Sept 24 ASIAN MACRO INITIAL THOUGHTS Trump says may not handover power peacefully -VE


28 Sep

Sept 24 ASIAN MACRO INITIAL THOUGHTS  Trump says may not handover power peacefully -VE

Covid-19 Globally over 31.8m cases, 974k deaths
Asian futures indicate a lower open.
US Futures Dow -0.6%, S&P -0.6% and NDX -0.9% as Trump said that he would not commit to a peaceful transfer of power should he lose the election appeared to hit sentiment.


DOW -1.92%, NDX -3.02%, S&P -2.37%, Russel 2K -3.04% Markets opened higher but sold down through he day to close at their lows with concerns on covid and whether there would be more Govt stimulus. Broad based sell off of both WFM and re-opening stocks.
Facebook -2.3%, Amazon -4.1%, Apple -4.2%, Netflix -4.2%, Alphabet -3.5% and Microsoft -3.3%.
Nvidia -4.1%, AMD -3.8%, Micron +0.3% and Skyworks -4.1%.
Re-opening stocks Boeing -3.6%, Caterpillar -1.9%, Simon Property -3.4%, Gap -1%, United Airlines -2.9%, Carnival -1.9%
Lock down names Campbell Soup -1.1%, General Mills -0.5% and JM Smucker -1.5%
DATA
MBA Mortgage Applications +6.8% vs -2.5% prior
MBA 30 year Mortgage Rate +3.1% vs +3.07%
House Price Index Jul +6.5% YoY vs 5.8% Jun revised (F/cast was +5.8%)
House Price Index Jul +1% MoM vs 1% Jun revised (F/cast was +0.7%)
PMI Flash Services Sept 54.6 vs 55 Aug (F/cast was 54.1)
Manufacturing Sept 53.5vs 53.1Aug (F/cast was 53)
Composite Sept 54.4 vs 54.6 Aug (F/cast was 53)
EIA Crude Oil stocks Change -1.639m vs -4.389m prior (Consensus was -2.325m)
EIA Gasline stocks Change -4.025m vs -0.381m (Consensus was -0.648m)
USD was flat vs Yen & Euro. Bitcoin % @ , VIX +6.4% @ 28.58, US T10 0.677%
OIL Brent +1.3%, WTI +0.3% after inventories fell but then fell in after hours trading
Gold -0.26%, Silver -1.06%, Copper -1.29%
AHEAD Initial Claims, 4 week ave initial claims, Continuing Claims, New Home Sales, Fed Chair Powell Testimony, EIA Gas Report, Kansas Fed Manufacturing Index.

DAX +0.39%, CAC +0.62%, FTSE +1.2% Markets opened higher German Consumer Confidence beat PMI’s for UK & Germany were better but Eurozone and French missed. Market peaked late morning and then traded lower for the rest of the day. As investors worried about covid as UK introduced further social restrictions and whether there would be more stimulus. Travel & Leisure led the gains.
Diploma +26% after raising £190 million ($241 million) in a share placing.
Adidas +4% and Puma +4%, after good numbers from Nike.
Alten +9%.
Beijer Ref -8% after U.S. group Carrier reduced its stake in the firm.
DATA
AHEAD

EUROZONE Economic Bulletin, ECB General Council Meeting, EU Council Special Meeting
GERMANY Ifo Business Climate, Current Conditions
FRANCE Business Confidence and Climate Indicator
UK CBI Distributive Trades

