Sept 29 Asian Macro Initial Thoughts Asian Futures mixed
Covid-19 Globally over 33.3m cases, 1m deaths
US Futures Dow +50pts with S&P +0.1% and NDX flat
Asian Futures mixed Nikkei lower, Australia higher, HK ADR’s higher
First US Presidential debate tonight between Trump and Biden.
DOW +1.51%, NDX +1.87%, S&P +1.61%, Russel 2K +2.4% Dow opened higher and worked higher but did ease back slightly in the last hour. S&P and NDX opened higher trading sideways for most of the day. NDX saw worked slightly higher in the PM.
Investors encouraged by Nancy Pelosi saying a new stimulus package remains on the table but the price tag is still above what the Republican’s have said they are willing to pay.
Banks saw good interest but the rally was broad based.
Facebook +0.8%, Apple +2.4%, Amazon +2.6%, Netflix +1.6%, Alphabet +1.4% and Microsoft +0.8%.
Nvidia +1.3%, AMD +2.7%, Micron +1.2% and Skyworks +4.3%.
Re-opening stocks Boeing +6.4%, Caterpillar +1.2%, Simon Property +3.5%, Gap +5.6%, United Airlines +5.1% Carnival +1.6%
Lock down names Campbell Soup +0.9%, General Mills +0.4% and JM Smucker +1%
Devon Energy +11% and WPX Energy +16.4% announced they will move forward with a merger of equals.
Caesars Entertainment +2% disclosed a cash offer to buy London-based William Hill -11.6% for 2.9 billion pounds.
Dallas Fed Manufacturing Index Sept 12.6 vs 8 Aug (F/cast was 5)
USD slightly weaker vs Yen & Euro. Bitcoin +1.2% @ 10,868.96, VIX -0.7% @ 26.19, US T10 0.658%
OIL Brent +1.22%, WTI +0.9% on hopes of an agreement on the next US stimulus package
Gold +1%, Silver +2.9%, Copper +1.03%
AHEAD Goods Trade Balance, Wholesale Inventories, Redbook, Case Schiller Home Prices, Consumer Confidence, API Crude Oil Stock Change. First presidential debate.
DAX +3.22%, CAC +2.4%, FTSE +1.46% having opened higher and worked higher through the Dayton close at their highs. HSBC rallied on news that Ping An had increased its stake in the bank and other Banks rallied on the news. Deutsche Bank, Standard Chartered and Commerzbank all gaining more than 5%. All sectors closed +VE as China Industrial Production numbers taken as a positive that its recovery was continuing.
Daimler +3.8% as CEO Dieter Zetsche announced he would relinquish his role as chairman, with investors now calling for an independent figure to lead the supervisory board.
Commerzbank +5.6% has named Manfred Knof, formerly head of German retail banking at Deutsche Bank, as its new CEO.
Siemens Energy debuted on the Frankfurt stock exchange Monday following its spinoff from tech giant Siemens -1.5%, but fell slightly from their 21.60 euros ($25.20) listing price.
ArcelorMittal +10% on news its in talks to merge its U.S. assets with Cleveland-Cliffs, the largest producer of iron ore pellets in the U.S.
Sonova +12.8% raised its guidance, while Danish rival Demant +9%.
French real estate trust Klepierre +11%.
Rolls-Royce -3.6% as concerns continue.
EUROZONE Consumer Confidence, Sentiment data (Economic, Industrial and Services), Consumer Inflation Expectations
GERMANY Inflation Rate
FRANCE No data due
UK No data due
JAPAN Nikkei futures indicate a flat open but I think we may see some upside following the US but likely to be mutes after Monday’s strong performance. Pre market Tokyo Core CPI inline but CPI missed slightly.
Yen currently 105.51
Nikkei futures 23,485 (Osaka was at 23,380) vs 23,511.62 Nikkei 225′s last close.
Tokyo CPI Sept +0.2% YoY vs +0.3% Aug (F/cast was +0.3%)
Tokyo Core CPI Sept -0.2% YoY vs -0.3% Aug (F/cast was -0.2%)
BoJ Summary of Options. Later Coincident Index and Leading Economic Index.
Tokyo confirmed 78 new infections, down from 144 on Sunday and 270 on Saturday. On Monday, a total of 301 cases were reported nationwide.
