Aug 18 ASIAN MACRO INITIAL THOUGHTS DOW futures +VE
Covid-19 Globally over 21.7m cases, 775k deaths
US Futures Dow opened -10pts but have edged higher to +50pts, S&P and NDX slightly +VE
US Charges former CIA officer, a naturalised US citizen who was born in Hong Kong, with spying for China -VE for sentiment on US/China relations
DOW -0.31%, NDX +1%, S&P +0.27%, Russel 2K +0.48% Markets opened higher but DOW sold down whilst the S&P and NDX opened higher and worked higher initially before trading sideways. S&P still failing to break a new high.
Democrats and Republicans at a stalemate over a new stimulus package
Back to work stocks weak; American Airlines -5.3%, Delta -3.2%, Carnival Cruise -5.1%, Simons Property unch, GAP +2% as Third Point had bought 3m shares filings show.
Facebook -0.03%, Alphabet +0.8%, Microsoft +0.7%.
Amazon +1.1% after Reuters reported it wants a minority stake in cloud company Rackspace Technology.
Apple -0.3% but off lows after the EPIC files lawsuit
Newmont +7% and Freeport-McMoRan +2.3% after Barrick Gold +11.6% on news Warren Buffett’s Berkshire Hathaway (BRKB), has taken a stake
CureVac (CVAC) +53% after its strong debut on Friday
Sanofi +1.2% is buying US biotech firm Principia Biopharma (PRNB) +9.4% for $100 per share in cash, or around $3.7 billion. The price represents a premium of about 10% over Principia’s Friday closing price, and strengthens the French drugmaker’s presence in autoimmune and allergy-related diseases.
IBM -0.7% announced a new data center processor that will able to handle triple the workload of its predecessor. Samsung has been tapped by IBM to manufacture the new chip known as the Power10.
JD.com +7.9% after earnings
Nvidia +6.7% is in exclusive talks to buy chipmaker ARM
Home Depot +2.8% due to report Tuesday. It has seen a 35% jump in daily foot traffic since April, according to a study done by Unacast, which tracks mobile phone location data, and cited by The Wall Street Journal. The increase came despite the pandemic-related cancellation of Home Depot’s usual spring sales, and as consumers stuck at home began ramping up various home improvement projects. +VE Cross read for Techtronics (669 HK). Walmart +2.3% and Kohl’s +0.2% also due to report Tuesday.
NY Empire State Manufacturing Index Aug +3.7 vs +17.2 Jul (F/cast was 16)
NAHB housing Market Index Aug 78 vs 72 Jul (F/cast was 72)
Foreign Bond Investment Jun $+28.9b vs -27.7b May
Net Long Term TIC flows Jun $+113b vs +127b May
Overall Net Capital Flows Jun $-67.9b vs -4.5b May (F/cast was -35b)
USD flat vs Yen & Euro. Bitcoin +4.4% @ 12,361.79, VIX -3.2% @ 21.35,
US T10 0.691%
OIL Brent +1.3%, WTI +2.1% as OPEC+ producers almost fully complied with cuts
Gold +1.9%, Silver +3.7%, Copper +0.05%
AHEAD Housing Starts, Building Permits, Redbook, API Crude Oil Stocks Change
DAX +0.15%, CAC +0.18%, FTSE +0.61% markets opened slightly positive but saw initial selling before working back into the green and now trading sideways in choppy trading. Covid and US/China tensions overhanging the markets, as US/China trade talks are postponed. Basic Resources +VE but Travel and Leisure were -VE
Cranswick +6.6% after reporting a 25% rise in revenue for the first quarter.
Klepierre -5.2% around day low.
GERMANY Bundesbank Monthly report
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK No data due
JAPAN Expect Nikkei to open flat Yen currently 106.00 on signs of safe haven buying slight -VE Exporters. Power companies likely to see interest as Japan is hit by a heat wave.
Data due Tankan Index Aug (Jun was -44, F/cast was -32)
Monday’s GDP data showed that all the gains from Abenomics have been wiped out
PM Abe underwent a medical check-up in hospital on Monday, on concern that he could be suffering fatigue from handling the coronavirus pandemic.
Japan lawmakers seek extra parliamentary session after GDP collapse; the sharpest drop in the postwar period.
Tokyo reported 161 new covid cases on Monday. -VE
Toyota to be helped by Amazon.com Inc's cloud computing unit to build a platform to help manage and monetize data gathered from the automaker's global vehicle fleet, the companies said on Monday. +VE
Hitachi seeks to revive U.K. nuclear power plant plans, report says. Horizon Nuclear Power Ltd., a Hitachi subsidiary, has been holding detailed discussions with the government for weeks, according to the Financial Times.
SOUTH KOREA Expect markets to open lower as markets re-open and play catch-up; the recent covid outbreak -VE for sentiment.
No data due
Government warned on Monday of a looming novel coronavirus crisis as new outbreaks flared, including one linked to a church where more than 300 members of the congregation have been infected but hundreds more are reluctant to get tested.
