Asia Nikkei Futures opened +VE and trending higher currently +60pts, HK ADR’s +157pts although China Inflation and PPI data due on the open could impact that. China likely to see Team China active again but investors sentiment remains weak as investors try to identify government policy. Australia ASX 200 higher in early trades. S Korean to open higher with renewed interest in Tech, the easing of inflation fears and OECD raising its growth forecast. Taiwan trade data continues to show growth and good local results +VE
US Futures opened slightly higher Dow +35pts, S&P and NDX +0.1%. Inflation data due tonight.
OECD expects Biden’s stimulus bill to boost the global economic recovery and upgraded it growth outlook.
Biden to hold virtual meeting with Japan India and Australia on Friday Slight -VE implications for China
US Cybersecurity and Infrastructure Security Agency issued an alert on Twitter regarding Microsofts Exchange email application; Microsoft has already blamed a China state-backed hacking group known as Hafnium for the initial attacks -VE for relations
DOW +0.1%, NDX +3.7%, S&P +1.4%, Russel 2K +1.9% Markets opened higher as bond yields eased and rallied especially the NDX after 5 down days. But Dow reversed from late morning to close just off its low, whilst the NDX and S&P saw a sell off in the last hour. A nice bounce the question is whether it lasts. Tech led the gains while Energy lead the laggards followed by Financials and Industrials.It is expected that Biden’s stimulus bill will be passed today and signed by the weekend.
Peloton +VE on news it will launch in Australia.
Dick’s Sporting Goods weak after a cautious forecast.
Tesla Inc surged nearly 20% on Tuesday, rebounding from a deep selloff with its largest daily gain in a year after data showed an increase in China sales and an analyst raised his rating on the stock.
Banks JPMorgan Chase -0.7%, Citigroup -1.7%, Wells Fargo -1.4%, Amex -3.4%
Work from home names: Facebook +4.1%, Apple +4.1%, Amazon +3.8%, Netflix +2.7%, Disney -3.7%, Zoom Video +10%, Alphabet +1.6% and Microsoft +2.8%,
Tech NXP Semi +7.5%, Nvidia +8%, Micron +5%, AMD +6.2%, Skyworks +7%
Re-opening stocks Boeing +2.9%, Caterpillar -2.2%, Simon Property -0.6%, Kohl’s +1.2%, Nordstrom +0.8%, Gap +0.4%, United Airlines -1.2%, Carnival +3.3%, Wynn Resorts +0.2%, Chevron -0.2% at investor day promised to go greener and boost returns, Exxon Mobil -1.5%,
Lock down names Campbell Soup -0.7% General Mills -0.6%, JM Smucker -0.7%
Toll Brothers +2.4% (was -0.4% normal hours) hiked its quarterly dividend by 54% to 68 cents per share. The increased dividend will be payable on April 23.
MongoDB flat (was +8.7% in normal hours) after the database services company reported a less-than-expected Q4 loss.
Sonos unch (was +7.1% in normal hours) revealed a fiscal 2024 revenue target of $2.25 billion, (a 13% compound annual growth rate based on the midpoint of its fiscal 2021 expectations). The company also announced the release of a new portable speaker called Roam, set to go on sale on April 20 this year.
Levi Strauss -0.9% (was unch in normal hours) after the company said Chairman Stephen Neal will step down, effective March 26. He will be succeeded by Robert Eckert.
NFIB Business Optimism Feb 95.8 vs 95 Jan (F/cast was 96)
Redbook 6 Mar -18.1% MoM vs -0.3% prior (+8% YoY vs +4.6% prior)
3 yr Note Auction +0.355% vs +0.196% prior
API Crude Oil Stock Change 12.792 vs 7.356m prior (Consensus was -0.833m)
USD was flat vs Yen & Euro. Bitcoin +5.5% @ 54,478.03, VIX -5.7% @ 24.03, US T10 @ 1.528% off recent highs
OIL Brent -1.55%, WTI -1.92% weakness ahead of inventory report which came out after market and was much higher than consensus.
