Aug 28 ASIAN MACRO INITIAL THOUGHTS US Futures Flat Asian mixed open


01 Sep

Aug 28 ASIAN MACRO INITIAL THOUGHTS US Futures Flat Asian mixed open
Covid-19 Globally over 24.3m cases, 828k deaths
US Futures +30pts S&P and NDX flat


DOW +0.57%, NDX -0.34%, S&P +0.17%, Russel 2K +0.28% Markets opened slightly higher and effectively traded sideways. DOW has now erased 2020 losses. They dipped as Powell started speaking but rallied on the news the Fed was shifting policy to allow inflation and employment to run higher at times in order to try and achieve an average rate. Effectively rates are going to remain lower for longer.
Bank stocks rose broadly. Citigroup +1.7%. JPMorgan Chase +3.3%, Bank of America +2% and Wells Fargo +2.3%
Big Tech shares fell across the board. Facebook -3.5%, Netflix -3.9%, Amazon -1.2%, Alphabet -1%, Apple -1.2%. Microsoft +2.5% on teaming up with Walmart for bid on TikTok.
Data was +VE with Pending Home sales strong.
Tiffany +1.5% on good results which cited online demand and improved trends in China. The performance lowered the chances that LVMH would be able to negotiate a lower takeover price for the jeweller.
DATA
GDP Growth Rate 2nd Est Q2 -31.7% QoQ vs -5% prior (F/cast was -32.9%)
GDP Price Index 2nd Est Q2 -2.3% QoQ vs +1.7% prior (F/cast was -2.1%)
Corporate Profits Pree Q2 -11.8% QoQ vs -11% prior revised (F/cast was -26%)
Initial Claims 1.006m vs 1.104m prior revised (F/cast wa 1.004m)
Initial Claims 4 week average 1.068m vs 1.17525m prior revised (F/cast was 1.068m)
PCE Prices 2nd Est Q2 -1.8% QoQ vs +1.3% prior (F/cast was -1.9%)
Core PCE Prices 2nd Est Q2 -1% QoQ vs +1.6% prior (F/cast was -1.1%)
Pending Home Sales Jul +15.5% YoY vs +5.6% Jun revised (F/cast was +4%)
Pending Home Sales Jul +5.9% MoM vs +15.8% Jun revised (F/cast was +2%)
EIA Natural Gas Report 45 Bcf vs 43 Bcf prior (consensus was 47 Bcf)
Kansas Fed Manufacturing Index Aug 23 vs 7 Jul (F/cast was 2)
USD gained vs Yen & Euro. Bitcoin -1.7% @ 11,281.54, VIX +5.16% @ 24.47,
US T10 0.754% moved higher as Fed changes policy
OIL Brent -1.12%, WTI -0.3% as Hurricane Laura hits but the storm surge was less than expected
Gold %, Silver %, Copper %
AHEAD Personal Income and Spending, PCE Price Index, Goods Trade Balance, Wholesale Inventories, Core PCE Price Index, Chicago PMI, University of Michigan Final Data (Consumer Expectations, 5 year Inflation Expectations, Consumer Sentiment, Inflation Expectations, Current Conditions), Jackson Hole Economic Policy Symposium continues, Baker Hughes Total Oil Rig Count

DAX -0.7%, CAC -0.64%, FTSE -0.75% markets opened lower with caution ahead of Powells speech later today. They traded basically sideways but dipped into the close after Powells speech. French Business Confidence rose and Eurozone loans data was higher than forecast. UK car production remained weak.
WPP +6.5% after the company posted a lower-than-expected fall in underlying net sales and resumed its dividend.
Bouygues +1.3% after reporting a lower-than-expected operating loss in its first-half results
Rolls Royce +1.4% thanks to a late rally and off initial lows after it posted a £3.2 billion ($4.2 billion) pretax loss for the first half of the year, said it planned asset sales and announced the departure of its CFO.
Delivery Hero fell after announcing an expansion into quick commerce with the €300m purchase of Dubai grocery app InstaShop. Analysts worried that the move would push back profitability for Delivery Hero beyond 2022
DATA
EUROZONE
Loans to Households Jul +3% YoY vs +3% Jun (F/cast was +2.7%)
Loans to Companies Jul +7% YoY vs +7.1% Jun (F/cast was +6.9%)
M3 Money Supply Jul +10.2% YoY vs +9.2% Jun (F/cast was +9%)
FRANCE
Business Confidence Aug 93 vs 82 Jul (F/cast was 85)
Business Climate Indicator Aug 91 vs 84 Jul revised (F/cast was 87)
UK
Car Production Jul -20.8% YoY vs -48.2% Jun (F/cast was -32.9%)
AHEAD
EUROZONE Consumer Confidence, Sentiment (Economic, Industrial and Services) Consumer Inflation Expectations
GERMANY GfK Consumer Confidence, Import Prices
FRANCE GDP Growth Rate, Inflation Rate, Household Consumption, PPI
UK No data due

