ASIAN Inital Thoughts


July 31 ASIAN MACRO INITIAL THOUGHTS. US Futures open strong +VE

Covid-19 Globally over 17m cases, 669k deaths
DOW Futures opened 237pts higher after good Tech earnings NDX futures +1% S&P +0.8%

Earnings Due include Caterpillar, Merck, Exxon Mobil, Chevron, Illinois Tool Works, Colgate-Palmolive, Lazard, Booz Allen Hamilton, LyondellBasell, Weyerhaeuser, Newell Brands

DOW -0.85%, NDX +0.43%, S&P -0.38%, Russel 2K -0.37% Markets opened lower on record weakness in the GDP data, weak initial claims and ahead of earnings from Apple, Amazon, Alphabet and Facebook all of whom opened lower but worked better. BUT then worked better through the day with markets closing near their highs.
P&G +2.3% after reporting stronger sales of cleaning products.
UPS +14.2% after reporting a Q2 surge in home deliveries.
EARNINGS after market
Apple +6% (+1.2% normal hours) reported a blowout quarter, with overall sales +11% and announced a 4-for-1 stock split.
Amazon +5.5% (+06% normal hours) as sales skyrocket during the coronavirus pandemic. Revenue growth +11% and issued stronger-than-expected sales guidance for the current quarter.
Alphabet +0.4% (+1% normal hours) results beat but overall revenue declined. Revenues for Google Cloud were also just below analyst expectations.
Facebook +6.2% (was +0.5% in normal hours) Q2 earnings and revenue beat.
Gilead Sciences -3.8% (was -0.9% normal hours) Q2 earnings of $1.11 per share excluding some items on revenues of $5.14 billion. This missed estimates who predicted earnings of $1.45 per share on revenues of $5.31 billion. But it did raise FY guidance
Ford +2.7% (was -2.6% in normal hours) Q2 numbers better-than-expected
Shake Shack -4.9% (was +0.7% in normal hours) Q2 loss of 45 cents per share excluding some items on revenues of $92 million, missing analysts’ estimates of a loss per share of 37 cents on revenues of $93 million. The company said Shack sales diminished 39.5%.
DATA
GDP Growth Rate Adv Q2 -32.9% QoQ vs -5% prior (F/cast was -33%)
GDP Price Index Adv Q2 -2.1% QoQ vs +1.7% prior revised (consensus was +1.1%)
Initial Claims 1.434m vs 1.422m prior (F/cast was 1.4m)
Jobless Claims 4 week average 1.3685m vs 1.363m prior (F/cast was 1.348m)
PCE Prices Adv Q2 -1.9% vs +1.3% prior
Core PCE Prices Adv Q2 -1.1% vs +1.6% prior revised (Consensus was 1%)
EIA Natural Gas Report 26Bcf vs 37 Bcf prior (Concensus was 26 Bcf)
USD was vs Yen & Euro. Bitcoin -0.1% @ 11120.0, VIX +2.7% @ 24.76,
US T10 0.545% dipped below 0.55% after record GDP contraction.
OIL Brent -1.9%, WTI -3.3% but off lows. Brent futures expire Friday
Gold Futures -0.6%, Silver -4.9%, Copper +0.2%
AHEAD Personal Spending & Income, PCE Price Index, Employment Cost Index, (Benefits and Wages), Core PCE Price Index, Chicago PMI, Michigan Data (Inflation Expectations, Consumer Expectations, 5yr Inflation Expectations, Current Conditions, Consumer Sentiment). Baker Hughes Total Rig Count.

DAX -3.45%, CAC -2.13%, FTSE -2.13% Opened lower as CS, Volkswagen and Renault reported before the open and trended lower throughout the session before a small bounce at the end to close off the lows. Weak US data also hurt sentiment.
Credit Suisse -1.6% Net Income +24% and made additional provisions amid a “challenging economic environment,” along with announcing several structural changes.
Volkswagen -6.1% 1H operating loss 800m Euro and cut its dividend with a deliveries -27% due to the coronavirus pandemic.
Renault -9.3% 1H Net loss slumped to 7.3 billion euro
FDJ +18.8% on good 1H results
Lloyds -7.8% reported a pretax loss on the back of a sharp increase in credit loss provisions due to the pandemic.
BBVA -8.1% reported Net Profit -50%
DATA
EUROZONE Economic Bulletin
Unemployment Rate Jun 7.8% vs 7.7% May revised (F/cast was +7.8%)
Consumer Confidence Jul -15 vs -14.7 Jun (F/cast was -15)
Sentiment Economic Jul 82.3 vs 75.8 Jun revised (F/cast was 79.5)
Sentiment Industrial Jul -16.2 vs -21.6 Jun revised (F/cast was -18)
Sentiment Services Jul -26.1 vs -35.5 Jun revised (F/cast was -23)
Consumer Inflation Expectations Jul -17.5 vs +21.6 Jun (F/cast was +19)
GERMANY Unemployment Rate Jul +6.4% VS 6.4% Jun (F/cast was +6.6%)
GDP Growth Rate Flash Q2 -10.1% QoQ vs -2% prior revised (F/cast was -9.2%)
GDP Growth Rate Flash Q2 -11.7% YoY vs -2.3% prior revised (F/cast was -11.4%)
Inflation Rate Prelim Jul -0.1% YoY vs +0.9% Jun (F/cast was +0.3%)
Inflation Rate Prelim Jul -0.5% MoM vs +0.7% Jun (F/cast was +0.1%)
FRANCE PPI Jun +0.7% MoM vs 0% May (F/cast was +0.2%)
UK Car Production Jun -48.2% YoY vs -95.4% May revised (F/cast was -54%)
AHEAD
EUROZONE GDP Growth Rate, Inflation Rate,
GERMANY Retail Sales
FRANCE GDP Growth Rate, Inflation Rate, Household Consumption,
UK No data due

JAPAN Expect Nikkei to open slightly higher with Tech in focus. Yen firm currently 104.79. But general sentiment weak as new covid cases Thursday were 1,304 a new high and exceeding 1,000 for a second day.
Data due Unemployment Rate, Jobs/Applications ratio, Industrial Production.
Toyota Motor Corp group sold 4.16 million vehicles globally in the January to June period, becoming the world's best-selling automaker on a 1H basis for the first time in six years, data released by the company showed Thursday. The figure, including the sales of minivehicle maker Daihatsu Motor +VE
IBM Corp on Thursday launched a research partnership with Japanese industry to accelerate advances in quantum computing, deepening ties between the two countries in an emerging and sensitive field. +VE
Raytheon is lobbying Japanese lawmakers to replace Lockheed Martin Corp as the supplier of powerful radars as Tokyo reconsiders plans for two Aegis Ashore missile defence sites, three sources said. Slight -VE
The Japan Wind Power Association said on Thursday it aims to expand the country's offshore wind power installed capacity to 10 gigawatts(GW) in 2030 and 30-45 GW in 2040. +VE
Panasonic Corp. said Thursday it incurred a net loss of ¥9.83 billion ($93 million) in the April to June quarter, its first red ink in nine years for the period -VE
The trial for a former Nissan Motor Co executive Greg Kelly; accused of being an accomplice in Carlos Ghosn's alleged financial misconduct is set to begin Sept 15, a Japanese court said Thursday. Slight -VE

SOUTH KOREA Expect markets to open higher but may see some consolidation having seen the Kospi touch a six month high Thursday. Foreign buying focused on Tech and Autos. Construction names may see interest after torrential rains hit Central region. Pre market data beat f/cast +VE
Data out
 
Industrial Production Jun -0.5% YoY vs -9.6% May (F/cast was -7.5%)
Industrial Production Jun +7.2% MoM vs -7% May revised (F/cast was -0.8%)
Retail Sales Jun +3.4% MoM vs +4.6% May (F/cast was -0.6%)
Jun +6.3% YoY vs +1.7% May (F/cast was +3.5%)
Manufacturing Production Jun -0.4% YoY vs -9.8% May (F/cast was -7.5%)
Construction Output Jun -2.7% YoY vs -5.4% May (F/cast was -4%)
Also on Saturday Balance of Trade, Exports, Imports due.
South Korea's government is moving to create a special fund to support the New Deal initiative and help funnel investment into cutting-edge 5G technology, autonomous cars and eco-friendly sectors, the country's top economic policymaker said Thursday.
LG Electronics posted an overall slide in its Q2 earnings, but still came out resilient, posting earnings bigger than US’ Whirlpool.
Samsung Electronics expects a global recovery in demand for mobiles and consumer electronics in 2H after an increase in online activity during the pandemic helped boost earnings.
SK Innovation said Thursday it has partnered with professor John B. Goodenough, who was awarded the Nobel Prize in Chemistry last year, to develop a next-generation battery. They will co-develop all-solid lithium-metal batteries, which are potentially more powerful and safer than current lithium-ion batteries.
Mirae Asset Daewoo said Thursday it plans to repurchase 15 million treasury stocks worth 113.4 billion won ($94.84 million) in an effort to boost shareholder value and stabilize its shares.
Booyoung Group said Thursday that it was entering the housing market in Cambodia for the first time and developing Borey Booyoung Sensok in Phnom Penh, the nation’s capital.

TAIWAN Expect market to open higher with Tech names continuing to move higher.
Data due
GDP Growth Rate
Lee Teng-hui, who guided Taiwan through a rapid and peaceful transition to democracy while serving as Taiwan's president from 1988 to 2000, has died at the age of 97.
Central bank policymakers are planning to save space for further interest rate cuts should there be a sharper economic downturn because of the COVID-19 pandemic, the minutes of their meeting last month that were released yesterday showed.
Delta Electronics yesterday said that gross margin last quarter hit a record high, as the company benefited from the work from home and remote learning trends. +VE
AU Optronics yesterday reported a narrower net loss for Q2 compared with the previous quarter and gave a cautiously optimistic outlook for this quarter. +VE

CHINA Expect market to open flat with concerns about US/China tensions and rising covid cases. Also key will be the PMI data and likely to limit the downside.
Data due 
Manufacturing PMI Jun was 50.9 F/cast 51 and Non Manufacturing PMI Jun was 54.4 F/cast 54.1
PRC's Politburo Standing Committee (PSC) convened a meeting, deciding that the 5th Plenary Session of the 19th Central Committee will be hosted in Beijing in October 2020. Hosted by Chinese President Xi Jinping, the meeting will discuss the 14th 5-year Plan and targets for 2035.
FT reports on how China has banned the breeding and consumption of snakes and other land-based wildlife, and promised to compensate breeders and find them new jobs but they say the government keeps delaying -VE
US. Sec of State Mike Pompeo said Thursday to the Senate Foreign Relations Committee that the “tide is turning” in U.S. dealings with China, saying there is international support for American policies even as he said he was dismayed at the number of countries supporting Beijing’s new security law for Hong Kong.
US ‘considering’ measures to let Hongkongers settle in the country in wake of national security law, Mike Pompeo says -VE for sentiment
Australian miners Rio Tinto and Fortescue post record iron ore shipments as China industrial recovery continues +VE Construction names
Anti-China sentiment in US at ‘historic high’, Pew Research survey finds, amid friction over trade, coronavirus and human rights. -VE for sentiment

HONG KONG ADR’s -69pts to open at 24,641 and may see some initial margin call selling but downside limited with E Commerce names and TECH especially the Apply supply chain +VE. Financial ADR’s weak.
No data due


Short Selling HSI Thursday 20.7% vs 17.9% Wednesday
Top Shorts
Hang Seng Bank (11) 38%, Ping An (2318) 37%, Bank of China (3988) 36%, CCB (939) 32%, China Shenhua (1088) 30%, MTRC (66) 28%, Mengniu Dairy (2319) 28%, BoC (HK) (2388) 28%, Henderson Land (12) 27%, NWD (17) 26%, Hengan (1044) 25%.

New Security Law Hong Kong on Thursday disqualified a dozen pro-democracy candidates from running in a key election, citing reasons including collusion with foreign forces and opposition to the new China-imposed national security laws. Even the Civic Party candidates were disqualified which signals Beijing is becoming less tolerant of even moderate democrats. The government said there could be more disqualifications. -VE for sentiment. It is also rumoured that the administration in intending to postpone the election for 12 months. Another -VE as it is said Beijing doesn’t mind free elections as long as it knows the result before the first vote is cast.

WATCH
I.T (999.HK) Profit Warning -VE
expects a net loss in Q1ended May 2020 as compared to a net profit in the corresponding period last year. Hong Kong & Macau same store sales -49.1% YoY.
CHINA SHENHUA (1088.HK)'s profit for 1H 2020 is estimated to be RMB20.4 billion, -16%YoY
STANCHART's stock price dived over 4% in London as it warned over HongKong tensions.
SHK PPT (16.HK) said the subscription for Regency Bay closed at 1pm Thursday. The Tuen Mun project is slated for a second sales round tomorrow. 54 Regency Bay units will be sold and 1 unit will be tendered. The project received 1,307 tickets in aggregate, representing an over-subscription of above 23 times based on the 54 units.
As USD/ HKD triggered the Strong-side Convertibility Undertaking, the HKMA undertook a selling order of US$200 million to inject HK$1.55 billion into the market. The balance of the banking system of Hong Kong will increase to HK$184.906 billion next Monday.
Li Ka Shing Foundation Adds $101M Medical Support to 'Love Can Help II’ The coverage will be extended from local medical services to the social welfare sector.
Standard Chartered Bank (Hong Kong) Mary Huen Wai-yi, chief executive officer said the NIM of the bank will still come under downside pressure in 2H20, yet cautious provision was made in 1H20. She hoped that a result turnaround could be manifested upon economic recovery in 2H20. In 1H20, the bank reported a profit before tax decline of 19% YoY to $5.501 billion; and revenue fall of 1% YoY to $14.277 billion.
WHARF REIC (1997.HK) interim results ended 30 June 2020. Underlying net profit -26% annually to HK$3.844 billion. Inclusive of net investment properties revaluation deficit of HK$7.35 billion, the Group swung into loss of HK$4.454 billion from profit of HK$6.989 billion over a year ago. LPS equaled HK$1.47. An interim DPS of HK$0.78 was declared, against HK$1.1 over a year ago. Interim dividend payout ratio stayed unchanged. Chairman Stephen Ng said the top priority is to tap income sources and cut costs amid the current economic landscape, and bend over backwards to scout local market. Ng revealed the company had offered over $1 billion rental concession in 1H20, depicting it is not a minor amount.
Centa Valuation Index (Major Banks) (CVI) last printed at 45.31 this week, -2.86 pts weekly. Centaline Property, said CVI stood firmly around 45 for three weeks with a stabilizing sign. They believe the index will struggle in short run as the epidemic has yet to worsen further.

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July 30 ASIAN MACRO INITIAL THOUGHTS US futures opened flat

Covid-19 Globally over 16.9m cases, 663k deaths
IATA says air travel will take four years for a full recovery as a second wave of pandemic looms large and consumer confidence tumbles, pushing its previous projection back by a year. -VE Airlines and Tourism plays
US Futures opened Flat ahead of big tech earnings today.

EARNINGS include Apple, Amazon, Alphabet, Procter and Gamble, Comcast, Ford, Shake Shack, Dunkin Brands, Cigna, Dupont, Eli Lily, Northrop Grumman, Textron, Valero, ConocoPhillips, Comcast, Kellogg, AstraZeneca, Kraft Heinz, Southern Co., Stryker, Generac, Stanley Black and Decker, Marsh and McLennan, Electronic Arts

DOW +0.6%, NDX +1.35%, S&P +1.24%, Russel 2K +2.1% DOW and S&P opened flat the trended higher all day, NDX opened higher plateaued shortly after the open and then drifted higher through the day. Markets were cautious ahead of the FOMC decision which was unchanged but said economic growth better than in the trough but is well below pre pandemic levels.
CEOs of Amazon +1.1%, Apple +1.9%, Facebook +1.4% and Google-parent Alphabet +1.3% testifyed before the House Antitrust Subcommittee later Wednesday following a yearlong probe into their anti-competitive practices.
GE -4.4% off initial high as revenue beat forecasts says it will sell Baker Hughes stake within 3 yrs to boost balance sheet.
Boeing -2.8% off initial high as loss was greater than expected
AMD 12.5% earnings beat and gave upbeat guidance
Starbucks +3.7% Q3 loss but raised current quarter forecast
L Brands led the S&P 500 gainers after the retailer announced plans to operate its Victoria’s Secret chain as a standalone company in preparation for a break-up.
Results have been good but a number of companies have stressed how Govt support has been key and the need for more of it
AFTER MARKET
Qorvo +7% in extended trading after financial results for Q1 2021 beat Eastman Kodak at one point after hours was up 6%, before reversing course and falling more than 5%. President Donald Trump on Tuesday announced the company had been tapped to produce ingredients for generic drugs in response to the coronavirus crisis. Due to volatility, trading on the stock was halted 15 times Wednesday.
Qualcomm +12% after market Q3 as earnings beat and it announced a patent deal with Huawei.
PayPal +5% in extended trading Q2 earnings beat “In the midst of the COVID-19 pandemic, digital payments have become more important and essential than ever,” PayPal CEO Dan Schulman said of the company’s quarter.
Cognizant Technology +6% in after-hours trading Q2 results beat
ServiceNow -3% Q2 earnings despite beating and also raising its subscription revenue forecast for the year.
At Home +45% after releasing preliminary Q2 results that saw comparable store sales rise by 42% relative to last quarter.
DATA
MBA Mortgage Applications -0.8% vs +4.1% prior & 30 year Mortgage Rate +3.2% vs 3.2% prior
Wholesale Inventories Adv Jun -2% vs -1.2% May (F/cast was +0.5%)
Goods Trade Balance
Pending Home Sales Jun +16.6% MoM vs +44.3% May (F/cast was +15%) [Jun +6.3% YoY vs -5.1% May (F/cast was -1%)]
EIA Crude Oil Stocks Change -10.612m vs +4.892m prior (Consensus was +0.357m)
EIA Gasoline Stocks Change +0.654m vs -1.802m prior (Consensus was -0.733m)
FOMC Interest Rate Decision unchanged and Press Conference.
USD was flat vsYen & Euro. Bitcoin +3% @ 11,281.71, VIX -5.3% @ 24.1,
US T10 0.577% flat as Fed keeps rates unchanged.
OIL Brent +0.41%, WTI +0.56% as crude inventories drop but rising covid cases keeps upside limited.
Gold Spot +1%, Silver +0.8%, Copper +0.5% Gold continues to rise as Fed keeps rates unchanged.
AHEAD GDP Growth Rate, GDP Price Index, Initial Claims, Jobless Claims 4 week average, PCE Prices, Core PCE Prices, EIA Natural Gas Report,

DAX -0.1%, CAC +0.61%, FTSE +0.04% Markets traded sideways, CAC opened higher, FTSE and DAX opened around flat. Traders concerned over the differences between the Democrats and Republicans over the next stimulus package. Covid cases still a concern and caution ahead of the FOMC rate decision and press conference.
Deutsche Bank -2.5% reported a smaller Q2 loss that f/cast but increased its credit lass provisions
Barclays -6% 1H net income GBP695m and increased loan loss provisions
Banco Santander posted a Euro 11bn loss after write downs.
Sopra Steria +12.3% after good 1H earnings
Spie as 1H revenue and profit beat
Orion+12% after its new ALS drug failed in phase 3
Network International -10.5% after a GBP205m share placement
Kering rallied after results from the luxury goods maker helped ease worries that Gucci, its key brand, had lost momentum.
Taylor Wimpey led UK housebuilders lower after reporting much weaker than expected first-half margins, because of Covid-19-related costs, and cautioning that completion rates would remain weak for the rest of 2020.
Cineworld retreated on news that AMC, its main rival in the US, had agreed a deal with Universal Pictures to reduce the time before films could be put on premium streaming services to just three weekends.
DATA
GERMANY Import Prices Jun +0.6% MoM vs +0.3% May (Consensus was +0.5%)
FRANCE Consumer Confidence Jul 94 vs 96 Jun revised (F/cast was 95)
UK Mortgage Lending Jun GBP +1.9b vs +1.3b May revised (F/cast was +1.6b)
Mortgage Approvals Jun 40k vs 9.27k May revised (F/cast was 33.4k)
BoE Consumer Credit Jun GBP -0.086b vs -4.542b May revised (F/cast was +1.1b
Net Lending to Individuals Jun GBP +1.8b MoM vs -3.38 May (F/cast was -1b)
AHEAD
EUROZONE Economic Bulletin, Unemployment Rate, Consumer Confidence, Sentiment (Economic, Industrial, Services) and Consumer Inflation Expectations
GERMANY Unemployment Rate, GDP Growth Rate, Inflation Rate
FRANCE PPI
UK Nationwide Housing Prices, Car Production

JAPAN Expect Nikkei to open higher following US, Yen remains firm, currently 104.94. Local sentiment weak as Osaka confirmed over 220 new covid cases and total for Japan exceeds 1,000 for the first time. Floods in Northeast Japan also -VE for sentiment.
Data due 
Retail Sales, Foreign Bond and Stock Investments
The US military will help Japan monitor "unprecedented" Chinese incursions around East China Sea islands controlled by Tokyo but claimed by Beijing as Chinese boats prepare to begin fishing in nearby waters, the commander of U.S. Forces Japan said on Wednesday.
Fitch on Wednesday lowered its outlook on Japan's long-term foreign currency debt rating to negative from stable, citing the heavy blow from the coronavirus crisis and rising public debt as policymakers try to get the economy back on track. "The coronavirus pandemic has caused a sharp economic contraction’.
Japan and Britain are battling over their new bilateral trade agreement, with London seeking zero tariffs on malt grains and other farm products and Tokyo opposing such preferential treatment.
ANA Holdings Inc on Wednesday reported a record net loss of 108.82 billion yen ($1 billion) in the April-June quarter, as the novel coronavirus pandemic sharply reduced demand for air travel.
Takeda Pharmaceutical looking to cut sales jobs in Japan in its latest restructuring effort, as it overhauls domestic business following its $59 billion purchase of Shire Plc, sources familiar with the company's plans said.

