Sept 21 Asian Macro Initial Thoughts Japan re-opens should ease the pressure on HK.


21 Sep

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Asia much remains closed but Japan re-opening should take some pressure off HK. Evergrande and Beijing policy remain the focus. Expect intial margin call selling in HK but then may see bargain hunting.

Australia Futures indicate market to open -98pts with miners remaining weak although the Iron Ore price did see a small bounce concerns remain about Chinese demand.  Oil also weak but Gold pushed higher.   Ex Div today includes BHP and energy companies Oil Search Ltd (ASX: OSH) and Santos Ltd (ASX: STO).
Japan Nikkei CMA futures at 6am opening down around 800pts but the currency is still 109.35 expect broad initial weakness and especially in companies with exposure to China.
S Korea Markets closed for Chuseok re-opens Thursday
Taiwan Market closed Mid Autumn Festival No data due  
China Market closed Mid Autumn Festival No data due  
HK ADR’s -248pts at  23,852 with all stocks in the red.  Expect margin call selling to add to the initial weakness.
US Futures 
Opened Dow Jones futures -12 points. S&P 500 futures were down less than 0.1% and Nasdaq 100 futures were about flat.
Ahead Current Account, Housing Starts, Building Permits, Redbook, API Crude Oil Stock Change. FOMC meeting starts.
UN General Assembly

The United States will re-open to air passengers from China, India, Britain and many other European countries who have received COVID-19 vaccines in early November, the White House said Monday, rolling back tough pandemic-related travel restrictions that started early last year.  +VE for Airlines

DOW -1.78%, NDX -2.19%, S&P -1.7%, Russel 2K -2.44%
Markets trended lower for most of the day but did see a strong rebound in the last hour.  Key worries were Evergrande and the wider implications for the Chinese Property Market and the implications for its suppliers, bankers and investors.
Concerns over what guidance the Fed will give on tapering.
Covid cases remaining high as winter approaches.
US Debt Ceiling as the parties in Washington fail to agree on the way forward.
Worth noting that many had been concerned that we had not seen a significant pullback.
Banks JPMorgan Chase -3%, Citigroup -0.7% Wells Fargo -1.4%, Amex -2%
Work from home names: Facebook -2.5%, Apple -2.1%, Amazon -3.1%, Netflix -2.4%,  Disney -2.7%, Zoom Video -2.4%, Alphabet -1.5% and Microsoft -1.9%,
Tech NXP Semi -3.1%, Nvidia -3.6%, Micron -2.6%, AMD -2.2%, Skyworks -2.7%
Re-opening stocks  Boeing -1.8%, Caterpillar -4.5%, Simon Property -1.3%, Kohl’s -0.9%, Nordstrom -1.2%, Gap -2.2%, United Airlines +1.6%, Carnival -1.3%, Wynn Resorts -1.4%, Chevron -2.1%, Exxon Mobil -2.7%,  
Lock down names Campbell Soup -1.4% General Mills -0.3%, JM Smucker -0.6%
DATA
NAHB House Market Index Sept 76 vs 75 Aug (F/cast was 74)
USD was stronger as safe haven vs Yen & Euro. Bitcoin -8% @ 43,720.44, VIX +23.6% @ 25.71, US T10 @ 1.312% yield slides as investors seek safety
OIL Brent -1.45%, WTI -2.1% risk aversion and dollar strength
Gold +0.8%, Silver -0.41%, Copper -2.84% Platinum -3.1%, Palladium -6.2%.
AHEAD Current Account, Housing Starts, Building Permits, Redbook, API Crude Oil Stock Change.  FOMC meeting starts.
UN General Assembly