JAPAN Expect Nikkei to open lower pre market CPI data weak and also caution ahead of PM Abe’s press conferences today. Yen currently 106.59 slight +VE for exporters.
Data out 
Tokyo Core CPI Aug -0.3% YoY vs +0.4% Jul (F/cast was +0.3%)
Tokyo CPI Aug +0.3% YoY vs +0.6% Jul (F/cast was +0.6%)
On Monday pre market we get Retail Sales and Industrial production data.
PM Abe news conference on Friday amid growing concerns over his health, following two hospital examinations within a week.
Japan’s government upgraded its view on exports and output in August for the second straight month as global demand slowly improves, but authorities cautioned conditions were still severe due to the coronavirus pandemic.
Japan and Britain, which have been negotiating over a post-Brexit free trade agreement, are set to reach a broad accord on a new trade deal shortly.
SoftBank, Toyota venture unveils van with enhanced airflow as COVID-19 measure.
Toyota Motor Corp. plans to drastically review the way it calculates annual pay raises in spring, by linking them with personnel evaluations instead of the current across-the-board wage increase, sources said Thursday.
Honda goes small with first mass-produced all-electric car the Honda e, released in Europe earlier this month, is a compact model meant solely for city driving

SOUTH KOREA Expect markets to open lower on covid concerns as Seoul reports 154 new cases a new high.
No data due
South Korea urged businesses on Thursday to have employees work from home 
after reporting the highest daily number of coronavirus cases since March, as it also flagged the risks of new clusters at call centres and logistics warehouses. -VE
The Bank of Korea yesterday cut its growth forecast and held its policy rate at a record low amid mounting pressure on policymakers to take more action to counter the economic hit amid the COVID-19 pandemic. Slight -VE


TAIWAN Expect market to open higher with Tech in focus but upside limited ahead of the weekend.
No data due
The government’s business climate monitor last month showed “yellow-blue” for the fifth straight month, 
with the domestic economy stalled amid the COVID-19 pandemic, although it is starting to show signs of improvement, the National Development Council (NDC) said yesterday. Slight +VE
Taiwan warns of accidental conflict as regional tensions rise. The risk of accidental conflict is rising because of tension in the South China Sea and around Taiwan and communication must be maintained to reduce the risk of miscalculation, Taiwan President Tsai Ing-wen said on Thursday.
KLM Royal Dutch Airlines yesterday announced that it would resume four passenger flights per week between Amsterdam and Taipei via Bangkok starting on Tuesday next week after suspending the route since the middle of March. +VE for sentiment
E Ink Holdings , the world’s sole supplier of e-paper displays for e-readers and electronic shelf labels, yesterday gave a positive outlook for the second half of this year, as the COVID-19 pandemic is stimulating demand +VE
Adimmune Corp yesterday said that it began the phase 1 trial of its COVID-19 vaccine this week. The firm did not say when the first of an expected 70 participants was vaccinated and if there were any side effects. It would reveal more information later, Adimmune said. Slight +VE

