APAC Market Wrap - Feb 12

Chinese Equity Markets:

The major indices closed higher on Thursday, with the Shanghai Composite edging up 0.05%, the Shenzhen Component gaining 0.86%, and the ChiNext Index climbing 1.32%.

Sector-wise, the AI computing power chain saw a broad-based explosion, with computing power leasing and power grid equipment leading the charge. Conversely, the broad consumption sector dragged, with film, tourism, retail, and food & beverage leading the decliners.

Hong Kong Equity Markets:

Sentiment weakened in Hong Kong, with all three major indices retreating. By the close, the Hang Seng Index fell 0.86% to 27,032.54; the Tech Index slid 1.65% to 5,408.98; and the Hang Seng China Enterprises Index dropped 1% to 9,175.18.

High-end manufacturing and computing power stocks managed to buck the trend, while film, consumer discretionary, and crypto-linked stocks saw significant pullbacks.

Japanese Equity Market:

The Nikkei 225 edged down 0.02% to close at 57,639.84. Gains in mining, non-ferrous metals, and utilities were offset by declines in services, air transport, and miscellaneous manufacturing.

South Korean Equity Market:

The KOSPI surged 3.13% to a record high of 5,522.27. Trading companies, conglomerates, and semiconductors spearheaded the rally, while electronics and public transportation trended lower.

Australian Equity Market:

The S&P/ASX 200 rose 0.32% to 9,043.50. Banking, utilities, and furniture stocks gained, while diversified financials and healthcare services struggled.

Singapore Equity Market:

The Straits Times Index (STI) gained 0.65% to 5,016.76. Apparel and O&G were the top performers, while asset management and interactive media stocks declined.

Malaysian Equity Market:

The FTSE Bursa Malaysia KLCI fell 0.32% to 1,750.89. Energy and logistics gained, while telecom and financial services led the decline.

Key Events

Samsung Seizes the Lead: HBM4 Enters Mass Production and Ships to Clients

Samsung Electronics (Thursday, Feb 12) announced it has begun delivering its latest HBM4 (sixth-generation High Bandwidth Memory) chips to customers. This represents a critical breakthrough as the South Korean giant moves to outpace rivals in the AI chip race. Samsung claims to be the first to achieve mass production and delivery of HBM4.

Looking ahead, HBM4E samples are slated for H2 2026, with customized versions arriving in 2027. "Samsung took a bold leap by adopting the most advanced process technology rather than relying on mature designs," said Sang Joon Hwang, EVP of Memory Development.

OpenAI Bet Drives $18.2B Gain for SoftBank as Risks Consolidate

SoftBank Group posted its third-quarter results for FY2025, recording its fourth consecutive quarterly profit. Net income reached 248.59 billion yen ($1.62 billion), bolstered significantly by the soaring valuation of its stake in OpenAI.

This gain helped offset losses within the Vision Fund, specifically from South Korean e-commerce giant Coupang. However, the result fell short of the 857 billion yen market consensus.

Institutional Views

Goldman Sachs: Friday’s CPI is the "Hawkish Pivot" Risk

Kay Haigh of Goldman Sachs Asset Management noted that while the labor market is showing early signs of re-tightening, it is not yet "hot." However, with the economy continuing to beat expectations, the FOMC's focus shifts to inflation. If Friday’s CPI data surprises to the upside, it could force a hawkish tilt from the Fed, potentially narrowing the window for the two rate cuts Goldman currently expects this year.

TD Securities: Rate Cut Hopes Pushed to June

TD Securities has delayed its forecast for the first Fed rate cut from March to June. The firm still anticipates 75 basis points of easing this year, bringing the terminal rate to 3.0%. Analysts noted the easing is a "normalization" of policy as inflation returns to target, rather than a response to economic distress. They also projected 10-year Treasury yields to hit 3.75% by year-end.

Nomura: Takaichi Government Bolsters Fiscal Discipline, Strengthening Yen

The Yen outperformed G10 and Asian peers as markets digested Prime Minister Sanae Takaichi’s approach to fiscal responsibility. Nomura analysts noted that discussions on funding a temporary consumption tax cut—potentially using surpluses from "foreign exchange fund special accounts"—have provided relief to the FX market.

Monex: March Rate Cut is Officially "Off the Table"

Nick Rees, Head of Macro Research at Monex, stated that the robust January jobs data has effectively eliminated market bets on a March rate cut. While Monex still expects easing to resume in June, the immediate focus has shifted to pricing in a higher-for-longer environment following the strong labor showing.