SOUTH KOREA Expect markets to open higher local business confidence beat f/casts and good US earnings +VE. KEY today will be the Samsung Q2 Results.
Data out 
Business Confidence Jul 57 vs 51 Jun (F/cast was 50)
The World Trade Organization’s Dispute Settlement Body has decided to set up a panel to look into South Korea’s complaint over Japan’s trade restrictions, the Ministry of Trade, Industry and Energy said Wednesday.
GREEN CROSS Pharma on Wednesday applied to carry out a phase 2 clinical trial of its plasma-derived COVID-19 treatment with the Drug Ministry. +VE
Korea’s antitrust watchdog has decided to impose a fine of 64.7 billion won ($54.1 million) on food giant SPC for violation of antitrust laws, officials said Wednesday.
South Korea’s exports of kimchi rose sharply in the first half of the year thanks to its growing popularity, data showed.
Woori Financial Group said Wednesday that it plans to collaborate with telecom giant KT to upgrade its contactless retail services. +VE


TAIWAN Expect market to open higher as local earnings continue to be +VE
No Data due

United Microelectronics Corp yesterday reported Q2 results that beat market expectations, driven by robust shipments, a higher factory utilization rate and improved gross margin rising to 23.1% the highest in five years, due to strong demand for 28-nanometer (nm) chips used in mobile phones, the company said. +VE
Macronix Int yesterday reported that gross margin last quarter was 34.98% the highest since the third quarter of 2018, citing robust demand and higher product prices. +VE
Coretronic Corp on Tuesday reported that net income last quarter increased substantially to NT$552 million (US$18.71 million) from NT$5 million in the previous quarter, the company said. +VE
MediaTek has hired a former US Department of Commerce official to help it navigate worsening US-China tensions that have already ensnared its customer Huawei Technologies.

CHINA Expect market to open higher. Sentiment cautious after 101 new covid cases reported Wednesday as the outbreak in Dalian has now spilled over to nine cities across the country, including Beijing.
No data due

Kweichow Moutai sales slow to 5 year low; Revenue was +8.8% in the 3 months to June vs a 12.5% rise in Q1. Profit was +8.9% vs 16.7% prior. Shares are +46% YTD.
Bank of China report says China should prepare for potential US sanctions by increasing use of its own financial messaging network for cross-border transactions in the mainland, Hong Kong and Macau rather than relying on the Belgium based SWIFT system to reduce exposure of China's global payments data to the United States
FT reports that Xu Zhangrun, to sue public security bureau. The former constitutional law professor at Beijing’s elite Tsinghua University, who was detained by police in early July and held for a week on charges of “soliciting prostitution” before being released is to sue the Qingyang district public security bureau in Chengdu who brought the charges. He has focused on trying to hold China’s leaders accountable for “extrajudicial acts that betray the transformation of China into becoming a modern constitutional nation”.
China on Wednesday denied protecting fugitive financier Low Taek Jho, being sought by global investigators over his role in the multi-billion dollar 1MDB scandal.
Australian exports of coking coal to China for steel making surged 67% in the first half, as coronavirus restrictions held back imports from Mongolia. ALSO Australian shipments of thermal coal used in power plants also rose strongly, as rumours of a Chinese ban over diplomatic tensions proved incorrect
TikTok is being reviewed by US national security panel CFIUS, Treasury Secretary Steven Mnuchin says Slight -VE ByteDance
Brazil may face ‘consequences’ if it gives Huawei 5G access, says US ambassador -VE


HONG KONG ADR’s +72pts to open at 24,955 expect market to test 25k in early trades as recent shorts cover. But local sentiment weak as Carrie Lam warns that the latest uptick in cases could overwhelm the hospital system. The arrest of Tony Chung former leader of a student group under the new security law a slight -VE for sentiment.
Data due 
After market Retail Sales.
Out after market Wednesday:
GDP Growth Rate Q2 Adv -0.1% QoQ vs -5.3% prior (F/cast was -0.5%)
GDP Growth Rate Q2 Adv -9% You vs -9.1% prior (F/cast was -2.2%)
As the coronavirus pandemic was largely under control in Hong Kong in May and June, and the recovery of the Chinese economy also helped partly offset the external headwinds facing Hong Kong's exports of goods, the overall economic situation showed signs of stabilisation during the quarter. However, the COVID-19 pandemic remains a threat to the economy as it constrains exports while the recent surge in cases in Hong Kong impacts local activities.

Short Selling HSI Wednesday 17.9% vs 23% Tuesday 
Top Shorts Hang Seng Bank (11) 47%, Mengniu Dairy (2319) 39%, Ping An (2318) 38%, CCB (939) 34%, MTRC (66) 28%, Bank of China (3988) 27%, Henderson Land (12) 25%.

WATCH
Vanke Property (HK), CNQC Win Residential Land at Ma Wo Rd
at $3.7B, In Line The Lands Department announced that the tender for a site, Tai Po Town Lot No. 243 at Ma Wo Road, Tai Po, New Territories, was awarded to the highest tenderer, Wealth Honour Limited (parent companies: Vanke Property (Hong Kong) Company Limited and CNQC International Holdings Limited), on a 50-year land grant at a premium of $3.705 billion. The market valuation ranged $2.7-4.57 billion.
Prada (1913) recorded a net loss of 180 million euros (HK$1.64 billion) during the first half of this year, with Asia-Pacific retail sales falling 18.8% as Hong Kong and Macau markets suffer from the pandemic. Losses per share were 0.70 euros and the company has suspended dividends.
ASM Pacific Technology (0522) said its first-half net profit more than doubled from a year ago to HK$391 million, driven by rising 5G sector demand despite pandemic and political uncertainties.
International Housewares Retail (1373), the parent company of retail chain JHC, said full-year net profit as of the end of April +26.8% to HK$151 mn, with revenue +8.2% to HK$2.54 billion. Earnings per share during the financial year was 21.1 HK cents and it declared a final dividend of 11 HK cents. Revenue from Hong Kong also rose 8.1 percent to HK$2.24 billion during the financial year.
IMAX China (1970) recorded an interim net loss of US$35.25 million (HK$275 million) for this year ended June, with revenue falling 88.8% to US$6.66 million.
Thailand's True and ZTE (763.HK) have recently entered into a commercial 5G contract. Pursuant to which, True will adopt ZTE's 5G RAN products and services to build a commercial 5G network in Thailand.
CITIC BANK (998.HK) announced that its subsidiary CNCB Investment had entered into the limited partnership agreement with Xingcheng Special Steel and other parties through Shenzhen Dingxin and Xinyin Hengtai, establishing Jiaxing Goldstone Pengheng Equity Investment Partnership to make equity investment in the target company Xuzhou Construction Machinery.
CNCB Investment and Xinyin Hengtai will respectively contribute RMB277mn and RMB202mn.
Tencent 'Biped' on PRC 3rd Domestic Online Game Approval List for July China has approved the third batch of 57 domestic game edition numbers for July, including 7 online games, announced by National Press and Publication Administration. Biped, a title developed by TENCENT (700.HK)'s NExT Studios, was on the approval list. +VE
TAO HEUNG HLDGS (573.HK) Profit Warning -VE supplementary announcement, expecting a loss attributable to equity holders of HK$100 mn to HK$110 mn for the six months ended June 2020 as compared to a profit attributable to equity holders of HK$72 million for the corresponding period last year. -VE
Centa-Salesman Index (CSI) last printed at 44.58, -2.62 pts weekly.
CSI busted below 45 on a narrower decline, neutral for market sentiment and a panic-stricken home market slide, reported Centaline Property. They expect the index to struggle at around 45, which is not a signal of a market slump.
Jospeh Yam said that weaponising finance wouldn’t hurt HK unless there was a ban of the HK dollar or banning mainland corporations from investing in America, halting US investments in the mainland or even banning mainland enterprises from raising funds in the United States.  He admitted it was a strong weapon and the market shouldn’t underestimate its potential impact. As I have said for sometime this is Trumps intimate weapon.
HENLIUS-B (2696.HK) announced that the first patient was dosed in a Phase 2 clinical trial of Recombinant Humanised Anti-PD-1 Monoclonal Antibody Injection (HLX10) in combination with Recombinant Anti-EGFR Humanised Monoclonal Antibody Injection (HLX07) as therapy for recurrent or metastatic head and neck squamous cell carcinoma (HNSCC) in mainland China.

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July 29 Asian Macro Initial Thoughts. Dow Futures flat expect a weak open in Asia

Covid-19 Globally over 16.5m cases, 655k deaths
US Futures flat ahead of FOMC rate decision and the CEO’s of the Amazon, Apple, Facebook and Google-parent Alphabet will testify before the House Antitrust Subcommittee at noon Wednesday following a yearlong probe into their anti-competitive practices.

EARNINGS ahead include Facebook, General Electric, Boston Scientific, Anthem, Sanofi, Barclays. General Dynamics GlaxoSmithkline, Boeing, General Motors, Norfolk Southern, Qualcomm, Yum China, PayPal, Cheesecake Factory, Spotify, Owens Corning, Barclays, Deutsche Bank

DOW -0.77%, NDX -1.27%, S&P -0.65%, Russel 2K -1% Markets opened lower, initial weakness on poor earnings from MacD -2.5% and 3M -4.9% being off-set by hopes for agreement on the new stimulus package as republicans set out their package although the democrats seem to be some distance apart.
Markets then traded sideways with caution as the two day FOMC meeting got underway. The Fed announced it is extending the emergency lending facilities it set up to shore up financial markets during the pandemic until the end of the year.
TECH saw weakness Amazon -1.8% and Netflix -1.4%. Alphabet -1.7%. Facebook -1.5% and Apple -1.6% lower.
Re-opening names United +3.2%, American Airlines +3.3%, Delta advanced 1.7%. Carnival +4% and Norwegian Cruise +6.3%, Simon Property +3.5%, Kohls +2.5%
Marco data was mixed but Home Prices missed as new waves of covid disrupt sales.
Starbucks -2.4% says it’s seeing steady recovery as its stores reopen, but it expects the impact of the new coronavirus to last well into the fall. The coffee giant said Tuesday that revenue in its fiscal third quarter plummeted 38% to $4.2 billion. That was still ahead of Wall Street’s forecast.
Advanced Micro Devices + 9% after the chipmaker posted better-than-expected quarterly earnings and issued an upbeat guidance for the year.
DATA
Redbook 25 Jul -8.7% YoY vs -7.5% prior (+1.1% MoM vs +1.9% prior)
Case-Swiller Home Prices May +3.7% YoY vs +3.9% Apr (revised) (F/cast was +4.1%) [May +0.4% MoM vs +0.8% Apr (revised) (F/cast was +0.8%)]
Consumer Confidence Jul 92.6 vs 98.3 Jun revised (F/cast was 95)
Richmond Fed Manufacturing Index Jul 10 vs 0 Jun (F/cast was 5)
USD was weak vs Yen & flat vs Euro. Bitcoin unch @ 10,995.00, VIX +2.8% @ 25.44,
US T10 0.579% yield fell slightly as FOMC meeting started.
OIL Brent -0.44%, WTI -1.35% rising covid cases sparks demand fears.
Gold Spot +0.3%, Silver -1%, Copper -0.12%. Some profit taking after recent rally.
AHEAD MBA Mortgage Applications & 30 year Mortgage Rate, Wholesale Inventories, Goods Trade Balance, Pending Home Sales, E

DAX -0.03%, CAC -0.22%, FTSE +0.4% Markets opened mixed FTSE higher and initially sold down in the red, rallied and then traded sideways with a small rally ahead of the close. Resources +VE as Gold continues to hit new highs. But Covid cases and new travel restrictions -VE for sentiment.
CAC opened lower sold down in the morning but worked better in the PM. DAX opened higher sold down into the red, then worked slightly better to close flat.
LVMH -4% after disappointing earnings; it seems even the rich are turning cautious about spending.
Ubi Banca +8.3% as shareholders said they would accept a takeover offer from larger domestic rival Intesa Sanpaolo -0.8%
DATA
UK CBI Distributive Trades Jul 4 vs -37 Jun (F/cast was -23)
AHEAD
EUROZONE No data due
GERMANY Import Prices
FRANCE Consumer Confidence
UK Mortgage Lending, Mortgage Approvals, BoE Consumer Credit, Net Lending to Individuals,

JAPAN Expect Nikkei to open lower Yen currently 105.04. There were 266 new covid cases reported in Tokyo Tuesday -VE for sentiment.
No data due

The Osaka prefectural government on Tuesday decided to request its citizens to refrain from drinking in groups of five or more people
Vietnam on Tuesday signed an agreement with the Japan International Cooperation Agency (JICA) to borrow 36.63 billion yen ($348.2 million) to build six patrol vessels, state media reported, amid rising tensions in the South China Sea.
Mitsubishi Motors faced doubts about a quick recovery after posting dismal quarterly sales in its key Southeast Asia market partly due to the coronavirus outbreak, sending its shares down 13% to a record low on Tuesday. -VE
Nissan Motor is forecasting a wider-than-projected operating loss for the current fiscal year and plans not to pay a dividend; as the impact from the coronavirus pandemic forces the automaker to accelerate cost-cutting measures. The operating loss for the year to March will be ¥470 billion ($4.5 billion), compared with analysts’ average prediction for a ¥216 billion loss and a ¥40.5 billion loss in the prior year. The Yokohama-based company also plans to skip its dividend, it said in a statement Tuesday. -VE
Canon on Tuesday reported a group net loss of ¥8.8 billion for April to June due to the fallout from the coronavirus pandemic, suffering the first red figure on a quarterly basis since it started earnings disclosure in 2001. -VE
NEC Corp and travel agency JTB Corp said Tuesday they are launching a new service allowing teleworkers to book empty hotel rooms for use as remote offices, repurposing the spaces left vacant due to the coronavirus' impact on hotel occupancy rates. +VE

SOUTH KOREA Expect markets to open flat premarket data better than expected but traders likely to be cautious. Yesterday saw strong foreign buying helped by a weaker USD but expect some consolidation today.
Data out Consumer Confidence Jul 84.2 vs 81.1 Jun (F/cast was 80)
Samsung Display has recognized an in-house union, ending its long-standing practice of operating without a bargaining unit made up of its employees, industry sources said Tuesday. +VE
Hanwha Energy said Tuesday it has completed the world’s first hydrogen fuel cell power plant that generates electricity using waste hydrogen left over from petrochemical facilities +VE
Hanwha Solutions has submitted a bid for 50 percent stake in the ethane cracking center at Sasol’s Lake Charles complex in Louisiana, according to industry sources Tuesday. +VE
Daewoo Engineering and Construction said Tuesday it is entering the electric vehicle charging infrastructure industry by investing in Humax EV. +VE
Samsung likley to fall behind TSMC in H1 operating profit. Samsung is set to announce its Q2 earnings results on Thursday. Although Samsung outstripped TSMC in terms of sales, raising an estimated 36 trillion won ($30 billion) in the first six months of the year, the Korean chipmaker is expected to achieve a smaller operating profit of 9.3 trillion won than TSMC’s 10.4 trillion won.

TAIWAN Expect market to open flat, TSMC in focus after yesterday’s strong initial performance, yesterday was also the highest turnover in the Taiwan Stock Exchange’s history.
No Data due
After Market Tuesday
Consumer Confidence Jul 69.43 vs 68.77 Jun (F/cast was 71)
Consumer confidence remained virtually flat but people showed more interest in buying real estate and have regained modest confidence in stock investment, a National Central University survey showed yesterday.
Landis Taipei Hotel has reported a significant pickup in room and restaurant revenues, although continuing border controls limited the scale of recovery. +VE
Elan Microelectronics which supplies touch-panel controller chips, yesterday said that revenue this quarter would grow modestly from last quarter, when sales surged to an all-time high of NT$3.54 billion (US$120 million), due to coronavirus-induced telecommuting and remote learning demand. +VE
Win Semiconductors the world’s largest pure-play gallium arsenide foundry, yesterday said that its revenue this quarter would increase from the second quarter as 5G demand remains strong, despite the COVID-19 pandemic and the US-China trade dispute. +VE
TSMC, retained its title as the most prolific applicant for invention patents in Taiwan in the first half of the year, the Ministry of Economic Affairs said yesterday. +VE

CHINA Expect market to open lower following the US sell off but Team China likely to be active in limiting the downside. FT reports a record number of covid cases in Xinjiang adding to fears of a second wave in China -VE for sentiment. Also sentiment weak as the New Third Board Select has seen losses.
No data due
Worldwide investment in 5G network infrastructure will nearly double this year
to US$8.1 billion, accounting for 21.3% of the overall wireless infrastructure, said Gartner in a report.
Huawei has already completed its global 5G deployment, with sector application and unlocking 5G profit as its focuses in the next phase, said Rotating Chairman Guo Ping at the Huawei Better World Summit 2020, cited by Chinese media.
China Southern Airlines yesterday rolled out an “all you can fly” pass, becoming the latest in a fleet of cash-strapped carriers to join a promotional craze that analysts have said has helped revive a COVID-19-ravaged air travel market. At least eight of China’s dozens of airlines have introduced similar deals since last month, often priced at about US$500 for in some cases unlimited flights.
Washington toughened its stance against Beijing’s aggressive territorial claims in the South China Sea last week by signing a memorandum of understanding (MOU) with Vietnam, pledging support for its fishermen against “illegal intimidation”.

HONG KONG ADR’s -174pts to open at 24,598 with broad weakness and likely to prompt some early margin call selling. Rumours that the administration will delay the local elections due for September for 12 months citing the covid pandemic are likely to raise more local concerns.
Data due 
after market GDP Growth Rate

Short Selling HSI Tuesday 23% vs 21.5% Monday 
Top Shorts MTRC (66) 49%, Ping An (2318) 42%, Wharf REIC (1997) 42%, Mengniu Dairy (2319) 41%, China Shenhua (1088) 39%, China Res Land (1109) 38%, Bank of China (3988) 38%, CCB (939) 31%, Sinopec (386) 31%, Hang Seng Bank (11) 30%, HK & China Gas (3) 29%, Galaxy (27) 29%, CK Asset (1113) 29%, Country Garden (2007) 28%, CNOOC (883) 26%, Swire A (19) 25%.

WATCH
Tencent Holdings has offered to buy out and take private search engine Sogou Inc
in a US$2.1 billion deal, adding to a slew of Chinese technology giants seeking to delist from US bourses.
SJM HOLDINGS (880.HK) interim result ended June 2020. Net gaming revenue -74.4% YoY to HK$4.272 bin. The profit swung into loss of HK$1.412 billion. LPS was HK24.9 cents. No dividend was declared, versus HK8 cents over a year ago. For 1H20, adjusted EBITDA loss was HK$984 million, against adjusted EBITDA of HK$2.078 billion over a year ago. Following completion of construction work on the Grand Lisboa Palace in late 2019, the Group began the inspection and application process with the Macau Government. Subject to obtaining the necessary operating permits, the project is expected to open by the end of 2020.
The Hong Kong Housing Authority (HA)'s Subsidised Housing Committee (SHC) Tuesday approved the new arrangements for the sale of recovered Tenants Purchase Scheme (TPS) flats and additional incentives to encourage sitting TPS tenants to purchase the flats in which they reside. Currently, sitting tenants of the 39 TPS estates may still opt to purchase the flats in which they reside and will enjoy a special credit during the first two years of their tenancies. In order to encourage sitting TPS tenants to buy the flats in which they reside, the SHC approved to provide an additional discount of 17.5 per cent for one year starting from September 1, 2020, to sitting TPS tenants who no longer enjoy any special credit.
The Subsidised Housing Committee of Housing Authority approved a two-month rent waiver for public rental housing (PRH) tenants to offset the 9.66% rent hike. Equally, the Committee decided to waive PRH rents in September 2020 and September 2021. Well-off tenants can also enjoy a basic rent waiver.
CATHAY PAC AIR (293.HK) and its airlines will transfer their jetliners this week to Alice Springs, Australia for parking, as Apple Daily learnt from rumours. The Hong Kong flagship airline is set to transfer around a third of its passenger planes outside the city over the coming few months, as it replied to the press. It has decided to park some planes at desert area to minimise the impacts of humidity and storms thereon, said the report, and the decision may involve over 50 planes.
Chinese Foreign Ministry stated that HKSAR Government will suspend extradition and other mutual assistance in criminal matters with Britain, Canada and New Zealand and that these countries have seriously meddled in China's internal affairs by halting their extradition treaty with Hong Kong.

