Aug 21 ASIAN MACRO INITIAL THOUGHTS Dow Futures +32pts Asian Futures +VE
Covid-19 Globally over 22.5m cases, 790k deaths
China says trade talks to be rescheduled shortly.
Dow Futures opened +32pts S&P and NDX slightly +VE
Asian Futures higher
DOW +0.17%, NDX +1.1%, S&P +0.32%, Russel 2K -0.49% Markets opened lower on the weak jobs data but worked higher through the day to close at the day highs; with NDX hitting a new high on big tech moves; Facebook +2.4%, Apple +2.2% ,Amazon +1% and Microsoft +2.3%.
Alibaba -1.1%, despite Q1 earnings beating analyst estimates on the top and bottom line.
Intel +1.7% after the company announced an accelerated $10 billion stock buyback program.
L Brands +3.9% after the company reported a surprise quarterly profit despite Covid-19 business closures.
Estee Lauder -6.7% following its disappointing quarterly results.
CureVac +15.7% after the company announced that it is in advanced talks with the European Commission to supply up to 405 million doses of a potential Covid-19 vaccine.
Shake Shack +2.7% higher after Wedbush lifted its rating on the stock to outperform from neutral.
Tesla +6.6% to hit an all-time high of $1994.75, approaching the $2,000 mark.
Ross Stores +0.5% in after-hours trading on the back of a surprise profit and better-than-expected revenues.
OSI Systems - 3% after the company issued disappointing revenue guidance for fiscal 2021.
Keysight Technologies +6% in after-hours trading after the company posted better-than-expected results for its fiscal third quarter.
Initial claims 1.106m vs 971k prior revised )F/cat was 890k)
Initial claims four week ave 1.17575m vs 1.25475m prior revised (F/cast was 1.49m)
Philadelphia Manufacturing Index Aug 17.2 vs 24.1 Jul (F/cast was 20)
CB Leading Index Jul +1.4% MoM vs 3% Jun (F/cast was 1.4%)
EIA Natural Gas Report 43 Bcf vs 58 Bcf prior
30 yr TIPS Action -0.272% vs +0.261% prior
USD was flat vs Yen & Euro. Bitcoin +0.7% @ 11,831.71, VIX +0.8% @22.72,
US T10 0.653%
OIL Brent -2.7%, WTI -0.82% on demand concerns after poor initial claims number. Brent remained weak in after hours trading.
Gold +0.5%, Silver +0.86%, Copper +0.6%. Gold bounces but short of $2,000
AHEAD Flash PMI data,Existing Home Sales, Baker Hughes Total Rig Count
DAX -1.14%, CAC -1.33%, FTSE -1.61% markets opened lower in reaction the US FOMC minutes and traded sideways. Also concerns over tensions between US and Russia and China over UN sanctions against Iran. Rising public defiance in Belarusian also a concern. All sectors weak.
EQT -14.5% after 1H results
Galapagos +3% a small bounce after -24% on Wednesday
GERMANY PPI Jul +0.2% MoM vs 0 Jun (F/cast was +0.3%) [Jul -1.7% YoY vs -1.8% Jun (F/cast was -1.7%)]
EUROZONE Construction Output Jun -5.9% YoY vs -10.5% May revised (F?cast was -7.8%)
EUROZONE Flash PMI data, Consumer Confidence
GERMANY Flash PMI data
FRANCE Flash PMI data
UK Consumer Confidence, Retail Sales, Pubklic Sector Net Borrowing, Flash PMI data, CBI Industrial Trends Orders
JAPAN Expect Nikkei open higher following the US expect some initial bargain hunting after the sell off Thursday. Pre market inflation data could curb the upside and covid concerns remain. Yen currently 105.77
Data due pre market Inflation data and later Flash PMI
Government has signed a contract with a Deloitte-linked consulting group to distribute coronavirus relief payouts following public anger over a previous deal involving advertising giant Dentsu (4324.T).
