Things to know before trading Asia on Monday

08 Aug

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People are gradually realising that getting vaccinated is going to be the only way to be able to control the spread of covid and more firms are making it mandatory.

Australia Expect a cautious open with covid concerns prevalent and earnings in focus.  Key data this week Housing data, Confidence and Inflation expectation Data
Japan Market closed re-opens Tuesday.  Data this week includes Bank Lending,  Eco Watchers, Machine Tools, PPI,
S Korea Expect markets to open higher follow the US. Covid concerns remain as social distancing is extended.  Data this week includes Unemployment, Import and Export prices.
Taiwan Market to open slightly higher with the focus on local earnings now that covid seems to have been brought under control.
China Market to open lower after Saturday’s trade data showed that growth was slowing, with also have  Inflation and PPI data on the open. Later this week we will get Loans and Total Social Financing data.  Concerns remain over debt conditions and the recent crackdown on tutoring which could hurt youth unemployment and undermine the birth stimulus hopes.
HK ADR’s -31pts @ 26,147 (Futures -87pts) Financials and Ecommerce names weak. Later this week GDP growth data.
Europe Key;  Eurozone Trade Data, Zew & Production data.  German Inflation and Wholesale Prices. Franch  Unemployment and Inflation  
UK data includes Trade, Investment, GDP and Production data,
US  Earnings wind down, around 10% of companies left to report. Key data this week includes; Inflation, PPI, Trade Balance, Michigan prelims.

DOW +0.41%, NDX -0.4%, S&P +0.17%, Russel 2K +0.53%
Dow and S&P traded flat in the green and closed at new highs.  Whilst the NDX traded sideways in the red as the employment data was stronger than expected. Banks +VE on the expectations for increased profitability.  Tech and Utilities weak as investors look to growth stocks again.
Earnings from Canopy Growth, AMC Networks, DraftKings, Norwegian Cruise Line and Goodyear Tire. Expedia -7.9% after the travel company’s earnings per share missed expectations in its quarterly report.
Berkshire Hathaway earnings out Saturday morning reported Q2 operating earnings of $6.69 billion +21% YoY

Banks JPMorgan Chase +2.84%, Citigroup +4% Wells Fargo +3.8%, Amex +1%
Work from home names: Facebook +0.15%, Apple -0.6%, Amazon -0.92%, Netflix -0.83%,  Disney +0.24%, Zoom Video -3.8%, Alphabet -0.38% and Microsoft flat,
Tech NXP Semi +0.4%, Nvidia -1.3%, Micron +0.6%, AMD -2%, Skyworks +0.13%
Re-opening stocks  Boeing +0.6%, Caterpillar +0.6%, Simon Property %, Kohl’s +2.5%, Nordstrom +3%, Gap +2.1%, United Airlines +0.8%, Carnival +2.4%, Wynn Resorts +0.2%, Chevron +0.7%, Exxon Mobil +1.2%,  
Lock down names Campbell Soup +0.2% General Mills +0.5%, JM Smucker -0.4%
Non Farm Payrolls Jul 943k vs 938k Jun (F/cast was 900k)
Unemployment Rate Jul 5.4% vs 5.9% Jun (F/cast was 5.8%)
Ave Weekly Hours Jul 34.8 vs 34.8 Jun revised (F/cast was 34.7)
Participation Rate Jul 61.7 vs 61.6% Jun (F/cast was 61.5%)
Ave Hourly Earnings Jul 4% YoY vs 3.7% Jun revised (F/cast was 3.6%)
Ave Hourly Earnings Jul +0.4% MoM vs +0.4% Jun revised (F/cast was +0.3%)
Govt Payrolls Jul 240k vs 169k Jun (F/cast was 130k)
Manufacturing Payrolls Jul 27k vs 39k Jun revised (F/cast was 29k)
Nonfarm Payrolls Private Jul 703k vs 769k Jun revised (F/cast was 770k)
Wholesale Inventories Jun +1.1% MoM vs +1.3% May (F/cast was +0.8%)
Baker Hughes Total Rig Count 491 vs 488 prior
Baker Hughes Oil Rig Count 387 vs 385 prior
Consumer Credit Change Jun $37.69b vs 36.69b May revised (F/cast was 21.6b
USD was stronger vs Yen & Euro. Bitcoin +1.4% @ 43,510.87, VIX -6.54% @ 16.15, US T10 @ +1.305% as unemployment rate falls
OIL Brent -0.8%, WTI -1.2%
Gold -2.3%, Silver -3.3%, Copper -0.3% Platinum -2.4%, Palladium -1%.
AHEAD JOLT’s Job Openings, Consumer Inflation Expectations

