This and previous notes can be found at Substack ( Asian Market Sense )
Check out ERI-C.com for interesting research and trading analysis
Expect Petrochems to rise as after market API draw down was much higher than expected. Gold higher but Tech likely to be under pressure along with Financials
Australia Futures indicate market to open higher +17pts, but could go higher as oil +VE after API data. Gold higher but Tech likely to be under pressure along with Financials
No data due but RBA Gov Lowe is speaking.
Japan Nikkei futures opened lower currently -60pts (Chicago Futures were unchanged). Expect caution ahead of premarket data and sentiment weak on covid worries. Earnings remain in focus
S Korea Expect markets to open higher following the US with focus on Samsung investor conference call
Taiwan Market to open higher after good trade data; easing inflation and covid concerns.
China Market to open lower on concerns about tighten and debt defaults but the wild card is ‘Team China’.
HK ADR’s -109pts at 27,851, with broad weakness on investors over China tightening international investor access. Local sentiment slight +VE as some social distancing rules will be relaxed.
Opened flat Dow+17pts, S&P 500 and Nasdaq 100 both ticked north of their respective flatlines with gains of less than 0.1%
DOW +0.3%, NDX +0.01%, S&P +0.34%, Russel 2K -0.95%
Markets opened higher with the NDX hitting a new high. Markets were initially dipped but rebounded and traded sideways. S&P closed at a new high. The T10 yield fell to 1.306% and large tech rallied but Financials fell. Oil stocks rallied. The threat of a correction hangs over the market like the sword of damocles.
FOMC minutes revealled that it might be adjusting policy in the months ahead but that it was not rushing.
Banks JPMorgan Chase +0.12%, Citigroup +0.4% Wells Fargo +0.2%, Amex +0.7%
Work from home names: Facebook -0.7%, Apple +1.8%, Amazon +0.6%, Netflix -1.1%, Disney -0.5%, Zoom Video +1.8%, Alphabet +0.2% and Microsoft +0.8%,
Tech NXP Semi -1.7%, Nvidia -1.6%, Micron -3.5%, AMD -4.2%, Skyworks -1.1%
Re-opening stocks Boeing -1.9%, Caterpillar +0.6%, Simon Property -1.5%, Kohl’s -3.9%, Nordstrom -4%, Gap -2.8%, United Airlines -2.2%, Carnival -3.8%, Wynn Resorts -3.4%, Chevron -1%, Exxon Mobil -1.6%.
Lock down names Campbell Soup +1.2%, General Mills +0.9%, JM Smucker +0.4%
WD-40 +10.5% in extended trading (was +2% in normal)after improving its full-year revenue forecast. It now expects sales between $475 million and $490 million for the fiscal year thanks to strong performance in its third quarter +VE.
GAN Ltd +17.5% after preliminary results for Q2 of 2021 (was -7.9% in normal hours). It currently expects Q2 sales somewhere between $34 million and $35 million as “higher-than-expected revenue more than offset strategic investments in talent and technology.” +VE
MBA Mortgage Applications -1.8% vs -6.9% prior & 30yr Mortgage Rate +3.15% vs +3.2% prior
Redbook +19.4% YoY vs +18.2% prior
JOLTs Job Openings May 9.209m vs 9.286m Apr (F/cast was 9.1m)
IBD/TIPP Economic Optimism May 54.3 vs 56.4 Apr (F/cast was 56)
API Crude Oil Stock Change -7.983m vs -8.153m prior (Consensus was -3.925m)
USD was little changed vs Yen & Euro. Bitcoin +1% @ 34,319.50, VIX -1.5% @ 16.2,
US T10 @ 1.323% continues to ease and touched 1.296% at one point.
OIL Brent -1.5%, WTI -1.7%
Gold +0.54%, Silver +0.18%, Copper +1.31% Platinum +0.1%, Palladium +2%.
Initial Claims, 4 Week Average, Continuing Claims, EIA Natural Gas and Oil Stocks Change, Consumer Credit Change.
DAX +1.17%, CAC +0.31%, FTSE +0.71%
Markets opened higher with all sectors in the green and initially traded sideways. CAC then drfited lower to trade around flat but ticked up into the close . DAX worked higher. FTSE continued sideway. Sentiment +VE as the European Commission raised its F/cast for the Euro Area.
Resources leading with oil ending slightly lower and Travel & Leisure weak on covid delta concerns.
Shell announced to boost returns vs buybacks & dividends sooner than expected.
Nordic Entertainment Group +6.3% after winning the rights to show Premier League games in the Netherlands, Poland, Estonia, Latvia and Lithuania from 2022 to 2028.
