Aug 6 ASIAN MACRO INITIAL THOUGHTS
Covid-19 Globally over 18.5m cases, 702k deaths
EARNINGS include Bristol-Myers Squibb, News Corp, ViacomCBS, Cardinal Health, Mylan,Mylan, Booking Holdings, Uber Technologies, First Solar, Zillow, Cushman and Wakefield, Datadog, Dropbox, Murphy Oil, Hilton Worldwide, Papa John’s, Zoetis, Sealed Air, Ball Corp, AXA, ING, Adidas, Siemens, Nintendo, Toyota
DOW +1.39%, NDX +0.52%, S&P +0.64%, Russel 2K +1.91% Markets opened higher and traded sideways.
MBA Mortgage Applications -5.1% vs -0.8% prior and 30 year Mortgage Rate +3.14% vs 3.2% prior,
ADP Employment Change Jul +167k vs 4.314m Jun (F/cast was 1.55m)
Balance of Trade Jun US$-50.7B vs -54.8b May (F/cast was -50.7b)
Exports Jun $158.25b vs 144.69b May (F/cast was 159.6b)
Imports Jun $208.95b vs 199.49b May (F/cast was 210.3b)
Services PMI Jul 50 vs 47.9 Jun (F/cast was 49.6)
Composite PMI Jul 50.3 vs 47.9 Jun (F/cast was 50.0)
ISM Non Manufacturing Data
Business Activity Jul 67.2 vs 66.0 Jun (F/cast was 59.1)
Prices Jul 57.6 vs 62.4 Jun (F/cast was 57.9)
New Orders Jul 67.7 vs 61.6 Jun (F/cast was 57.4)
Employment Jul 42.1 vs 43.1 Jun (F/cast was 47.2)
PMI Jul 58.1 vs 57.1 Jun (F/cast was 54.6)
EIA Gasoline stocks change 0.419m vs 0.654m (Consensus was -0.17m)
EIA Crude stocks change -7.373m vs -10.612m (Consensus was -3.001m)
USD weaker vs Yen & Euro. Bitcoin +4% @ 11,654.79, VIX -3.2% @ 22.99, US T10 0.549%
OIL Brent +1.6%, WTI +1.18% on inventory drop
Gold +0.23%, Silver +1%, Copper 0.02%
Roku -1% Q2 reported a loss of 35 cents per share on revenues of $356 million vs F/cast 50 cents per share on revenues of $315 million. Roku said it added 3.2 million incremental active accounts in Q2 reaching 43 million.
Etsy — The marketplace company’s stock whipsawed in extended trading after the company released its second-quarter earnings. Etsy said it had earnings of 75 cents per share with revenue of $429 million, while analysts estimated earnings of 39 cents per share on revenues of $330 million.
Teladoc +2% Livongo +1% after both stocks tumbled throughout the day. Teladoc announced it was acquiring digital health company Livongo Wednesday. The deal values Livongo at $18.5 billion.
Novavax -1% in extended trading after climbing 10% earlier in the day. The stock has seen movement following released data yesterday from its coronavirus vaccine trial showing promising results.
Twilio -2% in after-hours trading. In an SEC filing, Twilio said the company is offering $1.25 billion of Class A common stock.
Live Nation -1% Q2 earnings missed Wall Street projections. Live Nation said it saw second-quarter revenue of $74 million, far below the $268 million analysts had predicted, according to Refinitiv. Live Nation reported a second quarter loss of $2.67 per share, also missing estimates of a loss of $2.08 per share. The company said it expects live events will return at scale in the summer of 2021.
Fitbit +1% Q2 reported a loss of 12 cents per share excluding certain items and revenues of $261.3 million, compared to FactSet analysts’ estimate of a loss of 22 cents per share and revenues of $194.2 million. The EU launched an investigation into Google’s proposed acquisition of Fitbit on Tuesday.
Western Digital -12% in extended trading Q4 earnings of $1.23 per share on revenues of $4.29 billion, while analysts polled by Refinitiv had expected earnings of $1.22 per share on revenues of $4.34 billion.
Zynga +6% Q2 revenues of $518 million surpassed Refinitiv analysts’ estimate of $503 million.
AHEAD Challenger Job Cuts, Initial Claims (and 4 week average), EIA Natural Gas Report,
DAX +0.47%, CAC +0.9%, FTSE +1.14% Markets opened higher DAX and CAC drifted lower while the FTSE traded sideways
EUROZONE Services Jul 54.7 vs 48.3Jun (F/cast was 55.1)
Composite PMI Jul 54.9 vs 48.5 Jun (F/cast was 54.8)
Retail Sales Jun +5.7% MoM vs +20.3% revised (F/cast was +5.9%) [Jun +1.3% YoY vs -3.1% revised (F/cast was +0.2%)]
GERMANY Services Jul 55.6 vs 47.3 Jun (F/cast was 56.7)Composite PMI Jul 55.3 vs 47 Jun (F/cast was 55.5)
FRANCE Services Jul 57.3 vs 50.7 Jun (F/cast was 57.8)
Composite PMI Jul 57.3 vs 51.7 Jun (F/cast was57.6 )
Retail Sales Jun +9.4% MoM vs +38.6% revised (F/cast was+6.7%) [Jun +5% YoY vs -3.3.6% revised (F/cast was -6%)]
UK Services Jul 56.5 vs 47.1 Jun (F/cast was 56.6)
Composite PMI Jul 57 vs 47.7 Jun (F/cast was 57.1)
New Car Sales Jul +11.3% vs -34.9%
EUROZONE Construction PMI
GERMANY Factory Orders, Construction PMI
FRANCE Construction PMI
UK BoE Interest Rate Decision, Construction PMI
JAPAN Future indicate Nikkei to open flat following US modest gains, Results in Focus with Toyota due to report. Yen currently 105.58
Data due Foreign Bond and Stock Investment
Japanese holidaymakers should refrain from domestic travel and regional governments should act independently to contain a resurgence of coronavirus infections, the country's top doctors' association said on Wednesday.
Japan is considering extending a special employment subsidy to help firms hit by the coronavirus pandemic that would keep furloughed workers on the payroll, but no decision has been made yet, a labor ministry official told Reuters on Wednesday. +VE
Honda Motor Co (7267.T) on Wednesday forecast a 68% decrease in annual operating profit to a 10-year low with global demand for cars expected to slide because of the coronavirus pandemic. -VE
Japanese drugstores were stripped bare of gargling solution by Wednesday, a day after the governor of the western prefecture of Osaka suggested it could help fight coronavirus, triggering panicked buying but experts cast doubt over claims.
The average summer bonus at major Japanese companies this year dropped 2.17% from a year earlier to ¥901,147, a Japan Business Federation survey showed Wednesday. -VE
SOUTH KOREA Expect markets to open higher with Kopsi breaking back above 2,300 yesterday with strong support from retail investors
Data out Current Account $6.88b vs 2.29b (F/cast was 6.9b)
Samsung Electronics, unveiled its second flagship model for the year Galaxy Note 20 and four new upgraded mobile gadgets during its first-ever online showcase event, streamed live from a studio in Goyang, Gyeonggi Province, Wednesday night.
Jeju Air suffered an operating loss of 84.7 billion won ($73.3 million) during the second quarter this year, raising its net operating loss for the first half of the year to nearly 150 billion won, according to a tentative financial report released Wednesday.
Amorepacific, said Wednesday it launched two of its flagship brands, Amorepacific and Mamonde in US Amazon, as part of its efforts to expand presence in the US.
Samsung Biologics on Tuesday launched a proprietary cell line expression technology called S-CHOice, intent to improve its contract development services by shortening the drug development period for clients and lowering their drug product costs.
TAIWAN Expect market to open higher
Data due Inflation Rate, Wholesale Prices
Chunghwa Precision Test Technology yesterday said net profit last quarter reached NT$233 million (US$7.9 million), its highest second-quarter revenue ever, and maintained a cautiously optimistic outlook for the second half of this year. +VE
Vanguard International Semiconductor which makes power management ICs and driver ICs for displays, yesterday said that it would raise capital spending by about 35% this year to boost 8-inch wafer capacity amid strong customer demand. +VE
The Taipei 101 shopping mall last month saw its business return to positive territory, thanks to a sharp increase in the number of domestic shoppers as well as the government-issued Triple Stimulus Vouchers. +VE
CHINA Expect market to open higher
No data due.
