Aug 11 ASIAN MACRO INITIAL THOUGHTS US futures flat


13 Aug

Aug 11 ASIAN MACRO INITIAL THOUGHTS US futures flat

Covid-19 Globally over 20m cases, 732k deaths
US Futures opened unchanged


EARNINGS
SoftBank, BioNTech, Sysco, Casper Sleep, Canada Goose, Super Micro, Viavi Solutions, Vir Biotechnology.
Hong Kong WH Group (288), Giordano Int (709), China Literature (772), China Tower Corp (788), China Longyuan Power (916), Hua Hong Semiconductor (1347), Orient Securities (8018)


DOW +1.3%, NDX -0.39%, S&P +0.27%, Russel 2K +1% Dow opened higher and worked higher initially and the retested the opening support before trading back to the morning highs and then working higher for th rest of the session to close on the highs. But the S&P and NDX saw early selling before rebounding and then trading sideways around flat. Sentiment helped by Trumps relief package.
Nike +3.5% and Boeing +5.5% led. Banks were firm on recovery hopes; JPMorgan +1.3%, Citigroup +1.4%, and Bank of America +1.8% but off early highs and Wells Fargo -1.5% sold down late morning. Energy & Industrial names were firm
Facebook -2%, Amazon -0.6%, Netflix -2.3, Alphabet -0.1% and Microsoft -2% (sold down after hours).
Simon Property +5.3% on a report that it was in talks with Amazon to turn some vacant department store sites into dispatch centres for the online retailer.
China’s Tencent Music Entertainment Group (TME.N) beat Wall Street estimates for quarterly revenue on Monday, as a wider content library led to a surge in paid subscribers for the company’s music streaming service. +VE
Secretary of State Mike Pompeo slammed China for the arrest of Hong Kong media tycoon Jimmy Lai, who he said was a “patriot,” and said the move indicated that Beijing is unlikely to change its position on the financial hub.
DATA
JOLTs Job Openings Jun 5.889m vs 5.371m revised (F/cast was 4.9m)
Consumer Inflation Expectations Jul 2.9% vs 2.68% Jun (F/cast was 2.3%)
USD was almost unch vs Yen & Euro. Bitcoin +1% @ 11,812.25, VIX -0.4% @ 22.13, US T10 0.58%
OIL Brent +1.3%, WTI +0.1%
Gold -0.12%, Silver -0.26%, Copper +0.1%
AHEAD NFIB Business Optimism Index, PPI, Core PPI, Redbook, API Curde Oil Stock Change


DAX +0.1%, CAC +0.41%, FTSE +0.31% Markets opened higher helped by the China data and the increased potential for a US stimulus deal. Markets saw some initial selling (DAX and CAC dipped into the red) but then markets rebounded and traded sideways for the rest of the day before dipping into the close. US/China tensions seemingly taking a back seat. Banks led on recovery hopes with Tech seeing weakness.
Cineworld +17% after a US federal judge ruled that the Justice Department could terminate antitrust laws dating from the 1940s that blocked big movie studios from owning cinemas. The change in law follows speculation that Netflix and Amazon, which were not bound by the antitrust law, might buy US-based operator AMC.
Banco de Sabadell +9.4%
Hellofresh -5% ahead of earnings due today
AHEAD
EUROZONE ZEW Economic Sentiment Index
GERMANY ZEW Economic Sentiment Index and Current Conditions
FRANCE No data due
UK Unemployment Rate, Average Earnings data

JAPAN to re-open with the Nikkei to open slightly higher. Yen currently 105.96
Tokyo reported 197 new covid cases on Monday, the first time below 200 since July 27 +VE. There were a further 761 case reported across the rest of Japan.
Data due pre market 
Current Account, Bank Lending At 1pm Eco Watchers Survey Outlook & Current
Nagashiki Shipping Company and operator Mitsui OSK Line expected to be weak after the MV Wakashio is spilling oil around Mauritus.
Exports of Japanese consumer goods to S Korea; especially tobacco, beer and automobiles shrank 23.4% in July amid the continuing nationwide boycott, data showed Monday. Beer was -84.2% YoY as the S Korea boycott continues. Exports of Motorbikes, pet feed and gold clubs however was up.