CHINA Expect market to open lower with concerns over US/China relations and the potential for more sanctions.
No data due
China calls for US talks over listings dispute 
A US official said that a deal with the PRC to allow auditing of Chinese firms listed in US has been sought for years, but conditions must be met. Chinese Securities Regulatory Commission (CSRC) Vice Chairman Fang Xinghai said that China is “sincere” in wanting to solve the standoff over the accounting issues.
State Councillor Wang Yi, said on Thursday it was unclear whether the corona virus had first originated in China, casting doubt on the views of health experts and foreign governments. But coming after China did not allow the WHO team to visit Wuhan there remain questions. He also warned against giving the Nobel Peace Prize to Hong Kong’s protesters, as he urged Norway to “cherish the healthy and stable” bilateral relationship that was once frozen by the award.
Canada warns China that ‘coercive diplomacy’ won’t secure release of Huawei’s Meng Wanzhou Foreign minister Francois-Philippe Champagne pressed Chinese counterpart Wang Yi on Canadian detainees during Rome meeting
ByteDance told engineers of its popular short-video app TikTok this week to make contingencies should it need to shut down its U.S. operations, even as it works toward divesting them, people familiar with the matter said on Thursday.
Sinovac Biotech Ltd, Bangladesh has approved a late-stage trial of a potential COVID-19 vaccine made by Sinovac in the hope of being a priority recipient for the jab, the health minister said on Thursday. +VE
China’s semiconductor drive stalls in Wuhan; the construction on a US$20 billion state-of-the-art semiconductor manufacturing plant in Wuhan has stalled due to a lack of funding. It’s the latest example of a Chinese chip factory hitting funding problems, underlining how far the nation has to go to boost production capabilities
Shenzhen home prices rose another 5% in July while mainland developers' first-half earnings mostly declined due to the pandemic.

HONG KONG ADR’s-82 pts to open at 25,199 with HSBC, HKEX and the Petro names +VE but others in the red. I would expect caution with large number of results due today, especially the Chinese Banks and going into the weekend. Expect continued rotational trading on results.
No data due

EARNINGs due out Friday 
include Far East Holdings (36 HK), Shangri La (69 HK), Poly Property (119 HK), China Merchants Port (144 HK), Kingboard Holdings Limited (148 HK), Tsingtao Brewery (168 HK), Jiangsu Expressway (177 HK), Melco (200 HK), Ping An Securities Group (231 HK), AVIC (232 HK), CITIC (267 HK), BYD Electronic (285 HK), Wing On (289 HK), China Travel (308 HK), Angang Steel (347 HK), Jiangxi Copper (358 HK), Wing Tai Property (369 HK), Sinopec (386 HK), China Railway (390 HK), Minth (425 HK), Dongfeng Motor (489 HK), bonjour (653 HK), China High Speed Transmission (658 HK), China Eastern Airlines (670 HK), Genting (678 HK), CAR (699 HK), Truly (732 HK), Air China (753 HK), Solargiga Energy (757 HK), ZTE (763 HK), China Rare Earth (769 HK), Global Brands (787 HK), Mingfa (846 HK), China Construction Bank (939 HK), Lianhua Supermarket (980 HK), Datang Int (991 HK), Anhui Expressway (995 HK), C Banner (1028 HK), China Southern Airlines (1055 HK), China Shenhua (1088 HK), Chong Hing Bank (1111 HK), Yanzhou Coal (1171 HK), Sino Biopharm (1177 HK), China Railway Construction Corporation (1186 HK), Midland (1200 HK), BYD (1211 HK), Agricultural Bank of China (1288 HK), Xtep (1368 HK), Industrial and Commercial Bank of China (1398 HK), Postal Savings Bank of China (1658 HK), CGN New Energy (1811 HK), China Coal Energy (1898 HK), COSCO Shipping (1919 HK), Bank of Chongqing (1963 HK), China Minsheng Banking (1988 HK), Cosmo Lady (2298 HK), Great Wall Motor (2333 HK), China Shineway Pharmaceutical (2877 HK), China National Building Material (3323 HK), Bank of Communications (3328 HK), Anton Oilfield (3337 HK), Waison (3393 HK), GCL-Poly Energy (3800 HK), SinoTruk (3808 HK), China Merchant Bank (3968 HK), China Railway Signal & Communication Corporation (3969 HK), China Molybdenum (3992 HK), Haitong Securities (6837 HK), China Galaxy Sec (6881 HK)

