Oct 12 Asian Macro Initial Thoughts; most to see a lower open. HK may see T8 this afternoon.


12 Oct

This and previous notes can be found at asianmarketsense.com   and Substack ( Asian Market Sense )

Check out ERI-C.com for  interesting research and trading analysis


Asia Summary 

Australia Market trended lower on the open following the US but rebounded with Energy +VE and Iron Ore continuingto move higher.  Gold names a slight -VE.
Data New Home Sales, Business Confidence,

Japan Nikkei futures indicating slightly lower open although a weaker Yen +VE for exporters

S Korea Markets to reopen lower  with concerns over inflation and US earnings.  KRW easing (slight +VE) but Oil higher (-VE)   LG Electronics earnings in focus.

Taiwan Market to re open lower; rising energy costs locally and concerns about the slowdown in China with energy shortages there impacting production.

China Expect market to open lower, Golden Dragon Index closed flat but WSJ says the President Xi is now targeting the Financials and their ties with private firms for a crackdown.  Evergrande still overhangs the market and other developers coming into a similar focus.  

HK ADR’s -202pts at 25,123 broad weakness with only Petrochina +VE.  Ecommerce names weak after Monday’s strong rally.  Supermarket shelves emptied ahead of severe tropical storm Kompasu.  Chinese Developers continued weakness as Modern Land (1107) seeks a 3 mth extension on its US$ bond due 25 Oct.  T8 potential in PM, key is if raised during trading market will close 15 minutes later.

US Futures Weak open: Dow -20 pts,  S&P 500 futures and Nasdaq 100  both -0.1%.



DOW -0.72%, NDX -0.64%, S&P -0.69%, Russel 2K -0.56%
Muted trading on Columbus Day.  Markets opened higher but gave up initial gains to trade flat by midday and then trended lower in the red from midday and accelerated selling in the last 30 mins to close at day lows.   Caution ahead of earnings which start with the major banks;  JPMorgan on Wednesday. Goldman Sachs, Bank of America, Morgan Stanley, Wells Fargo and Citigroup following later in the week. Delta Airlines and Walgreens Boots Alliance reports are report this week.

Southwest Airlines -4.2% after over 2,000 cancellations since Saturday, largely due to staff shortages; who have previsouly complained about grueling schedules but thought to be linked to a vaccination mandate.

Banks JPMorgan Chase -2.1%, Citigroup -2% Wells Fargo -1.5%, Amex -1%

Work from home names: Facebook -1.4%, Apple -0.1%, Amazon -1.3%, Netflix -0.9%,  Disney -1.8%, Zoom Video -0.4%, Alphabet -0.6% and Microsoft -0.2%,

Tech NXP Semi -2.3%, Nvidia -0.7%, Micron -1.3%, AMD -0.4%, Skyworks -0.9%

Re-opening stocks Boeing unch, Caterpillar -1.2%, Simon Property +0.4%, Kohl’s -3.5%, Nordstrom -2%, Gap -4.8%, United Airlines unch, Carnival +0.2%, Wynn Resorts +3.4%, Chevron -0.9%, Exxon Mobil -1%,  

Lock down names Campbell Soup -0.8% General Mills +0.4%, JM Smucker -0.1%

DATA

USD was stronger. Bitcoin +3.4% @ 57,282.40, VIX +6.6% @ 20.0, US bond market closed.

OIL Brent +1.5%, WTI +1.4% as energy plays continue to rise to multi year highs.

Gold -0.2%, Silver -0.5%, Copper +1.5%, Platinum -2.1%, Palladium +1.7%.

AHEAD  Redbook, NFIB Business Optimism, JOLT’s job openings, Consumer Inflation Expectations, WASDE report.


DAX -0.05%, CAC +0.16%, FTSE +0.72%

DAX traded in the red, just below flat for most day. CAC followed a similar path but rallied into the close. FTSE spent most of the day above flat with a rally into the close. General caution ahead of US Q3 results with Banks starting on Wednesday. European Resources names +VE but Travel & Leisure -VE.

Stellantis +0.9% despite it’s Italian unit warned production was being hit harder and for longer due to Covid-19 the carmaker has halted operations at some of its factories in Europe and the U.S., and expects to produce 1.4 million fewer vehicles this year.

ASOS -13.4% announced CEO Nick Beighton stepping down with immediate effect as it issued a profit warning on the back of higher logistics costs and supply chain disruption.

Britvic -4.8% to lead losses, while Anglo American +4.9%.

