This and previous notes can be found at Substack ( Asian Market Sense )
Check out ERI-C.com for interesting research and trading analysis
Britain said on Tuesday it would permanently deploy two warships in Asian waters after its Queen Elizabeth aircraft carrier and escort ships sail to Japan in September through seas where China is vying for influence with the United States and Japan.
Australia Futures show market to open +55pts oil +VE as it rebounded, watch Beach Energy Ltd (ASX: BPT) and South32 Ltd (ASX: S32) on quarterly updates. Gold miners +VE. Financials also likely to rebound.
Data due later Leading Index and Retail Sales
Japan Nikkei futures +VE expect a strong rebound; remember this is the last day of trading this week so expect a number of risk positions to be closed out. Earnings in focus.
S Korea Expect markets to open higher following the US rebound and good 20day Import/Export data.
Taiwan Market to open higher with a strong rebound in Tech (good results from IBM) and I would expect Shipping and Steel. But market could see a Typhoon announced
China Market to open flat with concerns over covid’s surge on the recovery, power shortages, Iron Ore shortages and international relations. Wild card remains Team China
HK ADR’s +79pts at 27,337 (Futures +57pts) but expect initial volatility with recent shorts covering but also some margin call selling. Chinese Financials weak.
Europe Light on data but covid remains a concern.
DOW +1.62%, NDX +1.57%, S&P +1.52%, Russel 2K +2.99%
Markets opened higher rebounding strongly from Monday’s sell off and after some initial weakness trended higher through the morning, then traded sideways in the PM before a small dip into the close. Re-opening names like Airlines partcularly strong. Banks recovered. Energy names rebounded. Bitcoin weakness could put speculators under pressure.
Netflix earnings missed along with subscriber growth but revenue beat and it confirmed it was moving into gaming.
United Airlines narrows losses and expects Q3 pretax profit as travel rebounds.
Chipotle earnings beat with sales strong as dine-in clients return.
Regular Market close
Banks JPMorgan Chase +1.9%, Citigroup +2.6% Wells Fargo +4.2%, Amex +3.7%
Work from home names: Facebook +1.4%, Apple +2.6%, Amazon +0.7%, Netflix -0.2%, Disney +2.2%, Zoom Video +0.5%, Alphabet +1.3% and Microsoft +0.8%,
Tech NXP Semi +2.5%, Nvidia -0.9%, Micron +1.1%, AMD +0.6%, Skyworks +1.2%
Re-opening stocks Boeing +4.9%, Caterpillar +2.4%, Simon Property %, Kohl’s +3.9%, Nordstrom +4.7%, Gap +3%, United Airlines +6.6%, Carnival +7.5%, Wynn Resorts +1.8%, Chevron +0.6%, Exxon Mobil +1.1%,
Lock down names Campbell Soup -1.4% General Mills -1.3%, JM Smucker -1.1%
Housing Starts Jun +6.3% MoM vs +2.1% May revised (F/cast was +0.8%)
Building Permits Jun -5.1% MoM vs -2.9% May (F/cast was +0.5%)
Redbook +15% YoY vs 14% prior
API Crude Oil Stock Change +0.806m vs -4.079m (Consensus was -4.167m)
USD was stronger vs Yen & Euro. Bitcoin -2.5% @ 29,918.74, VIX -12.3% @ 19.73, US T10 @ 1.22% a slight rebound
OIL Brent +1.52%, WTI +1.35%
Gold +0.08%, Silver -0.63%, Copper +1.51% Platinum -0.5%, Palladium +1.67%.
AHEAD MBA Mortgage Applications and 30yr Mortgage Rate, EIA Oil Report, 20yr Bond Auction
DAX +0.55%, CAC +0.81%, FTSE +0.54%
Markets opened higher but trended lower with the FTSE and DAX dropped to zero before rebounding the CAC followed a similar pattern but remain in the green. Strong earnings from UBS +5.3% pre market +VE for sentiment but warning of a quieter end of year. Bitcoin dropped below $30k also -VE for sentiment. Markets started with Tech weak and F&B seeing interest but at the close Construction/Basic Resources was leading and Travel/Leisure was weak. Earnings in Focus
Alfa Laval +8% after beating profit estimates.