Japan plans to remove a ban on overseas travels for about 10 countries starting next month, hoping that such a step would prompt other countries to lift travel curbs on the Japanese +VE
Japan will consider easing a rule on eating at movie theaters, economic revitalization minister Yasutoshi Nishimura said Monday, in an additional relaxation amid a recent decline in the number of novel coronavirus infections. +VE
Nippon Telegraph and Telephone will take full control of its wireless carrier business NTT Docomo Inc for about 4 trillion yen ($37.89 billion +VE
SoftBank's robotics arm said on Monday it will bring a food service robot developed by California-based Bear Robotics to Japan as restaurants grapple with labour shortages and a new socially distanced norm as a result of the novel coronavirus.
Kioxia Holdings Corp, the world's second-largest maker of flash memory chips, on Monday shelved plans for what would have been Japan's largest initial public offering (IPO) this year, as U.S-China tensions cloud the global chip market. -VE
The government plans to double the maximum amount of financial assistance to newlyweds from ¥300,000 to ¥600,000 starting next fiscal year, The Yomiuri Shimbun has learned. This is part of the government’s efforts to improve the child-rearing environment by having fertility treatments covered by health insurance, and reducing the number of children waiting to be accepted to nursery schools, areas in which Prime Minister Yoshihide Suga is taking the initiative.
SOUTH KOREA Expect markets to open higher but upside limited by the mixed pre market data with weakness in Manufacturing & Industrial Production and Construction output. BUT Retail sales were up MoM and Business Confidence beat forecasts.
Business Confidence Sept 68 vs 66 Aug (F/cast was 61)
Industrial Production Aug -3% YoY vs -2.5% Jul (F/cast was -2.5%)
Industrial Production Aug -0.7% MoM vs +1.6% Jul (F/cast was -0.9%)
Retail Sales Aug +0.3% YoY vs +0.5% Jul (F/cast was +1.5%)
Retail Sales Aug +3% MoM vs -6% Jul (F/cast was +2.5%)
Manufacturing Production Aug -3.1% YoY vs -2.4% Jul (F/cast was -0.8%)
Construction Output Aug -9.4% YoY vs -0.6% Jul (F/cast was -0.5%)
Monday reported 50 new covid cases, the lowest since a new wave of outbreaks emerged from a church and a large political rally last month.
Big Hit Entertainment, the management label of hugely popular South Korean K-Pop group BTS, priced its initial public offering (IPO) at the top of its range on Monday, as hopeful buyers chased South Korea's largest listing in three years.
Air Busan, the budget carrier unit of Asiana Airlines, said Monday it seeks to raise 89 billion won ($76 million) in a rights offering in December to secure operating capital. -VE
Ssangyong Engineering and Construction said Monday it had won an urban redevelopment contract worth about 65 billion won, in Goyang, Gyeonggi Province. +VE
S-Oil will begin its first overseas manufacturing and distribution of lubricants in India, the company said Monday. +VE
Hyundai Motor said Monday it had exported four fuel cell electric vehicles to Saudi Arabia, its first-ever FCEV exports to the Middle East. +VE
TAIWAN Expect market to open higher; yesterday saw Chip makers strong as expected on news of US sanctions on SMIC prompted buying but they may see some profit taking today as analyst warn transferred orders might not provide an immediate revenue boost given local chipmakers’ high utilisation rates.
No data due
The Taiwan United Nations Alliance yesterday said that it is considering launching a petition for a referendum proposal to have the nation join the UN under the name “Taiwan.” They said that it is the right time for a petition because Taiwan’s visibility on the world stage has increased, as it has been praised for its success in containing its COVID-19 outbreak and for helping other countries by sharing its medical expertise and donating masks.
Taiwan said on Monday the European Union had stepped in to help after a global alliance of mayors stopped referring to Taiwanese cities as part of China, in a rare win for the island amid growing Chinese pressure.
Consumer confidence this month rose marginally to 71.6, as interest in buying real estate rose to a record high and offset confidence declines in the economy, stock investment and job hunting, a National Central University survey showed yesterday. +VE
Yageo Corp has formed a strategic alliance with Hon Hai Precision to develop key electronic components for electric vehicles and digital healthcare, it said yesterday. +VE
Hon Hai Precision Industry, Wistron and Pegatron will be watched following a Reuters report that the firms plan to invest nearly $900 million in India in the next five years as part of a new production-linked incentive scheme.
