May 12 Asian Marco Initial Thoughts Mixed opens poor China data but bargain hunting Team China wild card


13 May

Check out  ERI-C.com ; for your research needs

Asia
Australia 
Futures indicate market to open 33pts lower following the US and ahead of new Home Sales and Consumer Inflation Expectations. Xero Limited earnings in focus expected to be good. Alsowatch CBA as GS downgrade the stock. Oil higher +VE Oil Search , Woodside etc. but Gold fell -VE Evolution and Resolute
Japan Nikkei futures opened opened +65pts and are rising, currently +88pts after the damatic falls this week expect bargain hunting now the US inflation data is out.  
S Korea Expect markets to open lower following the US and the poor Chinese loans data but also expect to see bargain hunting as investors now reposition themselves.
Taiwan Market to open lower with the potential for more margin calls after yesterday’s sell-off. But then work higher on bargain hunting as downside limited as the National Stabilization Fund Committee likely to convene a meeting to respond to the ongoing market rout amid rising COVID-19 infections and as global technology shares retreat, Minister of Finance Su Jain-rong said. It last intervened when the index dropped to 8,500.
China Market to open lower following the poor loans data (although in line with the PBoC wishes) and the US sell off. But the ‘wild card’ remains ‘Team China’ and whether they will again step in to support the markets. Deteriorating international relations also a concern.
HK ADR’s -189pts at  28,042  a broad sell off with only CLP and Petrochina closing in the green. Poor China loan data, news of the introduction of a property tax and a clamp down on education providers -VE. The last two day the market has remained firm but on low turnover, today i would expect a greater sell off. Mengniu Dairy -VE on news of shareholder block sale.
US Futures
Opened Dow +35pts S&P and NDX flat but have moved higher Dow +70pts, S&P +0.1% and NDX slighty +VE
Colonial Pipeline resumed operations easing the pressure on oil/gasoline.

DOW -1.99%, NDX -2.67%, S&P -2.14%, Russel 2K -3.26%
Markets opened lower and trended lower all day to close at the day lows. The Dow’s worst day since January , S&P’s since February after inflation came in much higher than expected. Selling was acrosss the board not just Tech but value names too on fears the Fed will raise rates sooner that expected and taper generally. I doubt it unless they see a significant rise in employment and wage inflation. But today you saw a knee jerk reaction and I would imagine that ETF’s selling was part of the reason for such broad declines.

Banks relative outperformers but still sold JPMorgan Chase -0.7%, Citigroup -0.9% Wells Fargo -0.2%, Amex -1.4%
Work from home names: Facebook -1.3%, Apple -2.5%, Amazon -2.2%, Netflix -2%,  Disney -2.1%, Zoom Video -3.5%, Alphabet -3.1% and Microsoft -2.9%,
Tech NXP Semi -5.1%, Nvidia -3.8%, Micron -4.8%, AMD -2.9%, Skyworks -3.2%
Re-opening stocks  Boeing -3.5%, Caterpillar -0.8%, Simon Property -4.1%, Kohl’s -5.1%, Nordstrom -5.1%, Gap -8.1%, United Airlines -3.2%, Carnival -4.3%, Wynn Resorts -3.3%, Chevron +0.6%, Exxon Mobil -0.9%,  
Lock down names Campbell Soup -1.7% General Mills -0.2%, JM Smucker -1.5%DATA
MBA Mortgage Applications +2.1% vs -0.9% prior and 30 yr Mortgage Rate 3.11% vs 3.18%
Inflation Rate Apr 4.2% YoY vs +2.6% Mar (F/cast was +3.8%)
Inflation Rate Apr +0.8% MoM vs +0.6% Mar (F/cast was +0.3%)
Core Inflation Rate Apr +3% YoY vs +1.6% Mar (F/cast was +2.2%)
Core Inflation Rate Apr+0.9% MoM vs +0.3% Mar (F/cast was +0.2%)
EIA Gasoline Stock Change +0.378m vs +0.737m prior (consensus was -0.6m)
EIA Crude oil Stock Change -0.427m vs -7.99m prior (consensus was -2.817m)
WASDE report released
10 year Note Auction 1.684% vs 1.680% prior
Monthly Budget Statement Apr $-226B vs -660B Mar (F/cast was -260B)
USD was stronger vs Yen & Euro. Bitcoin -3.6% @ 54,471.72, VIX +26.3% @ 27.6,
US T10 @ 1.693% after hotter than expected inflation
OIL Brent +0.54%, WTI +0.67%
Gold -1.1%, Silver -2.1%, Copper -0.9% Platinum -2.1%, Palladium -2.6%.
AHEAD PPI, Core PPI Initial Claims, 4 week Average Claims, Continuing Claims, EIA Natural Gas Report.Earnings: Walt Disney, Airbnb, Plantronics, Burberry, Casper Sleep, Brookfield Asset Management, Door Dash, Petrobras, Aurora Cannabis, Alibaba

