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Apple hit a high and supply chain in focus as it names Sept 14 for a launch event. The rest of Asia more mixed with Japanese GDP data pre market and Chinese Inflation and PPI data due tomorrow.
Australia Futres indicate market to opens -29pts, following the weak US, weakness in Oil and Gold and a number of companies going Ex Div (including SEK, MPL, AUB, SBM, BKL, BXB).
Data due RBA Chart Pack,
Japan Nikkei local futures opened -35pts, Chicago futures -5pts with caution ahead of GDP data due open. Market closed just before 30k mark so weak GDP could prompt a sell down as investors lock in recent gains
S Korea Expect markets to open lower following the weakness in the US but concerns over the delta variant impact could prompt renewed interest in Tech and S Korean Internet names.
Taiwan Expect market to open higher as Apple hits a high and announces new launch date +VE Tech/Supply chain. Aftermarket trade data was firm but rising inflation will be a concern. T/O was low Tuesday so watch for an increase in flows with US back.
China Expect market to open lower with concerns about the weakness in the US and the possible impact on exports. Also caution ahead of Inflation and PPI data due Thursday.
HK ADR’s -11pts @ 26,342 with weakness in Chinese Financials. Ecommerce names continue to see interest.
Opened Dow -15 pts. S&P 500 and Nasdaq 100 futures unch.
DOW -0.76%, NDX +0.07%, S&P -0.34%, Russel 2K -0.72%
US markets opened mixed Dow and S&P dipped in early trading partly recovered but traded in the red all day. NDX opened flat and traded sideways in the green. After GS downgraded its Economic Outlook due to the delta virus and MS downgraded US equities. Comes as millions of jobless Americans lost their unemployment benefits on Monday, leaving only a handful of economic support programs for those who are still being hit financially by the year-and-a-half-old coronavirus pandemic. Two critical programs expired on Monday. One provided jobless aid to self-employed and gig workers and another provided benefits to those who have been unemployed more than six months. Further, the Biden administration's $300 weekly supplemental unemployment benefit also ran out on Monday.
PPG Industries -3.4%, a paint maker, warned that sales may fall short this quarter because of logistics issues and higher commodity costs.
Drug stocks including Johnson & Johnson, Merck and Amgen were slightly lower after Morgan Stanley downgraded the three stocks.
Banks JPMorgan Chase -0.2%, Citigroup -0.5% Wells Fargo +0.3%, Amex +0.3%
Work from home names: Facebook +1.6%, Apple +1.6%, Amazon +0.9%, Netflix +2.7%, Disney +1.9%, Zoom Video +0.6%, Alphabet +0.4% and Microsoft -0.3%,
Tech NXP Semi -0.1%, Nvidia -0.8%, Micron -0.2%, AMD -0.7%, Skyworks -0.9%
Re-opening stocks Boeing -1.8% (as 787 Dreamliner deliveries will be delayed), Caterpillar -1%, Simon Property -0.9%, Kohl’s -0.8%, Nordstrom +3.1%, Gap -0.9%, United Airlines +0.8%, Carnival +2.6%, Wynn Resorts +5.6%, Chevron -0.4%, Exxon Mobil -0.6%,
Lock down names Campbell Soup -0.4% General Mills -1.7%, JM Smucker -0.8%
LMI Logistics Managers Index Current 73.8 vs 74.5 prior
USD was flat vs Yen rises vs Euro. Bitcoin -10.3% @ 46,481.11 as the El Salvador roll out falters, VIX +10.5% @ 18.14, US T10 @ 1.377%
OIL Brent -0.9%, WTI -1.3%
Gold -2.1%, Silver -1.7%, Copper -1.4% Platinum -2.6%, Palladium -2%.
AHEAD MBA 30 yr Mortgage Rate and Mortgage Applications, Redbook, IBD/TIPP Economic Optimism, JOLTs Job Openings, NYFed Treasury Purchases TIPS 1 to 7.5 yrs, Consumer Credit Change, API Crude Oil Stock Change.
