Three new Asian holdings
Asian stock markets performed positively in September. Carnegie Asia rose 2.7 percent.
It is becoming increasingly clear that global economic activity continues to weaken. Statistics in the US, Europe and China are showing weaker growth. As a logical consequence, we can now see that central banks are starting to act to stimulate and inject new liquidity.
The Fed lowered interest rates by 0.25 percent, which was the second cut this year, and the ECB is also acting to support the economy. The Indian government launched a powerful stimulus package with reduced corporate taxes, from 35 percent to 25 percent, and for investments in new capacity the taxation is only 17 percent.
The aim is to stimulate new investment and attract foreign direct investment to India. The measure has an important signal value since the economy is now only growing by 5 percent. The stock exchange lifted significantly, and profits are expected to increase by 8 percentage points as a result.
In the middle of the month, Saudi Aramco’s refineries were attacked by drones, knocking out a large part of production. This briefly led to a steep rise in oil prices. The incident is believed to be a consequence of the escalated US-Iran conflict. Higher oil prices are a negative factor for Asia. Increased geopolitical tensions also meant that Asian stock markets fell at the end of the month. At the same time, continued turmoil around the US-China trade war created uncertainty, which does not benefit the investment climate in the Asian markets.
On October 1, China celebrated seventy years since the Communist Party took power. At the same time, demonstrations were being held in Hong Kong for increased democracy.
The fund invested in three new companies this month. Purchases were made in Chinese real estate company Longfor Group and internet retailer JD.com. The latter’s business model can almost be compared to Amazon.com in the United States. A new investment was also made in Taiwan’s Largan Precision. The holding in Swire Pacific was reduced.