Month: April 2019

Asian stocks rally as China’s factory bounce lifts confidence

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian stocks powered higher on Monday as positive Chinese factory gauges and signs of progress in Sino-US trade talks boosted sentiment, although another defeat for British Prime Minister Theresa May’s Brexit deal added to sterling’s woes.

Spreadbetters expected European stocks to open higher, with Britain’s FTSE gaining 0.4 percent, Germany’s DAX adding 0.8 percent and France’s CAC rising 0.9 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 1 percent and the Shanghai Composite Index rallied 2.4 percent.

Australian stocks climbed 0.6 percent, South Korea’s KOSPI gained 1.3 percent and Japan’s Nikkei advanced 1.4 percent.

The markets took heart after China’s official purchasing managers’ index (PMI) released on Sunday showed factory activity unexpectedly grew for the first time in four months in March.

A private business survey, the Caixin/Markit PMI, released on Monday also showed the manufacturing sector in the world’s second biggest economy returning to growth.

If sustained, the improvement in business conditions could indicate that manufacturing is on a path to recovery, easing fears that China could slip into a sharper economic downturn.

“Our view is the impact of policy easing is gradually kicking in, pushing up sequential growth indicators such as PMI first,” wrote China economists at Bank of America Merrill Lynch.

“In particular, the larger-than-expected tax and fee cuts and improving financial conditions have likely helped boost business sentiment in the manufacturing space.”

Stocks in Asia also took their cues from Wall Street, with the S&P 500 posting its best quarterly gain in a decade on Friday amid trade optimism.

The United States and China said they made progress in trade talks that concluded on Friday in Beijing, with Washington saying the negotiations were “candid and constructive” as the world’s two largest economies try to resolve their drawn out trade war.

“The ongoing US-China trade conflict has provided a steady stream of conflicting signals for the markets. But as a whole the negotiations appear to be headed towards a conclusion,” said Soichiro Monji, senior strategist at Sumitomo Mitsui DS Asset Management.

“Hopes that the United States and China would reach an agreement on trade as early as this month are enabling stocks to begin the quarter on a positive tone.”

In the currency market, the dollar index against a basket of six major currencies stood at 97.147 after going as high as 97.341 on Friday, its strongest since March 11.

The greenback had benefited from the flagging pound, which was on track to post its fourth day of losses in the wake of the ongoing Brexit saga.

Sterling took its latest knock after British lawmakers rejected Prime Minister May’s Brexit deal for a third time on Friday, sounding its probable death knell and leaving the country’s withdrawal from the European Union deeper in turmoil.

The pound crawled up 0.15 percent to $1.3055 having posted three sessions of losses.

The Australian dollar advanced 0.35 percent to $0.7122. The Aussie is sensitive to shifts in the economic outlook for China, the country’s main trading partner.

The euro rose 0.2 percent to $1.1239 while the dollar gained 0.2 percent to 111.035 yen.

Safe-haven government bonds retreated as risk aversion in the broader markets eased.

The benchmark 10-year US Treasury yield edged up to a six-day high of 2.444 percent, pulling away from a 15-month low of 2.340 percent brushed on March 25.

The Treasury 10-year yield had sunk as the Federal Reserve halted its drive to hike rates and as risk aversion, driven by concerns about a global economic slowdown, gripped financial markets towards the end of March.

The slide had pushed the 10-year yield below the three-month rate for the first time since 2007 late last month.

This phenomenon – when the spread between short- and long- dated yields turns negative – is known as a curve inversion and has preceded every US recession over the past 50 years.

The 3-month/10-year yield spread has since pulled back from negative territory and stood around 3 basis points.

Crude oil prices added to Friday’s gains, with US West Texas Intermediate (WTI) futures gaining 0.6 percent to $60.52 per barrel.

Oil prices posted their biggest quarterly rise in a decade during January-March, as US sanctions against Iran and Venezuela as well as OPEC-led supply cuts overshadowed concerns over a slowing global economy.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India to be among top-10 media markets by 2021: Study

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

India is expected to be among the top-10 entertainment and media markets globally by 2021 in terms of absolute numbers, according to a joint study by ASSOCHAM-PwC.

The country’s per capita media and entertainment spending is likely to be capped at $32 or Rs 2,080 by 2021, the study noted. By some estimates, India is among the fastest growing OTT markets in the world and will be one of the top-10 by 2022, it said.

The market size is expected to reach $52.68 billion in 2022 from $30.36 billion in 2017, it claimed. “It (India) is set to be in the top 10 entertainment and media markets globally by 2021 in terms of absolute numbers,” the study said.

It attributed growth of OTT content to increasing penetration of smartphones in the country and continuous rise in data consumption. The OTT market (transactional video on demand and subscription video on demand) is set to grow at a compounded annual growth rate (CAGR) of 10.1 percent during the period 2017-2022.

“During the same period in India, the segment is expected to grow from $297 million to $823 million in 2022 at a CAGR of 22.6 percent. With increasing smartphone penetration and lower data tariffs, VoD is showing promising growth,” the report said.

Globally, the industry has recently witnessed a shift in focus from content and distribution to user experience.

“India’s per capita media and entertainment spend will be capped at USD 32 (about Rs 2,080 ) by 2021. The spend is much lower than that of China, which will stand at $222 (Rs 14,430 ) for the same period, and that of the USA, which will have the highest spend at $2,260 (Rs 1.46 lakh),” the study said.

The large number of choices in the video-on-demand segment has spoilt consumers in India, the study noted.

“Hotstar has had a first-mover advantage in the OTT space in India. Other top players in the OTT ecosystem include Voot, SonyLIV, Netflix, Amazon Prime, Eros Now and ALTBalaji. Start-ups such as Arre and YuppTV are an additional presence,” it added.

In India OTT players, including Hotstar, Amazon Prime and Eros Now, are not only competing among themselves but also also with DTH players and other means.

“With increasing traffic in metro cities, the time spent on viewing videos is also on the rise. Cab aggregators, such as Ola, have installed tablets inside their cabs with a wide range of curated content for passengers at no additional cost,” the report said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow