Sept 8 ASIAN MACRO INITIAL THOUGHTS Asian Futures indicate a higher open


10 Sep

Sept  8 ASIAN MACRO INITIAL THOUGHTS   Asian Futures indicate a higher open

Covid-19 Globally over 27m cases, 890k deaths
Asian futures indicate a higher open
Volumes to remain moderate as the US market was closed Monday

US Markets closed for Labour Day
AHEAD
NFIB Business Optimism, IBD/TIPP Economic Optimism, Consumer Credit Change

DAX +2.01%, CAC +1.79%, FTSE +2.39% Markets opened higher and worked higher through the session to close at their highs, regaining Friday’s loses. Potential covid vaccine trials in focus. All sectors closed in the green led by Autos. China trade data was taken to be positive. Germany warned Russia that a lack of co-operation with regard to the poisoning of Alexei Navalny could impact the Nord Stream 2 gas pipeline project.
British point fell as PM Johnson hinted at no deal Brexit
Sanofi +0.2% (was -VE for most of the day) and GlaxoSmithKline +4.2% covid vaccine will likely cost less than 10 euros ($11.80), the president of Sanofi France said Saturday.
Credit Suisse +0.9% under the tenure of former CEO Tidjane Thiam could still have further evidence of wider spying to be revealed. The bank is currently subject to enforcement action by Swiss regulator FINMA over the spying scandal which erupted late last year.
Dechra Pharmaceuticals +6.9% after a strong earnings report, but see Lex steep valuation, deal making and licensing +VE if they pay off.
Nokia slid on renewed competition worries after US telecoms group Verizon confirmed that it had awarded a contract to supply 5G network hardware to Samsung Electronics.
Housebuilders +VE on the Halifax Price Index and rebounded from Friday’s weakness into leasehold mis selling.
DATA
OIL Brent -1.1% WTI -1.3% on demand concerns as Chinese slowed oil imports in August
GERMANY
Industrial Production Jul +1.2% vs +9.3% Jun revised (F/cast was 4.5%)
UK
Halifax house Price Index Aug +5.2% YoY vs +3.8% Jul (F/cast was +4.2%)
Halifax house Price Index Aug +1.6% MoM vs +1.7% Jul (F/cast was +0.7%)
AHEAD
EUROZONE GDP Growth Rate, Employment Change
GERMANY Balance of Trade, Current Account, Imports Exports
FRANCE Balance of Trade, Current Account
UK No data due

JAPAN Expect Nikkei to open higher but key will be the pre market data. Yen currently 106.27
Data due
Household Spending, Average Cash Earnings, GDP (Growth Rate, Growth Annualied, Price Index, External Demand, Capital Expenditure, Private Consumption) Bank Lending, Eco Watchers Survey (Current and Outlook).
Tokyo reported 77 new covid cases Monday (39 less than Sunday). Nationwide the total wa 288.
Japan's Suga signals chance of calling snap election: he is still the frontrunner fo the leadership of the LDP.
Softbank expected to remain under pressure after recent revelations over its trading. There is a -VE Lex item on the stock also See Market Thinking for more background detail
https://market-thinking.com/2020/09/fear-then-greed-then-fear-again/
Nissan received a Yen 130bn loan from the Development Bank of Japan with a guarantee that the government will repay most of it in case of a default by the struggling automaker, sources familiar with the matter said Monday. +VE
The postponed 2020 Tokyo Olympics will go ahead next year regardless of the coronavirus pandemic, IOC Vice President John Coates told AFP Monday, vowing they will be the “games that conquered COVID.”
Sharp Corp. said Monday that research by the firm has shown that its air purifying tech is able to reduce airborne coronavirus particles, claiming it as a world first. The electronics maker said its plasmacluster technology, which emits positive hydrogen ions and negative oxygen ions through plasma discharge, cut coronavirus particles by about 90 percent in an experiment jointly conducted with Nagasaki University and Shimane University. +VE

SOUTH KOREA Expect markets to open higher following Europe. Further easing in the number fo new covid cases (119 reported Monday) +VE for sentiment.
No data due
South Korea’s top 100 companies by revenue saw overseas sales drop 19.8% YoY in Q2 due 
to the global economic downturn caused by the pandemic, data from the Federation of Korean Industries showed Monday -VE for sentiment.
Yonhap separately reported that South Korean listed companies' half-year dividends tumbled more than 20% this year on the fallout from covid -VE
Samsung Electronics said on Monday it had won a $6.64 billion order to provide wireless communication solutions to Verizon in the United States, a major win for the South Korean firm in the next-generation 5G network market. +VE
Samsung Electronics has decided to cease production at its only TV factory in China by the end of November, a spokesman said on Monday, the latest in a series of moves by the South Korean firm to shift production from the world's second-largest economy.
Green Investment Group, Total and Hyundai Heavy Industries on Monday held a webinar to exchange ideas on how to cooperate regarding 1.5 gigawatts of floating offshore wind projects in Ulsan. +VE
Eastar Jet Co. said Monday it will reduce its workforce by more than half as part of efforts to find a new investor after Jeju Air Co. scrapped its plan to acquire the smaller budget carrier amid the coronavirus pandemic. -VE for sentiment
SK Innovation is pushing for its third battery plant in Hungary, people familiar with the issue said Monday. +VE
Kakao Corp. said Monday it will establish a data center in a city south of Seoul in an industrial-educational cooperation project. +VE


TAIWAN Expect market to open higher after good trade balance data for August and encouraging revenue reporting from Tech companies.
Data due
Wholesale Prices, Inflation Rate
After Market Monday
Balance of Trade Aug $6.47b vs 5.37b Jul (F/cast was for $5.5b)
Exports Aug +8.3% vs +0.4% July (Consensus was +1.6%)
Imports Aug +8.5% vs -6.8% July (Consensus was +0.7%)
Exports surged driven by seasonal demand for electronics and frontloading by China’s Huawei Tech ahead of sales bans, the Ministry of Finance said yesterday. It said the data was surprisingly strong and expects shipments to expand this month too. “The trade data suggest that exports have stabilized, thanks to 5G deployment and distance businesses, as countries opened up their economy,” +VE
United Microelectronics Corp (UMC) yesterday saw its share price soar to close at a two-week high on reports that Washington is looking to ban Semiconductor Manufacturing International Corp (SMIC) amid an escalating US-China trade dispute. May see some weakness today.
Hon Hai Precision yesterday reported revenue of NT$420.55 billion (US$14.24 billion) for last month, +4.27% MoM and 5.45% YoY The figure was a company record high for the month of August, which an official attributed to gains in sales of its consumer electronics, components, computer peripherals and cloud computing businesses. +VE
Advantech yesterday reported that revenue dropped for a second straight month to NT$4.3 billion last month, -10.99% YoY. Sales at its industrial Internet-of-things and applied computing divisions expanded year-on-year last month, but its other divisions saw sales decline. Some +VE signs, company remains conservative about Q3 noting some customers postponed orders.
Memorychip makers Macronix International and Winbond Electronics Corp yesterday posted mild growth in revenue for last month amid rising demand for laptops and the deployment of 5G networks. +VE
Macronix posted revenue of NT$3.15 billion (US$106.69 million) for last month, +0.5% from NT$3.14 billion in July and the highest level in four months, but a year-on-year decline of 16.8% from NT$3.79 billion.
Winbond posted revenue of NT$4.43 billion for last month, +7.48% from NT$4.12 billion in July and the highest level in 11 months, but a year-on-year decline of 0.68% from NT$4.46 billion, the company said.

CHINA Expect market to open flat with concerns on US/China relations and potential sanctions as Trump threatens US companies that create jobs overseas will be barred from US contracts and reward that onshore jobs to the US.
No data due
India China relations worsen 
as China allegedly abducts 5 Indians in Arunachal Pradesh following the death of a Tibetan Special Forces soldier.
Beijing has held off renewing the expiring press credentials of journalists at U.S. media outlets, including Bloomberg, CNN and the Wall Street Journal, the news organisations reported, amid a tussle with Washington over journalist visas, Reuters reports, as Chinese journalists in the United States wait for their lapsed work visas to be renewed. The Chinese journalists have been allowed to stay in the United States during a 90-day grace period that expires in early November -VE
Another Chinese company has said that a major shareholder accidentally sold its shares, increasing speculation that insiders could be testing the market before they offload their stakes. Shenzhen Changfang Group Co said that Nie Xianghong a shareholder acting in accord with top investor Li Dichu, accidentally sold 16,000 shares on Friday last week by inputting the wrong ticker symbol. Other recent ‘accidents’ have been Sany Heavy, TCL and at least three other companies, including Liqun Commercial Group, have disclosed and apologized since late last month for executives selling shares by mistake. Seen as an indication that some top executives are turning cautious about the recovery. The Shenzhen Stock Exchange on Friday last week said that it is monitoring the shares due to the significant gains.
Cheap seats give Chinese airlines a much-needed passenger bounce Although the airlines are still loss-making and analysts say the recovery for China’s aviation market is fragile and subject to setbacks, the cheap airfare strategy is far more cost-effective than having planes grounded. It also provides a model for other countries to borrow from or even top. Slight +VE

HONG KONG No ADR’s as US market was closed but expect market to open slightly higher following the advances in Europe and with a +VE debut for NongFu expected.
No data due
but after market Monday
Foreign Exchange Reserves Aug $450b vs 450b Jul (F/cast was 448b)

IPO NONGFU SPRING (9633.HK), shares list today, closed at $41.25 in grey market, up 91.9% against the listing price of $21.5, on volume of 8.47 million shares and turnover of $356 million, PhillipMart data showed. It is in the bottled water and soft drink sector, which is quite competitive and whilst it is well known in China and has the largest market share it is always subject to competition. It’s angle is to only do bottled water not purified that works as long as the source remains pure.

PROTESTS New World First Bus drivers plan a work-to-rule action following the arrest of a colleague during a protest in Yau Tsim Mong district. Police say the man was behind the wheel of a route 970 bus that was traveling at a high speed along Nathan Road at about 5pm on Sunday and that he was honking his horn in an "unreasonable” manner. -VE for public sentiment.

SHORT SALES Monday 12.9% vs 11.3% Friday

Top Shorts Bank of China (3988) 33%, CLP (2) 28%, Hengan (1044) 21%

BUYBACKS/INSIDER DEALING/DEALS
Li Ka-shing and Victor T K Li through Li Ka Shing Foundation Limited acquired a total of 1.3565 million shares in CK ASSET (1113.HK) at the average price of HK$41.7750, HK$41.6166, HK$41.5991 and HK$41.2020 per share on 1 September, 2 September, 3 September and 4 September 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset have increased from 35.49% to 35.53% and from 35.56% to 35.60% respectively.
EASYKNIT INT'L (1218.HK) announced that it had through its subsidiary Ace Winner acquired on-market a total of 38.90 million EMINENCE ENT (616.HK) shares from 24 February to 4 September at an aggregate purchase price of $16.0256 million. Upon completion, EASYKNIT INT'L's shareholding in EMINENCE ENT increased from 25.42% to 29.60%.

WATCH
Shun Tak (242 HK) executive chairwoman Pansy Ho Chiu-king, purchased 2.12 million shares for HK$5.76 million in the first two days this month. Pansy Ho raised her stake in Shun Tak to 24.84% from 24.77%
BYD COMPANY (1211.HK) total sales volume for August reached 36,800 units, up 2.15% year-on-year.
SINO-OCEAN GP (3377.HK) announced proposed spin-off and separate listing of shares of Sino-Ocean Service, a subsidiary of the Company, on the main board of the Stock Exchange.  Sino-Ocean Service has submitted a listing application form (Form A1) to the Stock Exchange.
CHINA LONGYUAN (916.HK) for the first eight months of 2020, the total power generation amounted to 34.3439 million MWh, +3.34% YoY
FOSUN PHARMA (2196.HK) and SINOPHARM (1099.HK) inked a strategic cooperation agreement in respect of the logistics of BioNTech mRNA vaccine to jointly nudge the vaccine commercialization and supply chain services.  Pursuant to which, both parties will set up a vaccine cold chain system, covering vaccine storage and delivery, to flourish the entire supply chain services.
BABA-SW (9988.HK)announced that the "2020 Computing Conference" will be held online between 17 and 18 September, at which breakthroughs of cloud computing and robot will be showcased. The company expected more than 10,000 developers to participate.
Alibaba (Shanghai) Network Technology Co., Ltd.has been established with registered capital of RMB10 million, Chinese media reported.  The company is mainly engaged in technological services in internet technology sector, software development, information system integration services and so on.
The Securities and Futures Commission (SFC) commenced proceedings in the Market Misconduct Tribunal (MMT) against Tianhe Chemicals Group Limited (Tianhe) and its executive director, Wei Xuan, for allegedly issuing Tianhe’s listing prospectus in which the company’s revenue was overstated by over RMB6.7 billion. The SFC is also seeking orders from the Court of First Instance under section 213 of the SFO to restore all public shareholders of the company to the position before their subscriptions or purchases of Tianhe’s shares.

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