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Business Times
4 days ago
- Business
- Business Times
Trump tariff risks put Asian stocks' strong July record to test
[SINGAPORE] A seasonal lift for Asian equities in July may be hard to come by this year as tariff and macroeconomic concerns dampen sentiment. Markets are bracing for heightened volatility ahead of the Jul 9 deadline for countries to cut trade deals with the US. Uncertainty over the outcome of these negotiations poses a hurdle for regional shares to maintain an average return of 1.36 per cent for July, the second-best performing month of the year, over the past decade. Investors are 'somewhat holding back on fresh allocations to emerging Asia', said Christian Nolting, global chief investment officer at Deutsche Bank's Private Bank. 'While recent comments from high-level negotiators suggest constructive progress in ongoing talks with major Asian trading partners,' uncertainties remain high given that trade disputes during US President Donald Trump's first term lasted one and a half years, he added. While the MSCI Asia-Pacific Index has gained for three consecutive months to June, a potential return of 'Liberation Day' tariff rates could send shares plunging in the similar way they did in early April. Trump ruled out delaying the Jul 9 deadline for imposing higher levies on trading partners and renewed threats to hike tariffs on Japan. That saw Japanese shares leading losses in Asia early on Wednesday, with the Nikkei 225 down about 1 per cent. Even if trade deals materialise, some levels of tariffs are likely to stay. That would be a drag on the region's export-led economies. A number of central banks in Asia have lowered their growth outlooks for the year. Meanwhile, elevated US interest rates may curb the scope for Asian central banks to further lower borrowing cost. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'The third quarter looks to have lots of dangerous potholes with higher inflation and the prospect of slower growth,' said Gary Dugan, chief executive officer of the Global CIO Office. 'We are not so convinced the Federal Reserve will have sufficient reasons to cut rates at the pace the market prices.' To be sure, a milder-than-expected tariff outcome and more dovish signalling from the Federal Reserve may encourage flows into the region. Current positioning in Asian assets leaves room for upside, said Gary Tan, a portfolio manager at Allspring Global Investments. The US central bank has refrained from cutting interest rates this year as it assesses the impact of Trump's tariffs on inflation. The Trump administration though has been applying pressure to lower borrowing costs, and two Fed governors in recent days have said a cut could be appropriate as soon as July. The MSCI Asia-Pacific gauge has risen 12 per cent so far this year, outperforming the US, with shares in South Korea and Hong Kong seeing renewed interest. Still, some markets in South-east Asia, where countries were hit with among the highest tariff rates, remain under pressure. 'We continue to expect choppy markets over the summer,' Nomura Holdings strategists, including Chetan Seth, wrote in a recent note. 'We recommend investors focus on stock selection and on idiosyncratic themes that provide insulation from policy uncertainty and ones that offer better visibility.' BLOOMBERG
Economic Times
5 days ago
- Business
- Economic Times
Asian stocks post modest gains, dollar edges down
For a Fed awaiting more clarity on the potential inflationary impact from tariffs, any pronounced deterioration in the labor market would likely lead to more pressure on officials to lower rates. Asian markets showed caution due to worries about President Trump's tariffs. Nikkei-225 in Japan experienced a dip. Trump threatened new tariffs on Japan, citing trade issues. The European Union is open to a tariff accord with exemptions. The US jobs report is expected soon. The Federal Reserve may consider rate cuts if the labor market weakens. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Asian shares opened cautiously and Japanese equities dipped on lingering concerns over the impact from President Donald Trump's tariff Nikkei-225 index fell 0.9% at the open as Trump threatened to impose a fresh tariff level on the Asian country. The MSCI Asia-Pacific Index rose 0.2%. Contracts for the S&P 500 were flat after the index notched its best quarter since December 2023 and closed at a record high on Monday. Hong Kong has a public holiday Street's bulls drove stocks to all-time highs at the end of a solid quarter amid hopes the US is moving closer to reaching concrete deals with its top trading partners. Bets the Federal Reserve will resume rate cuts powered the best first-half stretch for Treasuries in five threatened to impose a fresh tariff level on Japan. The president's latest round of brinkmanship with Tokyo on Monday comes just over a week before a July 9 deadline for higher tariffs to restart for dozens of trading partners, including Japan. He cited what he said was the country's unwillingness to accept US rice Trump's trade deadline fast approaching, the European Union is willing to accept an accord that includes a 10% universal tariff on many of the bloc's exports, but seeks key exemptions. Trump's top economic adviser said the White House aims to finalize deals with partners after the July 4 days ahead of the US jobs report , bonds rose Monday. Treasury Secretary Scott Bessent indicated it wouldn't make sense to ramp up sales of longer-term debt given where yields are, though he held out hope that rates across maturities will drop as inflation slows. Goldman Sachs Group Inc. projects a Fed cut in September as the inflationary effects of tariffs 'look a bit smaller' than June employment report, due on Thursday, given the July 4 holiday on Friday, is forecast to show growth in the workforce easing to about 110,000 new jobs from 139,000 the prior month, according to economists surveyed by Bloomberg. The unemployment rate is seen nudging up to 4.3%.For a Fed awaiting more clarity on the potential inflationary impact from tariffs, any pronounced deterioration in the labor market would likely lead to more pressure on officials to lower rates.
