Things to know before Trading Asia on Monday


21 Mar

Investors last week had two key questions answered.  The Fed will remain accommodative and US/China relations are not going change in the short term and for China might be slightly harder as the US presents a multi lateral approach.  It will be interesting to see how asset allocators position themselves in the next couple of weeks.

Data wise for China is light; with just prime loan data on Monday.
For Japan just Coincident & Leading Economic indexes Monday and PMI data Wednesday along with the BoJ meeting notes and then Tokyo Inflation data Friday.
S Korea PPI and Consumer Confidence.
Taiwan Unemployment and Exports Monday, Industrial Production and Retail Sales Tuesday and M2 Money supply Wednesday.
HK Current Account and Inflation on Monday and trade data Thursday.
But Hong Kong has more earnings with Petrochems and Ecommerce names reporting.

In Europe Flash PIM data in focus along with Confidence data from Germany and France. German Ifo data
UK Employment and wages data, inflation, PPI, Retail Prices and Sales.
In the US; Home Sales data will be closely watched, along with Chicago Fed National Activity Index , Richmond Fed Manufacturing Index, Durable Goods, PMI, GDP data, Personal Income and Spending, Wholesale Inventories, Michigan Consumer data and the Feds liked PCE data.

DOW +0.71%, NDX +0.76%, S&P -0.06%, Russel 2K +0.88% 
Markets opened flat NDX saw initial weakness but then rallied back into the green and worked higher until around 2pm before reversing and selling off a little into the close. Dow sold down for the first 30 minutes and but then trended better in choppy trading until midday. It then traded sideways until the last 30 minutes when it sold off into the close. S&P followed a similar pattern.
Banks under pressure as the Fed decided not to extend the supplementary leverage ratio introduced at the start of the covid pandemic prompting a surge in Treasury yields and weakness in banksFed Ex +6% after good earnings. Visa -6.2% on news the DOJ is investigating whether Visa has unlawfully curbed merchants’ capacity to route debit-card transactions over less-expensive networks.
Banks JPMorgan Chase +1.6%, Citigroup -1.1%, Wells Fargo -2.9%, AMEX -1.3%
Work from home names: 
Facebook +4.1%, Apple -0.5%, Amazon +1.6%, Netflix +1.5%,  Disney -0.6%,  Zoom Video +3.1%, Alphabet +0.3% and Microsoft -0.2%,
Tech 
NXP Semi +1.7%, Nvidia +1%, Micron +0.8%, AMD +1.2%, Skyworks +0.6%
Re-opening stocks  
Boeing flat, Caterpillar -2.3%, Simon Property -0.1%, Kohl’s +2.4%, Nordstrom -0.2%, Gap +0.4%, United Airlines flat, Carnival +2.4%, Wynn Resorts -0.1%, Chevron -0.7%, Exxon Mobil -0.6%,  
Lock down names 
Campbell Soup +0.6% General Mills +0.3%, JM Smucker +2%
DATA
BakerHughes Oil Rig Count 318 vs 309 prior revised
BakerHughes Total Rig Count 411 vs 402 prior
USD was stronger vs Yen & Euro. Bitcoin -0.05% @ 58,786.06, VIX -2.9% @ 20.95, US T10 @ 1.73%
OIL Brent +1.98%, WTI +2.37% Gold +0.66%, Silver -0.06%, Copper -0.1%, Platinum -1.76%, Palladium -1.49%
AHEAD 
Chicago Fed National Activity Index, Existing Home Sales
Fed Speakers Powell, Quarles and Bowman.
DAX -1.05%, CAC -1.07%, FTSE -1.05% 
Markets opened lower and trading sideways/lower. Investors attention on US treasury yields. Tech to be under pressure.
Premarket data a slight +VE but sentiment very much risk off ahead of the weekend. Utilities leading, with Retail weak.
TeamViewer -12.4% after it cut its 2021 guidance.
Netcompany +3.9% after securing a contract to develop Denmark’s coronavirus passport for use from May, according to Danish media reports.
Telecom Italia -7.4% on uncertainty surrounding Italy’s single network project, according to Reuters.
GEA Group +2.9% after UBS upgraded the stock to “buy” and raised its price target.
After Market 
Reuters reported that Germany is working on a debt-financed supplementary budget of over EUR60 billion, which will expand the government borrowing to a record high more than EUR240 billion this year, due to the pandemic crisis.
Britain said Saturday that half the country’s adults have received at least one dose of the vaccine against the coronavirus disease as the government races to reach everyone over age 18 by the end of July, AP reports.
Data out
Germany 
PPI Feb +0.7% MoM vs +1.4% Jan (F/cast was +0.5%)
PPI Feb +1.9% YoY vs +0.9% Jan (F/cast was +1.8%)
UK
Consumer Confidence Mar -16 vs -23 Feb (F/cast was -20)
Public Sector Net Borrowing Feb GBP -19.1b vs -8.75b Jan (F/cast was -20.2b)
AHEAD
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK No data due

