Pacific (ex-Japan)

17/12/2008

Asian stockmarkets delivered negative returns in November as the financial crisis continued to loom large over the world economy. However, the pace of the declines was considerably muted compared to the previous month as global central banks stepped in to cut interest rates while governments talked about loosening fiscal policy. Over the month, the MSCI AC Asia Pacific ex Japan Index slightly outperformed the MSCI World Index. China, the Philippines and Hong Kong saw the best relative performance in the region. In China, stocks were lifted by a USD 586 billion stimulus package and an interest rate cut by the People’s Bank of China (PBoC), with the utilities & materials sectors contributing positively to market performance. In the Philippines, the market was helped by the performance of its telecommunications & industrials sectors, while the market benefited from the telecommunications and utilities sectors in Hong Kong. Over the month, Korea, Indonesia and Taiwan were the weakest performers in the region. The Korean won and Indonesian rupiah lost more than 10% against the USD in November, depressing returns. Key detractors to market performance in Korea included the consumer discretionary & IT sectors, while the energy & financials sectors dragged down market performance in Indonesia. In Taiwan, where key detractors to market performance include the IT & consumer discretionary sectors, the government’s stimulus package worth USD 14.5 billion and 25 bps in interest rate cuts failed to lift investor confidence.