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July 28 Asian Macro Initial Thoughts Dow futures flat

Covid-19 Globally over 16.3m cases, 649k deaths
DOW Futures opened +40pts S&P and NDX slight +VE too.
Gold continues to rise as covid, geopolitical tensions and inflation worry investors. CNBC Cramer says golds move higher is a sign that a vaccine will fail

DOW +0.43%, NDX +1.67%, S&P +0.74%, Russel 2K +1.16% Markets opened higher with strength in Tech; Apple +2.4%, Facebook +1.2%, Amazon +1.5%, Netflix +3.2% and Alphabet +1.1%. Durable good numbers were weak. Earnings in focus in what will be busy weak for results.
After the administration said Senate Republicans had reached an agreement in principle on a new relief package.
Under Armour +2.7% off initial lows as it disclosed it received a ‘Wells notice’ regarding sales booked between Q3 2015 and Q4 2016.
Hasbro led the S&P 500 fallers on much weaker than expected second-quarter earnings, which were in contrast to a strong update last week from closest peer Mattel.
Earnings Albertson’s, F5 Networks, Hasbro, NXP Semiconductor, LVMH, Avery Dennison, Legg Mason, SAP, TrueBlue, National Oilwell Varco
DATA
Durable Goods Orders Jun +7.3% MoM vs +15.1% May revised from +15.8% (F/cast was +5%)
Durable Goods Orders Ex Transport Jun +3.3% MoM vs +3.6% revised from +4% May (F/cast was +3%)
Durable Goods Orders Ex Defence Jun +9.2% vs +15.2% May revised from 15.5% (F/cast was +4%)
Dallas Fed Manufacturing Index Jul -3 vs -6.1 Jun (F/cast was -16)
USD was weaker vs Yen & Euro. Bitcoin +12.8% @ 11,185.96, VIX -4.3% @ 24.74, US T10 0.615% on concerns over the recovery
OIL Brent +0.2%, WTI +0.75% on a weak USD and more US stimulus but upside capped by US/China tensions
Gold +0.5%, Silver +2.3%, Copper +0.6% Gold continues o mover higher
AHEAD Redbook, Case-Swiller Home Prices, Consumer Confidence, Richmond Fed Manufacturing Index, API Crude Oil Stock Change.FOMC meeting starts.

Earnings Amgen, Visa, 3M, Pfizer, McDonald’s, Starbucks, Mondelez, Chubb, Aflac, DR Horton, Raytheon, Invesco, MSCI, Rockwell Automation, Altria, Laboratory Corp, Martin Marietta, Roper Tech, Harley-Davidson, Canon, Nissan, Centene, Polaris, Sherwin-Williams, Corning, Boyd Gaming, Akamai, Lattice Semiconductor, Advanced Micro Devices, Visa, Juniper Networks

DAX unch, CAC -0.34%, FTSE -0.31% after trading sideways for the day. Covid in focus as UK imposes a two week quarantine period on holiday makers returning from Spain -VE for Travel Stocks and Tui -11.4% but off initial lows as it cancelled all holidays from the UK to Spain until Aug 9. Spain insists the outbreak in under control. Ryanair -3.9% off initial lows; as it reported a net loss of 185m Euro’s for Q1. (IAG -7.9% EasyJet -8% Lufthansa -5%
Basic Resources continued to climb. German Ifo data was slightly better than forecast.
Gold’s record high buoyed the bullion miners, with Polymetal and Centamin both setting new records. Antofagasta led the wider mining sector higher as dollar weakness helped lift copper prices.
Sentiment slightly +VE after the good Chinese Industrial Profits number but that was before the most recent rise in covid cases. US/China tensions remain high after the ’tit for tat’ consular closures.
DATA
EUROZONE Loans to Households Jun +3% YoY vs +3% May (F/cast was +2.3%)
Loans to Companies Jun +7.1% YoY vs +7.3% May (F/cast was +7.6%)
M3 Money Supply Jun +9.2% YoY vs 8.9% May (F/cast was 9%)
GERMANY Ifo Business Climate Jul 90.5 vs 86.3 May revised (F/cast was 88.5)
Ifo Current Conditions Jul 84.5 vs 81.3 May revised (Consensus was 85)
Ifo Expectations Jul 97 vs 91.6 May revised (F/cast was 93.7)
Bundesbank Monthly Report
FRANCE Unemployment Benefit claims Jun -202.7k vs -148.3k (F/cast was -42k)
Jobseekers Total Jun 3.964m vs 4.1674k May (F/cast was 4.1254k)
AHEAD
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK CBI Distributive Trades

JAPAN Expect Nikkei to open higher but upside limited by the number fo covid cases with 131 new cases Monday. Yen strengthened currently 105.30
No data due
Japan's economy minister urged on Monday for businesses to aim for 70% telecommuting
and enhance other social distancing measures amid a rise in coronavirus cases among workers, some infected during after-work socialising.
Government stirs controversy with huge COVID aid contract for ad giant Dentsu raising questions about how public money is being spent during the crisis. Dentsu is known as a company with close ties to the ruling LDP. -VE
AstraZeneca will pay up to $6 billion to Japan's Daiichi Sankyo under the drugmakers' second multi-billion dollar oncology collaboration to develop and market a new type of targeted cancer treatment. +VE
Mitsubishi Motors Corp reported Monday a 176 billion yen ($1.7 billion) loss for April-June, and forecast more red ink for the fiscal year, as the coronavirus pandemic slammed auto demand around the world. The Japanese automaker had posted a profit of 9.3 billion yen for the fiscal first quarter the previous year. Quarterly sales shrank 57% to 229.5 billion yen ($2.2 billion). -VE and expect other makers tone suffering too.

SOUTH KOREA Expect markets to open higher and work higher sentiment remains +VE as trader watch for the next US stimulus package. Banks may see weakness after Worri and Industrial Bankod Korea results but other sectors +VE
No data due
Celltrion’s anti-inflammatory biosimilar Remsima SC, which is injected under the skin, gained approval 
from the European Medicines Agency as a treatment for inflammatory bowel disease.
Woori Bank and Industrial Bank of Korea reported on Monday that their Q2 net profit plummeted by 45 percent and 25 percent, respectively, weighed down by risks stemming from the coronavirus and hedge fund misselling.
Taihan Electric Wire said Monday it has signed a 92.5 billion won ($77.3 million) contract with the UK’s National Grid to supply underground cables and accessories for the London Power Tunnel 2.
SK Telecom on Monday unveiled an augmented reality-powered application designed to let visitors experience life in Seoul’s Changdeokgung 600 years ago. +VE. It also said Monday it has permanently ended its 25-year-old 2G mobile service. +VE
LG Electronics said Monday it won’t quit its solar module business, denying rumors that it has been searching for a financial advisor since last year to sell off the business.
Samsung Electronics said Monday it has clinched multiple supply deals in the UK, in an apparent move to push harder into the home interior and housing market. +VE

TAIWAN Expect market to open. Watch TSMC after two strong days we may see some locking in of profits. Results in focus
No data due
Consumer confidence remained virtually flat this month, 
but people showed more interest in buying real estate and have regained modest confidence in stock investment, a National Central University survey showed yesterday. Slight +VE
The government’s business climate monitor last month remained “yellow-blue” for a fourth month, indicating economic softness, as the COVID-19 pandemic continued to weigh on major economic barometers, except imports of capital equipment and cash supply, the National Development Council said yesterday.
The government’s NT$210 billion (US$7.12 billion) Stimulus 3.0 program is to provide more relief to Taiwanese businesses affected by the COVID-19 pandemic, Minister of Economic Affairs Wang Mei-hua told a news conference yesterday. While the service industry has recovered, non-semiconductor-related manufacturing industries are still hurting badly, Wang said.
Faraday Technology Corp gave a cautiously optimistic outlook for this quarter as more new projects focused on application-specific integrated circuit (ASIC) solutions are likely to offset weakness in its non-recurring engineering services (NRE) and silicon intellectual property (IP) business. +VE
Young Optics Inc yesterday posted an operating loss of NT$37 million (US$1.25 million) and a net loss of NT$36 million for last quarter, or losses per share of NT$0.31. Gross margin rose to 19.1 percent last quarter from 15.9 percent in the first quarter, but down from 22.8 percent in the same period last year. It was the third consecutive quarterly loss, pushing its cumulative net loss to NT$121 million for the first half of the year, or losses per share of NT$1.06. The company predicted shipments of optical components this quarter would grow at the same pace as the second quarter, but that shipments of micro-projectors, TV walls and 3D printers would likely decline quarter-on-quarter. -VE
China Steel Corp yesterday posted a pretax loss of NT$225 million for last month, or losses per share of NT$0.01, 58 percent less than May’s pretax loss of NT$535 million, the company said in a statement. That brought the company’s cumulative pretax loss for last quarter to NT$1.253 billion, or losses per share of NT$0.08, down more than 50 percent from the first quarter. As steel prices in this quarter are likely to rise month-on-month while end-market demand warms up, the company’s operations are expected to improve and it could turn a profit, analysts said. +VE

CHINA Expect market to open higher following the US but expect choppy trading
No data due
Huawei has axed its India revenue target for 2020 by up to a half 
to US$350-500 million, the Indian Economic Times reported. The Chinese tech giant is sinking 60-70% of its Indian workforce, which does not involve the R&D and global service centre.
Smartphone sales in China -17% YoY but +9% QoQ in the second quarter of 2020, as Counterpoint wrote in a report. During the period, 5G devices accounted for a third of the smartphone sales.
China took over the premises of the U.S. consulate in Chengdu on Monday, after ordering the facility to be vacated in retaliation for China’s ouster last week from its consulate in Houston, Texas.
China will sell 10,000 tonnes of frozen pork from state reserves on July 30, the China Merchandise Reserve Management Center said on its website on Monday.
China’s newly-created mini-IPO market kicked off trading on Monday in a frenzy as circuit breakers were triggered for both surging and slumping stocks on their debuts.
China opens first large-scale helium plant as it tries to reduce reliance on US imports.
China's foreign ministry said today that China's territorial sovereignty and maritime rights and interests in the South China Sea would not be altered by unjustified accusations from any country, state media reports. The spokesperson made the remarks at a daily press conference in response to Australia's accusations against China over the South China Sea. China's territorial sovereignty and maritime rights and interests in the South China Sea were established throughout a long course of history and have been upheld by successive Chinese governments, Wang said "They are consistent with international law including the United Nations Convention on the Law of the Sea (UNCLOS) and cannot be altered by the unwarranted allegations of any country," he noted. UNCLOS has not yet been ratified despite being around since 1994. Also China lost the case brought by the Philippines against it over its claims to the South China Sea after which China called the rolling ill-founded.

HONG KONG ADR’s +115pts to open at 24,718 and expect further initial upside as recent shorts are squeezed. Trading volumes likely to remain light as we enter earnings season. Sentiment cautious as Hong Kong increases lockdown measures to trying contain the virus.
No data due


Short Selling HSI Monday 21.5 vs 18.4% Friday 

Top Shorts Hang Seng Bank (11) 49%, China Res Land (1109) 46%, Ping An (2318) 39%, Bank of China (3988) 39%, Sands China (1928) 37%, Swire A (19) 36%, China Shenhua (1088) 34%, HK & China Gas (3) 34%, CKH (1) 34%, Petrochina (857) 33%, CCB (939) 32%, HSBC (5) 32%, Sinopec (386) 31%, MTRC (66) 30%, Galaxy (27) 29%, AAC Tech (2018) 28%, BoC HK (2388) 27%, Citic (267) 26%, Henderson Land (12) 26%, Country Garden (2007) 25%.

NEW SECURITY LAW Bernard Chan, convener of the Executive Council, the de facto cabinet that advises Carrie Lam, Hong Kong’s chief executive, said a US bank recently informed him it was closing his account and refunding his money. He declined to name the bank but said other senior officials were facing a similar issue.

WATCH
EVERGRANDE (3333.HK) said it will toughen up the footfall control at its exhibition hall 
at 16/F, Billion Plaza II, Cheung Sha Wan for its projects EMERALD BAY and THE VERTEX from 29 July, in a bid to work with the government's anti-epidemic policy.
PROPERTY INVESTORS Weak as press reports Street shop landlords in core business areas are slashing asking rents amid unprecedented social distancing measures, with the asking rent for a street shop in Causeway Bay plunging by about 80% from its peak in 2016.
The Education Bureau (EDB) announced today (July 27) that all schools would continue to suspend all on-campus activities from July 29 (Wednesday) to August 16 (Sunday). Schools may consider conducting make-up classes or other learning activities online.
Wheelock Properties announced that KOKO HILLS' exhibition halls are suspended today and tomorrow for thorough cleansing as part of reinforced precautionary measures.
SINGAMAS CONT (716.HK) announced that it has delivered a mobile Polymerase Chain Reaction (PCR) laboratory for COVID-19 testing to the Shanghai Pudong Airport on 8 July.
XIAOMI-W (1810.HK)'s Mi TV announced that its shipment topped China's TV sales chart for the first half of year, ranking no. 1 for the 6th straight quarter.

Read More  

July 27 ASIAN MACRO INITIAL THOUGHTS  Japan Re-opens

Covid-19 Globally over 16m cases, 645k deaths
Dow Futures opened -60pts with S&P and NDX also lower.
Earnings this week include McDonald’s, Pfizer, Alphabet, Apple and AMD
Market hopes for new US stimulus package; Treasury Secretary Steven Mnuchin said Republicans had finalized a bill for about $1 tn in coronavirus relief funds. Mnuchin added he hopes the proposal can find bipartisan support. But that may be hopefully as there is a wide gap between the GOP and Democrats. Closing the gap will probably take more than a week, which means that an agreement is unlikely to be reached before July 31.

JAPAN Expect the market to reopen significantly lower on increased US/China tensions and the rising number of covid cases. Tokyo reported 239 new cases on Sunday. Chipmakers +VE after the Intel news of delays. Yen last traded on Friday 106.12 as its safe haven status seems to come back into fashion; worth watching
Data due
BoJ Summary of opinions, Capital Spending Q1 (Prior was -3.5% F/cast is +4.3%). Later we get All Industry Activity Index, Coincident Index, Leading Economic Index.
Fujifilm Corp said Friday its biotechnology subsidiary and US vaccine maker Novavax Inc have agreed to manufacture bulk drug substance for the latter's vaccine candidate against the coronavirus disease.

SOUTH KOREA Expect markets to open lower but work higher with good interest in Tech. Traders watching for the next US stimulus package/
No data due

Hyundai Development Co. on Sunday called for an additional round of due diligence on Asiana Airlines as it reaffirmed its interest to close the $2.2 billion deal to take over the country’s second-largest full-service airline. However, this move is casting doubts over the successful closure of the mega-deal to acquire Asiana considering the aggravating financial situation of the airline amid the protracted COVID-19 impact on the aviation industry. Slight -VE
The Fair Trade Commission said Friday it has decided to impose a fine of 970 mn won ($808,000) on Hyundai Heavy Industries for misappropriating technical data from a subcontractor. -VE
Homplus is speeding up its asset securitization plan to sell physical stores in order to secure liquidity. On Friday, Hompeplus said it has decided to securitize a store branch in Daejeon, one week after the retailer announced plans to sell another branch in Ansan, Gyeonggi Province. The company’s move comes after it recorded the net loss of 532.2 billion won ($442.8 million) during the period between March 2019 and February this year. SLIGHT +VE
Nexon on Friday announced the launch of its open-world MMORPG game V4 in 150 countries. Standing for “Victory For,” V4 is a mobile MMORPG made using Unreal Engine 4. It boasts high-end graphics, a vast virtual combat field and character customizing features. +VE
Smilegate said Friday that its 36-episode drama series based on its first-person shooter game CrossFire has recorded 100 million views in China. According to the South Korean game company, the drama series, also named as CrossFire, recorded the milestone on China’s biggest over-the-top platform Tencent Video as of Thursday. +VE
S-Oil on Friday said Q2 operating loss 164.3 billion won ($136.7 million) getting back on its feet after suffering its worst-ever operating loss of 1 trillion won in the previous quarter. +VE
Samsung SDS said Friday Q2 earnings were dented due to the COVID-19 pandemic. Sales -7.5% YOY to 2.56 trillion won ($2.1 billion), while operating profit -24% to 196 billion won.
Korea Investment Corp., South Korea's $157 billion sovereign wealth fund, is seeking to buy commercial properties in Europe and China, the company's top executive has said, in what could be its latest alternative investments.
North Korean leader Kim Jong Un declared an emergency and a lockdown in a border town after a person suspected of being infected with the novel coronavirus returned from South Korea after illegally crossing the border, state media said on Sunday.

TAIWAN Expect market to open flat with continued interest in TSMC which benefits from Intels delay.
Data due
M2 Money Supply Jun 5.42% vs 4.18% (F/cast was 5.2%)
The Taiwan Institute for Economic Research Friday raised its forecast for the nation’s GDP growth this year from 1.58% to 1.83% on improving private consumption and investment as countries begin reopening their economies amid the global COVID-19 pandemic. +VE
Domestic gasoline prices are to increase by NT$0.1 per liter today, after a reduction of NT$0.1 per liter last week, CPC Corp, Taiwan and Formosa Petrochemical Corp announced separately yesterday. However, premium diesel prices are to remain unchanged for a third straight week at NT$19.6 per liter at CPC stations and NT$19.4 per liter at Formosa stations, the companies said.


CHINA Expect market to open lower as staff leave the Houston Consulate and US closes its Chengdu Consulate. Flooding along with Covid-19 remain concerns as well.
Data due on the open Industrial Profits Jun YTD (May was -19.3% YoY F/cast is -17%)
Australia has joined the United States in stating that China’s claims in the South China Sea do not comply 
with international law in a declaration likely to anger China and put more strain on their deteriorating relations.
India to restrict Chinese companies from bidding for government contracts,
on “national security” concerns part of a process as New Delhi looks to loosen economic ties with its neighbour after a fatal border brawl. -VE China
Alibaba, Jack Ma summoned by Indian court over former employee’s complaint who said he was wrongfully fired after objecting to what he saw as censorship and fake news on company apps, documents seen by Reuters showed. Slight -VE
FT article Chinese listings surge on Wall Street despite tensions. IPOs more than double this year even as Beijing’s relations with Washington plummet. The rush to list in American seems at odds with the current threat that some Chinese firms will be forced to delist due to auditing standards. To my mind it highlights how China knows it needs the US capital fro its companies to grow and that the way currently relations are that source of funds is under threat of being cut off. The US is th biggest source of liquidity and they want to tap it while they can. For investors I think they should be seeking a higher risk premium to reflect the political risk that should be added to the mix. Trump has ‘advised’ government funds not to invest in Chinese companies; ‘advising’ private money to do the same is only a small step further down that line and can be done without time consuming legislation, under the banner of saving US jobs.


HONG KONG ADR’s +44pts to open at 24,749 although after Friday's 560pts sell off I would expect for the open to BE lower with the prospect of early margin selling. ADR’s showed weakness in Mobile, Petrochina, ICBC, BoC and Hutch. COVID cases show little sign of easing with 128 cases on Sunday and 133 on Saturday. Government says it is clamping down on loopholes
Data due after market Balance of Trade, Exports and Imports

Short Selling HSI Friday 18.4%vs 20.2% Thursday
Top Shorts Hang Seng Bank (11) 55%, MTRC (66) 45%, Ping An (2318) 34%, CCB (939) 34%, China Res land (1109) 31%, BoC HK (2388) 31%, Galaxy (27) 28%, HSBC (5) 27%, Sands China (1928) 27%, HK & China Gas (3) 26%, Country Garden (2007) 25%.

WATCH
HSBC may see weakness as Chinese media says HSBC Set up Huawei’s Sabrina Meng to get rid of a US's money laundry suit.
After the Canadian Court moved on to make public the evidence for the next trial of Huawei CFO Sabrina Meng's extradition case, People.com.cn wrote in an editorial that this is purely a political rigging case conspired by the US. HSBC had colluded in malicious evidence fabrication to frame Meng who is indeed innocent. Claiming to have been deceived by Meng in the case, the London-based bank had suffered no actual loss. HSBC cooperated with Washington to set Huawei up for a hidden interest exchange behind, opined the Chinese official press, as it was trying to get remission from the US Department of Justice's lawsuit over money laundry.
CHAOWEI POWER (951.HK) +VE Profit Alert +VE , expecting profit attributable to shareholders of no less than RMB400 million for the six months ended June 2020, up around 40% yearly.
LIFESTYLE CHI (2136.HK) Profit Warnings -VE For the six months ended 30 June 2020, it expects profit to fall 50% YoY. Mainly due to the pervasive business disruptions to department store and retail businesses caused by the outbreak of the novel coronavirus (COVID-19) since early 2020, which resulted in a decline in sales revenue and hence profit of the Group’s department store operations; and a drop in share of profit from the Beiren Group, associate of the Group based in Hebei Province, the People’s Republic of China.
LAI SUN DEV (488.HK) Profit Warning -VE expected to record a loss for the year ending 31 July 2020 vs a profit for the year ended 31 July 2019. Such decline in the Group’s results is primarily due to the absence of the net gain from the one-off bargain purchase on acquisition of subsidiaries of approximately HK$3.737 billion recorded during the year ended 31 July 2019 and decrease in valuations of properties owned by the Group. -VE
GIORDANO INT'L (709.HK) Profit Warning -VE announced that as compared to the profit attributable to shareholders of HK$161 million for the corresponding period in 2019, the Group expects to record a net loss attributable to shareholders for the six months ended June 30, 2020 of between HK$170 million to HK$180 million.
SHKP (16 HK) sold 105 units of 108 units offered at Regency Bay in Tuen Mun on Saturday and intends to launch another 50 units this weekend.
Henderson Land Development (12) released the second price list for Seacoast Royale in Tuen Mun, comprising 62 flats at an average price of HK$13,748 per sq ft after discounts. The project, jointly developed with Hong Kong Ferry Holdings (0050) and Empire Group, has received 2,630 subscriptions for the first batch of 185 units and the developers plan to release a new price list shortly.
LINK REIT (823 HK) has agreed to buy the Cabot in London for HK$3.68bn in a move to diversify its portfolio.
Beike the TENCENT (700.HK) backed Chinese online property platform intends to raise up to US$2 billion according to its US filing.
Centaline said 409 groups of clients have made flat viewing bookings for the ten major housing estates of Centaline, -4.4% weekly to a 23-week low. Hong Kong is facing towering COVID-19 infections amid the 3rd wave of epidemic, said Louis Chan, Asia-Pacific Vice Chairman and Managing Director for Residential Sales at Centaline. Citizens may stay home at the weekend under tighter gathering ban, affecting flat viewings.
GALAXY ENT (27.HK) will not shower senior managers and workers ranked below with summer special discretionary bonus this year, as Deputy Chairman Francis Lui told Macao Daily. The next salary review will be done in April 2021, subject to the results performance by then.
ESPRIT The Standard has an article on the company and looks at Karen Lo Ki-yan’s possible intentions for the company.
Centa-City Leading Index (CCL) last printed at 181.77, +0.53% WoW to a 36-week peak. CCL (small-and-medium units) +0.64% WoW to 182.49; CCL Mass +0.73% WoW to 184.98; CCL (large units) -0.04% WoW to 178.05. Centaline Property, mentioned the outstanding performance of New Territories. CCL Mass for New Territories East climbed 1.59% weekly to 194.78; and that for New Territories West surged 1.61% weekly to 167.24.

