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EMERGING MARKETS-Trump attack on Chinese apps adds to virus woes across Asia

Published 08/07/2020, 04:09 PM
Updated 08/07/2020, 04:10 PM
© Reuters.
USD/JPY
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USD/SGD
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JP225
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USD/IDR
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USD/MYR
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USD/PHP
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GENS
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TBEV
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NSEI
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JKSE
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KLSE
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KS11
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TWII
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SSEC
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SETI
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PSI
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0700
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BPI
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STI
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SM
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* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
* Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA
* Asian FX to consolidate in near term - strategist
* Malaysian ringgit up 1.2% for week, top performer
* Rupiah slips 0.5% for week, coronavirus cases jump

By Rashmi Ashok
Aug 7 (Reuters) - Tensions over a planned U.S. ban on major
Chinese apps kept most Asian markets subdued on Friday, with
Philippine stocks suffering an added blow from a jump in
coronavirus infections that made its caseload the highest in
Southeast Asia.
Citing security concerns, President Donald Trump issued
executive orders on Thursday that will ban U.S. transactions
with ByteDance, the Chinese owner of the popular video-sharing
app TikTok, and Tencent 0700.HK , owner of the WeChat app, in
45 days' time. Worries about whether China would retaliate through trade
restrictions dented most currencies in early trade, with the
Malaysian ringgit MYR= , often seen as a proxy for China's
yuan, and trade-sensitive Singapore dollar SGD= and South
Korean won KRW=KFTC all down.
"It is much tougher for China to react in a manner that
could jeopardise investment into the country. However, it seems
likely that tensions will ratchet higher ahead of U.S.
elections, a factor that could play badly for risk assets,"
Mitul Kotecha, senior emerging markets strategist at TD
Securities, wrote in a note.
"While Asian FX including the yuan have been supported by
dollar weakness lately, USD/Asia may at the least be in for some
short-term consolidation if not an outright increase in pressure
as tensions worsen."
The rising geopolitical tensions come at a time when a
number of the region's developing economies are struggling with
fresh coronavirus outbreaks.
Philippine equities .PSI closed 1% lower after the country
recorded a surge in infections late on Thursday, overtaking
Indonesia as the worst-hit country in Southeast Asia.
The spike in cases also followed dismal data on Thursday
which showed gross domestic product plunged 16.5% in the second
quarter.
For the week, most Asian currencies are set for gains,
having benefited from sustained dollar weakness. The ringgit was
the top performer with a 1.2% weekly gain so far.
Apart from some technical factors, Maybank attributed the
ringgit's outperformance to recent stability in the yuan and oil
prices, robust foreign inflows into domestic bonds and strong
fiscal and monetary responses by the government to deal with the
COVID-19 crisis.
The Indonesian rupiah IDR= was the worst performer with a
0.5% weekly loss, as coronavirus cases spread unabated and a
lockdown was placed in and around its capital, sparking worries
about further economic fallout from the virus.

HIGHLIGHTS
** In the Philippines, top index losers were Bank of the
Philippine Islands BPI.PS down 4.5% and SM Investments Corp
SM.PS down 3.13%
** Top losers on the Singapore STI .STI included Genting
Singapore Ltd GENS.SI down 4.93% and Thai Beverage PCL
TBEV.SI down 4%
** Malaysia's 10-year benchmark yield inched up 0.8 basis
points to 2.508%​​ while its 3-year benchmark yield climbed 0.6
basis points to 1.894%​​


Asia stock indexes and
currencies at 0718 GMT
COUNTRY FX RIC FX FX INDEX STOCK STOCK
DAILY YTD % S S YTD
% DAILY %
%
Japan JPY= +0.01 +2.92 .N225 -0.39 -5.61
China .SSEC -0.96 9.96
S>
India INR=IN -0.04 -4.78 .NSEI -0.16 -8.10
Indonesia IDR= -0.14 -4.93 .JKSE -1.00 -18.6
2
Malaysia MYR= -0.05 -2.36 .KLSE -0.13 -0.14
Philippines PHP= +0.16 +3.38 .PSI -0.96 -25.2
0
S.Korea .KS11 0.39 7.01
C>
Singapore SGD= -0.14 -1.90 .STI -0.71 -21.1
6
Taiwan TWD=TP +0.44 +2.50 .TWII -0.66 6.93
Thailand THB=TH -0.19 -3.98 .SETI -0.45 -15.9
9


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