Trade Performance and Fund Flow Week Ended 19 April 2024

▪ Emerging markets experienced broad declines with the MSCI Emerging Index (EM) extended its losses by closing at -3.6% lower than its previous week, following Iran’s first-ever direct assault on Israeli territory. The heightened tension spurred rally in safe-haven assets, with U.S. Treasury yields climbed and gold prices hovered near a record high of close to USD2,400 per ounce. Additionally, market expectations shifted from anticipating three rate cuts this year to fewer than two, after Federal Reserve Chair Powell made a “lack of further progress” remark on inflation this year. 

▪ Chinese market closed mixed last week, with the Shenzhen Composite Index down -1.2% while the Shanghai Composite Index climbed 1.5% higher. Mainland Chinese index posted commendable gain after the release of better-than-expected GDP data for the first quarter. In another development, China’s State Council pledged to tighten stock listing criteria, crack down on illegal share sales and strengthen the supervision of dividend payout. The issuance of strengthened delisting draft rules has sparked fears that a slew of companies would be kicked off stock exchanges, triggering selldown in small-cap shares. The CSI 2000 Index of small-cap companies dropped 11.0% in two days. Nonetheless, the country’s top securities regulator reassured that there wouldn’t be a surge in delisting arising from the new stock exchange rules. 

▪ The TWSE Index contracted by -5.8% WoW, primarily weighed down by TSMC’s revised economic outlook. The company attributed its recent upbeat first-quarter revenue to its high-performance computing segment, including AI chips, which helped offset weakness in revenue from chips for smartphones and the Internet of Things segment. Consequently, TSMC lowered its forecast for the global market growth this year, excluding memory chips, to 10%, down from “more than 10%” previously. Foreign outflows from Taiwan widened to USD5.9 bil, marking the largest outflows this year. 

▪ Korea stock exchange continued its selling momentum for the fourth consecutive week, closing 3.4% lower. Korea also witnessed foreign outflows for the first time after three consecutive months of inflows. 

▪ In Southeast Asia, all stock exchanges closed lower, with VNINDEX recorded the highest moderation amid political uncertainty and leadership changes triggered by the abrupt resignation of Vietnamese president, Vo Van Thuong on 20 March 2024.