DOW -0.68%, NDX -0.94%, S&P -0.62%, Russel 2K -1.52% Market opened lower with Tech weak after news that Intel -16.2% was delaying its next release of chips (AMD +16.5% on the news) and the escalation in US/China tensions as Chinese agents left the Houston Consulate.  Also weighing on investors are the ongoing concerns of covid’s impact on the markets, with US deaths surpassing 1,000 for a fourth day. It seems the downside it limited by hopes of the next stimulus package.  Markets initially trended higher PMI was a little light but New Home Sales were strong but market hit resistance just below Thursdays closing levels.  They then trended lower until around 1pm after which they reversed but again encountered resistance just below Thursday’s closing level and dipped lower into the close.  Gold was the big winner today hitting US$1,900 with talk now of US$2,000.  
Data saw PMI miss small but New Home Sales were strong but had little impact DR Horton -0.2% but off early lows, Lennar -0.4%,
Facebook -0.8%, Alphabet -0.6%, Apple -0.3% and Microsoft -0.6% and Tesla -0.6% Amazon +0.8% and Netflix +0.6%. But as the group they closed lower with concerns that they are overvalued and over owned and the possibility that there is a tech
bubble.
Re Open stocks United Airlines -1.1%, Delta -3%, American -3.2% Carnival unch, Royal Caribbean +0.8% Simon Property -1.9%, Kohls -5.4% and GAP -3.2%
To see both stay at home and re-open stocks trading lower Think indicates that investors are starting think that the hoped for V shaped recovery is becoming increasingly unlikely as seen in the results from American Express -1.4% Q2 net profit US$238 million, -86% YoY but beating the consensus for a loss. But shows consumers and businesses are cutting back on spending.
Banks were weak JPM -0.7%, GS -0.8%, MS -0.7%, Citi -0.8%, Wells Fargo -0.3%. Bell weather mixed Caterpillar +0.7%, Boeing -1.5% plans to delay its delivery of 777X airline by several months or up to a year, in response to dropping demands for jetliners amid the coronavirus crisis, as Reuters learnt from three people familiar with the plan.
DATA
PMI Data Flash
Manufacturing Jul 51.3 vs 49.8 Jun (F/cast was 51.5)
Services Jul 49.6 vs 47.9 Jun (F/cast was 50.8)
Composite Jul 50 vs 47.9 Jun (F/cast was 50.4)
New Home Sales Jun +13.8% MoM vs 19.4% May (F/cast was 3.2%)
Baker Hughes Total Rig Count 251 vs 253 prior
USD was weaker vs Yen & Euro. Bitcoin +0.5% @ 9603.00, VIX -0.92% @ 25.84,
US T10 @ 0.591% small gains after the mixed data after 4 days of declines.
OIL Brent +0.07%, WTI +0.54%
Gold +0.55% to US$1,900 topping its 2011 high, with people talking of US$2,000 soon, Silver -0.06%, Copper -1.5%
AHEAD Durable Goods (Orders, Ex Transport, Ex Defence), Dallas Fed Manufacturing Index

DAX -2.02%, CAC -1.54%, FTSE -1.41% markets opened lower following Asia and the news that China had revoked the US Chengdu Consulate licence. They worked better into lunch but failed to break higher and then drift lower in the afternoon session. PMI flash data was generally better than F/cast and and UK retail sales were much stronger. But prospects of a UK/EU deal remain small as the parties Puch back the deadline top September.
The European Union has drafted a bill that will limit technology exports to Hong Kong which can be used for repression or surveillance, Reuters reported, and the bill will hopefully come into effect on Tuesday.
Centrica +16% on agreeing to sell its US business Direct Energy for US$3.8bn
Dialog Semi -7% STMicro -2.7% and Infineon -4% on the Intel news
Thales -6.3% after1H earrings showed operating income -57%
DATA
EUROZONE PMI Data Flash
Manufacturing Jul 51.1 vs 47.4 Jun (F/cast was 49.8)
Services Jul 55.1 vs 48.3 Jun (F/cast was 50.8)
Composite Jul 54.8 vs 48.5 Jun (F/cast was 50.7)
GERMANY PMI Data Flash
Manufacturing Jul 50 vs 45.2 Jun (F/cast was 49.5)
Services Jul 56.7 vs 47.3 Jun (F/cast was 50.5)
Composite Jul 55.5 vs 47 Jun (F/cast was 50.1)
FRANCE PMI Data Flash
Manufacturing Jul 52 vs 52.3 Jun (F/cast was 52.7)
Services Jul 57.8 vs 50.7 Jun (F/cast was 51.8)
Composite Jul 57.6 vs 51.7 Jun (F/cast was 52.3)
UK Consumer Confidence Jul -27 vs -30 Jun (F/cast was -26)
Retail Sales Jun +13.9% MoM vs +12.3% May revised (f/cast was +7.4%) [Jun -1.6% YoY vs -12.9% May revised (f/cast was -7%)]
Retail Sales ex Fuel Jun +13.5% MoM vs +10.6% May revised (f/cast was +6.6%) [Jun -1.7% YoY vs -9.6% May revised (f/cast was -4.4%)]
PMI Data Flash
Manufacturing Jul 53.6 vs 50.1 Jun (F/cast was 51.5)
Services Jul 56.6 vs 47.1 Jun (F/cast was 50.5)
Composite Jul 57.1 vs 49.8 Jun (F/cast was 51.5)
AHEAD
EUROZONE Loans to Households, Companies and M3 Money Supply.
GERMANY Ifo data Business Climate, Current Conditions and Expectations, Bundesbank Monthly Report.
FRANCE Unemployment Benefit Claims and Jobseekers Total
UK No data due

Read More  

July 24 ASIAN MACRO INITIAL THOUGHTS  Dow futures Flat  Japan closed

Covid-19 Globally over 15.3m cases, 625k deaths
US Futures opened flat (-2pts) but S&P and NDX were slightly higher

DOW -1.3%, NDX -2.29%, S&P -1.23%, Russel 2K unch markets opened lower and sold down initially. Microsoft -4.4% despite largely positive results, Tesla -5% also giving back early gains both despite generally good results other Tech also traded Apple -4.6%, Amazon -3.7%, Facebook -3%, Netflix -2.5%. The view being that they are 'overbought, over owned and overvalued.' Also adding to the initial weakness was the disappointing unemployment data which showed claims rising. Concerns that the rising covid cases will curtail the economic rebound.
Markets saw a small bounce back after the initial weakness and then traded sideways, the sold down in the PM and traded sideways into the close.
Traders still watching for insight into the next stimulus package as Treasury Sec say next extension of unemployment benefit will be based on circa 70% of wage replacement. Republicans considering extending the current $600 per week unemployment benefit at a reduced rate of $100 per week.
AFTER MARKET
INTEL -10.6% after hours (was -1% in normal trading) says its relying the planned launch of its next generation of chips by six months, raising questions about its attempt to regain the manufacturing edge it lost to TSMC.
DATA
Initial Claims 1.416m vs 1.307m prior (F/cast was 1.295m)
Jobless 4 week average 1.36025m vs 1.37675m prior (revised) (F/cast was 1.995m)
CB Leading Index Jun +2% MoM vs +3.2% May revised (F/cast was +2.5%)
EIA Natural Gas Change 37Bcf vs 45 Bcf prior. (Consensus was 36Bcf)
Kansas Fed Manufacturing Jul 7 vs 2 Jun (F/cast was 5)
10 yr TIPS Auction -0.93% vs -0.47% prior
USD was weaker vs Yen & Euro. Bitcoin +1% @ 9,619.46, VIX +7.2% @ 26.1,
US T10 0.577% on poor jobs data
OIL Brent -2.3%, WTI -2% concerns that rising covid cases and worsening US/China relations will hurt demand.
Gold Futures +1.3%, Silver -2.2%, Copper -0.5%. Gold push higher on weak USD.
AHEAD PMI Flash (Manufacturing, Service and Composite), New Home Sales, Baker Hughes Total Rig Count

DAX +0.07%, CAC -0.06%, FTSE +0.11% Markets opened slightly higher and initially rallied but then drifted lower for the rest of the session. Investors watching US data and covid cases along with earnings.
Roche -2.8% 1H net profit -5% as covid and a strong Swiss franc weighed on earnings. Sales -4%, but it maintained its 2020 outlook. Closed just off the lows of the day.
Unilever +8.9% reported a much smaller-than-expected 0.3% fall in quarterly sales vs expectations of -4.3%
Daimler +4.3% Q2 loss 1.68 billion euros ($1.9 billion) but projected a rise in profit this year for its Mercedes-Benz cars and vans division as sales begin to rebound.
Publicis Groupe +8% after beating profit expectations.
Neste +11.4% after reporting a smaller-than-expected 31% fall in Q2 profit.
IG Group -9.6% as the company flagged a return to normal in markets after volatile trading caused profits to surge in the last quarter.
DATA
EUROZONE Consume Confidence Flash Jul -15 vs -14.7 Jun (F/cast was -12)
GERMANY Consumer Confidence Aug -0.3% vs -9.4% Jul revised (F/cast was -4)
FRANCE Business Confidence Jul 82 vs 78 Jun revised (F/cast was 83)
Business Climate Indicator Jul 85 vs 78 Jun (F/cast was 84)
UK CBI Business Optimism Index Q3 -1 vs -87 prior (F/cast was -38)
CBI Industrial Trends Orders Jul -46 vs -58 Jun (f/cast was -34)
AHEAD
EUROZONE PMI Flash (Manufacturing, Service and Composite)
GERMANY PMI Flash (Manufacturing, Service and Composite)
FRANCE PMI Flash (Manufacturing, Service and Composite)
UK Consumer Confidence, Retail Sales

JAPAN Market closed, re-opens on Monday
No data due
Japan's capital has reported 366 new coronavirus cases, 
Yuriko Koike, the governor of Tokyo, said on Thursday, a new daily record fuelling fears of a second round of infections.-VE
The United States has begun talks with Japan about deploying mobile U.S. Marine units in Okinawa armed with anti-ship and air defense missiles that would work closely with Japanese forces on islands that prevent easy access to the Pacific for China's military, the Marine Corps commandant said on Thursday. +VE
SONY Associated Press says it has reached a deal with Sony Electronics to exclusively equip its photojournalists with new video and still cameras over the next two years. +VE
The Bank of Kyoto, a regional lender based in the ancient Japanese city, has a unique buffer against the hit to tourism from the coronavirus - dividends from local high-tech heavyweights; they include Nintendo, and electronics makers Nidec and Omron. +VE

SOUTH KOREA Expect markets to open lower and look to consolidate ahead of the weekend. Tech to see interest after good results from Hynix
No data due
SK Hynix Inc, yesterday posted a big jump
in quarterly profit thanks to higher chip prices, but warned of uncertainty for the rest of the year.
Hyundai Motor and Kia Motors on Thursday reported a sharp drop in their Q2 earnings as the new coronavirus outbreak drove down overseas demand for their vehicles. But on their home turf, Hyundai and Kia performed well helped by new models and tax cuts. -VE
LG Display on Thursday heralded the much-awaited opening of its new organic light-emitting diode (OLED) panel manufacturing plant in Guangzhou, which enables full-fledged mass-production of 8.5-generation OLED panels for LG Display, and increases the company’s monthly OLED production capacity to 130,000 panels. +VE
Dyson has introduced two new cordless vacuum cleaners in South Korea, intent to test the marketability of the newest products with lower price tags here first. +VE Dysin slight -VE existing manufacturers in S Korea.
Smilegate said Thursday that it has officially launched its mobile tank battle game Super Tank Blitz in 142 countries. +VE

TAIWAN Expect market to open lower and trade sideways; good industrial production data after market to help. Retail sales improved but missed f/casts
TSMC likely to see interest and support the market after Intel says after market US time that its delaying its new chip release by six months.
Data due
After market M2 Money Supply
After Market Thursday
Industrial Production Jun +7.34% YoY vs +1.68% May revised (F/cast was +2.5%)
Retail Sales Jun -1.3% YoY vs -5.7% May (F/cast was 2.5%)
Industrial production snapped a three month of decline, as strong demand for 5G-related applications and work-from-home and distance-learning trends boosted production of electronic components to a record high. But Automotive, pretrochems, and textiles were weak.
Retail weakness eased but not by as much as expected.
The central bank has raised its cap on special loans to SMEs suffering due to the COVID-19 pandemic, after companies called for more funds to weather the downturn. +VE

CHINA Expect market to open lower as relations with the US worsen and concern about rising covid cases put the global recover in question. As ever the wild card is Team China’s activities.
No data due
A review of the Greater Bay Area has identified shortcomings 
that have slowed progress on Beijing’s plan for the region to become a hi-tech hub, including not enough research facilities and poor coordination and flow of talent and capital between the cities. In my view not surprising when you try and force an unnatural situation rather than allowing market forces to work.
China is going to consider BNO as an invalid passport and reserves her right to take further actions as Britain has breached her promise, said Chinese Foreign Ministry Spokesperson Wang Wenbin. London has broken her word and violated international laws by politically manipulating BNO matters despite Beijing's solemn negotiation, stated Wang. Will raise tensions as a lot of people outside China feel that the imposition of the national security law on Hong Kong was the triggering breech!
China’s French embassy on Thursday hit back at French criticism of Beijing’s treatment of Uighur Muslims, saying French politicians were being misled by a slanderous American, Australian and British campaign. The French responded that if Beijing wanted to avoid criticism it should allow observers into Xinjiang. Seems a very simple solution if China has nothing to hide.
China-EU investment treaty talks hit crunch time, as Europeans bemoan seven years of ‘promise fatigue’ from Beijing SCMP article says that negotiations have so far yielded few concessions from China, and with each round of talks the impression builds among Europeans that China wants the perks of multilateralism without making any of the required domestic reforms.
The head of the Chinese consulate in Houston will not commit to closing the office a direct threat of defiance to the State Department’s demand that it be shut down by Friday.
US diplomats have left the US to restaff its mission in China a day after an American order to close the Chinese consulate in Houston sharply escalated tensions.
US Secretary of State Mike Pompeo urges China’s citizens to help ‘change the behaviour’ of their government. “1.4 billion people who are surveilled, oppressed, and scared to speak out” and Asia-Pacific countries like Vietnam and Australia – Pompeo proposed “a new alliance of democracies” to push back against “the Chinese Communist Party’s designs on hegemony”. Further pressure on China to retaliate but it is finding that it has fewer options that that do not impact its won economic outlook.
PetroChina, China’s state-owned oil and gas firm, said on Thursday it would sell its major oil and gas pipelines and storage facilities to the newly launched China Oil and Gas Pipeline Network for 268.7 billion yuan ($38.36 billion). The creation of the new company, also called PipeChina, marks the largest industry reshuffle in the country in the past two decades, aimed at providing fair market access to infrastructure and boost investment in oil and gas production.
Ren Zhiqiang has been ousted from China’s ruling Communist Party. The former chairman of state-controlled property developer Huayuan Real Estate Group, had called Xi a “clown” over a speech he made in February about government efforts to battle the coronavirus. He also said the lack of a free press prevented to covid outbreak to be tackled sooner, causing the situation to worsen. He’s not been seen since March. The notice accused Ren of “losing faith”, “not being aligned with the party on important matters of principle”, “vilifying the image of party and country” and being disloyal and dishonest to the party. According to the notice, Ren also used official funds on golf expenses, used office and residential spaces provided for free by businessmen, and unlawfully earned huge profits which have been confiscated.

HONG KONG ADR’s -166pts to open at 25,097 most ADRs traded lower. Plus the rising covid cases and ahead of the weekend I would expect more downside.
MACAU names weeks Las Vegas Sands loss was bigger than expected. As with China the wild card is Team China but with US/Chinese tensions rising I think local investors will err on the side of caution. IF the initial selling accelerates expect some margin call selling in the PM session.
No data due


Short Selling HSI Thursday 20.2% vs 16.9% Wednesday
Top Shorts
Hang Seng Bank (11) 34%, Want Want (151) 34%, HSBC 95) 32%, Mengniu Dairy (2319) 31%, Ping An (2318) 31%, Hengan (1044) 29%, CCB (939) 29%, China Res land (1109) 28%, BoC (3988) 28%, Petrochina (857) 27%, Citic (267) 26%, CNOOC (883) 26%, HK & China Gas (3) 25%, Henderson Land (12) 25%.

WATCH
ICBC (1398.HK)'s new RMB loans in 1H 2020 carry average interest rates 
of 4.31%, down 45 bps yearly and below the market average, said President Gu Shu at CBIRC's press conference. During the period, the bank delivered additional inclusive loans of RMB168.4 billion, up 35.7%, added Gu.
HKT-SS (6823.HK) announced the launch of HEYPARK, a one-stop digital food ordering platform for dine-in and takeaway that accepts mobile payments. From now until August 31, HKT-SS is offering a promotion to support SMEs. Those who register now can enjoy free set-up and a 4-month waiver on monthly subscription fees.
ZDDC (600633.SH) stated that it had during 1H 2020 confirmed intended partnership with BABA-SW (9988.HK) over a new batch of data centre cabinet leasehold, Securities Times reported. By which, the company will also foster business ties with Huawei and TENCENT (700.HK) on marketing and e-sports business.
GREATWALL MOTOR (2333.HK) announced preliminary financial data for the interim period of 2020 prepared in accordance with the China Accounting Standards for Business Enterprises. Net profit -24.02% yearly to RMB1.153 billion. EPS equaled RMB0.12495.
Eu Yan Sang, HUNGFOOKTONG (1446.HK) and HKBN (1310.HK) announced a strategic partnership. With this partnership, they will gain exposure at each other’s extensive customer touchpoints, to further expand their sales channels and customer reach. Customers and employees of Eu Yan Sang, HUNGFOOKTONG and HKBN will get to enjoy exclusive membership/customers and employee discounts on a diversified range of product offerings at all three companies, starting from the end of July.
Centa Valuation Index (Major Banks) (CVI) last printed at 48.18 this week, +2.08 pts from 46.09 in the previous week.  Centaline Property, elaborated that the index did not move itself deeper to the lower end of the critical point at 40 after breaking below 50, despite epidemic flare-up in Hong Kong. The turnaround of the index reversed the seven-week downswing, signaling a stabilization.

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JULY 23 ASIAN MACRO INITIAL THOUGHTS. JAPAN CLOSED

Covid-19 Globally over 15m cases, 618k deaths
DOW Futures Opened -15pts S&P and NDX little changed

DOW +0.62%, NDX +0.24%, S&P +0.57%, Russel 2K +0.18% Markets opened flat and traded sideways fro most of the day with a small rally in the last hour. S&P traded at a five month high. Sentiment encouraged by talks on the next stimulus package and progress on a vaccine by Pfizer +5.1% and BioNTech +13.7% who will receive $1.95bn to produce 100m vaccines if theirs proves safe and effective.
Market upside checked by news the the US has told China to close is Houston Consulate and ahead of after market earnings
After Market
Tesla +4.4% after hours (was +1.5% in normal trading) reported its first full year of GAAP profits, along with second-quarter results Wednesday, although the numbers were a little short of analysis f/casts.
Microsoft -2.2% after hours (was +1.4% in normal trading) despite largely good results its transactional license purchasing continued to slow and that subsidiary LinkedIn was negatively impacted by the weak job market.
DATA
MBA Mortgage Applications +4.1% vs +5.1% prior and 30 year Mortgage Rate 3.2% vs 3.19% prior.
House Price Index May -0.3% MoM vs +0.1% revised (F/cast was +0.4%)
Existing Home Sales Jun +20.7% MoM vs -9.7% May (F/cast was +23%
EIA Crude Oil Stocks Change +4.892m vs -7.493m prior (Consensus was -2.088m)
EIA Gasoline Stocks Change -1.802m vs -3.147m (Consensus was -1.386m)
USD was little changed vs Yen & Euro. Bitcoin +1.3% @ 9519.79, VIX -2% @ 24.32,
US T10 0.6% fell on rising tensions between US and China adding to the Covid-19 concerns.
OIL Brent -0.1%, WTI -0.1% as data showed a surprising rise in inventories.
Gold %, Silver %, Copper %
AHEAD Initial Claims, Jobless 4 week average, CB Leading Index, EIA Natural Gas Change, Kansas Fed Manufacturing, 10 yr TIPS Auction

DAX -0.51%, CAC -1.32%, FTSE -1% Markets opened lower and and traded sideways, rising covid-19 cases, especially in the US the big concern. Most sectors closed in the red only banks bucked the trend.
Schibsted +15% after its spin-off Adevinta bought eBay’s classifieds unit for $9.2 billion on Tuesday.
Melrose -19% after reporting Q2 losses and warning of job cuts.
Kingfisher, owner of B&Q, led the FTSE 100 risers after reporting a 21.6% rise in like-for-like sales in the quarter to July 18 +VE TECHTRONICS (669 HK)
NO DATA
AHEAD

EUROZONE Consumer Confidence
GERMANY Consumer Confidence
FRANCE Business Confidence, Business Climate Indicator
UK CBI Business Optimism, CBI Industrial Trends Orders

JAPAN Market closed for Marine Day and will be closed Friday for Health and Sports day and re-open on Monday
No data due
Japan’s government on Wednesday slightly raised its economic view for a second straight month in July, though authorities conceded that the situation remained severe in light of a renewed spike in coronavirus cases in many parts of the world. The government described the world’s third-largest economy as “showing signs of picking up” from the COVID-19-induced recession, underscoring cautious optimism among policymakers as more countries have started re-opening their economies following lockdowns to curb the spread of the virus. SLIGHT +VE
Japan's health ministry has approved dexamethasone, a cheap and widely used steroid, as a second treatment of COVID-19 after a trial in Britain showed the drug reduced death rates in hospitalised patients. +VE
Tokyo governor recommends residents stay at home over 4 day weekend.
Government has decided to begin discussions over easing immigration restrictions with China, South Korea and Taiwan, public broadcaster NHK reported on Wednesday.
Japan launched a national travel campaign on Wednesday that aims to revive a battered tourism industry, but the effort has drawn heavy criticism as major cities have racked up a jump in new coronavirus cases.
Canadian convenience store operator Alimentation Couche-Tard Inc , Japanese peer Seven & i Holdings Co and private equity firm TDR Capital are preparing to submit rival bids this week for Marathon Petroleum Corp's gas station network Speedway, Reuters reported.

