Feb 16 Asian Macro Initial Thoughts Japan & S Korea flat, HK to reopen higher


16 Feb

Futures Nikkei Futures opened flat currently -2pts,  HK ADR’s +279pts and Australia moved higher in early trades.  Monday saw better than expected GDP numbers from Japan Singapore and Thailand suggesting the pandemic has not caused as much damaged as thought earlier. +VE for sentiment
US Futures opened Dow +180pts, S&P +20pts (+0.5%) and NDX +68pts (+0.5%)

Norway’s US$1.3 trillion sovereign wealth fund, the world’s largest, wants the companies it invests in globally to boost the number of women on their boards and to consider setting targets if fewer than 30 percent of their directors are female, top fund officials told Reuters.
The World Health Organization (WHO) on Monday listed AstraZeneca and Oxford University's COVID-19 vaccine for emergency use, widening access to the relatively inexpensive shot in the developing world.
British Prime Minister Boris Johnson said on Monday that world powers should clinch a global treaty on pandemics to ensure proper transparency after the novel coronavirus outbreak which was first reported in China.  Johnson said he would be keen to sign a global treaty on pandemics where countries agreed to share data, amid British and US concern over access given to a World Health Organization (WHO) mission to China.

US Market closed for President Day
Dealing with the China challenge will be among the key issues for discussion when Joe Biden joins leaders of the Group of Seven nations for virtual talks on Friday, his first multilateral summit as US president. Biden will also focus on the international response to the Covid-19 pandemic and the world economy during the meeting.
The U.S. dollar held near two-week lows on Monday. Among the gainers versus the weaker dollar, the British pound broke US$1.39 for the first time in nearly three years.  The offshore-traded Chinese yuan continued its recent rise and was on the cusp of breaking above 6.39 per dollar for the first time since June 2018.
AHEAD NY Empire State Manufacturing Index, Overall Net Capital Flows, Net Long Term TIC flows, Foreign Bond Investment.
Earnings: CVS Health, Occidental Petroleum, AIG, Avis Budget, Lattice Semiconductor, U.S. Foods, Advance Auto Parts, Vulcan Materials, Palantir, Agilent, La-Z-Boy

DAX +0.42%, CAC +1.45%, FTSE +2.52%  Trading volumes light with US closed along with China, Taiwan and Hong Kong but European markets opened higher, FTSE & CAC worked higher while the DAX traded sideways.  UK announced it had vaccinated 15m people across is top 4 priority categories.  Media leading as Vivendi surged 20%  on news it plans to list Universal Music and distribute 60% of the capital to shareholders.  Oil rallied of news of increased tensions in the Middle East as Saudi lead forces fighting in Yemen claim to intercepted an explosive drone, Brent Oil +1.5%  
UK stocks strong on a resources rally with Tin prices rocketing.
Bollore +14.6% owns a stake in Vivendi
Galapagos -6%
Catalan separatists increased their majority in the Catalonia regional parliament; setting the scene for more talks between them and Madrid.
Danone board met with Artisan Partners regarding a board shake-up
Biosearch Life jumped after Kerry Group announced a “friendly public tender offer” for the Spanish probiotics food group. The deal, at €2.20 per share, represents a 46 per cent premium on Friday’s closing price.
Bluejay Mining rallied after announcing that its subsidiary, Dundas Titanium, had received a letter of interest from the Export-Import Bank of the United States for $208m in debt funding for its Dundas Ilmenite Project, a scheme to extract ilmenite (used in the production of titanium) in northern Greenland. Any potential debt financing would be eligible for a maximum repayment term of eight and a half years.
Eurozone Finance ministers held a virtual meeting to discus the Eurozone recovery.
DATA
EUROZONE 
Balance of Trade Dec Euro 29.2b vs 25.8b Nov (F/cast was 23b)
Industrial Production Dec -0.8% YoY vs -0.6% Nov (F/cast was 0%)
Industrial Production Dec -1.6% MoM vs +2.6% Nov revised (F/cast was -0.4%)
AHEAD
EUROZONE Employment Change, GDP Growth Rate, ZEW Economic Sentiment Index
GERMANY ZEW Economic Sentiment Index & Current Conditions
FRANCE Unemployment rate
UK No data due