JAPAN 
Expect Nikkei to open higher although upside may be muted with investors cautious about US/China relations and inflation worries.  Yen closed 108.87
Data due mid day Coincident Index and Leading Indicators index
The Tokyo metropolitan government on Sunday reported 256 new cases of the coronavirus, down 86 from Saturday.  The nationwide figure is 324.
Cyberattacks on Japanese virus control center rose in 2020 The National Center for Global Health and Medicine said the attacks, with many originating in China and Russia, did not lead to the leak of confidential research or personal information due to robust cybersecurity measures.
A magnitude 7.0 earthquake struck near the east coast of Honshu, Japan on Saturday, The earthquake, hit off the coast of Miyagi Prefecture at 6:26 p.m. (0926 GMT) at a depth of 60 km (40 miles), the Japan Meteorological Agency said. Japan public broadcaster NHK warned residents a tsunami of one metre was expected for Miyagi Prefecture.
PM Suga said Sunday Japan's Self-Defense Forces must learn to operate in a security environment that has changed greatly over the 30 years since the Soviet Union collapsed.  "Unprecedented challenges and threats may emerge and new missions may be assigned to the SDF," Suga said at a graduation ceremony speech at the National Defense Academy in Yokosuka, near Tokyo."I want you to be willing to try new things and adapt to future changes.”     It would be nice to hear him telling Japan inc the same that business has changed over the past 30years and they need to change too.
Japanese and U.S. defence chiefs agreed in their meeting last week to closely cooperate in the event of a military clash between China and Taiwan, Kyodo News reported on Sunday, citing multiple government sources.
Renesas Electronics, a key automotive semiconductor supplier, said on Sunday that production at a fire-damaged plant will take at least a month to restart, potentially worsening a chip shortage that is disrupting car production. About two-thirds of production on the advanced 300mm wafer line affected by Friday’s fire is automotive chips. -VE
The first meeting of a third-party panel to investigate why engineers at a Chinese affiliate were able to access the personal information of LINE messaging app users will be held on Tuesday, LINE Corp. parent company Z Holdings Corp. has announced. Slight -VE
The Tokyo 2020 Olympic Organising Committee said on Saturday that international spectators will not be allowed to enter Japan during the Olympic Games which are scheduled for this summer.  -VE for Tourism and Property related stocks who have poured billions into developing their facilities in anticipation of the Olympics.
Just under two-thirds of Japanese people think the government’s rollout of coronavirus vaccines, which started in mid-February, has been slow, a weekend Kyodo News survey showed Sunday. The approval rate for Prime Minister Yoshihide Suga’s Cabinet stood at 42.1%, up from 38.8% in the previous poll last month when the rating fell below 40% for the first time since he took office in September.
Japan Airlines plans to discontinue its in-flight audio service on domestic routes at the end of March, The Yomiuri Shimbun reported.

