Apr 22 Asian Marco Initial Thoughts expect a rebound for most Asian markets


22 Apr

Asia
Markets to rebound; Biden’s Earth Day Summit today and US initial claims data
Australia Market to open higher futures +31pts, Oil Search and Woodside Petroleum weak as oil fell overnight but Gold was firm +VE Miners.  Tech +VE after US rebound. Santos in focus as it realises its first quarter update.
Japan Nikkei futures opened -5pts and have eased much as -25pts but I would expect the market to open higher with bargain hunting, stocks like Daikinwhich have seen recent selling  
S Korea Expect markets to open higher with initial bargain hunting following Wednesday’s sell off especially in the chemicals, tech and heavy industries which saw the brunt of yesterdays selling.
Taiwan Market to open higher with a focus on tech.  Wednesday saw buying rotation into old economy names (shipping and cement as safe havens).
China Market to open flat having closed higher Wednesday, key will be whether 'Team China’ are supporting the market.  For the CSI 300 5,100 was the key resistance level.  Concerns remain PBOC tightening, Bond Defaults and deteriorating international relations.
HK ADR’s +201pts at  28,822 a broad recovery but Sinopec and Petrochina weak along with CK Hutch, Tencent’s ADR +1.7% but Baba +0.4%Expect some early margin call selling but probably off set by short covering.  Upside capped by China Gas’s top up placement with concerns that more are waiting in the wings.
Sentiment slightly helped by zero new covid cases yesterday.
US Futures Opened Dow -31pts, S&P and NDX -0.15% expect some caution ahead of initial claims data.

DOW +0.93%, NDX +1.19%, S&P +0.93%, Russel 2K +2.35% 
Markets opened higher and worked higher through the day after two down days, with strength in small cap names especially.
Norwegian Cruise +10.3% after Goldman Sachs upgraded the stock+VE cross read to Carnival and Royal Caribbean
United Airlines +3% after plunging 8.5% on Tuesday after the carrier reported its fifth consecutive quarterly loss and said
Netflix -7.4% weak after disappointing subscriber numbers.
The US. dollar rose on Wednesday from a seven-week low hit overnight, as broad weakness in stock markets triggered by a resurgence of COVID-19 cases in India and Japan encouraged a retreat to the safe-haven appeal of the greenback.
A bipartisan US congressional push to counteract China picked up steam on Wednesday as a Senate committee overwhelmingly backed the '“Strategic Competition Act of 2021” a bill pressing Beijing on human rights and economic competition and other lawmakers introduced a measure seeking billions for technology research.
Banks JPMorgan Chase +0.9%, Citigroup +1.2% Wells Fargo +1.7%, AMEX +1.4%
Work from home names: 
Facebook -0.4%, Apple +0.3%, Amazon +0.8%, Netflix -7.4%,  Disney +0.2%, Zoom Video +0.3%, Alphabet flat and Microsoft +0.9%,
Tech 
NXP Semi +3.8%, Nvidia +1.3%, Micron +2.3%, AMD +3%, Skyworks +2.1%
Re-opening stocks  
Boeing +0.8%, Caterpillar +2.1%, Simon Property +3%, Kohl’s +4.4%, Nordstrom +5.9%, Gap +3.2%, United Airlines +3%, Carnival +6.2%, Wynn Resorts +3.6%, Chevron +1.4%, Exxon Mobil +1.3%,  
Lock down names 
Campbell Soup +0.8% General Mills +0.7%, JM Smucker +0.9%
DATA
MBA Mortgage Applications +8.6% vs -3.7% prior
MBA 30 yr Mortgage Rate +3.2% vs+3.27% prior
EIA Oil Gasoline stock changes +0.086m vs+0.309m prior (Consensus was+0.464m)
EIA Oil Crude stock changes +0.594mvs -5.889m prior (consensus’s -2.975m)
USD was firm vs Yen & Euro. Bitcoin -2.9% @ 54,889.91, VIX % @ ,
US T10 @ 1.57%
OIL Brent -2%, WTI -2.1% on an increase in US inventories and covid resurgence in Asia
Gold +1% as Treasury yields slide , Silver +2.1%, Copper +1.8% Platinum +1.4%,
Palladium +4.4% to a new high benefiting from firming commodity demand and expectations for deficits following the Arctic mine disruptions at Nornickel's mines
AHEAD  Chicago Fed National Activity Index, Initial Claims, 4 week Average Claims, Continuing Claims, Existing Home Sales, EIA Natural Gas Report, Kansas Fed Manufacturing Index, 5 year TIPS auction.
Earnings AT&T, Intel, D.R. Horton, American Airlines, Union Pacific, Alaska Air, Pentair, Tractor Supply, Celanese, Seagate Technology Biogen, Dow, Credit Suisse, SAP, Boston Beer, Mattel, Snap, Valero Energy, Freeport-McMoRan, Quest Diagnostics

