Apr 27 Asian Marco Initial Thoughts Expect a cautious open ahead of BoJ and China Industrial Production numbers


27 Apr

Asia
Australia 
Market futures +10pts following the US. Oil weaker overnight -VE Beach Energy Ltd  and Woodside PetroleumIRESS Ltd in focus after upgrading its net profit after tax guidance. Gold higher +VE for miners Evolution Mining and Northern Star Resources.  Watch  Afterpay Ltd  and Zip Co Ltd likely +VE after +VE US tech overnight.
Japan 
Nikkei futures opened +13pts and have fluctuated but remained +VE , expect cautious initial trading ahead of the BoJ announcement and quarterly report.
S Korea 
Expect markets to open higher following the US and the strong GDP growth data out
Taiwan Market to open higher following the US
China Market to open flat with caution ahead of the Industrial data and lingering concerns over debt defaults.
HK ADR’s +95pts at 29,047  broadly +VE but Chinese Financials remain weak. News that WuXi Bio shareholder placing 98m shares -VE for sentiment and will raise concerns about more placements ahead.Expect caution ahead of the China Industrial Profits data on the open and then results out later in the day.  Cathay Pacific +VE reports some flights to Singapore already sold out
Europe data due FRANCE Unemployment Benefit Claims, Jobseekers and UK CBI Distributive Trades
US Futures Opened Dow and S&P flat, NDX+0.1%
Data due Redbook, Case-Schiller Home Price Index, CB Consumer Confidence, Richmond Fed Manufacturing Index API Crude Oil Stock Change. FOMC meeting starts
Earnings Microsoft, Alphabet, Visa, Amgen, Advanced Micro Devices, 3M, General Electric, Eli Lilly, Hasbro, United Parcel Service, BP, Novartis, JetBlue, Pultegroup, Archer Daniels Midland, Waste Management, Starbucks, Texas Instrument, Chubb, Mondelez, FireEye, Corning, Raytheon

Britain's HMS Queen Elizabeth aircraft carrier will lead a flotilla of Royal Navy ships through Asian waters on port visits to Japan and South Korea on its maiden deployment, the British embassy in Tokyo said on Monday.  The high-profile visits, aimed at bolstering security ties in East Asia, come amid tensions in the region as concern grows in Japan over any threat posed to neighbouring Taiwan by China.

DOW -0.18%, NDX +0.87%, S&P +0.18%, Russel 2K +1.15% 
Markets opened around flat with weak durable goods orders; Dow drifted lower, S&P traded sideways in the green and NDX worked higher to close at a new high.
Tesla +1.2% in normal hours but -1.9% after market, it beat on earnings and revenue and boosted by sales of bitcoin and regulatory credits. But margins squeezed by supply chain pressures
GameStop’s +12% in after-hours trading after the video game retailer said it sold 3.5 million additional shares, raising $551 million to speed up the company’s e-commerce transformation.
Banks JPMorgan Chase +0.3%, Citigroup +1.2% Wells Fargo +0.6%, AMEX +4.2%
Work from home names: Facebook +0.6%, Apple +0.3%, Amazon +2%, Netflix +0.9%, Disney +0.7%, Zoom Video -0.1%, Alphabet +0.4% and Microsoft +0.2%,
Tech NXP Semi +1.7%, Nvidia +1.4%, Micron +2.1%, AMD +3.2%, Skyworks +4.6%
Re-opening stocks  Boeing +1.3%, Caterpillar +0.2%, Simon Property +2.8%, Kohl’s -2.1%, Nordstrom -2.9%, Gap -1.6%, United Airlines +1.3%, Carnival +1.1%, Wynn Resorts +0.7%, Chevron flat, Exxon Mobil +0.2%,  
Lock down names Campbell Soup -1.7% General Mills -1.2%, JM Smucker flat
DATA
Durable Goods Orders Mar +0.5% MoM vs -0.9% Feb revised (F/cast was +1.7%)
Durable Goods Orders Ex Transport Mar +1.6% vs -0.3% Feb revised (F/cast was +1.5%)
Durable Goods Orders Ex Defence Mar +0.5% vs -0.4% Feb revised (F/cast was +1.2%)
Dallas Fed Manufacturing Index Apr 37.3 vs 28.9 Mar (F/cast was 26)
USD was slightly stronger vs Yen & Euro. Bitcoin +7.2% @ 53,125.62, VIX % @ , US T10 @ 1.57%
OIL Brent -0.7%, WTI -0.37% on concern covid in India will hurt demand
Gold +0.1%, Silver +0.5%, Copper +2.5% Platinum +0.2%, Palladium +1.8%.
AHEAD Redbook, Case-Schiller Home Price Index, CB Consumer Confidence, Richmond Fed Manufacturing Index API Crude Oil Stock Change. FOMC meeting starts
Earnings Microsoft, Alphabet, Visa, Amgen, Advanced Micro Devices, 3M, General Electric, Eli Lilly, Hasbro, United Parcel Service, BP, Novartis, JetBlue, Pultegroup, Archer Daniels Midland, Waste Management, Starbucks, Texas Instrument, Chubb, Mondelez, FireEye, Corning, Raytheon