DAX +0.2%, CAC +0.19%, FTSE +0.82%
DAX and FTSE opened higher and traded sideways in the green, dipped on the US inflation number and then worked higher before a small sell off into the close. CAC opened flat and trading around yesterday’s close until the US inflation number, dipped and then worrked higher and then sideays into the close.
Earnings out from EDF, Allianz, Bayer, TUI Group and RWE.
Commerzbank +8.3% after Q1 profit beat expectations and it raised its full-year revenue outlook.
UDG Healthcare +20.7% but off initial highs after announcing that private equity firm Clayton, Dubilier & Rice had agreed to buy the company for £2.6 billion ($3.7 billion).
Ambu -22.8% after reporting a fall in quarterly earnings.
ABN Amro -5.6% reported a Q1 net loss of 54 million euros ($66 million) after a substantial money laundering fine.
Ubisoft -11.7% issued a warning that profits may fall this financial year
DATA
EUROZONE
Industrial Production Mar +10.9% YoY vs -1.8% Feb (F/cast was +11.5%)
Industrial Production Mar +0.1% MoM vs -1.2% Feb (F/cast was 1%)
GERMAN
Inflation Rate Final Apr 2% YoY vs +1.7% Mar (F/cast was +2% )
Inflation Rate Final Apr +0.7% MoM vs +0.5% Mar (F/cast was +0.7%)
FRANCE
Inflation Rate Final Apr +1.2% YoY vs +1.1% Mar (F/cast was +1.3%)
Inflation Rate Final Apr +0.1% MoM vs +0.6% Mar (F/cast was +0.2%)
UK
Balance of Trade Mar £-2B vs -0.9B Apr revised (F/cast was -6.1B)
GDP Growth Rate Prel Q1 -6.1% YoY vs -7.3% Q4 (F/cast was -5.6%)
GDP Prel Q1 -1.5% QoQ vs +1.3% Q4 (F/cast was -1.4%)
GDP Mar +2.1% MoM vs +0.7% Feb revised (F/cast was +1.5%)
GDP Mar +1.4% YoY vs -7.8% Feb revised (F/cast was +1%)
GDP 3mth Ave Mar -1.5% vs -1.7% Feb revised (F/cast was -1.4%)
Business Investment Prel Q1 -11.9% QoQ vs +5.9% Q4 (F/cast was +3.2%)
Business Investment Prel Q1 -18.1% YoY vs -7.4% Q4 (F/cast was -4.4%)
Industrial Production Mar +1.8% MoM vs +1% Feb (F/cast was +1.2%)
Industrial Production Mar +3.6% YoY vs -3.5% Feb (F/cast was +2.9%)
Manufacturing Production Mar +4.8% YoY vs -4.2% Feb (F/cast was +4%)
Manufacturing Production Mar +2.1% MoM vs +1.5% Feb revised (F/cast was +1.2%)
Construction Output Mar +6% YoY vs -3.3% Feb revised (F/cast was +1.5%)
Construction Orders Mar -13.3% YoY vs -13% Feb revised (F/cast was +1.8%)
Goods Trade Balance Mar vs Feb (F/cast was )
NIESR Monthly GDP Tracker Apr +1.3% vs -1.5% Mar (F/cast was +1.1%)
AHEAD
EUROZONE 
No data due
GERMANY No data due  
FRANCE 
No data due
UK No data due