Kone +3.1% beat quarterly operating profit forecasts, helped by strong growth in North America and China, but warned of higher costs over the full year due mainly to the global semiconductor shortage.
Electrolux -6.4% after issuing a supply chain warning
Current Account May €4.3B vs €30.6B Apr revised (F/cast was €19.5bB
PPI Jun +1.3% MoM vs +1.5% May (F/cast was +1%)
PPI Jun +8.5% YoY vs +7.2% May (F/cast was +8.3%)
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK Public Sector Net Borrowing
Nikkei futures +VE expect a strong rebound; remember this is the last day of trading this week so expect a number of risk positions to be closed out. Earnings in focus.
Yen currently 109.85
Data due Pre Market
Balance of Trade Jun (May was ¥-187.1B F/cast is ¥400B)
Export Jun (May was +49.6% Consensus was +46.2%)
Imports Jun (May was +27.9% Consensus was +29%)
Tokyo reported 1,387 new covid cases with some related to the Olympics. National total 3,758.More companies pull out from the Olympic ceremony.
Sales at convenience stores in June rose 0.8% YoY to ¥856.5 billion on a same-store basis, up for the fourth consecutive month, the Japan Franchise Association said +VE
Japan to extend employment subsidy progam until Dec +VE
B-R31 Ice Cream Co. (2268 JP) 3 p.m.
IwaiCosmo Holdings Inc. (8707 JP)
Jafco Group Co. (8595 JP) 12 p.m.
Nafco Co. (2790 JP) 2 p.m.
Nidec Corp. (6594 JP) 3:15 p.m.
Nomura Real Estate Holdings In (3231 JP) 3 p.m.
Obic Business Consultants Co. L (4733 JP) 2 p.m.
Obic Co. (4684 JP) 3 p.m.
Tokyo Steel Manufacturing Co. L (5423 JP) 3 p.m.
Comment from Bberg
Disco (6146): 1Q operating profit 15.4b yen vs analyst estimate 17.4b yen; Nikkei preview ~14b yen; forecast implies 2Q OP of 18.7b yen vs estimate 17.5b yen
Eagle Industry (6486): Raises full-year operating profit forecast 27% to 8.1b yen
Japan Tobacco (2914): Credit rating lowered to A2 from A1 at Moody’s
NOK (7240): Boosts full-year operating profit forecast 47% to 33b yen
Takeda (4502): To Import 50m More Moderna Shots From Start of 2022; reports results of a Phase 3 trial on recombinant von Willebrand factor prophylaxis.
Expect markets to open higher following the US rebound and good 20day Import/Export data , just out. Watch for bargin hunting; Samsung was very weak yesterday and is likely to see bargain hunting today. Earnings in focus.
PPI Jun +0.4% MoM vs +0.5% May revised from+0.4% (F/cast was +0.1%)
PPI Jun +6.4% YoY vs +6.6% May revised from +6.4% (F/cast was +6.7%)
KDCA reported 1,252 new covid cases on Tuesday (+26 DoD)
BoK picked Ground X, a blockchain subsidiary of the nation’s tech giant Kakao Corp., as the preferred bidder for the partner position on its pilot digital currency development program.
GC Pharma has partnered with US-based biotech firm Speragen to develop a cure for a rare disease, according to the company, Tuesday.
The two companies will develop an enzyme replacement therapy for a rare disease called succinic semialdehyde dehydrogenase deficiency, which currently has no treatment. +VE
Doosan Heavy Industries & Construction Co. said Tuesday that it has decided to invest $60 million to expand its stake in NuScale Power LLC., a US small modular reactor (SMR) maker. +VE
Lotte Foods is expanding the exports of its canned ham products with a goal of doubling the profit from ham exports this year, the company said Tuesday. +VE
Renault Samsung Motors’ Mobilize offers easy traveling for those planning to embark on a summer break, the automaker said Tuesday.