JAPAN 
Nikkei futures opened flat   after the historic close yesterday I still like the Mega Banks and Brokers as a play on the upside.
Data due out at 11:30am Dec Tertiary Industry Index  (Nov was +0.7% F/cast was +0.3%).
Tokyo reported 266 new covid cases Monday (vs 369 Sunday) the national total was 961 the first time below 1,000 since Nov 16.
Saturday’s earthquake has caused production line damage at Asahi & Kirin Breweries, Renesas Electronics, Mitsui Chemicals, JFE Steel with various levels of damage and closure.  Kirin expected to resume production Wednesday.  Airlinese and Buses are increasing services as high speed connections are disrupted.
Nissan Motor Co Ltd said on Monday it is not in talks with Apple Inc, following a report that the iPhone maker approached the Japanese company in recent months about a tie-up for its autonomous car project.  +VE for Nissan
FT Reports Japan’s Unizo urged to consider bankruptcy by Asia Research and Capital Management, a $3bn hedge fund based in Hong Kong, which said it had reason to believe that the company was probably insolvent, even accounting for the assets it still owns after it sold most of its prime real estate portfolio.

SOUTH KOREA 
Expect markets to open flat 
Data out 
Export Prices Jan -6.7% YoY vs -5.4% Dec (Consensus -5.1%)
Import Prices Jan -2.3% YoY vs -10.2% Dec (Consensus -11.2%)
South Korea said on Monday it will not use AstraZeneca’s coronavirus vaccine on people aged 65 and older, reversing an earlier decision, and scaled back initial vaccination targets due to delayed shipments from global vaccine-sharing scheme COVAX. South Korea had said it would complete vaccinations on 1.3 million people by the first quarter of this year with AstraZeneca shots, but it slashed the target sharply to 750,000.
President Moon Jae-in on Monday hinted at further easing of the nation’s COVID-19 social distancing rules to boost the pandemic-battered economy, especially hardest-hit small business owners. +VE
Netflix saw its subscriber numbers soar in South Korea last year due to changes in people's media usage patterns caused by the coronavirus pandemic, a report by market research firm Nielsen Korea.  The monthly unique visitors to Netflix in South Korea in November last year surged 64.2 percent, compared with January of the same year.
Xinjiang polysilicon boycott opens window for OCI; the only Korean chemical company that makes polysilicon, is expected to produce 25,000 metric tons of polysilicon per year at its plant in Malaysia and supply them to Longi Solar for the next three years. +VE
LG Chem has raised 820 billion won ($744.1 million) through sales of environment, social and governance bonds to make aggressive investments into new growth engines -- carbon neutrality, battery materials, new drugs and sustainable growth, the company said Monday.
Brand X Corp., a company behind fitness wear brand Xexymix, reported a whopping 113 percent on-year increase in sales last year, thanks to the popularity of leggings during the coronavirus pandemic. +VE
Hankook Tire & Technology  said Monday it plans to expand its US plant to meet demand from local carmakers. Hankook Tire plans to initially inject 100 billion won ($91 million) this year to double the production at its plant in Tennessee by the first half of 2024, a company spokesman said over the phone. +VE
Samsung Heavy Industries said Monday that it has signed a 781 billion won ($707 million) deal to build five liquefied natural gas (LNG)-fired container carriers. +VE
Local brokerage firms benefited from recent stock market rallies after a March plunge in 2020 as the companies’ profits jumped sharply, data showed Monday.  The combined operating profit of South Korea’s 20 local stock brokers, including Mirae Asset Daewoo and Korea Investment & Securities came in at 7.85 trillion won ($7.1 billion) last year, up 36.7 percent from 5.74 trillion won posted in the previous year, according to data compiled by state regulator Financial Supervisory Service. +VE

TAIWAN 
Market closed
No data due 
Evertrust Rehouse Co Taiwan’s largest property broker by number of offices, saw its sales approach NT$700 billion (US$24.66 billion) last year, an increase of 30 percent from 2019, as collaboration between affiliated brands effectively facilitated deals. +VE
GlobalWafers Co Ltd yesterday said it has started the additional acceptance period for its all-cash tender for Siltronic AG after achieving the minimum acceptance threshold of 50 percent. The Hsinchu-based wafer maker said it had reached 56.92 percent in the voluntary public tender offer during the main offer period from Dec. 21 last year to Thursday last week.  
The Ministry of Economic Affairs (MOEA) aims to develop 423 hectares of land currently held by Taiwan Sugar Corp  for industrial use by the end of the year, the Industrial Development Bureau said yesterday. +VE
Taiwan expects to add more than 1 gigawatt of renewable energy capacity this year, the Bureau of Energy said yesterday.  Three new offshore wind farms are slated for completion or partial operation this year, which would contribute more than 800 megawatts, while a major solar project on Taiwan Sugar Co’s land due to begin operations this year would account for 181 megawatts.