EARNINGS OUT After market
SH PHARMA (2607.HK) interim result ended June 2020. Operating revenue -5.8% year on year to RMB87.165 billion. The net profit amounted to RMB2.443 billion, +6.8% yearly. EPS was RMB0.86. No dividend was declared.
COSCO SHIP ENGY (1138.HK) interim result ended June 2020. Revenue +37% year on year to RMB9.669 billion. Net profit RMB2.955 billion, +528.2% yearly. EPS. was 67.19 fen. No dividend was declared.
BEIGENE (6160.HK) interim result ended June 2020. Turnover -63.4% year on year to US$118 million. The loss widened to US$699 million from US$253 million in the corresponding period of the previous year. LPS was US$0.69. No dividend was declared.
NEW HIGHER EDU (2001.HK) interim result ended June 2020. Revenue +28% year on year to RMB641 million. Net profit RMB239 billion, +18.7% yearly.
EPS was RMB0.15. An interim dividend of RMB0.042 was declared, against a dividend of RMB0.036 in the corresponding period of the previous year.
SMIC (981.HK) interim result ended June 2020. Revenue +26.3% year on year to US$1.843 billion, setting an all-time high. Net profit US$202 million, +556% yearly, logging a new high. EPS was US4 cents. No dividend was declared.
CHINA CINDA (1359.HK) interim result ended June 2020. Total income +0.8% year on year to RMB45.82 billion. Net profit RMB6.341 billion, -27% yearly.
EPS was RMB0.17. No dividend was declared.
CHOW SANG SANG (116.HK) interim result ended June 2020. Turnover -32.7% year on year to HK$6.418 billion. Net profit HK$211 million, -65.6% yearly. EPS was HK31.2 cents. An interim dividend of HK5 cents was declared, against a dividend of HK14 cents in the corresponding period of the previous year.
NAGACORP (3918.HK) interim result ended June 2020. Revenue -57.7% year on year to US$378 million. Net profit US$20.626 million, -91.6% yearly.
EPS was US0.48 cents. An interim dividend of US0.29 cents was declared.
WEICHAI POWER (2338.HK) interim result ended June 2020. Revenue +4% YoY to RMB94.495 billion. Net profit RMB4.68 billion, -11.5% YoY. The Board passed a resolution to propose the distribution to all shareholders of an interim cash dividend of RMB1.5 for every 10 shares.
GREAT EAGLE H (41.HK) interim result ended June 2020. Revenue -42% year on year to HK$2.724 billion. The profit swung into loss of HK$6.513 billion. LPS was HK$9.05. A total dividend of HK$1.83 was declared, including an interim dividend of HK33 cents and a special dividend of HK$1.5, against an interim dividend of HK33 cents in the corresponding period of the previous year.
Ping An Bank (000001.SZ) interim results. In 1H20, the net profit attributable to shareholders of the parent company -11.2% yearly to RMB13.678 billion. Basic
EPS equaled RMB0.66. NIM was 2.59%, down 3 bps yearly.
XD INC (2400.HK) interim result ended June 2020. Revenue +10% year on year to RMB1.44 billion. The net profit RMB207 million, -12.7% yearly.
EPS was RMB0.49. No dividend was declared.
CHINA VANKE (2202.HK) unveiled the results for the six months ended 30 June 2020. Revenue +5% yearly to RMB146.35 billion. The net profit +5.6% yearly to RMB12.508 billion. EPS was RMB1.11. No dividend was declared.