Unlike other car rental programs, Mobilize, which is Renault Samsung’s monthly car subscription service, does not charge by mileage, and comes without an early termination fee, the automaker said. +VE
LG Chem said Tuesday it will create an environmental, social and governance business model that encompasses the entire life cycle of plastic -- from its production and use to retrieval and recycling. +VE
SK Materials said Tuesday it will form a joint venture with Group 14 Technologies to tap into the lithium-ion battery material business. SK Materials said it plans to invest 60 billion won ($52 million) to hold a 75 percent stake in the joint venture with Group 14 Technologies, a US-based provider of lithium-silicon battery material designed to enhance the energy density of batteries. +VE
Expect market to open higher with a strong rebound in Tech (good results from IBM) and I would expect Shipping and Steel. But market could see a Typhoon announced
No data due but after market Tuesday
Export Orders Jun +31.1% YoY vs +34.5% May (F/cast was +30%)
Export orders grew for a 16th straight month; despite the COVID-19 pandemic, robust global demand for tech products and high commodity prices made last month’s orders the strongest June level on record +VE
CECC reported 18 local covid cases +VE for sentiment.
The Chung-Hua Institution for Economic Research (CIER) yesterday revised up its forecast for Taiwan’s GDP growth this year from 4.8 percent to 5.16 percent, as exports gain speed on the back of an improving global economy, offsetting sluggish consumer activity caused by a nationwide level 3 COVID-19 alert to combat the outbreak. +VE
Yulon Nissan Motor Co which distributes Nissan and Infiniti vehicles in Taiwan, yesterday said it plans to introduce more new models, including of its Leaf electric car, later this year to boost sales. +VE
The prices of mainstream TV panels dipped by US$1 to US$2 this month in a clearer signal that the one-year-long upcycle is nearing an end, according to the latest pricing information released by TrendForce Corp yesterday. -VE
Expect market to open flat with concerns over covid’s surge on the recovery, power shortages, Iron Ore shortages and international relations. Wild card remains Team China
No data due
Mainland China recorded 65 new confirmed infections for July 19, compared with 31 a day earlier, the National Health Commission said in a statement -VE for sentiment.
Talk of power shortages in China; could put industrial production at risk and raises questions about coal demand. Populous centers including Beijing and Xian; have alerted electricity users there would be scheduled disruptions as grid operators struggle to maintain overloaded networks. The NDRC sent a notice to the six biggest state-owned power firms requiring them to restock enough coal for more than seven days by today to prevent unplanned blackouts. +VE for coal prices but -VE for the economic outlook.
China warned Lithuania on Tuesday not to "send the wrong signals to Taiwan independence forces" after the Chinese-claimed island said it would open a de facto embassy in the Baltic country, a move the United States strongly backed.
Afghanistan’s presidential palace in Kabul came under rocket attack yesterday as President Ashraf Ghani attended prayers for the Muslim festival of Eid-al-Adha. As Taliban forces move ahead of US exit.
China has challenged the US-led accusations that Beijing was behind a wave of global cyber attacks, including an offensive against a Microsoft email application that affected tens of thousands of organisations. It also called on the US to stop its cyber attacks on China.
ADR’s +79pts at 27,337 (Futures +57pts) but expect initial volatility with recent shorts covering but also some margin call selling. Chinese Financials weak.