DAX -0.56%, CAC -0.26%, FTSE -0.53%
Markets opened and are trending slightly lower to close around the day lows. Data was mixed and investors were cautious ahead of the US re-opening and the ECB meeting on Thursday. Most sectors closed in the red.
U.K. retailer Marks and Spencer +3.3% after UBS upgraded the stock and raised its price target.
Meggitt -12.1% after U.S. defense firm TransDigm ruled itself out of a potential $8 billion takeover bid for the British rival, ending speculation of a bidding war with Parker-Hannifin.
PM Johnson announced new taxes to fund healthcare breaking a manifesto pledge.
Employment Change Q2 +0.7% QoQ vs -0.2% Q1 (F/cast was +0.5%)
Employment Change Q2 +1.8% YoY vs -1.8% Q1 (F/cast was +1.8%)
GDP Growth Rate Q2 +2.2% QoQ vs -0.3% Q1 (F/cast was +2%)
GDP Growth Rate Q2 +14.3% YoY vs -1.2% Q1 revised (F/cast was +13.6%)
ZEW Economic Sentiment Index Sept 31.1 vs 42.7 Oct (F/cast was 30)
Industrial Production Jul +1% MoM vs -1% Jun (F/cast was +1%)
ZEW Economic Sentiment Index Sept +26.5 vs +40.4 Oct (F/cast was 29)
ZEW Current Conditions Sept 31.9 vs 29.3 Oct (F/cast was 30)
Halifax House Price Index Aug +7.1% YoY vs +7.6% Jul (F/cast was +7.3%)
Halifax House Price Index Aug +0.7% MoM vs +0.4% Jul (F/cast was +1%)
BBA Mortgage Rate for Aug 3.61% vs 3.61 Jul (F/cast was 3.61%)
EUROZONE No data due
GERMANY No data due
FRANCE Non Farm Payrolls, Private Non Farm Payrolls, Balance of Trade, Current Account.
UK No data due
Nikkei futures opened Chicago futures -5pts with caution ahead of GDP data due open. Market closed just before 30k mark so weak GDP could prompt a sell down as investors lock in recent gains. Softbank rallied on the Deutsche Telecom news but upside probably fully valued.
Data due pre market
GDP Growth Data (Growth Rate, Growth Annualised, Capital Expenditure, Price Index, External Demand and Private Consumption)
Later Eco Watchers Outlook and Current.
Tokyo reported 1,629 new covid cases (+661 DoD) and the national tally rises again to 10,603 -VE
The Japanese government is eyeing an extension of the COVID-19 state of emergency for Tokyo, neighboring and some other prefectures past its Sept 12 end date, having deemed the strains on the health system have not eased enough to lift restrictions on business activity, sources say -VE.
The Japan Business Federation, better known as Keidanren, on Monday called on the Suga administration to relax restrictions for fully inoculated arrivals as part of its proposals to resume international travel and revive the nation’s economy. +VE
The European Union is likely to remove Japan and five other countries from its list of safe travel destinations, meaning visitors or people returning from those countries could face tighter controls such as COVID-19 tests or quarantine. -VE
Toyota to invest 1.5tn Yen (US$13.7bn) on the supply and development of batteries for hybrid and EV’s by 2030 +VE
The United States, South Korea and Japan are preparing for a possible meeting of officials handling North Korea next week in Tokyo, Kyodo news agency reported on Tuesday.
Expect markets to open lower following the weakness in the US but concerns over the delta variant impact could prompt renewed interest in Tech and S Korean Internet names.
No data due
Fitch Ratings said Tuesday that it would maintain South Korea’s credit rating and keep the economic growth projection positive, citing economic resilience, despite the latest wave of the pandemic hitting the country. +VE
China’s foreign minister will visit South Korea next week amid stalled denuclearisation talks with North Korea, Seoul’s foreign ministry said on Tuesday. +VE
The 8th International Electric Vehicle Expo, which kicked off on Tuesday on the southern island of Jeju, seeks to expand the scope of e-mobility, shedding light on other means of transportation, including ships and urban air mobility +VE.
