Feb 11Asian Macro Initial thoughts; HK open. Closed are: Japan, S Korea, Taiwan and China


11 Feb

Asian Futures HK ADR’s -139pts weakness in Chinese Financials and E Commerce.  Market will close at lunchtime.  Australia dipped lower in early trades but has now bounced back and back in the green.
US Futures opened Dow +34 pts (+0.08%). S&P 500 +0.06% and Nasdaq 100 futures +0.07%.
US announced sanctions on Myanmar military leaders; freeze assets and cutting exports.

DOW +0.2%, NDX -0.25%, S&P -0.03%, Russel 2K -0.72% markets opened higher, with Nasdaq hitting a new intraday high and Dow closing at a new high; after a tame inflation report in line with forecasts and good earnings. But then saw big sell off in tech after 30 minutes and then worked better through the day to but failed to get back into the green.  Dow traded around flat for most of the day, did see a small rally in the last hour but faded into the close.
Powell said policy would remain ‘patiently accommodative’ to support the economy as the labour market faces challenges. Coca-Cola -0.2% but opened higher after Q4 topped estimates due to cost-cutting efforts. Under Armour +8% after a surprise profit for the holiday quarter as sales were boosted by strong digital growth.
Twitter +13.2% after earnings and revenue beat expectations.
Better-than-expected earnings from Lyft +4.8% Cisco Systems -2.6%, Mattel -2.1% and Yelp -4.5% boosted initial sentiment but most of the stocks then sold down in the first hour.
Trumps impeachment trial started; with the US Senate voting to proceed with Trump’s second impeachment trial by rejecting his legal team’s argument that the process was unconstitutional, although the overwhelming majority of Republicans backed the former president.
Banks JPMorgan Chase +0.1%, Citigroup +0.8% Wells Fargo -0.2%, Amex +1.2%
Work from home names: 
Facebook +0.9%, Apple -0.5%, Amazon -0.6%, Netflix +0.8%,  Disney +0.8%, Zoom Video +0.2%, Alphabet +0.5% and Microsoft -0.4%,
Tech 
NXP Semi -0.1%, Nvidia +3.5%, Micron -1.2%, AMD +1.6%, Skyworks +1.3%
Re-opening stocks  
Boeing -1.5%, Caterpillar +0.2%, Simon Property +3.6%, Kohl’s +0.3%, Nordstrom +2.8%, Gap +2.7%, United Airlines +1.1%, Carnival -0.6%, Wynn Resorts +2.7%, Chevron +1.8%, Exxon Mobil +1%,  
Lock down names 
Campbell Soup +1.3% General Mills +0.8%, JM Smucker +0.5%
DATA
MBA Mortgage Applications -4.1% vs +8.1% prior and 30 year Mortgage Rate 2.96% vs 2.92% prior
Inflation Rate Jan +1.4% YoY vs 1.4% Dec (F/cast was +1.4%)
Inflation Rate Jan +0.3% MoM vs +0.2% Dec revised (F/cast was +0.2%)
Core Inflation Rate Jan +1.4% YoY vs 1.6% Dec (F/cast was +1.6%)
Core Inflation Rate Jan +0% MoM vs +0% Dec revised (F/cast was +0.1%)
Wholesale Inventories Dec +0.3% vs 0% Nov (F/cast was +0.1%)
EIA Crude Oil Stocks Change Report -6.644m vs -0.994m prior (Consensus was +0.985m)
EIA Gasoline Stocks Change Report +4.259m vs +4.466m prior (Consensus was +1.814m)
Monthly Budget Statement $-163b vs -430b prior. (F/cast was -147b)
USD was weaker vs Yen & Euro. Bitcoin -4.5% @ 45,086.71, VIX +1.7% @ 21.99, US T10 @ 1.124% small fall after tame inflation reading.
OIL Brent +0.6%, WTI +0.55% EIA report showed US inventories dropped vs a forecast rise.