Time of India
5 days ago
- Business
- Time of India
Asian stocks post modest gains, dollar edges down
For a Fed awaiting more clarity on the potential inflationary impact from tariffs, any pronounced deterioration in the labor market would likely lead to more pressure on officials to lower rates. Asian markets showed caution due to worries about President Trump's tariffs. Nikkei-225 in Japan experienced a dip. Trump threatened new tariffs on Japan, citing trade issues. The European Union is open to a tariff accord with exemptions. The US jobs report is expected soon. The Federal Reserve may consider rate cuts if the labor market weakens. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Asian shares opened cautiously and Japanese equities dipped on lingering concerns over the impact from President Donald Trump's tariff Nikkei-225 index fell 0.9% at the open as Trump threatened to impose a fresh tariff level on the Asian country. The MSCI Asia-Pacific Index rose 0.2%. Contracts for the S&P 500 were flat after the index notched its best quarter since December 2023 and closed at a record high on Monday. Hong Kong has a public holiday Street's bulls drove stocks to all-time highs at the end of a solid quarter amid hopes the US is moving closer to reaching concrete deals with its top trading partners. Bets the Federal Reserve will resume rate cuts powered the best first-half stretch for Treasuries in five threatened to impose a fresh tariff level on Japan. The president's latest round of brinkmanship with Tokyo on Monday comes just over a week before a July 9 deadline for higher tariffs to restart for dozens of trading partners, including Japan. He cited what he said was the country's unwillingness to accept US rice Trump's trade deadline fast approaching, the European Union is willing to accept an accord that includes a 10% universal tariff on many of the bloc's exports, but seeks key exemptions. Trump's top economic adviser said the White House aims to finalize deals with partners after the July 4 days ahead of the US jobs report , bonds rose Monday. Treasury Secretary Scott Bessent indicated it wouldn't make sense to ramp up sales of longer-term debt given where yields are, though he held out hope that rates across maturities will drop as inflation slows. Goldman Sachs Group Inc. projects a Fed cut in September as the inflationary effects of tariffs 'look a bit smaller' than June employment report, due on Thursday, given the July 4 holiday on Friday, is forecast to show growth in the workforce easing to about 110,000 new jobs from 139,000 the prior month, according to economists surveyed by Bloomberg. The unemployment rate is seen nudging up to 4.3%.For a Fed awaiting more clarity on the potential inflationary impact from tariffs, any pronounced deterioration in the labor market would likely lead to more pressure on officials to lower rates.