DAX +0.11%, CAC +0.28%, FTSE +0.35% 
Markets opened flat; CAC +VE and FTSE -VE trading sideways, DAX slipping lower after the Ifo data. But from mid morning the indexes worked slightly better to close at day highs. Banks leading with F&B the laggard.
Earnings from Pearson +3.6% and Michelin +0.6%
Philips -3.6% despite reporting a 74% jump in core earnings in tQ1 to 362 million euros ($438 million) and upgraded its earnings forecasts for 2021. But it is taking a 250 million euro provision for risks in respiratory care devices.
Fabege -3.9% after reporting a Q1 decline in property management profits.
Tate & Lyle +5.9% after announcing that it is considering selling its commercial sweeteners unit.
IMI +11% after raising its 2021 profit guidance.
AMS -0.7% off initial lows after Credit Suisse double-downgraded the stock on concerns about potential lost product supply deals with Apple.
DATA
GERMAN Ifo Data
Business Climate Apr 96.8 vs 96.6 Mar (F/cast was 97.5)
Current Conditions Apr 94.1 vs 93.1 Mar raised (F/cast was 94)
Expectations Apr 99.5 vs 100.3 Mar revised (F/cast was 101.5)
AHEAD
EUROZONE No data due
GERMANY No data due
FRANCE Unemployment Benefit Claims, Jobseekers
UK CBI Distributive Trades

JAPAN
 Nikkei futures opened +13pts and have fluctuated but remained +VE , expect cautious initial trading ahead of the BoJ announcement and quarterly report.Yen currently 108.14
Data due BoJ Interest Rate Decision and Quarterly Outlook
Tokyo reported 425 new covid cases (vs 635 Sunday) and Osaka 924 (vs 1,050 Sunday) slight +VE  as new emergency state takes effect.
Japan's services prices showed signs of a pick-up in March as advertising and transportation fees rose, data showed on Monday, suggesting the economy was recovering moderately from last year's severe hit as the coronavirus pandemic took hold. But the third state of emergency, rolled out on Sunday to combat a resurgence of new COVID-19 infections, clouds the outlook, with requests for retailers to close likely to hurt consumption.
Toshiba Corp's (6502.T) second-biggest shareholder called on the Japanese conglomerate to undergo a strategic review and explicitly solicit suitors, saying potential acquirers were deterred by the company's comments on wanting to remain listed. The comments by 3D Investment Partners, which owns a 7.2% stake in Toshiba, come as a $21 billion buyout offer from CVC Capital Partners earlier this month has sparked expectations for a bidding war for the Japanese company. read more +VE
Nomura Holdings Inc (8604.T) said on Monday it will appoint Christopher Willcox as Co-CEO of the group's holding company for Americas as Japan's biggest brokerage and investment bank aims to beef up its U.S. management.  Willcox, former CEO of JP Morgan Asset Management, will work with Yo Akatsuka, who will remain as CEO of Nomura Holding America Inc. His appointment is effective May 3.  +VE but still the firm will not appoint non Japanese to senior roles, he will have to work with Yo Akatsuka. Slight +VE
ANA said Monday it aims to become carbon neutral by 2050 through new technology, emissions trading and other efforts. It comes after Prime Minister Yoshihide Suga announced last week that Japan would target a 46-percent cut in greenhouse gas emissions by 2030, significantly more than previously pledged. +VE
Private sector advisers to Prime Minister Yoshihide Suga warned on Monday that Japan’s birth rate is declining at a faster pace amid the coronavirus crisis, saying that society should have a “sense of crisis” about it. -VE
China said on Monday the International Atomic Energy Agency(IAEA) would invite Chinese experts to join a working group to monitor and assess Japan’s disposal of contaminated water from the crippled Fukushima nuclear plant.
Tokyo Olympics organizers have defended their request for 500 nurses at the pandemic-delayed mega-event, after accusations of diverting crucial medical resources.  It seems to me that the Olympics are becoming increasingly alienated from the public in Japan and that the event is unlikely to be a success.

