Feb 20 Things to know before trading Asia on Monday

20 Feb

G7 in agreed statement vowed ’to work together and with others to make 2021 a turning point for multilateralism’.   Link to full statement https://www.consilium.europa.eu/en/press/press-releases/2021/02/19/g7-february-leaders-statement/

Biden called for US and Europe to push back against China’s economic 'abuses and coercion’; everyone must play by the same rules.  He also stated that the US is determined to reengage with Europe.

BioNTech/Pfizer Covid-19 vaccine no longer needs to be kept minus 60C to minus 80C.  According to new results on stability data, which the companies have submitted to the US regulator, show the shot can be kept at normal medical freezer temperatures of minus 15C to minus 25C for up to two weeks, that will allow distribution to be dramatically expanded to doctors’ clinics, pharmacies and more remote regions. +VE for mass vaccinations  Slight -VE for refrigeration firms that had geared to meet the expected new demand and may see orders being cancelled

DOW unch, NDX +0.07%, S&P -0.19%, Russel 2K +2.2%  
Opened flat after Yellens comments about going big but essentially traded sideways all day with a small dip into the close. Yellen noted the inflation threat but thinks the Fed has the tools to be able to contain it.  She is more worried about the scarring of peoples lives and livelihoods.
Cyclicals in focus with industrials +1.8% materials +1.7%, Financials +1.6% and small/mid caps rallying. But Tech, Utilites and Consumer Staples were weak.
Data showed homebuyers active which is a +VE for the recovery.Citi strong on news it is exploring options for slimming down its international operations, including the retail banking unit in Asia-Pacific, Bloomberg citing insiders. The group is also considering selling businesses in South Korea, Thailand, the Philippines and Australia.
Deere +9.9% on strong forecast much higher than analysts forecasts.
Banks JPMorgan Chase +1.7%, Citigroup +3.6%, Wells Fargo +2.4%, Amex +2.5%
Work from home names: Facebook -2.9% on ceasing Australian news but reprots say it is back talking to the Australian Govt. Apple +0.1%, Amazon -2.4%, Netflix -1.5%,  Disney +0.4%, Zoom Video -0.2%, Alphabet -0.8% and Microsoft -1.2%,
Tech NXP Semi +3.1%, Nvidia +0.7%, Micron +2.7%, AMD +1.7% earnings beat and gave a +VE outlook, Skyworks +2.3%
Re-opening stocks  Boeing +4.3%, Caterpillar +5%, Simon Property +2.7%, Kohl’s +8.5%, Nordstrom +2.8%, Gap +4.3%, United Airlines +6.8%, Carnival +7.3%, Wynn Resorts +3.2%, Chevron +0.8%, Exxon Mobil +0.7%,  
Lock down names Campbell Soup -1.7% General Mills -2.6%, JM Smucker -2.5%
Flash PMI Services Feb 58.9 vs 58.3 Jan (F/cast was 56.4)
Manufacturing Feb 58.5 vs 59.2 Jan (F/cast was 57.5)
Composite Feb 58.8 vs 58.7 Jan (F/cast was 56.6)
Existing Home Sales Jan +0.6% MoM vs +0.9% Dec revised (F/cast was -1.5%)
Baker Hughes Total Rig Count 305 vs 397 prior
Baker Hughes Oil Rig Count 397 vs 306 prior
USD was weaker vs Yen & Euro. Bitcoin +8% @ 56,175.00, VIX -2% @ 22.05, US T10 @ 1.34% hitting a 12 month high.
OIL Brent -1.6%, WTI -2.1% as Texas and the Plains prepared for production to restart.
Gold +0.46%, Silver +1.1%, Copper +4.26% hitting a 10 year high, Platinum +0.6%, Palladium +1.3%
AHEAD Chicago Fed National Activity Index, Dallas Fed Manufacturing Index
Earnings: Dish Network, Royal Caribbean, Marathon Oil, Ingersoll-Rand, Occidental Petroleum, Transocean, Zoominfo, ONEOK, HSBC

