Stocks
Asian investors trade cautiously ahead of central bank decisions
Asian markets edged down Tuesday as investors jockey ahead of a slew of central bank decisions, key economic data and earnings from tech titans this week.
While last week’s US inflation report further stoked optimism that the Federal Reserve will cut interest rates at least once this year, traders became more cautious after Monday’s rally.
The US central bank is expected to stay put on monetary policy Wednesday, but its post-meeting statement will be pored over in hopes of confirmation it will lower borrowing costs in September.
Boss Jerome Powell ramped up bets on a move earlier this month when he said officials did not need to see inflation hit their two percent target before cutting.
A string of figures indicating prices were under control and the labour market was softening have helped fuel confidence that easing is on the way, with some market-watchers suggesting there could be three cuts before January.
The release of figures on US jobs creation and openings is also in sight this week, which could have some impact on the bank’s thinking.
The Fed gathering concludes hours after the Bank of Japan makes a much-anticipated decision, with speculation swirling over whether it will hike rates again, having lifted them for the first time in 17 years back in March.
BoJ chief Kazu Ueda has been tight-lipped about what decision-makers will say, though he is expected to lay out a plan for winding down the bank’s bond-buying, which has helped keep borrowing costs ultra-low for years.
But Katsutoshi Inadome, senior strategist at SuMi TRUST, said an interest rate move was unlikely just yet.
“A rate hike this month, combined with detailed plans to scale back Japanese Government Bond (JGB) purchases, would excessively disrupt the market, and cause yen appreciation which would hurt domestic equities,” he warned in a commentary.
“The only situation in which a rate hike would appear the wisest course is if the yen weakens excessively.
“The reduction (in JGB purchases) is expected to occur in stages, considering the economic impact as well as the market’s reaction.”
He added that he did not expect “a clear outlook for interest rate hikes as (the bank) continues to assess the impact of bond purchase reduction but do expect an additional increase by October”.
Bets on a Fed cut and BoJ cut have helped push the yen up against the dollar in recent weeks, having hit a nearly four-decade low close to 162 per greenback at the start of July.
With traders still uncertain, Asian equities slipped Tuesday, having enjoyed a healthy run-up the day before.
Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei, Jakarta and Manila were all down, though Wellington edged higher.
Markets had a rough ride last week after disappointing earnings from heavyweights Tesla and Google-parent Alphabet, which raised questions about the surge in tech giants that has helped power some indexes to record highs this year.
And investors are steeling themselves for more reports this week from other titans, including Microsoft, Facebook-parent Meta, Apple and Amazon.
Oil prices extended Monday’s retreat on continued worries about demand owing to weakness in the Chinese economy, which overshadowed tensions in the Middle East after Israeli Prime Minister Benjamin Netanyahu vowed a “severe response” to a strike on the annexed Golan Heights that killed 12 children.
The warning came as diplomats raced to contain escalation between Israel and Iran-backed Hezbollah in Lebanon, which has been blamed for the attack.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 1.0 percent at 38,101.24 (break)
Hong Kong – Hang Seng Index: DOWN 1.3 percent at 17,020.75
Shanghai – Composite: DOWN 0.8 percent at 2,868.23
Dollar/yen: UP at 154.05 yen from 154.00 yen on Monday
Euro/dollar: DOWN at $1.0817 from $1.0826
Pound/dollar: DOWN at $1.2848 from $1.2862
Euro/pound: UP at 84.20 pence from 84.14 pence
West Texas Intermediate: DOWN 0.5 percent at $75.44 per barrel
Brent North Sea Crude: DOWN 0.4 percent at $79.46 per barrel
New York – Dow: DOWN 0.1 percent at 40,539.93 (close)
London – FTSE 100: UP 0.1 percent at 8,292.35 (close)
One of the Listed companies, National Polymer Limited has recommended 10.50% Cash Dividend for the year ended June 30, 2024.
It has reported Consolidated EPS of Tk 2.27 paisa, and Consolidated NAV per share of Tk 30.63 for the year ended March 31, 2024.
The Annual General Meeting (AGM) of the company will be held on December 18, through the digital platform. The record date for this has been fixed at October 22.
The Company also discloses its financial reports for the second quarter, (April – June 24).
As per the company’s consolidated life revenue account for April to June 2024, the excess of total income over total expenses, including claims (surplus), stood at Tk 1,394.24 million. This marks a significant increase from the surplus of Tk 823.68 million during the same period in 2023.
For the first half of 2024, from January to June, the company reported a surplus of Tk 2,177.57 million, compared to Tk 1,290.39 million in the corresponding period of the previous year.
Additionally, the Life Insurance Fund balance as of June 30, 2024, reached Tk 55,188.62 million, showing a net increase of Tk 5,892.25 million from Tk 49,296.37 million on June 30, 2023.
One of the Listed companies, Beacon Pharmaceuticals PLC has recommended 20% Cash dividend and 10% Cash Dividend to Sponsor Shareholder and Directors for the year ended June 30, 2024.
It has reported EPS of Tk 2.26 paisa, and NAV per share of Tk. 26.37 for the year ended June 30, 2024.
The Annual General Meeting (AGM) of the company will be held on December 23, through the digital platform. The record date for this has been fixed at October 27.
The Bangladesh Securities and Exchange Commission (BSEC) has removed three audit firms from its panel for their failure to secure enlistment with the Financial Reporting Council (FRC), according to a notice issued today.
The firms—A Hoque & Company, FAMES & R, and SK Barua & Company Chartered Accountants—were delisted following the FRC’s request. In December last year, the FRC published a list of enlisted audit firms and subsequently, in February, requested the BSEC to remove any firms that were not included on that list.
BSEC regulations mandate that financial statements signed by auditors outside its approved panel will not be accepted. With the removal of these three firms, the total number of audit firms on the BSEC panel has been reduced from 48 to 45.
Sources from the FRC revealed that 15-20 audit firms failed to secure enlistment last year, and approximately 45 chartered accountants are currently under restrictions imposed by the Institute of Chartered Accountants.
Although the delisted firms can no longer audit issuer companies or listed securities, they are allowed to complete audit and assurance services that were initiated before their removal, the BSEC clarified.
