Oct 6 Asian Macro Initial Thoughts US Futures turn -VE Asian Futures +VE China still closed.
Covid-19 Globally over 35.4m cases, 1,04m deaths
US Futures opened flat Dow +20pts, NDX +0.1%, S&P flat as Trump returns to the White House but then eased to Dow -10pts, NDX -0.3% and S&P -0.1%
Asian Futures; Nikkei indicating higher.
DOW +1.68%, NDX +2.32%, S&P +1.8%, Russel 2K +2.77% having opened higher; rebounding from Friday’s sell off they worked higher all day and closed at their highs. Most stock rebounding from Friday’s sell off. Stimulus deal hoped for as Pelosi and Mnuchin due to meet Tuesday.
+VE move in the Russel shows the broad based rebound on Monday and may reflect some rotation out of the main tech names which have been the big drivers.
Facebook +1.8%, Apple +3.1% as pricing for its new phones was leaked on Twitter, Amazon +2.4%, Netflix +3.5%, Alphabet +1.9% and Microsoft +2%.
Nvidia +4.4%, AMD +5.3%, Micron +2.3% and Skyworks +3.3%.
Re-opening stocks Boeing +1.9%, Caterpillar +2.4%, Simon Property +0.8%, Gap +4.8%, Carnival -1.3%. Airlines United +0.5%, Delta +0.8%, Southwest -0.7%.
Lock down names Campbell Soup +0.4%, General Mills +0.2% and JM Smucker +0.8%
Services PMI Sept 54.6 vs 55 Aug (F/cast was 54.6)
Composite PMI Sept 54.3 vs 54.6 Aug (F/cast was 54.4)
ISM Non Manufacturing Data
Business Activity Sept 63.0 vs 62.4 Aug (F/cast was 62)
Prices Sept 59 vs 64.2 Aug (F/cast was 65)
New Orders Sept 61.5 vs 56.8 Aug (F/cast was 55)
Employment Sept 51.8 vs 47.9 Aug (F/cast was 49)
PMI Sept57.8 vs 56.9 Aug (F/cast was 55)
USD was weaker vs Yen & Euro. Bitcoin +0.9% @ 10,767.00, VIX +1.2% @ 27.96,
US T10 @ 0.778 % on optimism over a stimulus package.
OIL Brent +5.8%, WTI +5.9% on stimulus hopes and Norway production shutting down. Priced were still +VE in after hours trading.
Gold +1%, Silver +2.4%, on stimulus deal impact. Copper +0.1%
AHEAD Balance of Trade, Exports, Imports, Redbook, JOLT’s Job Openings and API Crude Oil Stock Change. Fed Speakers Powell, Harker and Kaplan.
DAX +1.1%, CAC +0.97%, FTSE +0.69% having opened higher they saw some initial selling but then worked better through the day to close at their highs. On improved sentiment as Trump’s condition improves. Telco’s lead the market with only Utilities in the red.
Weir Group +16% after the sale of its oil and gas division.
Centamin -2.7% off initial lows which extended Friday’s losses ; when it warned of a hit to its gold production.
Cineworld -36% Monday, said it would close all of its U.K. and U.S. movie theaters this week.
Services PMI Sept 48 vs 50.5 Aug (F/cast was 47.6)
Composite PMI Sept 50.4 vs 51.9 Aug (F/cast was 50.1)
Retail Sales Aug +4.4% MoM vs -1.8% Jul revised (F/cast was +2%)
Retail Sales Aug +3.7% YoY vs -0.1% Jul revised (F/cast was +1.8%)
Services PMI Sept 50.6 vs 52.5 Aug (F/cast was 49.1)
Composite PMI Sept 54.7 vs 54.4 Aug (F/cast was 53.7)
Services PMI Sept 47.5 vs 51.5 Aug (F/cast was 47.5)
Composite PMI Sept 48.5 vs 51.6 Aug (F/cast was 48.5)
Retail Sales Aug +6.2% MoM vs -3.3% Jul revised (F/cast was +0.7%)
Retail Sales Aug +3% YoY vs 0% Jul revised (F/cast was +6.3%)
New Car Sales Sept -4.4% YoY vs -5.8% Aug (F/cast was -2%)
Services PMI Sept vs Aug (F/cast was )
Composite PMI Sept vs Aug (F/cast was )
EUROZONE Construction PMI
GERMANY Factory Orders, Construction PMI
FRANCE Construction PMI
UK Construction PMI
JAPAN Expect Nikkei to open higher but upside limited after yesterday's strong rebound. Yen currently 105.75. Nikkei futures in Chicago @ 23,445 (Osaka @ 23,410) vs 23,312 Nikkei 225′s close Monday.