Wise +10% from its opening price in a solid direct listing on the London Stock Exchange Wednesday, which valued the company at £8 billion ($11 billion). Wise’s debut was seen as a victory for London, which is aiming to become a top global tech hub after Brexit.
Alstom -5.4%, continuing its decline after warning earlier in the week of a hit to cash flow.
Industrial Production May -0.3% MoM vs -0.3% Apr revised (F/cast was +0.7%)
Balance of Trade May €-6.8B vs €-6.3B Apr (F/cast is €-5.4B)
Current Account May €-2.3B vs €-2B Apr (F/cast is €-2B)
Halifax House Price Index Jun -0.5% MoM vs +1.2% May revised (F/cast was 2%)
Halifax House Price Index Jun +8.8% YoY vs 9.6% May revised (F/cast was 12.3%)
Labour Productivity Q1 +0.7% QoQ vs -4.3% Q4 (F/cast was +0.8%)
BBA Mortgage Rate Jun 3.62% vs 3.62% May (F/cast was 3.62%)
Eurozone ECB Monetary Policy Meeting Accounts
Germany Balance of Trade, Exports, Imports, Current Account
France No data due
UK No data due
Nikkei futures opened lower currently -60pts (Chicago Futures were unchanged). Expect caution ahead of premarket data and sentiment weak on covid worries. Earnings remain in focus
Heavy rains promps government to issues flood warnings; slight -VE
Yen currently 110.63
Data due pre market Current Account, Bank Lending, Foreign Stock & Bond investment. Later Eco Watchers Outlook and Current.
Tokyo reported 920 new covid cases the most since May 13. Nationwide the total was 2,191. Osaka askes for state of emergency to be extended and the Govt may issue a fourth state of emergency -VE
Japan unveiled an annual budget framework on Wednesday for the next fiscal year aimed at boosting growth in areas targeted by PM Suga, with eyes on a post-pandemic era, finance ministry officials said; namely; digital, green, regional economies and childcare with an aim to shore up Japan's long-term growth potential. +VE
SoftBank Group Corp has hired Mark Kornblau, a NBCUniversal executive and former communications director in the Obama administration, to head its global communications team, the Japanese conglomerate said on Wednesday. Kornblau will fill in the position left vacant by Gary Ginsberg, who resigned in December last year, according to media reports. Slight +VE
Thales has shortlisted Japan’s Hitachi Rail, Switzerland’s Stadler Rail and Spain’s CAF in the sale of its rail signalling business, people close to the matter said. Thales has asked for binding bids to be submitted by the end of this week and if its price expectations are met it could select a buyer in late July or early August. Slight +VE
Shoei Kisen Kaisha Ltd., reached a settlement with canal authorities over a compensation amount following weeks of negotiations and a court standoff. The Ever Given left the canal's Great Bitter Lake, where it had been held for over three months amid a financial dispute. +VE
Expect markets to open higher following the US with focus on Samsung investor conferenece
No data due
Government considering re-imposing covid social distancing measures as Seoul accounts for most of the 1,212 new covid cases. -VE
S&P Global Ratings revised South Korea’s economic growth outlook for 2021 by 0.4 percentage point to 4 percent Wednesday. The revision comes six months after the agency projected the Asia’s fourth-largest economy to grow 3.6 percent in January, which was then deemed more optimistic than the government’s projection. +VE
LG Electronics said Wednesday its operating profit in the second quarter is estimated at 1.11 trillion won ($979.4 million), up 65.5 percent on-year. In a regulatory filing, the firm said its sales during the April-June period is likely to have reached 17.11 trillion won, an increase by 48.4 percent from a year earlier.
Hyundai Motor and Kia will join a global clean energy initiative and will transition to 100 percent renewable energy by 2050, the firms’ parent Hyundai Motor Group said Wednesday. +VE
Samsung Electronics Co. said Wednesday it plans to switch all of its company cars to environment friendly vehicles by 2030, joining South Korea's efforts to reduce emissions of greenhouse gases largely responsible for global warming. +VE both directly and for Auto’s
Expect market to open higher after good trade data; easing inflation and covid concerns.