Seven-Eleven Japan, FamilyMart and Lawson are considering jointly delivering their products to stores by sharing trucks. They are joining hands to resolve driver shortages, as well as to help government efforts to reduce traffic congestion. Since the three have been rivals competing fiercely to open new stores, many issues need to be resolved in order to build a cooperative structure. +VE if it can be agreed.
Toyota Motor Corp. will withdraw from the U.S. subcompact car market, +VE
SOUTH KOREA Expect markets to open higher, following the US rebound with bargain hunting after the 3% sell off Thursday but covid concerns remain as South Korea added 288 new cases of COVID-19 on Thursday.
Data out PPI Jul +0.2% MoM vs +0.5% Jun (F/cast was +0.5%)
PPI Jul -0.8% YoY vs -1% Jun revised (F/cast was -0.2%)
Covid infections are back "in full swing" and spreading nationwide after members of a church attended a political demonstration, authorities said on Thursday, threatening one of the world's COVID-19 success stories. -VE
South Korea's intelligence agency believes that Kim Yo Jong, the sister of North Korean leader Kim Jong Un, is serving as his "de facto second-in-command" but has not necessarily been designated his successor.
Korea Development Bank said Thursday it has proposed a meeting between its Chairman Lee Dong-gull and HDC Chairman Chung Mong-gyu over the delayed Asiana Airlines’ acquisition deal. +VE
SeAH Steel Holdings said Thursday it will participate in Britain’s state-led offshore wind power project to supply key parts. +VE
US automotive distributor HAAH Automotive Holdings is preparing to submit a binding offer to invest in SsangYong Motor, according to media reports here Thursday +VE
TAIWAN Expect market to open higher after good export data and following the rebound in the US expect some initial bargain hunting in Tech.
No Data due but After market Thursday
Export orders Jul +12.4% YoY vs +6.5% Jun (F/cast was +2.5%)Current account Q2 $21.77b vs 18.11b prior Revised (F/cast was 13.5b)Exports had their best July ever, it was the fifth consecutive month that export orders grew on an annual basis. The good numbers were credited to continued strong demand for electronic products arising from the work-from-home trend, coupled with a gradual recovery in oil and raw material prices, for the record number. +VE
ASML Holding NV yesterday launched a global EUV (extreme ultraviolet) training center in Tainan to get closer to its customers. The center features live EUV machine modules and comprehensive training courses to train EUV engineers to cater to customers in Asia, ASML said in a statement. +VE
BASF, a leading world supplier of personal care ingredients, including UV filters, plans to set up a new line at its Kaohsiung plant to double its global production capacity. +VE
CHINA Expect market to open higher following US and on hopes the trade talks will resume shortly.
No data due
Vietnam says the presence of Chinese bombers on the disputed Paracel islands in the South China Sea "jeopardises peace”. A Vietnam foreign ministry spokesman said "not only violates Vietnam's sovereignty but also jeopardizes the situation in the area,"
China Animal Husbandry Group. New Zealand’s a2 Milk Co Ltd said on Friday it had offered to buy a 75.1% stake in dairy products maker Mataura Valley Milk owned by China Animal Husbandry Group
Drugmakers have slashed prices by up to 95% to win state contracts in China’s largest bidding round of its drug procurement programme, state media said on Thursday. Beijing has implemented a national scheme where global pharmaceutical companies and Chinese generic drugmakers vie to sell their products in bulk at public hospitals. In the latest bidding round for contracts worth hundreds of billions yuan in total, drugmakers cut prices by 53% on average, state media Xinhua reported, citing preliminary results. It involves 55 types of medicines, more than the previous two rounds.
Local Tech companies +VE China National Software & Service Co Ltd (600536.SS), China Greatwall Technology Group (000066.SZ) and Beijing Kingsoft Office Software (688111.SS) seeing increased interest on expectation that China will look to replace offerings from US firms like Intel, Microsoft, Oracle and IBM. But the stocks have already seen significant upside so some are concerned that the valuations are stretched.