CHINA 
Market closed 
No data due
China reports nine new Covid cases on February 14, the health commission said on Monday. Among the new cases were eight imported infections from overseas and one local case recorded in Hebei province, surrounding Beijing, the National Health Commission said in a statement.  Of the 10 new asymptomatic infections, which are not classified as confirmed cases in China, three were later confirmed as infected patients.  
Peruvian prosecutors are probing the use of so-called "courtesy doses" of China's Sinopharm vaccine after two top government officials resigned over the weekend upon acknowledging they had taken the Chinese shot months ago, well before they were widely available in the country. -VE
Zimbabwe receives 200,000 doses of Sinopharm COVID-19 vaccines. A further 600,000 doses from China are set to arrive in early March, information minister Monica Mutsvangwa said last week. It is unclear how much the cash-strapped southern African nation will pay for the second batch of the vaccines from China National Pharmaceutical Group (Sinopharm).
China appears to be giving more priority to vaccine diplomacy than its domestic inoculation programme, with Chinese pharmaceutical makers now exporting more Covid-19 doses than have been administered in the country. Figures compiled by the South China Morning Post show China shipped at least 46 million ready-made vaccines or their active ingredients around the world, as of Monday – with hundreds of millions more doses to come.
Canada on Monday launched a 58-nation initiative to stop countries from detaining foreign citizens for diplomatic leverage, a practice that Ottawa and Washington say China and others are using.
China is cracking down on vaccine-related crimes, making dozens of arrests over the production and distribution of fake coronavirus shots, price gouging and illegal inoculations.  Authorities had arrested 70 suspects by last Wednesday in 21 vaccine-related cases, Xinhua News Agency said yesterday, with many surfacing during initial phases of rollouts.

HONG KONG  

Re-opens; Friday's ADR’s were +279pts at 30,452 but expect a higher open after a +VE Europe and a strong showing by Japan after good regional GDP data on Monday.
No data due
HK reported 9 new inflections (3 of no know origin) on Monday but warned cases might increase after the long weekend.  Current social distancing measures would be further eased if the number of new cases dropped to single-digit, Health minister Sophia Chan Siu-chee said.
SHORT SELLING Thursday 23.6% vs 16.2% Wednesday 
Top Shorts:   Hengan (1044) 39%, China Res Land (1109) 39%, AAC Tech (2018) 38%, Bank of China (3988) 38%, SHKP (16) 38%, BABA-SW (9988) 38%, Shenzhou (2313) 37%, Country Garden (2007) 33%, Hang Seng Bank (11) 32%, Hang Lung Ppty  (101) 32%, AIA (1299) 32%, BankComm (3328) 32%, Bud Apac (1876) 32%, Anta (2020) 31%, CCB (939) 31%, Ping An (2318) 29%, Meituan (3690) 28%, Sino Biopharm (1177) 28%, CITIC (267) 27%, Sunny Optical (2382) 27%, Galaxy Ent (27) 27%,  CLP (2) 25%, Henderson Land (12) 25%, HSBC (5) 25%. 
WATCH
Property sales in Hong Kong soared to eight- and ten-year highs in the primary and secondary markets respectively over the four-day Lunar New Year holiday.  New home sales doubled to an eight-year high with at least 32 transactions, compared to 14 over the same period last year. The market had recorded less than 20 deals from 2014 to 2020 over the four-day holiday.
In secondary sales, 10 major housing estates saw a 10-year high of six transactions compared to three over the same period last year, data of Centaline Property showed.
Henderson Land Development (0012) sold a total of nine units, including five flats in Yuen Long, three in Quarry Bay, and one in Tai Kok Tsui.  Kerry Properties (0683) sold a luxury house with an area of 2,877 sq ft at HK$86.31 million, or HK$30,000 per sq ft, making it the biggest deal over the holidays.
Sino Land (0083) sold a one-room special unit at Silversands in Ma On Shan, measuring 267 sq ft, with a 103-sq-ft terrace for HK$6.41 million or HK$24,000 per sq ft.  The developer has sold 40 homes at the project, cashing out more than HK$300 million.
Chinachem is expected to launch sales of 68 units at Anderson Road in Kwun Tong this Saturday after previously releasing the price list with a discounted average price per sq ft of HK$20,363.

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