Gold +2.2%, Silver +3%, Copper -1.9%
AHEAD Core Inflation Rate, Inflation Rate, EIA Oil Change Report, Monthly Budget Statement
Earnings Campbell Soup, Oracle, Vera Bradley, Tupperware, United Natural Foods, Adidas, Cloudera, Bumble, Fossil, Lending Club, Express, AMC Entertainment
DAX +0.4%, CAC +0.37%, FTSE +0.17% Markets opened lower but worked higher as the US T10 yield eased back to 1.53 from 1.6%. CAC and DAX worked slowly better all day. FTSE rallied in the morning but sold down in the afternoon and then bounced into the close. Data was mixed withe the Eurozone economy contracting slightly more than expected. Banks and Autos a drag with Utilities leading and Retail leading.
Earnings in focus with numbers from IWG -4.4% as results missed, ITV +4.2% and Domino’s Pizza Group +8.6%.
M&G +4.7% on stronger-than-expected earnings. Leonardo’s +2.8% after good full-year results and Deutsche Post +3%. Pandora +7.2% after reporting a rise in year-on-year organic growth in February.
Continental -8% and IWG -4.4% following their results, while Dutch coffee and tea group JDE Peet’s -8% after lowering its forecasts.
Standard Life Aberdeen -7.2% after cutting its dividend by a third.
Salvatore Ferragamo +0.13% off earlier highs; said on Tuesday that China and e-commerce had boosted sales in the year so far, after the COVID-19 pandemic pushed the firm to its first full-year operating loss since it listed in Milan 10 years ago.
Employment Change Final Q4 +0.3% QoQ vs +1% Q3 (F/cast was +0.3%)
Employment Change Final Q4 -1.9% YoY vs -2.1% Q3 (F/cast was -2%)
GDP Growth Rate (3rd est) Q4 -0.7% QoQ vs +12.4% Q3 (F/cast was -0.6%)
GDP Growth Rate (3rd est) Q4 -4.9% YoY vs -4.3% Q3 (F/cast was -5%)
Balance of Trade Jan Euro 14.3b vs 15.2b Feb revised (F/cast was 12.4bn)
Exports sa Jan +1.4% MoM vs +0.4% Dec revised (Consensus was -1.2%)
Imports sa Jan -4.7% MoM vs 0% Dec revised (Consensus was -0.5%)
Current Account Jan Euro 16.9b vs 25.9b (F/cast was 22.9b)
Non Farm Payrolls Q4 -0.1% QoQ vs +1.7% Q3 revised (F/cast was -0.2%)
Private Non Farm Payrolls Q4 -0.1% QoQ vs +1.7% Q3 revised (F/cast was -0.2%)
EUROZONE No data due
GERMANY No data due
FRANCE Industrial Production
UK No data due
JAPAN Nikkei futures opened higher building on Tuesdays gains currently +60pts Expect Financials and Tech to lead the market as bond yields ease and US tech was strong. Yen weaker @ 108.52
No data due
Tokyo Tuesday reported 290 new covid cases (vs 174 Monday) Nationwide the total was 1,128.
Japan’s Terumo Corp said on Tuesday it has developed a new syringe that can get seven doses out of each vial of COVID-19 vaccine made by Pfizer Inc, at least one more than accessible with existing syringes. The health ministry approved the design on Friday, and Terumo will begin production at the end of March, a Terumo spokesman told Reuters. The Kyodo News agency, which first reported the development, said Terumo is aiming to make 20 million units this year. +VE
Japan has decided to stage this summer’s Tokyo Olympics and Paralympics without overseas spectators due to public concern about COVID-19, Kyodo news agency said on Tuesday, citing officials with knowledge of the matter. -VE
Japanese renewables group JRE has been put up for sale by its owners, including Goldman Sachs, three people familiar with the matter said, a deal expected to draw interest from European firms eager to enter Japan’s green power market. Japan Renewable Energy Corporation (JRE) is co-owned by Singapore’s sovereign wealth fund GIC, which took an undisclosed stake in 2017.