SOUTH KOREA Expect markets to open lower with poor GDP data and concerns over covid cases. I would expect the market to see further consolidation today. Expect slight lighter trading volumes with Japan closed.
Data out 
Adv GDP Growth Rate Q2 -3.3% QoQ vs -1.3% prior (F/cast was -2%)
Adv GDP Growth Rate Q2 -2.9% YoY vs +1.4% prior (F/cast was -1.5%)
A small South Korean survey of people with no history of COVID-19, but living in a city with the most cases, showed that roughly one in 13 had antibodies to the novel coronavirus, indicating the virus may have spread more widely than thought.
Samsung Electronics, is expected to rank third in terms of 5G smartphone production this year, its estimated at 29 million units, placing the company in third place globally, according to market researcher TrendForce. "Samsung has been experiencing setbacks in the Chinese market in recent years," it said. "Although these setbacks have not seriously affected its global market share and revenue, they have considerably slowed Samsung's growth in the 5G smartphone market."
China's Huawei was forecast to lead 5G smartphone production this year with 74 million units, followed by U.S. tech titan Apple with 70 million units in 2020, TrendForce added.
LG Electronics’ design-focused Velvet smartphone has become available in the United States, providing US consumers a new 5G device choice, according to the company on Wednesday.
Hanwha Energy and Korea Midland Power (Komipo) said Wednesday they signed a deal in Nevada to supply electricity generated by solar power to 36,000 households. +VE
A Chinese giant panda at South Korea’s Everland amusement park has given birth to a cub, the zoo said on Wednesday, the first baby panda born in the country and a rare event for an endangered species.

TAIWAN Expect market to open slightly higher with focus on tech and to trade sideways.
Data due 
After market Industrial Production and Retail Sales
Unemployment rate last month fell to 3.96% from 4.07% in May, ending four consecutive months of pickup, as fewer people quit or lost their jobs to business downsizing and closures, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. +VE
Foreign nationals can start visiting Taiwan for medical treatment from Saturday next week, the Central Epidemic Command Center (CECC) said yesterday, as it also loosened travel restrictions on overseas students. Although Taiwan has recorded a number of imported COVID-19 cases over the past few months, as of yesterday, it had not reported any new local case for 101 days, Minister of Health and Welfare Chen Shih-chung who heads the center, told a regular news briefing in Taipei.
The Chung-Hua Institution for Economic Research yesterday raised its forecast for Taiwan’s GDP growth this year to 1.77 percent, from a previous estimate of 1.03 percent, as private consumption might stage a comeback fueled by the government’s Triple Stimulus Vouchers. +VE
Wistron Corp, one of Apple Inc’s iPhone assemblers, yesterday said that it would subscribe to 3 billion yuan (US$429 million) of Luxshare Precision Industry common shares to double down on its strategic partnerships with the maker of Apple’s iPod earbuds. Slight +VE

CHINA Expect market to open lower in reaction to the new of the Chinese Consulate in Houston being fired to close, which came after market. I still think thought we will see Team China ready to give some support to the market.
Flood concerns remain high with news of more evacuations. Longer term +VE for Resources and Equipment makers like Sany and Zoomlion; especially as there are calls to test many of China’s ageing dams (it has over 94,000).
No data due
Analysts will be watching for signs of change 
from next weeks 25-member Politburo meeting
US Senate panel unanimously approves ban on TikTok on government devices now goes forward to the full senate for approval. Slight -VE along with the news that a group of US investors is trying to buy the app from its Chinese owners.

HONG KONG ADR’s +7.5pts to open at 25,064 but expect downside as Covid-19 cases continue to rise in Hong Kong Along with tensions between the US and China. After the significant sell off yesterday expect some early margin call selling.
No data due


Short Selling HSI Wednesday 16.9% vs 18.5% Tuesday
Top Shorts 
China Res land (1109) 41%, CCB (939) 31%, Want Want (151) 31%, Ping An (2318) 29%, BoC HK (2388) 29%, China Shenhua (1088) 28%, Country Garden (2007) 26%, Wharf REIC (1997) 25%.

WATCH
US Department of State confirmed that it notified China to shut down its consulate in Houston i
n three days as the US must protect her intellectual property and information in wake of aggravated tensions between the two countries, Reuters reported. China condemned vigorously to the decision of the US, threatening to revenge. It was known that China is considering to close the US consulate in Wuhan City.
BISON FINANCE (888.HK) announced that during the period from 17 June 2020 to 22 July 2020, the Trustee purchased a total number of 5 million Shares on the market for the purpose of the Share Award Scheme, involving $1.5256 million.
Shanghai Municipal Government held a contract signing ceremony today for foreign capital projects for the city, by which HSBC (China) inked a cooperation with Lingang New Zone, Shanghai, cs.com.cn reported. HSBC Bank (China) President and Chief Executive Officer Wang Yunfeng said the bank plans to establish a fintech services company in Shanghai, as the latest move of sequential investment in China, and an onset of digital-empowering wealth planning services, to provide technology and data services to the group's licensed financial institutions.
AAC TECH (2018.HK) announced that its subsidiary AAC Communication (engaging in optical business) introduced four strategic investors, namely Hubei Xiaomi Changjiang Industrial Fund (its controlling shareholder was Xiaomi Industry Investment Management Co., Ltd., ultimately controlled by XIAOMI-W (1810.HK) Chair Jun Lei), OPPO Guangdong Mobile Communication, Shenzhen Huiyou Haochuang Technology Investment and Nanjing Huarui Ruijun Entrepreneurship Investment Center. The parties agreed that the Strategic Investors will make a capital increase of RMB1.15 billion in aggregate to AAC Communication. The Strategic Investors will obtain a total of approximately 9.58% of the enlarged equity interest in the Target Company after the Capital Increase.
3SBIO (1530.HK) announced that the Proposed Spin-off Listing of Sunshine Guojian on the STAR Market and the Offering have been completed; and the dealings in the ordinary shares of Sunshine Guojian on the STAR Market commenced on 22 July 2020.
Empire Group, HK FERRY (50.HK) and HENDERSON LAND (12.HK) , released its first price list for phase one of Seacoast Royale, involving 123 standard units with saleable area of 207-548 sq.ft.. Prices on the list range $3.098-6.982 million. Deducting the maximum discount of 6%, the selling prices range $2.9121-6.5631 million, i.e. $13,578 per sq.ft. on average. The General Manager of Sales (1) Department at Henderson Land, said he remains slightly bullish on 2H20 property market, which may tend to stabilise. When asked about the tender for Tai Po residential site, the company stated that it is interested in all land parcels rich in potentials, subject to the price level.
Centaline Property, said the price list of Seacoast Royale Phase 1 represents 15% discount to the leftover first-hand units from the same districts for coronavirus factors. The project is very competitive as there are only 18 private homes priced below $3 million in Hong Kong now, according to Centaline's findings.
Midland's Residential Division Chief Executive. Said that being discounted by over 10% to the market level, the new project is set to be a new benchmark and spotlight, opined Po.
CATHAY PAC AIR (293.HK)  announced in its rights issue circular that a + or - 5%  in price of jet fuel would have increased/ decreased the Cathay Pacific Group’s other equity components by approximately HK$620 million. This is on the assumption that all other variables remain constant.  The scale of reduced flights due to the COVID-19 pandemic means that the Cathay Pacific Group is in an over-hedged position with respect to expected fuel consumption. The marked to market losses as at 31 December 2020 could be significant. Despite all measures to produce cash savings, the drop in passenger revenue to around only 1% of prior year levels meant that Cathay Pacific was initially losing cash at the operating level at a rate of HK$2.5 to 3 billion per month as it serviced a high level of customer refunds. This has subsequently reduced and is expected to remain at a rate of approximately HK$1.5 billion per month whilst minimal passenger services are in place.  While such passenger capacity cuts and cost management measures have helped to reduce expenditure, many costs are unavoidable regardless of the number of flights mounted. Accordingly, such measures will not fully offset the contraction in passenger revenue.

Read More  

July 22 ASIAN MACRO INITIAL THOUGHTS  Dow futures moving slightly +VE

Covid-19 Globally over 14.7m cases, 611k deaths
Trump says it will get worse before it gets better to resume nightly briefings
DOW Futures Opened flat (-6pts ) but have moved slightly higher now +20pts with the S&P and NDX moving from slightly -VE to slightly positive. Microsoft and Tesla report today.
The United States is conducting two military exercises in Asian waters this week involving allies Japan, Australia and India, the U.S. navy said on Tuesday; expected to annoy China. The US is also calling for a global coalition against China.
Debate on whether US will bar China from the Swift financial system continues, a -VE overhang for China and Hong Kong

DOW +0.6%, NDX -0.81%, S&P +0.17%, Russel 2K +1.33% US markets opened higher, Dow worked higher as IBM and Coca-Cola gained after announcing earnings after the bell Tuesday. S&P traded sideways but NDX sold off to flat. Trader are watching for clues on the next stimulus package. But the trend seemed to be rotation out of Tech into cyclicals.
Chevron +7% and Exxon Mobil +5%
Reopening names were JPMorgan Chase +2.2%, Citigroup +3.2%, Bank of America +3.5%. Delta +0.8%, Southwest +2%, Carnival +1.3%, Simons Property +0.9%, Kohls +5.2% GAP +2.9%
Stay at Home Facebook -1.5%, Amazon -1.8%, Alphabet -0.5%, Apple -1.4%, Microsoft -1.4% and Netflix -2.5%
Tapestry +4% as CEO resigns over an incident that occurred over 10 years ago.
Worth noting that 81% of companies have beaten analysts estimates which must rise some concerns about the quality of information/guidance coming out of the Wall Street firms.
AFTER MARKET EARNINGS
SNAP -6.4% after market (was -2.1% in normal hours) reported fewer that expected daily users but said sales rebounded in July.
United Airlines +0.3% after volatile trading (was +2.3% in normal hours) reported Q2 Net Loss of $1.62bn (-87% YoY)
DATA
Chicago Fed National Activity Index Jun 4.11 vs 4.5 May revised ((F/cast was 3.2)
Redbook 18 July +1.9% MoM vs 3% prior (-7.5% YoY vs -5.5% prior)
API Crude Oil Stock Change 17 Jul 7.544m vs -8.322m prior
USD was weaker vs Yen & Euro. Bitcoin +2.3% @ 9383.29, VIX +1.6% @ 24.84, US T10 @ 0.605%
OIL Brent +3.2%, WTI +2.8% with +VE news on vaccines and the EU Recovery Fund deal improving the recovery outlook.
Gold +1.5% (both spot and Futures), Silver +6.4% following the Gold trend. Copper +0.2%
AHEAD MBA Mortgage Applications and 30 year Mortgage Rate, House Price Index, Existing Home Sales, EIA Oil and Gasoline Report.
REPORTING Pre market Biogen, Baker Hughes and Nasdaq.
After market Microsoft, Tesla, Chipotle Mexican Grill, CSX and Las Vegas Sands

DAX +0.96%, CAC +0.22%, FTSE +0.13% Markets opened higher on news of a deal over the EU recovery fund. DAX and CAC initially traded higher but then sold down into the close.
FTSE opened higher but trended lower all day.
BANKS leading as UBS +2.6% announced earnings that beat estimates. Resources were weak.
Novartis -1.9% as Q2 earnings saw profit and sales fall and it cut its 2020 guidance
Volvo -1.4% reported 1H operating loss but expected business to recover as lockdowns eased and reported good recovery in China as that economy re-opened.
Adevinta +28% announced acquiring eBays classified unit for US$9.2bn. Denmark’s Schibsted +22% it has a stake in Adevinta.
GVC -7.3% on news of a probe into its Turkish gambling unit.
DATA
UK Public Sector Net Borrowing in GBP Jun -34.8b vs -44.7b (F/cast was -37.8b)
AHEAD
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK No data due

JAPAN Expect Nikkei to open lower with some Tech names under pressure but market to consolidate. PMI data could influence the market moves. Yen currently 106.82 Tokyo reported 237 new covid cases on Tuesday and other regions areas saw a rise in cases -VE for sentiment.
Data due 
PMI Flash Manufacturing Jul (Jun was 40.1 and F/cast is 42.4)
PMI Service Jul (Jun was 45 and F/cast is 47.2)
PMI Composite Jul (Jun was 40.8 and F/cast is 46.4)
Govt to pay Tokyoites ‘GoTo’ cancellation fees +VE but survey shows people expect to spend less YoY -VE
Toyota Motor Corp will make 2% fewer vehicles globally in August than
originally planned, the Japanese automaker said on Tuesday, as output recovers gradually from a steep drop because of the coronavirus pandemic.
Nissan Motor Co. is proposing to postpone the closure of its three Barcelona plants to June 2021 from December 2020, the head of the carmaker's industrial operations in Spain, Frank Torres, said on Tuesday
JAL says it will not recruit in fiscal 2021 except for pilots and certain key positions +VE for the airline but a slight -VE for the economy.
Carlyle Group Inc. is eyeing large-scale business acquisitions, on top of investment in midsize firms, in Japan, planning to spend hundreds of billions of yen on each target, it was learned Tuesday. +VE

SOUTH KOREA Expect markets to open lower and trade sideways
No data due
Samsung, Hyundai Motor to cooperate on future cars beyond batteries +VE

SK Bioscience, the vaccines business unit of SK Group, signed a trilateral memorandum of understanding with Korea’s Health Ministry and global biopharma AstraZeneca, to contract manufacture the latter’s COVID-19 vaccine candidate. +VE
Korean Air said Tuesday it has closed its regional headquarters in Europe and Southeast Asia in an effort to “streamline” business operations as the coronavirus pandemic continues. +VE
Samsung Biologics reached a milestone in the first half of the year by clocking the biggest revenue and operating profit in the January-June period since it was founded in 2011.
Seegene, a Korean diagnostics company acclaimed for having preemptively developed COVID-19 test kits before the pandemic even reached Korea, has since risen to the second rank on the Kosdaq bourse.
LS Cable & System said Tuesday it has launched a local area network cable that can send data and power as far as 200 meters at the same time. The cable called SimpleWide is double the limits of current LAN cables in the market that can only transmit about 100 meters, the company said. +VE

TAIWAN Expect market to open flat and consolidate.
Data due After market
Unemployment Rate Jun (May was 4.16% (F/cast is 4.2%)
Paraguayan Ambassador to Taiwan Marcial Bobadilla Guillen yesterday said that his country resolutely opposes the establishment of ties with Beijing, despite increasing pressure from China. +VE
Powertech Technology yesterday said that its revenue would slide slightly this quarter, due to sagging demand for chips used in data centers and smartphones due to covid. However, revenue this quarter is forecast to surpass the NT$17.71 billion the company made in the third quarter last year, he said.
Wistron Group yesterday announced a strategic partnership with Microsoft Corp Taiwan’s artificial intelligence research and development center, whereby the two firms would create an office in Kaohsiung for artificial intelligence and big data-related products and services. +VE
Beijing’s national security legislation has forced technology firms to reconsider their presence in Hong Kong. The nimblest among them; the territory’s start-ups are already moving data and people out, or are devising plans to do so. The polarizing legislation has upended Hong Kong’s technology scene just as it seemed on a path to becoming a regional hub. -VE for HK

CHINA Expect market to slightly lower. Concerns about the deterioration in China US and other countries a concern. Key today will be the support for Team China as investors worry about China being cut off from the US dollar payment system.
No data due.
Will the US cut China off from the US dollar payment system Swift? 
Analysts and officials continue to say it is highly unlikely United States will cut off China or Hong Kong from US dollar payment system Swift. It is one of the major threats that the US could use against China as it has against Iran and N Korea. Comes as China modestly increased its holdings of US Treasury securities in May, the first in three months.
China, denies that action will be taken to bar Nokia or Ericsson but says Chinese firms should be treated fairly in Europe. Which rather misses the point on two issues; one being the security of Huawei equipment if it uses Chinese made chips and second that EU and other counties companies have never been allowed as free access to China as China has had to the rest of the world.
US Justice Department on Tuesday indicted two Chinese nationals over their role in what the agency called a decade-long cyber espionage campaign that targeted defense contractors, COVID researchers and hundreds of other victims worldwide.
Shanghai appoints new mayor, who talks of turning crisis into opportunity. According to analysts, an immediate task will be dealing with the severe floods in the Yangtze River basin. Longer term, they said his background in economics would be put to the test to push the city’s development and growth while trying to limit fallout from the pandemic.
Huizhou to benefit from the tighter rules and sky-high prices in Shenzhen say analysts. It is in southern Guangdong province, and has seen home prices soar but it is remains far more affordable than nearby Shenzhen where new restrictions have made buying harder. The journey time between the two bay area cities is set to be halved next year, making Huizhou’s booming property market an even more attractive option for Shenzhen investors.

HONG KONG ADR’s -111pts to open at 25,524 across the board weakness except the Petrochems. Covid cases have risen above 2,000 and that continues to overhang the market But administration denies the rumour that Hong Kong could be locked down. Rumours that the US will exclude China from the Swift system likely to prompt further concerns. Key is that despite what local officials may say the US still has a large number of potential weapons to threaten China with. HK EX may see pressure having surged to a new high yesterday.

No data due
After market Tuesday

Inflation Rate Jun +0.7% YoY vs +1.5% May (F/cast was +1.7%)
Lowest since March 2017.
Prices slowed for food, in particular pork; housing and miscellaneous goods. Additionally, cost of durable goods dropped further while transport prices were unchanged, BUT the cost of miscellaneous services advanced at a faster pace. Also, prices declined less for electricity, gas & water and clothing & footwear. On a monthly basis, consumer prices went down

Short Selling HSI Tuesday 18.5% vs 21.3% Monday 
Top Shorts China Res land (1109) 53%, Want Want (151) 43%, China Shenhua (1088) 38%, CCB (939) 36%, Ping An (2318) 32%, Hang Seng Bank (11) 32%, BoC (3988) 29%, Citic (257) 29%, Link REIT (823) 27%, Mengniu Dairy (2319) 27%, China Life (2628) 26%, Country Garden (2007) 26%, Petrochina (857) 26%, New World New (17) 25%.

WATCH
ALIBABA FT report on how its live streaming model 
is helping to fend off rivals +VE and worth a read mentions Lazada that was commented on yesterday too.
MEITUAN-W (3690.HK) announced that on July 20, 2020, 1.255 million Options were granted to certain employees of the Company pursuant to the Post-IPO Share Option Scheme. The exercise price of the Options granted was HK$195.98 per Share.
XTEP INT'L (1368.HK) -VE Profit Warning announced that the Group is expected to record an approximately 45% to 55% YoY decrease in its consolidated profit for the six months ended 30 June 2020, as compared to that for the corresponding period in 2019. Said that the core Xtep brand reported retail sell-through growth (including offline and online channels) for the three months ended 30 June 2020 at low-single digit decline year on year. The retail discount level was at 30% - 35%, and the retailinventory turnover was 5 - 5.5 months.
A-LIVING (3319.HK) +VE Profit Alert. The consolidated net profit and the unaudited consolidated net profit attributable to the Shareholders for the six months ended 30 June 2020 are expected to record a significant increase of not less than 50% and 35%, respectively, as compared to that for the corresponding period in 2019. Also announced a proposed change of company name from “A-Living Services Co., Ltd.” to “A-Living Smart City Services Co., Ltd".
SHK PPT (00016.HK) Having unveiled the first two price lists of Regency Bay, announced to launch the Tuen Mun residential project at 10am this Saturday (25 July). A total of 108 flats will be offered, measuring saleable area of 261-437 sq.ft each. The discounted selling prices range $4.6888-7.3004 million sq.ft., i.e. an average of $17,498 per sq.ft.
FIH (2038.HK) announced additional inside information to its Profit Warning, expecting 1H20 revenue to exceed US$3.66 billion, down 42.7% yearly, and 1H20 consolidated net loss to approximate, or below, US$105 million, against US$83.839 million for 1H19.
L'OCCITANE (973.HK) announced that total net sales amounted to EUR274 mn during the three months ended 31 December 2020, down 22.2% on both reported and constant rates. In particular, Hong Kong net sales slid 62.1% on constant rates, the gravest in all markets.
HSBC clarified that the layoff plan as rumoured on the social media is groundless. Netizens circulated news recently that roughly 400 workers of the bank will be notified of redundancy.