DAX +0.44%, CAC +0.74%, FTSE +0.52% 
Markets opened higher and traded largely sideways/lower but saw an uptick late mid afternoon. UK inflation ticked higher and may have hit an inflection point. Retail sector leading with Auto’s the laggards
Good trading update from Heineken +4.8%expects good beer volumes in Q1ASML +6.3% after the company beat first-quarter profit expectations.
Carrefour +5% announcing a share buyback following strong first-quarter earnings.
But oil storage firm Vopak -3.8% after missing earnings forecasts.
Earnings out from AkzoNobel +2.8%, Randstad -1.53% and Roche +3.8% and others
DATA
UK  
Inflation Rate Mar+0.7% YoY vs +0.4% Feb (F/cast was+0.8%)
Inflation Rate Mar +0.3% MoM vs +0.1% Feb (F/cast was +0.3%)
Core Inflation Rate Mar +1.1% YoY vs +0.9% Feb (F/cast was +1%)
Core Inflation Rate Mar +0.4% MoM vs 0% Feb (F/cast was +0.3%)
PPI Output Mar +1.9% YoY vs +0.9% Feb (F/cast was +1.6%)
PPI Output Mar +0.5% MoM vs +0.7% Feb revised (F/cast was +0.2%) PPI Core Output Mar +0.4% MoM vs +0.3% Feb revised
PPI Core Output Mar +1.7% vs +1.7% Feb revised
PPI Input Mar +5.9% YoY vs +3.3% Feb revised (Consensus was +4.4% ) PPI Input Mar +1.3% MoM vs +0.9% Feb revised (Consensus was +0.6% ) Retail Price Index Mar +0.3% MoM vs +0.5% Feb (F/cast was +0.3%)  Retail Price Index Mar v+1.5% YoY vs +1.4% Feb (F/cast was +1.5%)  AHEAD
EUROZONE Government Budget to GDP and Government Debt to GDP, ECB Rate Decision and Press Conference
GERMANY No data due
FRANCE No data due
UK CBI Industrial Trends Orders and Business Optimism Index

JAPAN 
Nikkei futures opened -5pts and have eased much as -25pts but I would expect the market to open higher with bargain hunting, stocks like Daikinwhich have seen recent selling  Yen currently 108.06
Data due Foreign Stock and Bond Investment
Tokyo reported 843 new covid cases (vs 711 Tuesday) above 800 for the first time since end of Jan.  Osaka reported 1,242 a new high, Nation-wide the total was 5,290Government to make decisions on state of emergency for Tokyo, Osaka, Kyoto and Hyogo on Friday as new COVID-19 case numbers surge.
Health ministry said Wednesday that 505 new cases of highly contagious coronavirus variants were reported in the week to Tuesday, nearly double the amount reported in the previous seven days, amid a nationwide resurgence of infections.
PM Suga has cancelled plans to visit India and the Philippines during his country's extended holiday starting in late April amid a sharp rise in COVID-19 cases, a senior government spokesman said
Toshiba;  Bain Capital is looking at formulating a bid to acquire Toshiba Corp, two people familiar with the matter said, making it one of several firms said to be interested in taking the Japanese conglomerate private.
Japan Post Holdings Co Ltd said on Wednesday it would book a 67.4 billion yen ($623.8 million) one-off loss in the financial year ended March on the partial sale of Toll Holdings, its money-losing Australian logistics arm. -VE but already known
West Japan Railway Co., or JR West, has agreed with its biggest labor union to transfer 200 to 300 employees outside its group on loan in stages from June. The move is part of efforts to reduce its personnel costs while maintaining employment at a time when the novel coronavirus pandemic is heavily weighing on the business of the railway operator. Slight +VE
SoftBank Group Corp's (9984.T) $100 billion Vision Fund is widely seen reporting record earnings on May 12 after portfolio companies listed during the quarter, mostly driven by gain on its stake in South Korean e-commerce giant Coupang . +VE
The Japanese and U.S. governments are planning to jointly monitor e-commerce giant Rakuten Group Inc for fear of customer data falling into the hands of Chinese authorities, sources with knowledge of the matter said. A group company of Chinese tech giant Tencent Holdings Ltd has become Rakuten's major shareholder  -VE