Japan's government picked Junko Nakagawa, the first female CEO of Nomura Asset Management, on Tuesday to join the central bank's fragmented nine-member board that faces the challenge of tackling the side-effects of prolonged monetary easing.
Nissan is recalling more than 854,000 cars in the U.S. and Canada because the brake lights might not come on when the driver presses on the pedal. The recall covers certain Sentra compacts from the 2016 through 2019 model years -VE
Expect markets to open higher following the US and the OECD raisings its growth forecast for S Korea.
No data due
The Organization for Economic Cooperation and Development (OECD) on Tuesday revised up its 2021 growth outlook for the South Korean economy to grow 3.3 percent this year, up from its December estimate of 2.8 percent; as the country's exports remain robust amid the pandemic. +VE
Coupang Inc, backed by SoftBank Group Corp, is seeking a valuation of more than $58 billion in its U.S. stock market debut, after the e-commerce giant raised the price range for its offering on Tuesday. Good demand but FT carried a worrying article on it’s safety record and treatment/use of staff which could raise ESG issues.
The Bank of Korea (BOK) on Tuesday purchased 2 trillion won ($1.76 billion) worth of government bonds as part of its market-stabilizing efforts amid the coronavirus crisis. +VE
Samsung SDI spent a record 808.3 billion won ($710.2 million) on research and development for next-generation electric vehicle batteries in 2020. According to its annual report, released Tuesday, the amount was 7.2 percent of its revenue last year. +VE
Samsung Electronics was the dominant player in the global foldable smartphone market last year, a report showed Tuesday, with its leading status expected to continue through 2021. For the whole of 2020, Samsung logged an 87 percent share on a unit basis in the global foldable smartphone market that was estimated at 2.2 million units, according to market tracker Display Supply Chain Consultants (DSCC). +VE
Samsung Electronics Co. is expected to recapture the top spot in global smartphone production in the first quarter of the year, a report showed Tuesday, with the release of its new flagship smartphone. The South Korean tech giant is estimated to produce 62 million smartphones in the January-March period and account for 18.1 percent of global smartphone production, according to market researcher TrendForce. +VE
Samsung Heavy Industries Co. said Tuesday that it has obtained a 794 billion-won ($695 million) order from an Asian company. Under the deal to build five 15,000-twenty foot equivalent unit (TEU) container carriers, Samsung Heavy Industries will deliver the vessels by January 2024, the shipbuilder said.
Kia Corp. on Tuesday released a teaser for the EV6, its first dedicated all-electric model built on Hyundai Motor Group's EV platform, ahead of its global unveiling later this month. Kia plans to launch seven all-electric models by 2027, and the EV6 is the first model of the planned EV-only lineup, the company said in a statement.
Seoul’s newest and biggest department store, the Hyundai Seoul, is enjoying immense popularity, in what industry insiders hope to be a sign of a revival of consumer sentiment amid the prolonged COVID-19 pandemic. +VE cross read to Lotte Department Store and Shinsegae Department Store who have seen sales rising too
Expect market to open higher following the US rebound in Tech and whilst Tuesday’s trade data was slightly weaker than expected it still showed strong growth.
No data due after market Tuesday
Balance of Trade Feb $4.51b vs 6.19b Jan (F/cast was 5.7b)
Exports Feb +9.7% vs 36.8% Jan (Consensus was 10.5%)
Imports Feb +5.7% vs 29.9% Jan (Consensus was +10.5%)
Inflation Rate Feb -0.08% MoM vs +0.51% Jan (F/cast was +0.3%)
Inflation Rate Feb +1.37% YoY vs -0.17% Jan (F/cast was +1.3%)
Wholesale Prices Feb -0.35% vs -2.86% Jan (F/cast was -1.4%)
Trade surplus increased but slightly less than expected. Exports increased for an 8th month reflecting the global rebound, recording the strongest Feb since records began. Imports rose but much less than expected. The pace of the pickup is expected to accelerate this month by 15 to 20 percent to above US$30 billion after the Lunar New Year holiday disruptions of last month, the ministry said.
