Hong Kong Tech Boom Defies Global Storm, Thailand Feels Pinch
Asian markets displayed surprising resilience this past week, navigating complex US tariff threats and global economic uncertainty. While anxieties surrounding President Donald Trump’s proposed levies on auto imports, semiconductors, and pharmaceuticals were significant, Hong Kong emerged as a positive outlier, fueled by strong tech sector performance, particularly from e-commerce giant Alibaba, which exceeded earnings expectations.
This contrasted sharply with the Stock Exchange of Thailand (SET) index, which declined 2% week-on-week, closing at 1,246.21. Despite fluctuating between 1,236.80 and 1,267.72 points, and an average daily turnover of 50.81 billion baht, the overall trend was downward. Interestingly, foreign and institutional investors were net buyers, demonstrating confidence in the Thai market. Conversely, retail investors and brokerage firms were net sellers, perhaps reflecting a more cautious outlook amidst global headwinds.
The week’s financial news highlighted a global economy in flux. President Trump’s expanded tariff threats increased market volatility. Minutes from the Federal Open Market Committee meeting signaled a potential pause in US interest rate cuts, prioritizing a return to the 2% inflation target. This cautious approach contrasts with current inflation at 3%, creating a policy dilemma.
Beyond the US, diverse economic narratives unfolded. Japan reported stronger-than-expected GDP growth, offering regional hope. South Korea implemented provisional tariffs on Chinese steel imports, mirroring US actions. In a potential sign of improving relations, China hinted at lifting its eight-year ban on Korean entertainment content. Across the Atlantic, UK inflation reached a 10-month high, driven by rising food and transport costs.
Corporate performance was mixed. Etihad Airways reported a significant profit increase, while retail giant Walmart issued a lower-than-expected profit forecast, reflecting pervasive economic uncertainty. Alibaba’s strong performance boosted investor confidence in the tech sector. Conversely, Mercedes-Benz projected a shrinking profit margin, highlighting automotive industry challenges. Reports surfaced of TSMC potentially acquiring controlling stakes in Intel facilities, a move possibly driven by US government efforts to bolster domestic chip production.
Thailand’s economic picture remained complex. Fourth-quarter GDP growth missed expectations, and the International Monetary Fund advocated for further interest rate cuts to stimulate the economy and combat low inflation. Commercial bank lending contracted significantly, indicating subdued domestic demand. The SET announced plans to tighten regulations on short selling and high-frequency trading to restore investor confidence. Industry forecasts were mixed, with cautious optimism for beverages and life insurance, while the automotive industry faced restructuring. The anticipated launch of the ThaiESG fund offered potential for investors seeking new opportunities.
The coming week features numerous economic data releases, including Eurozone and German inflation figures, US consumer confidence, GDP, and jobless claims data, and a Bank of Thailand policy rate review. Analysts cited potential benefits from a Chinese economic recovery for Thai businesses, particularly in tourism, electronics, and construction materials. Investors should closely monitor statements from Federal Reserve members for clues about future US interest rate trajectories. The technical outlook for the SET index suggests a range-bound market, with support and resistance levels identified by analysts. This week promises another crucial period for navigating the interplay of global economic forces and their impact on Asian markets.
