July 12 Asian Macro Initial Thoughts Expect mixed open N Asia weak; China +VE on data & RRR cut


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Asia Good loan data from China and a RRR cut from the PBoC likely to prompt a strong open for China and Hong Kong, although some wonder whether the recovery in China is slowing.
US starts reporting season again starting with the Banks.
G20 ministers warn that lack of vacinations covid could undermine the improving global recovery. Yellen warns that new tax mechanisms may not be ready until 2022.


Australia Futures indicate market to open +76pts, with Oil & Gold moving higher, Tech +VE following the rebound in the US on Friday. But the covid outbreak continues to weigh on sentiment.
Japan Nikkei futures -67pts (Chicago -10pts) caution ahead of pre market data but sentiment weak as covid remains an issue.
S Korea Expect markets to open higher although upside limited as covid concerns remain; Seoul &  Gyeonggi will be subject to the strictest social distancing restrictions for the next two weeks.
Taiwan Market to open higher following the rebound in the US on Friday
China Market to open higher on good loans data and the RRR cut but concerns over tightening rules on overseas IPO’s, debt defaults and covid remain.
HK ADR’s +280pts with a broad recovery, we may see some initial margin call selling but unlikely to have much impact.
Europe Lagarde say new measures will be announced for supporting the recovery in the  next 10 days.  Slight +VE
US Futures 
Opened Dow +25pts S&P +0.1% and NDX +0.2% as US earnings season kicks off. Also this week Powells testimony and PPI data

JAPAN
Nikkei futures -67pts (Chicago -10pts) caution ahead of pre market data but sentiment weak as covid remains an issue.  Contruction names +VE as heavy rains have caused significant damage across the country. Yen currently 110.14
Data due pre market
Machinery Orders
PPI
Machine Tool Orders
Tokyo reported 614 new covid cases -336 DoD  after Saturday’s 2 month high;  Nationwide the total was 2,029 Slight +VE
Japan stands  ready to pump more money into the economy to ease the pain of a  prolonged pandemic, the top government spokesman said on Sunday, nodding  to growing political calls for additional stimulus to prop up growth.  Less  than two weeks before hosting the Olympics, Tokyo goes into its fourth  COVID-19 state of emergency from Monday through Aug. 22, fuelling fears  of extended pain for restaurants hit by shorter hours and a ban on  alcohol consumption.
Fukushima follows Tokyo’s lead and will ban spectators from Olympic events reversing an earlier decision.  
Softbank in talks to take a 10% stake in Yanolja a S Korean hotel booking platform.

SOUTH KOREA
Expect markets to open higher although upside limited as covid concerns remain; Seoul &  Gyeonggi will be subject to the strictest social distancing restrictions for the next two weeks.
No data due Monday but Unemployment data out Wednesday and a Bank of Korea meeting Thursday.
KDCA reported 1,324 new covid cases on Sunday, above 1,300 for a third day.
Kakao Mobility, the firm behind, Kakao T, announced Sunday that the company would allow drivers with good ratings from passengers to enjoy a better chance of getting booked.   New contract terms will apply to taxi drivers who newly subscribe to Pro Membership, a paid membership program designed to help them pick up more passengers.
Korean Air’s plan to launch an integrated airline after acquiring its  long-term rival Asiana Airlines will cost an additional 600 billion won  ($524 million), new data revealed on Sunday.  Also foreign pilots have accused Korean Air of mistreating them ever since  the pandemic began early last year and forcing them to leave their  belongings behind in South Korea.  Slight -VE
Ship builders +VE as new orders won by South Korean shipbuilders hit a 13-year high in the first half of the year amid signs of a modest recovery in global trade from the COVID-19 pandemic, data showed Sunday.
SsangYong Motor, decided to sell the site of its plant in Pyeongtaek as part of self-rescue efforts, the local government said Saturday. Slight +VE
Hyundai Motor Co. said Friday it will suspend Asan one of its seven domestic plants for four weeks to prepare for the production of its Ioniq 6 electric vehicle. +VE
Unionized workers at Hyundai Heavy Industries have decided to extend their ongoing walkout for another week to up the ante in their wage negotiations with the management as the company urged them to return to work, the labor union said Friday. +VE
Samsung Electronics Co. is considering launching the upcoming budget model of the Galaxy S21 smartphone in the United States and Europe only, industry sources said Friday, due to global semiconductor shortages. +VE
Major business lobbies in South Korea on Friday expressed concern over a new law that would allow CEOs to be punished, even by imprisonment, for serious workplace disasters.

