The economies in Asia are slowing based on the recent economic data. Fears have increased following a weak jobs report from the United States Department of Labor last Friday. The BNY Mellon Index showed that the leading Asian ADRs slumped by 1.2 percent.
Reuters reported that orders for machinery in Japan declined by 14.8 percent in May. The result was 3.3 percent lower compared with the expectations set by economists. The stock value of Kubota Corp (NYSE:KUB) (TYO:6326), one of the leading machinery manufacturers in Japan declined by 1.05 percent to $46.21 per share during the closing bell of stock market on Monday.
Reputed short-seller Spruce Point Capital Management released its latest short report this week. The firm is shorting Canadian dairy and grocery manufacturer Saputo. Spruce Point chief Ben Axler believes the company is entering a phase of declining growth and highlights the financial stress and growing challenges he sees it facing, not only in Canada but Read More
On July 5th, the Chinese government lowered its interest rate benchmark for the second time following an estimated 7.7 percent economic growth slowdown. China recorded a 29-month low inflation rate of 2.2 percent. Analysts say that the figure shows sluggish demand for overseas exports. Commodity prices are decreasing as imports from China slow.
The shares of Aluminum Corp. of China Limited (NYSE:ACH) (SHA:601600) (HKG:2600) dropped by 3.15 percent to $10.46 per share while China Petroleum & Chemical Corporation (NYSE:SNP) (SHA:600028) (HKG:0386)’s shares decreased by 1.42 percent to $84.33 per share.
The stock value of other Asian companies such as Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930), the world’s largest TV and mobile phone manufacturer was down by 3 percent to 1,126,000 won. HTC Corp., (2498:TT), the second largest smartphone manufacturer in Asia declined by 5.6 percent to NT$ 304 to a two year low. For the last two years, the company’s revenue also has been on a down-trend. Analysts speculated that HTC will report a further 27% revenue decrease for the third quarter.
Bloomberg reports that Governments in Hong Kong and Vietnam lowered their economic growth expectations. According to Hong Kong Finance Secretary John Tsang, the government will change its 2012 economic forecast, while Vietnam’s Deputy Prime Minister Vu Van Ninh projected that the Government may not be able to reach its target ecomic growth. On the other hand, the government of the Republic of the Philippines plans to control its currency gains to protect exports. Bangko Sentral ng Pilipinas deputy governor Diwa Gunigundo confirmed that the nation’s central bank would restrict foreign funds from investing in special deposit accounts, to stop gains onits currency. The country will also consider other strategies to manage flows caused by the ongoing economic decline in the U.S. and European economies.
The central bank anticipates that low yields in safe European countries and the United States, will drive funds to search for higher yields in the emerging markets. The Philippines is the best performer among the 11 most-traded Asian countries.
According to Bloomberg, Asian policy makers are intensifying their efforts to protect the regional economy and currency market amidst the weakening global economic situation.