SOUTH KOREA
Expect markets to open higher following the US and the strong GDP growth 
Data out.
GDP Growth Rate Adv Q1+1.6% QoQ vs +1.2% Q4 (F/cast was.+0.9%)
GDP Growth Rate Adv Q1 +1.8% YoY vs -1.2% Q4 (F/cast was.+1.1%)
KDCA reported 500 new covid cases on Monday vs 644 Sunday.
President Moon Jae-in's public disapproval rating hit an all-time high, a poll showed Monday, as the ruling bloc continues to struggle with fallout from its recent crushing defeat in local by-elections.  In the five-day Realmeter survey conducted through last Friday, Moon's disapproval rating hit 63 percent, up 1.5 percentage points from a week earlier. The latest poll canvassed 2,532 people, aged 18 or older, nationwide.
South Korea and China have not discussed the Quad alliance, a US-led democratic coalition comprising the US, Australia, India and Japan to contain an increasingly assertive China, the Ministry of National Defense said Monday.
Battery material maker SK IE Technology Co Ltd (South Korea’s SKIET) raised $2 billion in its initial public offering (IPO) which attracted the hottest demand ever for a deal in South Korea, the company said in a statement Monday.  Shares were priced at 105,000 won each which was the top of the range announced in a regulatory filing last month to raise about 2.2 trillion won ($1.98 billion). The listing, which parent company SK Innovation Co Ltd said will take place on May 11, will be the biggest in South Korea since gaming company Netmarble Corp raised 2.7 trillion won in its IPO in May 2017, according to Korea Exchange data.
Celltrion has completed administration of an experimental COVID-19 antibody treatment to a total of 1,300 people participating in its phase 3 clinical trial, the company announced Monday.
The final stage of human tests of the drug candidate, known as Regkirona or CT-P59, is being conducted in 13 countries, including Korea, the US, Spain and Romania, the firm added. The treatment has cleared an emergency use authorization in Korea in February.
Samsung Electronics Co. said Monday sales of 2021 QLED TV models have topped 10,000 units in South Korea less than two months since its release as the company expects more premium TV sales amid the pandemic-induced stay-at-home trend.
SK E&C is speeding up the process to secure certified emission reduction credits in Korea and Vietnam, paving the way for potential renewable business opportunities in the future, the firm said Monday.  The Seoul-based builder has so far committed to two Programs of Activities, one that is a modality of project development under the Clean Development Mechanism of the United Nations Framework Convention on Climate Change and the other organized by the Environment Ministry.
Mobile carrier KT teamed up with Samsung Electronics to launch the world’s first emergency telecommunications network that covers the whole nation, KT said Monday.