DAX +0.77%, CAC +0.79%, FTSE +0.1%  
FTSE opened flat and trading sideways after weak Retail Sales data and news of Sterling firmer vs USD. DAX and CAC opened higher and working higher on good data. Earnings in focus. All markets worked better from midday and closed at day highs. Resources lead. Concerns about inflation remain. PMI data showed good manufacture numbers which off-set in part the weak service numbers.
Allianz +VE announced a 14% decline in full-year net profit as business claims spiked due to lockdowns and demand for car and travel insurance dwindled. The German insurer said it sees operating profit rising in 2021.
Renault weak announced a record annual loss of 8 billion euros ($9.7 billion) in 2020.
Hermes strong beating expectations on the back of 16% sales growth in Q4Leonardo strong after Italian press reports that the company could raise up to 2.1 bn euros from listing its U.S. unit DRS on the New York Stock Exchange.
Moncler +VE after its full-year earnings report.
French real estate group Gecina weak after its results.
Travel and Leisure leading the gains with Petrochems the laggard.US T10 back above 1.3% raising inflation concerns.
G7 Leaders hold a virtual meeting today.
Germany’s regulator on Thursday declared that the AstraZeneca-University of Oxford vaccine was “highly effective” and said negative side-effects are short-lived.
Flash PMI
Services Feb 44.7 vs 45.4 Jan (F/cast was 45.6)
Manufacturing Feb 57.7 vs 54.8 Jan (F/cast was 54.5)
Composite Feb 48.1 vs 47.8 Jan (F/cast was 48)
PPI Jan +1.4% MoM vs +0.8% Dec (F/cast was +0.6%)
PPI Jan +0.9% YoY vs +0.2% Dec (F/cast was 0%)
Flash PMI Services Feb 45.9 vs 46.7 Jan (F/cast was 47)
Manufacturing Feb 60.6 vs 57.1 Jan (F/cast was 56.9)
Composite Feb 51.3 vs 50.8 Jan (F/cast was 50.9)
Inflation Rate Jan +0.6% YoY vs 0% Dec (F/cast was +0.6%)
Inflation Rate Jan +0.2% MoM vs +0.2% Dec (F/cast was +0.2%)
Flash PMI
Services Feb 43.6 vs 47.3 Jan (F/cast was 47.5)
Manufacturing Feb 55 vs 51.6 Jan (F/cast was 51.1)
Composite Feb 45.2 vs 47.7 Jan (F/cast was 48.1)
Consumer Confidence Feb -23 vs -28 Jan (F/cast was -26)
Retail Sales Jan -5.9% YoY vs +3.1% Dec revised (F/cast was -0.7)
Retail Sales Jan -8.2% MoM vs +0.4% Dec revised (F/cast was -1.8%)
Retail Sales Ex Fuel Jan -8.8% MoM vs +0.4% Dec (F/cast was -2%)
Retail Sales Ex Fuel Jan -3.8% YoY vs +6.7% Dec (F/cast was +2.1%)
Flash PMI
Services Feb 49.7 vs 39.5 Jan (F/cast was 40)
Manufacturing Feb 54.9 vs 54.1 Jan (F/cast was 54.5)
Composite Feb 49.8 vs 41.2 Jan (F/cast was 41.5)
Public Sector Net Borrowing Jan GBP -8.75b vs -26.8b Dec (F/cast was -26b)
CBI Industrial Trends Feb -24 vs -38 Jan (F/cast was -36)
EUROZONE No data due
GERMANY Ifo Business Climate, Current Conditions and Expectations.
FRANCE No data due
UK No data due