SOUTH KOREA 
Expect markets to open higher with initial bargain hunting following Wednesday’s sell off especially in the chemicals, tech and heavy industries which saw the brunt of yesterdays selling.
No data due
KDCA reported 731 new covid cases Wednesday (vs 549 Tuesday) South Korea hopes the United States will help it tackle a shortage of coronavirus vaccine in return for test kits and masks Seoul sent to Washington earlier in the pandemic, the foreign minister said on Wednesday.
SK Telecom, South Korea’s No. 1 mobile carrier, aims to grow into a global key player in nonmemory chip design and is on the lookout for acquisition targets, its chief executive officer said Wednesday.  -VE
Naver is considering listing its web cartoon in the US as part of efforts to go global, Bloomberg News reported Wednesday. +VE
South Korea will launch a standardized environmental, social and governance index as businesses are confused by more than 600 different ESG indices existing home and abroad.
The antitrust regulator said Wednesday it will speed up its review of SK hynix Inc.'s deal to acquire US chipmaker Intel Corp.'s NAND business. +VE
Hyundai Motor Co. on Wednesday denied rumors that it is considering the sale of its loss-making railway affiliate, Hyundai Rotem.  
It also said Wednesday it has resumed production at a domestic plant for Grandeur and Sonata sedans after two days of suspension following eased chip supply shortages. +VE
Hanwha Q Cells, said Wednesday it will provide solar modules for a 370-megawatt solar farm project in Angola. Hanwha Q Cells said it will supply photovoltaic modules for the project that plans to build seven solar farms in the South African nation, without elaborating on the amount of the contract.  Slight +VE
Concerns rising as more young Koreans dip their toes into crypto market;  Six out of 10 new crypto investors in the first three months of the yea;r were those in their 20s and 30s, a report showed Wednesday, raising concerns that the surging market volatility would pose risks for the young amateur investors.

TAIWAN 
Expect market to open higher with a focus on tech.  Wednesday saw buying rotation into old economy names (shipping and cement as safe havens).
Data due Unemployment Rate
Paraguayan President Mario Abdo Benitez on Tuesday said that the country would not accept any kind of blackmail or diplomatic conditions in exchange for COVID-19 vaccine purchases.  Abdo Benitez’s remarks followed media reports over the past month that the South American nation might switch diplomatic recognition from Taiwan to China, as it was desperate to obtain vaccines due to surging COVID-19 cases.  +VE
The Chung-Hua Institution for Economic Research (CIER) yesterday raised its forecast for Taiwan’s GDP growth this year to 4.8 percent, an increase of nearly 30 percent from an earlier projection, as exports continue to gain traction while domestic demand continues to recover from the COVID-19 pandemic.  The Taipei-based think tank, which projected 3.73 percent growth in December last year, said that the economy has chance of expanding 5 percent if uncertainty clears up. +VE
AU Optronics Corp  expects value-added panels and new service solutions to account for as much as 20 percent of its overall revenue in 2023 as its transformation efforts begin to bear fruit, the company said yesterday.  “AUO ... aims to become more comparative in terms of product value, rather than [capacity] scale. We want to make sure we can sell our products at better prices,” AUO chairman Paul Peng said.  The company’s strategy is to “go premium” and “go vertical,” “AUO aims to be a company that can earn stable profits.”  AUO is expanding its business scope downstream to five major areas beyond the panel industry: the smart retailing, smart medical care, smart transportation, smart entertainment and smart manufacturing segments, he said. +VE
Gogoro Inc  yesterday said that it has formed a strategic partnership with Hero MotoCorp Ltd to accelerate the Indian scooter maker’s shift to electric.The companies are planning a joint venture to take Gogoro’s battery-swapping platform to India and are to collaborate on electric vehicle development to bring Hero-branded vehicles to the market using the Powered by Gogoro Network model. +VE
Quanta Computer yesterday confirmed that it had recently been subject to a cyberattack, but said that its operations have not been affected.  “Quanta Computer’s information security team has worked with external [information technology] experts in response to cyberattacks on a small number of Quanta servers,” the company said in a statement.
Securities firms in Taiwan reported combined net profit of NT$11.47 billion for last month, up 52.78 percent from the previous month, the Taiwan Stock Exchange (TWSE) said. Accumulated net profit  in the first three months of this year totaled NT$26.85 billion, up NT$31.45 billion from the same period last year. As total TWSE trading value grew 56.29 percent month-on-month to NT$7.06 trillion last month, firms reported an increase in brokerage fee income than the previous month, it said. However, net profit from trading decreased 4.88 percent monthly, while net underwriting income increased by 67.12 percent, it said.  Overall +VE
The average fixed-location download speed of Taiwan’s 4G systems last year was 119 megabits per second (Mbps), up from 108.33Mbps in 2019, a survey conducted by the National Communications Commission (NCC) showed yesterday. BUT, the average upload speed was down from 27.18Mbps in 2019 to 26.12Mbps due to an increased demand to upload videos to social media, the commission said.