KWG GROUP (1813.HK) interim result ended June 2020. Revenue +26.6% year on year to RMB13.483 billion. The net profit RMB3.516 billion, -41% yearly. EPS
was RMB110.7 cents. An interim dividend of RMB40 cents was declared, vs a dividend of RMB32 cents in the corresponding period of the previous year.
SINOTRANS (598.HK) interim results for the period ended June 2020. Turnover +5.2% year-on-year to RMB39.691 bn. The net profit RMB1.215 bn, -19.9% YoY.
EPS was RMB0.1642. No dividend was declared.
CC NEW LIFE (9983.HK) interim result ended June 2020. Net profit RMB184 million, +70.3% yearly. EPS was RMB0.187. An interim dividend of HK6.6 cents was declared.
FOSUN INTL (656.HK) unaudited interim result ended June 2020. Net profit RMB2.012 billion, -73.6% yearly. EPS was RMB0.24. No dividend was declared.
EMPEROR WATCH&J (887.HK) interim results for the period ended June 2020. Turnover -61.3% year-on-year to HK$931 million. The results swung into loss of HK$114 million against a profit of HK$118 million for the year-ago period. LPS was HK1.68 cents. No dividend was declared against a dividend of HK0.35 cents for the same period of last year.
PETROCHINA 1H20 Swings to Loss of RMB29.98B; Interim Div 8.742 Fen
EVERG HEALTH (708.HK) interim result ended June 2020. The total revenue rose 70.3% year on year to RMB4.51 billion. The loss widened to RMB2.274 billion from RMB1.527 billion in the corresponding period of the previous year. LPS was RMB26.319 cents. No dividend was declared.
COSCO SHIP PORT (1199.HK) interim results for the period ended June 2020. Turnover -12.6% year-on-year to US$453 million. The net profit US$163 million, +10.5% yearly. EPS was US5.17 cents. An interim dividend of HK16 cents (equivalent to US2.068 cents) was declared against a dividend of US1.9 cents in the corresponding period of the previous year.
LEGEND HOLDING (3396.HK) interim results for the period ended June 2020. Turnover +3.1% year-on-year to RMB184.866 billion. The net profit RMB637 mn, -76.1% yearly. EPS was RMB0.27. No dividend was declared.
PING AN (2318.HK) interim result ended June 2020. Total revenue -1% year on year to RMB683.28 billion. The net profit RMB68.683 billion, -29.7% yearly. An interim dividend of RMB0.8 was declared, against a dividend of RMB0.75 in the corresponding period of the previous year.
KAISA GROUP (1638.HK) interim results for the period ended June 2020. Turnover +10.9% year-on-year to RMB22.297 billion. The net profit RMB2.769 billion, -2.4% yearly. EPS was RMB0.456. An interim dividend of HK3 cents was declared, staying flat year-on-year.
CITIC BANK (998.HK) interim results ended June 2020. Net profit RMB25.541 billion, -9.8% yearly. EPS equaled RMB0.52. No dividend was declared.
CHINA EB LTD (165.HK) interim results for the period ended June 2020. Turnover +60.1% year-on-year to HK$9.069 billion. The net profit HK$765 mn, -58.9% yearly. EPS was HK45.4 cents. An interim dividend of HK14 cents was declared, against a dividend of HK25 cents in the year-ago period.
HKTV(1137.HK) interim results ended June 2020. Profit amounted to $109 million, as compared with $155 million in loss a year ago. During the period, GMV on order intake reached $2.747 billion, representing 113.6% year-on-year growth.