Business Times
17-06-2025
- Business
- Business Times
Tourism dip fuels worst stock drop in Asia at Thai airport firm
[BANGKOK] Thailand's post-Covid flood of tourists has turned into more of a trickle, adding to concerns for Airports of Thailand (AOT) as it grapples with shrinking duty-free sales without a full-time chief executive officer. Its shares have more than halved in 2025, notching the steepest loss among any of the world's airport operators worth at least US$100 million, according to data compiled by Bloomberg. The tumble wiped out about 460.7 billion baht (S$18.2 billion) of AOT's market capitalisation and made the stock the biggest loser on the MSCI Asia-Pacific Index. The sell-off for what was once the world's most valuable airport operator is playing out as safety concerns rattle Thailand's tourism industry. Chinese travellers, key spenders at duty-free shops and a major source of travel revenue, have turned away from the South-east Asian nation after the viral kidnapping of a Chinese actor in January stoked worries about security. 'Falling Chinese tourist arrivals and spending – driven mainly by safety fears – threaten to further reduce revenue from duty-free shops and other commercial properties,' said Denise Wong, an analyst at Bloomberg Intelligence. 'A failure to adopt effective measures to reinvigorate Chinese demand will likely mean the current downtrend persists.' The government plans to trim its target of 37.5 million international visitors for 2025 after a 30 per cent slump in Chinese tourists in the first four months, Teerasil Tapen, deputy governor of the Tourism Authority of Thailand, said in May. Foreign tourist arrivals last month fell 13 per cent from a year earlier, led by a drop in Chinese visitors. The dour outlook has clouded the so-called The White Lotus effect – a temporary boost in Western visitors inspired by the latest Koh Samui-set season of HBO's hit show. It also adds to economic risks for the country, where global tariffs and weak consumption have ravaged local equities. The nation's key benchmark stock index has slid about 20 per cent this year, lagging most global peers. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Still, the downturn in Chinese tourists will likely rebound in the second half of this year as the Thai government steps up efforts to lure those travellers again, according to Boonyakorn Amornsank, an analyst at Maybank Securities (Thailand). In the meantime, the lack of Chinese arrivals is weighing on duty-free sales. AOT reported a 13 per cent decline in March quarter net income, mostly driven by a decrease in revenue sharing from duty-free shops and other commercial areas, the company said. Thailand's largest duty-free shop operator King Power has asked AOT to cancel concessions at five airports, citing dwindling Chinese visitors as a main reason. The company's board will hire two external advisers to review the request from King Power, whose concessions contribute about 17 per cent of AOT's total revenue, acting president Paweena Jariyathitipong said on Monday (Jun 16). The firm is searching for a new leader after former CEO Kerati Kijmanawat quit in late April. At least four brokers have lowered their ratings on the stock since King Power made the concession plea last week, according to data compiled by Bloomberg. That follows at least three downgrades made last month after AOT's quarterly results. BLOOMBERG
The Star
26-05-2025
- Business
- The Star
Asian hedge funds regain lost ground in May, increasing leverage
A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., April 8, 2025. REUTERS/Brendan McDermid/File Photo HONG KONG: Asian equity-focused hedge funds have risen in May, erasing April's tariff-driven losses and returning to year-to-date highs on the back of broad market gains. Asia-focused fundamental long-short hedge funds have posted a gain of 1.6% so far this month, bringing year-to-date performance back to the first-quarter high of 6.1%, according to a Goldman Sachs note citing data as of May 22. A strong stock market rebound, fueled by the U.S.-China agreement to temporarily slash tariffs, helped regional managers recover from early April losses, the bank said. By country, China-focused fundamental managers have returned 1.3% in May, while Japan-focused peers are up 0.8%, Goldman Sachs estimated. However, the gains lag major benchmarks, as many funds had aggressively cut positions amid extreme volatility in early April. The MSCI Asia-Pacific Index has advanced more than 4% this month. "The V-shaped recovery was hard to trade for some," said Patrick Ghali, managing partner of hedge fund advisory firm Sussex Partners. Depending on positioning, Asian hedge funds' performance has diverged since April and "we will see a lot more dispersion of returns", he added. Goldman Sachs noted dispersion is particularly high in hedge funds trading Japanese shares. Despite ongoing tariff and geopolitical uncertainties, most hedge funds appear more willing to take on risk. Net exposure among Asian equity hedge funds jumped to 50.8% as of May 22, up from 46% at the end of April, Goldman Sachs says. - Reuters
