May 17 Asian Marco Intial Thoughts China data in focus, covid overhang


17 May

This and previous notes can be found  on substack
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US earnings are wrappng up but Retail earnings in focus this week with Walmart and Home Depot will report Tuesday. Target, TJX and Lowe’s release results Wednesday, and B.J.’s Wholesale and Kohl’s on Thursday. We also get the Fed minutes and a number of Fed speakers in focus.

Asia
Sentiment in Asia cautious on covid with Singapore closing schools, Taiwan at level 3 and China reporting more cases.  The slight upside is that new cases in India seem to be dropping.

Australia Futures indicate market to open 48pts higher but Iron Ore prices fell -VE for the miners but Gold and Oil higher.  Tech +VE following the rebound in the US on Friday.  Carsales to resume trading after fund raising to make acquisition +VE.   Incitec Pivot to relases earnings.
Japan Futures opened -5pts but now +3pts with caution ahead of today’s PPI and Tuesday’s GDP data.  Company earnings continue to be in focus. Expect market to open higher following the US rebound but trade cautiously.  
S Korea Expect markets to open higher following the US but with caution over inflation. Earnings remain in focus. But key this week will be whether the recent foreign outflows continue. On Friday Tech and Bio saw a strong rebound but Steel and Insurance were weak.
Taiwan Market to open higher following the US but upside limited by the imposition of level 3 covid alert and the weather office saying no sign of rain in the next 10 days. Adding to the inflation concerns on input prices for Tech. Retail investors were under pressure last week to sell in order to meet margin calls which put the index under more pressure. That will ease if the market sees a rebound.
China Market to open lower on light volumes ahead of key data. Sentiment slightly -VE on new Covid cases and domestic rating agencies downgrading Chinese corporate bonds. The news of Mars landing news +VE but investors more focused on the Economic data.
HK ADR’s +223pts @ 28,250 a broad rebound with only Baba and CK Hutch in the red. Expect significant short covering as the market pops above 28,250 as most recent shorts were placed when the HSI was trading below 28,000. But general investors cautious ahead of the China data, which after the weak loans data could well come in light. Key will be whether we see a rise in T/O (excluding the IPO) as to gauge sentiment. News that Jimmy Lai’s assets have been frozen under the National Security Law -VE for sentiment. Also Tencent earnings due.
US Futures
Opened slightly higher Dow +40 points. S&P 500 futures and Nasdaq 100 futures were both 0.2% higher.

Bitcoin -8% Saturday night after a Tweet from Much suggested Tesla had sold all its Bitcoin; something I suggested last week following his earlier comments.  Bitcoin this morning was US$45,816.75
AT&T is in advanced talks to merge WarnerMedia with Discovery in a deal that will strengthen the combined company against rival media giants Netflix and Disney, according to people familiar with the matter.
Commercial X ray screening equipment and sniffer dogs in demand as commercial carriers struggle to meet new ICAO rules on screening cargo.

JAPAN
Futures opened -5pts but now +3pts with caution ahead of today’s PPI and Tuesday’s GDP data.  Company earnings continue to be in focus. Expect market to open higher following the US rebound
but
trade cautiously.
Sunday saw reports of a 5.8 earthquake 
off Asahikawa.
Yen closed weaker at 109.34
Data due pre market
PPI Apr (March was +0.8% MoM F/cast is +0.6%)
PPI Apr (March was 1% YoY F/cast is +3.3%)
Later  
Machine Tool Orders Apr (March was +65% YoY F/cast is +50%)
Tokyo reported 542 new covid cases Sunday (-230 vs Saturday), Osaka 620  Nationally the number was 5,215
Japan has declared a state of emergency in three more prefectures hit hard by the COVID-19 pandemic with measures taking effect from Sunday, PM Suga said on Friday, a surprise move that reflects growing concern about the spread of covid. The latest declaration comes as Japan grapples with a surge of a more infectious virus strain just 10 weeks before the Tokyo Olympics are due to start on July 23. Hokkaido, Okayama and Hiroshima will join Tokyo, Osaka and four other prefectures on Sunday. Slight -VE
PM Suga also said that Japan was determined to hold the Olympics. I think he is wrong and that could seriously damage his election chances -VE although it could give Abe a chance at returning.