President Tsai Ing-wen yesterday pledged a comprehensive industry upgrade for small and medium-sized enterprises (SME) after touting the government’s economic achievements amid the COVID-19 pandemic. +VE
Taiwan Semiconductor Manufacturing Co (TSMC) yesterday said that its soon-to-be-opened research and development center in Hsinchu County’s Baoshan Township would be involved in its ongoing efforts to develop a 3-nanometer (nm) process. The company made the statement following media reports that the world’s largest contract chipmaker is planning to expand its proposed 3-nanometer production at the South Taiwan Science Park to the new Hsinchu facility to meet strong global demand. The reports said that the expansion was being undertaken to compete for orders from US clients such as Apple Inc.
Largan Precision Co yesterday announced that it had acquired 20 million shares of Ability Optoelectronics Technology Co in a private placement, giving the company a 15.2 percent stake in its smaller rival. Largan bought the shares at NT$29.92 each for a total of NT$598.4 million (US$21.08 million), it said in a filing with the Taiwan Stock Exchange. The share purchase came after the two firms on Friday last week reached an out-of-court settlement over an intellectual property rights dispute. +VE
Eclat Textile Co yesterday said that its revenue is likely to increase by a double-digit percentage this quarter, thanks to rising demand from major clients such as Nike Inc and Under Armour Inc. The company has clear order visibility through the first 10 months of this year at least, Eclat chairman Hung Chen-hai told investors. “In the first quarter, it is 100 percent sure that our revenue will grow by a double-digit percentage,” Hung said. “If we can ship all products smoothly based on orders in hand, revenue is likely to climb to a record high this year.” +VE
Topco Technologies Corp, which distributes silicone products made by Shin-Etsu Chemical Co Ltd, yesterday said net profit rose 4.91 percent year-on-year last year, due to a recovery in demand in the second half of last year. Robust demand for different categories of products, such as those used in consumer electronics, 5G-related devices and automobiles, helped offset the impact caused by the COVID-19 pandemic in the first half of last year, Topco said in a statement. +VE
Innolux Corp and AU Optronics Corp yesterday reported robust revenue growth for last month as prices rose due to short supply. Innolux saw its revenue surge 79.3 percent to NT$25.34 billion, compared with NT$14.13 billion a year earlier. The Miaoli-based company said that the growth was also due to a lower comparison base as it shut down Chinese factories temporarily due to COVID-19 pandemic last year. On a monthly basis, revenue dropped 7.9 percent from NT$27.51 billion. AUO said that its revenue jumped 44.7 percent to NT$25.6 billion from NT$17.69 billion a year earlier, but decreased 3.8 percent from NT$26.62 billion in January. The company said it shipped 5.9 percent fewer panels last month as the Lunar New Year holiday reduced the number of working days. +VE
Quanta Computer Inc yesterday reported revenue of NT$80.15 billion for last month, down 15.1 percent month-on-month, but up 62.9 percent year-on-year. As the Lunar New Year holiday reduced the number of working days, Quanta said it shipped 6 million laptops last month, 400,000 less than in January. +VE
Separately, PC brands Acer Inc and Asustek Computer Inc announced that their revenue rose last month from a year earlier, but fell month-on-month due to the holiday. Acer’s revenue rose 80.92 percent annually to NT$20.32 billion, while Asustek’s revenue increased 57.56 percent to NT$33.54 billion. +VE
TCI Co Ltd’s shares yesterday fell 5.02 percent after the company on Monday announced that it would acquire 30 percent of Maxigen Biotech Inc’s outstanding shares via a public tender.