DAX +0.11%, CAC +0.53%, FTSE +0.04%
Markets opened about flat; the DAX  and FTSE trades around flat whilst the CAC worked higher from midday.  Earnings and Covid in focus.  Banks +VE but Healthcare weak.
Maersk +0.5% posted a sharp increase in Q2 earnings as congestions and bottlenecks continue to drive up shipping rates. EBITDA of $5.1 billion, a 200% YoY
Allianz +2.2% beat Q2 profit expectations with a 2.225 billion euro ($2.6 billion) net income and raised its outlook and announcing a 750 million euro share buyback program.
London Stock Exchange +6% and Banco BPM +6% after earnings reports but Rational -5.8%.
Thyssenkrupp +1.8% on Thursday announced that it has agreed to sell its infrastructure unit to German investment company FMC Beteiligungs KG for an undisclosed fee, a key part of its restructuring plan.
Industrial Production Jun -1.3% MoM vs -0.8% May revised (F/cast was +0.5%)
Balance of Trade Jun €-5.82B vs €-6.59B May (F/cast was  €-5B)
Current Account Jun €-0.5B vs €-2.4B May revised (F/cast was €-5B)
Private Non Farm Payrolls Q2 +1.2% QoQ vs +0.5% Q1 (F/cast was +0.3%)
Halifax House Price Index Jul +0.4% MoM vs -0.6% Jun revised (F/cast was -0.7%)
Halifax House Price Index Jul +7.6% YoY vs +8.7% Jun revised (F/cast was +7.4%)
BBA Mortgage Rate Jul +3.61% vs 3.62% Jun (F/cast was 3.62%)
EUROZONE No data due
Balanced of Trade, Exports, Imports and Current Account
FRANCE New Car Registrations
UK  No data due

Market closed
No data due
Tokyo reported 4,566 new covid cases Saturday with the national total reaching 15,753
Shionogi & Co plans to seek state approval for its oral coronavirus  drug by the end of this year, in the hope of offering at-home treatment  and easing strains on hospitals, company sources said.
Envision AESC Japan Ltd will build a lithium-ion battery factory for Nissan Motor Co's electric vehicles in Ibaraki Prefecture, northeast of Tokyo, with an initial investment of 50 billion yen.

Expect markets to open higher follow the US. Covid concerns remain as social distancing is extended.  Data this week includes Unemployment, Import and Export prices.
No data due
Govt extended the social distancing curbs by two weeks to contend with outbreaks nationwide and more people falling severely ill, Prime Minister Kim Boo-kyum said on Friday.
KDCA reported 1,729 new covid cases on Sunday,  (-94 DoD) still the highest Sunday total.
North Korean leader Kim Jong-un has ordered full state support for recovery efforts in a flood-hit eastern province.  More pressure on the North Korean state.
Green Car will expand its advanced driver-assistance system (ADAS) to its entire fleet of cars by the end of 2022 for a safer and more convenient driving experience, the firm said Friday.
Kakao Corp said Friday that it plans to expand the domestic ecosystem for subscription-based platforms while also seeking to grow its profit in the Japanese webtoon market.  The plans were revealed during the firm’s earnings call for the second quarter. +VE
Korea Shipbuilding & Offshore Engineering signed a 659.2 billion won ($577 million) deal to build an offshore plant for an American oil company, the South Korean shipbuilder said Friday.
LG Uplus Corp. said Friday its second-quarter net profit grew 40 percent thanks to the continued growth of 5G mobile subscriptions and its business infrastructure division. +VE

