Emerging Markets update: The month of August in review

Emerging market equities delivered another positive month, albeit underperforming relative to developed market peers. Trade tensions once again dominated the headlines with Washington’s “reciprocal tariffs” leaving many trading partners facing higher tariffs while others secured temporary truces to keep negotiations going. The MSCI Emerging Markets index was up by a modest 1.3%, largely driven by strong performance from China and the Latin America region, while the MSCI World Index gained a stronger 2.6%.

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China’s advancements in hard technology

Chinese equities extended their rally in August, with gains largely concentrated in the AI compute chain. While consumer and healthcare sectors took a pause, the strength of the market was underpinned by visible progress and substantial market opportunities across the computing power ecosystem. This reflects both the technological drive and the unique structure and ecosystem of China’s equity market. On the macro front, inflation remains muted, but activity data signalled resilience. The MSCI China Index gained 4.9% and the MSCI China A Onshore Index advanced by 12.8%. Domestic tourism registered a 21% year-over-year increase in the first half of 2025, while county-level regions are emerging as new growth drivers. Household deposits fell by 0.7% in July, representing a withdrawal of over RMB 1 trillion.

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Global Market Commentary: August 2025

 Global markets hold steady amid policy shifts and trade uncertainty Global equity markets advanced in August, with the MSCI World Index gaining 2.6% despite ongoing trade tensions and political uncertainty.…

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The importance of risk management in China

China’s equity markets posted solid gains in July, supported by improving sentiment and thematic sector strength. Mainland-listed A-shares outperformed Hong Kong-listed H-shares, reversing the relative outperformance seen in the first half of the year. The rally was led by themes such as computing power, “anti-involution” (efforts to curb excessive internal competition), biotech and new consumption. The MSCI China Index and the MSCI China A Onshore Index were up by 4.8% and 4.4% respectively. Macro-sensitive sectors, including home appliances, real estate, and food & beverage, remained muted. Inflows from retail, pension, and insurance investors remained strong, and average daily turnover surged to approximately CNY 0.8 trillion, up from CNY 0.5 trillion in June.

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Emerging Markets update: July 2025

Global markets ended July on a positive note, with the MSCI World index up by 1.3%. Emerging markets (EM) continued to outperform their developed market (DM) peers, as the MSCI Emerging Markets index gained 2.0% for the month. Performance was lifted by the ongoing artificial intelligence (AI) boom, although lingering tariff risks and US dollar strength provided headwinds for EM equities. 

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Emerging Markets update: June 2025

Emerging market (EM) equities posted strong gains over the month, delivering a 6.0% return, outperforming relative to developed market (DM) peers. Performance was supported by easing geopolitical tensions and trade negotiations, which improved investor sentiment across global markets. For the year to date, the MSCI Emerging Markets Equity Index is up 15.3% while the MSCI World Equity index delivered a total return of 9.5%, highlighting EM’s relative strength.  

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Chinese consumer brands on the rise

China was relatively muted in June, with limited policy signals from Beijing and no major announcements. Nevertheless, the equity market held up well, with key indices maintaining their upward momentum driven by improved trade dialogue with the US. and rising confidence in the economy’s stabilisation. The MSCI China, MSCI China All Shares, and MSCI China A Onshore indices saw gains, ending the month up by 3.1%, 2.95%, and 3.46%, respectively. Sector wise, semiconductors, renewable energy, and financials were the major contributors. Retail sales in May rose by 6.4% year-on-year, beating expectations and marking the strongest growth since December 2023.

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