FT Reports Huawei employees are worried about lay-offs after tougher US sanctions -VE for sentiment
HONG KONG ADR’s +58pts to open at 24,849 but expect an initial squeeze after increased shorting over the past two days. Aliababa was weak in the US despite results beating. Earnings still in focus
No data due
After Market Thursday Inflation Rate Jul -2.3% YoY vs +07% Jun (F/cast was +0.5%)
Netting out the effects of all Government's one-off relief measures, the year-on-year rate of increase in the Composite CPI (i.e. the underlying inflation rate) in July 2020 was 0.2%, smaller than that in June 2020 (1.2%).
Looking ahead, both external and internal price pressures should remain subdued in the rest of the year amid the weak global and local economic conditions, said a Government spokesperson. The Government will continue to monitor the inflation situation and the risk of deflation closely.
COVID Social distancing measures in Hong Kong will not be eased until mid-September when the government completes voluntary COVID-19 testing exercise, the South China Morning Post reported. It is expected the tests will be completed within two weeks from September 1st with details to be rolled out on Friday (21st) afternoon. Earlier, Secretary for Food and Health Sophia Chan had estimated that around 5 million people will participate in the voluntary testing exercise.
Government has implemented special work arrangements for government employees in the past month. As only emergency and essential public services were provided, the provision of many public services has been reduced to various extents. In view of the latest development of the epidemic situation, a spokesman for the Government announced today (August 20) that government departments will gradually resume the provision of basic public services, which have been suspended or reduced in scale earlier, from August 24 (next Monday) to meet the needs of the public and enterprises.
EARNINGS DUE Friday include Tian An China (28), Cross Harbour (32), Orient Overseas (316), Huabao (336), Yips Chemicals (408), SOHO China (410), Fountain Set (420), Shenzhen Expressway, (548), China Trad Chinese Medicine (570), Playmates Holdings (635), Haitong Int (665), Zhang An (672), Hopson Development (754), Playmates Toys (869), Anhui Conch (914), Vanke Overseas (1036), Sinopharm (1099), Mainland Headwear (1100), Brilliance China (1114), Zoomlion (1157), CC Land (1224), China Resources Cement (1313), PICC (1339), Xingda (1899), China Renaissance (1911), PICC Property and Casualty (2328), AviChina (2357), Sinopec Engineering (2386), CPIC (2601), Greentown Services (2869), China State Construction (3311), Fuyao Glass (3606), Meituan Dianping (3690), CanSino Biologics (6185)
Short Selling HSI Thursday 23.9 vs 20.5% Wednesday Top Shorts Sino Land (83) 55%, Power Assets (6) 41%, ICBC (1398) 40%, BOC (3988) 37%, Ping An (2318) 35%, Country Garden (2007) 34%, Want Want (151) 33%, CCB (939) 32%, China Shenhua (1088) 31%, CITIC (267) 30%, BOC HK (2388) 30%, China Res Land (1109) 28%, PetroChina (857) 27%, AIA (1299) 27%, Mengniu Dairy (2319) 27%, HSBC (5) 26%, Galaxy Ent (27) 26%, MTRC (66) 26%, Hang Seng Bank (11) 25%, Wharf REIC (1997) 25%, Shenzhou (2313) 25%.
EARNINGS OUT Thursday After market
BABA-SW (9988.HK) results for the three months ended June 30, 2020. Net income attributable to ordinary shareholders was RMB47.591 bn, +124% YoY. Non-GAAP net income was RMB39.474 bn, +28% YoY Adjusted EBITDA, a non-GAAP measurement, +30% YoY to RMB51.039 bn. Revenue for the quarter ended June 30, 2020 was RMB153.751 bn, +34% YoY. Beat forecasts but traded lower in the US
K Wah International (0173) said its first-half underlying profit +85% to HK$2.74 billion, while chairman Lui Che-woo expressed a cautiously optimistic sentiment towards the local home market due to strong rigid demand. Net profit for the first six months this year +68% to HK$2.56 billion. Earnings per share were 81.77 HK cents, with an interim dividend of 7 HK cents per share declared.