1,799 suicides reported nationwide in April +12.1% YoY.  Female suicides have been increasing every month since June 2020, having been hit hardest financially by the pandemic.
Seven & i Holdings Co says it has completed its $21 billion acquisition of Speedway LLC, a U.S. convenience store chain and gas station network, despite the acting chairwoman and a commissioner of the U.S. Federal Trade Commission said in a statement Friday, the deal may be "illegal."    -VE  
MUFG Bank plans to eliminate in-person service counters, including those for opening bank accounts, at most of its branches nationwide as part of efforts to simplify its operations.  By the end of fiscal 2023, MUFG plans to specialize in handling various procedures via teleconference terminals and providing consultations on asset management. The number of customers who visit branches has been on the decline due to the novel coronavirus crisis, prompting the bank’s decision to accelerate reforms to cut costs. +VE
Toyota reported strong SUV sales in US and China +VE
Japan External Trade Organization reports China's imports of Japanese cosmetics keep rising.  In terms of import value, Japan overtook South Korea and ranked top in 2019.  Japanese brands such as Shiseido and Pola are well known among Chinese consumers.
Suzuki likely to see significant impact from the covid surge in India along with Honda, Panasonic and Nippon Steel all of whom have large operations -VE
Honda Motor Friday forecast a 10.3% drop in net profit to ¥590 billion ($5.4 billion) in the current business year through next March amid uncertainty over semiconductor supplies and surging material costs.  Honda’s cautious outlook came after record car sales in China and cost-cutting helped the automaker report a 44.3% gain in net profit to ¥657.43 billion, the first rise in three years. For fiscal 2021, Honda aims to sell 5 million cars globally as demand is expected to recover from the coronavirus pandemic, following a 5.1% drop to 4.55 million in fiscal 2020. Honda expects to sell 18 million motorcycles in the current business year, up from 15.13 million. “We expect the impact (of the shortage) to continue in the first half of the current business year, but we will recover in the second half,” Executive Vice President Seiji Kuraishi told a news briefing. Honda experienced a production cut of 100,000 units in fiscal 2020. Kuraishi did not elaborate on the projected impact for fiscal 2021. Slight -VE
Mazda Motor Corp (7261.T) said on Friday it expects a semiconductor crunch to affect around 100,000 of the Japanese automaker's vehicles globally during the fiscal year.  However, Mazda will fully leverage available inventory to minimize the hit to about 70,000 wholesale units, it said in a statement.
Toshiba Corp (6502.T) forecast on Friday a 63% rise in annual operating profit as restructuring measures bear fruit. The conglomerate, under scrutiny for a strategic review after it dismissed a $20 billion buyout bid, said it was open to credible offers and is projecting 170 billion yen ($1.6 billion) in operating profit for the year to end-March. That compares with a consensus estimate of 179 billion yen drawn from 13 analysts polled by Refinitiv. For the year just ended, Toshiba posted an 20% slide in operating profit to 104.4 billion yen. It also said on Friday it had been hacked in Europe by the DarkSide ransomware group widely believed to have been behind a crippling fuel pipeline attack in the United States this week.
Sumitomo Mitsui Financial Group Inc (8316.T) (SMFG), reported on Friday Q4 net profit -15.2%, primarily due to an increase in credit-related costs amid the COVID-19 outbreak. Profit was 78.9 billion yen ($722.13 million) vs 93.1 billion yen in the year-ago period, according to Reuters calculations based on the bank's filing. -VE
Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc (SMFG), on Friday forecast a drop in credit-related costs this year on expectations the economy will recover as vaccination proceeds.  Mizuho (8411.T) is predicting credit-related costs of 100 billion yen ($914.6 million) this year, while SMFG's sees costs at 300 billion yen. Both figures smaller than the last financial year.
While Japanese banks have seen an increase in lending since last year as companies rushed to borrow due to the COVID-19 pandemic. Bank lending in Japan rose 4.8% in April from a year earlier, according to data compiled by the Bank of Japan. Japanese bank shares have outperformed the 2.3% rise in the benchmark Nikkei index (.N225) in the year to date, with Mizuho's shares up 23.7% and SMFG 25.5% higher. "While Japan's economy is expected to recover gradually as vaccination proceeds, it's still unclear how COVID-19 would impact specific industries," SMFG's chief executive Jun Ohta told an earnings briefing.
