June 25 ASIAN MACRO Initial thoughts ; Taiwan, China & HK Closed


June 25 ASIAN MACRO Initial thoughts ;  Taiwan, China & HK Closed
Covid-19 Globally over 9.3m cases, 480k deaths
US Futures Dow opened -30pts and have drifted lower now -60pts

DOW -2.7%, NDX -2.2%, S&P -2.6%, Russel 2K -3.5% Markets opened lower and sold down through the morning on the news of rising new covid-19 cases. New York, New Jersey and Connecticut ordered visitors from certain ‘hotspot states’ to quarantine for 14 days. Markets then traded sideways during the PM.
The rise in cases suggests that the worst may not be passed despite what politicians say; the 7 day average of new cases rose 30% WoW. Adding to concerns way new that The Trump administration is considering new tariffs on $3.1 bn of exports from France, Germany, Spain and the UK., according to a notice from the US Trade Representative released Tuesday evening. The new duties on olives, beer, gin and trucks can be up to 100% and are said to be linked to subsidies given to Airbus.
Re-opening stocks saw significant selling United Airlines -8.3%. Delta -7.8% American -6.9% and Southwest -7.2%. Carnival -11%, Norwegian Cruise Line -12.4% and Royal Caribbean 11.3%. Retailer Gap -9.3%, Simon Property -7.1%, D R. Horton -4.1%, Disney -3.8% as its theme park workers petition that it should postpone its re-open.
OIL also sold down GOLD rallied
US. government financing for projects to return critical supply chains to the United States as part of coronavirus response efforts could reach tens of billions of dollars and clients may include a projected $12 billion Taiwanese semiconductor plant, the head of the agency managing the funds told Reuters.
DATA
MBA Mortgage Applications 19 Jun -8.7% vs +8% prior
MBA 30 yr Mortgage Rate 19 Jun 3.3% vs 3.3% prior
House Price Index Apr +0.2% MoM vs +0.1% Mar (F/cast was -0.4%)
EIA Gasoline Stocks change -1.673m vs -1.667m prior (Consensus was -1.304m)
EIA Crude Stocks change +1.442m vs +1.215m prior (Consensus was +0.299m)
USD was stronger vs Yen & Euro. Bitcoin -3.4% @ 9,281.79, VIX +7.9% @ 33.84, US T10 0.679%
OIL Brent -5.5%, WTI -5.9% as crude stocks rise along with covid-19 cases
Gold -0.4% after hitting $1,779.06 intraday a 7.5yr high, Silver -2%, Copper -0.4%
AHEAD GDP Growth Rate & Price Index, Durable Goods, Corporate Profits, Goods Trade Balance, Wholesale Inventories, Initial Claims, PCE Prices, Core PCE Prices, EIA Natural Gas Stocks Change, Kansas Fed Manufacturing Index, Fed Stree Test Results for Banks

DAX -3.43%, CAC -2.92%, FTSE -3.11% Markets opened lower on news that the US is considering US$3.1bn of new tariffs on products from France, Germany UK and Spain. Markets then sold down through the day to end at the lows. Adding to the downside were concerns over the rise in covid cases (More cases in Germany) and the comments from White House Health Adviser Dr Fauci on Tuesday; overriding the general good macro data. Auto’s lead the declines.
Wirecard -28% giving up earlier gains.
Evolution Gaming -5.9% on reports it offered to buy NetEnt AB +33.4% for 19.6bn Swedish Krona.
Dialog Semi +6% on +VE Q2 revenue update
DATA
EUROZONE ECB Non Monetary Policy Meeting
GERMANY Ifo Data
Business Climate Jun 86.2 vs 79.7 May (revised) (F/cast was 85.1)
Current Conditions Jun 81.3 vs 78.9 May (F/cast was 84)
Expectations Jun 91.4 vs 80.5 (revised) (F/cast was 86)
FRANCE Business Confidence Jun 77 vs 71 May (revised) (F/cast was 79)
Business Climate Indicator Jun 78 vs 60 May (revised) (F/cast was 71)
UK BoE FPC Meeting
AHEAD
EUROZONE ECB Monetary Policy Meeting and General Council Meeting
GERMANY Consumer Confidence
FRANCE Unemployment Benefit Claims, Jobseekers Total
UK CBI Distributive Trades