Gold +0.36%, Silver -1.12%, Copper +1.44% on slightly weaker USD
AHEAD Initial Claims, Jobless Claims 4 week Average, Continuing Claims, EIA Natural Gas Stocks Change, Fed Monetary Policy Report.
Earnings: PepsiCo, Walt Disney, Kraft Heinz, Expedia, AstraZeneca, Generac, Virtu Financial, Yeti, Kellogg, AllianceBernstein, Borg Warner, Duke Energy, Molson Coors, Tyson Foods, ArcelorMittal

DAX -0.56%, CAC -0.36%, FTSE -0.11%  Markets opened slightly higher with focus on earnings after Societe Generale, Air Liquide, Metro, Thyssenkrupp, Siemens Energy, Heineken, Maersk and Equinor all reported pre-open.
Markets then eased back to flat and traded sideways for most of the day but dipped lower in the last hour as US markets saw a sell off before a slight rebound into the close.
Most sectors closed in the red.
Germany to extend lockdowns on concerns over new virus variants -VE
Soc Gen +2.9% after Q4 net profit 470m Euros.
Thule Group +5.1% and Adyen +8.7% after strong fourth-quarter earnings reports.
Maersk-6.8% despite strong Q4 warned of challenges ahead. Some analysts commented guidance was too conservative.
Galapagos -18.7% after the discontinuation of a phase three trial alongside Gilead Sciences flat.
Ubisoft -7.6% reported record quarterly sales but narrowed its guidance for the full year.
Thyssenkrupp +6.4% on good Q4 results.
DATA
GERMANY 
Inflation Rate Jan 1% YoY vs -0.3% Dec (F/cast was +1%)
Inflation Rate Jan +0.8% MoM vs +0.5% Dec (F/cast was +0.8%)
FRANCE 
Industrial Production Dec -0.8% MoM vs -0.7% Nov revised (F/cast was +0.3%)
AHEAD
EUROZONE No data due
GERMANY Wholsesale Prices
FRANCE IEA Oil Report
UK No data due

JAPAN market closed re-opens Friday Yen closed 104.58
No data due 
Japan will start coronavirus vaccinations next week, PM Suga said Wednesday, but it is scrambling to secure suitable syringes so doses won't go to waste.
The Tokyo metropolitan government on Wednesday reported 491 new covid cases  up 79 from Tuesday. Nationally the number was 1,885.  Govt to maintain emergency state in 10 prefectures for the time being.
Bank of Japan As the coronavirus pandemic stokes fears of deflation, the Bank of Japan is facing changes in its board that could tip the balance in favour of aggressive monetary easing and test the limits of its already stretched policy tool-kit. Parliament approved on Wednesday the government’s nominee Asahi Noguchi, an academic known as a vocal advocate of heavy money printing, to join the BOJ’s nine-member board in April. He succeeds Makoto Sakurai, who has warned of the rising cost of prolonged easing, when his five-year term ends in March.
Toyota said Wednesday that net profit soared 50 percent in the third quarter and upgraded its full-year forecasts as the global auto industry gradually recovers from the coronavirus pandemic. The world's top carmaker said it made 838.7 billion yen in the three months to December.
Carlyle Group on Wednesday withdrew its bid to buy energy and environment firm Japan Asia Group (JAG) in a deal worth 48 billion yen ($459 million), as a Japanese activist fund beat its offer.
Prices continue to soar for condominiums in urban areas, with new condos in the Tokyo metropolitan area marking their highest price level in 2020 since the bubble economy period. The concentration of people in Tokyo has eased due to increased telecommuting, but condominiums in convenient locations remain popular, as fewer units are sold and there are more high-income households. +VE Developers
Taisei in Japan has developed integrated remote control system for construction machinery of different makers. The company will conduct tests at work sites and plans to introduce a fully operational system for the Namma Dam construction project in Tochigi Prefecture scheduled to begin in December. Taisei will then gradually expand the range of sites where the system can be used. +VE
The La Nina weather phenomenon that has been ongoing since late last year has an 80% chance of ending in the northern hemisphere spring, Japan’s weather bureau said on Thursday on its website.
