Money Talk on RTHK Radio 3 - Friday 13 July 2018

Financial markets in Asia were decidedly nervous on Thursday morning as investors digested the possibility of further tariffs on Chinese and US goods in an escalating trade war. China’s currency weakened further while the dollar made further gains. Onshore yuan, which trades within a 2% band either side of the daily midpoint set by the PBOC, was down 0.3% and close to breaking below Rmb6.70 versus the US dollar. This is the level which led to the PBOC launching an aggressive verbal intervention last week to support the currency. The Japanese yen weakened to a six-month low. In the commodities markets, Brent crude oil rebounded 1.6% following its 7% plunge the previous day.

The prospect of renewed discussions between trade officials from the US and China helped Asian equities regain their footing on Thursday morning following steep falls the previous day and on Wall Street overnight. The Shanghai Composite was up almost 2% by the lunchtime break and the Hang Seng by 0.7%. Chinese telecoms firm ZTE rose by its 10% limit in Shenzhen and was 15% higher in Hong Kong after the US Commerce Department said that it signed an agreement with the company to remove the ban on doing business with US suppliers, once the company deposits US$400 million in an escrow account. This week’s Hong Kong debutant Xiaomi moved further above its IPO price of HK$17 following a disappointing first day’s trading on Monday. It reached a high of HK$19.70 in the morning session. Elsewhere in the region, Australia’s ASX 200 rebounded almost 1%, the Nikkei 225 in Japan climbed 1.3% and South Korea’s Kospi tagged on 0.6%.

The Bank of Korea left its benchmark interest rate unchanged at 1.5%. That was in line with economists’ forecasts for a central bank that has only raised rates once in the past 6 years.

Our final Money Talk guests for the week are Kenny Wen, Wealth Management Strategist from Everbright Sun Hung Kai and Ronald Wan, Non-Executive Chairman of Partners Financial Holdings. On the phone from Singapore is Geoff Howie, Market Strategist at the SGX. In part 2 of the programme, our Friday entrepreneur this week is Alex Gaddotti, CEO, of e-commerce platform Zwoop. And finally, to round off an exciting week, we’re going to take a look at the Soccer World Cup with RTHK’s sports presenter Atom Cheung.