JAPAN Expect Nikkei to open lower with concerns about the rise in Tokyo covid cases and this world wide. Yen currently 107.05 easing slightly from overnight. News of a 6.2 magnitude earthquake -VE for sentiment.
Data due Foreign Stock and Bond Investments, All Industry Activity Index.
Tokyo recorded 55 new cases of novel coronavirus infection on Wednesday, -VE. Gov Yuriko Koike said a number of the new infections reported on the day could be traced back to nightlife destinations as well as contact among employees working in the same location. -VE for sentiment
The ruling Liberal Democratic Party and its coalition partner Komeito have disagreed over when to dissolve the House of Representatives for a general election. While some LDP members are calling for dissolution before the end of the year, Komeito opposes the idea. With a reshuffle of LDP executives and Cabinet members scheduled for autumn, behind-the-scenes negotiations are likely intensifying between the parties.
Nissan Motor Co on Wednesday said that car sales in Japan were recovering after a drop in demand in April and May due to the impact of the coronavirus.
Olympus said Wednesday it is selling its struggling camera division to focus on medical equipment +VE
Meiji Yasuda Life Insurance Co. has decided to start selling insurance products online, starting in April 2021, aiming to move away from ‘ our to door’ model. Meiji Yasuda aim to do both direct and online sales channels. I wrote about this last week in response to an FT article as it impacts significantly the women’s employment in Japan. Key is that companies will still need staff to make sales although the use of apps that staff can talk clients through I think will be key for the initial launch.
Japanese Trade Union Confederation, known as Rengo, Survey of teleworkers shows 52% respondents work longer hours and are not reporting overtime. +VE for businesses. Only 20% said they received subsidies from their work for expenses incurred like internet connections and phone fees with 66% saying they would pay them themselves. Those with preschool children about 70% said they found it hard to telework because the children need attention.

SOUTH KOREA Expect markets to open lower following the US sell off but to work higher
No data due
A pilot of Korean Air Lines Co. has been diagnosed with the new coronavirus, the company said Wednesday, adding to the woes of the national flag carrier. -VE
NEXON and other IT companies in South Korea are developing artificial intelligence-based software to counter abusive online comments. +VE
SK Biopharmaceuticals IPO in the two-day retail tranche that wrapped up Wednesday, as it was oversubscribed 323 times with deposit payments amounting to 30.98 trillion won ($25.8 billion). Debuts on July 2
Samsung Biologics shares upbeat Wednesday having announced a contract manufacturing deal worth $314 million with a European biopharmaceutical firm. +VE
Samsung Electronics announced Wednesday that Sebastian Seung, an artificial intelligence expert, will head its AI research arm, strengthening its prowess in the sector. The computer engineering professor at Princeton University will lead Samsung’s 15 R&D centers in 13 countries, including Korea, and seven AI centers, to develop future technologies.
Samyang Foods said Wednesday that it is rolling out various character goods to promote its Buldak Spicy Chicken noodle character Hochi.