Pressure mounts on Olympics chief Yoshiro Mori, to quit after his sexist comments about women continue to dominate public debate.  Tokyo’s governor has refused to join a meeting with him and he is under growing pressure to resign.  Slight -VE for Olympic’s.

SOUTH KOREA Markets closed re-open Monday
No data due
KDCA reported 444 new covid cases Wednesday (vs 371 Tuesday) highest since Feb 4.  Health authorities urged people to avoid family gatherings during the Lunar New Year holiday.
South Korea on Wednesday said it would grant its first approval for a coronavirus vaccine to AstraZeneca, and will allow use in people 65 years or older, despite advisory panels’ warning of a lack of data on its efficacy for the elderly.
GC Pharma has once again risen as a potential contract manufacturer to a foreign vaccine, this time for Russia’s Sputnik V. Company officials, however, refrained from commenting, citing the sensitivity of the issue.
Korean Air’s plan to take over Asiana Airline has been approved by antitrust authorities in Turkey, the airline said Wednesday. +VE
After a year of the COVID-19 pandemic, South Korea’s conglomerates saw some fluctuations in their asset rankings, reflecting the impact from major mergers and acquisitions and from the contactless business trend, industry data showed Wednesday.  Samsung Group maintains its unrivaled lead with 440.42 trillion won in assets, up 15.57 trillion won from a year earlier.Hyundai Motor Group and SK Group are next, with 243.68 trillion won and 232.37 trillion won in respective total assets.
LG Group retains fourth position, despite the anticipated spinoff of its non-electronics affiliates as early as March after a shareholders meeting.
Samsung Heavy Industries Co. said Wednesday that it will demonstrate whether its remote autonomous navigation system can autonomously steer a large ship in August. A 9,200-ton ship will be used to demonstrate the shipbuilder's remote autonomous navigation system known as Samsung Autonomous Ship, or SAS, the company said. +VE
South Korea's exports of information and communication technology (ICT) products +21.7% YoY in January on the back of strong overseas demands for chips, data showed Wednesday.  Outbound shipments of ICT goods came to $16.3 billion in January, which marked the second-largest amount ever for any January, according to the data compiled by the Ministry of Science and ICT. The country posted record high ICT exports of $17.6 billion in 2018 for January. Imports came to $10.7 billion, resulting in a trade surplus of $5.5 billion, the data also showed. +VE
Apple remained the world’s largest buyer of semiconductor chips in 2020 for the second year straight, industry data showed Wednesday. Reflecting the increased demand for telecommunications amid the COVID-19 pandemic, according to global research and consulting firm Gartner, Apple spent $53.6 billion on chips, +24% YoY, and thus accounted for 11.9% of the worldwide market. Next was Samsung Electronics, which spent $36.4 billion, up 20.4% YoY “Two major factors impacted the top OEMs’ semiconductor spending in 2020, the COVID-19 pandemic and the political conflict between the US and China,” said Masatsune Yamaji, research director at Gartner.
Samsung Electronics Co. said Wednesday its latest smartphone line, the Galaxy S21 series, posted 30% higher sales than its predecessor in South Korea as the tech giant strives to boost its handset sales.  Samsung said sales of the Galaxy S21 family between Jan. 29 and Monday were 30 percent higher than those of the Galaxy S20 series. +VE
Hyundai Motor Group on Wednesday unveiled its first "uncrewed" mobility vehicle concept as it strives to morph into a future mobility solutions provider.  The TIGER robot, which stands for Transforming Intelligent Ground Excursion Robot, is designed to operate as a four-wheel drive vehicle or a four-legged walking machine to conduct scientific exploration activities, carry emergency medical kits and deliver products to inaccessible areas, Hyundai said in a statement. Slight +VE

TAIWAN Markets closed re-opens 17 Febuary
No Data due 
US bill ties WHO funding to Taiwan stance Two US senators on Tuesday introduced a WHO accountability bill, seeking to withhold US funding until the organization reforms its leadership and accepts Taiwan as a member state.