TAIWAN 
Expect market to open higher following the US
No data due 
Hong Kong police on Saturday blocked access to the Web site of the Presbyterian Church in Taiwan due to “national security” concerns, Chinese state-owned daily Wen Wei Po reported on Sunday. The report from Wen Wei Po, which is run by Beijing’s Hong Kong Liaison Office, said that access to the Web site was blocked due to contraventions of Hong Kong’s National Security Law. The Stand News Web site said the measure likely signaled that Beijing is planning to extend its Internet firewall to Hong Kong. -VE
The Ministry of the Interior and lawmakers are pushing for amendments that would raise the cost burden for multiple homeowners and property developers, after credit controls and property tax hikes were recently implemented to cool the property market.
Holtek Semiconductor expects revenue to grow sequentially by a double-digit percentage this quarter, with growth momentum potentially extending into next quarter due to price hikes and healthy customer demand mainly from China, a company executive said yesterday.  The microcontroller units developer said it is considering raising prices further in the second half of this year to reflect an uptrend in wafer costs.  Holtek raised the prices of all of its products by 15 percent this month. +VE
Taiwan might be heading into another record summer of electricity use, Taiwan Power Co said yesterday. Q1 electricity use increased 3 percent year-on-year, with the last three days of last month breaking record peak use for March, the state-run utility said. So far this month, power use is up 7 percent year-on-year. The most power used this month was on Thursday last week when 32.765 gigawatts (GW) were used in a day, up from the previous April record of 29.99GW.  +VE

CHINA 
Expect market to open flat with caution ahead of the Industrial data and lingering concerns over debt defaults.
Data due on the open 
Industrial Profits (YTD) Mar (Feb was 178.9% YoY F/cast is +45%)
China reported 11 new coronavirus disease patients on April 25, down from 13 a day earlier.
The National Health Commission, said in a statement, all were imported infections. The number of new non symptomatic patients, which China does not classify as confirmed, climbed to 18 from 14 a day earlier.
China next month plans to launch a series of promotional activities, including a new consumer goods expo in southern Hainan Province, to boost spending as the Chinese retail sector recovers from consumer caution induced by COVID-19. Expanding domestic consumption is a priority in China’s “dual circulation” economic strategy first highlighted by Chinese President Xi Jinping (習近平) in May last year, which also called for a reduced dependence on foreign markets.
Ant Group Co plans to offer zero-interest loans to employees who own illiquid stock options, seeking to boost morale after the company’s landmark initial public offering (IPO) was suspended in November last year, people familiar with the matter said.  The loans are to be backed by eligible employees’ restricted stock options, which would be valued at levels calculated after a 2018 funding round, the people said, asking not to be identified as they were discussing private information.
Ministry of State Security is identifying key entities – firms, groups, government departments – to help protect state secrets.  New regulation allows national security apparatus to install devices where needed or dismantle devices and hardware where necessary.  Once included on a list, the entity must conduct counter-espionage vetting and training for all personnel with access to secrets, the regulation said. Those personnel must sign non-disclosure agreements before taking on their jobs.  In these organisations, counter-espionage training is required before any worker leaves on an overseas trip. Personnel returning from abroad must be interviewed on national security grounds, according to the new rules.
China to put former top anti-corruption inspector on trial for graft.  Dong Hong’s case has been handed over to prosecutors amid allegations that he committed ‘grave violations’ of Communist Party discipline.   Party leaders could be trying to clear a backlog ahead of next year’s party congress, observer says.
China has sought to reinforce its territorial claims to a group of East China Sea islands by releasing a landscape survey of the Japanese-administered features as tensions build with Tokyo.  The survey of the Diaoyu Islands – known as the Senkakus in Japan – was released on Monday by China’s Ministry of Natural Resources and covers the main island and two smaller nearby islets. “The report … supplements and improves the basic geographic data of the Diaoyu Islands and its affiliated islands, and provides important support for the management of the Diaoyu Islands’ resources and environmental protection,” the ministry said. -VE for tensions
A livestream of the Academy Awards in Shanghai hosted by alumni of Oscar-winner Chloe Zhao’s alma mater ran into China’s Great Firewall, with the organiser saying access to his virtual private network (VPN) service was blocked for nearly two hours.  Beijing-born Zhao, whose critical 2013 comment on China resurfaced after her nomination, sparking backlash in the country, was named best director for "Nomadland" on Monday, making her the first Asian woman to win the category in the award's 93-year history.

