Things to know before trading Asia on Monday


This and previous notes can be found at Substack ( Asian Market Sense )
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Australia Expect market to open higher but covid lockdowns raising concerns about the impact on the economy.
Later this week we get inflation data
Japan Markets re open and likely to play catch up with Asia.
S Korea To open hgiher with focus on earnings but concerns over covid could result in volatility.  Last week Foreigners were net sellers.  Retail and Institutions were net buyers.  Investors will be watching for the Q2 GDP data.
Taiwan Market to open higher but mixed data on Friday reveals the impact of the recent surge in covid cases and social distancing conditions.
China Expect market to open lower on deteriorating US relations after sanctions and increased concerns about regulatory changes broadening to doctrine.  Typhoon In-Fa expected to make landfall and bring bad weather.  As always ‘Team China’ the wildcard
HK ADR’s -123pts at 27,198 as investors react to renewed regulatory risk and worsening Sino/US relations.  I doubt we get anything positive  from the US Deputy Sec of State’s meetings.  Over the weekend a number of smaller companies have issues positive positive alerts but unlikely to be enough to move the needle of -VE news on the market leaders  
Europe Earnings in focus along with the resurgence of covid cases
US Earnings remain in focus along with the Fed’s Rate decision statement.  Housing Data, Initial claims and PCE data


DOW +0.68%, NDX +1.04%, S&P +1.01%, Russel 2K +0.46%
Markets opened higher and Dow closed above 35,000 for the first time and S&P and NDX high new highs.  Optimism ahead of earnings from some market heavyweights this week; Facebook, Alphabet, Apple, Microsoft and Amazon.
Banks JPMorgan Chase -0.2%, Citigroup -0.3% Wells Fargo -1%, Amex +1.3 %
Work from home names: Facebook +5.3%, Apple +1.2%, Amazon +0.5%, Netflix +0.7%,  Disney +0.6%, Zoom Video -0.6%, Alphabet +3.6% and Microsoft +1.2%,
Tech NXP Semi +1.1%, Nvidia -0.2%, Micron +0.5%, AMD +1%, Skyworks +0.9%
Re-opening stocks  Boeing +0.3%, Caterpillar +0.2%, Simon Property -0.8%, Kohl’s -1%, Nordstrom -2.9%, Gap +0.4%, United Airlines -0.9%, Carnival -3.3%, Wynn Resorts -3.6%, Chevron flat, Exxon Mobil -0.1%,  
Lock down names Campbell Soup +0.7% General Mills +1%, JM Smucker +1%
DATA
Manufacturing Jul 63.1 vs 62.1 Jun (F/cast was 61.8)
Services Jul 59.7 vs 63.7 Jun (F/cast was 63)
Composite Jul 59.8 vs 64.6 Jun (F/cast was 64.1)
Baker Hughes Total Rig Count 491 vs 484 prior
Baker Hughes Oil Rig Count 387 vs 380 prior
USD was stronger vs Yen & Euro. Bitcoin +0.9% @ 34,358.39, VIX -2.8% @ 17.2, US T10 @ 1.281%
OIL Brent +0.4%, WTI +0.4%
Gold -0.18%, Silver -0.56%, Copper +2.71% Platinum -2.89%, Palladium -1.09%.
AHEAD New Home Sales, Dallas Fed Manufacturing Index.