PROTESTS 
Protesters gather again at Yuen Long MTR station last night with a number arrested under the new security law including a local district councillor. Some residents say the police are over reacting to the chanting of slogans. It is telling that after 12 months the police say they are still investigating the original incident despite them saying its been accorded high priority.
Confidence in freedom, democracy and the rule of law dropped to the lowest since 1997, the Hong Kong Public Opinion Research Institute has found.
And the rating for prosperity also dropped to its lowest point since July 2003 as the SAR continues to struggle against the pandemic. Eighteen of 25 indicators dropped to their lowest since the survey began in 1997. Degrees of democracy, freedom, the rule of law and and stability scored below five. The freedom rating saw the biggest drop, going from 5.58 three months ago to 4.84. Of 10 freedom sub-indicators eight were below five, including academic freedom, free speech and a free press. But freedom for the right to demonstrate scored the lowest at 3.31.


Read More  

July 21 Asian Macro Initial Thoughts Asia +VE open as Dow Futures flat

Covid-19 Globally over 14.6m cases, 607k deaths
Dow Futures opened flat (-30pts) along with S&P and NDX futures.

DOW +0.03%, NDX +2.51%, S&P +0.84%, Russel 2K -0.36% Markets opened lower with the Dow -150pts S&P opened flat and worked slightly higher through the day but the NDX opened higher and continued to rally. Amazon +7.9% had its best day since Dec 2018. IBM +1% in normal hours but +4.6% after hours after better than expected earnings.
Dow member Pfizer +0.7% and BioNTech +3.5% having reported early positive data on a joint coronavirus vaccine candidate.
Traders were watching lawmakers as negotiations for new stimulus measures get underway. Comes as the existing benefits are due to expire
Halliburton +2.5% at its day low posted for Q2 a $1.7bn net loss as it took at $2.1bn write down due to the lack of oil field services work.
Chevron -2.2% as it confirmed its agreement to buy Noble Energy +5.4% in an all stock transaction.
DATA
USD was unchanged vs Yen & weaker vs Euro. Bitcoin -0.5% @ 9169.21, VIX -4.8% @ 24.46, US T10 0.606%
OIL Brent +0.35%, WTI +0.54% Slight +VE from a number of +VE vaccine indicators although off-set by the lack of agreement over the EU Recovery fund.
Gold Futures +0.4% highest since Sept 2011, Silver +2.4% a 4yr high, Copper +0.2%
Earnings Ahead from Coca Cola, Philip Morris pre market. United Airlines after market
AHEAD Chicago Fed National Activity Index, Redbook, API Crude Oil Stock Change

DAX +0.99%, CAC +0.47%, FTSE -0.46% Markets opened lower as EU leaders failed to reach agreement over the EU recovery fund but worked better as the talks continued on Monday. Dax rebounded into the green but drifting lower. FTSE hit resistance at Friday’s close with concerns over the UK/China relations. CAC recovered into the green but dipped back into the red
Telco stocks lead but Travel and Leisure remained weak despite news that the Oxford University Vaccine with AstraZeneca +1.5% showed +VE immune response in an early trial.
Synairgen +429% claimed its covid-19 was effective as reducing the number of patients needing intensive care.
GSK -0.7% buys up 10% of German vaccine producer CureVac for £130m
Ubi Banca +14% after Intesa Sanpaolo increased its bid for the smaller lender
Natixis -7.4% on news its owner did not intend to tender an offer for more shares in the bank.
Renault +1.7% 1H sales -35%
M&S -0.2% to cut 950 jobs.
DATA
EUROZONE Current Account May Euro -10.5b vs +9.9b Apr (F/cast was +12.1b)
GERMANY PPI Jun 0% MoM vs -0.4% May (F/cast was +0.4%) [Jun -1.8% YoY vs -2.2% May (F/cast was -1.4%)
AHEAD
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK Public Sector Net Borrowing

JAPAN Expect Nikkei to open higher with focus on Tech. Covid -19 cases still a concern with 168 new cases in Tokyo on Monday. Yen currently 107.25. Pre market data in-line.
Data out

Inflation Rate Jun +0.1% YoY vs +0.1% May (F/cast is +0.1%) [Jun +0.1% MoM vs +0% May (F/cast is +0.1%)]
Core Inflation Jun 0% YoY vs -0.2% May (F/cast is +0%)
Inflation Rate Ex Food & Energy Jun +0.4% YoY vs +0.4% May (F/cast is +0.4%)
Govt under pressure to pay travel plan cancellation fees for those in Tokyo after the city was excluded from the national programme.
Shionogi & Co aims to boost production capacity for its potential coronavirus vaccine to produce enough for 30 million people annually by the end of 2021, a company official told Reuters on Monday. +VE
Japan's convenience store sales in June -5.2% YoY but improved MoM on solid sales of hygiene and other items after the lifting of a state of emergency declared over the novel coronavirus, an industry body said Monday. +VE
SoftBank has pulled a more than $500 million investment from Credit Suisse's supply chain finance funds after the Swiss bank reviewed the funds including the Japanese conglomerate's role, according to two sources.

SOUTH KOREA Expect markets to open higher, following US with focus on Tech names after good PPI data PLUS improved sentiment as covid cases drop to single digits for the first time in 2 months.
Data out 
PPI Jun +0.5% MoM vs 0% May (F/cast was +0.1%) [Jun -0.9% YoY vs -1.7% May (F/cast was -1.5%)].
South Korea’s household debt compared to its economic size has become one of the world’s highest, while its debt grew at one of the fastest paces during the first quarter this year, a report showed Monday. -VE
Naver Corp, said Monday it is moving its overseas data backup center from Hong Kong to Singapore amid privacy concerns in the Chinese territory. -VE for Hong Kong
LG Display said Monday it will begin to mass-produce OLED panels soon at its factory in Guangzhou, China, after a one-year delay due to the new coronavirus outbreak. It is currently producing 8.5 generation OLED panels at the factory on a small scale but will begin mass production soon. +VE
GS25 said Monday the bestselling product from its mobile app for wine and liquor orders was Disaronno, an Amaretto-tasting liqueur. Over 70% of wine orders made via the app were made outside of Seoul, it added. The convenience store chain launched the mobile app Wine25 Plus on July 13, allowing customers to order alcoholic beverages and pick them up from a nearby GS25 store. +VE
Paris Baguette, operated by SPC Group, said Monday it is testing a new subscription business by launching a monthly discount service for its coffee and sandwich menus. +VE
GC Pharma announcing Monday it preemptively began producing plasma-derived COVID-19 treatment drug samples on Friday. +VE

TAIWAN Expect market to open higher after Export orders grew at the fastest rate in 2 years; with Electronics +24% YoY.
No data du
e
After Market Monday Export Orders Jun +6.5% YoY vs +0.4% May (F/cast was +0.8%)
Survey by Cathay Financial Holding Co on how people planned to use their Triple Stimulus Vouchers found that 42% would buy daily groceries. Other top uses included department store spending (24.2%) and travel (14.6%), while 6.3% of respondents would use them for dining and drinks, and less than 1% plan to use them for arts and culture activities, while 11.6%of respondents said they had not made up their minds, the survey found. Overall slight +VE for Retail.
Taiwan Semiconductor Manufacturing Co yesterday said that it has no plans to build chip foundries in Japan, but would not rule out the possibility.
Taiwan Mobile Co yesterday said that it is providing 5G networks and vehicle-to-everything solutions to Formosa Plastics Transport Corp for its testing of self-driving vehicles, a joint statement said. Formosa Plastics Transport, which operates more than 1,500 trucks, is the nation’s first commercial fleet operator investing in autonomous vehicles. It plans to use Chang Tung Health and Culture Village as a testing ground for its vehicles. +VE
Yeong Guan Energy Technology Group yesterday posted net profit of NT$113 million for last month, or earnings per share of NT$1.07, an increase of 93 percent year-on-year. Revenue rose 13.02 percent to NT$722 million from NT$638 million a year earlier, as shipments increased 20.5 percent year-on-year to 15,600 tonnes, the company said. As wind power customers continue to maintain high orders, and demand for injection molding machines and industrial machinery remains stable, shipments this month would remain at a normal level, Yeong Guan said. +VE


CHINA Expect market to open higher following the US with Team China continuing to remain active and ‘managing the bull market’ especially on news that the Insurance companies can now increase their equity holdings.
No data due

Two potential vaccines to protect against the novel coronavirus - one from Oxford University and AstraZeneca Plc and the other from China's CanSino Biologics - induced immune responses in healthy volunteers without causing dangerous side effects, according to studies published on Monday in The Lancet. +VE
US Commerce Department on Monday added 11 Chinese companies to its blacklist for being implicated in what it called human rights violations in connection with the treatment of Uygurs in Xinjiang. They include Changji Esquel Textile, of the Esquel Group, which produces clothing for Ralph Lauren, Tommy Hilfiger and Hugo Boss. Also blacklisted is Hetian Haolin Hair Accessories, whose products – said to contain human hair from Xinjiang – were seized in the US earlier this month
Britain announced on Monday it would suspend its extradition treaty with Hong Kong in an escalation of a dispute with China over its introduction of a national security law for the former British colony. State Media says that the UK should face public and painful retaliation from Beijing. The Global Times said “But it’s unnecessary to turn it into a China-UK confrontation. The UK is not the US, nor Australia, nor Canada. It is a relative ‘weak link’ in the Five Eyes. In the long run, the UK has no reason to turn against China, with the Hong Kong issue fading out.” Interesting that they feel the Hong Kong issue is fading out! Overall -VE for China/UK relations
Chinese citizens’ satisfaction with the government improved overall from 2003 to 2016, but slowing economic growth since then could dent public opinion, according to a Harvard University study. Shows the pressure that the Beijing is currently under Slight -VE.
Australia’s iron ore exports to China strong, but weak global demand indicates mixed coronavirus recovery. Rio Tinto reported a 3% rise in total iron ore exports, largely due to stronger demand from China but recovery in demand from the likes of Japan and Europe has yet to begin
China's cash-strapped small lenders are expanding their pile of the riskiest kind of bank debt to shore up their capital levels, bracing against an economic slowdown and rising loan defaults. Smaller lenders including Chongqing Three Gorges Bank, Bank of Rizhao, and Huarong Xiangjiang Bank accounted for more than 70 percent of the issuance. -VE


HONG KONG ADR’s +105pts to open at 25,162 with broad based bounced with only Mobile, Petrochina, CCB, ICBC and BoC ADR’s in the red. Expect an initial squeeze and then for the market to work higher; Tech names connected with the new HSI index in focus (see list below). Also +VE HKEX (388) on news of Ant Group and Didi Chuxing listings.
But the rise in local covid-19 case -VE for sentiment along with more, generally -VE profit warnings although likely to have less impact today
Data due
Inflation Rate After Market
After Market Monday Unemployment Jun 6.2% vs 5.9% May (F/cast was 6.3%)
The unemployment rate increased across almost all the major economic sectors, with more distinct increases observed in the decoration, repair and maintenance for buildings sector; import and export trade sector; and warehousing and support activities for transportation sector. Commenting on the latest unemployment figures, the Secretary for Labour and Welfare, Law Chi-kwong said the labour market continued to deteriorate for the second quarter of 2020 as a whole, but the pressure faced by the labour market showed signs of easing towards the end of the quarter as the local epidemic situation abated in May and June. The launch of the Employment Support Scheme also helped counter the headwinds facing the labour market.
WORTH noting that was BEFORE the latest wave of Covid cases -VE


Short Selling HSI Monday 21.3% vs 22.3% Friday
Top Shorts CCB (939) 43%, Hang Seng Bank (11) 38%, Sands China (1928) 38%, Ping An (2318) 38%, Mengniu Dairy (2319) 34%, Sunny Optical (2382) 33%, HSBC (5) 33%, MTRC (66) 32%, Galaxy (27) 30, China Shenhua (1088) 30%, New World New (17) 29%, BoC (3988) 28%, Wharf REIC (1997) 25%

PROFIT WARNINGS
ADTIGER CORP (1163.HK) +VE Positive Profit alert. The Group is expected to record an increase in adjusted net profit (which is a non-HKFRS measurement and is calculated by excluding the effect of one-off listing expenses) of not less than 40% as compared with the adjusted net profit for the six months ended 30 June 2019 (which is a non-HKFRS measurement and is calculated by excluding the effect of one-off listing expenses).
WUXI APPTEC (2359.HK) +VE PROFIT WARNING total operating revenue for the first half of 2020 was expected to grow around 22.68% yearly to RMB7.23 billion. Net profit was expected to rise roughly 62.49% yearly to RMB1.72 billion, and basic EPS up by about 63.04% yearly.
SMOORE INTL (6969.HK) -VE Profit Warning the Group expects that the profit and total comprehensive income for the six months ended 30 June 2020 will decrease by approximately 89.1% to 94.0% compared to that of the six months ended 30 June 2019. On an adjusted net profit basis, the Group expects to record a profit in the range of approximately RMB1.286 billion and RMB1.331 billion for the Period compared to a profit of approximately RMB931 million for the Comparable Period, representing an increase ranging from approximately 38.1% to 42.9%.
MIRAMAR HOTEL (71.HK) -VE Profit Warning, expecting that the revenue and profit attributable to shareholders during the six months ended 30 June 2020 will be significantly reduced as compared with the corresponding period in the year of 2019.


WATCH
Didi Chuxing, a ride-hailing company in China, plans to ignite an IPO in Hong Kong 
as fast as this year, according to the sources of chinastarmarket.cn. The company is now in talks with investment banks for the IPO with a target valuation of approximately US$80 billion, equivalent to over HK$600 billion, which is likely to become one of the biggest IPOs in Hong Kong in recent years.
Alipay's owner Ant Group (formerly known as Ant Financial) today announced to kick-start the simultaneous IPO plan on the Main Board of HKEX (388.HK) and Sci-Tech Innovation Board of Shanghai Stock Exchange. Under which, Ant Group looks to ramp up domestic consumption by underpinning digital upgrades for the service industry. The group also seeks sustainable development through stronger global team-up and support for its technological R&D and innovation. +VE for HK EX (388 HK)
Hang Seng Indexes Company announced that it will launch the Hang Seng TECH Index on 27 July 2020 (Monday). This new index will track the 30 largest technology companies listed in Hong Kong that pass the index’s screening criteria.
Rankings|Stocks|Weightings
1 |BABA-SW (9988.HK |8.53%
2 |TENCENT (700.HK) |8.52%
3 |MEITUAN-W (3690.HK) |8.33%
4 |XIAOMI-W (1810.HK) |8.11%
5 |SUNNY OPTICAL (2382.HK) |8.02%
6 |SMIC (981.HK) |5.96%
7 |ALI HEALTH (241.HK) |5.08%
8 |JD-SW (9618.HK) |4.84%
9 |KINGDEE INT'L (268.HK) |4.47%
10 |PA GOODDOCTOR (1833.HK) |3.98%
PROPERTY Hong Kong Interbank Offered Rate fell for a seventh consecutive trading day to a near four-year low, as a survey showed that more than a third of Hongkongers expect home prices to pick up in the second half; although that was before the current wave of infections.
Goldin Financial's (0530) chairman Pan Sutong has borrowed over HK$600 million from Bank of Communications (Hong Kong) by pledging his luxury house at 75 Deep Water Bay Road. This came after the company revealed plans last week to raise HK$8.7 billion to settle subsidiary debts, as well plans to sell a land plot in Kai Tak. Meanwhile, the Industrial and Commercial Bank of China (Macau) has acquired a security interest in 1.97 billion shares, or 28.18 percent of the company's stake last week. Those shares were reported to have been pledged by Pan, who holds a majority 70.86 percent stake in the company.
CHINA TELECOM (728.HK) June, the mobile subscribers numbered 343.47 million with a net increase of 2.27 million, among which 5G package subscribers had a net increase of 7.79 million, slackening from 8.35 million in May.significantly reduced as compared with the corresponding period in the year of 2019.
CHINA UNICOM (762.HK) aggregate number of mobile billing subscribers amounted to 309.5 million in June 2020, representing net addition of 783,000 for the month. During the month, the aggregate number of 4G subscribers neared 261 million, representing net addition of 2.503 million for the month vs 1.905 million for May.
MACAU’s Statistics and Census Service (DSEC) indicated that there were 22,556 visitor arrivals in June 2020, a decline of more than 90% YoY. Same-day visitors and overnight visitors totalled 13,205 and 9,351 respectively. In the first half of 2020, number of visitor arrivals reduced by 83.9% YoY to 3.2689 million.
ESPRIT (330 HK) Karen Lo Ki-yan, an heiress of Vitasoy International (0345) and the wife of veteran investor Eugene Chuang Yue-chien, increased her stake in Esprit for the fourth time this month. She now holds 19.51 percent from 18.8 percent, with increased holdings of 13.5 million shares.
FULUM GP HLDG (1443.HK) has been notified by Centre for Health Protection that four patients diagnosed with novel coronavirus had on 11 July been to Fulum Restaurant at Tuen Mun Central Square. In order to guarantee the health and safety of staff and customers, the eatery group has shut down the said branch for four days with immediate effect for throughout disinfection and sterilisation until 24 July.  Slight -VE
HSBC Insurance, CEO said online insurance applications have indeed burgeoned during the COVID-19 epidemic, citing a sharp increase in online applications for insurance coverage in the first three months of 2020 and the first half of year. The insurer believed this trend should persist even after the pandemic eases.


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July 20 Asian Macro Initial Thoughts   US Futures open flat +45pts

Covid-19 Globally over 14.3m cases, 603k deaths
US Futures opened +45pts with S&P and NDX futures +0.2% as US covid-19 cases surge and ahead of US reporting getting into full swing but investors are likely to be watching medical reports on vaccine studies with even more interest. Reporting this week includes. (In date order): IBM, Lockheed Martin, Coca-Cola, Texas Instruments, Snap, United Airlines, Lockheed Martin, Coca-Cola, Texas Instruments, Snap, United Airlines, AT&T, Union Pacific, Tractor Supply, Twitter, Southwest Airlines, American Airlines, Intel, Skyworks, Boston Beer, Honeywell International, American Express, Verizon.
G20 Finance ministers vow to extend debt relief for developed nations and new tax rules for Amazon, Apple Facebook and Google.
EU leaders are struggling to agree over the Recovery Fund for Europe -VE

Expect Asian markets to open flat or lower with rising concerns over Covid-19, China’s deteriorating relations with most countries except maybe Russia.

JAPAN Expect Nikkei to open lower as Government under pressure from rising covid case with more than 660 new cases nation-wide on Saturday following Tokyo reporting 286 on Friday and remarks from Tourism Minister. Yen strengthen closed Friday US at 106.99
Data due 
Balance of Trade Jun (May was Yen -833.4bn F/cast -40b)
Exports Jun (May was -28.3%YoY Consesnus is -24.9%)
Imports Jun (May was -26.2% YoY Consensus is -16.8%)
Also BoJ meeting notes
Tensions with China rising Press reports that China complained to Japan early in July about Japanese fishing boats allegedly "trespassing" in its territorial waters near a group of disputed islands in the East China Sea, it was learned Sunday. Press also reports that airforce jets are constantly patrolling to stop Chinese aircraft from entering Japanese airspace -VE
Government to pay firms for relocating out of China; with back to Japan or to other Asian countries -VE for Japan/China relations
Tourism minister Kazuyoshi Akaba urged young people and seniors in large group tours not to use the campaign, citing the risk they may spread the coronavirus and, in the case of the elderly, develop severe symptoms. Comes after the Govt revised the travel initiative on Wednesday to exclude Tokyo. That change prompted mass cancellations but the government says it has no plans to reimburse people for their loss. Over the weekend more governors asked for flexibility to adapt the programme as covid-19 cases rise.
British government asks Japan to help build its 5G wireless networks without Huawei Technologies, the Nikkei said on Sunday, a further step in a global technology and security war between the United States and China. +VE for NEC Corp (6701.T) and Fujitsu Ltd (6702.T) as potential alternative suppliers to Huawei
Japan will look closer into whether to issue central bank digital currencies (CBDCs), the government said in its annual policy road map, a sign that Tokyo may be warming to the idea as the coronavirus heightens demand for cashless payments. I
Ootoya Holdings said it would oppose a takeover offer from its top shareholder, Colowide Co. turning the bid into the Japan's latest hostile deal.
Tokyo Olympics looks increasingly likely to be postponed again with a poll showing 36% this it should be postponed and 34% cancelled.