Hyundai Motor Group on Tuesday unveiled a new hydrogen vision that includes plans to make hydrogen vehicles as cheap as electric vehicles within 10 years. +VE
NC Soft buyback likely to give support to the stock
LG Chem has developed a new material for foldable displays that is as hard as glass, but can bend both ways without the creasing issue, it said Tuesday. +VE
LX Hausys, formerly LG Hausys, which specializes in windows and interior materials, has entered the race to acquire South Korea’s top furniture maker Hanssem. The company is part of LX Group (separated from LG Group earlier this year), is the latest to show interest, following other retail giants including Lotte, according to multiple reports. For its bid, LX Hausys will be joining a private equity fund set up by IMM Private Equity with 300 billion won ($255.4 m) of investment money +VE.
South Korea has test-fired a ballistic missile (SLBM) from a submarine, Yonhap news agency reported on Tuesday, becoming the first country without nuclear weapons to develop such a capability. +VE
Expect market to open higher as Apple hits a high and announces new launch date +VE Tech/Supply chain. Aftermarket trade data was firm but rising inflation will be a concern. T/O was low Tuesday so watch for an increase in flows with US back.
No data due but after market Tuesday
Wholesale Price Aug 11.88% YoY vs 11.77% Jul (F/cast was 12%)
Balance of Trade Aug $3.48b vs 5.9b Jul (F/cast was 6.3b)
Exports Aug 26.9% YoY vs 34.7% Jul (Cnsensus was 23.55%)
Imports Aug 46.3% YoY vs 41% Jul (Concensus was 29.4%)
Inflation Rate Aug 2.36% vs +1.95% Jul (F/cast was 2.1%)
Inflation rose due to torrential rain increased food prices and transport costs remained high.
The Ministry of Foreign Affairs yesterday reiterated Taiwan’s sovereignty, saying that it has never been ruled by the People’s Republic of China (PRC). The ministry issued the remarks after Polish Minister of Foreign Affairs Zbigniew Rau was quoted by the Chinese-language edition of Russia’s Sputnik News Agency as saying in an interview in Lithuania on Monday that Poland recognizes the “one China” policy and that Taiwan is part of China. +VE for sentiment.
A batch of 64,000 doses of the AstraZeneca COVID-19 vaccine donated by Japan arrived in Taiwan yesterday afternoon, the fourth such donation made by Tokyo. Reflects growing ties between the two countries +VE
TSMC says that it was not ruling out any possibility of Kaohsiung plants after the Chinese-language Economic Daily News reported that the world’s largest contract chipmaker is planning to build a new 7-nanometer hub in Kaohsiung’s Linyuan District +VE
Yageo Corp shareholders yesterday approved the company’s acquisition of Chilisin Electronics Corp. Chilisin is the biggest maker of inductors in Taiwan, with about 75 percent of its revenue from sales of the products.
Yageo focuses on making other passive components, including multilayer ceramic capacitors (MLCC), tantalum capacitors and chip resistors. It allows Yageo to provide one-stop shopping for customers, Yageo said in a statement. It would also allow the firm to align with supply chain optimization efforts spearheaded by clients over the past few years, it said. +VE
MediaTek Inc is to hire 2,000 new workers by the end of this year, tripling the number of positions it opened in the same period last year, the company said yesterday. The world’s biggest designer of 5G smartphone chips had 17,377 employees as of the end of April. “MediaTek seeks to widen its talent pool, as it is bullish about its business prospects,” the Hsinchu-based company said in a statement. +VE
Coupang Corp yesterday launched its second outlet in Taipei after opening its first in Zhongshan District in July. The new site in Xinyi District suggests that Coupang, often described as “the Amazon of South Korea,” is to contest the app-based delivery space occupied by Foodpanda Taiwan Co and Uber Eats Taiwan. Slight -VE for incumbants
Expect market to open lower with concerns about the weakness in the US and the possible impact on exports. Also caution ahead of Inflation and PPI data due Thursday.