At this stage I would expect the Nikkei to open flat on Monday; following the US.   Yen closed 105.43
No data due 
Japan confirmed a new variant of COVID-19, and an infection cluster emerged at a Tokyo immigration facility, presenting new challenges as the country tries to overcome a third wave of the pandemic. But Govt said it will receive a second vaccine shipment on Sunday
The Osaka Prefectural Government has decided to ask the central government to lift the coronavirus state of emergency it declared in the western prefecture at the end of this month. Osaka Gov. Hirofumi Yoshimura said Friday that he plans to finalize the decision after talking next week with his counterparts in neighboring Kyoto and Hyogo prefectures, hoping to request the lifting together. +VE
PM Suga said G7 leaders gave unanimous support for holding the Olympics.
Japan's communications ministry said Friday it has replaced two senior bureaucrats and is considering reprimands following reports that its officials were treated to expensive dinners by a son of Prime Minister Yoshihide Suga in possible violation of ethics code. +VE
Nearly three quarters of Japanese firms have no plan to offer blanket base pay hikes at this year's shunto labor talks, with two thirds keeping wages flat or cutting them as the coronavirus pandemic hits earnings hard, a Reuters poll found. In a sign labor costs are straining profits, three in five firms will keep the number of employees flat in the coming financial year, while a quarter intend to raise the head counts and 17% plans to cut them, the Corporate Survey showed.
Nissan will halt production at two domestic plants for two days next week due to a parts shortage caused by the recent powerful earthquake. Nissan will suspend output at its Oppama plant and Nissan Shatai Co, a group vehicle assembly company, will stop operations at its Shonan plant on Monday and Tuesday, the sources said. It is not immediately known what parts procurement has been disrupted. -VE
Honda Motor said on Friday its chief executive, Takahiro Hachigo, would step down and be replaced by Toshihiro Mibe, its head of research and development, on April 1.

At this stage expect the the markets to open lower with foreigners likely to remain sellers on US inflation fears as US Treasury yields hit a 12 month high.
No data due

KDCP reported 446 new cases Saturday (vs 561 Friday) +VE for sentiment
PM Chung Sye-kyun assured there were no safety issues with AstraZeneca’s coronavirus vaccine on Friday, as the government held final drills ahead of next week’s scheduled rollout of the first vaccines.
LG Electronics; Moody's Investors Service on Friday upgraded its credit ratings of for the company; the first time in seven years after it reported record earnings last year. Moody's raised the ratings to Baa2 from Baa3, with its ratings outlook remaining "stable." This is the first time since February 2014 that Moody's has revised up its ratings on the major South Korean tech firm.  +VE
Korea Electric Power Corp. (Kepco) on Friday reported a net income of 2.09 trillion won ($1.9 billion) in 2020, turning from a loss of 2.26 trillion won a year earlier on the back of the low fuel costs. Operating profit for the year was 4.08 trillion won, compared with a loss of 1.27 trillion won from the previous year, the company said in a regulatory filing. Annual sales fell 1 percent to 58.56 trillion won.
Kakao, BlackRock became a blockholder in an apparent bet on the corporation behind Korea’s most popular messenger app, a filing showed Friday.  The US investor’s subsidiary BlackRock Fund Advisors and its 13 affiliates have spent 986.4 billion won ($891.9 million) to obtain 5.18 percent of common shares in Kakao as of Monday, according to the filing. +VE
SK hynix’s operating profit for the first quarter this year is expected to hit 1.36 trillion won ($1.2 billion), up 70.6 percent on-year  Shinhan Investment said Friday.

Expect market to open lower with large cap tech under pressure but downside limited as there are still bargain hunters in the wings
Data due out Saturday Afternoon

GDP Growth Rate Q4 YoY ( Q3 was 3.92% (F/cast was 4.94%)
Export Orders Jan YoY (Dec was 38.3%)
US Senator Rick Scott and US Representative Guy Reschenthaler on Thursday reintroduced in the US Congress the Taiwan invasion prevention act, aiming to boost Taiwan’s ability to resist Chinese aggression.  +VE for US relations.
Winbond Electronics Friday said it is increasing prices to reflect persistent supply constraints, as emerging applications are adding to the effects of the COVID-19 pandemic in driving demand for chips. Aside from computers, the chipmaker attributed supply constraints this year to new applications, such as Wi-Fi 6, advanced driver assistance systems, video game consoles and new wireless earbuds. +VE“Supply is very tight. We have sold out our capacity for deliveries in the second quarter,” Chen said. “Chip prices, DRAM chips in particular, have long been under reasonable levels in the past. We hope [new] chip prices can reflect the current market situation,” he said. +VE
United Renewable Energy plans to build more than half of the nation’s solar panel modules this year, the company said Friday. It said that it has secured new government solar farm projects through open bidding. The firm said it has secured module supply contracts for a 120 megawatt (MW) aquaculture/solar project in Tainan, a 100MW project on sunken land in Pingtung County and a 70MW project on an island off Yunlin County. +VE

