Stocks
Asian Markets Respond to Powell’s Remarks, Navigate Middle East Crisis
Asian markets experienced fluctuations on Wednesday as Federal Reserve Chairman Jerome Powell’s suggestion that interest rates might remain higher for an extended period counteracted a rebound following the recent Middle East-induced selling.
While investors anxiously awaited Israel’s response to Iran’s missile and drone attack over the weekend, the absence of immediate retaliation shifted attention to the monetary policy stance of the US central bank.
A series of inflation and job data releases in the first quarter, which exceeded expectations, compelled investors to recalibrate their expectations regarding the number of interest rate cuts the Fed might implement this year.
Powell virtually confirmed that interest rates would probably stay elevated for a longer duration than previously anticipated. “Recent data have not increased our confidence and instead suggest that it will likely take more time than expected to regain that confidence,” he cautioned on Tuesday in Washington. “Given the robust labor market and progress on inflation so far, it is prudent to give restrictive policy additional time to be effective and to let the data and the evolving outlook guide our decisions.”
The Fed’s most recent rate guidance, indicated by the “dot plot,” implied three rate cuts for this year, with June being considered for the first reduction. Initially, traders had priced in as many as six cuts at the beginning of the year. However, current predictions suggest only one or two cuts at best, possibly commencing in July or September. Some even argue that the next move could be a rate hike if inflation does not retreat to the Fed’s two percent target.
Powell’s comments align with sentiments expressed by several Fed officials, who have advocated for caution in timing the normalization of rates. Richmond Fed President Thomas Barkin remarked on Tuesday that recent economic indicators did not support the notion of a soft landing for the economy. Meanwhile, Fed Vice Chair Philip Jefferson anticipated a decline in inflation but anticipated that rates would remain elevated due to lingering price pressures.
In New York, the S&P 500 and Nasdaq declined, though the Dow managed to secure a gain. Asian markets displayed mixed performances, with Tokyo, Hong Kong, and Seoul declining, while Shanghai, Sydney, Singapore, Wellington, Taipei, and Manila recorded gains.
“The hawkish stance from Powell wasn’t unexpected, given the persistent inflationary pressures, the strong state of the US economy, and the Fed’s commitment to data-driven decision-making,” remarked Stephen Innes of SPI Asset Management. “Anything less than reaffirming the ‘higher for longer’ stance would likely have raised doubts about the Fed’s credibility.”
Traders remained vigilant regarding developments in the Middle East after Israeli Army Chief General Herzi Halevi warned of a response to Iran’s attack on Saturday, heightening concerns about a broader regional conflict.
Tehran stated that the attack was in retaliation for a strike on the consular annex of its Damascus embassy, which resulted in the death of seven Revolutionary Guards, although it indicated that the matter could be considered closed.
Despite tensions, trading activity remained relatively calm on Wednesday, with oil prices inching down despite crises in the Middle East, Ukraine, and OPEC output cuts.
“Our base scenario is one where tensions remain contained in the Middle East, avoiding a broader conflict that disrupts oil supply,” commented Han Zhong Liang of Standard Chartered.
– Key figures around 0250 GMT –
Tokyo – Nikkei 225: DOWN 0.2 percent at 38,404.45 (break)
Hong Kong – Hang Seng Index: DOWN 0.5 percent at 16,176.21
Shanghai – Composite: UP 1.1 percent at 3,038.92
Dollar/yen: DOWN at 154.65 yen from 154.72 yen on Tuesday
Euro/dollar: UP at $1.0634 from $1.0622
Pound/dollar: UP at $1.2439 from $1.2426
Euro/pound: UP at 85.48 pence from 85.45 pence
West Texas Intermediate: DOWN 0.5 percent at $84.90 per barrel
Brent North Sea Crude: DOWN 0.5 percent at $89.59 per barrel
New York – Dow: UP 0.2 percent at 37,798.97 (close)
London – FTSE 100: DOWN 1.8 percent at 7,820.36 (close)
Dhaka Stock Exchange DSE, Bourse on the second working day of the week, 20th May, ended with a drop in Indices and gain in Turnover from the previous working session. This information is known from DSE sources.