DAX -2.31%, CAC -1.74%, FTSE -0.86%
Markets opened lower and sold down through the morning but rebounded in the PM to close around the opening levels. Concerns about situation over Evergrande prompted weakness in stocks with exposure to China added to which there was caution ahead of the US FOMC meeting.
Basic Resources and Banks weak
Prudential -8.4% after the company announced a Hong Kong share sale.
AstraZeneca +6.2% after announcing promising results for a breast cancer drug.
DATA
GERMANY 
PPI Aug +1.5% MoM vs +1.9% Jul (F/cast was +0.9%)
PPI Aug +12% YoY vs +10.4% Jul (F/cast was +11.4%)
AHEAD
EUROZONE No data due
GERMANY No data due
FRANCE No data due  
UK  Public Sector Net Borrowing, CBI Industrial Trends Orders

JAPAN
Nikkei CMA futures at 6am opening down around 800pts but the currency is still 109.35 expect broad initial weakness and especially in companies with exposure to China.
Yen currently 109.35
No data due but BoJ rate decision tomorrow.
Tokyo reported 302 new covid cases(-263 DoD) with the national total 2,224.  Govt considering ending the State of Emergency at the end of the month +VE
Press focus remains on the LDP leadership election and the candidates’ policies.
Uber Eats Japan will launch services in Tokushima, Matsue, Tottori and Fukui from Sept. 28, the food delivery platform has announced.   The platform is currently used in 43 prefectures. Its launch in these four cities will expand the service to all 47 prefectures.  Run by Uber Technologies Inc., the platform has tied up with convenience store chain Lawson, Inc. in some areas where it delivers food and daily necessities.  +VE
MUFJ considering selling US unit  +VE
Sumitomo Metal (5713) to supply carbide wafers for power control semiconductors (semi's that can withstand higher voltage & reduce power loss) hence extend the driving range for electric vehicles +VE.
Takata airbags to be subject to another investigation in the US by the NHTSA -VE
Stocks exposed to China and Evergrande -VE; Toto on construction, Daikin supplying air cons. Nippon Paint.  Komatsu on construction.  Banks have relatively little exposure.  

SOUTH KOREA
Markets closed re-opens Thursday
No data due
KDCA announced 1,605 new covid cases  (1,577 domestic).  The second day under 2,000 but with concerns that cases will rise after the Chuseok holiday.

TAIWAN
Market closed re-opens Wednesday
No data due
The military should redefine its understanding of victory, which under the current circumstances is not so much winning battles, but preventing the enemy from occupying the nation, former chief of the general staff admiral Lee Hsi-ming said.
The former deputy minister of national defense made the remarks at a seminar hosted by the Academia Sinica’s Institute of Sociology in Taipei on Friday.
The event was titled: “Challenges for the Taiwanese military’s relationship with society under the overall defense concept.”
The value of presale and new housing projects in the six special municipalities is nearly NT$600 billion (US$21.63 billion) for this autumn sales season, as developers are regaining confidence because the COVID-19 situation has improved, the online housing unit of Addcn Technology Co Ltd said in a report last week.
Rakuten International Commercial Bank Co on Friday announced that it would offer a relatively high interest rate of 2 percent for its fixed-term deposit accounts if clients deposit more than NT$20,000 at the Web-only bank, in a bid to enhance its competitive position in the Internet banking market.
Taiwan Semiconductor Manufacturing Co (TSMC) last year saved almost 2 million tonnes of water as part of its efforts to fulfill its commitment to reach net-zero emissions by 2050, the company’s financial disclosure report said.  To reach its zero emissions goal, TSMC has been taking action to broaden its green influence and drive industry toward low-carbon sustainability, chairman Mark Liu said in the company’s Task Force on Climate-related Financial Disclosures report released last week.

CHINA
Market closed re-opens Wednesday
No data due

HONG KONG 
ADR’s -248pts at 23,852 with all stocks in the red. Expect margin call selling to add to the initial weakness.
No data due but after market Monday
Inflation Rate Aug +1.6% vs+3.7% Jul (F/cast was +2.8%)
Hong Kong's overall GDP increased by 7.6% in real terms in the second quarter of 2021 over a year earlier, compared with the 8% increase in the first quarter of 2021, according to the preliminary figures released by the Census and Statistics Department (C&SD) today. Analysed by constituent services sector and on a year-on-year comparison, net output in respect of all the services activities taken together increased by 6.5% in real terms in the second quarter of 2021 over a year earlier, compared with the 6.7% increase in the first quarter.According to the figures released by the Census and Statistics Department (C&SD), total employment in the private sector surveyed decreased by 0.4% or 11,700 persons in June 2021 compared with a year earlier. The total number of vacancies was 45,440, representing an increase of 16% or 6,320 over the preceding year.

