【English】2024/08/02 - Southern Dongying District Regional Market Report

Despite the seasonal decline in resident employment, Singapore's second-quarter employment growth was strong. In the second quarter of 2024, the total number of employed persons (excluding migrant domestic workers) increased by 11,300, more than double the increase of 4,700 in the first quarter.

On Saturday, July 27, the National Bureau of Statistics released data showing that the profits of China's industrial enterprises above designated size increased by 3.6% year-on-year in June, an acceleration of 2.9 percentage points compared with the previous value of 0.7%. From January to June, the total profits of national industrial enterprises above designated size reached 3.51 trillion yuan, a year-on-year increase of 3.5%, an acceleration of 0.1 percentage points compared with the period from January to May.

In the first half of the year, the contribution rate of the equipment manufacturing industry to the growth of profits in the industrial sector exceeded 60%. The profits of the consumer goods manufacturing industry continued to grow at a fast pace. The mining industry and raw material manufacturing industry saw a significant narrowing of profit decline, and the steel industry turned losses into gains.

After Bank of Japan Governor Haruhiko Kuroda made hawkish remarks and hiked interest rates earlier than expected, most Bank of Japan observers are reevaluating the interest rate trajectory and bringing forward the timeline.

A survey conducted by Bloomberg on Thursday showed that out of 41 economists polled, around 68% expect the policy rate to rise from 0.25% to 0.5% by the end of this year. Less than a quarter of respondents expect a rate hike in October, while 44% of respondents chose December. Another fifth of respondents expect a rate hike in January.

The Japanese stock market has experienced its largest decline since 2020, with the benchmark TOPIX index falling more than 10% from its July high, as the impact of tightening monetary policy disrupts one of the best-performing markets globally.

Exporters have been hit by the recent rise in the yen, while financial stocks have retreated due to concerns about recent gains.

The benchmark index fell 5.7% due to the early rate hike by the Bank of Japan on Wednesday and the tough remarks made by Governor Kazuo Ueda, with a consecutive 8% drop over two days. If the TOPIX index closes at its current level, it will enter a technical adjustment together with the Nikkei 225 stock average index.

Temasek, the sovereign wealth fund of Singapore, plans to invest up to $30 billion in the United States over the next five years, with investments in areas including medical care, financial services, and technology.

About 22% of Temasek's investments are in the Americas, totaling $63 billion, and 19% are in China. Last fiscal year, its exposure to the Americas exceeded China for the first time in a decade.

On Wednesday, the Federal Reserve's interest rate meeting kept the federal funds rate within the range of 5.25% to 5.5%. Powell stated that a rate cut could happen as early as the September meeting, and the overall view of the Fed is that the economy is approaching an appropriate level for rate cuts. The yield on the benchmark 10-year U.S. Treasury fell by 9.8 basis points to 4.043%.

On Thursday, August 1, the data released by ISM showed that the US manufacturing PMI in July fell below expectations, with the largest contraction in eight months. New orders and output declined, resulting in the largest drop in employment in four years.

Samsung Electronics announced a year-on-year profit growth of over 5 times to 9.64 trillion won in the second quarter, the fastest growth rate since 2010. Revenue increased by 23.42% to 74.07 trillion won (approximately 53.45 billion US dollars), surpassing expectations. Operating profit surged by 14.58 times to 10.44 trillion won, also exceeding expectations, due to strong demand for AI-powered advanced chips.

In the last quarter, Samsung's chip division achieved an operating profit of 6.45 trillion won, surpassing expectations. This marks the second consecutive profitable quarter after four consecutive losses, benefiting from the rise in memory chip prices and strong demand for high-bandwidth memory chips (HBM).

Due to the escalating tensions between the US and China, TSMC's customers from mainland China have been stockpiling chips. According to a CNyes report, Chinese companies that purchase chips manufactured by TSMC expect the 2024 US presidential election to bring (more) negative impact on China's access to the latest chips. TSMC's main clients in mainland China include Bitmain, Alibaba, and ZTE.

SK Hynix's factory will be located in the Yongin Semiconductor Cluster, where the South Korean government is seeking to build a large chip production complex.

SK Hynix has been riding the wave of artificial intelligence and partnered with Nvidia. The company reported that its second-quarter profits reached the highest level in six years.

Operating profit for April-June was 1.31 trillion yen, a 17% increase from the same period last year. This is essentially in line with the average analyst forecast of 1.32 trillion yen.

Hybrid cars are selling well in North America, offsetting the weak demand for toyota motor vehicles in Japan and China. Additionally, the weak yen is helping to boost domestic currency income for auto manufacturers.

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