HENDERSON LAND (12.HK) interim results for the period ended June 2020. The turnover +34.6% YoY to HK$10.943 billion. The net profit HK$2.834 billion, -62.3% yearly. EPS was HK$0.59. An interim dividend of HK$0.5 was declared, same as the dividend for the corresponding period of the previous year. The Group's underlying profit, excluding the effects of changes in fair value of investment properties and investment properties under development, amounted to HK$5.182 bn -23% YoY. Mainland businesses, property sales turnover and attributable profit before tax amounted to HK$2.915 bn -52% YoY and HK$682 mn -21% on a yearly basis.
HUADIAN POWER (1071.HK) interim results ended June 2020. Turnover -5.4% YoY to RMB40.943 billion. Net profit amounted to RMB2.411 billion, +47.2% yearly. EPS equaled RMB0.2. No dividend was declared.
CHINA OVS PPT (2669.HK) interim results ended June 2020. The net profit amounted to HK$280 million, up 12% yearly. EPS was HK8.52 cents. An interim dividend of HK2.2 cents was declared, against HK2.2 cents in the corresponding period of the previous year.
BOC AVIATION (2588.HK) interim results ended June 2020. Total revenues and other income +11.2% yearly to US$1.035 billion. Net profit amounted to US$323 million, +0.7% yearly. EPS equaled US47 cents. Interim DPS was US13.98 cents, up from US13.88 cents in the year-ago period.
PA GOODDOCTOR (1833.HK) interim results ended June 2020. Revenue +20.9% YoY to RMB2.747 billion. Loss narrowed from RMB273 million in the corresponding period of previous year to RMB214 million. LPS equaled RMB0.21. No dividend was declared.
ENN ENERGY (2688.HK) interim results for the period ended June 2020. The turnover -10.8% YoY to RMB31.543 billion. The net profit amounted to RMB2.693 billion, -19.9% yearly. EPS was RMB2.4. No dividend was declared.
Taiwan plans to stop local sales for Chinese internet television streaming services operated by the likes of iQiyi and Tencent Holdings, according to regulations released this week, but does not plan on blocking the services, Reuters reports.
Empire Group and Hong Kong Ferry (50) will offer around 20 special units at Seacoast Royale for sale by tender next week. The developers received about 11,000 checks for the 168 flats on offer on Saturday, for about 64 times oversubscribed.
HKEX (388.HK) has expanded its licensing agreement with MSCI Limited to include the broad-based MSCI Taiwan 25/50 Index, and plans to launch US-dollar (USD) denominated MSCI Taiwan 25/50 Index Futures and MSCI Taiwan 25/50 Net Total Return Index Futures on 28 September 2020, subject to regulatory approvals.
CHINA UNICOM (762.HK) announced that the aggregate number of mobile billing subscribers in July was 309.6 million, with a slower net addition of 26,000. Among which, the aggregate number of 4G subscribers was over 262 million, with a slower net addition of 1.659 million. Slight -VE
PA GOODDOCTOR (1833.HK) App recorded visitor number of over 1.11 billion during the peak of the pandemic with the number of newly registered users representing ten times of pre-pandemic level, Fang Weihao, Acting Chairman and Executive Director, said during a press conference on results announcement. As to intensified competition, Fang said it is a good thing with more companies entering the market, which means the business model is recognised. He added that new market participants would help foster industry development. The management did not give a direct response when asked about the schedule for the company results to swing into profit. Slight +VE
ANTA SPORTS (2020.HK) announced that it becomes a global strategic partner of the World Wide Fund for Nature (WWF) in China’s sports textiles industry. ANTA Sports will join hands with upstream and downstream partners to drive industry transformation and development of water management and packaging. They will also work with partners to develop and produce sportswear that meet the sustainable development requirement by advocating the concept of reuse and developing biodegradable raw materials to ultimately drive conservation of global biodiversity with consumers.
In the month of July 2020, new leases for Grade A office buildings dipped 14% on a monthly basis and negative absorption has been recorded for twelve straight months, Jones Lang LaSalle (JLL) reported, citing uncertainties due to the outbreak of the third wave of the pandemic in Hong Kong. However, rental decline slowed in July with 0.9% drop month-on-month for Grade A offices, the first time the fall was less than 1% since February 2020.