Expect market to open slightly higher with the focus on local earnings now that covid seems to have been brought under control.
Data due after market Balanced of Trade, Exports, Imports.
CECC Saturday reported 12 new covid cases (including 2 imported)
Beijing and Chinese state media have been attempting to downgrade Taiwan’s national status during the Tokyo Olympic Games by using the term “China Taipei” (中國台北), a report released yesterday by the Information Operations Research Group (IORG) showed.  Representatives of the Taiwan Republic Office and others yesterday urged the media to stop using “Chinese Taipei” (中華台北) in their coverage of the Tokyo Olympics and use “Team Taiwan” (台灣隊) instead.
Lithuania plans to open a representative office in Taiwan by the end of the year, Lithuanian Vice Minister of Foreign Affairs Mantas Adomenas said, reflecting a desire for the two countries to forge closer ties.  +VE for Taiwan’s international status
Dimerco Express Corp Friday reported robust revenues last month and solid net profits in the second quarter due to consistently strong air and sea cargo forwarding rates.  Company’s revenue last month surged 73 percent from a year earlier to NT$3.11 billion (US$111.82 million), it said in a statement. +VE
Innolux Corp Friday said it was cautiously optimistic about second-half prospects as an imminent glass substrate supply constraint and an ongoing chip shortage would curb supply and avert a glut.  The supply of glass substrates might start declining this month at the earliest, as some manufacturers commence annual factory maintenance, the Miaoli-based company said.
“We believe this should help ease industry concern over a supply-demand imbalance as some capacities, which are used to make panels for monitors, notebooks or TVs, would be down,” Innolux president James Yang (楊柱祥) told an investors’ teleconference. +VE

Expect market to open lower after Saturday’s trade data showed that growth was slowing, with also have  Inflation and PPI data on the open. Later this week we will get Loans and Total Social Financing data.  Concerns remain over debt conditions and the recent crackdown on tutoring which could hurt youth unemployment and undermine the birth stimulus hopes.
Data due
Inflation Rate Jul (Jun was +1.1% YoY F/cast is +0.9%)
Inflation Rate Jul (Jun was -0.4% MoM F/cast is +0.3%)
PPI Jul (Jun was 8.8% F/cast is 8.7%)
Data out Saturday
Foreign Exchange Reserves Jul $3.236T vs 3.214T Jun (F/cast was $3.2T)
Balance of Trade Jul $56.58b vs 51.53b Jun (F/cast was $52b)
Exports Jul 19.3% YoY vs 32.2% Jun (F/cast was 31%)
Imports Jul 28.1% YoY vs 36.7% Jun (F/cast was 33%)
China stepped up measures to protect its capital Beijing, as an uptick in coronavirus cases driven by the more infectious Delta variant spread across multiple cities in the country.  The National Health Commission reported on Saturday 107 new confirmed coronavirus cases in the mainland for Aug. 6, compared with 124 a day earlier.  75 locally transmitted -VE
Tencent Holdings-backed (0700.HK) Chinese education firm VIPKid said on Saturday it would stop selling classes taught by foreign-based tutors to students in China with immediate effect to comply with new rules announced for the country's private education sector. -VE
FT reports that experts say the clampdown on tutoring services is likely to aggravate youth unemployment.  It notes that “The latest crackdown will add pressure on youth employment, which could undermine the policy intention to boost the birth rate as young people delay marriage and child raising until they land satisfactory jobs,” -VE  
China’s delivery platform companies including Meituan and Alibaba’s recently joined a meeting with government regulators from the Ministry of Public Security and the Ministry of Human Resources and Social Security, on improving safety and labour rights for delivery workers.  Food delivery platforms, in the spotlight due to China’s regulatory reforms, have attracted severe criticism on social media for their treatment of delivery workers, most of whom are not covered by basic social and medical insurance. -VE
JPMorgan (JPM.N) got regulatory approval from Beijing on Friday to become the first foreign owner of a brokerage in China.
The Taliban cannot be trusted to keep their promise to China not to harbour Islamist militants seeking separatism in its Xinjiang region, Afghanistan's ambassador to China told Reuters, a week after China hosted Taliban officials.
The Economist looks at the prospects for commercial development in Xinjiang which is largely driven by SOE’s and hence rather than growth stagnation is more likely.
It also has an article on defaults and the dilemma that the regulators face. It referes to document No15 which set out that banks should stop lending to local government finance vehicles. So far none have defaulted but only because the banks continue to lend to them. The document seems to have been withdrawn but the problem remains. That adds to the risk which is currently focused on a number of property companiesand highlighted by Evergrande and Huarong. It notes the events surrounding Yongcheng Coal last November and how China is seeking to ensure that all creditors get treated equally which is good but also reflects that they are looking at a market solution rather than a government one.