Hon Hai Precision  yesterday announced a strategic partnership with British medical device start-up GyroGear Co, as the world’s largest contract electronics maker aims to manufacture GyroGear’s flagship product, the GyroGlove. Hon Hai would invest £1million (US$1.38 million) in GyroGear to acquire one seat on the firm’s board of directors, the world’s largest contract electronics maker said. The GyroGlove is the first wearable medical device developed for people with hand tremors, such as those with Parkinson’s disease or essential tremor disorder, Hon Hai said in a statement. +VE
Hota Industrial Manufacturing, the nation’s largest manufacturer of gears and shafts for vehicles, motorcycles, trucks and tractors, reported NT$609.77 million (US$21.48 million) in revenue last month, +17.95% YoY and 9.09% MoM.  The increase in revenue reflects a steady recovery in the global auto market, which boosted the company’s shipments of machinery parts and gear transmission products last month, the company said on Tuesday.
MediaTek on Tuesday posted consolidated revenue of NT$35.33 billion (US$1.24 billion) for last month, its second-highest monthly revenue on record. Thanks to growth in mobile computing, the Internet of Things and smart applications, revenue rose 78.29 percent from a year earlier and 8.96 percent from December last year. The company last month forecast that its first-quarter revenue would reach NT$96.4 billion to NT$104.1 billion, flat or up 8 percent from last quarter. It forecast that revenue from 5G chips would surpass that from 4G chips for the first time this quarter.
CHINA Markets closed re-opens 18 February 
No data due But after market Wednesday 
FDI (YTD) Jan +4.6% YoY vs +6.2% Dec (F/cast was 4%)
US. President Biden said Wednesday the Pentagon would review its strategy toward China, looking at pivotal areas including intelligence, technology and Washington’s military footprint in the region. The United States has contested China’s extensive territorial claims in the region, accusing it of militarizing the South China Sea and trying to intimidate neighbors such as Malaysia, the Philippines and Vietnam, which have claims that overlap with China’s in the resource-rich area.
A French submarine carried out a patrol through the South China Sea as part of efforts by France to challenge Beijing’s sweeping claims in the disputed waters. France’s defence minister Florence Parly tweeted late on Monday that the French nuclear attack submarine Émeraude and naval support ship Seine sailed through the contentious waters to “affirm that international law is the only rule that is valid, whatever the sea where we sail”. “This extraordinary patrol just completed its passage in the South China Sea,” she wrote. “This is striking proof of the capacity of our French navy to deploy far away and for a long time, together with our Australian, American and Japanese strategic partners.”  Another sign of more international pressure being applied to China.
Beijing said in response it would work with other countries in the region to maintain peace and stability after the United States sent two aircraft carrier strike groups to the disputed South China Sea on Tuesday, the latest sign of continued military tension under the. Biden administration. “The United States frequently sends ships and planes into the South China Sea to show off its force, which is not conducive to regional peace and stability,” Wang Wenbin, a spokesman for China’s foreign ministry, said in a regular press briefing.  “China will continue to take necessary measures to firmly safeguard national sovereignty and security, and work with countries in the region to firmly maintain peace and stability in the South China Sea.”
Press also reports that Japan is considering its response to China’s new law allowing its coastguard ship to fire.  China is facing more pressure which is better co-ordinated and it will be interesting to see how President Xi reacts.
An uncrewed Chinese spacecraft on Wednesday successfully entered orbit around Mars after a 6-1/2-month journey from Earth, China’s space agency said, in the country’s first independent mission to the red planet.