SOUTH KOREA Expect markets to open higher with expectations that the Kospi will test the 2,400 level shortly
No data due
Foreigners were net buyers of S Korea equities & bonds in July
, the first time in five months.
President Moon Jae-in replaced some of his senior aides on Monday as part of a shake-up aimed at jacking up approval ratings amid criticism over skyrocketing home prices.
President Moon Jae-in is facing severe criticism amid the longest and deadliest monsoon season in South Korea, as his push for solar power has left the whole nation susceptible to landslides.
Mahindra & Mahindra Ltd. will give up its status as the biggest shareholder of SsangYong Motor Co. if it finds a new investor, the South Korean company said Monday.
SK Innovation will become the world's first battery maker to commercialize nickel cobalt manganese (NCM) batteries that contain 90 percent nickel, according to industry sources Monday. It will supply lithium-ion batteries that contain 90% nickel, 5% cobalt and 5% manganese inside cathodes to Ford F-150 electric pickup trucks set for release in 2023, they said.
High court affirms guilty verdicts for Samsung execs, except Lee Sang-soon, in union sabotage case. He was acquitted because evidence about his alleged illegalities was illicitly collected. The court said that did not mean he was not involved.

TAIWAN Expect market to open higher after good results from TSMC, UMC and others but upside limited by tensions with China
No data due but the Average monthly take-home pay in June rose 1.41 percent 
from a year earlier to NT$42,352, while total wages including overtime and performance-based compensation increased 4.09 percent to NT$50,581, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
Chinese air force jets briefly crossed the mid-line of the Taiwan Strait on Monday and were tracked by Taiwanese missiles, Taiwan’s government said, as U.S. health chief Alex Azar visited the island to offer President Donald Trump’s support.
Taiwan Semiconductor Manufacturing Co (TSMC) reported that revenue last month +25% YoY but -12.8% MoM to NT$105.96 bn (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue are +33.6% to NT$727.26 bn vs NT$544.46 bn last year. TSMC has said it aims to grow its revenue by more than 20 percent this year. It said that since May 15 stopped taking new orders from Huawei Technologies , its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. +VE
United Microelectronics Corp revenue last month +12.87% YoY and 6.24% MoM to NT$15.49 billion, a record high. Its revenue in the first seven months reached NT$102.15, +24% YoY +VE
Media Tek revenue last month jumped 29% YoY and 5.59% MoM to NT$20.69 billion. It is considered a major beneficiary of the US’ ban on Huawei, as it could win new orders from the Chinese technology giant to supply advanced 5G chips after Huawei runs through stockpiles of Kirin chips designed by its semiconductor arm, Hisilicon Technologies +VE
TSMC’s sole supplier of extreme ultraviolet light pods, Gudeng Precision Industrial reported that revenue last month +24.13% YoY NT$214.59 million, but -33% MoM During the first seven months, cumulative revenue advanced 16.3% to NT$1.44 billion from a year earlier, it said. +VE
PChome Online Inc and Momo.com Inc Taiwan's two leading online retailers, yesterday separately reported their highest revenue for the month of July, as unusually hot weather and changing consumer behavior amid the COVID-19 pandemic drove more people to shop online. +VE

CHINA Expect market to open higher but upside limited as investors cautious over US/China relations.
No data due
Ministry of Foreign Affairs has decided, in response to U.S. Department of the Treasury's actions to impose sanctions that China will sanction U.S. lawmakers from both the Senate and House of Representatives 
who behave badly towards the Hong Kong issue with immediate effect. China strongly reprimands against U.S. behaviours on this matter and believes the U.S. has intervened with China's internal affairs, according to a spokesman for the Ministry.
The Philippine navy chief has called for a diplomatic protest to be filed against the presence of two Chinese research ships near the Reed Bank for “about a week already” and that due to their speed of “about three knots” the navy had concluded they were “conducting surveys” in a disputed area of the South China Sea.
Qinghai authorities confirm that Xingqing chief Ma Shaowei is in custody and five officials have been sacked. Ma accused of making billions from a coking coal operation in an area identified by the president as a conservation priority

HONG KONG ADR’s +123pts to open at 24,500 with Chinese Financials weak. Expect an initial short squeeze. Sentiment cautious as more people are arrested under the new Security Law including Agnes Chow for 'inciting secession’. Next Media in focus after the shares were +183% yesterday rumoured to be driven by Hong Kong Activists.
No data due.


EARNINGS due include WH Group (288), Giordano Int (709), China Literature (772), China Tower Corp (788), China Longyuan Power (916), Hua Hong Semiconductor (1347), Orient Securities (8018).

Short Selling HSI Monday 13.1% vs 14.8% Friday 
Top Shorts CLP (2) 48%, Hang Seng Bank (11) 42%, Mengniu Dairy (2319) 36%, Sino Land (83) 35%, CCB (939) 35%, MTRC (66) 33%, Ping An (2318) 33%, CITIC (267) 31%, Swire Pac A (19) 30%, Power Assets (6) 30%, Want Want (151) 27%, NWD (17) 26%, CK Assets (1113) 26%, Sunny Optical (2382) 25%.