TAIWAN Market Closed Tuen Ng Festival (Dragon Boat Day) and re-opens Friday
No Data due,

Taiwan puts more than 100 people under quarantine while it investigates its first possible local case of coronavirus infection in more than two months, a Japanese woman who tested positive last week, the government said on Wednesday.
ASE Technology yesterday confirmed its forecast of annual revenue growth this year, as customers continue to show a strong appetite for its advanced technology. Growth momentum is expected to continue from the first half of this year, when ASE’s revenue, net profit and equipment utilization all beat its expectations, it said. In particular, the company received higher orders in the first quarter as its factories in Taiwan kept running following the nation’s quick response to the COVID-19 pandemic, it added. +VE
Acer Inc yesterday said it is aiming to become a lifestyle brand following the launch of new energy drink in a livestream on Tuesday night. The beverage, called Predator Shot, is perhaps one of the computer company’s most surprising attempts in expanding the Predator gaming line. +VE
Taiwan Power Co yesterday restarted the No. 2 coal-fired generator at its Taichung Power Plant as energy consumption across the nation hit a record high. Despite threats from the Taichung City Govt to fine the company if it did due to concerns over air pollution.
Business sentiment improved to 85.73, +4.22 points MoM across sectors last month as local firms gained better order visibility after major economies lifted pandemic-induced lockdowns and enabled a phased return to normalcy, the Taiwan Institute of Economic Research. Also that 38% of companies expect business to pick up in the next six months, vs 23% in April, while those with a dim view of prospects fell from 36.5% to 22%. While the COVID-19 pandemic would no doubt weigh on sales of consumer electronics, companies are less pessimistic, but would likely remain cautious before the crisis settles, he said.

CHINA Market Closed Tuen Ng Festival (Dragon Boat Day) and closed Friday, re-opens Monday
No data due
China and Russia will be isolated at the United Nations 
if they continue down the "road to dystopia" by blocking a US bid to extend a weapons ban on Iran, US Iran envoy Brian Hook told Reuters ahead of his formal pitch of the embargo to the U.N. Security Council on Wednesday.
A Chinese military research institute has been approved to test its second experimental coronavirus vaccine in humans, the eighth candidate in clinical trials for China as it emerges as a front-runner in the global fight against COVID-19.
Senators Elizabeth Warren and Cory Booke are pressing America’s top meatpackers to disclose by month’s end how much pork, beef and chicken they shipped to China during the coronavirus outbreak while warning of possible meat shortages at home. Data shows such companies exported 112,327 tonnes of U.S. pork to China in April, more than any previous month and up 257% from a year earlier, according to U.S. Department of Agriculture data. The exports raise questions about why U.S. meat prices soared during the pandemic and President Donald Trump in April ordered slaughterhouses to stay open to protect the nation’s food supply, Warren and Booker said in a letter to Tyson, JBS, Smithfield and Cargill Inc this week.
US federal prosecutors in Los Angeles have tied the activities of an arrested Chinese military officer conducting research at the University of California to that of a Chinese defendant charged in another high-profile case, in what Washington sees as a coordinated pattern of spying.
FT reports The Pentagon has compiled a list of Chinese companies with ties to China’s military, including two groups listed on the New York Stock Exchange, as part of an intensifying effort by the administration and Congress to make it harder for China to secure US investment and sensitive technologies.
FT Reports Dozens of disgruntled Chinese investors protested this week in Chengdu, capital of the southwestern province of Sichuan, after Sichuan Trust, based in the city, said the firm would struggle to make principal and interest payments on at least Rmb13bn worth of “trust of trust” vehicles due by the end of the year.
Former British Prime Minister Tony Blair’s institute said on Wednesday that China’s newfound global clout means the West faces a “light Cold War” or at least big power rivalry with the People’s Republic. To cope with the “risen China”, the West should seek to cooperate, compete and, when necessary, confront Beijing.
China’s appetite for salmon and other seafood has crashed this month, after being associated with a wholesale food market ilinked to the Beijing covid-19 outbreak. Exporters all the way to Europe are feeling the pinch as the virus scare prompts supermarkets and e-commerce players such as Taobao, JD.com and Meituan in China, the world’s top consumer of frozen and fresh seafood, to slash salmon sales. Panic about the virus has extended to other farm products like beef and mutton, forcing some grocers to pull them from shelves.China’s soybean buyers have asked exporters to guarantee their cargoes are not contaminated, while overseas meat and fruit suppliers said China’s customs had asked them to sign declarations ensuring the safety of their shipments. -VE for Restaurants and recovery sentiment and company’s like Norway’s Bravo Seafood
Republican senator blocks China sanctions bill he supports, at request of White House, following outcry over Hong Kong national security law
China has urged Japan to resist striking a deal with the US to host American intermediate-range missiles on its soil and instead maintain its defence-oriented policy.Beijing said on Wednesday it would not sit idly by if the US sought to deploy such missiles on its doorstep, but rather would take “all necessary countermeasures”.

