Sept 15 ASIAN MACRO INITIAL THOUGHTS US Futures slight +VE Asian Futures lower


17 Sep

Sept 15 ASIAN MACRO INITIAL THOUGHTS  US Futures slight +VE Asian Futures lower

Covid-19 Globally over 29.2m cases, 926k deaths
US Futures Dow and S&P opened flat but are drifting higher. NDX opened +0.1% but is now +0.3%
ASIAN Futures weak on concerns about the Chinese Data due out at 10am which will give an insight into the economic recovery.

DOW +1.18%, NDX +1.87%, S&P +1.27%, Russel 2K +2.65% markets opened strongly as the Nvidia +5.8% deal to by ARM finalised (AMD +2%, Micron +6.4% and Skyworks +1.2%) and ByeDance rejecting the Microsoft +0.7% offer in favour of Qualcomm flat. Gilead +2.2% to acquire Immunonomedics +98% encouraged traders and squeezed short sellers. After the initial surge markets then traded sideways/lower. Investors are coming to terms that a new stimulus packages in now unlikely before the election. Investor will be watching to the impact on Retail Sales data due Wednesday.
Apple +3%, Tesla +12.6% but other tech Facebook -0.2%, Netflix -1.2%, Alphabet -0.5% and Zillow +2.1%
Amazon -0.4% said Monday that it will be hiring another 100,000 people to keep up with a surge of online orders. The company said the new hires will help pack, ship or sort orders, working in part-time and full-time roles.
Delta +4.1% turned its SkyMiles frequent flyer programme into a separate subsidiary and is using it as collateral for $6.5bn in new bonds and loans.
Re-opening stocks Boeing +3.1%, Caterpillar -0.2%, Simon Property +5.7%, Gap +4%, United Airlines +1.9%, Carnival +1%
DATA
Consumer Inflation Expectation Aug +3% vs +3.9% Jul (F/cast was +3%)
USD was weaker vs Yen & Euro. Bitcoin +4% @10,739.00 , VIX -3.8% @ 25.85, US T10 0.676%
OIL Brent -0.9%, WTI -0.19% concerns about the globally economy stalling.
Gold +0.9%, Silver +2%, Copper +0.84%
AHEAD Export & Import Prices, NY Empire State Manufacturing, Redbook, Industrial Production, Manufacturing Production, Capacity Utilisation, API Crude Oil Stock Change

DAX -0.07%, CAC +0.35%, FTSE -0.1% opened higher following the lead from Asia but sold down initially on reports of rising covid cases in UK, France and some US states which outweighed the +VE news about vaccine trials; with AstraZeneca -0.4% (off initial high) resuming its covid vaccine trial. Markets then basically traded sideways around flat. Mood also cautious ahead of Central Bank meetings. Manufactures +VE on the +VE Eurozone Industrial Production data.
Rumours CS +4.3% and UBS +2.5% considering a merger saw both stocks rise.
Travel & Leisure were up but Oil and Gas fell concerns over demand and BP saying that demand for fossil fuels may have peaked.
G4S +25% after the company received a £2.95 billion ($3.8 billion) takeover offer from Canada’s Garda World Security -0.1%
Dassault Aviation +9.1% after the Greek Air Force announced an order for 18 of its Rafale fighter jets.
British Airways parent IAG +4.5% off the early high helped by the news from AstraZeneca.
Tullow Oil -5.34%, while Polymetal International slid 3.8%.
DATA
EUROZONE
Industrial Production Jul -7.7% YoY vs -12% Jun revised (F/cast was -7.6%)
Industrial Production Jul +4.1% MoM vs +9.5% Jun revised (F/cast was +3.7%)
AHEAD
EUROZONE ZEW Economic Sentiment, Labour Cost Index, Wage Growth
GERMANY ZEW Economic Sentiment, Current Conditions,
FRANCE Inflation Rate, IEA Oil Market Report
UK Claimant Count Change, Employment Change, Age Earnings, Unemployment Rate


JAPAN Nikkei futures point to a lower open despite the US strength and new LDP leader Suga taking over the reins of power which I think is +VE for a smooth transition and a continuation of Abe’s policies. I would expect market to see some upside although the China data could impact that today. Yen strengthened currently 105.68 slight -VE for Exporters.
The Nikkei futures contract in Chicago was at 23,360 while its counterpart in Osaka was at 23,290. That compared against the Nikkei 225′s last close at 23,559.30.
Data due No data due but trial of former Nissan Executive Greg Kelly starts.
United Airlines said it would close its flight attendant base at Japan's Narita airport on Oct. 1, a move that will affect 270 flight attendants. -VE
Japan has suspended imports of pork and live pigs from Germany on Friday after a case of African swine fever (ASF) was confirmed in a wild boar in eastern Germany, the agriculture ministry said Monday. China and South Korea also banned such imports.

