trade barriers that provoke retaliation by other
countries, the Washington-based development lender said
Tuesday in the latest update to its global economic outlook.
(Bloomberg)
RELEASE FOR THE WEEK (JAN 16–20, 2017)
U.S.

Jan Empire Manufacturing on Jan 17

MBA Mortgage Applications on Jan 18

Dec CPI on Jan 18

Dec Industrial Production on Jan 18

Dec Capacity Utilization on Jan 18

Weekly Initial Jobless Claims on Jan 19
Eurozone

JNov Trade Balance SA on Jan 16

Jan ZEW Survey Expectations on Jan 17

Dec CPI on Jan 18

ECB Main Refinancing Rate on Jan 19

ECB Marginal Lending Facility on Jan 19

ECB Deposit Facility Rate on Jan 19
Japan

Dec Machine Tool Orders on Jan 16

Nov Industrial Production on Jan 16

Nov Capacity Utilization on Jan 16

Dec Machine Tool Orders on Jan 19

Dec Nationwide Dept Sales on Jan 20

Nov All Industry Activity Index on Jan 22
China

4Q16 GDP on Jan 19

Dec Industrial Production on Jan 19

Dec Retail Sales on Jan 19

Dec Fixed Assets Ex Rural YTD on Jan 19
Malaysia

Dec CPI on Jan 18

BNM Overnight Policy Rate on Jan 19

Foreign Reserves as at 13 Jan 2017 on Jan 20
DISCLAIMER: This report is for information purposes only. We have based the data and information in these reports from sources we believe to be reliable. However, we do not guarantee
as to the accuracy or completeness of the information provided. Any recommendation or opinion that is provided in this document, if any, does not have regard to the investment objective
and particular needs of any specific addressee. No parts of this publication may be reproduced or redistributed in any form or any means without a prior written permission of the publisher.