Expect market to open flat with concerns remaining about government policy. Inflation & PPI data on the open will be watched carefully. International relations also a concern on news Biden to virtually meet leaders from India, Japan and Australia on Friday and increased tension with the EU too. Any downside likely to be limited by 'Team China’ activities.
Data due on the open
Inflation Rate Feb (Jan was -0.3% YoY (F/cast is -0.3%) or +1% MoM (F/cast is +0.5%)
PPI Feb (Jan was +0.3% YoY (F/cast is +1.7%)
China summoned Britain’s ambassador in Beijing on Tuesday to lodge “stern representations” over an “inappropriate” article she wrote defending recent international media coverage on China, the foreign ministry said. Caroline Wilson’s article in Chinese was posted on the official WeChat account of the British embassy in Beijing last week, amid already tense relations between Britain and China over issues including Hong Kong, Xinjiang and the media. Wilson sought to explain why foreign media criticism of the Chinese government did not mean the journalists responsible did not like China, but were in fact acting in “good faith” and playing an active role in monitoring government action.
The European People’s Party (EPP), an umbrella grouping that includes MEPs from Angela Merkel’s Christian Democratic Union, will debate the paper on Tuesday night, when it is expected to be adopted without serious opposition, party sources said.It is set to adopt a hardline policy on China, including an investment treaty with
Taiwan and a total ban on goods “produced in re-education camps”, according to a draft position document seen by he South China Morning Post. While it will have no direct bearing on the European Union’s policies on China (foreign policy is mostly driven by member states at the Council of the EU) the document will reinforce the parliament’s harsher approach to China in recent months, particularly on trade and investment. -VE for sentiment.
China has endorsed a series of lawsuits against a German researcher central to claims of abuses in Xinjiang, in the latest move to hit back against foreign allegations of forced labour in the region. The suits seek apologies and financial compensation from the researcher, Adrian Zenz, according to the state-run news site Tianshannet, which reported the cases on Monday.
Salvatore Ferragamo said on Tuesday that China and e-commerce had boosted sales in the year so far, after the COVID-19 pandemic pushed the firm to its first full-year operating loss since it listed in Milan 10 years ago.
Tesla Inc surged nearly 20% on Tuesday, rebounding from a deep selloff with its largest daily gain in a year after data showed an increase in China sales and an analyst raised his rating on the stock.
Zimbabwe has authorised the emergency use of four COVID-19 vaccines, including Russia’s Sputnik V and China’s Sinovac, the minister of information said on Tuesday. The southern African nation last month rolled out its COVID-19 vaccination programme after receiving a donation of 200,000 doses of shots from China National Pharmaceutical Group (Sinopharm).
Mexico is turning to China to fill a vaccine shortfall with an order for 22 million doses, Foreign Minister Marcelo Ebrard said on Tuesday, a week after U.S. President Joe Biden ruled out sharing vaccines with Mexico in the short term.
President Andres Manuel Lopez Obrador spearheaded efforts to attain more help from China, Ebrard said.
FT article 'Sinopharm faces struggle to turn Covid vaccine into a global success’ State-backed Chinese group sees pandemic battle as a chance to establish itself on the world stage but questions whether it will succeed as production lags targets.
FT article 'China M&A surges amid domestic demand focus’. Certain sectors in focus.
ADR’s +157pts at 28,930 Chinese data on the open likely to impact trading as well as indications of Team China being active again. Ecommerce names strong overnight and the only ADR’s in the red were HSBC, Petrochina, AIA and Cheung Kong. HK Developers may see weakness after comments from Vice Premier Han Zheng about resolving HK’s housing supply problems.
No data due
SHORT SELLING Tuesday 12.7% vs 11.8% Monday
Top Shorts Ping An (2318) 50%, Bud Apac (1876) 43%, AIA (1299) 31%, ACC Tech (2018) 31%, HSBC (5) 29%, Sands China (1928) 26%, Sinopec (386) 25%, Hang Seng Bank (11) 25%, Bank of China (3988) 25%.