SOUTH KOREA 
Expect markets to open lower on inflation concerns although the encouraging economic recovery signals will give investors some encouragement
No data due.
The volume of cargo processed at South Korea's seaports declined 2.3 percent in February from a year earlier, data showed Sunday, amid economic jitters caused by the new coronavirus pandemic. Local seaports handled 118 million tons of cargo last month, compared with 121 million tons posted a year earlier, according to the data compiled by the Ministry of Oceans and Fisheries.
Processed export-import cargo, meanwhile, rebounded after 14 months of decline, rising 0.4 percent on-year. The ministry attributed the growth to rising overseas demand for sports utility vehicles and eco-friendly cars.
KDCPA on Sunday reported 456 new coronavirus cases – 437 locally transmitted and 19 imported from overseas (vs 452 Saturday).
Authorities in Seoul will scrap a controversial order for all foreign workers to be tested for coronavirus, they said on Friday, after an outcry sparked complaints by embassies and a human rights probe.
Following the visit of Secretary of State Antony Blinken and US Defence Secretary Lloyd Austin S Korea has sought to avoid being caught in the potential power struggle in contrast to Japan.  Probably due to the previous incidents where it has fallen foul of China. The joint statement released by South Korea and the US on Thursday was more circumspect, saying the two nations opposed activities that undermined the rules-based international order, and calling for an open Indo-Pacific region. It did not identify China by name or mention Beijing’s red line issues.
New dividend payout programs are set to take center stage at shareholders meetings next week as banking giants seek to appease shareholders amid growing discontent over new regulations that limit the size of earnings distribution.
Naver spent 1.33 trillion won ($1.1 billion) in research and development last year, nearly a quarter of its total annual sales, the company said Sunday. Its investment-to-sales ratio of 25.11 percent was the highest among all South Korean companies that release annual performance reports. +VE
Posco Group, said Sunday that it would increase investment in future business opportunities, while making efforts to improve corporate governance in announcing its new midterm plan covering the three years from 2021 to 2023. +VE
Samsung Biologics, the pharmaceutical arm of Samsung Group, vowed Friday to further expand its range of drug products down the road, in a move to grow beyond the conventional antibody drug conjugate business. +VE

TAIWAN 
Expect market to open higher following the rebound in the US Tech sector on Friday but concerns about US/China relations may limit the upside.Data due after market Unemployment Rate and Export Orders
Taiwan's Central Epidemic Command Center announced Saturday that the public can be vaccinated with Astrazeneca shots from next Monday.
The board of directors of Hiyes International, the nation’s largest housing broker, yesterday proposed distributing a cash dividend of NT$7 per share from net profit of NT$1.39 billion (US$48.84 million) last year. The payout plan came after its board recognized last year’s record earnings that represented a 145.58 percent increase from NT$565.06 million in 2019, thanks to a strong recovery in the local property market. +VE
Orsted Taiwan Ltd  has resumed construction of two major offshore wind farms after obtaining permits and environmental impact assessment approval, it said on Thursday.  Located about 35km to 60km off Changhua County, Greater Changhua 1 and 2a, with capacity of 900 megawatts, are to provide power to 1 million homes when they join the grid next year. “Orsted would begin laying export and array cables, and installing offshore substations and foundations this year, and proceed with turbine installation next year,” the company said. +VE
HSBC Bank Taiwan Ltd is to invest hundreds of millions of dollars per year over the next five years to boost its wealth management business in Taiwan, with plans to hire at least 300 financial planners, the bank said on Thursday. +VE

