January 18, 2021

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EMERGING MARKETS-Philippines leads modest Asia stock gains, Taiwan dollar up again

3 min read

By Nikhil Nainan

Jan 14 (Reuters)The Philippines led modest gains among Asia’s emerging stock markets on Thursday, as investors awaited U.S. stimulus plans while Taiwan’s dollar extended gains.

The region’s equity markets rose as much as half a percent, with Manila .PSI climbing 0.8%, ahead of details around President-elect Joe Biden’s pandemic relief package due later on Thursday. Biden had promised “trillions” of dollars in aid and CNN reported a package of $2 trillion was being considered.

That prospect and the U.S. Federal Reserve’s pledge to keep buying bonds lifted Treasury yields once again, propping up the dollar and suppressing many of Asia’s currencies, that were largely flat to lower.

Mizuho Bank said markets are “likely to be seduced by stimulus” ahead of Biden’s fiscal plans, which could help spur a recovery in the world’s largest economy and in turn trade-reliant Asia.

Taiwan’s dollar TWD=TP stood out among currencies, gaining 1.7%. The central bank had called on banks dealing in foreign exchange to exercise restraint as it seeks to rein in the soaring local dollar, which has gained nearly 2% this year.

But the central bank finds itself in a tricky position of not wanting to appear to intervene too heavily in the currency market and being labelled a currency manipulator by the United States. Taiwan was added to the Treasury department’s watchlist last month.

A soaring currency does not bode well for Taiwan’s manufacturing economy, which relies heavily on electronics exports. The Taiwan dollar gained nearly 6% on the greenback in 2020.

South Korea’s won KRW=KFTC dipped 0.5% ahead of Friday’s central bank policy meeting where interest rates KROCRT=ECI are expected to remain unchanged at 0.5%.

Robert Carnell, ING’s Asia-Pacfic head of research, said there may be a case for easing considering weak jobs data this week but argues that he doesn’t feel the argument is compelling enough.

“The won may have a small rally on the day in the event that the BoK does nothing as expected. Further moves in the won will be dominated by U.S. dollar trends.”

Elsewhere, Malaysian stocks .KLSE edged higher and the ringgit MYR= advanced 0.1%.

The Philippines authorised for emergency use the COVID-19 vaccine developed by Pfizer PFE.N and BioNTech 22UAy.DE, the first to be approved in the country.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields are up 1.099 basis points at 6.229%

** Globe Telecom Inc GLO.PS up nearly 4%, while JG Summit Holdings Inc JGS.PS and Security Bank Corp SECB.PS gain over 3%

** Chinese exports grow more than expected in Dec, imports quicken

** USD/TWD-Touch higher as Taiwan c.bank attempts to stem drop

Asia stock indexes and currencies at 0355 GMT

COUNTRY

FX

RIC

FX

DAILY %

FX

YTD %

INDEX

STOCKS

DAILY %

STOCKS

YTD %

Japan

JPY=

-0.18

-0.77

.N225

1.66

5.41

China

CNY=CFXS

-0.04

+0.89

.SSEC

-0.29

3.32

India

INR=IN

+0.00

-0.11

.NSEI

-0.10

4.06

Indonesia

IDR=

-0.11

-0.21

.JKSE

0.16

7.80

Malaysia

MYR=

+0.05

-0.50

.KLSE

0.34

0.92

Philippines

PHP=

+0.02

-0.10

.PSI

0.75

2.20

S.Korea

KRW=KFTC

-0.52

-1.33

.KS11

0.08

9.65

Singapore

SGD=

-0.02

-0.44

.STI

0.47

5.19

Taiwan

TWD=TP

+1.66

+1.80

.TWII

-0.42

6.60

Thailand

THB=TH

+0.07

-0.23

.SETI

-0.12

6.63

(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Jacqueline Wong)

(([email protected]; Twitter: @NikhilKurianN; +91 806 182 2724;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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