China called on the United States on Wednesday to invite the World Health Organization to investigate origins of the COVID-19 outbreak in the US, as sparring over the pandemic continued after the WHO wrapped up its field work in the Chinese city of Wuhan. Hours after the WHO team revealed preliminary findings at a Wuhan news conference on Tuesday, Washington said it wants to scrutinize data used by the team, which concluded that the virus causing COVID-19 did not originate in a laboratory in Wuhan, and that bats remain a likely source.
Cambodia launched its coronavirus inoculation drive on Wednesday, using 600,000 vaccine doses donated by China, with the sons of long-serving Prime Minister Hun Sen and government ministers among the first recipients.
China will force regional grid firms to buy at least 40% of power from non-fossil fuel sources by 2030 in order to meet the country’s climate targets, according to a new government document seen by Reuters.
Former Shanghai police chief Gong Daoan expelled from Chinese Communist Party, to stand trial.  Prosecutors have taken over his case to prepare for trial, says the Central Commission for Discipline Inspection.  Gong’s expulsion came just two weeks after China executed Lai Xiaomin, a former top banker. Gong, who was also formerly a vice-mayor. Authorities said “Gong, having abandoned his ideals and convictions, had attempted to build cliques within the Party, which caused serious harm to and had bad influences on the political environment,”.  Comes as inspectors from the top disciplinary body say that not enough has been done to root out the influences from ‘fallen’ officials.   That could be a sign of rising dissent within China.
Chinese businesswoman Geng Xiaonan jailed after voicing support for Beijing critic.  The 46-year-old is said to have been handed a three-year sentence after pleading guilty to charges including ‘illegal business activities’.  She was detained, along with her husband, after she spoke out in defence of dissident law professor Xu Zhangrun. who has openly criticised the Communist Party and President Xi Jinping. Geng Xiaonan, and her husband Qin Zhen, as well as employees of her private publishing company, stood trial at the Haidian District People’s Court in Beijing after the couple were detained in September and investigated for “illegal business operations”.  There was a heavy police presence outside the court and supporters said they were barred from entering. Friends including Xu and activists Ji Feng and Yan Zhengxue were stopped by the authorities from leaving their homes to attend the hearing.
Three listed units of China's indebted HNA Group announced plans to recoup at least 112 billion yuan (HK$134.6 billion) of misused funds, undisclosed debt guarantees and questionable investments by its major shareholders and their affiliates.  Flagship Hainan Airlines will ask its parent to repay part of its debt while two other group firms are paring the stake held by their controlling shareholders.


HONG KONG  ADR’s -139pts at  29,899 with weakness in Chinese Financials and E Commerce. Shortened trading market will close at midday and re-open on Monday.
No data due
SHORT SELLING Thursday 16.2% vs 19.8% Tuesday 
Top Shorts:  Hengan (1044) 44%, Bank of China (3988) 38%, BankComm (3328) 35%, Mengniu Dairy (2319) 33%, Hang Seng Bank (11) 30%, Bud Apac (1876) 28%, Country Garden (2007) 28%, Galaxy Ent (27) 27%, Ping An (2318) 26%, Sunny Optical (2382) 25%.
COVID 
An expert panel tasked with advising the government on the use of coronavirus vaccines in Hong Kong said on Wednesday that it is seeking more information from mainland drug maker Sinovac about the jabs it produced. The panel will wait for additional data from Sinovac and decide whether to recommend the vaccine to be used in Hong Kong at the next meeting two weeks later.

WATCH
STANCHART (02888.HK) announced that a meeting of a Committee of the Board of Directors of the Company will be held on 25 February 2021 for the purposes of approving the release of the Company’s announcement of results for the year ended 31 December 2020 and considering the payment of any final dividend for the year ended 31 December 2020. +VE
NH HEALTH-B (06606.HK), having closed the IPO subscription today (10 February) and ready to list on 18 February, registered over 1.07 million subscribers, freezing capital of over $850 billion, according to market sources. The IPO was over-subscribed by 4,130 times.