No data due but after market Tuesday
Unemployment Rate Jun +5.5% vs 6% May (F/cast was 6%)
Short Selling Tuesday 17.% vs 17.4% Monday
Top Shorts Country Garden (2007) 57%, Hengan (1044) 53%, Ali Health (241) 52%, AIA (1299) 45%, Bud Apac (1876) 42%, Ping An (2318) 40%, CLP(2) 40%, Haidilao (6862) 38%, ICBC (1398) 32%, China Life (2628) 29%, Wuxi Bio (2269) 28%, Sunny Optical (2382) 27%, Power Assets (6) 26%, Sino Bippharm (1177) 26%, CK Asset (1113) 25%, Bank of China (3988) 25%.
SUNAC (01918.HK) announced that the company repurchased 6.8 million shares of the company on the Stock Exchange today (20th) at $22.1-22.6 per share, involving almost $153 million.
SRE GROUP (01207.HK) announced that the Company is in discussions with potential investor(s) in relation to possible subscription of new shares to be allotted and issued by the Company. No legally binding agreement or memorandum of understanding has been entered into between the Company and the potential investor(s) in respect of the Possible Subscription. The discussions are still in progress and the Possible Subscription may or may not proceed.
NWS HOLDINGS (00659.HK) is expected to record profit attributable to Shareholders of not less than HK$1 billion for the financial year ended 30 June 2021 as compared to HK$253 million for FY2020, representing a year-on-year increase by not less than 295%.
MIJI INTL HLDGS (01715.HK) issued a profit warning, announcing that the group expects to record a net loss after tax of approximately RMB14.8 million for the six months ended 30 June 2021, as compared with a net loss after tax of approximately RMB12.3 million for the corresponding period in 2020.Chinese robot company "Keyi Tech" recently obtained the Series B round financing worth tens of millions of USD with the lead investors being XIAOMI-W (01810.HK) and Shunwei Capital, attracting also investment from the existing shareholders like Source Code Capital and BlueRun Ventures. Keyi Tech's founder and CEO Yang Jianbo revealed that the financing proceeds will be utilized in building developer ecosystem and product development.BYD COMPANY (01211.HK) announced that the 100,000th unit of the BYD Han vehicle has been rolled off, setting the fastest mid-size and large sedan production record among Chinese brands.
JOY CITY PPT (00207.HK) announced that for the six months ended 30 June 2021, the aggregate contracted sales of the company amounted to approximately RMB12.216 billion, up 78.57% YoY; with an aggregate contracted sales area of approximately 311,800 square meters, up 54.06%.
CHINA TELECOM (00728.HK) announced that the number of mobile subscribers reached 362 million in June, with a net increase of 1.82 million subscribers for the month. The number of 5G package subscribers hit 131 million, representing a net increase of 6.66 million subscribers for the month.
CHINA UNICOM (00762.HK) announced the operational statistics for the month of June 2021, with the aggregate number of mobile billing subscribers amounting to over 310 million, reflecting a net addition of 729,000 units MoM. The aggregate number of 5G package subscribers, on the other hand, amounted to 113 million in June, reflecting a net addition of 7.236 million units, lower than that of 7.529 million units in May. For 1H21, the cumulative net addition of 5G package subscribers amounted to 42.5 million units.
EVERGRANDE (03333.HK) has arranged to wire funds into the bond repayment account in advance today (20th), in order to repay the interests totaling around USD352 million, which were generated from the four batches of USD bonds issued by the company itself and its subsidiaries, reported Chinese media.
A spokesman for the HKSAR Government said that given the recent surge of confirmed cases in Singapore, the condition for launching the Hong Kong-Singapore Air Travel Bubble could not be met for the time being. Both sides agreed that a review of the way forward could be conducted in late August, taking into account the effectiveness of the enhanced infection control measures implemented by Singapore and the global situation at that time.
Hong Kong, Macau and Mainland China have been in close contacts for the two cities' convenient customs clearance, Radio Macau citing Ao Ieong U, Macau's Secretary for Social Affairs and Culture.
It is Macau's current plan to invite National Health Commission experts to inspect the city's fight against the pandemic and provide opinions on the Hong Kong-Macau border reopening, she added. However, there is no concrete timetable for the visit so far.