APAC Market Wrap - 2 Sep  

 

China Stock Market: The market experienced volatility and adjustment throughout the day, with the ChiNext Index leading the declines. By the close, the Shanghai Index fell 0.45%, the Shenzhen Component Index dropped 2.14%, and the ChiNext Index declined 2.85%.

 

Sector-wise, banking, precious metals, robotics, and oil sectors led the gains, while CPO, cross-border payments, PCB, and semiconductor sectors saw the largest drops.  

 

Hong Kong Stock Market: The major Hong Kong indices collectively adjusted downward today. By the close, the Hang Seng Index fell 0.47% to 25,496.55 points, the Tech Index dropped 1.22% to 5,728.46 points, and the State-Owned Enterprises Index declined 0.15% to 9,108.12 points.

 

Market performance showed banking and utility stocks gaining against the trend, while semiconductors, batteries, and most other stocks retreated. Gold stocks showed mixed results.  

 

Japan Stock Market: The Nikkei 225 rebounded by 0.29% after three trading days, closing at 42,310.49 yen, up 121.70 yen.

 

By industry, 29 sectors, including wholesale, shipping, securities commodity futures, glass and earth materials, and steel, rose. Meanwhile, machinery, other products, and services saw declines, with precision equipment remaining flat.  

 

South Korea Stock Market: The KOSPI rose 0.94% to 3,172.35 points.

 

Sector-wise, healthcare management, life sciences, life insurance, and aerospace led the gains, while stationery, household appliances, integrated facilities, and diversified communication services lagged.  

 

Australia Stock Market: The S&P/ASX 200 (XJO) fell 0.30% to close at 8,900.600 points.

 

Sectors like apparel and accessories, conglomerates, banking, and real estate rose, while industrial distribution, furniture, cyclical retail, and industrial products saw slight declines.  

 

Singapore Stock Market: The Straits Times Index rose 0.39% to close at 4,292.72 points.

 

Sectors such as waste management, other energy, and building materials saw modest gains, while restaurants, non-alcoholic beverages, and asset management experienced larger drops.  

 

Malaysia Stock Market: The FTSE Malaysia Index rose 0.10% to 1,576.70 points.

 

Sectors like transportation and logistics, and communications and media saw slight increases, while technology, real estate, and construction sectors declined.  

Key Events  

Blackstone Announces Major Investment in Korea’s Largest Hair Salon Chain, Valuation May Reach 800 Billion Won  

 

Global asset management giant Blackstone Group announced on Tuesday that it has agreed to make a “major investment” in JUNO Hair, South Korea’s largest hair salon chain.  

 

In a press release, Blackstone stated that its private equity fund has “reached a final agreement to make a significant investment in JUNO Hair.”  

 

Both JUNO Hair and Blackstone Group declined to comment on the specific amount of the deal, but reports suggest that JUNO Hair’s total equity valuation in negotiations with Blackstone is around 800 billion won .  

 

Blackstone Group remarked: “We see explosive global demand for Korean beauty services. Consumer beauty and wellness services are a key investment theme for Blackstone’s Asia private equity business.”  

 

Emerging Markets Perform Strongly but Earnings Reveal Concerns! Analysts Warn of Potential Downturn  

 

Emerging market assets have performed robustly this year, with the benchmark MSCI Emerging Markets Index recording monthly gains—a feat last seen in 2017 during Trump’s first year as U.S. President and in 1993 under President Clinton.  

 

However, the influx of capital into emerging markets does not guarantee a bright outlook. On Wall Street, Trump’s tariff policies are seen as severely impacting emerging market companies, posing a threat to future profitability.  

 

Based on released earnings reports, overall profits of emerging market firms have fallen short of expectations, averaging 13 consecutive quarters below forecasts. Meanwhile, companies are growing increasingly conservative in their future profit projections, signaling a decline in business confidence.  

 

Nenad Dinic, a stock strategist at UBS, expressed caution toward emerging market equities, citing ongoing tariff-related risks. After a 90-day tariff suspension, 2025 earnings-per-share forecasts have again trended downward, reflecting concerns about intensified tariff pressures in the second half of the year.  

 

Japanese Firms Issue Global Bonds, Set to Break $100 Billion Record  

 

As more Japanese companies issued bonds on Tuesday’s primary market, Japanese issuers’ dollar and euro bond issuances this year are poised to exceed $100 billion, setting a new record.  

 

At least seven Japanese companies, including Nomura Holdings and Mitsubishi UFJ Financial Group, launched dollar bond issuances, making this week particularly busy in the global bond market.  

 

Daniel Kim, co-head of debt capital markets for HSBC’s Asia-Pacific region, noted, “We’re seeing a surge in offshore bond issuances by Japanese companies, driven by increased M&A activity, massive foreign exchange capital expenditure needs, and investments in new technologies like AI and data centers.” He also mentioned issuers’ refinancing demands.  

 

Tesla’s India Launch Underwhelms, Car Orders Far Below Target  

 

Tesla’s entry into the Indian market has yielded lackluster results, with car orders falling short, sparking fresh doubts about the company’s global growth prospects.  

 

According to insiders, the electric vehicle maker under Elon Musk has received only over 600 car orders since launching sales in India in mid-July, below its expectations.  

Institutional Views  

ING: Gold’s Weekly Trend Hinges on Non-Farm Payrolls  

 

ING commodity analysts Ewa Manthey and Warren Patterson noted that gold prices continue to rise, supported by U.S. personal consumption expenditure data aligning with expectations, sustaining market hopes for a Federal Reserve rate cut at the September 16-17 meeting.

 

However, the trend will largely depend on Friday’s August non-farm payrolls report. A weak report could further bolster the view of a “likely Fed rate cut in September.” Meanwhile, speculators increased their net long positions in Comex gold by 6,363 contracts in the latest week, bringing the total net long position to 148,122 contracts.  

 

ING: Ukraine Attacks May Alter Russia’s Oil Export Model  

 

ING analysts Warren Patterson and Ewa Manthey stated that Ukraine’s attacks on Russia’s energy infrastructure could reduce Russian refined oil exports, boosting crude exports. “Since August, Ukrainian drone strikes on Russian energy facilities have driven domestic fuel prices up, prompting the government to extend gasoline export bans.”

 

They warned that further escalations could widen the price gap between crude oil and refined products like gasoline and diesel. Damage to refineries, reducing operating rates, may force Russia to increase crude exports to offset declining refined product exports, maintaining oil revenue.  

 

Mitsubishi UFJ: Weak Non-Farm Data Could Prompt Oversized Fed Rate Cut  

 

Mitsubishi UFJ analyst Lee Hardman suggested in a report that if Friday’s U.S. non-farm employment data significantly underperforms expectations, the dollar could weaken further. Another disappointing jobs report would reinforce market expectations, pushing the Fed to resume rate cuts in September, potentially by 50 basis points at once.

 

Current market consensus expects a 25-basis-point cut this month, with cumulative cuts exceeding 100 basis points by next September. Unless the data markedly exceeds expectations, it’s unlikely to dispel the market’s anticipation of a September rate cut.