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Asia ETF Roundup (Market) –April 2018

China’s GDP Grew 6.8% in Q1; China Cuts Reserve Requirement Ratios

Jackie Choy 10/05/18

For the latest ETF industry news, please refer to our “Asia ETF Roundup (Industry) – April 2018”.

Major Markets Performance

Performance across the major equity markets was mixed for the month of April. The S&P 500 was little changed after stocks sought direction amid fears of a trade on trade war with China. The U.K.’s FTSE 100 rose 6.4% as the British pound slid 1.8% against the greenback. In Asia, the leaders of North and South Korea held a historic summit. The KOSPI rose 2.8% for the month of April. Emerging- and frontier-markets’, performance was generally negative. The Vietnamese market retreated 8.8% after a strong first quarter (+17.5%). Indonesian stocks fell 5.1%. The Indian market was a bright spot, as stocks advanced 4.1% (all figures proxied by the respective MSCI country indexes in U.S. dollar terms).

The U.S dollar gained 1.8% in April, as measured by the ICE spot Index. The dollar also appreciated against many Asian currencies. Meanwhile, the Chinese Yuan registered a 0.8% reversal versus the greenback during April, putting its year-to-date increase at 2.6%.

Precious metals’ performance was mixed during the month. Silver appreciated by 0.6%, while platinum and gold prices declined by 3.3% and 0.8%, respectively.

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Economic and Market News

China Cuts Reserve Requirement Ratios by 100bps

During the month, the People’s Bank of China (PBoC) cut reserve requirement ratios by 100 bps to 16% for large banks and 14% for smaller banks. The last time that the PBoC revised the reserve requirement ratios for all banks was in February 2016, when the ratios were cut by 50bps for all banks.

 

Chinese Economic Data: GDP Grew 6.8% in Q1; Inflation at 2.1% in March; Official PMI Fell to 51.4 in April; Caixin/Markit PMI Rose to 51.1

  • China recorded 6.8% GDP growth during the first quarter, which surpassed the country’s 2018 GDP growth target of “around 6.5%”.
  • China’s inflation rate registered at 2.1% in March, down from February’s reading of 2.9%.
  • China’s official PMI reading for April fell slightly to 51.4 from March’s reading of 51.5. Meanwhile, the Caixin/Markit PMI for April registered at 51.1, compared to March’s reading of 51.0.

 

About Author Jackie Choy

Jackie Choy  

is the director of ETF Research for Morningstar Investment Management Asia