JAPAN
Nikkei futures opened +65pts and are rising, currently +88pts after the damatic falls this week expect bargain hunting now the US inflation data is out.
Yen currently 109.65
Data due
pre market
Current Account and Stock & Bond Investments by Foreigners
Later Eco Watchers Survey; Outlook and Current
Tokyo reported 969 new covid cases Wesdnesday (
vs 925 Tuesday) and Osaka 851 (vs 974 Tuesday).
The Japanese government has decided to ban foreign residents who have traveled to India, Nepal and Pakistan from re-entering Japan, amid an uptick in that region in new variants of the coronavirus.
Technical problems derailed Japan’s coronavirus vaccination booking system on Wednesday, compounding frustration over the government’s handling of new outbreaks of infections and an inoculation drive that critics say has been woefully slow. -VE
SoftBank Group Corp. reported the highest ever quarterly profit for a Japanese company thanks to an unprecedented windfall from its investment business. Net income was ¥1.93 trillion ($17.7 billion) for the three months ended March 31, the most for a listed Japanese company dating back to 1990, data compiled by Bloomberg show. Most of it came from SoftBank’s Vision Fund investment arm, whose ¥2.3 trillion profit was supercharged by the successful initial public offering of Coupang Inc. in March.
Activist investor ValueAct Capital has amassed a $1.53 billion stake in Seven & i Holdings and would like the Japanese owner of the 7-Eleven convenience store chain to consider changes, including a potential break-up. +VE
Nomura Holdings Inc (8604.T) raised its pretax income target for the next fiscal year by 14%,
showing the long-cherished ambitions of Japan's top brokerage and investment bank to join the global elite remain undimmed, despite sustaining a near $3 billion hit from the collapse of U.S. investment fund Archegos. +VE
Toyota Motor Corp forecast its profit would bounce back to pre-pandemic levels this year, as the world’s biggest automaker exuded confidence it can tackle a global chip shortage that has stung its rivals thanks to lesson learnt from the 2011 tsunami disaster. +VE
Nissan Motor Co shares -12.2% Wednesday 
to their lowest in five months after the Japanese automaker’s weaker-than-expected guidance for the current fiscal year. -VE
Hitachi Ltd. said Wednesday it will promote Vice President Keiji Kojima to president on June 23, replacing Toshiaki Higashihara, who will become chairman and CEO, in the company’s first change of presidency since 2014.  Chairman Hiroaki Nakanishi, who has been hospitalized due to an ongoing battle with lymphoma, left the post on Wednesday, according to the Japanese industrial conglomerate. The 75-year-old will also step down on June 1 as chairman of the powerful Japan Business Federation, also known as Keidanren. Slight -VE
The United States’ track and field team has cancelled its pre-Olympics training camp in Japan out of concerns for safety amid the COVID-19 pandemic, local authorities announced on Wednesday, raising more questions about the holding of the Games. Comes as the International Olympic Committee (IOC) on Wednesday said it supported Japanese measures to counter COVID-19 and was confident the Tokyo Olympics would be a "historic" event, despite wide public opposition.

SOUTH KOREA
Expect markets to open lower following the US and the poor Chinese loans data but also expect to see bargain hunting as investors now reposition themselves.
No data due
KDCA reported 635 new covid cases Wednesday vs 511 Tuesday -VE 
To stem the spread, the country is revving up its vaccination drive with an aim to achieve herd immunity by November.
More than 6 out of 10 South Koreans feel unsafe taking the COVID-19 vaccines being rolled out in the country, compared with fewer than 3 in 10 in the UK, a global survey has found. -VEHanwha Group has clinched a 5 trillion won ($4.4 billion) commitment from the Korea Development Bank to finance its environmental, social and governance efforts over the next five years, the company said Wednesday.
Samsung Electronics and LG Group decided Wednesday to offer paid leave to workers who receive a COVID-19 vaccine shot following health authorities' recommendation +VE
Samsung BioLogics Co Ltd (207940.KS) and Pfizer Inc (PFE.N) on Wednesday denied a report that they were working together
to produce in South Korea a COVID-19 vaccine developed by the U.S. drugmaker. -VE
Samsung Heavy Industries said Wednesday that it has completed a research and development plant related to liquefied natural gas. The plant set up at its shipyard on Geoje Island will develop and test key technologies needed to transport, store and supply LNG, Samsung Heavy Industries said. The R&D plant will help the shipbuilder widen the technological gap with other rivals in manufacturing LNG carriers and LNG-propelled ships, the company said. +VE
Hanwha Group has clinched a 5 trillion won ($4.4 billion) commitment from the Korea Development Bank to finance its environmental, social and governance efforts over the next five years, the company said Wednesday. +VE