No data due.
PM Suga, under fire for rejecting six scholars for membership of a science advisory panel, defended the move on Monday amid growing criticism that it violated the constitution’s principle of academic freedom. The move could stoke a furore that threatens his honeymoon with voters. Slight -VE
U.S. Secretary of State Mike Pompeo arrived in Japan on Tuesday shortly after midnight for a visit that has been cut short by President Donald Trump’s hospitalisation. He is expected to meet with PM Suga on Tuesday for the first time since Suga took office and attend a wider meeting with the foreign ministers of India and Australia.
Government is considering ways to lift its entry ban on foreign tourists from the spring with the coming of the Tokyo Olympic and Paralympic Games, which were postponed to the summer of 2021, according to government sources.
NEC Corp said on Monday it will buy Swiss financial software company Avaloq Group AG for 2.05 billion Swiss francs ($2.2 billion), a move that will spearhead its entry globally into finance software. +VE
Toyota and Nissan, will ask Britain to reimburse them for additional custom charges incurred if the UK government fails to reach agreement on Brexut.
Nomura’s broker side will send new-graduate employees to work at its call centre for their first year to expose them to dealing with customers over the phone, two people familiar with the matter said.
SOUTH KOREA Expect markets to open slightly higher but upside limited. Pre market inflation data higher than F/cast a slight +VE and sentiment remains +VE on hopes of US stimulus package and new covid cases remaining below 100 for a fifth day. (73 new cases, 64 locally transmitted).
Inflation Rate Sept +1% YoY vs +0.7% Aug (F/cast was +0.7%)
Inflation Rate Sept +0.7% MoM vs +0.6% Aug (F/cast was +0.4%)
Retail investors had submitted some 8.62 trillion won ($7.43 billion) in deposits during the first day of the two-day preorder session for stocks of Big Hit Entertainment, reflecting explosive interest from retail investors. It was more than the figure seen on the first day of public subscription of SK Biopharmaceuticals, that marked around 5.9 trillion won, but far less than Kakao Games with 16.4 trillion won.
Vehicle sales +3.4% YoY last month as robust domestic demand offset weak overseas sales amid the new coronavirus outbreak, industry data showed Monday +VE
Kia Motors Corp sales +10.3% YoY last month on robust domestic sales.
SsangYong Motor sales -4.4% YoY last month due mainly to an extended slump in overseas sales.
GM Korea Sales +89.5% YoY thanks to robust exports
Renault Samsung Motors Corp. -51.4 % YoY last month
Shinsegae Group said Monday it opened Starfield Ansung in Ansung, Gyeonggi Province, making it the largest shopping mall in the southern part of the province. Slight +VE
GC Pharma on Monday said that it completed the sales of its American subsidiaries to Spanish firm Grifols three months after they initiated talks. +VE
Lotte Duty Free and its rival Shinsegae Duty Free partially reopened their stores on the southern resort island of Jeju on Monday after suspending operations for months over the new coronavirus outbreak. +VE
South Korea's mobile subscriptions topped 70 million in August thanks to a pickup in 5G users, data showed Monday. As of August, the country had 70 million mobile accounts, up 201,119 from the previous month, according to data from the ICT ministry. South Korea has a population of 51.8 million. +VE but prices remain very competitive.