JAPAN Expect Nikkei to open lower Yen currently 105.34 sentiment weak on concerns about the global recovery.
Data due
BoJ Monetary Policy Meeting Minutes
BoJ Governor Kuroda said Wednesday the central bank was ready to extend its programs aimed at easing corporate funding strains that expire early next year, as the coronavirus pandemic keeps the economic outlook highly uncertain.
Japan is considering allowing more foreigners into the country for longer stays starting as early as next month, while keeping the COVID-19 entry curbs in place for tourists, the Asahi newspaper reported on Wednesday.
Olympics will require coronavirus tests of foreign athletes upon their arrival in Japan, but may not mandate a two-week quarantine period, according to draft measures released on Wednesday.
Nearly 36,000 Japanese companies have chosen to discontinue their business so far this year, mainly due to the hit from the coronavirus crisis and up sharply from a year ago in a sign of the pain the pandemic is inflicting on the fragile economy.
Convenience store sales in Japan -5.5% YoY in August marking the sixth straight month of decline, due to fewer customer visits covid hurts sales.

SOUTH KOREA Expect markets to open lower
No data due
Coupang is inching its way into the computer parts
industry by offering lower prices and replacing distributors and retailers. +VE for the company but -VE for the downstream operators.
Global experts from around the world and industry officials agreed on supremacy of South Korea’s 5G network technologies at an online seminar hosted by SK Telecom on Wednesday. But the key thing is still getting paid for the investment.
LG Electronics its headquarters building in Seoul has seen covid infections and it prompted the tech firm to expand its remote working system.


TAIWAN Expect market to open lower with broadband selling
Data due
M2 Money Supply
After Market Wednesday Industrial Production Aug +4.7% YoY vs +2.75% Jul Revised (F/cast was +2.*%)Retail Sales Aug +8.17% vs +2.79% Jul Revised (F/cast was +2.5%Industrial production a seventh consecutive month of growth, Thanks to the information and communications technology [ICT] sector remaining very, very strong
Acer Inc yesterday rolled out artificial intelligence (AI) software for diagnosing diabetic retinopathy in collaboration with National Taiwan University Hospital (NTUH) and Novartis (Taiwan) Co the first “smart” ophthalmology equipment approved by the Taiwan Food and Drug Administration (FDA). The software was created by training AI learning models with 50,000 retinal images sourced from databases abroad.
Prices for flat panels used in TVs would increase by about 10% next quarter due to persistent supply constraints, following a quarterly hike of 30 percent this quarter, reported TrendForce Corp
Pan German Universal Motors Ltd, which distributes BMW, Porsche and Mini vehicles in Taiwan, yesterday said that it received 17,172 bids for the public auction of 6.457 million new shares ahead of its initial public offering (IPO) on the TWSE on Oct. 12.

CHINA Expect market to open lower with concerns over the global recovery and international relations.
No data due
MoFA: To Allow Foreign Entry with Valid Permits for Work,
Private Matter, Reunion From Next Monday Amendments have been made to the notice on the temporary entry suspension of foreigners with Chinese visas or residence permits, which was jointly published by Ministry of Foreign Affairs and National Immigration Administration on 26 March 2020. Starting from 00:00 next Monday (28 September), foreigners with valid residence permits for working, private matters and reunion will be allowed to enter China.
The governor of Brazil's São Paulo state, said on Wednesday the state is likely to start to immunize its population with China's Sinovac vaccine for COVID-19 in mid-December, pending regulatory approval. +VE
Western diplomats and legal experts urged China on Wednesday to clarify the status of 12 Hong Kong residents arrested by China at sea last month and whether they have seen lawyers of their choice
China's Ant Group plans to raise about half of its $35 billion dual listing in Hong Kong and will not offer a cornerstone tranche as it bets on strong demand from institutional investors, sources said.
China’s securities broking sector is set for consolidation as stricter regulations covering opaque financial holding firms force owners of mid-sized brokerages to divest, analysts and industry participants said. +VE for the larger state backed brokers.
SOE’S Profits and revenues of China's state-owned enterprises grew for a third consecutive month in August while the first-half profits of listed mainland banks dropped for the first time in history. SOE profits overall rose 23.2% YOY last month, with revenue growing 6% YOY data from the Ministry of Finance showed.
China Beige Book claims its survey shows an alternative narrative to Beijing’s official economic recovery in the wake of the coronavirus. Its survey of 3,300 firms across China shows a disjointed recovery away from the ‘corporate elites’ in the coastal hubs of Beijing, Shanghai and Guangdong -VE
China’s post-coronavirus construction boom shows signs of cooling as steel output slows. Hit by bad weather and government curbs on property financing are slowing construction projects, reducing demand for steel and iron ore. Analysts say slowdown does not mean steel production will grind to a halt, with demand and output expected to pick up in the New Year. -VE