Hanwha Systems +VE as a A Seoul court revoked the antitrust watchdog’s requests to suspend the business of Hanwha Systems and limit its rights to participate in public biddings, according to industry sources on Monday.
Leading technology firms in Korea are returning to remote working systems, as the country saw triple-digit increases of new virus cases for a fourth straight day Monday.
Galaxy Note 20 series unveiled about two weeks ago is definitely the easiest option for those approaching the end of their two-year mobile contracts with existing phones. But despite initial market expectations, the hype appears to have died down quickly for the latest models, partly due to reduced subsidies for new phone purchases.
Jeju Air said Monday that new stocks worth 135 billion won ($114 million) have been allocated to the company’s existing shareholders and employees. The stocks were offered at 12,400 won, a 20 percent discount from the company’s stock price as of the end of last week. The company’s shares fell by 0.32 percent to close at 15,500 won.
Samsung Life Insurance, expect continued volatility as some lawmakers seek to revise the Insurance Business Act; which could mean the insurer would have to offload a large part of its Samsung Electronics stake, now worth nearly 30 trillion won ($25.3 billion).
SK Telecom, said Monday that usage of company‘s home care service by senior citizens using through its artificial intelligence speaker Nugu is continuing to increase this year.
To reduce volatility in the stock market exacerbated by the novel coronavirus pandemic, lawmakers from the ruling Democratic Party are pushing to extend the six-month ban on short selling, news reports said Monday.
TAIWAN Expect market to open flat following the US overnight
No data due
Chinese investments in Taiwan are to be more strictly regulated under a draft amendment to the Measures Governing Investment Permits to the People of the Mainland Area the Ministry of Economic Affairs said yesterday.
Yuan deposits in Taiwan last month weakened by 0.08 percent to 240.99 billion yuan (US$34.74 billion), the lowest level in six-and-a-half years, as the Chinese currency loses appeal among local investors, the central bank said yesterday.
Router and network switch exports are expected to reach a record-high this year, the Ministry of Economic Affairs said yesterday. From January to last month, exports grew 29.4 percent to US$3.13 billion, from the same period last year, according to data released by the Department of Statistics. +VE
ASE Technology yesterday said it would invest NT$26 billion (US$880.58 million) in a new fab in Kaohsiung to expand advanced testing and packaging capacity for 5G-related chips. The new fab, code-named K13, is part of the company’s broader plan to build six fabs in Taiwan within five years, ASE said. +VE
Nan Shan Life Insurance yesterday launched five new spillover insurance policies that offer cash-back rewards to policyholders based on the results of their health examinations. +VE
CHINA Expect market to open lower on news of tighter restrictions on Huawei but the wildcard remains the operations of Team China. Monday the market moved higher as the PBOC provided more medium term loans and CanSino Biologics got a patent for its vaccine but today there is little to drive the markets.
No data due
China’s Communist Party expels Cai Xia a former Central Party School professor who loses her pension after making comments with ‘serious political problems’. She also defended tycoon Ren Zhiqiang, who is facing corruption allegations after criticising the party.
US Commerce Department, issued new rules that mean any company that sells Huawei any products made anywhere with US technology will require a licence
Chinese drone giant DJI has made sweeping cuts to its sales and marketing team at the Shenzhen headquarters in recent months, shrinking the team members from 180 to 60, Reuters citing insiders.
US Charges former CIA officer with spying for China -VE for sentiment on US/China relations
Guangdong province suspended imports of frozen meat, fish and seafood from coronavirus-hit countries, as Beijing intensifies scrutiny of refrigerated food as a possible carrier of the disease.
HONG KONG ADR’s +29pts to open at 25,375 with weakness in HSBC, Unicom, CK Hutch and some Chinese Financials. Expect some cautious trading ahead of earnings. Expect weakness in AUTO’s after Geely's numbers
No data due
EARNINGS DUE Tuesday include HK Ferry (50), Miramar Hotel (71), Kingdee (268), Fufeng (546), China Tian Yuan Healthcare (557), China Telecom (728), Huaneng Power (902), Chain Yurun Food (1068), RoadKing Infra (1098), Nexteer Auto (1316), 361 Degrees (1361), CITIC Telecom (1883), Solomon Systech (2878), Hengdeli (3389), Kingsoft (3888), China Feihe (6186).
Earnings out after market Monday
SUNNY OPTICAL (2382.HK) interim result ended June 2020. The Group’s revenue was RMB18.864 billion, representing an increase of 21.1% compared to the corresponding period of last year. The net profit was RMB1.749 billion, +22.2% YoY. Beating most forecasts +VE
WEIMOB INC (2013.HK) interim results ended June 2020. Revenue +45.7% YoY to RMB957 million. Loss amounted to RMB544 million, against RMB289 million profit a year ago. LPS equaled RMB0.24. No dividend was declared.
SINO-OCEAN GP (3377.HK) interim results ended June 2020. Net profit amounted to RMB1.223 billion, down 34.8% yearly. EPS equaled 16.1 fen. Interim DPS was 5.6 fen, against 9.9 fen in the corresponding period of the previous year.