SOUTH KOREA Expect markets to open higher following the strong US rebound but with caution ahead of the China data. Monday saw moderate trading volume but expect that to increase today but upside limited ahead of US FOMC meeting.
Data out
Import Prices Aug -10.5% YoY vs -9% Jul
Export Prices Aug -6.8% YoY vs -5.8% Jul revised
Export support for SMEs to center on online realm Exporters close $18m in deals through video consulting between April and July. Government will strengthen support for promising startups and small and medium-sized companies to export their products online in the global market, officials said Monday. +VE
LG Electronics on Monday unveiled a whole new form factor for its LG Wing smartphone, as expected it comes with two screens but with a swing feature. The two screens are capable of running two different apps at the same time. For example, while users watch YouTube on the main screen, they can chat or make calls on the other. Different but I’m not sure of the benefits
Samsung Electronics on Monday announced its partnership with d’strict, a local content producer for digital media, to reinforce its smart signage business by providing digital content Slight +VE
Temporary flights will start to operate this week to allow South Korean residents in China who returned here during COVID-19 outbreak to travel back to China, the government said Monday. Korean Air Lines and Xiamen Airlines will operate a total seven flights from Incheon, west of Seoul, to Qingdao, Zhengzhou and Xiamen, from Thursday until Oct. 15, it said.
Lotte Aluminium said Monday it has increased the production capacity of its cathode foil plant in Ansan, Gyeonggi Province in response to growing demand for electric vehicle batteries. +VE
Pan Ocean Co. said Monday it has completed a takeover of a 36.25% stake in an export grain terminal on the US northwest coast in an effort to expand its presence in the global market. +VE
South Korean mobile carriers are racing to develop digital health care services, industry officials said Monday, as demand for remote personalized services grows amid the pandemic. SK Telecom Co., KT Corp., and LG Uplus Corp. have recently joined hands with local health care companies to create new services to capitalize on the recent contactless trend driven by social distancing measures against the pandemic. +VE


TAIWAN Expect market to open higher with Tech in focus following the US strength. Volumes yesterday were light with caution ahead of several Central Bank meetings this week but I would expect volumes to increase today and for tech to remain in focus.
No data due
Average monthly take-home pay in July rose at the slowest annual pace in four years 
to NT$42,481 (US$1,440.72), while total wages, including overtime and performance-based compensation, climbed 4.46% to NT$55,505, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The labour force expanded by 37,000 people, or 0.47% MoM to 7.94 million, as the fallout of the COVID-19 pandemic weakened, the statistics agency said in a report. Slight +VE as shows situation improving.
Average credit card spending on domestic travel in Taiwan in the first half of this year halved from a year earlier to NT$5,343 (US$181.20) per transaction amid the COVID-19 pandemic, the National Credit Card Center said in a report. -VE for Transport and Hotel names.
Nanya Technology Corp yesterday said that it would stop shipping chips to Huawei Technologies from today due to US export restrictions, joining the world’s other major memorychip suppliers, including Micron Technology Inc, Samsung Electronics Co and SK Hynix Inc. Expected and the company does not expect to see any revenue loss.
Apple Inc’s major iPhone assemblers are among the companies expected to win approval to participate in a US$6.6 billion stimulus program to bring manufacturing to India, people familiar with the matter said, a potentially seismic shift as the world’s most valuable company diversifies beyond China. The Indian government at a Cabinet meeting tomorrow is expected to approve a plan aimed at bringing US$150 billion in mobile-phone production to the nation over the next five years, said the people, who asked not to be identified because the matter is private.
Taiwan Semiconductor Manufacturing Co is to pay NT$504 million of special Sports Day bonuses to its employees, even though the event has been postponed due to the COVID-19 pandemic. TSMC said that it would issue a bonus of NT$12,000 to each of its employees in Taiwan who joined the company before May 31. About 42,000 employees are eligible for the bonus, meaning that NT$504 million would be paid out in employees’ salaries next month, the company said. While this year’s payment per employee is the same as last year, each employee is also to receive a NT$1,000 merchandise voucher, TSMC said. +VE