NODATA

AHEAD

EUROZONE No data due

GERMANY Wholesale Prices, ZEW Economic Sentiment & Current Conditions Index

FRANCE No data due  

UK  BRC Retail Sales Monitor, Employment & Wages Data,


JAPAN
Nikkei futures indicating slightly lower open although a weaker Yen +VE for exporters

Yen currently 113.3

Data due pre market

Bank Lending Sept (Aug was +1.5% YoY )

PPI Sept (Aug was 0% MoM, F/cast is +0.2%)

PPI Sept (Aug was +5.5% YoY, F/cast is +5.7%)

Earnings in focus 

Central Security Patrols Co. Lt (9740 JP)

Hogy Medical Co. (3593 JP)

Izumi Co. (8273 JP)

J. Front Retailing Co. (3086 JP)

Kintetsu Department Store Co. L (8244 JP)

Kojima Co. (7513 JP)

PAL Group Holdings Co. (2726 JP)

Plenus Co. (9945 JP)

Shift Inc. (3697 JP)

Tama Home Co. (1419 JP)

Toho Co. Ltd/Tokyo (9602 JP)

WingArc1st Inc. (4432 JP)

Tokyo reported 49 new covid cases Monday  (-11 DoD) Nationwide total 369 +VE

PM Kishida, defended his pro-nuclear energy policies on Monday, saying that re-starting nuclear power plants mothballed since the 2011 Fukushima disaster was vital.  He also said he will work on building a chip-manufacturing base in Japan. +VE

Japan's Shinsei Bank Ltd plans to officially reject SBI Holdings' $1.1 billion tender offer bid due to concerns that the rights of its shareholders could be infringed if SBI takes effective control, Nikkei reported on Monday.  -VE

Eneos Holdings Inc, said on Monday it would buy Japan Renewable Energy (JRE) for about 200 billion yen ($1.8 billion) to expand its low-carbon business, joining a list of major global companies moving away from climate-changing fossil fuels.

Chugai Pharmaceutical Co said on Monday it has applied to regulators to expand the use of an antibody treatment for COVID-19 to also allow for preventative care.

Honda Motor Co Ltd, Nissan Motor Co Ltd and Toyota Motor Corp saw their sales in China tumble in September as a chip shortage hit vehicle production in the world's biggest car market.  -VE

Retail Convenience Store Sept SSS;  Itochu (8001) +1.6%,  Lawson (2651) +0.4% and Seven & I (3382) -0.2%


S  KOREA
Markets to reopen lower  with concerns over inflation and US earnings.  KRW easing (slight +VE) but Oil higher (-VE)   LG Electronics earnings in focus.

Data due BoK Interest Rate Decision; no change expected. Customs to release Oct 1-10 Export Data.

KDCA reported 1,297 new covid cases Monday a third day below 2,000 but with concerns about an uptick after the extended weekend.

Hyundai Mobis has unveiled a steering wheel that can be folded while not in use.  The affiliate of Hyundai Motor said Monday that it has succeeded in developing the foldable steering wheel system that maximizes drivers comfort by allowing more space. +VE

Hanwha Defense said Monday it will showcase its advanced land defense systems at the AUSA 2021 defense expo in the US to expand its footprint in the market.  +VE

Lawmakers are trying to push back controversial taxation on income from investing in cryptocurrencies, which is to be implemented from Jan. 1, 2022. -VE

Samsung Electronics Co. said Monday it has partnered with some high-profile filmmakers to produce movies with its Galaxy smartphones as the South Korean tech giant aims to better promote its mobile devices. +VE

Asiana Airlines  will resume offering business class services on domestic flights starting next month, industry insiders said Monday, as it tries to improve profitability amid the COVID-19 pandemic. Slight +VE


TAIWAN
Market to re open lower as rising energy costs and concerns about the slowdown in China and energy shortages there impacting production.

No data due 

Taiwan should strive to reduce its trade dependency on China and instead seek to expand in central and eastern Europe, General Chamber of Commerce chairman Paul Hsu said on Sunday in response to President Tsai Ing-wen’s Double Ten National Day address. +VE

PChome Online Inc on Sunday posted its highest September sales, driven by purchases of portable barbecue devices, especially electric grills, as many people celebrated the Mid-Autumn Festival at home last month.  Barbecuing is popular during the holiday in Taiwan, but most local city and county governments banned grilling in public spaces this year to prevent large gatherings due COVID-19 concerns. +VE

Merida Industry Co Ltd  Friday reported annual declines in shipments and revenue for last month, as it continued to face shortages of components and shipping containers. Consolidated revenue last month dropped 24.04 percent year-on-year to NT$1.82 billion (US$64.89 million), while 78,801 units were shipped, a decline of 25.47 percent.

Hon Hai Precision Industry Co  is embarking on a recruitment drive to hire 200,000 workers in Shenzhen, China, as it ramps up production of the new iPhone 13 series, Chinese business news outlet Eastmoney.com reported. +VE


CHINA
Expect market to open lower, Golden Dragon Index closed flat but WSJ says the President Xi is now targeting the Financials and their ties with private firms for a crackdown.  Evergrande still overhangs the market and other developers coming into a similar focus.  Sentiment remains cautious, inflation concerns as Xi looks to re-orientate China’s growth drivers.