Even though the banks expect smaller credit-related costs in this fiscal year, they need to closely monitor the costs especially the ability of some sectors to make repayments as the situation continues to deteriorate for sectors like aviation and retail.
Amazon.com Inc is in talks with Japanese power utilities and trading houses to build a renewable power plant in Japan to procure clean energy for its local data centres, the Nikkei reported. It is seeking ways to procure electricity over the long term from exclusive renewable energy power stations. A Japanese trading house is considering supplying electricity to Amazon from an off-shore wind farm to be built in Japan if it wins in the government auction that began last year, the Nikkei said.
FT reports Pandemic has changed the way Japan shops  Looks at how the crisis has left the country’s retailers under pressure to improve their offering online — and in their storesSOUTH KOREA
Expect markets to open higher following the US but with caution over inflation. Earnings remain in focus. But key this week will be whether the recent foreign outflows continue. On Friday Tech and Bio saw a strong rebound but Steel and Insurance were weak.
No data due Monday; 
this week the only major data is PPI on Friday.
KDCA announced Sunday 610 new cases (vs Saturday 681 and Friday 747) 
but they remain concerned about the potential for another uptick. New Prime Minister Kim Boo-kyum said the nation would have new social distancing rules from July if the coronavirus situation stabilizes.
The Korea Communications Commission has recently opened a probe to see if Google has violated the Telecommunications Business Act by looking into an allegation that Google restricted applications downloaded from other app stores from accessing Android Auto, the company’s mobile operating software for in-car use.
LG Chem has purchased shares worth 40 billion won ($35.5 million) in Jiujiang DeFu Technology, a Chinese firm that manufactures copper foils for electric vehicle batteries, the firm said Sunday. DeFu is the No. 3 copper foil maker in China and runs two production facilities in the country, where it produces copper foils for EVs and prints circuit boards that go inside electric devices such as smartphones, according to LG Chem.
Prosecutors on Friday indicted the founder of cash-strapped budget carrier Eastar Jet for embezzlement and breach of trust. He became the second sitting lawmaker to be put behind bars in the current legislature. -VE
Korea Electric Power Corp. said Friday its operating profit for the first quarter surged 32.8 percent on-year to 571.6 billion won ($505.9 million), while its revenue fell 0.1 percent to 15 trillion won in the same period. Partly due to lower fuel costs, its new adaptive pricing system and cost savings. +VE
Hanwha Group, said Friday that its Q1 operating profit spiked to 848.5 billion won ($751.6 million), +186% YoY. Net profit +343.94% YoY to 819.9 billion won, largely on the back of the group’s disposal of unprofitable businesses. Revenue -11.23% to 12.8 trillion won.
Hanwha Group’s helped by key affiliates Hanwha Solutions and Hanwha Aerospace, both of whom enjoyed record quarterly performance in the January-March period. Outlook is likely to be tougher now that the easy savings have been made.
Hyundai Motor Co. and its affiliate Kia Corp. said Friday they will suspend some of their assembly lines for several days next week due to semiconductor shortages. -VE
Samsung Biologics said Friday that it has not been decided yet whether it will manufacture Moderna Inc.'s COVID-19 vaccines here.  Comes after local press reported that it was close to signing a contract to manufacture the US drug firm's mRNA vaccine against the novel coronavirus at plants in Songdo, west of Incheon. Slight -VE after stock bounced 9.4% Friday on the rumour, although the press sees it as the most likely partner .
Samsung Electronics Co. said Friday it has expanded support for blockchain users trading virtual assets on its Galaxy smartphones amid rising interest in cryptocurrencies.  It said its latest update will allow users to easily manage their transactions by importing their virtual assets stored on select cold hardware wallets to the Samsung Blockchain Wallet available on most Galaxy smartphones. +VE
Bithumb is facing mounting criticism over repeated glitches on its platform, which has accumulated to at least 11 times since April.

TAIWAN
Expect market to open higher following the US but upside limited by the imposition of level 3 covid alert and the weather office saying no sign of rain in the next 10 days. Adding to the inflation concerns on input prices for Tech. Retail investors were under pressure last week to sell in order to meet margin calls which put the index under more pressure. That will ease if the market sees a rebound.
No data due Monday.  