CHINA 
Expect market to open lower as investors react to the poor relations with the US following the talks at the end of last week.
Data due on the open Loan Prime Rate.
Regarding the US and China talks; Chinese representative Yang Jiechi commented both sides were frank during the talks, delivering constructive and, yet, divided opinions. US Secretary of State Antony Blinken disclosed that they had a couple-hour-long candid conversation with Beijing on a broad range of matters, including topics to the mutual interest of the two largest economies.
US President Biden “will be good for the relationship” between China and the United States, even though both sides might have “started a little on frosty side”, former US. Secretary of Defense William Cohen told the China Development Forum at the weekend.  Also speaking was Chinese General Yao Yunzhu who said the failure of this week’s U.S.-China meeting to build strategic trust has heightened the need for Beijing and Washington to improve crisis management regime. “Now that we cannot depend on strategic trust, as shown by the ongoing Anchorage meeting, to avoid crisis, we have to improve our crisis management regime, including updating the code of behaviour at close encounters,”
Canadian Prime Minister Justin Trudeau on Friday criticized China for blocking access to the trial of Michael Spavor, a Canadian detained by Beijing since late 2018 on spying charges, a case that is part of a wider diplomatic spat between Washington and Beijing. Canadian and other diplomats were not allowed to attend the trial on what China said were national security grounds, according to a Canadian envoy. Chinese courts have a conviction rate of over 99%. Kovrig, a former diplomat, is due to go on trial on Monday in Beijing.   It highlights China double standards.  Meng Wanzhou has full access to a legal team and consular services and an open trial but China does not afford the same to the foreigners it has arrested.  China uses the freedoms allowed under the wests rules based systems but uses its own rules within China.
National Health Commission of the PRC announced that four additional cases of novel coronavirus, all imported, had been confirmed Friday.
China has accelerated its vaccinations against COVID-19, administering 10 million doses in around a week, and is considering varied visa policies based on vaccination and virus conditions in different countries, officials said on Sunday.
CSRC Chairman Yi Huiman said that China's A-share registration review cycle has been much shortened upon a completed regime reform and that the market is almost mature.
The Philippines expressed concern about hundreds of Chinese military vessels it said were seen this month in the disputed South China Sea, the latest example of tension in the crucial waterway, Reuters reports.  The Philippine Coast Guard reported that some 220 vessels, believed to be manned by Chinese maritime militia personnel, were seen moored in line formation at a reef on March 7, a cross-government task force said late on Saturday.
China is building a ‘digital silk road’  between China, Europe and Africa, called  The Peace cable, it is due to be completed later this year.   But the project, and Huawei’s involvement, has raised security concerns in the United States
China’s property price declines in lower-tier cities take heavy toll on middle class.   Weakened real estate market in smaller Chinese cities is weighing on people’s ability to spend, impeding government’s goal of driving economic growth.  Analysts say some third-, fourth- and fifth-tier cities have suffered due to a lack of industrial development and an outflow of workers seeking better jobs in bigger cities.  Highlights the disparity within China and the differences that are occurring in the Chinese recovery.

HONG KONG  
ADR’s +177pts at  29,167 but continued weakness in ECommerce names. Earnings in focus as reporting season gets busier.
Data due after market Current Account and Inflation
SHORT SELLING Friday 17.7% vs 15.2% Thursday
Top Shorts  Ping An (2318) 44%, Bud Apac (1876) 42%, Sands China (1928) 32%,  Ali Health (241) 29%, Hengan (1044) 29%, Baba (9988) 27%, Country Garden (2007) 26%,  Power Assets (6) 26%, SinobioPharm (1177) 25%.
COVID 
HK Reports 1st Death after Comirnaty Vaccination; says a 66 year old  male died after receiving the jab brings the number of deaths post vaccination to 8 although government scientific advisers have so far dismissed any direct relationship between the jabs and their deaths.
HK reported 8 new covid cases on Sunday.