TAIWAN
Expect market to open lower with the potential for more margin calls after yesterday’s sell-off. But
then work higher on bargain hunting as downside limited as the National Stabilization Fund Committee likely to convene a meeting to respond to the ongoing market rout amid rising COVID-19 infections and as global technology shares retreat, Minister of Finance Su Jain-rong said. It last intervened when the index dropped to 8,500.
No data due
The Taiwanese authority has raised the pandemic alert to Level 2, effective Wednesday through 8 June, 
after reporting seven local cases yesterday, a mark of community outbreak. It said it might even move it to level 3 and ban all indoor gatherings with more than five participants, effective today, in view of the rampant outspread. After market it reported 16 local cases of novel coronavirus, among which three stemmed from untraceable origins.
President Tsai Ing-wen calmed the public by disclosing that Taiwan remains rich in anti-pandemic items with a well-established medical system.
Taiwan condemned China on Wednesday for seeking to use vaccines for political gain after Taipei's diplomatic ally Honduras said it was considering opening an office in China in a bid to acquire much needed COVID-19 shots.
TSMC joins American chip coalition lobbying group in another blow to China’s self-sufficiency drive. Major world chip makers and buyers set up a new coalition to bolster American semiconductor industry. New coalition may make it harder for China to achieve semiconductor independence from US technologies, analysts say
MediaTek Inc is stepping up its recruitment drive this year, with plans to hire more than 2,000 engineers specializing in core technologies, including 5G, wireless communication and artificial intelligence (AI). That would be double from the more than 1,000 people it hired on average in the past few years, as the Hsinchu-based company looks to boost growth this year and beyond. +VE
Asustek Computer yesterday said that its net profit last quarter soared about 10-fold to NT$9.79 billion (US$350.21 million) from a year earlier, aided by strong demand for PCs amid work and study-from-home trends due to the COVID-19 pandemic. Last quarter was the best first quarter in the company’s history. Asustek posted a net profit of NT$888 million in the first quarter of last year. +VE
Vaccine maker Adimmune Corp yesterday reported a net loss of NT$249 million (US$8.91 million) for last quarter, compared with a net profit of NT$1.24 billion in the fourth quarter of last year, due to rising research and development (R&D) expenses that involved a phase 1 clinical trial for its experimental vaccine against COVID-19. That translates into a loss per share of NT$0.58, widening from minus-NT$0.05 a year earlier. Revenue last quarter sank 98 percent year-on-year to NT$6.9 million due to a high comparison base last year, it said. Slight -VE
Yang Ming Marine Transport Corp has been added to the MSCI Global Standard Indexes after a semi-annual review.
In a statement on its Web site yesterday, the index provider said that it removed Yang Ming from the MSCI Global Small Cap Indexes, but added it to the MSCI Global Standard Indexes. +VE
Conversely, it said that it removed computer periphery supplier Chicony Electronics Co and property developer Highwealth Construction Co from the MSCI Global Standard Indexes, but added them to the MSCI Global Small Cap Indexes.
Uni-President Enterprises yesterday reported stronger-than-expected earnings for the first quarter on contributions from its subsidiaries. Consolidated net profit was NT$5.41 billion (US$193.5 million) last quarter, up 20.97 percent from a year earlier, or earnings per share of NT$0.95 — the highest for the period in the company’s history. Consolidated revenue rose 6.62 percent year-on-year to NT$115.46 billion in the first quarter, while gross margin fell 0.38 percentage points to 33.9 percent. +VE
Compal Electronics yesterday reported net profit of NT$2.62 billion for the first quarter, up 333 percent from a year earlier, but down 43 percent from the previous quarter, or earnings per share of NT$0.6. The firm attributed the annual increase in net profit to the effect of a larger economy of scale and the efficiency of automated production, which caused its operating profit to increase 261 percent year-on-year to NT$3.28 billion. With consolidated revenue rising 48 percent to NT$269.99 billion last quarter, Compal said its operating margin reached 1.21 percent. The firm last week reported that laptop shipments last month fell 20 percent month-on-month to 4.4 million units, but increased 2.33 percent from a year earlier. Shipments this quarter are likely to rise by a double-digit percentage from last quarter, the firm said. +VE