Expect market to open lower as G7 countries unite to constrain China and try to get China to follow the global trade rules.  Loan Prime data was released early on Saturday unchanged as expected.
Data out 
Loan Prime Rate 1yr @ 3.85% unchanged
Loan Prime Rate 5yr @ 4.65% unchanged
China’s  State Administration of Foreign Exchange (SAFE) announced that in terms of USD, China's current account recorded surplus of USD298.9 billion in 2020.
G7 leaders on Friday said they would seek a collective approach to China to counter "non-market oriented" policies and practices and to ensure a fair multilateral global trade. -VE for China’s exporters.
The US is to keep tariffs imposed on Chinese goods by the administration of former US president Donald Trump in place, but would evaluate how to proceed after a thorough review, US Secretary of the Treasury Janet Yellen told CNBC on Thursday. “For the moment, we have kept the tariffs in place that were put in by the Trump administration ... and we’ll evaluate going forward what we think is appropriate,” Yellen told the cable news network, adding that Washington expected Beijing to adhere to its commitments on trade. -VE
The United States is concerned by China’s recently enacted coast guard law and that it could escalate maritime disputes and be invoked to assert unlawful claims, the U.S. State Department said on Friday. Adding that “strongly implies this law could be used to intimidate (China’s) maritime neighbors.” -VE
China confirmed eight additional COVID-19 cases Friday (19th), all being imported infections, reported by National Health Commission.
China’s public hesitant to take Covid-19 vaccines, another survey suggests.  In poll of medical and epidemic prevention workers in Zhejiang, fewer than half want emergency jab, and only a quarter say they will when available to all.  This comes after similar scepticism among neighbouring Shanghai residents, it suggests ‘major hurdle for China to speed up vaccination’, expert says -VE
China orders inbound travellers from at least seven countries to quarantine for 14 days before departure. China only started easing entry requirements in September and these new rules are the strictest yet -VE
FTSE Russell said the inclusion of 11 STAR Market stocks as global index providers was based on market participants' opinions, cited by China Securities Journal. This will likely bring in US$100 million of additional funds to the Sci-tech Innovation Board.
China’s Geely plans to set up a firm to explore new approaches to product planning, marketing and sales of electric vehicles (EV), sources said, departing from industry convention whereby EVs are marketed and sold alongside traditional cars. It will establish Lingling Technologies this year to manage models based on its open-source EV chassis base, announced in September and dubbed Sustainable Experience Architecture (SEA), +VE
Chinese community grocery shopping app Xingsheng Youxuan has raised about $2 billion in a new funding round that values the company at $6 billion prior to the fresh capital injection, three people with knowledge of the matter told Reuters. Private equity firms FountainVest Partners, Primavera Capital Group and KKR & Co are among investors in this round, two sources said. Internet and gaming giant Tencent Holdings, which is an early backer of Xingsheng Youxuan, also invested in this round, one of them said.
Xie Feng, who previously headed the Ministry of Foreign Affairs office in Hong Kong, has been appointed as vice minister of foreign affairs, the Foreign Ministry, said, state media reported.  He is mainly responsible for policy planning, North America and Oceania, Latin America and the Caribbean, as well as translation and interpretation.

