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| HKECIC Weekly Market News |
| 30 September 2019 |
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| Market Snapshots |
| Asia and Australasia |
Hong Kong: Exports decreased by 6.3% yr/yr in August
The Census and Statistics Department reported that the value of Hong Kong's total exports of goods decreased by 6.3% yr/yr to HK$ 352.7 billion in August, after a decrease of 5.7% in July. For the first eight months of 2019 as a whole, the value of total exports of goods dropped by 4.3% over the same period in 2018. Decreases were registered in most major destinations, in particular India (-15.9%), the USA (-10.6%), the Mainland China (-6.0%), Germany (-5.8%), Japan (-3.9%) and Vietnam (-3.8%). However, year-on-year increases were registered in Singapore (+8.2%) and Korea (+5.3%). A Government spokesman said uncertainties associated with the development of US-China trade tensions will continue to pose downside risks to the already subdued external trading environment. Hong Kong's merchandise export performance will likely remain weak or even worsen further in the near term. |
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| Europe |
Germany: Business climate rose marginally
Business survey from the Munich-based ifo Institute showed that the Business Climate Index rose slightly to 94.6 in September after the index had fallen to its lowest level in seven years at 94.3 in August. The Ifo Institute said the increase was due to better assessment of the current situation in construction and service sector. However, Business expectations index fell to 90.8 in September from 91.3 points in August, the lowest level since June 2009. Chief Economist of the Institute explained the slight improvement of index is not the start of a change of trend as the slowdown is only taking a break. He emphasized that no signs of improvement were to be seen for Germany’s industry, which is stuck in a recession. By sector, business climate improved in construction (+22.2) and service (+16.6), while took further slide in manufacturing (-6.4) and trade (-3.7) in September.
Spain: S&P upgrades sovereign credit ratings citing growth
S&P Global Ratings has raised Spain’s long-term and short-term sovereign credit ratings to ‘A/A-1’ from ‘A-/A-2’, with a stable outlook. The upgrade reflects the balanced economic growth and improving budgetary position that put Spain's government debt-to-GDP ratio on a firmer downward trajectory. The rating agency forecasts Spain’s economy to expand by about 2.2% in 2019 compared to the 2.4% growth in 2018, with domestic demand continuing to drive growth, while net exports will likely make a slightly negative contribution. Separately, Spain’s trade deficit narrowed 3.6% yr/yr to EUR 17.20 billion in the first seven months of the year, as exports advanced 2% to EUR 172.7 billion and imports rose 1.5% to EUR 189.9 billion. |
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| North America |
US: Consumer spending drives economic growth in Q2
According to the third estimate from the Department of Commerce, the US economy grew at an unrevised annual rate of 2.0% in Q2, decelerated from 3.1% in Q1. Consumer spending, which accounts for two-thirds of US economic activity, grew at an annual rate of 4.6% in Q2, compared to a 1.1% growth in the preceding quarter. That marks the fastest pace of growth since Q4 2014, driven partly by the lowest unemployment rate in nearly 50 years. Spending by the federal government and state and local governments increased 4.8%. Meanwhile, business investment declined at a 1.0% annualized rate, the steepest decline since the Q4 2015, in part reflecting financial market fears of a recession. Separately, trade talks between the US and China are set to resume in 10-11 October in Washington. |
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Jabil Inc. (NYSE: JBL), a US-based electronic manufacturing services company, has announced its preliminary full year results. For the fiscal year ended 31 August 2019, the company posted net income of US$287.1 million (+232.7%) on net revenues of US$25.28 billion (+14.5%), with the increases primarily helped by the Electronics Manufacturing Services (EMS) segment, which posted a year-on-year growth of 26%. CEO Mark Mondello attributed the higher revenue to targeted end-markets in the areas of 5G, cloud, energy and healthcare. Looking ahead, the company expects net revenues in the range between US$6.65 billion and US$7.35 billion for the first quarter of fiscal year 2020. |
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Hong Kong Export Credit Insurance Corporation
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Copyright © 2019 Hong Kong Export Credit Insurance Corporation |
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Disclaimer
The information contained in the ‘Weekly Market News’ (WMN) is compiled by the Hong Kong Export Credit Insurance Corporation ("HKECIC") for general information only. Whilst HKECIC endeavours to ensure the accuracy of this general information, no statement, representation, warranty or guarantee, express or implied, is given as to its accuracy or appropriateness for use in any particular circumstances.
HKECIC is not responsible for any loss or damage whatsoever arising out of or in connection with any information including data or programmes on the WMN. HKECIC reserves the right to omit, suspend or edit all information compiled by HKECIC on the WMN at any time in its absolute discretion without giving any reason or prior notice. Users are responsible for making their own assessment of all information contained in this WMN and are advised to verify such information and obtain independent advice before acting upon it.
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