Data this week; Export Orders and Current Account on Thursday
Taiwan's Central Epidemic Command Center on Sunday recorded 207 new covid cases (206 local infections) of which 105 were linked to a tea house in Wanhua and  44 to visiting Wanhua.  5 were linked to a Lions club cluster,
CECC on Saturday raised the COVID-19 alert level for Taipei and New Taipei cities to Level 3 of it 4 tier system; as the cities struggled to contain a spiraling number of domestic infections. The new alert will be effective from Saturday through May 28, the CECC said.  People are now required to wear masks at all times when they leave their homes, indoor gatherings of more than five people are not allowed, and outdoor gatherings are limited to 10 people.
The Ministry of Finance on Saturday urged investors to stay calm after a spike in domestic COVID-19 infections and a global technology shares selloff unnerved the local stock market last week.
The ministry said that Taiwan’s economic fundamentals remain sound.  It also said the National Stabilization Fund,  might hold an impromptu committee meeting on whether action is necessary. +VE
TSMC annoucned after market it is weighing plans to pump another tens of billions of USD into its chip factories in the U.S. state of Arizona,
although prospects for an advanced European plant remain in the air, people familiar with the matter told Reuters. +VE
Hon Hai Precision yesterday said that a global supply crunch that has hit the consumer electronics and automaking industries will worsen this quarter, after it weathered component shortages to post better-than-expected quarterly profit last quarter. It reported Q1 net income of NT$28.2 billion (US$1 billion) beating the average NT$24.4 billion of adjusted analyst estimates. Revenue in Q2 will likely be steady from the previous quarter’s NT$1.35 trillion, as growth in its consumer electronics and components divisions is countered by a slowdown in its server and computer divisions, in part because of parts shortages, Hon Hai said. +VE
The Industrial Technology Research Institute (ITRI) yesterday revised upward its growth forecast for Taiwan’s chip industry, expecting production value to increase 18 percent to NT$3.81 trillion (US$136.01 billion) this year from NT$3.22 trillion last year. +VE
China Steel Corp Taiwan’s largest steelmaker, said that it is raising domestic steel prices by 8% on average for delivery next month, reflecting climbing steel demand worldwide and increased manufacturing costs due to higher raw material prices. Its the 12th consecutive month of hikes , taking a cue from its Chinese counterparts Baosteel Group Corp and Wuhan Iron and Steel Corp, as well as Formosa Ha Tinh Steel Corp in Vietnam. +VE
Formosa International Hotels Corp Friday posted NT$295 million (US$10.53 million) in net income for last quarter, +87.27% YoY as properties across Taiwan largely rebounded from the COVID-19 pandemic. The figures are the best showing in five quarters and translated into earnings per share of NT$2.11, FIH said after a board meeting. The outlook is slightly -VE after the recent surge in covid cases.
CPC Corp, Taiwan  and Formosa Petrochemical Corp Sunday announced that gasoline and diesel prices are to increase by NT$0.1 per liter this week, after prices were lowered by NT$0.2 per liter last week.  While global crude oil prices last week ended lower after an oil pipeline system in the eastern US was targeted by a cyberattack, as well as worsening COVID-19 outbreaks in India and Japan, CPC said that it would raise prices at its stations, as it had partly absorbed previous cost increases in the international market.
Home transactions last month lost some momentum and might slow further amid uncertainty due to disease-prevention measures after a spike in COVID-19 cases, Chinatrust Real Estate Co said on Friday.
The property market, which has come under pressure from a spate of unfavorable policy measures, is facing a greater challenge from local clusters of COVID-19 infections, Chinatrust general manager Jerry Chang said. Selective credit controls achieved their intended effect, as evidenced in the slowdown in property transactions, he said, adding that the market situation is worrisome after factoring in the virus outbreak. -VE

CHINA
Expect market to open lower on light volumes ahead of key data. Sentiment slightly -VE on new Covid cases and domestic rating agencies downgrading Chinese corporate bonds. The news of Mars landing news +VE but investors more focused on the Economic data.
Data due
China House Prices Apr (March was +4.6% YoY F/cast is 4.8%)
NBS Press Conference
Retail Sales Apr (March was +34.2% YoY F/cast is +26%)
Industrial Production Apr (March was +14.1% F/cast is +10%)
Unemployment Apr (March was 5.3% F/cast is 5.3%)
Fixed Asset Investment (YTD) Apr (March was 25.6% YoY F/cast is 19.5%) .