DAX +1%, CAC +1.35%, FTSE +0.85%
Markets opened higher and trending higher German and Eurozone PMI data showed strength. UK Retail sales and PMI a little light as was the French. Earnings still in focus with Thales +0.7% and Lonza +4.2% among those who reported Q2 results on Friday, while Vodafone +2.4% issued a trading update and Mercedes-Benz +5.5% announced a strategy update early afternoon. Auto lead the markets higher, with all sectors closing in the green.
Valeo +6% strong Q2 earnings beat expectations and confirming its +VE outlook.
Signify -5.2% despite reporting a 32% jump in Q2 profit, as it continued to grapple with supply chain issues.
DATA
Eurozone
Manufacturing Jul 62.2 vs 63.4 Jun (F/cast was 62.5)
Services Jul 60.4 vs 58.3 Jun (F/cast was 59.6)
Composite Jul 60.6 vs 59.5 Jun (F/cast was 60.)
Germany
Manufacturing Jul 65.6 vs 65.1 Jun (F/cast was 63.7)
Services Jul 62.2 vs 57.5 Jun (F/cast was 59.1)
Composite Jul 62.5 vs 60.1 Jun (F/cast was 60.7)
France
Manufacturing Jul 58.1 vs 59.0 Jun (F/cast was 57.9)
Services Jul 57.0 vs 57.8 Jun (F/cast was 58.7)
Composite Jul 56.8 vs 57.4 Jun (F/cast was 58.4)
UK
Consumer Confidence Jul -7 vs -9 Jun (F/cast was -7)
Retail Sales Jun +0.5% MoM vs -1.3% May revised (F/cast +0.7%)
Retail Sales Jun +9.7% YoY vs +24.6% May (F/cast +10.1%)
Retail Sales Ex Fuel Jun +0.3% vs -2% May (F/cast +0.8%)
Manufacturing Jul 60.4 vs 63.9 Jun (F/cast was 62.5)
Services Jul 57.8 vs 62.4 Jun (F/cast was 62.3)
Composite Jul 57.7 vs 62.2 Jun (F/cast was 62.4)
AHEAD
EUROZONE No data due
GERMANY Ifo Business Climate, Current Conditions and Expectations
FRANCE No data due  
UK  No data due

JAPAN 
Market to play catch up but rising covid cases likely to mean we see a muted open. Typhoon Nepartak approaching Japan could mean futher disruption to the games.
Yen currently 110.54
Data due after the open
Flash PMI
Manufacturing Jul (Jun was 52.4 (F/cast is 51.9)
Serivces Jul (Jun was 48.0 (F/cast is 47)
Composite Jul (Jun was 48.9 (F/cast is 47.5)
Saturday Tokyo reported 1,128 new covid cases with the nationwide total being 3,574.  With 127 cases linked to the Olympics.
PM Suga met with the CEO of Pfizer Inc (PFE.N) on Friday, requesting faster delivery of COVID-19 vaccines, the Nikkei reported, as the Olympic host nation struggles with a slow rollout of vaccine amid a surge in infections.
Toyota Motor Corp has suspended operations at all three of its plants in Thailand through next Wednesday due to a shortage of parts, as the latest coronavirus outbreak has forced an auto parts plant in the country to shut down, company officials said. -VE
Honda Motor Co. will halt operations at its Suzuka Factory in the city of Suzuka, Mie Prefecture, for five days in August. A global shortage of semiconductors and a lag in the supply of parts due to surging coronavirus infections in Southeast Asia are factors behind the decision. -VE