SOUTH KOREA Expect markets to open flat with consolidation expected with the index now at the 2,200 level. Some are hopeful that the market will move higher on the expectation of a big stimulus package from the US.
No data due
South Korea's new virus cases fell back to below 40
on Saturday, (28 imported cases) but health authorities are keeping their guards up as imported cases and sporadic outbreaks in the country continue to put a strain on their efforts to contain the deadly virus.
South Korea on Friday approved an early stage clinical trial of Celltrion Inc's experimental COVID-19 treatment drug, making it the country's first such antibody drug to be tested on humans. +VE
SK Biopharmaceuticals., (part of SK Group), is likely to be added to the list of 200 major stocks listed on the main bourse in September, as its market capitalization has run high for a certain period after its market debut, industry sources said Saturday.
SK Group’s investment-focused subsidiary SK Holdings will invest an additional 100 billion won ($82.9 million) in Wason, a Chinese manufacturer of copper foil. Copper foil is a core ingredient in anodes, one of the main components of electric vehicle batteries.
Government said Friday it will build more wind farms off the southwestern coast of the country in line with its efforts to stay away from fossil fuel-powered energy generation and boost the virus-ravaged economy.
The Ministry of Land, Infrastructure and Transport said Friday it has ordered a recall of 34,268 vehicles -- sold by Hyundai Motor, Kia Motors, Renault Samsung Motors, Toyota, Mercedes-Benz Korea, Hanbul Motors and BMW Korea -- for faulty components.
Government under pressure from investors after a series of hedge fund miss-selling/fraud allegations. -VE for sentiment
Some K-Pop stars' accounts on TikTok's sister app in China, Douyin, blocked from view comes after S Korea fined the app on Wednesday for data privacy noncompliance.

TAIWAN Expect market to open flat with concerns over the impact of covid -19 on the global recovery but with large Tech still in focus.
Data due after market 
Exports Orders and Unemployment.
The government is considering expanding its stimulus initiative for local industries affected by the COVID-19 pandemic, and its so-called “Stimulus 3.0” program is on the way, Minister of Economic Affairs Wang Mei-hua said Friday. +VE
The Belgian parliament’s Chamber of Representatives on Thursday overwhelmingly passed a resolution that called on the country’s government to support Taiwan’s democratic development and its meaningful participation in international organizations. +VE
The Central Epidemic Command Center (CECC) Friday reported two new imported cases of COVID-19, a woman and a man returning from months-long work in the Philippines.
China’s Peoples Daily accuses Taiwan’s freely elected DPP of meddling in Hong Kong and of being a ‘Black hand’ in the unrest, with pro-independence forces colluding to undermine China’s national security. It said Hong Kong’s national security law, which has prompted widespread international criticism, meant the “collusion between Taiwan and Hong Kong’s separatist forces” would be “to no avail”. It would appear the government is seeking to stir up anti-Taiwan sentiment. Which will raise concerns about possible military action -VE
TAIWAN Representative of the Taiwan Affairs Office in Hong Kong forced to leave as the HK administration would not renew their visa’s unless they signed a statement saying they would uphold the ‘one China’ policy.
Pegatron to open plant in India. Last month, the Indian government set out a US$6.6 billion plan to woo the world’s top smartphone manufacturers, offering financial incentives and ready-to-use manufacturing clusters. Pegatron is now setting up a local subsidiary and joining fellow Taiwanese electronics assemblers Hon Hai Precision and Wistron Corp, who have already been making some iPhone handsets in southern India. +VE and a slight -VE to China.
China Steel Corp raising steel prices for September delivery by an average of 1.49% MoM as COVID-19 economic stimulus packages and reopening markets boost demand worldwide.
Wistron Corp on Friday said that its agreed to sell two of the firm’s wholly owned subsidiaries to China’s Luxshare Group as part of its plans to better integrate group resources and improve its smartphone assembly profitability. +VE
Northern Taiwan’s presale and new housing market picked up 5.5% annually to NT$565.23 billion (US$19.1 billion) in the first half of the year, holding resilient amid the COVID-19 pandemic on the back of low interest rates and ample liquidity, the Chinese-language My Housing Monthly reported yesterday.
Domestic gasoline prices are to fall by NT$0.1 per liter today, ending 11 consecutive weeks of hikes, CPC Corp, Taiwan and Formosa Petrochemical Corp announced separately yesterday. Premium diesel prices remain unchanged for the second straight week at NT$19.6 per liter at CPC stations and NT$19.4 per liter at Formosa’s pumps, the companies said.

CHINA Expect market to open lower with increased international pressure and rising covid-19 cases both domestically (Xinjiang in the spotlight) and globally.
Data due
Loan Prime Rate 1 year (Currently 3.85% no change expected)
Loan Prime Rate 5 year (Currently 4.65% no change expected)
Mainland China reports 16 cases Saturday following 22 new coronavirus cases, including 16 in Xinjiang on Friday, up from 10 cases Thursday, the health authority said on Saturday. -VE for sentiment
UK to retract extradition agreement with China over the new security law in Hong Kong, but press reports it is unlikely to impose sanctions at this stage -VE
The government said it has taken control of Huaxia Life Insurance, Tianan Life Insurance, Tianan Property Insurance and Yi’an Property Insurance, according to a statement by the China Banking and Regulatory Commission (CBIRC) Along with New Times Trust, and New China Trust were also taken over, effective immediately. All linked to Xiao Jianhua the founder of Tomorrow Group who was ‘escorted’ out of Hong Kong in 2017 and has not been seen since but is reported as awaiting trial on charges of bribery and corruption. Comes as the Insurance company’s in China become so large the the government cannot allow them to fail. The government worries that their debt fuelled growth could hurt the nation’s financial system. Expect weakness in the Financials -VE.
Large parts of China were reeling on Friday from the worst floods in decades, as disruption mounted for supply chains, including for personal protective equipment (PPE), vital in the fight against the novel coronavirus. Expect more reconstruction spending +VE Zoomlion, Sany etc and for Resources. It will raise questions about the need for structures such as the Three Gorges Dam and other dams on the Yangtze Riiver.
China to connect its interbank and exchange bond markets, the People's Bank of China said Sunday, a move aimed at unifying segregated bond markets and facilitating monetary policy transmission and macro economic management. Qualified investors will be allowed to buy and sell bonds traded in each other's markets via the "connect" infrastructure.
The United States on Friday announced sanctions against four China-based individuals and one company run by alleged Chinese drug kingpin Fujing Zheng for links to trafficking in fentanyl. It named the individuals as Songyan Ji, Longbao Zhang, Guifeng Cheng and Guangfu Zheng, and the firm as Global United Biotechnology Inc, which it said was owned and operated by the Zheng Drug Trafficking Organization (DTO) run by Fujing Zheng. Likely to irate China as it does not to admit having a drugs issue.
China's embassy in Myanmar on Sunday accused the US of “outrageously smearing” the country and driving a wedge with its Southeast Asian neighbors over the contested South China Sea and Hong Kong, as tensions mount between the superpowers.
US-China relations worsen as : Beijing says banning 92 million Communist Party members from America ‘ridiculous’. That’s about 6.6% of the Chinese population although Beijing says it would put the US at odds with all 1.4bn Chinese citizens. The proposal is just one of many being considered.
US may place sanctions on Chinese State companies over ‘bullying’ in the South China Sea; possibly on China Communications Construction Company and CNOOC -VE
US has deployed two aircraft carriers to the South China Sea, for the second time in two weeks, the US Navy said on Friday, as China and the United States accuse each other of stoking tensions in the region. -VE for sentiment.
UK accuses China of ‘gross abuses against Uighurs’ press reports of growing calls for a boycott of the Beijing Winter Olympics over the issue. China’s UK Ambassador denied reports that China was carrying out a programme of sterilisation of Uighur women and other accusations with video footages from the British press -VE

HONG KONG ADR’s +20pts to open at 25,109 But expect market to open lower on rising covid 19 cases (108 announced on Sunday) with increased lockdown measures and weakness due to the possibility of sanctions on some SOE’s and weakness in Chinese financials as China announces taking over more of Xiao Jianhua’s Tomorrow Group. There were also arrests in Yuen Long at the anniversary of the assaults that occurred there in 2109 allegedly between triads and locals with the police accused of ’turning a blind eye’.
No data due

But after market Friday Business Confidence Q3 -11 vs -37 Q2 (F/cast was -32)

AFTER MARKET WARNINGS
BILLION IND (2299.HK) PROFIT WARNING -VE
expected to record a significant decline in the profit for the six months ended 30 June 2020 of not more than 50% as compared to the same period in 2019.
CHENGDU EXPWAY (01785.HK) PROFIT WARNING -VE expected that profit attributable to the shareholders of the Company for the six months ended 30 June 2020 will fall to be within the range of RMB50 million to RMB70 million, as compared to RMB232 million for the same period of 2019, down about 70%-78%.
SUNSHINE PAPER (2002.HK) PROFIT WARNING +VE expected that the Group will record an increase of not less than 70% in its net profit attributable to the shareholders for the six months ended 30 June 2020 as compared to that for the corresponding period in 2019. This was due to the decrease in purchase cost of raw materials, which in turn led to a significant increase in gross profit and gross profit margin.
SUNFONDA GP (1771.HK) PROFIT WARNING -VE expected to record a decrease of no more than 40% in the profit attributable to owners for the six months ended 30 June 2020 as compared to the six months ended 30 June 2019, while the profit attributable to owners was RMB74.82 million.
TOMO HOLDINGS (6928.HK) PROFIT WARNING -VE expected to record significant decreases in revenue by approximately 67.8% and gross profit by 81.6% for the six months ended 30 June 2020 as compared to the corresponding period in 2019.
SC HOLDINGS (413.HK) PROFIT WARNING -VE expected to report a loss for the six months ended 30 June 2020 as compared with a profit of HK$26.81 million for the corresponding period in 2019.
BEXCELLENT GP (1775.HK) PROFIT WARNING The Group is anticipated to record a loss for the year ending 31 July 2020 of not less than HK$16 million as compared to the profit of HK$11.9 million for the year ended 31 July 2019.

Short Selling HSI Friday 22.3% vs 19.1% Thursday
Top Shorts
Mengniu Dairy (2319) 46%, MTRC (66) 45%, BoC HK (2388) 40%, CCB (939) 39%, China Shenhua (1088) 38%, PetroChina (857) 34%, Hang Seng Bank (11) 34%, HK & China Gas (3) 33%, China Res Land (1109) 32%, Sands China (1928) 29%, SHKP (16) 29%, Henderson Land (12) 28%, HSBC (5) 27%, Tencent (700) 27%, ICBC (1398) 27%.


NEW SECURITY LAW. SFC’s CEO Ashley Alder sought on Sunday to reassure global banks in the city that China’s new national security laws for the financial hub would not harm their operations; saying the free flow of information is not expected to change. He said he 'would like to clarify that it is not aware of any aspect of the (new laws) which would affect or alter the existing ways in which firms and listed companies originate, access, disseminate and transmit financial market and related business information under the regulatory regime it administers,” But many doubt that, especially the freedom with which analysts were able to write with regards to China policy. The fact that he made such a statement shows the level of concern there is over Hong Kong’s future by investors.

WATCH
SHKP (16 HK) released another 50 units at Regency Bay
in Tuen Mun Sunday Priced 4% higher than the initial release
Press reports Home Buyers have forfeited over HK$250m in deposits in 1H 2020 +10% YoY. -VE for sentiment
NAGA CORP (3918 HK) gets permission to re-open its Cambodian Casino’s in Phnom Penh. +VE
SOLOMON SYSTECH (2878.HK) after the market close on 17 July 2020, the Company granted share options to certain employees of the Group to subscribe for a total of 2 million ordinary shares of HK$0.1 each in the capital of the Co
Head of Taiwan’s Hong Kong office, two colleagues forced to leave after refusing to sign document supporting ‘one-China’ principle as a condition of their visa’s being renewed. The declaration reads. “While in Hong Kong, [you should] rigorously abide by the one-China principle and Hong Kong’s Basic Law, as well as the rule of law in Hong Kong,” Another sign of Hong Kong’s freedoms being removed. -VE
Airport Authority Hong Kong announced that for June, the Hong Kong International Airport recorded year-on-year decreases in passengers and flight movements of 99.1% and 71.8% to 59,000 and 9,945, respectively. Cargo throughput saw a decrease of 7.7% to 357,000 tonnes compared to the same month last year.
CHINA SOUTH AIR (01055.HK) announced that in June 2020, passenger capacity measured by available seat kilometres of the Group -43.92% YoY In terms of cargo operations, in June 2020, cargo capacity (measured by available tonne kilometres - Cargo and Mail) +12.16% YoY
Lands Department announced today (July 17) that a site, Lot No. 1003 in Demarcation District No. 214 at Hiram's Highway near Heung Chung Road, Ho Chung, Sai Kung, New Territories, in the 2020-21 Land Sale Programme will be disposed of by public tender. The tender invitation for the lot will commence on July 24 (next Friday) and close on August 21. It has a site area of about 3,563 square metres and is designated for private residential purposes.
HKMA announced that the composite interest rate, which is a measure of the average cost of funds of banks, decreased by 10 basis points monthly to 0.71 per cent at the end of June 2020.
Hang Seng Indexes Company Limited announced that it will host an online press conference on Monday's afternoon (20 July) to unfold the details on a new technology index.
More than 10 million small shops and merchants have applied for Alipay's nationwide coupon handout this month, giving the incentive to 1 billion shoppers for consumption, reported Chinese media.
Centa-City Leading Index (CCL) last printed at 180.81, +1.04% WoW CCL Mass last stood at 183.65, +1.11% WoW. CCL (small-and-medium units) last posted at 181.33, +1.02% WoW CCL and CCL (small-and-medium units) +1.31% and +1.12% in two weeks, regaining lost ground and nearly hitting a nine-week high. Given ballooning local infections, Centaline Property, foresaw CCL choppiness in the near term with an unchanged uptrend. The index will likely reach 190 in autumn.

On Friday the US closed with the
DOW -0.23%, NDX -0.28%, S&P +0.28%, Russel 2K +0.39%
Markets had opened slightly higher but the Dow dipped into the red initially but then like the S&P and NDX traded sideways through the day. Netflix -6.5% after poor results after market Thursday Amazon -1.2%, Microsoft -0.5% and Apple -0.2%.
Re-Opening Names United -1.7%, Delta -0.8%, American -4.3%, Carnival -2%, Royal Caribbean -1.5%, Kohls -3.2%, GAP -1.4%, Simons Property -0.8%
DR Horton +1.5% and Pulte Group +1.5% as Housing starts beat forecasts
Boeing -1.7% as BA retires its 747 fleet
DATA
Housing Starts Jun +17.3% MoM vs +8.2% May (F/cast was +12.9%)
Building Permits Jun +2.1% MoM vs +14.1% May (F/cast was +2.5%)
Michigan Consumer Sentiment Data preliminary
Consumer Expectations Jul 66.2 vs 72.3 Jun (F/cast was 73.4)
Current Conditions Jul 84.2 vs 87.1 Jun (F/cast was 86.4)
Inflation Expectations Jul +3.1% vs 3% Jun (F/cast was 3.1%)
5 year Inflation Expectations Jul +2.7% vs 2.5% Jun (F/cast was 2.5%)
Consumer Sentiment Jul 73.2 vs 78.1 Jun (F/cast was 79.1)
Baker Hughes Total Oil Rig Count 253 vs 258 prior.
USD was weaker vs Yen & Euro. Bitcoin % @ , VIX -8.3% @ 25.7,
US T10 0.623% but did dip below 0.6% intraday as covid-19 cases continue to rise
OIL Brent -0.55%, WTI -0.44%
Gold +0.66%, Silver +0.88%, Copper unch
AHEAD No data due.

DAX +0.35%, CAC -0.31%, FTSE +0.63% Markets opened flat. DAX traded sideways just above flat, CAC just below. FTSE initially dipped into the red but then rebounded into the green and traded sideways. AUTO’s +VE as Daimler +4.3% said it would report a smaller operating loss that previously forecast. BANKs were weak. But markets cautious as EU leaders discussed the Euro750bn stimulus fund with the ‘four frugal’ states remaining opposed to some proposals and could be vetoed.
AstraZeneca +3.9% positiive sentiment on possible covid-19 vaccine.
IAG -2.3% as British Airways retired its entire Boeing 747 fleet
RioTinto +2.3% reported strong Iron Ore Demand with increasing orders from China
Danske Bank -1% despite Q2 net profit beating; it warned of further job cuts and cost cutting.
Ericsson +11% as profit beat estimates and it confirmed its 2020 and 2022 guidance.
Hexpol -8.8% (Chemicals) and Samhallsbyggnadsbolaget -7% property company (must be one of the most difficult stock names!) as results disappointed .
Natixis +4.1% on rumours its major shareholder could be interested in buying the remainder.
DATA
EUROZONE Construction Output May -11.9% YoY vs -31% Apr revised (F/cast was -23%)
Core Inflation Rate Jun +0.8% YoY vs +0.9% May (F/cast was +0.8%)
Inflation Rate Jun +0.3% YoY vs +0.1% May (F/cast was +0.3%) [Jun +0.3% MoM vs -0.1% May (F/cast was +0.3%)]
AHEAD
EUROZONE Current Account
GERMANY PPI
FRANCE No data due
UK No data due




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July 17 ASIAN MACRO Initial Thoughts  Dow futures slight rise

Covid-19 Globally over 13.6m cases, 586k deaths
US FUTURES DOW open flat but have risen 60pts, S&P and NDX also +VE Options Expiry.


DOW -0.5%, NDX -0.73%, S&P -0.34%, Russel 2K -0.72% US Markets opened lower with the Dow -200pts after the weak China data and a poor Initial Claims number although the retail sales number was better. Dow then reversed tested Wednesday close but failed to break above and worked lower for the rest to the day until a small bounce into the close. S&P opened lower and traded sideways and NDX started lower, dipped and then worked better for the rest of the day closing around its highs for the day.
Re-opening stocks weak United -5.2%, Delta -4.7%, American -7.4%, Carnival -9.7%,
But Kohls +2%, GAP +4% however Simons Property -5.6%
Stay at home Facebook +0.3% Amazon -0.3% (around day high), Apple -1.2%, Microsoft -2%
BoA -2.7% earnings beat but it took US$4bn in provisions. Morgan Stanley +2.4% beat on good trading profits. Johnson & Johnson +0.6% after lowering its guidance.
Netflix +0.8% but -10% in after market as Q2 earnings missed and guidance of 2.5m subs for Q3 was weak vs the 5.27m being expected.
Dell Tech +VE on news that it was considering spinning off VMware, its majority-owned cloud computing software division
DATA
Retail Sales Jun +7.5% MoM vs +18.2% May (revised) (F/cast was +4.5%) [Jun +1.1% YoY vs -5.6% May (revised) (F/cast was -3%)
Retail Sales Ex Auto Jun +7.3% MoM vs +12.1% May (revised) (F/cast was +4.2%)
Initial Claims 1.3m vs 1.31m prior (F/cast was 1.29m)
Continuing Claims 17.338m vs 17.67m prior (F/cast was 17.7m
4 week average claims 1.375m vs 1.435m prior (F/cast was 1.375m)
Philadelphia Fed Manufacturing Index Jul 24.1 vs 27.5 Jun (F/cast was 17)
NAHB Housing Market Index Jul 72 vs 58 Jun (F/cast was 58)
Business Inventories May -2.3% vs -1.3% Apr (F/cast was -1.8%)
EIA Natural Gas Report 45Bcf vs 56Bcf (Consensus was 47 Bcf)
Overall Net Capital Flows May US$-4.5b vs !21.7b Apr (revised from 125.3b) (F/cast was 200b)
Net Long Term TIC flows May US$127b vs -130.8b Apr (revised from -128.4b)
Foreign Bond Investment May US$-27.7b vs -176.5 bn Apr (revised from -176.7b)
USD was slightly stronger vs Yen & flat vs Euro. Bitcoin -0.7% @9130.04 , VIX +0.9% @ 28, US T10 0.618% slight fall as jobless claims disappoints.
OIL Brent -1%, WTI -1.1% as OPEC + agreed to ease supply curbs from August.
Gold Futures -0.7% to $1,800, Silver -1.2%, Copper -0.24%
AHEAD Housing Starts, Building Permits, Michigan Data Prelim (Consumer Expectations, Current Conditions, Inflation Expectations, 5yr Inflation Expectations, Consumer Sentiment, Baker Hughes Total Oil Rig Count.

DAX -0.43%, CAC -0.46%, FTSE -0.67% European markets opened lower following Asia after the weak China data. They then traded sideways ahead of the ECB rate decision, which left policy unchanged. Before working higher into the close.
Sartorius +10% on raising its FY guidance.
Orphan Biovitrum -8% as Q2 earnings disappoint.
Richemont, weak after posting Q2 sales -47% -VE cross read to Hong Kong Jewellers.
The European Union’s top court ruled Thursday that an agreement that allows big tech companies to transfer data to the United States is invalid, and that national regulators need to more action to protect data privacy
DATA
EUROZONE
New Car Registrations Jun -22.3% vs -52.2% May (F/cast was -26%)
Balance of Trade May Euro 9.4b vs 2.6b Apr (F/cast was 22.5b)
ECB Interest Rate Decision Unchanged
UK Unemployment Rate May 3.9% vs 3.9% Apr (F/cast was 4.2%)
Average Earnings Ex Bonus May +0.7% vs +1.7% Apr (F/cast was +0.5%)
Average Earnings Inc Bonus May -0.3% vs 1% Apr (F/cast was -0.7%)
After market Consumer Confidence Jul vs -30 Jun (F/cast was -26)
FRANCE
Inflation Rate Jun +0.1% MoM vs +0.1% May (F/cast was -0.1%) [Jun +0.2% YoY vs +0.4% May (F/cast was +0.1%)]
AHEAD
EUROZONE Inflation Rate, Inflation Rate, Construction Output. EU Meeting on Recovery Plan
GERMANY No data due
FRANCE No data due
UK No data due

JAPAN Expect Nikkei Futures are flat expect to open slightly lower, after weak US data, rising covid-19 cases (286 new cases in Tokyo) and the weekend Yen currently 107.28
No data due today
but Monday pre market we get Trade data and BoJ meeting notes.
Japan said it will exclude people living or vacationing in Tokyo from a subsidised domestic tourism campaign as record numbers of coronavirus infections there sparked concern that the capital's residents could spread the virus to other parts of the country.
Johnson & Johnson is in talks with the government of Japan and the Bill and Melinda Gates Foundation about locking up allocations of its potential COVID-19 vaccine as it prepares to kick off human trials, the company's Chief Financial Officer Joseph Wolk told Reuters in an interview.
Hitachi Ltd (6501.T) is moving to scrap seniority-based pay says its Chairman. It reflects Hitachi’s transformation from a hardware-focused manufacturer into a services business and highlights the realisation that for many Japanese firms old-school human resources practices aren’t practical.