SHORT SELLING HSI Monday 22.2% vs 15.9% Friday
Top shorts  
Henderson Land (12) 56%, Country Garden (2007) 53%, Bud Apac (1876) 49%, MTR (66) 48%, SHKP (16) 45%, Wharf REIC (1997) 42%, Xinyi Glass (868) 42%, CM Bank (3968) 36%, CK Asset (1113) 36%, BYD (1211) 36%, Wuxi Bio (2269) 36%, Haidilao (6862) 34%, Sunny Optical (2382) 34%, Petrochina (857) 33%, New World Dev (17) 33%, China Overseas (688) 30%, Mengniu Dairy (2319) 30%, Xinyi Solar (968) 29%, China Life (2628) 29%, CLP (2) 27%, ICBC (1398) 26%, Hang Lung Ppty (101) 26%, Hang Seng Bank (11) 25%.

NATIONAL SECURITY
Police seized M&M's, baby powder and dried shredded squid as they arrested three core members of Student Politicism (aged 18 - 20 years old), claiming they attempted to attract followers in prison using the seized items as “gifts”.  
Police under the national security department, said they have arrested two men and one woman for conspiracy to incite subversion of state power during a morning operation on Monday. The arrested, the police alledge also urged the public not to use the LeaveHomeSafe app and spread messages inciting hatred against the government, police said.

WATCH
The Macao SAR government is holding a special public consultation session for casino companies and junket operators on gaming law revision this afternoon (20th), reported Macao Daily. 
Ku Mei Leng, Chief of Macao's Office of the Secretary for Economy and Finance, said the authorities have no stance when it comes to eligibility review and stepping up regulation. The government will listen to sector opinions with an open mind.

The Real Estate Developers Association of Hong Kong chairman, said he never heard about Beijing meeting members of the association. He said members maintained communications with the government to discuss how to solve the problem of high property prices. But it is difficult to solve the problem in the short term, he said.  I think a good move would be to include a completion date into the land grant when developers acquire land; in addition to the existing start date.

HENDERSON LAND (00012.HK)'s residential project located in Eastern District, Hong Kong Island 
-- "THE HOLBORN" will further offer 23 units for sale this Friday (24th), with salable area of 220-260 sq.ft. The discounted selling prices for the batch range between $5.931 million to $8.19 million.

Cathay Pacific carried 135,353 passengers last month, the most in a year but warned that it cannot reach its expected level by the end of the year.  That was an increase of 278.4 percent compared to a year ago, but the number was still a 95.3 percent decrease compared to the pre-pandemic level.  Its passenger performance for the month, with capacity at about 13 percent of pre-pandemic levels, was far less than the previous pledge of 30 percent of pre-pandemic capacity by the fourth quarter.  The big drivers were student travel especially from the mainland to the US along with cargo.

The house lot at 75 Deep Water Bay Road, Southern District held by GOLDIN FIN HOLD (00530.HK)  Chairman Pan Sutong or related persons through Propway Limited was purportedly under sales talks in May 2021, reported Hong Kong Economic Journal.  Pan Sutong resigned as a director of Propway Limited in late August, according to Companies Registry's information. The press does not rule out the possibility that the deal has been completed.

MTR CORPORATION (00066.HK) announced to invite developers and/or consortia to submit Expression of Interest (EOI) for Tung Chung Traction Substation Property Development on 21 September 2021. The deadline for submission is 2:00pm on 28 September 2021. The development is a residential development to be built atop the Tung Chung Traction Substation and its associated railway facilities with a maximum residential gross floor area of 87,288 square metres, and may provide 1,400 to 1,800 residential units, MTR added.

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