By Margaret Yang, CMC Markets
Equities – Alibaba has spent $1bn to purchase a majority stake in Singapore based Lazada Group, which is a rising e-commerce player in Southeast Asia. This is a good move towards expanding its footprint in the region and securing a seat for future growth. This is Alibaba’s second deal in Singapore since it bought a 10% stake in SingPost for S$313m about two years ago. With these two deals, Alibaba has declared its ambition to expand into the ASEAN – a market covering a population of approximately 625m. This also implies more logistics tie-ups and business for SingPost in the future.
Asian markets finished higher yesterday, led by the Nikkei 225 which rebounded 1.13%. As USD/JPY has found some support at the 108 area, the Nikkei is likely to remain above 16,000. The Shanghai composite was down 0.34% whereas the Hang Seng gained 0.31%. Another 1.21bn yuan of northbound was observed via the HK-SH link yesterday. Today, traders will be waiting for Chinese trade balance data to find a clue to the country’s economic outlook. For the month of March, the forecast trade balance is a surplus of 30.85bn, a sharp reduction from the previous month’s forecast of 50.15bn, due to the disappointing Feb export data.
Commodities – WTI crude oil futures soared 4.5% last night to $42.17 on optimism that Saudi Arabia and Russia have formed consensus towards an output freeze. This has greatly increased the certainty in the upcoming freeze meeting this Sunday, regardless of Iran’s attitude. However, as a lot of optimism has been priced-in ahead of the meeting, traders shall remain cautious to the possible “sell on news” next week and also keep an eye on the weekly US DOE crude inventory tonight.
FX –USD/JPY rebounded to 108.61 this morning, leading Asian equities to open higher. The next resistances are 110.00 and 111.00. USTreasury prices have been falling for three days, as an oil price rebound has improved the overall risk sentiment in the markets.
Alibaba Group Holding – ADR
- Key Technical levels to watch:
- Up-trend channel formed
- Immediate resistance level: 80.0
- Immediate support level: 76.9 (20 SMA)
- MACD has converged, short term momentum is weakening
About the author
Margaret Yang Yan, CFA, is a market analyst for CMC Markets Singapore.