TAIWAN
Expect market to open higher following the rebound in the US on Friday
No data due this week
CECC reported 31 new covid cases Sunday. Slight +VE
Realtek Semiconductor Corp plans to invest about NT$7.2  billion (US$256.4 million) in Taiwan,
in line with its development  strategy, the Ministry of Economic Affairs said on Friday.  The company’s investment is also a demonstration of the robust  demand for semiconductors in the post-COVID-19 era, the ministry said in  a statement.  +VE
CPC Corp, Taiwan (CPC) and Formosa Petrochemical Corp on Sunday announced that they would increase gasoline prices by NT$0.3 per liter and diesel prices by NT$0.2 per liter this week, the ninth weekly increase in a row.
Nanya Technology Corp Friday posted its highest quarterly net profit in about two-and-a-half years 
as strong demand and an improved product lineup boosted prices by 30 percent. Net profit NT$6.16 billion (US$219.33 million) in the three-month period to last month from NT$2.7 billion in the first quarter, the highest since the fourth quarter of 2018. +VE
Acer Inc said Friday the supply of laptops has outstripped demand since March last year, with no end in sight, adding that it is creating a more diverse businesses portfolio to boost revenue. Acer reported revenue of NT$30.02 billion (US$1.07 billion) last month, the highest in seven years, up 16.9 percent year-on-year and 21 percent month-on-month +VE.
Formosa Plastics Group said its four major subsidiaries of Friday posted combined profit of NT$69.26 billion (US$2.47 billion) for last quarter, up 9.2 percent quarter-on-quarter in stark contrast to last year, when the group was NT$6.02 billion in the red. +VE  

CHINA
Expect market to open higher on good loans data and the RRR cut but concerns over tightening rules on overseas IPO’s, debt defaults and covid remain.
No data due but after market Friday
New Loans Jun CNY 2120B vs 1500B May (F/cast was 1800B)
Outstanding Loan Growth Jun +12.3% vs +12.2% May (F/cast was +12.1%)
Total Social Financing Jun CNY 3670B vs 1920B May (F/cast was 2900B)
Money Supply Jun +8.6% vs +8.3% May (F/cast was +8.5%)
PBOC announced a RRR cut of 0.5ppt; and said the move did not translate into a policy U-turn, according to Xinhua's article. China's stable monetary policy orientation remained unchanged.
Tuesday we get Balance of Trade data
China on Sunday said it will take “necessary measures” to respond to the U.S. blacklisting of Chinese companies over their alleged role in abuses of Uyghur people and other Muslim ethnic minorities.
The Commerce Ministry said the U.S. move constituted an “unreasonable suppression of Chinese enterprises and a serious breach of international economic and trade rules.” The U.S. Commerce Department said 14 companies were added to its Entity List over their dealings in Xinjiang, and another five for aiding China's armed forces.
China’s auto sales rose 27% in the first half of 2021 from a year  earlier but still were below pre-pandemic levels, and production and  sales fell in June due to global shortages of processor chips, an  industry group reported Friday.
The Cyberspace Administration of China published a notice to solicit public opinions on amending the Measures for Cybersecurity Review. It is stipulated that operators with personal information of over a million users must report to the CAC's Cybersecurity Review Office before overseas listings.
Thailand’s health ministry said on Sunday more than 600 medical workers who received two doses of China’s Sinovac vaccine have been infected with COVID-19, as authorities weigh giving booster doses to raise immunity. -VE
Heavy rains and flooding have forced thousands of people to evacuate in China’s southwestern province of Sichuan, with authorities on Sunday urging citizens across the country to brace for more downpours.  Slight +VE for infrastructure plays
China's National Health Commission reported 26 COVID-19 cases, including seven local infections (all from Yunnan).
The leaders of North Korea and China traded messages vowing to strengthen cooperation on the anniversary of their treaty of friendship, cooperation and mutual assistance between the two countries, North Korea's KCNA news agency reported on Sunday. In a message to China's Xi Jinping, North Korean leader Kim Jong Un said their relationship is vital in the face of hostile foreign forces, while Xi promised to bring cooperation "to a new stage", KCNA said.
African swine fever in China's top hog-producing province is increasing, say farmers and analysts, raising concerns it could spread further across the south and slow China's pork production recovery. The deadly African swine fever virus wiped out around half of China's huge pig herd during 2018 and 2019 but the country rapidly rebuilt much of the lost stock last year. But there have been fresh outbreaks in northern China this year, and there are more strains of the virus circulating. -VE