HONG KONG ADR’s -248pts to open at 23,494 but expect more downside on light trading volumes.
Data due
Balance of Trade, Exports & Imports

SHORT SALES Wednesday 19.6 vs 18.5% Tuesday 
Top Shorts Petrochina (857) 52%, Hang Seng Bank (11) 51%, BoC HK(2388) 45%, Country Garden (2007) 42%, Bank of China (3988) 41%, CCB (939) 38%, Bank Comm (3328) 37%, CKH (1) 32%, Ping An (2318) 30%, Hengan (1044) 29%, Sands China (1928) 28%, MTRC (66) 27%, ICBC (1398) 26%, AIA (1299) 25%.
BUYBACKS/INSIDER DEALING
CHINA GAS HOLD (00384.HK) announced that it had today repurchased 541,200 shares through the Stock Exchange, involving nearly $11.46 million.

WATCH
EIGHT STAR STREET, a residential project under SWIREPROPERTIES (01972.HK), offers 37 flats 
with saleable area of 430-900 sq.ft.. Adrian To, Residential Director assumed the project to be sold in 4Q20. Hopeful of the economic prospect of Hong Kong, the Group viewed the housing demand is enormous, envisioning a steady market in mid-to-long term.
Hyde Park, jointly developed by ITC PROPERTIES (00199.HK) and Urban Renewal Authority, will start selling 50 flats at its sales office in Wan Chai at 09:30 Saturday (26 September). The discounted entry fee of the Cheung Sha Wan residential project is $5.367 million.
MACAU names weak as press reports gamblers fear of China broadening a crackdown on offshore gambling which has sparked a rush to withdraw billions of dollars from Macau, threatening a recovery in the local economy hard hit by the coronavirus. Customers have been withdrawing money from junkets - companies that lure high rollers to gamble - after Beijing identified the cross-border flow of funds for gambling as a national security risk in July. -VE
CHINA RE (01508.HK) announced that the aggregate primary premium income as derived from China Continent Property & Casualty Insurance for the period from 1 January 2020 to 31 August 2020 was RMB33.961 billion, up 7.03% yearly.
The Government will not extend the option for Hong Kong Disneyland Resort to purchase the adjacent site at Penny's Bay, having taken into account the current economic conditions. Walt Disney Company (DIS.US) expressed its extreme disappointment at the Government's decision. Disney has lived up to its word to invest in Hong Kong Disneyland over the past 15 years, promoting the city's tourism development, according to the firm's spokesman.
The Government will publish in the Gazette 29 pieces of regulation and one order on September 25, 2020, to give effect to the extension of existing waivers/ concessions etc.
The estimated revenue forgone amounts to $2.048 billion.
Financial Services Development Council (FSDC) issued a document, promoting the development of structural products linked to A shares under Southbound Trading of Stock Connects or related indices, with priority in Northbound products. While investors are now able to trade A shares through Southbound Trading, the trading of the new structural product is believed to mitigate risk.
Centa-Salesman Index (CSI) last stood at 52.28, up 0.54 pts weekly, said Centaline Property. Since the Government started easing precautionary measures at end-August, CSI has been clawing back to the critical point 50, signally that frontline agents are getting more bullish.
HAITIAN ANTENNA (08227.HK) announced that the Board passed a resolution to approve the proposed non-public issuance of domestic invested shares of nominal value of RMB0.1 in the share capital of the Company to selected investors under the general mandate.

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