No data due
Stellantis NV's (STLA.MI) Chinese venture with GAC (601238.SS) will close one of its two factories in China by next March, GAC told Reuters, as Stellantis restructures operations in the world's biggest auto market where it has struggled to sell cars. The joint venture, which has capacity to make 328,000 vehicles a year, sold only 12,288 in the first seven months this year, all Jeep-branded sport-utility vehicles. It will transfer production from Guangzhou to Changsha to "increase (the) utilisation rate of plants and lower cost", GAC said in a statement. The Changsha factory has capacity to make 164,000 vehicles a year, still far more than the venture sells. -VE
Ecuador’s government is considering creating a new marine reserve near the Galapagos Islands to protect migratory species of turtles, whales and sharks threatened by industrial fishing and climate change. A massive Chinese fishing fleet operating near the Galapagos gained global attention last year over concerns about the potential impact to marine wildlife in the remote islands that inspired British scientist Charles Darwin's theory of evolution. Slight -VE as China relies on fish for food sufficentcy.
China's esports powerhouse status undermined by tough new gaming rules for under 18s. The move is provoking an outcry from many Chinese teens. Slight -VE
British sportscar maker Lotus plans to open up to 70 showrooms in China by 2024 and start production at its new Wuhan factory next year to ramp up competition with rival Porsche, Chief Executive Feng Qingfeng told Reuters on Tuesday. +VE
China's MOE, MCA and SAMR published a notice to implement the "Opinions on Further Reducing the Burden of Students' Homework and Off-campus Training in Compulsory Education" issued by the Central Office and the General Office of the State Council. Accordingly, off-campus training institutions providing curriculum subject-tutoring to students at the compulsory education stage must register as non-profit organizations (NPOs) with complete administrative approvals and registration of legal enterprises by end-2021. They should pause student enrolment and fee collection before completing NPO registration.
Foreign banks and insurers have kept ramping up their investments in Mainland China, mentioned China Banking and Insurance Regulatory Commission (CBIRC). Since 2020, JPMorgan, Barclays, The Bank of New York Mellon, and Fubon Bank (China) have respectively boosted capital of RMB1.5 billion, RMB710 million, RMB600 million, and RMB345 million to their Chinese institutions.
Asked about online platforms' financial business rectification, CBIRC's spokesperson said they are running thorough self-checks and formulating rectifying plans in compliance with laws, rules and regulatory requirements. These platforms will carry out rectification in an orderly manner. Equally, online platforms have achieved certain progress and results in bolstering consumer rights protection. Equally, online platforms have achieved certain progress and results in bolstering consumer rights protection.
There were five continuous slides in China's real estate financing as of end-July, said China Banking and Insurance Regulatory Commission (CBIRC). Firstly, the country's property loan growth set an eight-year low.
Secondly, property loan concentration declined for the 10th straight month. Thirdly, the REIT scale had been dwindling since June 2019.
Fourthly, the size of non-standardized real estate assets from wealth management products had been shrinking for almost a year.
Lastly, bankers' real estate inputs through SPV decreased for the 18th straight month.
HONG KONG ADR’s pts at -11pts @ 26,342 with weakness in Chinese Financials. Ecommerce names continue to see interest.
No data due
SHORT SELLING Tuesday 17.5% vs 11.3% Monday
Top shorts CK Assets (1113) 41%, MTRC (66) 38%, Techtronic (669) 37%, Bank of China (3988) 36%, AIA (1299) 34%, Hengan (1044) 34%, WH Group (288) 34%, ICBC (1398) 33%, CM Bank (3968) 32%, Haidilao (6862) 32%, Wharf REIC (1997) 28%, Hang Seng Bank (11) 27%, New World Dev (17) 27%, Ali Health (241) 26%, Henderson Land (12) 26%, Bud Apac (1876) 26%, Shenzhou (2313) 26%, CCB (939) 25%.
National Security Law
Local district councillors will be required to swear allegence to China or face dismissal from office.