Earnings Due include Cross-Harbour (32), China Overseas Ocean Group (81),  Kingboard   (148), China Resources Beer (291), Tingyi (322), Glorious Sun (393), China Taiping Insurance (966), APT Satellite (1045), China Outfitters (1146), CC Land (1224), Kingboard Laminates (1888), ENN Energy (2688), Greentown China (3900), KWG Living (3013), China Molybdenum (3993), Country Garden Services (6098), China Health Group (8225), Greentown Management (9979).
Later thisWeek
Tuesday includes  Henderson companies, K Wah, Kunlun,  Geely, ShuiOn Land, China Foods, Yue Yuen, Zhejiang Expressway Co, Asia Cement, China Literature, Convenience Retail Asia, Huaneng Power,  GoodBaby,  China Modern Dairy, Milan Station, Sino Biopharmaceutical , PICC, Guotai Junan International, Fosun Tourism Group, Lifestyle China Group, Wuxi Biologics, Chalco, Solomon Systech,Sino-Ocean Group, Agile, Hengdeli, Pou Sheng, Kingsoft, ZhongAn Online P & C Insurance Co,
Wednesday includes Kingdee International Software, Dah Sing, TVB, Shenzhen Expressway, Haitong, Tencent, Hopson,  Maoye, Petrochina, Emperor, China Yurun, Harbin Electric, Yashili, New China Life Insurance, Xiaomi, Zhaojin Mining, China Coal,  BAIC, Anta, China Mengniu, China Oilfield,  China State Construction, Bocom,
Thursday includes Chow Sang Sang Holdings, Daphne, Maanshan Iron & Steel, Greenland, WingTai, SohoChina, Cosco Shipping, Samson, Skyworth, NetDragon, CNOOC, Anhui Conch, China Mobile, AEON stores, China CITIC Bank, TCL, Meitu, KAISA GROUP, Shandong Chenming Paper, KWG, Country Garden, BBMG Corporation, AACTech,  Guangzhou Automobile,  Comba, Guotai Junan Securities, China Life Insurance, Guangzhou R&F, Win Hanverky
Friday includes Far East, Sunway, Shangri-La Asia, Xingfa Aluminium, Poly Property, Tsingtao Brewery, Jiangsu Expressway, Lai  Sun,  Shun Tak, Guangdong Investment, OOIL, Sinopec,  Minth, Ajisen, Tiande Chemical, Singamas Container, Tianneng Power, Mingfa, CCB,  Longfor, Datang, Anhui Expressway, Vanke, China Shenhua Energy, Brilliance China, Yanzhou Coal Mining, China Resources Gas, China Cinda Asset Management, Genscript Biotech, Bank of Tianjin, Tong Ren Tang Technologies, Macau Legend, FIH Mobile, Xinjiang Goldwind, Dawnrays Pharma, Coolpad, China Pacific Insurance, Greentown Service Group, China National Building Material, BoCom, Meituan, China Railway Signal & Communication Corporation, CanSino Biologics, China Everbright Bank