Samsung Electronics Co. said Monday the budget model of its Galaxy S20 smartphone will go on sale in South Korea next week as the tech giant aims to boost its handset sales amid the pandemic. +VE
TAIWAN Expect market to open higher following US but upside muted.
No data due
New vehicle sales last month +13.4% YoY to 37,241 units as new models from Mercedes-Benz and other brands stimulated sales, online market researcher U-Car said in a report on its Web site yesterday. Slight +VE
Nanya Tech yesterday said revenue last month about +14% MoM to NT$5.54 billion (US$190.9 million), the highest level since May, as customers stockpiled chips before the end of Q3, which led to a low-teens percentage growth in shipments. But declined to comment on whether the increase was caused by rush orders from Huawei, to which it stopped shipping chips on Sept. 15. Slight +VE
Largan Precision yesterday reported that revenue last month +1.9% MoM to NT$5.12 billion (US$176.4 million), the highest revenue since March. But -22.3% YoY which market observers attributed to lower contributions from non-Apple Inc customers. The company’s 20-megapixel lenses and other high-end models, which command higher prices, last month accounted for 20% to 30% of total sales, while its 10-megapixel lenses made up 50% to 60% and 8-megapixel lenses 10% to 20%. Slight +VE
Pharmally International yesterday said that it plans to hold an extraordinary shareholders’ meeting later this month to appoint new board members and replace chairman Tony Huang (黃文烈), who is suspected of embezzlement. +VE
CHINA Market closed
No data due
China said at a World Trade Organization meeting that restrictions by the United States on Chinese mobile applications TikTok and WeChat are in violation of the body's rules, a trade official said. It also called for an end to ‘coercive’ sanctions with the support of a number fo other countries including Russia. Saying they made dealing with covid harder.
Brazilian ride-hailing service 99, controlled by China's Didi Chuxing Technology Co Ltd, has partnered with WhatsApp to accept orders on the chat platform owned by Facebook in a move that would allow users to summon cars without using another app.
Cambodia denies speculation about building a Chinese base. Comes after the demolition of a US funded facility at the Ream Naval Base.
PLA troops eat mooncakes and tell Chinese not to worry in message from Indian border. Soldiers seen with flag on mountainside shouting ‘I am here to protect the border’ in latest military propaganda video.
Shenzhen new home transactions totaled 4,755 last month, +16.7% MoM, while secondary deals -24.2% under tightened purchase curbs since July, mainland media reported. A total of 8,577 home units changed hands as of September 29, with total gross floor area dropping 22.2 percent from August to 759,000 square meters, data from Shenzhen Centaline Property showed. The agency forecasts primary transactions will continue to grow in October with more projects being launched, while secondary deals may remain squeezed by new home supply and fewer vendors.
People’s Bank of China’s digital currency already used for pilot transactions worth 1.1 billion yuan. The Central bank is developing its own e-yuan as it seeks to hasten the transformation of China’s economy. Digital currency being used for transactions ranging from bill payments to government services in pilot tests
HONG KONG ADR’s +189pts to open at 23,956 but I think the upside could be limited. Rumours of large layoffs form Cathay Pacific continue -VE for sentiment.
No data due
SHORT SALES Monday 23.5% vs 17.7% Wednesday
Top Shorts Ping An (2318) 48%, HK & China Gas (3) 45%, CCB (939) 36%, Hang Seng Bank (11) 33%, BoC HK(2388) 33%, China Res Land (1109) 31%, NWD (17) 31%, Henderson Land (12) 30%, Sunny Optical (2382) 30%, AIA (1299) 29%, HSBC (5) 28%,Petrochina (857) 27%, Sands China (1928) 27%, BABA-SW (9988) 26%, Shenzhou Int (2313) 25%.
S HARBOURHOLD (01663.HK)’s Chairman Wong Lam Ping had Monday acquired an aggregate of 268,000 ordinary shares in the open market at an average price of approximately $0.128 per share.