Earnings due Tuesday inc Cathay Pac (293), Sunac Services (1516), Prada (1913),
IPO CHEERWIN GP (06601.HK), debut today, closed at $7.36 on the gray market, down 20% or $1.84 against the listing price of $9.2, on volume of 15.5 million shares and turnover of $111 million. Excluding handling fee, the book loss is $920 per board lot size.
Hong Kong's housing problem needs to be solved, according to Vice Premier Han Zheng - which commentators take to mean that Beijing will start addressing developers' hegemony. The top Beijing official in charge of Hong Kong affairs made the remarks during a meeting with the SAR's delegation on the sidelines of the seven-day National People's Congress. "The housing problem in Hong Kong is related to its history and development. Although it is really difficult to solve the problem, we still need to start the work," Han said. -VE HK Developers
AUTOHOME-S (02518.HK) priced its stock at HK$176.3 per share for its secondary listing in Hong Kong, Bloomberg reported. On the basis of one-ADR-for-four-H-shares, the price represented an about 5.5% discount to the ADR.
WHARF HOLDINGS (00004.HK) Chairman Stephen Ng said the group has been hoarding up land reserve investment in Hong Kong in the recent 2-3 months, revealing they will conduct study and make consideration if there is any appropriate project, as he opined the local housing market is "productive". Ng furthered that the control measures instituted by China heightened risks on developers, whilst constrained prices affected marginal profits as well as returns.
YUEXIUTRANSPORT (01052.HK) announced annual result ended December 2020. The net profit amounted to RMB160 million, down 85.9% yearly. EPS was RMB0.0959. A final dividend of HK7 cents was declared, against HK21 cents in the year-ago period.
SUNNY OPTICAL (02382.HK) announced that the shipment volume
of handset lens sets increased by 34.4% YoY to nearly 130 million units in February 2021, which was mainly due to the increased market share of the handset lens sets of the Company.
CHINA TELECOM (00728.HK) announced results for the year ended 31 December 2020. Operating revenues were RMB393.561 billion, +4.7%YoY; profit attributable to equity holders was RMB20.85 billion,+1.6% YoY. EPSequaled RMB0.26. Final DPS was HKD0.125. FY20 Mobile ARPU -3.7% to RMB44.1; 5G ARPU was RMB65.6. While FY20 CAPEX was RMB84.8 billion, the Chinese telecom carrier assumed FY21E CAPEX at RMB87.0 billion. It also proposed to apply for A share offering and listing on the Main Board of the Shanghai Stock Exchange. The number of A Shares to be publicly issued by the Company will be no more than 12.093 billion shares (so no more than 13% of the total issued share capital of the Company upon the A Share Offering, and prior to the exercise of the over-allotment option).Asked whether the company decided to return to A-share market because of withdrawal from NYSE, the Chairman Ke Ruiwen said the A-share issuance marks a substantial development move of the company, viewing the present moment represents a very strategic opportunity for the company to float A shares. The proposed A-share issuance not only aims for fundraising, Ke furthered, but also for introduction of strategic investors, in a bid to capture development opportunities.
Business receipts in value terms of many major service industries showed decreases of different magnitudes in the fourth quarter of 2020 when compared with the fourth quarter of 2019, according to the provisional figures of business receipts indices released today (March 9) by the Census and Statistics Department (C&SD). Comparing Q4 2020 with Q4 2019, larger decreases were recorded in accommodation services (-33.3%), administrative and support services (-26.0%), food services (-25.1%), banking (-12.2%), retail (-9.0%) and transportation (-6.5%) industries.
Analysed by service domain, business receipts of the tourism, convention and exhibition services domain decreased by 85.7% year-on-year during the same period, whereas those of the computer and information technology services domain increased by 1.7% year-on-year.
LONGFOR GROUP (00960.HK) announced that it had in February 2021 recorded contracted sales of RMB15.77 billion, up 1.25 times yearly, with contracted sales in terms of GFA of 958,000 sq.m..