HONG KONG  ADR’s +281pts at 27,625 with all sectors +VE and likely to see recent shorts squeezed.  
No data due

Short Selling Friday 13.8% vs 14.4% Thursday
Top Shorts 
HSBC (5) 51%, Sunny Optical (2382) 46%, Henderson Land (12) 42%, Country Garden (2007) 40%, Bank of China (3988) 38%, China Life (2628) 37%, Mengniu Dairy (2319) 37%, Citic (267) 37%, CLP (2) 35%, Bud Apac (1876) 32%,ICBC (1398) 32%, ICBC (1398) 32%, AliHealth (241) 31%, BoC HK (2388) 30%, Hang Seng Bank (11) 29%, Hengan (1044) 29%, Anta (2020) 29%, BankComm (3328) 28%,   AIA (1299) 28%, China Overseas (688) 27%, CK Asset (1113) 27%, Wuxi Bio (2269) 26%,


WATCH
Hong Kong property developers sold nearly 800 new homes in the first 10 days of July, though second-hand transactions declined as sellers raised their asking prices.
China Overseas Land and Investment (0688) launched second-round sales for its One Victoria project at Kai Tak on Saturday and sold 118 out of the 286 flats offered in one day, continuing the success of its first-round sale.
CK Asset (1113) said it has sold all 1,422 flats at Sea to Sky in Lohas Park, cashing out around HK$16.3 billion, following the launch of the project a year ago.
Wheelock Properties and Sino Land (0083) sold 11 flats at Grand Victoria phase one in West Kowloon yesterday for HK$182 million.
The developers have launched 143 flats at the project, including 34 units which will be sold by tender.
Henderson Land Development (0012) sold 20 flats at Skypoint Royale in Tuen Mun for more than HK$105 million.
In the secondary market, Centaline Property recorded 18 transactions at 10 blue-chip housing estates over the weekend, down 18.2 percent week-on-week.

GREENLAND HK (00337.HK) announced that for the first six months of 2021,
the contracted sales of the Group amounted to approximately RMB18.811 billion, up 41.7% YoY +VE.

RSUN PPT (01996.HK) announced that the aggregated contracted sales 
of the Group was RMB49.15 billion for the first half of 2021, up 55.7% YoY. +VE

LONGFOR GROUP (00960.HK) announced that the Group achieved aggregated contracted sales of RMB142.63 billion for the first half of 2021, up 28.4% YoY. +VE

CHINFMINING (01258.HK) Positive Profit Alert for the six months ended 30 June 2021 is expected to increase substantially to approximately USD204 million, representing an increase of 769% as compared to the corresponding period in 2020 +VE.


ZTE (00763.HK) Positive Profit Alert 
is expected to record a 104.6%-131.5% year-on-year growth of net profit attributable to shareholders for the first half of 2021. +VE

GAC GROUP (02238.HK) announced that the accumulated car production

volume and sales volume were 1.0014 million units and 1.0265 million units for the first half of 2021, representing a year-on-year increase of 25.6% and 24.5%. +VE

YIDA CHINA (03639.HK) announced that for the first half of 2021,
the Group’s contracted sales amounted to RMB2.605 billion, up 1.9% YoY.

C.P. POKPHAND (00043.HK) Profit Warning; 
is expected to record a profit attributable to Shareholders of US$160 million for the six months ended 30 June 2021, down about 50.3% YoY. -VE

China's State Administration for Market Regulation announced to launch an antitrust scrutiny into the merger between TENCENT (00700.HK)'s Huya with DouYu according to the law.
Based on Article 28 of the Anti-Monopoly Law and Article 35 of the Interim Provisions on the Examination of Concentration of Business Operators, SAMR forbade the merger as it will constitute the concentration of business operators. -VE

SUNNY OPTICAL (02382.HK) announced that the shipment
volume 
of handset lens sets decreased by 27.1% YoY and 13.7% MoM to 85.816 million units in June, which was mainly due to the impact of overseas pandemic and the slowing down of domestic smartphone market demand. -VE

YUEXIU PPT-NEW (00123.HK) announced that the aggregate contracted sales of the company for the period from January to June 2021
amounted to approximately RMB47.383 billion, representing a year-on-year increase of approximately 26%.
The corresponding GFA of the accumulated contracted sales amounted to approximately 1.7916 million sq.m., representing a year-on-year increase of approximately 18%. The value of the accumulated contracted sales accounted for approximately 42% of the 2021 contracted sales target of RMB112.2 billion.