HONG KONG  ADR’s -31pts @ 26,147 (Futures -87pts) Financials and Ecommerce names weak. Later this week GDP growth data.
No data due
After Market Friday
Foreign Exchange Reserves Jul $494.8b vs $491.6B

Earnings due  Yuexiu REIT (405), China Tower (788), Zhongsheng (881), China Singyes (8073), Beijing  Beida Jade Bird (8095) and others.

Short Selling Friday 13.3% vs 12.6% Thursday
Top Shorts 
AliHealth (241) 41%, BoC (3988) 41%, CLP (2) 37%, Haidilao (6862) 35%, Shenzhou (2313) 35%, Sands China (1928) 35%, Country Garden (2007) 34%, Bud Apac (1876) 34%, NWD (17) 33%, MTRC (66) 32%, Mengniu Dairy (2319) 31%, Ping An (2318) 29%, Sunny Optical (2382) 27%, Power Assets (6) 26%, CKH (1) 25%, HKEX (388) 25%
Tencent (0700.HK) said it would investigate the functions of its popular social messaging app WeChat's "youth mode", after Beijing prosecutors initiated a civil public-interest lawsuit against a subsidiary of the company on Friday.  
Prosecutors had said the "youth mode" on WeChat does not comply with laws protecting minors. -VE
China's antitrust regulator is preparing to fine MEITUAN-W (03690.HK) for about USD1 billion on the allegation of abusing its dominant role in the market to prevent companies from selling products on platforms run by its rivals, reported Dow Jones, citing people familiar with the matter.  Relevant details may be announced within few weeks and MEITUAN-W would be mandated to revamp its operating mode nicknamed "One out of Two" which forces smaller companies to take sides. -VE

BABA-SW (09988.HK), at the investor conference call, revealed that Chinese government will start trimming tax concession on internet sector with Beijing ramping up the scrutiny over the the industry, as a result of which big Chinese firms will have to increase billions of US dollars of cost, Bloomberg cited people with the knowledge of the matter.  Based on Tmall operators' assumption, the effective tax rate in September's quarter is 20%, above the 8% a year ago, report claimed. To this, BABA-SW declined to comment. -VE

YORKEY OPTICAL (02788.HK)  announced the results for the six months ended 30 June 2021. Net profit amounted to US$790,000, representing an increase of 157% yearly.  EPS  was US0.1 cent. No interim dividend was declared. +VE

RSUN PPT (01996.HK) announced that, for July, contracted sales of the Group was RMB6.863 billion, down 25.7% YoY. -VE

SEAZEN (01030.HK) announced that in July, the Company, together with its subsidiaries, achieved contracted sales of RMB16.888 billion, down 19.4% year-on-year. -VE

YUEXIU PROPERTY (00123.HK)  announced that in July, the value of the Company’s contracted sales (including contracted sales by joint venture projects) amounted to approximately RMB5.133 billion, representing a year-on-year decrease of  20%   The value of the Accumulated Contracted Sales for the first seven months of 2021 accounted for 47% of the 2021 contracted sales target. -VE
GAC GROUP (02238.HK) announced that the production volume  of vehicles for July was 163,729 units, representing a year-on-year decrease of 19.1%.  The sales volume of vehicles was 180,518 units, representing a year-on-year decrease of 1.9%.  -VE

YINCHENG LS (01922.HK)  is expected to record an increase in the net profit attributable to owners of the Company by not less than 30% for the six months ended 30 June 2021 as compared to the corresponding period in 2020. +VE

STANCHART (02888.HK) repurchased 1.223 million shares on the London Stock Exchange on 5 August, involving around GBP5.49 million in total. +VE

CKH HOLDINGS (00001.HK)  Short selling $109.35M; Ratio 25.208%   repurchased 900,000 shares on the Stock Exchange on 6 August, involving approximately $52.09 million in total. +VE

Didi Chuxing was considering transferring its data control to comply with Chinese regulation, foreign media reported earlier.  Didi said on Weibo that rumors on data control transfer to a third party, introduction of a substantial shareholder and delisting were all untrue.
CKH HOLDINGS (00001.HK)  Short selling $109.35M; Ratio 25.208%   announced that the Group has entered into a binding agreement with SWIRE PACIFIC A (00019.HK) to acquire 50% interest in Hongkong United Dockyards Limited (HUD) from Swire Pacific.  HUD and its subsidiaries focus on the business of marine engineering, harbour salvage and towage and related services, as well as mechanical and electrical engineering services.