WATCH
SWHYHK (00218.HK) announced FY20 results that net profit amounted to $176 million, up 28.5% yearly. EPS equaled 11.25 cents. Final DPS was 4 cents.
PHOENIX TV (02008.HK)  announced FY20 results that loss reached $1.037 billion, against $123 million in a year ago's profit. LPS equaled 20.77 cents. No final dividend was declared. -VE
CST GROUP (00985.HK) announced that it had on 19 March disposed of an aggregate of 1.444 million CNOOC (00883.HK) shares on the open market at an aggregate consideration of approximately HK$12.13 million.
CASH FIN SER GP (00510.HK)  announced that it had on 1-19 March acquired an aggregate of 22,400 TENCENT (00700.HK) shares through the open market at an aggregate consideration of HK$14.8 million, and 293,000 CHINA MOBILE (00941.HK) shares at HK$15.9 million.
CR CONSTRUCTION (01582.HK) announced results for the year ended 31 December 2020. Net profit amounted to $89.28 million, up 52.6% yearly.  EPS equaled 17.86 cents. Final DPS was 2.75 cents. +VE
CM BANK (03968.HK) announced results for the year ended 31 December 2020. Net profit amounted to RMB97.342 billion, up 4.8% yearly. EPS equaled RMB3.79. DPS was RMB1.253.
Baltic Dry Bulk Freight Index +66 pts or +3% to 2,281 pts, a record since September 2019. +VE shipping companies.HK Stock Exchange announced that BIDU-SW (09888.HK) Futures and Options will be introduced on 23 March and that its shares will be included in Designated Securities Eligible for Short Selling on the same date. Issuers can list derivative warrants on Baidu shares on 24 March.
BILIBILI-SW (09626.HK)’s IPO registered approximately $26.2 billion margin as at around 6:00 pm Friday according to brokers. Based on the public fundraising amount of $741 million, the IPO was over-subscribed by about 34.4 times.
HENGAN INT'L (01044.HK) Chief Financial Officer Li Wai Leung said the wood pulp price had slid to an all-time low in 2020; compounded with RMB appreciation, the gross profit. margin. of the group rose 3.7 ppts to 42.3% last year. However, the wood pulp price surged substantially from 4Q20, which was expected to exert pressure on gross profit margin of tissue products this year.   The CFO furthered the group had hoarded up its inventory when the raw material cost was lower. So far, it has no plan for product price adjustment
The tender for a residential site at Kai Tak Area 4E Site 2 was awarded to CK ASSET (01113.HK) at $10.28 billion earlier.  The Lands Department announced that the tender amounts submitted by the four unsuccessful tenderers ranged $6.808-9.75 billion. The second-highest tender amount was 5.16% below the bid-winning price.
Lamborghini reported record-high profit last year since customers ordered automobile at higher prices. Sales last year topped EUR1.6 billion at the current exchange rate, down 11% from 2019. Despite factory shutdown of over two months during the pandemic, Lamborghini delivered 7,430 cars in 2020, down 9% from the historic high in 2019.
HK & CHINA GAS (00003.HK) unveiled the results for the year ended 31st December 2020. Net profit amounted to HK$6.007 billion, down 13.8% yearly. EPS. equaled HK33.8 cents. The Company proposed to make a bonus issue of one new share for every twenty existing shares.A final dividend of HK23 cents per share was declared. Including the interim dividend of HK12 cents per share, the total dividend payout for the whole year shall be HK35 cents per share.
U-PRESID CHINA (00220.HK)  announced annual result ended December 2020. The net profit amounted to RMB1.626 billion, up 19% yearly.  EPS was 37.64 fen. A final dividend of 37.64 fen was declared against a dividend of 31.63 fen in the corresponding period of the previous year.

TENCENT (00700.HK)  and SWIRE PACIFIC A (00019.HK) 's Coca-Cola China announced the conclusion of a deep strategic cooperation agreement, whereby both sides will team up in commodity and user digitization, channel digitization, private domain operation, cloud technology, enterprise services and so on.
CK ASSET (01113.HK) announced to buy a 10%-20% stake in the European infrastructure assets from Li Ka Shing Foundation (LKSF) at around HK$17 billion, to be satisfied by the issue of 333 million shares at HK$51 each, reported Moody's.  CKA would then carry out a share buyback program, the net effect of which will be similar to using HK$17 billion in cash to buy these assets.  Moody's saw limited impact from the deal on CKA's credit ratings. As of end-2020, the firm had cash balance of HK$59.5 billion with low financial leverage, which should sufficiently accommodate its HK$17-billion cash outlay.
Centa-City Leading Index (CCL) last stood at 178.59, down 0.16% weekly, Centaline Property. 
Mass Centa-City Leading Index (CCL Mass) came in at 181.04, down 0.17% weekly. 
CCL (small-to-medium units) last reported at 179.05, down 0.04% weekly. 
CCL (large units) last tracked 176.22, down 0.82% weekly.
The three major CCL indices dropped altogether this week, yet the decrease was mild

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