China reported more new covid cases over the weekend following the 12 cases reported on Friday.  Authorities in China have stepped up Covid-19 controls after two provinces reported the country’s first cases of community transmission in over three weeks.  Yingkou, a port city in northeast China’s Liaoning province, reported five confirmed and eight asymptomatic cases as of Saturday.
The cities of Luan and Hefei, in the eastern province of Anhui, reported seven confirmed cases, and seven cases of asymptomatic infection as of Sunday afternoon. Shenyang, Liaoning’s capital, also reported one confirmed case on Sunday.
China urged to push ahead with controversial property tax as ‘inevitable’ solution to local debt crisis.  Proposed taxation on property owners, which will eventually cover ordinary Chinese households, has received strong opposition for the past decade.  A pilot programme in Chongqing and Shanghai mainly target villas and high-end property owners, but could be expanded to include the likes of Shenzhen and Hainan -VE for sentiment.
FT reports ‘Domestic rating downgrades of corporate bonds in China have more than tripled this year, underlining Beijing’s efforts to reduce risk in the country’s $17tn credit market following several high-profile defaults.’  -VE for sentiment   Caixin report says they are ‘updating methodologies'
China has cancelled the spring Everest climbing season over Nepal Covid-19 cases.  Sports authorities say action needed to ensure there is no chance of imported infections.  Comes as sherpa’s from the Nepal side are already on their way to summit to set the lines.
China braces for more heavy rains after tornadoes kill 12 on Friday Anhui, Zhejiang, Fujian, Jiangxi, Hunan and Guangdong and the Guangxi Zhuang autonomous region expected to bear the brunt of the downpours.  Level 10 thunderstorms forecast for Yichun, Nanchang, Jiujiang and Shangrao in Jiangxi -VE for agricultural.
China urges US to back UN calls for Israeli-Palestinian ceasefire
United Nations Security Council to meet to discuss Gaza conflict. All members must shoulder responsibility for peace, Chinese foreign minister says. Yet China is not prepared to support intervention in Myanmar which raises questions over its stance.
China has punished more than 2,500 firms and detained 95 people after a state inspection campaign across eight provinces turned up instances of illegal quarrying and wetland encroachments among others, the environment ministry said. The inspection teams fanned out from Beijing last month to assess compliance with environmental laws and regulations in the provinces and regions of Shanxi, Liaoning, Anhui, Jiangxi, Henan, Hunan, Guangxi and Yunnan.
Inflation re-cycling: Chinese exporters pass higher costs on to customers around the world. A metal coatings plant in China’s manufacturing hub has been hit by price increases of up to 30% for raw materials including steel, aluminium, thinner and paint since the Chinese New Year in February and has passed them on to clients. A sign that operating on tight margins they have no alternative but to pass the costs on. Comes as the government said it would move to control rapidly rising commodity prices; one option would be the releasing of some of China’s commodity reserves, or it could impose price controls and levy penalties for hoarding. So far there has been little impact on China’s domestic CPI but it is likely to come.
Worth noting that some Chinese factories have stopped accepting orders due the volatility in raw material prices.
China has given emergency use approval to a COVID-19 vaccine developed by Shenzhen Kangtai Biological Products, the company said on Friday, adding a sixth shot to the country’s vaccination drive.
Philippine President Rodrigo Duterte has rebuffed a call from China to withdraw vessels from disputed areas of the South China Sea and said “We have a stand here and I want to state it here and now again that our ships there ... we will not move an inch backward,” he saidhe would not bow to pressure, even if it jeopardises his friendship with Beijing. The Philippines has boosted its presence in contested areas of its Exclusive Economic Zone (EEZ), including Thitu island, near to Chinese military installation, in defiance of the months-long presence of hundreds of Chinese boats it believes are manned by militia. China last month said the Philippines must “stop actions complicating the situation and escalating disputes” in response to a rare maritime exercise conducted by the Philippines. Duterte has been criticised for refusing to press China to abide by a 2016 arbitration ruling on the South China Sea that went in Philippines’ favour. The loss of ‘friendship’ with the Philippines would proably allow Biden to increase leverage there. But I doubt China will back down -VE.