PROFIT WARNINGS
CAR INC (699.HK) PROFIT WARNING -VE expects to incur a net loss at a range of RMB3.8 billion to RMB4.3 billion for the six months ended 30 June 2020, as compared to the net profit of RMB279 million for the six months ended 30 June 2019. The loss was primarily attributable to the significant decrease in rental demand as a result of the outbreak of the novel coronavirus (COVID-19) in the PRC in the first half of 2020 which has adversely affected the rental revenue of the Group and the impairment of the equity investment in UCAR; trade receivables from UCAR and other customers; the prepayment of the subscription price of the shares and convertible bonds to be issued by FDG EVEHICLES (00729.HK) 0.000 (0.000%) ; and the residual values of vehicles manufactured by Beijing Borgward Auto Co., Ltd. with repurchase arrangements.

BUYBACKS/INSIDER DEALING
Cheung Kong series Senior Adviser Li Ka-shing and Chairman Victor T K Li through Li Ka Shing Foundation Limited acquired a total of 800,000 shares in CK ASSET (1113.HK) at the average price of HK$41.3669 per share on 7 August 2020. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK ASSET increased from 35.30% to 35.32% and from 35.37% to 35.39%.

WATCH
China’s Tencent Music Entertainment Group (TME.N) beat Wall Street estimates for quarterly revenue on Monday
, as a wider content library led to a surge in paid subscribers for the company’s music streaming service. +VE
Chinese hotpot ingredient supplier Guoquan Shihui is mulling an onset of its
IPO as soon as next year
, sources quoted as saying by Bloomberg. IDG Capital, a major investor, has begun preliminary discussions with banks in regard to the potential IPO, which will probably have a size of US$400 - 500 million. The listing location has yet to be determined with HKEX (388.HK) being one of the possible destinations. Guoquan Shihui is in possession of more than 300 food ingredient direct supply bases and over 3,600 stores in China. +VE HK EX (388)
FAIRWOOD HOLD (52.HK) announced that the company has offered to grant a total of 2.32 million share options to certain employees and directors with the exercise price of $17.08/share. The CEO Francis Lo has been granted 1 million share options while Executive Directors Mak Yee Mei and Peggy Lee have been granted 300,000 share options respectively.
ZHONGSHENG HLDG (881.HK) acquired two BMW stores and one Audi store in 1H20, according to Huang Yi, Chairman of the company. After the pandemic, there has been a stronger rigid demand for travelling by personal vehicles, leading to a significant rise in car purchases, Huang also mentioned.
Macau has been notified by HKMAO that starting from 00:00 on 12 August, Macau residents with no outbound travel record or overseas residency history over the past 14 days and holding negative nucleic acid test results or a health code valid within seven days may be exempted from the 14-day mandatory quarantine in Mainland China, said Ao Ieong U, Secretary for Social Affairs and Culture. Starting from the same date, Macau will resume travel pass granting for Zhuhai residents, including individual visits and tour groups. +VE MACAU NAMES
BUT SCMP article asks whether WeChat ban will impact the Macau casino links with their Chinese clients which could be -VE
The social distancing measures, falling expired tomorrow, will be extended by a week till 18 August, local media citing insiders.
NISSIN FOODS (1475.HK) announced that the Group invested in ValleyFarm Holdings Limited, an indoor hydroponic farm in Hong Kong. The invested fund would be used to build a new farm with upgraded facilities for hydroponic vegetable production. After the capital injection, the Group will hold the 80% shares in ValleyFarm and the ValleyFarm’s founder, HO King Yin Edwin, will hold the remaining 20% shares and shall remain as a director, overseeing the research & development and daily operation of ValleyFarm. The transaction has been completed today, 10 August 2020.

RESULTS
SIM TECH (2000.HK) announced that the unaudited monthly revenue 
of the Group for the month of July 2020 is approx HK$127 million, in which the revenue from the sale of residential properties and properties management (together, 'non-core business') is approximately HK$5.8 million and the revenue from the handsets and internet of things terminals business, the electronics manufacturing services business, the internet of things system and online-to-offline business together with the intelligent manufacturing business (together, 'core business') is approximately of HK$121 million. The revenue of the core business of July 2020 decreased by 26.7% as compared with that of last month, and increased by 18.4% as compared with that of the same period last year. The unaudited revenue of the Group for the seven months ended 31 July 2020 is approximately HK$555 million, which decreased by 11.7% as compared to same period last year.
CHINA GRAND PHARM (512.HK) interim results ended June 2020. Net profit amounted to HK$719 million, up 31.4% yearly. EPS equaled HK21.27 cents. No dividend was declared.
GUOTAI JUNAN I (1788.HK) interim results for the period ended June 2020. The revenue declined 22.6% year-on-year to HK$1.798 billion. The net profit amounted to HK$606 million, down 5.2% year-on-year. EPS was HK6.77 cents. An interim dividend of HK$0.034 was declared against a dividend of HK$0.042 in the corresponding period of the previous year.

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