Each week, we provide an overview of the percent returns of the primary indices in Southeast Asia and their currency appreciation or depreciation relative to the US Dollar. We provide this information below. We also capture this information, as well as the trailing four and year-to-date movements, and plot the data in charts, which you can find on the “index charts” and “currency charts” pages.
Indices
During the week of 22 January, eight of the ten indices in Southeast Asia advanced, with the Ho Chi Minh Stock Exchange Index leading all indices with a gain of 5.04%. The Cambodia Securities Exchange index had the greatest decline during the week, falling 0.99%.
On Tuesday, Canada announced that negotiations concluded on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, with the 11 member nations expected to sign a final deal by early March, according to Bloomberg.1 This trade pact replaces the earlier Trans-Pacific Partnership that the US abandoned in early 2017.
In Indonesia, the central bank plans to modify its reserve requirement ratio to provide banks more flexibility, according to The Jakarta Globe. Lenders currently are required to keep a minimum reserve of 6.5% of their total Rupiah deposits at the central bank, comprising a daily reserve of 5% and a two-week averaging reserve of 1.5%; the central bank plans to increase the averaging portion to 2%.
Bank Negara, Malaysia’s central bank, increased its policy rate from 3% to 3.25%. The increase in rates, which Bank Negara foreshadowed in late 2017, increased sentiment towards the country’s banks and boosted the KLCI—banks comprise more than 25% of the index—according to The New Straits Times.
The State Bank of Vietnam is aiming for 17% credit expansion in 2018, which is slightly down from the 18.17% growth in 2017, according to Viet Nam News. Lending will focus on the government’s priority sectors, to include agriculture, exports, supporting industries, SMEs, and high-tech firms; lending to risky sectors, such as real estate, securities, and consumer lending, will be limited.
In Laos, the government plans to increase the minimum wage from 900,000 Kip per month to 1,200,000 Kip, according to The Laotian Times. Since 1991, the minimum wage in Laos has increased seven times.
Weekly gains
- Ho Chi Minh Stock Exchange Index (VNI), 5.04%
- Hanoi Stock Exchange Index (HNX), 3.62%
- Myanmar’s Myanpix index (YSX), 3.11%
- Jakarta Stock Exchange index (JSX), 2.61%
- Philippine Stock Exchange index (PSEi), 1.41%
- Kuala Lumpur Composite Index (KLCI), 1.37%
- Singapore’s Straits Times Index (STI), 0.47%
- Stock Exchange of Thailand index (SET), 0.41%
Weekly declines
- Lao Securities Exchange index (LSX), -0.88%
- Cambodia Securities Exchange index (CSX), -0.99%
Currencies
Eight of the nine Southeast Asian currencies advanced relative to the US Dollar the week of 22 January, with the Malaysian Ringgit, Thai Baht, and Singapore Dollar continuing their strong gains verse the USD, rising 1.74%, 1.67%, and 1.00%, respectively. US Treasury Secretary Steve Mnuchin’s comment on Wednesday that he favored a weaker dollar, according to The New Straits Times, probably contributed to the appreciations in the Southeast Asian currencies.
Weekly appreciations
- Malaysian Ringgit (MYR), 1.74%
- Thai Baht (THB), 1.67%
- Myanmar Kyat (MMK), 1.32%
- Singapore Dollar (SGD), 1.00%
- Lao Kip (LAK), 0.23%
- Cambodian Riel (KHR), 0.12%
- Indonesian Rupiah (IDR), 0.01%
- Vietnamese Dong (VND), 0.00%
Weekly depreciations
- Philippine Peso (PHP), -0.45%
1 The following countries are members to the trade agreement: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.