Weekly Market Summary

💡1. Asia high-yield ETFs have been attracting substantial inflows despite a huge drop in returns in the second half of the year. The Singapore-listed iShares Barclays USD Asia High-Yield Bond ETF attracted $1.37bn in net inflows in the last three months of 2021. In Hong Kong, the Premia Partners’ Premia China USD Property Bond ETF, which became the territory’s first high-yield bond ETF when it was listed in April last year, attracted $10.22m in net inflows during the fourth quarter in 2021. The Asia high-yield bond market has been dominated by US dollar-denominated debt issued by Chinese property giants that are also facing tightening curbs on borrowing and declining home sales.

💡2. China’s industrial firms saw December profits grow at their slowest pace in more than a year and a half, pointing to cooling demand amid mounting economic challenges for the world’s second-largest economy. Profits rose by 4.2 per cent year-on-year in December, the slowest rate since April 2020, to 734.2 billion yuan (US$116 billion), compared with a 9 percent gain in November and a 24.6 percent gain in October. For 2021, industrial firms’ profits rose by a whopping 34.3 percent year-on-year to 8.7 trillion yuan (US$1.38 trillion). The constraining factors are building for China’s central bank. With the US Federal Reserve set to raise interest rates in March, time is running out for the PBOC to further ease policy, Economist says. The economy is set to expand by 5.5 percent this year, an adviser to the government’s cabinet said last week.

💡3. A proposed new screening regime for American outbound investment risks harming investment relations with China and making business more difficult for US multinationals, report says. A new analysis has found that if adopted, up to 43 percent of American foreign direct investment (FDI) to China between 2000 and 2019 would merit review under the proposed new legislation. The sectors at most risk under the proposed legislation include manufacturers of medical supplies and protective equipment, disaster recovery, military and intelligence, and developers of critical infrastructure. US firms are also likely face greater legal and compliance costs, while the US-China investment environment will change.

💡4. Hong Kong retail banks profits plunge as the low interest rates amid the ongoing Covid-19 pandemic crimped profit margins across the industry for the third consecutive year. The average pre-tax profit of 30 licensed retail banks fell by 18.6 per cent in 2021, while bad or doubtful loans – known as classified loans in Hong Kong stood at 0.81 percent at the end of September, according to HKMA. Hong Kong’s banks are faring poorly because of low interest rates that eroded their profit margins.

                                       ————————————————

One of the must-ask interview questions for banking and finance is: “Have you read any news recently?”, with the follow-up questions: “How would you link this news to the market and what investment suggestions would you give to your clients based on this news?” 

.

Showing your market sense and ability to provide feasible investment ideas would help to differentiate you from other candidates. Therefore, apart from the weekly news update / investment insights, we have also generated this Weekly Market Summary for you to have a quick understanding of the market development and tips to answer some hot discussion topics. Take a look of the summary and WhatsApp us in the group if you have questions.