SOUTH KOREA Expect markets to open lower following the US and to consolidate ahead of the weekend after BoK warned GDP growth likely to be slower this year. Volume on Thursday was high with local and foreign funds selling.
No data due
Smilegate said Thursday a 36-episode drama series based on its first-person shooter game CrossFire 
will be broadcast in China starting Monday. Launched in 2007, CrossFire is the most popular FPS game in China, with accumulated global revenue of 12.6 trillion won ($10.4 billion). +VE
SK Gas said Thursday it has introduced its first Eco Station, a hydrogen and liquefied petroleum gas charging station equipped with café, unmanned convenience store and premium DIY car washing facility. Slight +VE
Unity, a licensed game engine, is in full throttle in South Korea as the domestic industry is seeking a major shift to the mobile sphere with the engine. According to Unity Technologies Korea, eight mobile games that have been or will be launched in Korea this year are based on its game engine as increasingly more companies here are making mobile versions of their popular PC games.
Jeju Air said Thursday it can now walk away from a controversial 54.5 bn won ($45 mn) merger deal with Eastar Jet after the troubled low-cost carrier failed to meet the deadline to fulfill its prerequisites. +VE
Samsung Electronics Vice Chairman Lee Jae-yong and Hyundai Motor Group Executive Vice Chairman Chung Euisun are expected to meet again to hold a second round of discussions on next-generation electric car battery technology, according to news reports Thursday. +VE

TAIWAN Expect market to open lower following the US but downside limited after good numbers from TSMC.
No data due
The Central Epidemic Command Center 
(CECC) yesterday reported one new imported case of COVID-19, a Taiwanese woman in her 30s who traveled to the Philippines in late January for work. Also Taoyuan International Airport Corp has constructed two new COVID-19 sample-collection houses outside Taiwan Taoyuan International Airport
TSMC 2Q20 revenue increased 28.9% YoY to TWD310.699 billion. In the quarter, net profit after tax reached TWD120.822 billion, up 81% yearly and beating TWD110.55 billion in consensus. I also said it should have no problem filling the gap left by not being able to supply Huawei. CAPEX also increased +VE
Taiwanese CEOs expect recession due to pandemic; survey showed about 83% of the nation’s chief executive officers expect a global recession and diminished consumer confidence due to the COVID-19 pandemic, a PricewaterhouseCoopers (PwC) Taiwan survey showed. -VE for sentiment.

CHINA Expect market to open lower but we may see some bargain hunting; key will be whether Team China comes in to support the Market. Investors will be watching SMIC on the Star board after its 200% rise yesterday. Concerns over the Governments ability to stimulate the economy remain.
No data due but Monday
on the open we get Loan Prime Rate decision
China said Thursday it will stick to the Phase 1 trade deal but warned that it will respond to “bullying” tactics from Washington, as relations continue to deteriorate. -VE
China accused the United States of “gangster logic” after US President Trump ordered an end to Hong Kong’s special status under US.law in response to Beijing’s imposition of new security legislation on the former British colony.
US Burger King and a car manufactured by a General Motors (GM) JV were picked out for criticism on Thursday by China’s state television station in its high-profile annual show on consumer rights. The programme cited a Burger King outlet in Nanchang, southeast China, where it alleged employees only put two pieces of cheese on the burger when there should be three. Burger King China said on its official Weibo account that the outlet was managed by a sub-franchisee, and apologised for management mistakes given the practices were a departure from its “consumer is king” motto. Seems rather a shot in the foot!
Wall Street is scrambling to regulate Chinese companies listed on US equity markets SCMP reports to avoid intervention by US lawmakers, who have expressed bipartisan frustration over the lack of financial transparency the firms have offered even as they seek investors on American exchanges. US securities watchdogs have been in a continuing struggle with China over inspecting the audits of the country’s US-listed companies, and Beijing has refused to comply, citing state secret laws.
Kweichow Moutai, -VE was -7.9% Thursday after a state media unit devoted to promoting information on President Xi Jinping accused the company of reaping the benefits of corruption.

HONG KONG ADR’s +152pts to open after a 2% for the HSI Thursday. Expect an initial short squeeze and then some margin call selling. Key remains whether Team China comes in. Normally one would expect the market to consolidate ahead of the weekend. The record 67 covid-19 cases yesterday -VE for sentiment.
Data due afte
r market Business Confidence

Short Selling HSI Thursday 19.1% vs 20.3%Wednesday
Top Shorts Wharf REIC (1997) 51%, SHKP (16) 33%, Hang Seng Bank (11) 32%, CCB (939) 31%, Bank of China (3988) 30%, Ping An (2318) 29%, Henderson Land (12) 28%, BoC HK (2388) 28%, HSBC (5) 27%, MTRC (66) 26%, NWD New (17) 26%, China Res Land (1109) 25%, HK & China Gas (3) 25%.

WATCH
EDVANTAGE GROUP (382.HK) will see the end of the second semester of the 2019/2020 school year within this month, 
while students will gradually return to schools starting from end August to early October, revealed Chief Operating Officer Wenqi Liu. Liu expected the 2020/21 full-time student enrolments to grow to roughly 38,300 from about 34,800 a year ago, up by around 3,500 students.
COSCO SHIP ENGY (1138.HK) +VE PROFIT WARNING expects to record a net profit for the six months ended 30 June 2020 in the range of RMB2.81 billion to RMB3.01 billion, as compared to approximately RMB470 million net profit for the same period of 2019.
The Hong Kong Jockey Club stated that the local betting turnover of local horseracing -8.3% QoQ to $93.2 billion during the year of 2019-20.
SHK PPT (16.HK) unveiled the first price list for its Tuen Mun residential project, Regency Bay, involving 88 flats measuring 261-437 sq.ft. each. The units comprise of 21 open studios, 43 one-bedroom flats and 24 two-bedroom flats. The project priced each flat at $6.0113-9.158 million. With a maximum 22% discount, the selling prices ranged $4.6888-7.1432 million, i.e. $17,377 per sq.ft. on average. Subscriptions being Saturday and sales could start next week.Centraline MD said Regency Bay, the first project to unveil price list amid the 3th wave of COVID-19 outbreak, was launched with down-to-earth pricing as its developer aimed to sound out market response, The total selling prices are enticing despite aggressive price per sq.ft. for the first batch, he added.
KERRY PROPS (683 HK) has launched the sales arrangements for a 2,846-sq-ft house and a 1,760-sq-ft duplex apartment at Mont Rouge, Lung Kui Road, and will open the sales by tenders for two hours from 10am to 12am on Sunday.
Deutsche Bank's new Asia CEO will be based in Singapore, instead of Hong Kong, Bloomberg reported. Alexander von zur Muehlen will take office as Asia CEO in Singapore, in replacement of Werner Steinmueller who will be retired at end-July, said a spokesperson.
Centa Valuation Index (Major Banks) (CVI) at 46.09, -6.90 pts WoW
The steeper slide in reading hinted at banks' proactive efforts in controlling credit risks amid unfinished social conflicts and their ongoing prudence to mortgaging due to the community outbreak of novel coronavirus. Home prices may go on jumbling in a near term, rather than turning around into a fall, unless the index busts below the critical level 40. The fresh round of anti-pandemic measures rolled out this week and the deprival of Hong Kong privileged treatment by the U.S. may reflect on CVI in the coming two weeks.



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July 16 ASIAN MACRO INITIAL THOUGHTS. China data in focus

Covid-19 Globally over 13.4m cases, 580k deaths
Dow Futures Opened +82pts S&P and NDX slightly +VE.

DOW +0.85%, NDX +0.6%, S&P +0.91%, Russel 2K +3.5% Markets opened higher on the encouraging Moderna +6.9% vaccine results and very good results from Goldman’s +1.4% (off initial high) where trading revenue was +93% QoQ, which off-set concerns about the rising number of covid cases and the potential roll back of ‘re-opening’ plans. Markets saw selling late morning down to flat but then worked higher in the afternoon but closed off the initial highs.
Apple +0.7% but off initial highs after a European Union court annulled a 2016 European Commission order for the tech giant to pay $15 billion in taxes.
Re-opening names United Airlines +14.6%, Delta +9.5%, American +16.2%, Carnival +16.2%, Royal Caribbean +21.2%, Disney +1.9%, GAP +12.6%, Kohls +9.4%, Simon’s Property +7.5%
Stay at home names Facebook +0.2%, Amazon -2.4%, Alphabet -0.3%, Microsoft -0.2%
DATA
MBA Mortgage Applications +5.1% vs -0.38% prior
30 yer Mortgage Rate 3.19% vs 3.26% prior
Import Prices Jun +1.4% MoM vs +0.8% May (revised) (F/cast was +0.8%) [Jun -3.8% YoY vs -6.2% May (revised) (F/cast was -4.3%)]
Export Prices Jun +1.4% MoM vs +0.4% May (revised) (F/cast was +0.7%) [Jun -4.4% YoY vs -6.2% May (revised) (F/cast was -5%)]
NY Empire State Manufacturing Jul 17.2 vs -0.2 Jun (F/cast was +6.5)
Industrial Production Jun +5.4% MoM vs +1.4% May (F/cast was +4%) [Jun -10.8% YoY vs -15.4% May (revised) (F/cast was -6.2%)]
Manufacturing Production Jun +7.2% MoMvs +3.8% May (F/cast was +5.4%) [Jun -11.2% YoY vs -16.7% May (revised) (F/cast was -7.6%)]
Capacity Utilisation Jun 68.6% vs 65.1% May (revised) 9F/cast was 67.5%)
EIA Crude Oil Stocks Change -7.493m vs +5.654m prior (Consensus was -2.098m)
EIA Gasoline Stocks Change -3.147m vs -4.839m prior (Consensus was -0.643m)
Beige Book
USD weaker vs Yen & Euro (hit a four month high vs USD). Bitcoin -0.6% @ 9,218.21, VIX -6% @ 27.76,
US T10 0.633% on positive vaccine news posting risk sentiment.
OIL Brent +1.75%, WTI +2.3% on surprise drop in US inventories but upside limited as OPEC+ looking at easing the recent supply cuts at its forthcoming meeting
Gold Futures unch @ $1,813.80, Silver +0.7%, Copper +0.54%
RESULTS ahead due too report pre market: Johnson & Johnson, Charles Schwab, Abbott Labs and Domino’s Pizza
AHEAD Retail Sales, Initial Claims, Continuing Claims, 4 week average claims, Philadelphia Fed Manufacturing Index, NAHB Housing Market Index, Business Inventories EIA Natural Gas Report, Overall Net Capital Flows, Net Long Term TIC flows, Foreign Bond Investment

DAX +1.84%, CAC +2.03%, FTSE +1.83% Markets opened higher on the positive Moderna vaccine news which lifted the Travel and Leisure sector (Compass and RyanAir were the leaders) and offset the poor earnings news from Burberry -5.6%. Sentiment was also encouraged by the very good Q2 earnings from Goldman Sachs.
A slight -VE was the increase in US new covid-19 cases which could result in some States reversing their re-opening policies.
Atlantia +27% rebounding from Monday’s sell off on hopes its latest submission; to sell as majority stake in its motorway’s division, will enable it to retain the national concession.
DATA
UK

Inflation Rate Jun +0.1% MoM vs 0% May (F/cast was +0.1%) [Jun +0.6% YoY vs +0.5% May (F/cast was +0.6%)]
Core Inflation Rate Jun +0.2% MoM vs 0% May (F/cast was +0%) [Jun +1.4% YoY vs +1.2% May (F/cast was +1.3%)]
PPI Core Output Jun +0% MoM vs 0% May (F/cast was +0%) [Jun +0.5% YoY vs +0.6% May (consensus was +0.6%)]
PPI Input Jun +2.4% MoM vs +0.9% May (F/cast was +3%) [Jun -6.4% YoY vs -9.4% May (consensus was -6.5%)]
PPI Output Jun +0.3% MoM vs -0.2% May (F/cast was +0%) [Jun -0.8% YoY vs -1.2% May (consensus was -1.3%)]
Retail Price Index Jun +0.2% MoM vs -0.1% May (F/cast was +0.1%) [Jun +1.1% YoY vs +1% May (F/cast was +1%)]
AHEAD
EUROZONE New Car Registrations, Balance of Trade, ECB Interest Rate Decision
GERMANY No data due
FRANCE No data due
UK Unemployment Rate, Average Earnings Inc & Ex Bonus, Inflation Rate, Consumer Confidence Flash

JAPAN Expect Nikkei to open flat with upside limited as Tokyo raises covid alert to highest level. Yen currently 106.93 Investors will be watching for the China data out later for signs of recovery although the more recent covid-19 outbreaks means the data is of limited relevance.
Data due Foreign Bond & Stock Investment
BoJ kept monetary policy on hold but revised down its growth forecasts due to covid-19.
Tokyo raises its covid threat assessment to the highest level after 175new cases are reported in Wednesday.
The Tokyo Olympics may have to be postponed again if the novel coronavirus mutates into a stronger pathogen, Kiyoshi Kurokawa, a prominent Japanese government adviser, said on Wednesday. Slight -VE
Nissan unveils a new electric SUV, the Ariya to compete with Tesla.
Tokyo new condominiums listed for sale in 1H 2020 -44.2% YoY to 7,497 units, the lowest on record.

SOUTH KOREA Expect markets to open higher following the US but upside limited as New Deal already announced.
Data due
BoK Interest Rate Decision
The 21st National Assembly is set to begin its official proceedings Thursday, 48 days after the newly elected lawmakers’ terms began on May 30. President Moon Jae-in will address the parliament at the opening ceremony.
LG Chem FT Lex article generally +VE but warns of the risks; high retail concentration recently driving the stock as institutional investors sell, thin profit margins and the risk of rising cobalt prices could hurt. Still good for long term investors but traders beware.
Coupang said Wednesday it has launched Rocket Mobile, through which customers can browse and choose subscription plans offered by mobile carriers. The new platform is an addition to the current sales of smartphone devices, including those made by Samsung Electronics and Apple. Through Rocket Mobile, customers can now choose monthly call plans as they purchase mobile devices, a one-stop service that was initially only available at offline vendors. +VE
Samsung Electronics’ consumer electronics CEO Kim Hyun-suk on Wednesday expressed concerns over trade protectionism in major countries following a downturn in the home appliance market after the COVID-19 pandemic.
Sales of electric vehicles have taken a hit globally as the coronavirus pandemic continues to take its toll on the economy, according to data from market analyst company SNE Research. Global sales of electric cars between January and May this year -20.3% YoY to 710,000 units. Slight -VE
Mastern Investment Management said Wednesday it plans to invite 110 billion won ($91.6 million) in South Korean retail money through its new real estate investment trust (REIT) to take over part of equities in an office building in the suburb of Paris.


TAIWAN Expect market to open higher following the US but upside limited.
No data due
The National Stabilization Fund yesterday said that it would continue
to shore up the local bourse, as COVID-19 infections are spiking in many parts of the world and financial markets remain volatile. The decision bucked market expectations after the TAIEX stayed above 12,000 points for the most of this month.
Adimmune Corp plans to conduct phase I clinical trials of its COVID-19 candidate vaccine next month to assess its safety, the firm said yesterday. It expects to receive approval from the Food and Drug Administration (FDA) later this month to start trials, as the review has been going smoothly so far, +VE
Cathay Life Insurance must apply to the Financial Supervisory Commission before it can raise its stake in Indonesia’s Bank Mayapada Internasional Tbk PT beyond 40% the commission said. Slight -VE
Formosa Plastics Group. Opponents of its plans for a US$9.4 billion plastics complex on Tuesday asked a federal judge to stop work at the site in Louisiana. -VE

CHINA Expect market to open higher as Trump decides not a impose more sanctions on Chinese officials for now. But expect caution ahead of GDP and other data due out this morning. SMIC in focus as it debuts on the Shanghai Star Board.
Data due
House Price Index on Market open. Then at 10am; GDP Growth Rate, Industrial Production, Industrial Capacity Utilisation, Retail Sales, Unemployment Rate, NDS Press Conference, Fixed Asset Investment (YTD).
Social media-fueled rumors about banks collapsing are popping up at an unprecedented frequency in China, forcing regulators and even the police to step in to calm depositors. In the past month, worried savers have descended on three banks to withdraw funds amid rumours of cash shortages that were later dismissed as false. Over the weekend customers rushed to a bank in the northern Hebei province to take out money, prompting local regulators to publicly vouch for the soundness of its lenders as the police halted the run. -VE
Argentina has temporarily suspended exports to China from six meat packing plants after cases of the novel coronavirus were found among their employees, the president of Argentina's food quality and safety body Senasa said on Wednesday. -VE
US Sec of State Pompeo said US would impose visa restrictions on Chinese firms like Huawei Technologies Co Ltd that he accused of facilitating human-rights violations. -VE. He also said that the US will support countries that believe China has violated their maritime claims in the South China Sea but suggested it would do so through diplomatic rather than military means. -VE
US Senate committee is likely to vote next week on a bill that would ban federal employees from using social media app TikTok on government-issued devices. -VE
Shenzhen announced new home purchase restrictions in order to try and curb recent prices rises. Its government said only people who have lived in Shenzhen, have residency permits and made tax or social security contributions for three years are eligible to buy. Previously, anyone with a residency permit could buy.-VE

HONG KONG ADR’s +44pts to open at 25,525 (Futures +0.3%) expect some initial upside as recent shorts cover some exposure and cautious trading ahead of China data due at 10am.
Yesterday’s T/O dropped 20% DoD so watch the early T/O levels for signs of Team China’s presence.
No data due


Short Selling HSI Wednesday 20.3% vs 17.7% Tuesday
Top Shorts
Wharf REIC (1997) 56%, Hang Seng Bank (11) 47%, MTRC (66) 40%, BoC HK (2388) 34%, China Shenhua (1088) 33%, CCB (939) 33%, HSBC (5) 30%, China Res Land (1109) 29%, CITIC (267) 28%, PetroChina (857) 28%, HK & China Gas (3) 28%, NWD New (17) 28%, SHKP (16) 27%, Mengniu Dairy (2319) 26%.

IPO's CBHB (9668.HK), DEBUT opened at $4.8, flattish with the listing price, and closed at $4.79 in gray market, down 1 cent or 0.2% against the listing price of $4.8, on volume of 10.8 million shares, PhillipMart data showed.JIAXING GAS (9908.HK), DEBUT opened at $12, up 20% against the listing price $10, and last stood at $15.5, up 55% against the listing price, on volume of 51,000 shares, PhillipMart data showed.
FENGXIANG CO (09977.HK), DEBUT opened at $3.5, up 5.1% against the listing price $3.33, and last stood at $3.65, up 9.6% against the listing price, on volume of 1.94 million shares, PhillipMart data showed

WATCH
BANKCOMM (3328.HK) intends to increase the capital
of Bank of Communications (Hong Kong) Limited by phases with a total amount of not more than HK$30 billion. The capital injection plan had been reviewed and approved at the shareholders' meeting.
EASYKNIT INT'L (1218.HK) said that it had through its subsidiary Ace Winner acquired on market a total of 220,000 shares of BABA-SW (9988.HK) for an aggregate purchase price of approximately HK$53.752 million.
WHEELOCK (20.HK) the privatisation scheme was sanctioned without modification by the High Court. The reduction of the share capital of the Company involved in the scheme was also confirmed by the High Court on the same day. Subject to the scheme becoming effective on Thursday, 23 July, the listing of shares on the Stock Exchange is expected to be withdrawn at 9:00 a.m. on Monday, 27 July.
ANTA SPORTS (2020.HK) retail sales WARNING (in terms of retail value) of ANTA branded products for the second quarter of 2020 recorded low single-digit negative growth compared to the same period of 2019. -VE
CHINA LILANG (1234 HK) WARNING expects to see a 30-35% YoY drop in its net profit. -VE
CHINA OVERSEAS LAND (688 HK) has named its project at Kai Tak as One Victoria, which is expected to be completed in the first quarter of 2023 and offer 1,059 units.
HENDERSON LAND (12 HK) +VE as The University of Hong Kong bought the rest of Novum West in Sai Ying Pun, developed by Henderson Land, for HK$459 million last month, after it acquired part of the commercial project for HK$504 million in 2018. The property is said to be purchased for teaching and research purposes.
Top international brands are planning to ax shops and staff to cut costs, local press reports amid a pandemic that is underlining their bottom lines in red. That came despite fashion house Burberry saying mainland sales growth in June surpassed the 30% growth rate in January before the outbreak had escalated. -VE for sentiment.
Thailand's largest mobile carrier Advanced Info Service (AIS) disclosed that Huawei is one of the five firms bidding for its 5G core network project. The other bidders included Ericsson, Nokia, ZTE (00763.HK) -0.800 (-3.131%) Short selling $29.37M; Ratio 6.166% and Samsung.
Google, Amazon Web Services, and Microsoft have turned down a proposal giving Hong Kong's Securities and Futures Commission (SFC) access to customer banking records, reported Financial Times. Since 2019, these tech firms have been in talks with the SFC on providing access to financial data stored on their cloud platforms. However, the national security law has made signing up to the proposal "politically impossible", given potential sanctions from the US Congress, an insider said.

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