No data due

Liaoning warns of more power cuts; despite government efforts to boost coal supply and manage electricity use in a post-COVID-19 pandemic energy crisis hitting multiple countries. Monday it issued its second-highest level power shortage alert, the fifth in two weeks, saying the shortfall could reach nearly 5 gigawatts (GW). -VE

China's Fosun Fashion Group has changed its name to Lanvin Group and could pursue acquisitions as its seeks to build a global portfolio of luxury brands, the company said Monday, while also announcing the arrival of new investors. Slight +VE


HONG KONG 

ADR’s -202pts at 25,123 broad weakness with only Petrochina +VE. Ecommerce names weak after Monday’s strong rally. Supermarket shelves emptied ahead of severe tropical storm Kompasu. Chinese Developers continued weakness as Modern Land (1107) seeks a 3 mth extension on its US$ bond due 25 Oct.

No data due

Typhoon arrangements
https://www.hkex.com.hk/Services/Trading-hours-and-Severe-Weather-Arrangements/Severe-Weather-Arrangements/Trading?sc_lang=en


SHORT SELLING HSI Monday 21.9%  vs 20.1%  Friday
Top shorts 
Hengan (1044) 46%, Country Garden (2007) 44%, Henderson Land (12) 42%, AAC Tech (2018) 39%, Wharf REIC (1997) 36%, Sands China (1928) 33%, Sunny Optical (2382) 33%, Baba-SW (9988) 33%, CM Bank (3968) 31%, CLP (2) 31%, Bud Apac (1876) 31%, Power Assets (6) 30%, Hang Seng Bank (11) 29%, Ali Health (241) 28%, Haidilao (6862) 28%, HK & China Gas (3) 28%, BYD (1211) 27%, CG Services (6098) 27%, MTRC (66) 27%, Bank of China (3988) 26%, HSBC (5) 26%, SHKP (16) 26%, Mengniu Dairy (2319) 25%.


WATCH
Q TECH (01478.HK) announced that the total sales volume

of camera modules was 42.988 million units, up 5.5% MoM or 15.2% YoY. +VE


SUNNY OPTICAL (02382.HK) announced that the shipment

volume of handset lens sets in September decreased by 20.8% YoY to 133 million units, which was mainly due to the weaker demand from the overall smartphone market compared to the same period of last year.  -VEMEITUAN -VE as Wang Sicong, the son of Dalian Wanda Group’s billionaire founder; claims of data breach and stolen Dianping account. Meituan’s Dazhong Dianping service apologised to Wang and said it would message him privately after his account was linked to another user’s phone. -VE


MEITUAN founder Wang Xing locks down social media posts as China’s food delivery giant puts antitrust investigation behind it. Wang has hidden from the public all of his 661 posts on popular Chinese microblogging service Weibo and 17,105 posts on Fanfou, a now-obscure microblogging platform that he launched in 2007 during his early days as an entrepreneur.  +VE as it shows the company toeing the government line.

HK Developers +VE ahead of new releases.  Centralcon has received as many as 20,000 checks for 402 flats at The Arles near Fo Tan MTR Station to be launched on Saturday, marking an oversubscription of nearly 49 times. The developer said it will launch the first round of sales as early as Saturday, probably involving more than 500 units, suggesting that some extra flats will be on offer. It has revealed two price lists for 402 units with an average price of HK$19,678.

Kowloon Development (0034) named its project at Shek Kok Road as Manor Hill, offering 1,556 units in total. The smallest flat covers 200 square feet, which is expected to be the smallest among new private units in Tseung Kwan O. Wheelock Properties' Koko Reserve has attracted about 4,000 visits. About 40 percent of the visitors came from Hong Kong Island East and Kowloon East each, and the rest were from the New Territories.


CK ASSET (01113.HK)  announced Li Ka Shing Foundation Limited acquired a total of 1.517 million shares in CK Asset at the average price of HK$44.826, HK$44.9205, HK$45.7644 and HK$45.3783 per share on 5 October, 6 October, 7 October and 8 October 2021 respectively.  As a result, the deemed interests of Li Ka-shing, Victor T K Li and Li Ka Shing Foundation Limited in CK Asset increased from 46.19% to 46.23%; increased from 46.26% to 46.3%; and increased from 11.47% to 11.51%.

GEELY AUTO (00175.HK) announced that the total sales volume of the Group (including the sales volume of LYNK & CO-branded vehicles sold by the Group’s 50%-owned joint venture, namely LYNK & CO JV) during the month of September 2021 was 103,900 units, 
a decrease of approximately 18% from the same period last year, but up approx 18% from August 2021. The total sales volume in the first nine months of 2021 was 921,800 units, an increase of approximately 5% from the same period last year, achieving 60% of the Group’s full year sales volume target of 1.53 million units in 2021.  +VE


ASM PACIFIC (00522.HK) announced that its subsidiary, ASM USA, entered into a definitive agreement with Mycronic and AEi, pursuant to which ASM USA agreed to acquire all of the issued shares of AEi from Mycronic in an all-cash transaction.

China Evergrande New Energy Vehicle Group Limited underwent a business change, according to the Tianyancha app. The entity's registered capital rose from about US$2.015 billion to US$2.515 billion, up around 24.81%.  Company says it will have vehicles ready for delivery next year.

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