SCMP reports China population: state pension fund under pressure from ‘unprecedented challenge’ as nation gets older Last year, China’s working age population fell, while the nation’s elderly population grew, adding to the pressure on the state pension fund. China’s state pension fund could run out of money by 2035, with China’s elderly population potentially reaching 300 million by the end of 2025. An interesting read and I would also recommend listing to the recording of this week’s free ERI-C webinar on 'The Implications of Global Demographics For Long-Term Investors: Charles Goodhart & Manoj Pradhan in conversation with Stewart Paterson'
Beijing removes 90 apps in crackdown on information collection, flexing new data regulation muscles The Ministry of Industry and Information Technology removed 90 apps from app stores on Thursday over the “irregular collection of personal information”. The move comes two weeks after the implementation of a new regulation on what types of user data apps can collect. Slight -VE E-commerce names.
Sohu.com Limited (SOHU.US) announced that, for the first quarter ended 31 March 2021, the non-GAAP net income from continuing operations was US$37 million, compared with a net loss of US$8 million in the first quarter of 2020.

HONG KONG  
ADR’s +223pts @ 28,250 a broad rebound with only Baba and CK Hutch in the red. Expect significant short covering as the market pops above 28,250 as most recent shorts were placed when the HSI was trading below 28,000. But general investors cautious ahead of the China data, which after the weak loans data could well come in light. Also Monday we get Tencent earnings. Key will be whether we see a rise in T/O (excluding the IPO) as to gauge sentiment. News that Jimmy Lai’s assets have been frozen under the National Security Law -VE for sentiment along with a rumour from CY Leung that the paper could be outlowed by 1 June.
No data due 
but after market Friday
GDP Growth Rate Q1 +5.4% QoQ vs +0.5% Q4 revised (F/cast was +5.3%)
GDP Growth Rate Q1 +7.9% YoY vs -2.8% Q4 revised (F/cast was +7.8%)
COVID
Sunday there were 3 imported cases and 1 local case involving a 4 month baby.  On Saturday there were 3 new cases  including a 4 year old and 2 imported cases.IPO 
SF REIT (02191.HK) debut Monday closed at $4.94 in gray market, down 4 cents or 0.8% against the listing price of $4.98, on volume of 1.62 million units and turnover of $8 million, PhillipMart data showed.

NATIONAL SECURITY LAW
The Security Bureau announced Friday that national security police have frozen the assets of Jimmy Lai Chee-ying,
including his shares in Next Digital (0282), three private companies, and all assets in local bank accounts. The Security Bureau issued a statement confirming the seizure but did not give any details. Very -VE for local sentiment and whilst to date the HKMA has been saying that HK has not seen assets being moved off shore that could now change. I think so far HK citizens have not moved assets off-shore but have not repatriated excess monies.
Government also announced that authorities will step up regulation of unions under the national security law, and would not rule out revoking registration of some groups, Secretary for Labour and Welfare Law Chi-kwong said.Short Selling Friday 16.9% vs 12.2% Thursday
Top Shorts
Country Garden (2007) 41%, CK Assets (1113) 40%, CLP (2) 38%, Henderson Land (12) 37%, MTRC (66) 35%, BoC HK (2388) 34%, Hengan (1044) 32%, Wharf REIC (1997) 32%, Bank Of China (3988) 32%, AIA (1299) 31%, Hang  Seng Bank (11) 28%, Bud Apac(1876) 28%,  Baba (9988) 27%, China Overseas Land (688) 27%, Shenzhou Int (2313) 27%

Picks Techtronics (669 HK) with Home depot, Lowes, Walmart due to report expect movement.It was testing HK$150 but was sold down almost 10% on Wednesday, continued good numbers from the DIY stores should be positive for the stock

Buyback/Insider trades
CC NEW LIFE (09983.HK)  announced that Wang Jun, the chairman and the chief executive officer of the Company, acquired 327,000 shares 
at an average price of HK$6.14 per Share on 14 May in the open market for roughly HK$2.0067 million.WATCH
Tencent (700 HK)  earnings due investors will be looking for comments on the outlook
in the light of recent regulatory changes
Alibaba affiliate Ant Group became China’s largest seller of non-money-market mutual funds in Q1
industry data showed, disrupting a market dominated by banks despite a regulatory crackdown.
Regulators have urged Ant to reduce the size of Yu’ebao, China’s biggest money market fund managed by Ant-controlled mutual fund house Tianhong. It highlights the rapidly growing clout of independent fund advisers that sell funds via mobile apps and the internet, by-passing bank outlets. Ant’s top rankings could also reflect lower risk appetite as investors shift away from equities funds to fixed-income products, which are popular on Alipay.
