Asia ETF Roundup (Market) – February 2022

Russian-Ukraine war. 

Jackie Choy, CFA 09 March, 2022 | 11:05
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For the latest ETF industry news, please refer to our “Asia ETF Roundup (Industry) – February 2022”.

 

Major Markets Performance

Russia’s invasion of Ukraine has roiled global markets. The Moscow Exchange has been closed since 28 February. Precious metals’ prices increased anywhere from 4% to 8% as investors sought safe havens and discounted the impact on supplies. Crude oil prices surged past USD 100/barrel in anticipation of supply disruptions. The Morningstar Global Markets, Developed, and Emerging Markets Indices fell anywhere from 2% to 3% in February. The Morningstar Europe Index dropped 3.9%. The performance of Asian and other emerging markets was mixed. The Morningstar Russia Index fell 48.5%. The Morningstar China Index fell 2.9%. Meanwhile Brazilian, Indonesian, Malaysian and Thai equities rose anywhere from 4% to 5% (all market returns are proxied by their respective Morningstar indexes in U.S.-dollar terms).

The value of the U.S. dollar was little changed. The ICE USD Spot rate rose 0.2% in February. Most Asian currencies didn’t move much against the greenback. The Renminbi appreciated 0.9% against the U.S. dollar last month. 

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Economic and Market News

Russia Raises Key Rate to 20%; Brazil and UK Hike Rates

  • Russia Raised Rate to 20% – The Central Bank of Russia raised its key interest rate by 100bps to 9.50% on 11 February. Subsequently, on 28 February, the Bank raised rates by 10.5 percentage points to 20.0%. The Governor of the Bank of Russia stated that “The conditions for the Russian economy have altered dramatically. The new sanctions imposed by foreign states have entailed a considerable increase in the ruble exchange rate and limited the opportunities for Russia to use its gold and foreign currency reserves. Accordingly, we need to employ a wide range of tools to maintain financial stability.”
  • Brazil Hikes Rates by 150bps – On 2 February, the central bank of Brazil increased its key interest rate by 150bps.
  • UK Hikes Rates by 25bps – On 3 February, the Bank of England hiked rates by 25bps.

 

China Economic Data: Inflation at 0.9% in January; Caixin/Markit PMI and Official PMI Rose in February

  • Inflation registered at 0.9% in January. This compares to a reading of 1.5% in December 2021.
  • China’s Caixin/Markit PMI rose to 50.4 in February, back to the expansionary territory, from a reading of 49.1 in January. The official PMI edged up slightly to 50.2 in February from a reading of 50.1 in January.

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About Author

Jackie Choy, CFA  is the Director of ETF Research for Morningstar Investment Management Asia

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