Bright Sheland Int, which makes filtration products and separation systems under the Filtrafine brand, said that its shareholders yesterday approved proposals to add new businesses, such as medical equipment and medical-grade masks, to its portfolio. +VE
CHINA Expect market to open higher following the US but upside likely to be muted
No data due
China began five military exercises simultaneously along different parts of its coast on Monday, the second time in two months it will have such concurrent drills against a backdrop of rising regional tension.
President Xi Jinping and other leaders are expected to discuss and approve China’s economic and social development blueprint for 2021-2025 at a key Communist Party conclave on October 26-19, the sources told Reuters. Policymakers believe that setting a five-year growth target is vital for steering the world’s second-largest economy past the ‘middle income trap’, the sources said, after internal debate over whether it should abandon such targets to enable more flexibility.
China is stepping up scrutiny of illegal foreign exchange flows amid concern they could cause destabilising swings in the yuan and domestic financial markets, analysts said. The nation’s currency regulator, the State Administration of Foreign Exchange (SAFE), announced last week it would strengthen supervision and standardising procedures, as well as punish firms and individuals for illegal foreign exchange acts that threatened state or commercial secrets and personal privacy.
Ant Group Press reports Chinese investors are pouring into newly-launched mutual funds targeting Ant Group's upcoming initial public offering, underscoring strong demand for technology shares. Two of the five new funds launched on Friday to give Chinese retail investors access to strategic stakes in Ant's IPO had already reached their fundraising target and stopped accepting new investments, their fund managers said. The five funds are targeting a combined 60 billion yuan (HK$68.26 billion), with each fund aiming to raise up to 12 billion yuan over a two-week subscription period.
HONG KONG ADR’s +60pts to open at 23,536 most ADR’s +VE but Chinese financials seeing some weakness. Futures expiry today and no Southbound Connect flows ahead of the Chinese Golden week.
No data due
Govt banned the Civil Human Rights Front's application for a rally on Hong Kong Island on Thursday.
ZTO EXPRESS-SW (02057.HK), debut opened at $225.4 in gray market, up 3.4% against the listing price $218, and last stood at $231, up 6% against the listing price, on volume of 49,000 shares, PhillipMart data showed.
BAOZUN-SW (09991.HK), debut, opened at $83 in gray market, up 0.1% against the listing price $82.9, and last stood at $82.9, flattish with the listing price, on
volume of 190,000 shares, PhillipMart data showed.
Short Selling Monday 19.1% vs 20.9% Friday
Top Shorts Sands China (1928) 39%, MTRC (66) 38%, Ping An (2318) 36%, Bank of China (3988) 35%, CCB (939) 34%, CLP (2) 34%, BoC HK(2388) 32%, Mengniu Dairy 29%, Petrochina (857) 28%, HK & China Gas (3) 28%, Hang Seng Bank (11) 26%, Techtronic (669) 25%, HK EX (388) 25%.
PICK Techtronics (669 HK) McKinsey report found consumers worldwide are cutting back on clothing and shoes, but spending more to improve their homes. Accumulate below HK$100
Geely gets nod to raise capital on Shanghai’s Star Market as carmaker remakes itself into tech company It aims to raise as much as 20 billion yuan (US$2.94 billion) to develop new technologies and car models. It plans to sell 1.73 billion shares, or 15 per cent of its enlarged capital, according to its offering prospectus +VE
The Government will launch the Wong Chuk Hang MTR station project this quarter to offer 1,000 units, as Secretary for Development Michael Wong told the press. The total number will add to 1,150, taking into account four private redevelopment projects. An aggregate of 2,780 private housing flats will be available in the quarter, implying a private home supply of 7,400 units via different channels for the first three quarters, furthered Wong.It also announced a prime site in Central - called the New Central Harbourfront Site 3 - had been originally scheduled for sale this quarter, but has now been moved to the next quarter, which starts in October.
New World Development (0017) has obtained presale consent for the first phase of the residential project atop Tai Wai Station. The project will offer 3,090 units across three phases, including 783 units in the first phase.
Minmetals Land (0230) expects to obtain presale consent for Montego Bay in Yau Tong as early as next month. The project consists of four blocks and provides 688 units.
CK Asset (1113) has collected about HK$6.1 billion after selling 644 units at Seaside Sonata, in Cheung Sha Wan.
Chinese regulators have recently asked major commercial banks to lower and curb the size of real estate loans including individual mortgage loans, 21st Century Business Herald citing sources. Earlier this year, the watchdog had required that new home loans must not exceed roughly 30% of the total new loans for the year, according to sources.