Today, DSEX stops at 5,393 points, marking its lowest record in approximately 39 months since February 24, 2021, when it was at 5,385 points. Additionally the Indices marked 6th day losing streak.
561 crore 21 lakh taka shares were traded on this day. 152 crore 2 lakh more tradings were done in DSE today compared to the previous workday, 19th May , Shares worth Tk 409 crores 18 lakh shares were traded last time, Sunday
The benchmark DSEX lost 37.62 points or 5,393 The Shariah-based index DSES dropped 10.88 points or 1,180, and the blue-chip index DS30 decreased by 9.55 points or 1,938.
Of the issues traded, 81 advanced, 238 declined and 30 remained unchanged.
Orion Pharma Limited ranked top gainer on DSE, the share price increased by Tk 6.80 paisa or 9.81 percent. On this day, the share was last traded at Tk 76.10 paisa.
eGeneration Limited ranked top loser on the DSE, the share price dropped by Tk 1.50 paisa or 3.00 percent. On this day, the share was last traded at Tk 48.60 paisa.
DSE topped on trade is Orion Pharma Limited 41 crore 45 lakh takas of company shares have been traded.
A total of 42 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 46 lakh 41 thousand 807 shares of the companies were traded. The financial value of which is 31 crore 87 lakh taka
One of the listed companies, Provati Insurance Company Limited discloses its financial reports for the first quarter, (January – March 24).
The company’s earnings per share (EPS) was Tk 0.55 paisa in Q1 of the current financial year (January – March 24). EPS was Tk 0.73 (restated) paisa during the same period last year. As of March 31, 2024, at the end of the first quarter of the fiscal year, the company’s net asset value (NAV) per share stood at Tk 21.56.
One of the listed companies, Delta Life Insurance Company Limited, discloses its financial reports for the first quarter, second quarter. This source is known from DSE.
Q1: The company’s consolidated life revenue account for January to March 2022 shows significant growth and increased activity in its life insurance segment.
As of March 31, 2022, the balance of the Life Insurance Fund stood at 39,447.09 million taka. This marks an increase from 38,669.99 million taka recorded on March 31, 2021, resulting in a net growth of 777.10 million taka over the year.
The company also reported a substantial rise in net premium income for the first quarter of 2022. Net premiums collected from January to March 2022 amounted to 1,534.55 million taka, compared to 1,277.77 million taka during the same period in 2021.
However, the company experienced a rise in total expenses for the first quarter of 2022. Expenses reached 2,624.33 million taka, up from 2,137.90 million taka during the same period in 2021.
Q2: According to the company’s consolidated life revenue account for the half year ending June 30, 2022, the Life Insurance Fund grew significantly. The balance of the fund was 39,757.84 million taka as of June 30, 2022, compared to 38,752.46 million taka on March 31, 2021, resulting in a net increase of 1,005.38 million taka.
Net premiums collected from April to June 2022 were 2,042.16 million taka, up from 1,549.95 million taka during the same period in 2021, showing a healthy increase in premium income.
Total expenses for April to June 2022 were 2,523.06 million taka, compared to 2,282.25 million taka during the same period in 2021. This rise in expenses reflects the company’s expanded operations and investments.
Q3: According to the company’s consolidated life revenue account for the third quarter ending September 30, 2022, the Life Insurance Fund showed significant growth. The balance was 39,908.687 million taka as of September 30, 2022, compared to 38,745.166 million taka on September 30, 2021, marking a net increase of 1,163.521 million taka.
Net premiums collected during July-September 2022 were 1,751.352 million taka, up from 1,665.650 million taka in the same period in 2021, indicating an increase in premium income.
Total expenses for July-September 2022 were 2,289.415 million taka, down from 2,493.825 million taka during the same period in 2021. This decrease in expenses reflects improved cost management.