ADR’s +56pts 2 30,701 a broad recovery but Ecommerce and Petrochems names still weak.  Expect interest in the Miners as Copper hit a 10 year high Friday, with Nickle and Aluminium strong too.  HSBC and Hang Seng Bank in focus ahead of earnings.
Data due 
after market Jan Inflation Rate (Feb was -0.7% F/cast was +0.5%)
SHORT SELLING Friday 13% vs 14.2% Thursday
Top Shorts:  Hengan (1044) 48%, Bud Apac (1876) 47%, Hang Seng Bank (11) 41%, Ping An (2318) 40%, Bank of China (3988) 35%, China Res Land (1109) 33%, BankComm (3328) 31%, Hang Lung Ppty  (101) 30%,  Sands China (1928) 29%,  CCB (939) 28%, NWD (17) 27%, Wharf REIC (1997) 25%.
The administration has ordered sweeping changes to the city’s public broadcaster RTHK; which had been modelled on the BBC.  Pro Beijing and Chinese State media have attacked it as being biased in its coverage. Key being the replacement of Leung Kawing, a veteran journalist who has led RTHK for more than five years, by Patrick Li, a longtime civil servant with no journalistic experience but appointed because the government said it was unable to find an internal candidate with a broadcast background. The government also called for better internal controls and oversight of RTHK’s output.  
Saturday local media reports 15 new cases (vs 13 Friday)The government has arranged for lawmakers from the Hong Kong Legislative Council to receive the Sinovac coronavirus vaccines next Monday at the Hong Kong Central Library in Causeway Bay.
SANDS CHINA LTD (01928.HK) preliminary results for the year ended December 31, 2020. Loss was US$1.523 billion for 2020, compared to a profit of US$2.033 billion for 2019. LPS equaled US18.82 cents. Adjusted property EBITDA loss was US$428 million for 2020, compared to adjusted property EBITDA of US$3.193 billion for 2019. No final dividend was declared.
HSBC (0005) has appointed Dame Carolyn Fairbairn, 60, as an independent non-executive director effective September 1, 2021. She will also be appointed as a member of the committees on remuneration, risk, and nomination and corporate governance.
SCICLONE PHARMA (06600.HK)’s IPO registered margin of approximately $33.58 billion granted by local brokers as at around 6 pm. Based on the public fundraising amount of about $218 million, the IPO was over-subscribed by 153 times.
Macau Tourism Office announced that during the Spring Festival Golden Week on 11-17 February 2021, the number of visitors was 90,615 and the average occupancy rate of hotel rooms was 48.3%. During the period, the average room rate of hotels and apartments approximated MOP1,175.3, down 42.1%.
Hang Seng Indexes Company has licensed the Hang Seng China Enterprises Index to ChinaAMC to serve as the underlying index for the creation of an exchange-traded fund (ETF). The ChinaAMC Hang Seng China Enterprises ETF was listed on the Shenzhen Stock Exchange today (19 February).
The Hong Kong Monetary Authority (HKMA) announced that the composite interest rate, a measure of the average cost of funds of banks, decreased by 4 basis points to 0.24 per cent at the end of January 2021, from 0.28 per cent at the end of December 2020.
CHINA TAIPING (00966.HK) announced that the gross premium income for January reached RMB41.047 billion, up 4.85% year-on-year.
BUD APAC (01876.HK) announced that Guilherme Strano Castellan will step down as the chief financial officer on 28 February 2021 and that Ignacio Lares has been appointed as the Chief Financial Officer as from 1 March 2021.
All off-course betting centers will open from Monday, offering services for horse races and football matches, the Hong Kong Jockey Club, announced. Horse races and football matches will not be broadcast, the club said. The centers will provide betting services for horse races and football matches, betting account deposits or withdrawals, cash-in of cash vouchers or winning tickets and opening or re-activation of betting accounts. Mark Six lottery betting will not be available.
CCL last printed at 176.11, -0.24% weekly. CCL Mass dipped 0.4% weekly to 178.4. CCL (small-to-medium flats) faded 0.29% weekly to 176.2.
The three major indices hit the soft spot after two weeks of rally, with an ongoing uptrend. Over the past three weeks, CCL +0.61% CCL Mass +0.46% and CCL (small-to-medium flats) +0.59%.

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