SOUTH KOREA Expect markets to open higher with focus on earnings but concerns over covid could result in volatility.
Last week Foreigners were net sellers. Retail and Institutions were net buyers. Investors will be watching for the Q2 GDP data.
No data due.
KDCA reported 1,487 new covid cases Sunday the 19th day in excess of 1,000. Despite the level 4 social distancing measures.  On Friday the Govt extened the restrictions in Seoul for a furthertwo weeks
Members of South Korea's main trade union the Korean Confederation of Trade Unions defied government coronavirus restrictions on Friday to rally in support of demands for better working conditions and pay despite police efforts to block the gathering.
South Korea’s first travel bubble with Saipan kicked off quietly on Saturday morning with just a handful of passengers traveling under the scheme amid a fourth wave of COVID-19 infections.  Two flights from Asiana Airlines and low-cost carrier Jeju Air departed from Incheon Airport for the main island in the Northern Mariana island chain. Slight +VE
Hyundai Motor said Sunday it has signed a memorandum of understanding with safety standards company UL to strengthen the safety of its second life battery energy storage system, also known as SLBESS. Slight +VE
Kia Corp said Sunday it will suspend one of its eight domestic plants on Monday as dozens of workers at the factory were infected with COVID-19 in recent days. The No. 1 Sohari plant's suspension may be extended depending on the result of coronavirus tests on its workers, a company spokesman said. -VE
South Korea has reactivated three nuclear reactors in the space of a week, as fears of a power supply shortage gripped the nation amid a smothering early-summer heat wave. +VE
Korea Shipbuilding & Offshore Engineering Co. (KSOE) said Friday it has signed orders worth a combined 1.56 trillion won ($ 1.4 billion) to build seven LNG carriers.  Slight +VE but steel price volatility could result in downside.
Samsung Electronics said Friday its sales of air conditioners have more than doubled so far this month, compared to a year ago, due to the sweltering heat. +VE
The state-run Export-Import Bank of Korea said Sunday it will invest 100 billion won ($87 million) in future mobility businesses to ensure local firms can gain an upper hand in those fields amid a rapidly changing global market. +VE
Deferred loan and interest payments owed by businesses hit by the COVID-19 pandemic in South Korea added up to an alarming 108 trillion won ($97 billion) this month, data showed Sunday. Since the launch of the deferral program in February last year, the combined amount of loans yet to be repaid totaled 99.7 trillion won as of Friday, data provided by the five major commercial banks here showed. Additionally, overdue payments set to be paid in installments amounted to 8.4 trillion won and overdue interest payments totaled 54.9 billion won  Slight -VE Banks.

TAIWAN Expect market to open higher but mixed data on Friday reveals the impact of the recent surge in covid cases and social distancing conditions.
No data due but after market Friday
Industrial Production Jun +18.37% vs +16.88% May revised (F/cast was +14%)
Retail Sales Jun -13.3% vs +3.4% May revised (F/cast was +1.6%)
M2 Money Supply Jun +9.23% vs +9.21% May.
CECC on Sunday reported 12 new covid cases and 1 imported case.
The Taiwan Institute of Economic Research (TIER) Friday raised its forecast for Taiwan’s GDP growth this year to 5.4 percent, as exports and private investment fare stronger than expected amid an improving global economy.  The revision represented a pickup of 0.37 percentage points from its projection in April, the Taipei-based think tank said.
“Exports will thrive for the rest of this year, while private investment remains healthy, thanks to the effort of local companies to upgrade and expand to maintain their global technology leadership and meet customer needs,” TIER president Chang Chien-yi told an online news conference. +VE
Hon Hai Precision Industry Co  yesterday said that its shareholders had approved a proposal to distribute a cash dividend of NT$4 per common share, the highest in 20 years. The iPhone maker also said it was upbeat about its prospects for the second half of the year +VE.
Taiwan Fire & Marine Insurance Co (TFMI) is at risk of losing money from its popular COVID-19 insurance policy, as it has paid NT$1.15 billion (US$41.03 million) to compensate more than 11,000 policyholders, nearing the break-even level of NT$1.15 billion to NT$1.34 billion, data from the Financial Supervisory Commission showed.
Formosa Chemicals & Fibre Corp chairman Wang Wen-yuan  yesterday announced that he is stepping down from his position and is to be succeeded by the company’s vice chairman, Hung Fu-yuan, pending approval by the board of directors.