No data due but after market Wednesday
Balance of Trade $5.15b vs 6.16b May (F/cast was 6.1b)
Exports Jun +35.1% YoY vs +38.6% May (Consensus was 30.3%)
Imports Jun 42.3% vs 40.9% May (Consensus was 33.4%)
Wholesale Prices Jun 10.74% YoY vs +11.63% May (F/cast was +12%)
Inflation Rate Jun +1.89% YoY vs +2.48% May (F/cast was +2.5%)
Inflation Rate Jun -0.2% MoM vs +0.27% May (F/cast was +0.3%)
The Export data was the second-highest level in history, as demand for electronics remained strong, while a low base meant that non-technology products posted faster growth, the Ministry of Finance said yesterday. The improving global economy accounted for the impressive showing that is likely to extend into the second half of the year with the arrival of the high sales season +VE
CECC reported 39 new domestic cases and one imported case of COVID-19 as the outbreak continues to follow a stable trend. +VE
Scientific data suggest that a gradual lifting of a nationwide level 3 COVID-19 alert can be considered, National Taiwan University College of Public Health professor Tony Chen said yesterday. +VE
A string of aftershocks jolted Hualien County in eastern Taiwan Wednesday night, following a magnitude 5.4 temblor in the same area at 7:24 p.m., according to the Central Weather Bureau Slight -VE.
Minister of Economic Affairs Wang Mei-hua (王美花) on Thursday last week videoconferenced with Australian Minister for Trade, Tourism and Investment Dan Tehan, the Ministry of Economic Affairs said in a news release on Tuesday. +VE
The global semiconductor shortage is expected to last until 2023 as the COVID-19 pandemic boosts demand for chips for automobiles and smart home devices, United Microelectronics Corp (UMC) copresident Chien Shan-chieh said yesterday. +VE for UMC, TSMC and Samsung.
Yageo Corp, yesterday gave an upbeat business outlook for next quarter, as robust demand for high-end products has helped to lift its book-to-bill ratio and keep inventory healthy. +VE
Fubon Securities Investment Services Co sees the combined profit of all local publicly traded firms rising 30 percent year-on-year to NT$3.3 trillion (US$117.9 billion) this year, laying a foundation for the TAIEX to advance, Fubon Securities Investment Services chairman Charles Hsiao said in a videoconference yesterday +VE
GlobalWafers yesterday reported revenue of NT$5.41 billion (US$193.3 million) for last month, up 12.52 percent month-on-month and 6.81 percent year-on-year. As a result, the company’s second-quarter revenue increased 2.7 percent quarter-on-quarter and 11 percent year-on-year to NT$15.21 billion. In the first half of the year, revenue totaled NT$30.01 billion, up 10.28 percent from a year earlier, a company regulatory filing showed. GlobalWafers said that it has a positive outlook for the second half of the year thanks to a gradual recovery of the global economy and strong demand for semiconductors. +VE
A fire triggered by an explosion broke out early yesterday at a chemical plant operated by Formosa Plastics Corp in Kaohsiung, but there were no casualties. The plant’s operations were unaffected, the company said. Slight -VE
Expect market to open lower on concerns about tighten and debt defaults but the wild card is ‘Team China’.
No data due after market Wednesday
Foreign Exchange Reserves Jun $3.214T vs 3.22T May (F/cast was 3.2T).
Friday we get Inflation and PPI data.
China will use timely cuts in the bank reserve requirement ratio (RRR) to support the real economy, especially small firms, the cabinet said on Wednesday. +VE
Vice Premier Han Zheng has called for ecological protection to be stepped up in the Yellow River Basin after a secretive filming project highlighted the need to address environmental problems, state media reported on Wednesday Slight -VE reveals the current short comings and suggests stiffer measures ahead.
China's regulator intends to toughen up the corporate overseas listing, meaning any Chinese companies which adopt Variable Interest Entity (VIE) structure will have to seek approval before listing in Hong Kong or the U.S., Bloomberg cited sources. VIE firms such as BABA-SW (09988.HK) will also need the greenlight if it wants to issue additional shares on offshore market, in case the new rule rolls out, report furthered. -VE
Didi Chuxing has been wiped out from the service column of WeChat Pay app, whereas no result will be obtained if searching key words "Didi Chuxing Mini Program" on WeChat, Chinese media reported. Meanwhile, Alipay users cannot search "Didi Chuxing Mini Program" anymore in the search engine. Didi Global (DIDI.US) closed-4.6% in US trading.
HONG KONG ADR’s -109pts at 27,851, with broad weakness on investors over China tightening international investor access. Local sentiment slight +VE as some social distancing rules will be relaxed.
No data due but after market Wednesday
Foreign Exchange Reserves Jun $491.6b vs 494.5b May
LANDSEA LIFE (01965.HK), debut, closed at $5.3 in gray market, up 66.7% against the listing price of $3.18, on volume of 6.48 million shares and turnover of $35.7 million, PhillipMart data showed. Excluding handling fee, the book gain was $2,120 per board lot size of 1,000 shares.
