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The Week in Numbers: Factory Activity in Asia Slows

Factory activity shrank across Asia in January. China’s official Purchasing Managers’ Index (PMI) was 49.5 in January and 49.4 in December. A reading below 50 indicates contraction on a monthly basis.

Japan’s factory activity was the slowest in 29 months, with weakening exports and output. Much of the decline across Asia has been due to weakening China economy and the ongoing trade war. A Reuters poll of economists showed that growth forecasts for 33 of 46 economies have been cut.

Singapore has also not been spared. Factory growth cooled for the fifth consecutive month. The republic’s PMI dipped 0.4 points to 50.7, its lowest reading since December 2016. Singapore’s key electronics sector shrank for a third straight month, with PMI standing at 49.6.

Meanwhile, former Fed chairman, Janet Yellen, has said that if global growth weakens and financial conditions tighten, it is possible that the next move by the Fed is an interest rate cut. On January 30, the Fed said it would be patient on policy. It was a sharp turn from mid-December when the Fed raised its rates and suggested two more hikes in 2019. Yellen had spent one term as Fed Chair from 2014 to 2018.

In company-related news, SoftBank Group Corp shares jumped after founder Masayoshi Son said that the company plans to repurchase as much as 600 billion yen (US$5.5 billion) worth of stock.

This is a shift in tact for Son, who has favoured spending his capital on tech investment, and whose portfolio includes companies such as Uber and Alibaba Group Holdings Ltd. On Thursday, SoftBank shares jumped 18% to 9,962 yen.

1,560 HDB resale flats changed hands in January, 8.8% more than in December and 43% more than in January 2018. Resale prices were up 0.5% compared to a month ago but still down 1.1% from a year ago, and 13.9% down from its peak in April 2013. Last month was also the first time the volume of sales increased on a monthly basis since last July’s cooling measures were announced.

Finally, this week we welcomed the year of the Pig. Chinese new year sees the largest migration of people each year. Chinese citizens will rack up about 3 billion trips this week, while more than 400 million Chinese tourists will travel domestically. The celebrations will last 15 days in China, with official public holidays in China lasting seven full days.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Jeremy Chia owns shares in Alibaba Group Holdings Ltd.