SUN ENT GP (08082.HK) announced that the loss for the first quarter ended 31 March 2021 expanded to HK$7.96 million from HK$7.37 million in the same period of 2020. LPS equaled HK0.6 cents. No dividend was declared.
CHINA INFO TECH (08178.HK) announced the disposal of an aggregate of 9 million TOMO HOLDINGS (06928.HK) Shares on 14 May to an independent third party by way of an off-market block trade.  The Group is expected to recognise a gain of HK$1.98 million.
Upon Disposal, the Group will cease to hold any TOMO HOLDINGS Shares.
MIDLAND IC&I (00459.HK)  announced to acquire from independent third party Lilly Company the Property and lease of Shop 3 on Ground Floor, Bijou Apartments, Prince Edward Road West, Kowloon with a gross floor area of approximately 356 sq. ft. at a cash consideration of HK$27.8 million.
AIR CHINA (00753.HK) announced the key operating data of April 2021. Number of Passengers carried reached 8.435 million, up 216.5% YoY and 10.9% MoM.  Total Cargo and Mail carried hit 111,300 tonnes, up 69.8% YoY and 0.5% MoM.
CHINA EAST AIR (00670.HK) announced the operating data for April 2021. Number of passengers carried reached 9.3139 million, up 248.35% year-on-year.  In April, freight traffic  volume increased by 111.28% year-on-year.
PING AN (02318.HK) announced that the accumulated gross premium incomes of four subsidiaries of the Company for the first four months of 2021 hit RMB302.59 billion, down 5.8% YoY.
ZA ONLINE (06060.HK) announced that pursuant to the PRC Accounting Standards, the aggregate gross written premiums for the first four months of 2021 were approximately RMB5.924 billion, up 38.9% from the same period in 2020.
Hong Kong's economy has seen green shoot but the resumption is not balanced, opined the Government Economic Advisor Andrew Au.  He anticipated that the local demand of the second quarter will further improve as the business and consumption sentiment in April and May have turned vibrant, while the full revival still takes time.
AAC TECH (02018.HK) CFO Guo Dan said the optical GPM registered evident increment, but the overall GPM rise still needs time. The company aspired to diversified strategy in future.
NEXT DIGITAL (00282.HK) announced that Chang Yue Shing has tendered his resignation as an executive director of the Company in order to pursue his personal interest. The management of the Group has determined to cease publication in print form of the Group’s newspaper in Taiwan, namely Taiwan Apple Daily, with effect from 18 May 2021. This Strategic Plan will enable the Group’s management in Taiwan to increase focus on the strong market for digital media in Taiwan. The Group will be making certain redundancies in respect of its operations in Taiwan.
The Hong Kong Monetary Authority announced that at the end of April 2021. Foreign assets, representing the external assets of the Exchange Fund, decreased during the month by HK$8 billion to HK$4.0085 trillion.
The Monetary Base, comprising Certificates of Indebtedness, Government issued currency notes and coins in circulation, the balance of the banking system and Exchange Fund Bills and Notes issued, amounted to HK$2.1117 trillion. Claims on the private sector in Hong Kong amounted to HK$246.7 billion.
Centa-City Leading Index (CCL) last tracked at 183.68, up 0.23% weekly to a new high since September 2019.
CCL Mass grew 0.57% weekly to 186.95;
CCL (mid-and-small units) added 0.48% weekly to 184.40;
CCL (large units) slipped 1.14% weekly to 179.85.DOW +1.06%, NDX +2.32%, S&P +1.49%, Russel 2K +2.47%
Markets opened higher and worked higher to close around the day highs largely ignoring the weak data, especially the weak Michigan Sentiment readings. Market still down on the week (Dow -1%, S&P -1% and NDX -2.3%). That could reflect a bigger move by retail/day traders than institutions.