KEYMED BIO-B (02162.HK), debut; closed at $71.5 in gray market, up 34.2% against the listing price of $53.3, on volume of 8.81 million shares and turnover of $604 million, PhillipMart data showed. Excluding handling fee, the book gain was $9,100 per board lot size of 500 shares.
Short Selling Wednesday 15% vs 13.5% Tuesday
Top Shorts Hang Seng Bank (11) 48%, Bank of China (3988) 42%,CK Asset (1113) 40%, Petrochina (857) 39%, China Life (2628) 39%, Country Garden (2007) 36%, HSBC (5) 35%, Anta (2020) 32%, CLP (2) 31%, ICBC (1398) 30%, CCB (939) 30%, Henderson Land (12) 30%, Longfor (960) 29%, AIA (1299) 29%, BankComm (3328) 29%, (27) Citic (267) 27%, Galaxy Ent (27) 26%, NWD (17) 26%, Bud Apac (1876) 25%, SinoBionpharm (1177) 25%
CHINA OVERSEAS (00688.HK) announced that for June, the contracted property sales amounted to RMB51.792 billion, with a year-on-year decrease of 10% -VE.
CH OVS G OCEANS (00081.HK) announced that for June 2021, the contracted sales of the company amounted to RMB11.505 billion and the contracted GFA reached 860,800 square meters, with a year-on-year increase of 8.7% and a year-on-year decrease of 6.6% respectively. From January to June 2021, the total property contracted sales amounted to RMB43.287 billion and the total contracted GFA reached 3.1855 million square meters, with a year-on-year increase of 55.3% and 31.6% respectively. -VE
livi bank announced the number of its clients to have reached over 100,000. David Sun, CEO of the virtual bank, expressed his gratitude for having over 100,000 users, believing it to be the recognition from Hong Kong consumers for livi bank. Sun also believes that this illustrates livi bank can effectively fulfil clients' daily needs through convenient and pleasurable digital finance experiences.
The paper loss of Chinese Estates (0127) from investment in China Evergrande (3333) widened to HK$4.89 billion at the end of June, an increase of more than 526 percent from the end of last year.
The developer announced that, based on the closing market price of China Evergrande on June 30 at HK$10.12, it is expected that an unrealized loss on fair value of about HK$4.11 billion would be recorded for the first half -VE.
Towngas (0003) has joined hands with mainland vehicle battery giant Contemporary Amperex Technology to create an energy technology solutions provider. The two firms will collaborate in the areas of energy internet construction, energy storage solutions, energy storage business model innovation, battery technology cooperation, chip and equity investment, among others.
Chinese media reported the talks between CHINA JINMAO (00817.HK) and EVERGRANDE (03333.HK) on their equity cooperation. However, EVERGRANDE replied that the news was inaccurate.
For the first half of 2021, SUNSHINE 100 (02608.HK) achieved unaudited contracted sales of approximately RMB2.109 billion, down 12.42% yearly. The figure was corresponding to a contracted sales area of approximately 195,300 sq.m..
The Employment (Amendment) Bill 2021 underwent the Third Reading and was passed at the Legislative Council today, by which the number of days for legal holidays will progressively increase to 17 from currently 12, effective 1 January 2022.
RAZER (01337.HK) announced an investment of EUR2 million in Loupedeck, the Helsinki-based creator of custom consoles, through the company's zVentures. The investment will be used to further Loupedeck’s growth, building off the release of the Loupedeck Live. Founded in 2016, Loupedeck has experienced rapid growth and is now the leading brand of custom editing consoles. Loupedeck’s three consoles – the Loupedeck+, Loupedeck CT and Loupedeck Live, address the rising demand to simplify the overwhelming complexities of streaming and creative software on the market today.
China's State Administration for Market Regulation mounted a probe into 22 internet cases involving illegal concentration of business operators under the Anti Monopoly Law. These included seven cases tied to DiDi's arms, six from BABA-SW (09988.HK), five from TENCENT (00700.HK), two from Suning.com (002024.SZ), and one from MEITUAN-W (03690.HK). SAMR has recently fined each of these companies RMB500,000.
Developers applied for pre-sale consent for three residential projects involving 838 flats last month, of which 836 are from Koko Hills in Cha Kwo Ling, according to the data from the Lands Department.
Koko Hills phase 3A will offer 392 units and phase 3B will offer 444 units. A site in South Lantau Road, Cheung Sha, will offer two units.
As of the end of June, 23 applications for residential pre-sale consent were being processed, involving 12,639 units. Two residential pre-consents for 1,171 units were approved in June, of which 1,059 are from One Victoria in Kai Tak. A site in King Sau Lane, Tuen Mun, will offer 112 units.