PCCW (00008.HK) interim result ended June 2021. The revenue rose 0.4% year on year to HK$18.355 billion. The loss narrowed from HK$584 million in the corresponding period of previous year to HK$315 million. LPS was HK4.08 cents. An interim dividend of HK9.36 cents was declared against a dividend of HK9.18 cents in the corresponding period of the previous year.  It  said its OTT business may possibly break even in the second half of 2021 or the first half of 2022, said Executive Director and Group Managing Director BG Srinivas at the result release conference. Equally, the group will seek to go public in the foreseeable future.  Srinivas voiced huge confidence in the boy group Mirror, anticipating more shows for them going ahead. Slight +VE

GEELY AUTO (00175.HK)  Short selling $485.68M; Ratio 21.010%   announced that the total sales volume in the first seven months of 2021 was approximately 729,500 units, an increase of approximately 15% from the same period last year, achieving 48% of the group’s full year sales volume target of 1.53 million units in 2021. The company added 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 July 2021 was approximately 99,300 units, a decrease of approximately 6% from the same period last year and down approximately 1% from June 2021. FORTUNE REIT (00778.HK) announced interim result ended June 2021. The revenue declined 5% year on year to HK$904 million. The loss swung into profit of HK$204 million compared to a loss of HK$2.267 billion for the corresponding period of the previous year.  EPS was HK10.42 cents. An interim dividend of HK24.96 cents per unit was declared, up 10.4% year on year.  For the period, the income available for distribution rose 0.2% year on year to HK$491 million.    It also announced malls tracked a 20% footfall growth on the first Sunday following the consumption voucher scheme rollout from the figure on Sundays in July, said Executive Director and CEO Justina Chiu at an interim result release conference.  On another note, Chiu anticipated a further rental reversion improvement for FORTUNE REIT in the second half of 2021.
PRU (02378.HK)  announced that the shareholder circular in relation to the proposed demerger of Jackson Financial for listing has been submitted to the Financial Conduct Authority.
Centa-City Leading Index (CCL) last stood at 190.1, hitting the second-highest level under a 0.7% weekly uptick. The figure was only 0.2% away from the record high 190.48.
CCL Mass last stood at 192.86, up 0.68% weekly.
CCL (small-and-medium units) last reported at 190.44, up 0.62% weekly.
CCL (large units) last posted at 188.31, up 1.15% weekly.
CCL Mass for the New Territories West logged a record high, up 0.37% from its previous high.

The Development Bureau (DEVB) Friday (August 6) announced the receipt of two more applications under the Land Sharing Pilot Scheme (LSPS), concerning two sites in Yuen Long and Tai Po.  
One application concerns a site at Ho Chau Road, Yuen Long (near Tung Shing Lei), covering about 5.9 hectares of private lots and adjoining government land, currently zoned "Residential (Group D)". The application involves about 2,616 public housing/Starter Homes units (the exact choice of subsidised housing type is to be determined by the Government) with supporting facilities and 1,474 private housing flats, with a total gross floor area of about 175,300 square metres. The application is jointly made by Topwood Limited, Success King Limited and Richduty Development Limited. Their parent company is SHK PPT (00016.HK) Short selling $36.94M; Ratio 16.870% .
The other application concerns a site at She Shan Road and Lam Kam Road, Tai Po (near Lam Tsuen), covering about 19.3 hectares of private lots and adjoining government land, currently zoned "Agriculture" and "Government, Institution or Community". The application involves about 8,484 public housing/Starter Homes units (the exact choice of subsidised housing type is to be determined by the Government) with supporting facilities and 3,636 private housing flats, with a total gross floor area of about 645,300 sq m. The application is jointly made by Ocean Target Enterprises Limited (whose parent company is HENDERSON LAND (00012.HK) Short selling $9.08M; Ratio 18.279% Development Company Limited), Gettenwood Company Limited and Fullmark Development Limited (the parent company of these two companies is Wheelock Properties Limited).

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