CHINA 
Expect market to open flat having closed higher Wednesday, key will be whether 'Team China’ are supporting the market.  For the CSI 300 5,100 was the key resistance level.  Concerns remain PBOC tightening, Bond Defaults and deteriorating international relations.
No data due
Residents of some parts of China that are grappling with tight supplies of coronavirus vaccines have not received their second doses in time, but the crunch will ease by June as production is being stepped up, a health official told state media.  Slight -VE
Australia on Wednesday cancelled two deals struck by its state of Victoria with China on Beijing’s flagship Belt and Road Initiative, prompting the Chinese embassy in Canberra to warn that already tense bilateral ties were bound to worsen. -VE
Car bomb kills 4 at Pakistan’s luxury Serena Hotel, which was hosting China’s ambassador.  Chinese diplomat Nong Rong was at a function during the attack, which has been claimed by the Pakistani Taliban.  It is unclear if he was the target but historically China has enjoy relative immunity from terrorist attacks but its recent international actions could see that change.
Thailand will continue to use COVID-19 vaccine from China's Sinovac Biotech (SVA.O) following six reports of unusual "stroke-like" side effects among recipients, government-appointed experts said on Wednesday.  Slight. -VE
The Philippines is beefing up its presence in the South China Sea and deploying more ships and an aircraft to protect its maritime territory and resources, a government task force said on Wednesday.  The Philippines has ramped up its rhetoric in recent weeks in defiance of what it says is threatening behaviour by Chinese vessels in its 200-mile Exclusive Economic Zone (EEZ), despite four years of rapprochement with historic rival China. -VE for sentiment
China is considering a plan that would see the central bank assume more than 100 billion yuan (HK$119.48 billion) of assets from China Huarong Asset Management (2799), helping the state-owned company clean up its balance sheet and refocus on its core business of managing distressed debt, people familiar with the matter said. Slight +VE but it will depend on the details an especially the status of the offshore unit.  FT article 'Huarong affair tests Beijing’s resolve to bail out state groups'
China's Ant Group (688688.SS) has sealed a deal to acquire a 5% stake in the Brazilian loyalty program Dotz, according to a securities filing on Wednesday. Dotz and Alibaba's payment affiliate Ant Group have also signed a business cooperation agreement, in which both companies explore, for instance, new opportunities for digital financial services in Brazil. +VE
China's agriculture ministry issued a plan on Wednesday to divide the country into five regions to be charged with greater responsibility to prevent and control African swine fever, as well as other animal diseases.  The move comes after a severe winter wave of swine fever in the northern region and some provinces, as the incurable disease causes significant losses in the world's largest hog herd. Slight +VE

HONG KONG  
ADR’s +201pts at  28,822 a broad recovery but Sinopec and Petrochina weak along with CK Hutch, Tencent’s ADR +1.7% but Baba +0.4%Expect some early margin call selling but probably off set by short covering.  Upside capped by China Gas’s top up placement with concerns that more are waiting in the wings.Sentiment slightly helped by zero new covid cases yesterday.
Data due Unemployment Rate
Short Selling Wednesday 12.5% vs 8.6% Tuesday
Top Shorts
 
