Capitaland stakes its claim over CapitaMalls Asia
Last week was a shortened trading week which saw the S&P500 Index adding 2.7% while Asian indices delivered mixed results. The HSI futures fell 0.9% for the week, led by a decline in China with the China A50 futures dipping 3.3%. However, the STI outperformed the region, adding 1.7%. Locally, all eyes were on the property sector last week after Southeast Asia's biggest developer, CapitaLand offered to buy out investors in CapitaMalls Asia. As a result, CMA shares soared a record 21% in one day. 
 
Fed reiterates commitment
The rise in the S&P500 index came after US data and earnings boosted optimism about the world's largest economy. Federal Reserve Chairman Janet Yellen said that the central bank will remain committed to supporting the recovery in the US. She said that the Fed has a "continuing commitment" to support the recovery and investors should pay attention to shortfalls in both inflation as well as the jobless rates. In turn, this has reinforced the belief of some investors that this data could provide clues on FOMC decisions regarding the policy rate.
 
PBOC juggling a delicate act
Last Wednesday, China's statistics bureau said that the gross domestic product (GDP) rose 7.4% in the first quarter as compared to a year ago. This was the weakest pace of expansion observed in six quarters. Previously, the People's Bank of China said that the aggregate financing fell in March, signaling an expected slowdown in economic activity. On the flip side, the government is trying to mitigate the slowdown by trying to ease credit terms in the rural areas so as to provide more funds to agriculture-related industries.
 
According to Bloomberg, the MSCI Asia Pacific gauge ended the week trading at 12.65 times estimated earnings, compared tto a multiple of 15.9 for the S&P500 Index. In September 2011, both the S&P500 Index and the MSCI Asia Pacific Index were trading at multiples of 11.4. The increase in the S&P500 Index P/E could indicate that the index is overvalued at these levels.  
 
Macro releases by major economies this week
Finally, this is the list of economic data scheduled for release this week:
Mon 21 Apr: Japan trade balance, Eurozone Producer Price Index
Tue 22 Apr: Eurozone consumer confidence, US existing home sales
Wed 23 Apr: HSBC China manufacturing PMI, Eurozone manufacturing PMI, Eurozone Non-manufacturing PMI, US new home sales
Thu 24 Apr: China conference board March leading economic index, US durable goods orders, US jobless claims
Fri 25 Apr: Japan CPI, US U. of Michigan confidence
 

Source: Macquarie Research - 21 Apr 2014