Tech saw a big rebound along with re-opening plays after the CBCP eased guidelines on mask wearing and social distancing especially retail names but an exception was Disney which closed -2.6%
Banks JPMorgan Chase +1.6%, Citigroup +1.7% Wells Fargo +1.2%, Amex +2%
Work from home names: Facebook +3.5%, Apple +2%, Amazon +1.9%, Netflix +1.4%, Disney -2.6%, Zoom Video +6.1%, Alphabet +2.2% and Microsoft +2.1%,
Tech NXP Semi +3.1%, Nvidia +4.2%, Micron +3.3%, AMD +2%, Skyworks +2%
Re-opening stocks  Boeing +2.6%, Caterpillar +0.9%, Simon Property +3.6%, Kohl’s +8%, Nordstrom +11%, Gap +6.6%, United Airlines +5.4%, Carnival +8.2%, Wynn Resorts +3.5%, Chevron +2.6%, Exxon Mobil +2.5%,  
Lock down names Campbell Soup -0.6% General Mills -0.9%, JM Smucker -0.6%
DATA
Retail Sales Apr 0% MoM vs 10.7% Mar revised (F/cast was +0.3%)
Retail Sales Apr +51.2% YoY vs +29% Mar revised (F/cast was 30.5%)
Retail Sales Ex Auto Apr -0.8% vs +9% Mar (F/cast was +0.9%)
Export Prices Apr +14.4% YoY vs +9.5% Mar revised (F/cast was +13.9%)
Export Prices Apr +0.8% MoM vs +2.4% Mar revised (F/cast was +0.7%)
Import Prices Apr +10.6% YoY vs +7% Mar revised (F/cast was +7.3%)
Import Prices Apr +0.7% MoM vs +1.4% Mar (F/cast was +0.7%)
Industrial Production Apr +0.7% MoM vs +2.4% Mar revised (F/cast was +1.3%)
Industrial Production Apr +16.5% YoY vs +1% Mar (F/cast was +19%)
Manufacturing Production Apr +23% YoY vs +3.2% Mar revised (F/cast was +11.5%)
Manufacturing Production Apr +0.4% MoM vs +3.1% Mar revised (F/cast was +2.1%)
Capacity Utilisation Apr 74.9% vs 74.4% Mar (F/cast was 75.1%)
Business Inventories Apr +0.3% MoM vs +0.6% Mar revised (F/cast was +0.2%)
Michigan Data Preliminary
Sentiment May 82.3 vs 88.3 Apr (F/cast was 90)
Inflation Expectations May +4.6% vs +3.4% Apr (F/cast was +3.8%)
Consumer Expectations May 77.6 vs 82.7 Apr (F/cast was 83.5)
5 year Inflation Expectation May 3.1% vs +2.7% Apr (F/cast was +2.8%)
Current Conditions May 90.8 vs 97.2 Apr (F/cast was 98.5)
Baker Hughes Oil Rig Count 352 vs 344 prior
Baker Hughes Total Rig Count 453 vs 448 prior
USD was weaker vs Yen & Euro. VIX -18.7% @ 18.81
US T10 @ 1.635% eased after the weak retail sales data
Bitcoin currently US$45,683 on a Tweet that suggest Tesla sold all its Bitcoin. But Dogecoin rallied after a Musk tweet about working with the developers to improve efficiency.
OIL Brent +2.48%, WTI +2.43% but futures strong after market but the covid wave in India remains a concern.
Gold +1.1%, Silver +1.72%, Copper -0.58% Platinum +2.04%, Palladium +0.92%.
AHEAD NY Empire State Manufacturing Index, NAHB Housing Market Index, Foreign Bond Investments, Overall Net Capital Flows, Net Long-term Tic Flows.

DAX +1.43%, CAC +1.54%, FTSE +1.15%
Markets opened higher DAX & CAC saw some initial selling then worked higher. FTSE opened flat and traded sideways. Sentiment +VE after the strong rebound in Asia and markets worked higher through the day to close at the day highs. UK Govt said it was worried about the new Indian covid variant.
Unicredit +2% but slight -VE as Blackrock votes against CEO’s renumberation package.
Atlantia -0.2% but off the initial lows after reporting Q1 net loss on Thursday and confirmed that it would make a decision on the sale of a majority stake in its motorway unit by June 11.
Man Group +5% after Credit Suisse raised its price target.
Commerzbank +3.7% led a broad rally for banks, after price target raises from Independent Research and Morgan Stanley.
Earnings from CureVac +7.5% and British software firm Sage +3.8%
No macro data released
On Sunday AXA announced a ransomware attack ‘recently’ which impacted its operations in Thailand, Malaysia, Hong Kong, and the Philippines” -VE.
AHEAD
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK No data due

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