India’s rupee posted the biggest gain in Asia this week as improving data in the US spurred a rally in global stocks and inflows to emerging markets. South Korea’s won fell as tensions with North Korea intensified.
Global funds poured a net US$1.1 billion into shares in India, Indonesia, the Philippines and South Korea during the week. The won dropped after North Korea warned it may act against the US and other “aggressors” to defend its “supreme interests.”
“Asian currencies were supported by equity-related inflows,” said Ho Woei Chen, a Singapore-based economist at United Overseas Bank Ltd. “At the start of the week, the markets were concerned over tightening measures in China, in particular relating to the property sector.”
The rupee climbed 1.1 percent during the five days to 54.3250 per US dollar in Mumbai, the biggest weekly advance since Jan. 18, according to data compiled by Bloomberg. The yuan rose 0.15 percent to 6.2143 and Thailand’s baht advanced 0.1 percent to 29.75.
In Taiwan, the New Taiwan dollar dropped against the US dollar on Friday for the second straight day, down NT$0.023 to close at the day’s low of NT$29.718 after the central bank stepped in again to help the greenback reverse its earlier losses, dealers said.
For the week, the NT dollar slipped 0.2 percent to NT$29.718 against the US currency,
South Korea’s won fell on Friday after threats from North Korea. The UN Security Council voted unanimously to impose tougher sanctions on North Korea over its latest nuclear test, a measure that may cause provocation from the communist nation, South Korean central bank Senior Deputy Governor Park Won-shik said at an emergency meeting in Seoul on Friday.
The won closed 0.3 percent lower at 1,090.46 in Seoul for a weekly drop of 0.5 percent.
“Concerns that North Korean risks are heightening are driving investors away, weakening the currency and the stock market,” said Jang Bo-hyeong, an analyst at Hana Institute of Finance in Seoul.
The yuan had a second weekly gain, supported by the People’s Bank of China raising the fixing on Friday by the most in a month, amid speculation policymakers will allow appreciation to help contain inflation.
Consumer prices currently face pressure from imported inflation and carry over effects, China Securities Journal reported on Friday, citing central bank Deputy Governor Pan Gongsheng (潘功勝).
Elsewhere in Asia, the Philippine peso was little changed at 40.675. Indonesia’s rupiah weakened 0.1 percent to 9,688 and Malaysia’s ringgit dropped 0.3 percent to 3.1060.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a