HK Administration Intends to Let Some Establishments (e.g. Fitness Centers, Beauty Salons) Resume Limited Biz from 18 Feb.  Nighttime dine in services to extend to 10pm from 18 Feb with 4 customers per table.  Says that Establishments, Restaurants Resuming Biz Must Ask Customers to Use 'LeaveHomeSafe' App, Register Personal Info. +VE for sentiment
MTR CORPORATION (00066.HK)  announced that the Board of Directors of the Company has recently undertaken a review of the Company’s corporate strategy, with a view to ensuring the sustainable growth of the Company in the future and the continued delivery of high quality public transport and property services to its customers in Hong Kong and in the other cities in which it operates (New Strategy). To support the implementation of the New Strategy, a new management organisation will be put in place by phases with the intention of clarifying accountability for the delivery of the new strategy and strengthening the Company’s internal control and risk management framework.
The first phase of the reorganisation encompasses the following changes, which will be implemented with effect from 22 February 2021: David Tang Chi-fai (an existing Member of the Executive Directorate of the Company) will be responsible for overseeing the Company’s European business, in addition to his existing responsibilities for the Company’s Hong Kong property business and Australian business. He will be appointed as the Property and International Business Director of the Company.
Director of Macao Government Tourism Office, learnt from local hoteliers that the average booking rate approximates 30% during the Chinese New Year holiday, cited Radio Macao. The gambling hub expected 6-10 million visitor arrivals this year, said the director. +VE
Wallace Lau Chak-sing, Convenor of the Advisory Panel on COVID-19 Vaccines, said Sinovac Biotech intended to apply for emergency use of its vaccine in Hong Kong. The Panel shall receive data from the biotech firm in two days, which comprises clinical trial data of phases one and two. Lau claimed Sinovac's vaccine showed certain efficacy based on the phase three data, viewing the vaccine security was acceptable and quite high.  Upon data collection from Sinovac, Lau hoped the Panel could convene a meeting two weeks later and make suggestion to the FHB after studying.
Ricky Wong, Managing Director of WPL, conservatively estimated FY21 home prices to grow 5-8%, riding on a peachy market after the Chinese New Year. Before Kai Tak Area 4E Site 2 closes tender tomorrow, Wong said the group will highly likely submit a tender. +VE
Wheelock Properties has named the second phase of Monaco development in Kai Tak Grande Monaco. Ricky Wong said he expects the project to be launched after the Lunar New Year, including releasing the brochure. There will be a 10 percent increase in price compared to the first phase, given the better location and environment, said Wong. The project accommodates 247 units and is composed of 2 high-rise and 4 low-rise residential complexes providing one- to four-room units with areas of 340 sq ft to 960 sq ft, he added. The developer sold 328 units of the first phase, accounting for around 90 percent of the available units, and cashed out at nearly HK$3.9 billion. +VE
Buildings Department approved 14 building plans in December, including Sun Hung Kai Properties (0016)'s Kai Tak Area 4C Site 3. The developer received the green light to build eight 23-story composite buildings, a five-story residential building and a three-story single family residence. The residential floor area is nearly 625,030 square feet, with another 30,468 square feet area for non-residential use. This came before the last residential site in Kai Tak, Area 4E Site 3, will see its tender close at noon today.
Global trade recovery is set to slow down again during the first quarter of 2021 as the coronavirus pandemic kept eroding the travel industry, UNCTAD wrote in a report. The worldwide trade had contracted 9% in 2020, according to the report.
Centa-Salesman Index (CSI) last stood at 62.32, up 1.06 pts from the previous week's 61.26. The research department of Centaline Property, highlighted that the index had risen for seven weeks amassing 14.78-pt gain, indicating the front-line agents' sentiment kept rising.   With Spring Festival drawing close and prosperous second-hand deals, they forecast  the CSI to head north nearing 70 in coming weeks, hinting housing prices to enter long and sturdy uptrend.

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