Asian shares rise on US stimulus

by Jonathan Adams
shares rise

However, Asia’s emerging currencies came under pressure as the US dollar firmed on the back of strong jobs data and the pandemic relief bill

Shares in Asia broadly rose on Monday after the passage of a US$1.9 trillion US stimulus fiscal bill boosted optimism about the global economic recovery, with Singapore and Malaysia stock markets outperforming on local company news.

Shares in Taiwan, India and Thailand rose, as upbeat Chinese exports data also underpinned appetite for risk.

However, Asia’s emerging currencies came under pressure as the US dollar firmed on the back of stronger-than-expected jobs data and the pandemic relief bill. The US Senate passed the pandemic relief package on Saturday and U.S. President Joe Biden said he hoped for a quick passage of the revised bill by the House of Representatives.

Higher US yields also kept pressure on Asia’s bond markets and valuations.

Mizuho Bank analysts said the US fiscal passage “may be fanning the embers of reflation further this week.”

On the other (hand) discomfort with excessive and abrupt pick-up in UST bond yields could roil some parts of EM, they said.

A spike in oil prices past US$70 for the first time since the Covid crisis triggered inflation worries for Asia.

Singapore’s stock index advanced to its highest level in more than a year, led by a rally in the shares of Jardine Strategic and Jardine Matheson, which jumped nearly 20% and 8%, respectively.

Jardine Matheson said it plans to buy the remaining 15% of Jardine Strategic that it does not already own for about US$5.5 billion to simplify structures of the sprawling Asian conglomerate that has a foot in construction to aviation.

The Singapore dollar tumbled 0.2%, hitting its lowest level since late November.

In Malaysia, shares climbed 1.5%, with Petronas Chemicals Group leading the gains. The petrochemical product maker climbed nearly 10% after CGS-CIMB upgraded the stock to “add” and raised its price target.

Meanwhile, shares in Philippines dropped over 1%, shedding last week’s gains.

In Indonesia, stocks and the rupiah sank. The country is susceptible to higher US yields as it houses some of the highest-yield debt in emerging markets.

The yield on Indonesia’s 10-year bonds gained 19.2 basis points this session to 6.817%.

Chinese exports grew at a record pace in February from a year earlier, data showed. Exports in US dollar terms soared 154.9% from a year ago when the pandemic ravaged the economy.

This article is for information purposes only.
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