Short Selling HSI Thursday 22.1% vs 18.9% Wednesday
Top Shorts
Sino Land (83) 61%, Want Want (151) 55%, HSBC (5) 47%, China Res Land (1109) 46%, CLP (2) 38%, Hang Lung Ppty (101) 37%, Country Garden (2007) 35%, CCB (939) 35%, Power Assets (6) 33%, Petrochina (857) 33%, China Mobile (941) 33%, CNOOC (883) 32%, China Shenhua (1088) 32%, MTRC (66) 31%, BoC HK (2388) 31%, ICBC (1398 ) 30%, Hang Seng Bank (11) 30%, Ping An (2318) 29%, China Life (2628) 29%, Mengniu Dairy (2319) 29%, BoC (3988) 25%.

WATCH
FOSUN PHARMA (2196.HK) and BioNTech SE (BNTX.US) jointly announced for an intended collaboration to supply 10 million doses of their BNT162 mRNA-based vaccine candidate against SARS-CoV-2, subject to clinical success and regulatory approval, to Hong Kong and Macao SARs (the Region).  Fosun Industrial Co., Limited, a wholly owned subsidiary of FOSUN PHARMA, entered into the Letter of Intent with JACOBSON PHARMA (2633.HK)  in relation to the contemplated distribution of 10 million doses of vaccine targeting at COVID-19 in the Region on 27 August.
PETROCHINA (857.HK) CFO Chai Shouping, at the results conference call, predicted that the import gas loss of the group in 2H20 will be milder than 1H20 as the import gas cost in 2H20 is expected to be lower than 1H20.  The group is mapping out a new energy plan for China's "14th Five-year Plan" in hope of developing low-carbon energy ecosystem and amplify investment in geothermal, wind and solar power, aiming zero carbon emissions in 2050, the CFO added.He forecast that the average Brent oil price will range US$41-43/ barrel for the whole year with the price likely higher in 2H20 than 1H20. In face of falling price, the group adopted multiple measures in 1H20 that helped attain RMB14.5-billion cost-saving. Such measures will be kept in place for 2H20. Despite loss making during 1H20, the company managed to hike interim dividend to 8.742 fen as it remained actively optimistic about the distribution in spite of hardships. The group has been maintaining its dividend policy for years at around 45% of net profit. It hoped to continue the return to shareholders in future and retain steady dividend policy.
HKTV (1137.HK) Vice Chairman Wong Wai Kay, Ricky said that the company acquired the successful experience in transforming itself from an online supermarket to an online shopping mall, in addition to the knowledge of warehouse, logistics and infrastructure. Harnessing such experience and knowledge, the company will set up two to three overseas subsidiaries in coming half year to promote the company's system and solution to the world. Citing the British company Ocado as an example, it only has to provide the technology to help traditional supermarkets shift to online platform to yield over GBP80 million revenue a year as turnover sharing. Different from Ocado, HKTV will target companies, such as property developers, that intend to invest in building large online shopping platform. Wong hoped this business model to be long-lasting.
The Communications Authority (CA) approved an application by TVB (00511.HK) for changes in its shareholding structure arising from the transfer of certain shares in Young Lion Holdings Limited (YLH), which indirectly held 26% of the voting shares of TVB via its wholly owned subsidiaries, from its existing shareholders to Ever Port Limited, a company controlled by Mr Kenneth Hsu. The CA also approved an application by Profit Global Investment Limited (PGIL) and related parties to hold up to 3.9% of the voting shares of TVB as unqualified voting controllers as part of the changes in TVB's shareholding structure. The changes in the shareholding structure of TVB have taken effect following completion of the relevant transactions today. Upon completion of the transactions, the proportion of the voting shares of TVB held by YLH has been reduced from 26% to 22.1%, with PGIL and related parties receiving 3.9% of the voting shares of TVB in exchange for surrendering all of its YLH shares. YLH remains the major shareholder of TVB, with Mr Hsu becoming the ultimate voting controller of 22.1% of TVB's voting shares held by YLH.HKD reached 7.75 against US dollar, the strong-side convertibility undertaking, during local trading hours.
The Hong Kong Monetary Authority (HKMA) injected HK$3.488 billion into the market, absorbing the US$450 million disposal in the market. Hong Kong's banking balance as at August 31st will increase to HK$191.905 billion.
EVERG HEALTH (708.HK) At the first phase, it's seeking to produce 400,000 vehicles at its production bases in Shanghai and Guangzhou, said Vice Chairman Liu Yongzhuo. Production trial may start next month, followed by mass production in 2H21. The group invested around RMB14.7 billion in the EV business in 2019, mainly used for equity acquisition, base construction, R&D expenditure, said CFO Pan Darong.
The Hong Kong Jockey Club (the Club) announced that all Off-Course Betting Branches (OCBBs) will be re-opened on non-race-days from 29 August. The opening hours will start from 12:00 nn to 8:00 pm.
Centa Valuation Index (Major Banks) (CVI) last printed at 34.90 this week, -8.59 pts WoW Some homeowners became willing to trim property prices for sale under the relentless epidemic, said Centaline Property. Therefore, banks' valuations have descended in the near term.
At Hang Seng Investment Management press conference, CEO Rosita Lee stated that capital is flooding into the technology sector, which has been rapidly expanding in the recent years. The firm is going to roll out HSTI-tracking ETF, furthered Lee. As the product has moved on to the final stage of review and approval, it may hit the market very soon.

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