Secretary of State Mike Pompeo urges US app stores to remove ‘untrusted’ Chinese-owned apps -VE
Vietnam cracks down on illegal entries from China as Covid-19 cases flare up, which suggests an under reporting by the Chinese authorities -VE
HONG KONG ADR’s +1pts to open at 25,103 but I would expect caution and the market to open lower. Holding above 25k key results in focus
No data due
EARNINGS CK HUTCH (1 HK) PCCW (8 HK), China Motor Bus (26), MTRC (66 HK), Manulife (945 HK), SMIC (981 HK), CK Asset (1113 HK), MGM China (2282 HK),
Short Selling HSI Wednesday 16.7% vs 17% Tuesday
Top Shorts HK & China Gas (3) 43%, Mengniu Dairy (2319) 37%, CCB (939) 33%, Want Want (151) 32%, Hang Seng Bank (11) 31%, NWD (17) 30%, CLP (2) 29%, Hang Lung PPTY (101) 29%, Bank of China (3988) 29%, Wharf REIC (1997) 26%, Power Assets (6) 26%, AAC Tech (2018) 25%, MTRC (66) 25%.
IPO LEADER EDU (01449.HK), to be listed today, opened at $2.3, up 9.5% against the listing price $2.1, and last stood at $2.11, up 1 cent against the listing price, on volume of 1.47 million shares, PhillipMart data showed.
CG SERVICES (6098.HK) PROFIT ALERT +VE announced that the Company’s unaudited consolidated revenue, profit before income tax and net profit for the six months ended 30 June 2020 are expected to record an increase by more than 50% as compared to that for the corresponding period in 2019. Mainly attributable to the increase in the area of properties managed by the Group, the comprehensive growth in revenue from community value-added services, value-added services to non-property owners , and “Three Supplies and Property Management” businesses.
XIAOMI-W (1810.HK) made up 10.1% of global smartphone market in 2Q20, maintaining its top four position among handset plants, according to Canalys’ report. The company even became the fastest growing smartphone manufacturer in European market, with an annual increment of 65% and market shares of 17%, beating Huawei as the third largest smartphone maker in Europe. +VE Tech component makers
FOSUN PHARMA (2196.HK) and BioNTech announced that the first 72 participants have already been dosed with BNT162b1 following IND approval by the Chinese regulatory authority, National Medical Products Administration (NMPA). FOSUN PHARMA and BioNTech are jointly developing the COVID-19 vaccine candidate in China. The trial is part of BioNTech’s global development program aimed at supporting a global supply upon regulatory approval.
POWER ASSETS (6.HK) interim profit contribution from the UK amounted to HK$842 million, -53.9% YoY. In Hong Kong, HK Electric Investments made a profit contribution of HK$271 million, +14.3% YoY
BJ CAPITAL LAND (2868.HK) July contracted sales RMB3.31 billion -17.9% YoY
SHIMAO GROUP (813.HK) July contracted sales RMB28.967 bn +45% YoY and the Group’s contracted sold area 1.6373 million sq.m., +45% YoY
CSPC PHARMA (1093.HK) VP Sun Jumin expected the group to commercialize some 50 new products in the coming three years, adding there could be at least 15 drugs with a market space of over $1 billion.
CKI HOLDINGS (1038.HK) interim results ended June 2020. The turnover +0.9% YoY to HK$18.241 billion. Net profit amounted to HK$2.86 billion, -51.9% YoY. EPS equaled HK$1.14. Interim DPS was HK$0.68, flattish yearly.
IGG (799.HK) interim result ended June 2020. The net profit amounted to US$133 million, up 87.8% yearly. EPS was US$0.1084. A total dividend of HK50.2 cents was declared, including an interim dividend of HK25.1 cents and a special dividend of HK25.1 cents
CITIC Bank International's call conference, Chief Economist Liao Qun stated that the coronavirus shocks came in beyond expectation. While the situation has gone muted in China and Europe, the pandemic remains rampant in Americas and Southern Asia. It may take a long time before the lockdown measures can be removed worldwide. Global economy was expected to slide 4.8% this year. Liao anticipated Chinese economy to grow 2.4% this year, as the only major economy posing positive growth, after picking up 3.2% growth in the second quarter. For Hong Kong, grave recession will likely happen this year, possibly followed by sluggish recovery in future.
HKT-SS (6823.HK) interim result ended June 2020. EBITDA -3% YoY to HK$5.546 billion. Net profit amounted to HK$1.898 billion, -12.2% YoY An interim dividend of HK30.1 cents was declared, against a dividend of HK30.01 cents in the corresponding period of the previous year.
Centa-Salesman Index (CSI) last printed at 43.34, -1.24 pts weekly, said Centaline Property. The index narrowed its loss from 9.14 pts two weeks ago to 1.24 pts this week, signally the market was not seeing more pessimism