CHINA
Expect market to open lower following the poor loans data (although in line with the PBoC wishes) and the US sell off. But the ‘wild card’ remains ‘Team China’ and whether they will again step in to support the markets. Deteriorating international relations also a concern.
No data due but out after market Wednesday
New Yuan Loans Apr CNY 1470 B vs 2730 B Mar (F/cast was 1850 B)
Outstanding Loan Growth Apr +12.3% vs +12.6% Mar (F/cast was +12.5% )
Total Social Financing Apr CNY 1850 B vs 3340 B Mar (F/cast was 2470 B)
M2 Money Supply Apr +8.1% vs +9.4% Mar (F/cast was +9.5%)
Vehicle Sales Apr +8.6% YoY vs+74.9% Mar (F/cast was +70%)
The United States, Germany and Britain clashed with China at the United Nations on Wednesday over the treatment of Uyghur Muslims in Xinjiang, angering Beijing by hosting a virtual event that China had lobbied U.N. member states to stay away from. "We will keep standing up and speaking out until China's government stops its crimes against humanity and the genocide of Uyghurs and other minorities in Xinjiang," U.S. Ambassador to the U.N. Linda Thomas-Greenfield told the event, which organizers said was attended by about 50 countries. A group of UN members called for ‘immediate, meaningful and unfettered access’ to Xinjiang for rights inquiry; ‘If you have nothing to hide, why do you not finally grant unimpeded access?’ one ambassador asks
US Secretary of State says China ‘criminalises religious expression’ as report on religious freedom is released. The annual State Department report on international religious freedom calls out Beijing for suppressing Christians, Uygur Muslims and Tibetan Buddhists. Antony Blinken also announces the placing of sanctions on a Communist Party official for ‘gross violations of human rights’ -VE
Onshore bond defaults in mainland China have hit nearly 100 billion yuan (HK$120.57 billion) so far in 2021, growing at the fastest pace on record.  Firms so far this year have failed to make payments on 99.8 billion yuan of onshore bonds, according to Bloomberg-compiled data. While 2021 is set to be the fourth straight year the 100 billion yuan level has been topped, it previously hadn't happened before September. For all of 2015, when China's stock market crashed, defaults totaled just 8.9 billion yuan. -VE
The Philippines on Wednesday reported what it said were incursions into its exclusive economic zone (EEZ) by 287 maritime militia vessels from China, in a further sign of cracks reappearing in a relationship after a period of rapprochement. As a result the Philippines plans a South China Sea ‘logistics hub’, as Beijing accused of increasing boats. Foreign Secretary Teddy Locsin Jnr says there are now 300 Chinese boats in the disputed waters, up from 200 in March
China is framing tough new rules to clamp down on a booming private tutoring industry, aiming both to ease pressure on school children and boost the country’s birth rate by lowering family living costs, sources told Reuters. -VE for tutoring firms.
SCMP reports China reviving efforts to roll out property tax to rein in runaway home prices, after two-year silence.  A high-level meeting signals the much-anticipated residential property levy is back on Beijing’s agenda, according to industry experts. It comes after the central government highlighted the unaffordability of homes as a ‘difficulty’ in Premier Li Keqiang’s work report in March -VE Developers

HONG KONG  
ADR’s -189pts at 28,042 a broad sell off with only CLP and Petrochina closing in the green. Poor China loan data, news of the introduction of a property tax and a clamp down on education providers -VE. The last two day the market has remained firm but on low turnover, today i would expect a greater sell off. Mengniu Dairy -VE on news of shareholder block sale.
No data due

