Weekly Market Updates
US markets continue to pullback slightly from its previous winning streak, but it was mainly the Asian markets which were in the spotlight last week as investors were mainly standing by for the FOMC minutes this week. What stood out late last week was China real estate market which took center stage once again.
Country Garden (2007 HK Equity) defaulted on two dollar bond coupons due on 6 August 2023, triggering another wave of fear regarding Chinese property developers collapse. This instantly reversed the recovery pace of Asian stocks.
However, despite the Asian markets weakness led by Country Garden, this was not China’s first rodeo in dealing with developers’ defaulting. All eyes will be on whether the owner of Country Garden is willing to dip into her personal net worth to fulfil these corporate payments much like the action of Mr. Hui Ka Yan, founder of defaulted developer China Evergrande Group.
Investors were also hopeful that such drastic Chinese market backdrop will coerce the Chinese authorities to step in and provide additional policy support to help bolster growth for 2023 and beyond.
Main Index & P/E Ratio-3 years
The demand for the safe-haven greenback was seemingly on the rise as markets weakened. The Japanese Yen breaches the 145 mark against the US dollar, which will likely provoke a reaction from the Bank of Japan. Any further weakening of the Yen will likely spell inflationary trouble for Japan moving forward.
Investment views