S-ENJOY SERVICE (01755.HK) announced that Executive Director Qi Xiaoming had on 5 October 2020 purchased a total of 200,000 shares at an average price of HK$19.16 per Share on open market, for an aggregate consideration of HK$3.832 million.
COWELL (01415.HK) announced a Special Dividend of HK93.206 cents per ordinary share to Shareholders whose names appear on the register of members of the Company on October 23, 2020. The Special Dividend will be paid on November 5, 2020.
TENCENT (00700.HK)'s Honor of Kings and PUBG Mobile in Q3 remained at the No. 1 and No. 2 positions among the top-grossing games worldwide, according to Sensor Tower's report. +VE
TikTok stayed as the strongest app in terms of revenue amongst non-gaming category in 3Q20 despite US ban, according to the report of Sensor Tower. Including the performance of its Chinese version Douyin, the company's quarterly revenue ballooned 800% yearly. YouTube came as second with annual revenue growth of 59% during the period, preceding Tinder. TENCENT (00700.HK)'s Tencent Video ranked the fourth with annual revenue increment of 42%. In terms of installs, TikTok also topped the world with annual download increase of 8% in 3Q20. The second and third places went to Facebook and Zoom (ZM.US)
Estate Agents Authority announced that as of 30 September, the number of licensed estate agents declined by 43 monthly to 39,815, indicating a two-month slide.
CHINA AOYUAN (03883.HK) in September 2020, the Group achieved unaudited property contracted sales of approximately RMB12.08 billion, +13.7% YoY.
COUNTRY GARDEN (02007.HK) announced that for the single month of September 2020, the group achieved contracted sales of RMB64.63 billion, up by 25.30% year on year, with contracted sales GFA of 7.59 million square meters, up by 31.67% compared to September 2019.
Moody's in its report affirmed SHIMAO PROPERTY (00813.HK)'s corporate family rating at "Ba1", with the outlook moved up to "Positive" from "Stable", attributable to likely credit metrics improvement in the coming 12-18 months, driven by its strong sales over the past 1-2 years, and controlled debt growth.
MEITUAN-W (03690.HK)'s daily food delivery orders secured by errand runners burgeoned by 151% YoY on average during 1-3 October, according to Meituan Waimai's data. Of which, takeaway orders secured by hired queuers ballooned by 419%.
The Government announced that the inflation-linked bonds (iBonds) for 2020 will be open for subscription from 23 October until 2 p.m. on 5 November. The bond will have a denomination of $10,000 and a tenor of three years. The target issue size will be $10 billion, with a ceiling of $15 billion when necessary. The interest will be paid once every six months, with a floating rate linked to inflation, and a fixed rate of 2 per cent (raised from 1 per cent).
HKEX (00388.HK) announced that the enhanced Pre-opening Session (POS) will be launched on 19 October 2020. The enhanced POS will no longer cover all securities but all equities (including depository receipts, investment companies, preference shares and stapled securities), funds (including Exchange Traded Funds (ETFs) and REITs) and leveraged and inverse products (L&I Products). For consistency, L&I Products will also be included in CAS starting from the same date to ensure consistency of stock coverage in both opening and closing auctions. In order to prevent extreme price movement during POS for ETPs (covering ETFs and L&I Products) on their listing day, on top of the enhanced POS features concluded and announced previously, another fine-tuned feature will be introduced, i.e. the 15% price limit during POS to be also applied to ETPs on their listing day, and the ETP’s pre-IPO net asset value per unit (NAV) will be used as the POS reference price for price validation.
NWD The compulsory sale of the State Theatre building, which is mostly held by New World Development (0017), opens Thursday with a reserve price of HK$4.77 billion. The price would be a record high for a compulsory auction in the city. New World has already acquired 98 percent of the ownership of the historic building in North Point. It has pledged to preserve the 68-year-old property, which was not only a cinema but art and cultural venue. Following approval from the Lands Tribunal in late August, it is the first Grade I historic building to go on sale. Market watchers believe the valuation of shops in North Point could benefit from the sale.