Stocks in emerging markets fell yesterday, extending the biggest weekly drop in five weeks as investors weighed the timing of an increase in US interest rates and Chinese industrial companies’ profits slumped.
PT Astra International led Indonesian shares toward a 21-month low as the rupiah weakened for a fifth day. Equity gauges in Thailand, the Philippines, Vietnam and Malaysia slid at least 0.4 percent. The Shanghai Composite Index dropped to a one-week low. The ringgit sank to the lowest level in 17 years versus the US dollar. Markets in Hong Kong, South Korea and Taiwan were closed for holidays.
The MSCI Emerging Markets Index lost 0.2 percent to 787.82 at 1:22pm in Hong Kong. US data Friday showed the world’s largest economy grew more than previously forecast in the second quarter, a sign that the country might be able to withstand higher borrowing costs. Federal Reserve Chair Janet Yellen said the central bank is on track to raise rates by December. Chinese industrial companies reported profits fell the most in at least four years.
“The likelihood of higher US rates could lead to capital outflows from emerging markets, while the weak Chinese data clearly shows its economy is not on the road to recovery just yet,” said Norico Gaman, head of research at Jakarta-based PT BNI Securities. “However, with stock prices and valuations already having dropped severely, investors with long-term investment horizon may start selectively buying some stocks.”
The developing stocks gauge fell 19 percent this quarter, on course for its steepest quarterly retreat since September 2011. The measure trades at 10.5 times 12-month projected earnings, a 29 percent discount to the MSCI World Index, according to data compiled by Bloomberg.
All 10 industry groups fell, led by consumer companies. Astra International sank 4.3 percent, the biggest drag in the Jakarta Composite Index, which slid 1.6 percent. The rupiah headed for the longest losing streak since an eight-day drop through Aug. 26. Thai shares declined toward the lowest close since Sept. 1 and Philippine equities decreased for a fifth day.
The Shanghai Composite retreated 0.4 percent, its second day of losses. Industrial companies’ profits plunged 8.8 percent last month, compared with a 2.9 percent drop in July. Trading volumes in Shanghai plunged 52 percent below the 30-day average before a week-long holiday that starts on Thursday.
Indian shares were little changed before an interest-rate decision today. The ringgit weakened 0.5 percent, its fifth day of losses, while the Thai baht and the Philippines peso depreciated at least 0.2 percent.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
DIVERSIFYING: Taiwanese investors are reassessing their preference for US dollar assets and moving toward Europe amid a global shift away from the greenback Taiwanese investors are reassessing their long-held preference for US-dollar assets, shifting their bets to Europe in the latest move by global investors away from the greenback. Taiwanese funds holding European assets have seen an influx of investments recently, pushing their combined value to NT$13.7 billion (US$461 million) as of the end of last month, the highest since 2019, according to data compiled by Bloomberg. Over the first half of this year, Taiwanese investors have also poured NT$14.1 billion into Europe-focused funds based overseas, bringing total assets up to NT$134.8 billion, according to data from the Securities Investment Trust and Consulting Association (SITCA),
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