CHINA Expect market to open slightly higher following the US but with caution ahead of data due out at 10am. That data will direct the course of trading today.
Data due at 10am
NBS Press Conference, Fixed Asset Investment (F/cast -0.5% YoY), Industrial Production (F/cast +4.5% YoY) , Retail Sales (F/cast +0.2% YoY), Unemployment Rate (5.6%)
China Tourism Academy published the 2020 domestic tourism development report, envisioning a highly probable W-shaped tourism economy revival and boost in growth momentum. The institution modeled the full-year domestic visitation at 3.426 billion, a negative growth of 43% YoY.
The Chinese wearable device market shipment +4.1% yearly to 26.58 million units during the second quarter of 2020, as IDC wrote in a report. +VE Apple who have the largest market share and Samsung and their supply chains.
The mainland banking sector saw the ratio of non-performing loans rise to 2.14% by end-August and outstanding non-performing loans reached 3.7 trillion yuan by the end of last month, said CBIRC official Liu Zhongrui. The mainland bank industry has disposed of a total of 5.8 trillion yuan (HK$6.59 trillion) of non-performing loans since 2017. The number is even higher than the sum of those handled during the eight years before that, said Zhu Tong, a China Banking and Insurance Regulatory Commission official. In the first half of the year, the disposal of non-performing loans amounted to 1.06 trillion yuan, rising 168.9 billion yuan from a year ago. -VE for the Chinese Banks and reflects the economy remain under due to covid.
FT reports that Huawei is still courting app makers despite the sanctions threat to its devices

HONG KONG ADR’s indicate -81pts to open at 24,558 following Mondays 137pts rise; with caution expected ahead of the data due out from China at 10am. I think we are likely to see a slight higher open as recent shorts continue to cover, following the US markets rebound. But XIAOMI weak on news of the share placement by the Vice Chairman.
No data due
After market Monday
Industrial Production Q2 -5.1% vs -4.6% (F/cast was -9.5%)

IPO
FOURACE IND GP (1455.HK),
whose shares debut today, closed at $0.81 in gray market, up 102.5% against the listing price of $0.4, on volume of 15.7 million shares and turnover of $12.9 million, PhillipMart data showed. Excluding the handling fees, a book gain of $2,050 was reported per board lot of 5,000 shares.


SHORT SALES Monday 22.3% vs 20.9% Friday
Top Shorts Ping An (2318) 43%, Mengnui Dairy (2319) 34%, BABA (9988) 34%, ICBC (1398) 32%, China Res land (1109) 30%, Bank of China (3988) 29%, Tencent (700) 26%, CCB (939) 23%.

BUYBACKS/INSIDER DEALING
Li Ka-shing and Victor T K Li through Li Ka Shing Foundation Limited acquired a total of 460,000 shares in CK ASSET (01113.HK) at the average price of HK$41.1687, HK$40.845 and HK$40.975 per share on 8 September, 9 September and 11 September respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset have increased from 35.53% to 35.54% and from 35.6% to 35.61% respectively.

WATCH
XIAOMI vice chairman Lin Bin is seeking as much as US$1 billion from the sale of 350 million shares
at HK$22.55 to HK$22.85 each - a discount of 2.97 percent to 4.25 percent to Monday's closing price of HK$23.55. -VE
SC CREATIVE DEV (1781.HK)  interim results ended June 2020. Loss amounted to $18.146 million, against $14.702 million in profit a year ago. LPS equaled 3.36 cents. No dividend was declared.
JIAYUAN INTL (02768.HK) announced that for the eight months ended 31 August 2020, the contracted sales  RMB16.8957 billion, +8% YoY and the corresponding gross floor area sold was 1.5678 million sq.m., +11%  YoY
SMARTONE TELE (315.HK)  has officially launched Home 5G broadband services. Clients may enjoy unlimited 5G data (200GB full-speed data) for a $148 monthly plan.
CHINA SOUTH AIR (1055.HK) announced that in August 2020, passenger capacity (measured by available seat kilometres) of the Group -34.24% YoY.  Passenger traffic (measured by revenue passenger kilometres) -44.03% YoY.
PING AN (2318.HK) stated that the life insurance sector reform in China is set to be decisive to the industry development over the coming decade. In the first half of 2020, Ping An Life Insurance has completed 1.69 million compensation cases, said the Chinese insurer.
The Hong Kong Monetary Authority (HKMA) released today (September 14) the key analytical accounts of the Exchange Fund at the end of August 2020. The external assets of the Exchange Fund, increased during the month by HK$1.4 billion to HK$3.68 trillion. Claims on the private sector in Hong Kong amounted to HK$232.9 billion.
August 2020, 195 sale and purchase agreements (SPAs) were registered for luxury homes priced above $20 million (including new homes and second-hand ones), -33.9% from 295 SPAs in July, said Wong Leung Sing, senior associate director at research department of Centaline Property. The transaction value totaled $9.664 billion in the month, down 29.5% from $13.708 billion in July. Both SPA and transaction value figures hit four-month low

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