BYD COMPANY (01211.HK) announced that during 6-9 July, its Director Xia Zuo had dumped more than 9.5483 million A-shares through Centralized Bidding Trading at RMB241.66-261.5 each.

BAUHAUS INT'L (00483.HK) announced that for the three months ended 30 June 2021, 
the same store sales (SSS) of the group’s self-managed offline shops dropped 17% year-over-year, with those in Hong Kong recording a 19% decrease and those in Macau recording a 11% decrease. As of 30 June this year, the number of shops in operation of the group amounted to 51, with 41 in Hong Kong and 10 in Macau.

SHUI ON LAND (00272.HK) announced that the accumulated contracted property sales 
amounted to RMB12.115 billion for the first six months of 2021, an increase of 95% compared to the same period of 2020. The aggregated GFA sold for contracted property sales reached 235,800 sq. m. with the average selling price of RMB51,400 per sq. m.

Centa-City Leading Index (CCL) last stood at 186.68, -0.9% WoW.
CCL Mass last stood at 189.63, -0.72% WoW.
CCL (small-and-medium units) last reported at 187.11, -0.74% WoW.
CCL (large units) last posted at 184.42, -1.76% WoW

DOW +1.3%, NDX +0.98%, S&P +1.13%, Russel 2K +2.17%
Markets opened higher and worked higher through the day. S&P closed at a new high. With Banks rebounding strongly after Thursdays weakness along with re-opening stocks. Treasuries rebounded easing concerns about the recovery.
Banks 
JPMorgan Chase +3.2%, Citigroup +2.5%, Wells Fargo +3.8%, Amex +2.7%
Work from home names: Facebook +1.4%, Apple +1.3%, Amazon -0.3%, Netflix +1%,  Disney +2.5%, Zoom Video -0.2%, Alphabet +0.4% and Microsoft +0.2%,
Tech NXP Semi +2.2%, Nvidia +0.7%, Micron +2.1%, AMD +1.3%, Skyworks +1.7%
Re-opening stocks  Boeing +1.2%, Caterpillar +2.5%, Simon Property +3.7%, Kohl’s +5%, Nordstrom +6.6%, Gap +4.7%, United Airlines +2.9%, Carnival +2.3%, Wynn Resorts +2%, Chevron +1.4%, Exxon Mobil +1.8%,  
Lock down names Campbell Soup -0.5%, General Mills +0.1%, JM Smucker +1%
DATA
Wholesale Inventories May +1.3% vs +1.1% Apr (F/cast was +1.1%)
Baker Hughes Oil Rig Count 378 vs 376 prior
Baker Hughes Total Rig Count 479 vs 475 prior
USD was slightly weaker vs Yen & Euro. Bitcoin +0.7% @ 33,627.75, VIX -14.8% @ 16.18, US T10 @ 1.361%
OIL Brent +1.9%, WTI +2.3% as US inventories fall.
Gold +0.5%, Silver +0.8%, Copper +1.8% Platinum +2.3%, Palladium +0.3%.
AHEAD Consumer Inflation Expectations, WASDE report


DAX +1.73%, CAC +2.07%, FTSE +1.3%
Markets opened higher and trended higher, covid concerns remain but eased as UK eases quarantine rules. Strong loan data and the RRR cut in China +VE for enabling the recovery. G20 Finance meeting kicking off too.
Mining stock lead the gains, Auto and Travel +VE But the Retail Sector remains weak.
DATA
UK
Industrial Production May +20.6% YoY vs +27.2% Apr revised (F/cast was 26.2%)
Industrial Production May +0.8% MoM vs -1% Apr revised (F/cast was +1.2%)
Manufacturing Production May +27.7% YoY vs +39.1% Apr revised (F/cast was +30.6%)
Manufacturing Production May -0.1% MoM vs 0 Apr revised (F/cast was +1.1%)
Construction Output May +56.5% YoY vs +79.4% Apr (F/cast was +64%
GDP May +24.6% YoY vs +27.4% Apr revised (F/cast was +25.1%)
GDP May +0.8% MoM vs +2% Apr revised (F/cast was +1.5%)
GDP 3 Mth ave May +3.6% vs +1.5% Apr (F/cast was +3.7%)
Balance of Trade May £0.9B vs £-1.6B Apr (F/cast was £-1.4B)
Goods Trade Balance May £-8.481B vs £-10.95B Apr (F/cast was £-12B)
NIESR Monthly GDP Q2 +4.8% vs +3.6% Q1 revised (F/cast was +5.1%)
AHEAD
EUROZONE No data due
GERMANY No data due
FRANCE No data due  
UK  No data due