Stocks
Asian markets wobble ahead of Fed as China fears dent sentiment
Asian investors trod cautiously Monday as they struggled to build on recent equity gains, with debate swirling around how big an expected US interest rate cut will be this week, while sentiment was being dragged by worries about the Chinese economy.
The yen edged to a new high since December ahead of the Federal Reserve decision on Wednesday and a policy meeting at the Bank of Japan two days later.
Data showing US inflation slowed more than expected last month to its weakest pace since February 2021 has sparked fresh talk that Fed officials will announce a bumper 50-basis-point cut and continue easing into the new year.
However, while bets on such a move have risen, some analysts warned that it could send a signal that decision-makers are worried about the economy, particularly after two readings showing the labour market was softening.
While bank officials have played their cards close to their chest, they have hinted that they are willing to discuss a bigger cut, while former New York Fed chief Bill Dudley said he thought “there’s a strong case for 50”.
Michael Krautzberger at AllianzGI said: “The Fed, like other central bankers, are now focused on economic growth rather than inflation risks and becoming increasingly worried about being behind the curve on policy — cutting rates too late to avert a recession or sharper growth slowdown.
“Therefore, in our view, the risks of larger rate cuts at subsequent meetings this year cannot be discounted, especially if labour market activity deteriorates faster than currently expected and inflation continues to head towards target.”
All three main indexes on Wall Street pushed higher Friday, with the Dow and S&P 500 within a whisker of their record highs.
But Asian investors were unable to extend the rally, with Hong Kong, Singapore and Wellington down but Sydney, Taipei and Manila edging up.
Trade was muted by holidays in Tokyo, Shanghai, Jakarta and Seoul.
On currency markets the yen hit 140.43 per dollar, its strongest level since the end of December, while gold remained at all-time highs after hitting a record $2,586.10 per ounce Friday.
Traders are keeping tabs on developments in China after more weak data on credit, retail sales, industrial production and house prices stoked concerns about the state of the world’s number two economy.
The figures “collectively add to concerns that policy measures announced in recent weeks and months have so far failed to have any measurable impact in lifting economic growth thus far in the third quarter after the weak second quarter performance”, said National Australia Bank’s Ray Attrill.
He added that investors will be keenly watching the government’s upcoming Politburo meeting — the date of which has yet to be set.
In light of the latest batch of disappointing figures, the central bank outlined plans to support the economy, saying it will “make maintaining price stability and pushing for the mild rebound in prices an important consideration for monetary policy and meet reasonable financing demand for consumption in a more targeted way”.
The Fed’s decision is set to be followed by the BoJ on Friday, with most analysts expecting it to hold rates after a surprise hike at the end of July sparked turmoil on markets.
“A consecutive hike would likely be seen as too aggressive, especially given criticism that the BoJ’s hawkish stance contributed to global market turbulence in early August,” said IG analyst Tony Sycamore.
“That said, stronger-than-expected inflation and wage growth in Japan over the past month have given the BoJ confidence in a wage-price cycle that could keep inflation above two percent, paving the way for more policy tightening.”
– Key figures around 0230 GMT –
Hong Kong – Hang Seng Index: DOWN 0.6 percent at 17,271.92
Tokyo – Nikkei 225: Closed for a holiday
Shanghai – Composite: Closed for a holiday
Dollar/yen: DOWN at 140.53 yen from 140.76 yen on Friday
Euro/dollar: UP at $1.1088 from $1.1079
Pound/dollar: UP at $1.3141 from $1.3125
Euro/pound: DOWN at 84.37 pence from 84.40 pence
West Texas Intermediate: UP 0.5 percent at $68.98 per barrel
Brent North Sea Crude: UP 0.4 percent at $71.86 per barrel
New York – Dow: UP 0.7 percent at 41,393.78 (close)
London – FTSE 100: UP 0.4 percent at 8,273.09 (close)
The Bangladesh Securities and Exchange Commission (BSEC) has initiated an investigation into Strategic Equity Management Limited (SEML), an asset management company owned by Chowdhury Nafeez Sarafat and his wife. The move comes following allegations of irregularities tied to the firm.
On September 17, the capital market regulator established a committee, led by BSEC Additional Director Md Emdadul Haque, to conduct the inquiry. Other members of the committee include Deputy Director Rafiqun Nabi and Assistant Director Md Abu Hena Mostafa.
According to sources within the regulatory agency, Nafeez, who previously served as the chairman of Padma Bank, allegedly diverted Tk245 crore from the troubled bank into SEML. This misuse of funds prompted BSEC to take swift action and initiate a detailed probe into the company’s operations.
In its notification, BSEC stated that the committee has been given a 60-working-day timeline to submit a report addressing several specific concerns. Key areas of investigation include whether SEML’s investments through the “Alternative Investment Fund of Bangladesh” adhered to regulatory guidelines and investment parameters from its inception to the present day.
The committee is also tasked with collecting concrete evidence related to all investments made by the fund. They will assess any conflicts of interest arising from dealings with individuals or entities connected to the fund manager and trustee.
Furthermore, the investigators will review official bank statements of the fund, tracking account balances at the end of each fiscal year. They will also verify any interest or profits generated from term deposits and other investments with banks or financial institutions throughout the fund’s lifespan.
The probe will examine dividends and capital gains earned from both listed and non-listed securities, and evaluate the fund’s operating expenses, including annual fees, management fees, trustee fees, and other related charges since the fund’s inception.
Additionally, the committee will seek to uncover any illicit payments made from the fund’s accounts that may have benefited the fund manager or other parties. BSEC has emphasized the importance of reviewing these details thoroughly.
The inquiry will also assess the roles of the fund manager and trustee in ensuring proper governance and oversight, in accordance with BSEC’s rules and the fund’s constitutive documents. The committee may address other related matters as deemed necessary during the course of their investigation.
Dhaka Stock Market DSE, Bourse on the third working day of the week, 18th September, ended with a hike in Indices and drop in Turnover from the previous working session. This information is known from DSE sources.
553 crore 65 lakh taka shares were traded on this day. 81 crore 30 lakh less tradings were done in DSE today compared to the previous workday, 17th September, Shares worth Tk 634 crores 96 lakh shares were traded last time, Tuesday.
The benchmark DSEX added 12.53 points or 5,694 The Shariah-based index DSES gained 7.49 point or 1,245 and the blue-chip index DS30 increased by 8.36 points or 2,076.
Of the issues traded, 113 advanced, 224 declined and 59 remained unchanged.
Beacon Pharmaceuticals PLC ranked top gainer on DSE, the share price increased by Tk 12.60 paisa or 9.98 percent. On this day, the share was last traded at Tk 138.90 paisa.
Premier Leasing & Finance Limited ranked top loser on the DSE, the share price dropped by Tk 0.40 paisa or 9.52 percent. On this day, the share was last traded at Tk 3.80 paisa.
DSE topped on trade is Sonali Aansh Industries Limited 25 crore 36 lakh takas of company shares have been traded.
A total of 36 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 43 lakh 94 thousand 483 shares of the companies were traded. The financial value of which is 45 crore 50 lakh taka.
1 Mutual Fund, Asian Tiger Sandhani Life Growth Fund from Dhaka Stock Exchange (DSE) have disclosed their Dividends for the year ended June 30, 2024. This source is known from the DSE official website. The Fund has recommended Null Dividend for the year ending June 30, 2024.
It has reported EPU loss of Tk 1.95 paisa, and NAV per unit at a market price of Tk. 8.31, NAV per unit at cost price of Tk. 11.25 for the year ended June 30, 2024. Record date: 08.10.2024