Sunny Optical (2382) 41%, Bank Of China (3988) 37%, Mengniu Dairy (2319) 36%, Bud Apac (1876) 33%, ICBC (1398) 33%, CCB (939) 32%, Sino BioPharm (1177) 32%, Country Garden (2007) 32%, BankComm (3328) 32%,  Wuxi Bio (2269) 29%, MTRC (66) 27%, Sands China(1928) 27%.
WATCH
CHINA GAS HOLD (00384.HK) plans to place up to 392 million shares by top-up subscription at $29.75-30.75 each, according to market sources. The placing price represented a discount of 6%-9% to the closing price of $32.7 as quoted today (21 April). The company will raise a maximum of $12.054 billion.
HSBC will not “flip-flop” on strategy every time there is a flare-up in tensions between Beijing and the west, according to chief executive Noel Quinn, rebuffing criticism of the bank for moving closer to China as it cracks down on Hong Kong.
Tencent Holdings Ltd is the best of China’s energy-guzzling cloud services providers when it comes to tackling carbon emissions and procuring from renewable sources, Greenpeace said in a research report. Internet firms now rank among the biggest corporate consumers of electricity, and in China rely largely on carbon-intensive coal-fired power to keep their data centres humming around the clock.  +VE
In relation to a rumor spreading among WeChat group about MINSHENG BANK (01988.HK) being taken over, the bank issued a statement that the rumor is malicious disinformation, and that the company has reported the case to the Chinese public security agency and will pursue the legal responsibility of the relevant entities.
GREATWALL MOTOR (02333.HK) announced first-quarter results ended March 2021. Total operating revenue rose 150.6% year on year to RMB31.117 billion. Profit was RMB1.639 billion, as compared with RMB650 million in a year ago's loss.
EPS equaled RMB0.18.
CHINA UNICOM (00762.HK) announced operational statistics for March 2021 that Aggregate Number of Mobile Billing Subscribers reached 309 million, representing Net Addition of 2.957 million for the Month. In particular, Aggregate Number of 5G Package Subscribers hit 91.852 million, representing Net Addition of 7.309 million for the Month, as compared with February's 6.589 million.
Also key financial and performance indicators for the first quarter ended 31 March 2021. Revenue totaled RMB82.272 billion, up 11.4% year-on-year.   Net profit +21.4% annually to RMB3.843 billion in the quarter.
CHINA LIFE (02628.HK) (601628.SH) announced that based on the Company’s preliminary estimates, it is estimated that the net profit for the first quarter of 2021 will increase by a range between approximately RMB9.4 billion and RMB12.818 billion as compared to the same period of 2020 (representing an increase of approximately 55% to 75%).
BOJUN EDU (01758.HK) has issued a profit warning, expecting a decrease in net profit for the six months ended 28 February 2021 by approximately 40%-60%, as compared with that recorded during the six months ended 29 February 2020.
William Yeung, Co-Owner and Executive Vice-chairman of HKBN (01310.HK), announced the launch of 5G mobile virtual network operator (MVNO) through HUTCHTEL HK (00215.HK)'s 3HK network under bilateral 4G and 5G partnership.
With colleagues actively gearing up for new offers, Yeung foresaw more promotions in 5G buildout around mid-May.
HKBN (01310.HK) announced results for the six months ended 28 February 2021. Revenue reached $6.23 billion, up 39.8% yearly. Profit was $48.562 million, down 63.3%. EPS equaled 3.7 cents. EBITDA added 2% to $1.312 billion. Interim. DPS. was 39 cents.
BIDU-SW (09888.HK) Chief Technology Officer Wang Haifeng, at the Boao Forum for Asia, said A.I. technology has penetrated into all kinds of industries. A thorough integration of A.I. technology and industrial development will hence be necessary, he opined.
EVERG VEHICLE (00708.HK) had declared in early 2021 the placement to six investors to raise $26 billion, including $5 billion worth of shares subscribed by a company under Kingkey Group Chairman Chen Hua. The deal was indeed negotiated by EVERG VEHICLE boss Xu Jiayin and Chen, where Chen will transfer Kingkey Real Estate's Shenzhen project under construction to EVERGRANDE (03333.HK) for capital, which will be used to have EVERG VEHICLE's 1.875% stake, reported Caixin.  Shares of EVERG VEHICLE eroded nearly 13% to $59.7.

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