Hong Kong leader Carrie Lam said on Tuesday that some residents from China and the former Portuguese colony of Macau will be allowed to enter the city without undergoing quarantine from Sept. 15, relaxing strict border restrictions to curb COVID-19. Speaking at her weekly press conference, Lam said the government would let up to a total of 2,000 residents from both places enter the financial hub each day, subject to certain requirements such as a negative COVID-19 test prior to arrival. Sligth +VE
Wetland Seasons Bay, the residential project of SHK PPT (00016.HK) in Tin Shui Wai, having uploaded the No. 4 sales arrangement, will roll out 266 flats for sales in the fourth round this Saturday (11th). The discounted prices range from $4.4853 million to $10.0421 million. Worth noting that SHKP will report on Thursday.
Kaisa Group (1638) realized contracted sales of approximately 7.9 billion yuan (HK$9.5 billion) last month involving a gross floor area of around 453,724 square meters. For the first eight months, accumulated contracted sales were 81.85 billion yuan, up 49 percent year on year, putting Kaisa at 63 percent of its target for the year. The contracted gross floor area for the period was approximately 4.85 million sq m, which was 51.3 percent higher than that of last year. +VE
XIAOMI-W (01810.HK)'s shareholder 5Y Capital (formerly Morningside Venture Capital) has transferred over 184 million shares of Class B shares in XIAOMI-W held by Morningside China TMT Fund I, L.P. and Morningside China TMT Fund II, L.P. to its limited partner, according to disclosure information from HKEX. After the transfer, 5Y Capital will no longer have any shareholding in XIAOMI-W.
CANSINOBIO-B (06185.HK) +3.000 (+0.980%) Short selling $164.84M; Ratio 31.317% announced on its official WeChat account that, according to the results of clinical testing, receiving a third booster shot of CANSINOBIO-B's adenovirus vector COVID-19 vaccine after taking two doses of inactivated vaccine could achieve outstanding protection rate and no severe vaccine-related negative reactions has been observed. The data further illustrated that taking the third booster shot of adenovirus vaccine could raise the antibody level by approximately 78x, the company added.
At the 1st China Digital Carbon Neutrality Summit in Chengdu, PING AN (02318.HK) laid out its five-year target (from now on till 2025) to move up green investment plus credit to RMB400 billion, and green insurance premiums to RMB250 billion, National Business Daily reported.
HK TECH VENTURE (01137.HK) announced that, over August, it has achieved HK$633 million GMV on order intake, up 11.8% MoM; an average daily order number of 42,700 orders, up 5.2% MoM; and 549,000 unique customers whom made purchases at HKTVmall, up 13.9% MoM, with all 3 key parameters becoming new record high at HKTVmall.Christina Choi, Executive Director of Investment Products Division at Securities and Futures Commission (SFC), expressed during a webinar that Hong Kong’s asset and wealth management business maintained strong growth last year and recorded a 21% year-on-year increase in assets under management to USD34.93 trillion as at the end of 2020. Choi stressed that, in hope to strengthen the city’s position as a capital raising hub and premier asset and wealth management centre, both the Hong Kong government and the SFC are keen to promote REITs and develop Hong Kong as a vibrant REIT market in Asia. The SFC has also been actively involved in the government’s taskforce on introducing a new unified profits tax regime for funds to provide profits tax exemptions to eligible onshore and offshore funds alike, Choi added.
HUTCHMED (00013.HK) announced that new analyses and updates on the ongoing studies of amdizalisib (HMPL-689), savolitinib and fruquintinib will be presented at the upcoming 2021 European Society for Medical Oncology (ESMO) Virtual Congress taking place on September 16-21, 2021.
Macau's Secretary for Economy and Finance, Lei Wai Nong, expressed that the development of Guangdong-Macao Intensive Cooperation Zone in Hengqin marks a new page in Macau's history and could aid the city in diversifying its industries, reported Zhuhai Special Zone Daily. Lei added that, if the cooperation zone grants the Macau government ample room and policy support, Macau will concentrate on developing the bond market, wealth management and financial lease segments, so as to accelerate the development of the modernized financial sector.