HONG KONG ADR’s -275pts @ 24,507 with most ADR’s in the red.Market Closed Tuen Ng Festival (Dragon Boat Day) and re-opens Friday
No data due
Short Selling HSI 
Wedneday 17.5% vs 21% Tuesday
Top Shorts Wharf REIC (1997) 42%, MTR (66 HK) 38%, Hang Lung PPT (101) 38%, Hang Seng Bank (11) 38%, PetroChina (857) 36%, Bank of China (3988) 33%, AIA (1299) 33%, Mengniu Dairy (2319) 31%, Ping An (2318) 30%, CCB (939) 28%, Country Garden (2007) 28%, CLP (2) 26%, China Unicom (762) 26%,
BUYBACKS/INSIDER DEALING Li Ka-shing and Victor T K Li acquired shares of CK ASSET (01113.HK) further by a wholly-owned subsidiary of Li Ka Shing (Global) Foundation. They acquired a total of 1.3295 million shares in CK Asset at the average price of HK$47.25, HK$47.1437, HK$47.2822 and HK$46.9328 per share on 18 June, 19 June, 22 June and 23 June 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset increased from 35.17% to 35.2%, and from 35.23% to 35.27%.
WATCH
SUCCESS DRAGON (1182.HK) expected to record the loss in the range of HK$11mn to HK$14mn for the year ended 31 March 2020 as compared with the loss of HK$38.898mn for the year ended 31 March 2019.
As USD/ HKD re-hit the Strong-side Convertibility Undertaking, the HKMA undertook US$510 million of selling orders during Hong Kong trading hours to inject HK$3.953 billion. The balance of the banking system of Hong Kong is expected to increase to HK$131.609 billion next Monday (29 June).
YTO EXP INTL (6123.HK) POSITIVE PROFIT alert The Group was expected to record an increase in the revenue and a substantial increase in the net profit for the six months ending 30 June 2020 as compared with the corresponding period in 2019, based on the preliminary review by the Company’s management on the unaudited consolidated management accounts of the Group for the five months ended 31 May 2020 and other information currently available to the Board.
COWELL (1415.HK) POSITIVE PROFIT alert The Company expected to record a significant improvement in the Group’s profit for the six months ending June 30, 2020 as compared with the same period in 2019. The significant improvement in profit was primarily attributable to the increase in camera module sales; improved production yield; and efficient cost management.
TAI CHEUNG HOLD (88.HK) announced annual results ended March 2020. Net profit amounted to HK$125 million, down 46.2% yearly. EPS equaled HK$0.2. Final DPS was HK$0.12, as compared with HK$0.23 in the year-ago period.
Google stated that it is considering alternative destination to Hong Kong after the US Department of Justice has suggested Federal Communications Commission ban its application to link Pacific Light Cable Network with Hong Kong out of national security concerns
CATHAY PAC AIR (293.HK) said around 80% of its employees have so far expressed willingness to partake in the new round of voluntary furlough arrangement. The second round of furlough application will expire on 28 June.
Centa-Salesman Index (CSI) last printed at 60.48, +1.35 pts WoW. For almost five weeks, CSI lingered within a narrow range around 60 with the peak and trough at 60.48 and 57.9. The index has been maintaining at the upper end of the critical point of 55. In near term, they forecast the CSI to hover around 60 continuously and amass upswing momentum, which foretold an ongoing uptrend of housing prices.