Short Selling Wednesday 17.3% vs 13.9% Tuesday
Top Shorts
  CK Assets (1113) 55%, Country Garden (2007) 48%, Henderson Land (12) 47%, Bank Of China (3988) 45%, NWD (17) 43%, Wharf REIC (1997) 43%, Hengan (1044) 42%, BoComm (3328) 36%, Shenzhou Int (2313) 28%, ICBC(1398) 32%, CKH (1) 32%, CCB (939) 32%, BoC HK (2388) 31%, HSBC (5) 30%, Bud Apac(1876) 30%,  MTRC (66) 30%, AAC Tech (2018) 29%, Power Assets (6) 28%, SinoBioPharm (1177) 27%, Sunny Optical (2382) 26%, HK & China Gas (3) 25%

NATIONAL SECURITY
Hong Kong’s police chief said today that the Organised Crime and Triad Bureau of the force will handle the investigation on the city’s second-ranked police officer in the National Security Department, 
Frederic Choi Chin-pang, after he was caught in an unlicensed massage parlor during a police raid. -VE for sentiment

BUYBACKS/INSIDER DEALING
Danone is disposing through Goldman Sachs Group of 387.5 million shares in MENGNIU DAIRY (02319.HK) at a placing price of $38.95-39.8 each, representing a 5-7% discount
to today's closing price $41.9, for a maximum cash consideration of around $15.42 billion, the market rumored.
WATCH
It is outdated now to propose again the merger between POWER ASSETS (00006.HK) and its parent CKI HOLDINGS (01038.HK), said POWER ASSETS Chairman Canning Fok
at the shareholders' meeting today (12 May), local press reported. Fok furthered that they will not reconsider such idea for the time being.
BOSSINI INT'L (00592.HK) announced that for the quarter ended 31 March 2021, 
the Group’s revenue from continuing operations decreased by 11% to HK$218 million year-on-year. Furthermore, the Group is preparing for a major brand revamp with redefined image, product segmentation and pricing, accompanied with the adoption of the right online and offline distribution channels.
PING AN (02318.HK) announced the initial close of Ping An Voyager Partners, LP, a growth stage venture fund that will make investments in fintech, healthtech and related businesses around the world.
Targeted at institutional investors, Voyager Partners has secured approximately US$200 million in commitments toward its planned US$475 million offering.
HKTV (01137.HK) announced the launch of a new 1-hour delivery option
“HKTVexpress” on “HKTVmall” in cooperation with smart logistics platform Zeek.
Customers are now opened for placing orders in partnering shops located within 2 kilometres of the delivery address on “HKTVexpress” within HKTVmall app, and that the items will be delivered by Zeek in one hour.
At CKI HOLDINGS (01038.HK)'s AGM today, Chairman Victor Li said the company's share price is undervalued,
as the value of its businesses and assets in Britain, Canada, Australia, China and Hong Kong remains yet to be priced in, cited Ming Pao. Its stock price only reflects the value of water, power and gas distribution and POWER ASSETS (00006.HK) in the UK. The infrastructure conglomerate will hopefully carry out more M&A activities when the pandemic goes muted, disclosed Li.
The Financial Secretary, Paul Chan, attended a webinar to update the Canadian political and business community on Hong Kong's edge and competitiveness as an international financial centre, its active role in national development and the ample opportunities for Canadian businesses. In the past two years, Chan has not seen any significant fund outflow from Hong Kong's banking system. On the contrary, a total inflow of US$50 billion into the Hong Kong dollar system had been recorded as at the end of last year. Hong Kong's status as an international financial centre remains solid and its competitiveness remains strong.
The Government announced the launch of a new batch of inflation-linked retail bond (iBond), with a target issuance size of HK$15 billion. Paying interest once every six months at a rate linked to inflation in Hong Kong, subject to a minimum rate of 2 per cent.
MAXICITY (08216.HK) announced the results for the first quarter ended 31 March 2021. Net profit fell 31.1% yearly to HK$5.404 million. EPS equaled HK1.4 cents.
More than 40 percent of members surveyed by the American Chamber of Commerce (AmCham) in Hong Kong said they might leave the territory, highlighting the business community’s concerns over a China-imposed National Security Law and the local government’s handling of COVID-19 outbreaks. Singapore figured among the most popular potential destinations, while some mentioned Tokyo, Taipei and Thailand as alternatives, the lobby group said in a report released yesterday.


Comments
* The email will not be published on the website.