HONG KONG  
ADR’s +95pts at 29,047  broadly +VE but Chinese Financials remain weak. News that WuXi Bio shareholder placing 98m shares -VE for sentiment and will raise concerns about more placements ahead.Expect caution ahead of the China Industrial Profits data on the open and then results out later in the day.  Cathay Pacific +VE reports some flights to Singapore already sold out
Data due after market Balance of Trade, Exports and Imports

Short Selling Monday 15.2% vs 14.2%  Friday
Top Shorts
 
Bud Apac (1876) 40%,  Hengan (1044) 39%, Bank Of China (3988) 34%, Country Garden (2007) 32%,  CCB (939) 31%, Wuxi Bio (2269) 31%, Wharf REIC (1997) 30%, BankComm (3328) 26%, HK & China Gas (3) 26%, NWD (17) 26%, CK Asset (1113) 26%, Ali Health (241) 25%
Earnings Tuesday 27 April 

HSBC Holdings plc 00005.HK Banks Hang Seng Bank Ltd. 00011.HK Banks
WH Group Ltd. 00288.HK Agricultural, Poultry & Fishing Production
Jiangxi Copper Co. Ltd. - H Shares 00358.HK Nonferrous Metal
Guangshen Railway Co. Ltd. - H Shares 00525.HK Public Transport
Skyworth Group Limited 00751.HK Household Appliances
China Education Group Holdings Limited 00839.HK Other Support Services
Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd.- H Shs 00874.HK Medicine
Dongjiang Environmental Co. Ltd. - H Shares 00895.HK Environmental Goods
Huaneng Power International, Inc. - H Shares 00902.HK Electricity Supply RES
Anhui Conch Cement Co. Ltd. - H Shares 00914.HK Construction Materials
Sinopec Yizheng Chemical Fibre - H Shares 01033.HKPetroleum & Gases Equipment & ServicesSinopharm Group Co. Ltd. - H Shares 01099.HK Medicine COSCO SHIPPING Ports Limited 01199.HK Marine & Harbour Services
China International Marine Containers - H Shares 02039.HK Machinery & Equipment
Aluminum Corporation of China Ltd. - H Shares 02600.HK Nonferrous Metal
China Molybdenum Co., Ltd. - H Shares 03993.HK Nonferrous Metal
China Merchants Securities Co., Ltd.-H shares 06099.HK Securities
China YuHua Education Corporation Limited 06169.HK     Other Support Services    

WATCH
WUXI BIO (02269.HK)'s controlling shareholder WuXi Biologics Holdings plans to place 98 million shares at $105-108 each, representing a 5.9-8.5% discount to Monday's closing price, for estimated proceeds up to $10.584 billion, according to the prospectus seen by Bloomberg.
BABA-SW (09988.HK) announced establishment of TMall Shanghai center, as the connection between TMall and local brands. +VE
There were reports on XIAOMI-W (01810.HK)'s talks with GREATWALL MOTOR (02333.HK) on EV production using the latter's plants.  GREATWALL MOTOR dismissed the reports as inaccurate, adding there have been no negotiations between the automaker and XIAOMI-W in this regard.
CK Asset (1113) will hold an extraordinary general meeting on May 13 to vote on a HK$19.38 billion share buyback plan. Sources said most institutional investors support the buyback plan.
HSBC HOLDINGS (00005.HK) is set to appoint Jean-Manuel Richier as the head of investment banking for continental Europe, in succession to Hubert Preschez, according to internal documents seen by foreign press.
Dowson Tong, Senior Executive Vice President of TENCENT (00700.HK)  cum President of Cloud and Smart Industry Business Unit, said at a press conference that it is not going to manufacture vehicles for the time being because its core capability is "linkage", alike the old times when it did not make phones, Chinese media reported. That said, it will support the industry in terms of software.
Chinese State Administration of Market Regulation (SAMR) announced that it has based on recent reports launched an investigation into MEITUAN-W (03690.HK)'s "choose one from two" syndicated action.  The company wrote in WeChat that it would fully cooperate in investigation, after receiving today a notice from Chinese State Administration of Market Regulation (SAMR) about an investigation into its alleged syndicated behavior, cited Chinese press. The group clarified that all businesses are running smoothly as usual. -VE

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