HK & CHINA GAS (3.HK) interim results ended June 2020. Net profit amounted to HK$2.667 billion, -31.4% yearly. During the period, operating profit of principal businesses after taxation amounted to HK$3.517 billion, -9.4% YoY
MAOYAN ENT (1896.HK) interim results for the period ended June 2020. The revenue -89.8% YoY to RMB203 million. The results swung into loss of RMB431 million. LPS was RMB0.38. No dividend was declared.
Short Selling HSI Monday 21.7% vs 20.5% Friday
Top Shorts Want Want (151) 48%, HK & China Gas (3) 47%, CLP (2) 47%, China Res Land (1109) 45%, Sino Land (83) 45%, Hang Lung PPTY (101) 41%, Ping An (2318) 39%, MTRC (66) 38%, Mengniu Dairy (2319) 35%, Hang Seng Bank (11) 34%, China Mobile (941) 34%, Power Assets (6) 33%, Wharf REIC (1997) 33%, Swire Pac A (19) 32%, NWD (17) 31%, China Shenhua (1088) 31%, Hengan (1044) 30%, Shenzhou (2313) 30%, ICBC (1398) 30%, HSBC (5) 29%, Sands China (1928) 29%, CCB (939) 27%, BOC HK (2388) 27%, Galaxy (27) 24%.
KWUNGS HOLDINGS (1925.HK) PROFIT WARNING -VE The Group was expected to record a drop in revenue of 26%, and net profit of 70% for the six months ended 30 June 2020 as compared to the six months ended 30 June 2019.
SFSY ENERGY (00750.HK) PROFIT ALERT +VE expects the profit for the six months ended 30 June 2020 would be ranging from RMB180 million to RMB220 million, while the Group recognised a loss of RMB468 million in the six months ended 30 June 2019.
XIAOMI-W (1810.HK) reported 50.53 million views and RMB210 million of sales through the founder Lei Jun's livestream sales on Douyin (internationally known as TikTok), both setting new highs on Douyin's record.
TENCENT (700 HK) bought a stake in French mobile games company Voodoo, as it looks to step up the pace of its investments in Europe +VE
HuYa and DouYu are set to form a special committee respectively to study the merger proposal of TENCENT (700.HK) DouYu said the board of directors of the company remains yet to decide on the response to the proposal.
SHENZHENEXPRESS (548.HK) announced that the company, the general partner and the other limited partners entered into the partnership agreement, pursuant to which the parties shall contribute an aggregate amount of RMB4.01 billion for the establishment of the partnership fund, among which the company shall contribute RMB300 million. Upon establishment, the partnership fund will not become a subsidiary of the company.
GEELY AUTO (175.HK) is going to develop electric vehicles as a next step of the company's development, said the company's executive director cum Zhejiang Geely's president An Conghui during a press conference. It will unveil its electric vehicle framework and electric cars under the new framework next year. The new products and techniques are expected to be displayed in the car exhibition in Beijing this September. It also said it is also proceeding with its IPO plan in the Sci-tech Innovation Board (SSE STAR Mkt).
The company's executive director cum Zhejiang Geely's president An Conghui said that it had foreseen the year before the last that the sector would enter a correction phase and that the sales volume started proving this prediction last year. Overall, the market decline has intensified this year due to the pandemic. The company will try to outperform its peers in 2020 and the management is confident the adjusted sales target could be achieved.
CHINA AOYUAN 03883.HK) For Jan-July achieved contracted sales of RMB60.4 bn, about 46% of the full-year target, said Chairman Guo Zi Wen. He is confident that the group can achieve FY20 contracted sales growth target at 12% yearly while the sales efforts will be ramped up over the next couple of months. +VE
CHINA COAL (1898.HK) announced that production volume of commercial coal +9.1% YoY to 9.69 million tonnes in July. Sales volume of commercial coal +31.5% YoY to 23.73 million tonnes in the month.
BABA-SW (9988.HK)'s international footprints have covered over 190 countries with global active procurers reaching 20 million, it was revealed during a press conference. Hong Kong merchants from the Alibaba platform saw a yearly order growth of 111% in June 2020 with an annual turnover +92%. The sectors that recorded highest turnover included consumer electronics, home gardening, beauty and skincare, and clocks, watches and jewellery.
Airport Authority Hong Kong’s (AA) relief package for the airport community will extend for another two months to end of October 2020 in view of the ongoing impact of the COVID-19 pandemic. +VE for Airlines; especially Cathay Pacific
HKEX (388.HK) announced that Brian Lee has joined the company as Managing Director, Group Head of Technology Risk, reporting to Group Risk Officer, John Killian. Lee will work across the HKEX Group as part of the broader Group Risk team, with a focus on continuously improving HKEX’s cyber security and technology resilience; enhancing the Group’s policies and guidelines and performing risk assessments across the group. He will oversee the group’s cyber security protection, as well as its management and governance framework.