CHINA
Expect market to open lower on deteriorating US relations after sanctions and increased concerns about regulatory changes broadening to doctrine.  Typhoon In-Fa expected to make landfall and bring bad weather.  As always ‘Team China’ the wildcard
No data due
The next target for China’s cybersecurity crackdown is to be the pools of data collected by the latest generation of vehicles. This approach risks Beijing shooting itself in the foot, and jeopardizing its ambitious plans to lead the global race for electric and autonomous vehicles.  China wants to have control over the information vehicles have about their drivers, the roads they traverse, and the faces and voices they pass, according to a draft law on data-security management for the automotive industry issued in May.
U.S. Deputy Secretary of State Wendy Sherman will tell China in upcoming talks that while Washington welcomes competition, there needs to be a level playing field and guardrails to ensure ties do not veer into conflict, U.S. officials said on Saturday.
China promises US a ‘tutorial’ in how to treat other countries equally ahead of deputy secretary of state Wendy Sherman’s visit Foreign Minister Wang Yi criticises Washington for thinking it is ‘superior’ and says it needs to learn how to treat others equally.  Wang’s comments were in response to a briefing by senior administration officials that the US was dealing with China from a position of ‘strength’.
China criticised NBC Universal for showing an "incomplete map" of the country in its broadcast of the opening ceremony of the Tokyo Olympics, after a map displayed during the arrival of Chinese athletes included neither Taiwan nor the South China Sea.   -VE that China really believes those area’s are under its control despite international agencies discrediting its claims.
HONG KONG 
ADR’s -123pts at 27,198 as investors react to renewed regulatory risk and worsening Sino/US relations. I doubt we get anything positive from the US Deputy Sec of State’s meetings. Over the weekend a number of smaller companies have issues positive positive alerts but unlikely to be enough to move the needle of -VE news on the market leaders
Data due after market Balance of Trade, Exports and Imports.

Short Selling Friday 15.8% vs 14% Thursday
Top Shorts 
Longfor (960) 46%, Bud Apac (1876) 46%, CLP (2) 45%, Country Garden (2007) 38%, Mengniu Dairy (2319) 36%, Ping An (2318) 36% (on Henan floods), Power Assets (6) 35%, BankComm (3328) 35%, HSBC (5) 33%, Ali Health (241) 32%, AIA (1299) 31%, Galaxy (27) 31%, Hengan (1044) 31%, Sinopec (386) 29%, Sands China (1928) 28%, Sino BioPharm (1177) 28%,  HK & China Gas (3) 27%, Bank of China (3988) 26%, Geely Auto (175) 25%.  

WATCH
Tencent  was ordered to give up exclusive music streaming rights and pay half a million yuan in fines, 
becoming the latest Chinese internet giant to be brought to heel by regulators.   An official investigation found Tencent’s 2016 acquisition of China Music Corp.’s stakes violated regulations partly because of a lack of reporting to authorities, according to a statement by the anti-trust watchdog on Saturday. The State Administration for Market Regulation (SAMR) required Tencent and its affiliates to waive exclusive music rights within 30 days and handed down a fine of 500,000 yuan ($77,145). It announced it has received SAMR's administrative penalty notice for  the alleged concentration of business operators concerning the  acquisition of China Music Corporation.  Tencent  vowed to genuinely comply with SAMR's decision and complete the  rectifying measures with Tencent Music and other affiliates within the  prescribed time frame.

HUISHANG BANK (03698.HK) For the six months ended June 30, 2021, the net profit of will likely increase by around 14% as compared with the same period of 2020.

CHINA GLASS (03300.HK)  expects to record a net profit of not less than RMB300 million for the six months ended 30 June 2021, as compared to a net loss of RMB277 million recorded for the six months ended 30 June 2020.

TIANDE CHEMICAL (00609.HK)  expects the net profit for the six months period ended 30 June 2021 will be approximately RMB100 million, representing an increase of 108.3% as compared with the corresponding period in 2020.

CHINA VERED FIN (00245.HK)  is expected to record net profit of not less than HK$200 million for the six months ended 30 June 2021, representing an increase of not less than 196% as compared to the corresponding period in 2020.

TIMES NEIGHBOR (09928.HK)  is expected that the profit attributable to the equity owners of the Group for the six months ended 30 June 2021 will record a significant increase by over 80% as compared to that for the corresponding period in 2020.CHINA UNICOM (00762.HK)  announced that the Bank of New York Mellon has given a notice to all holders of ADSs that the ADS Program of the Company will terminate on 18 October (U.S. Eastern Time).

SIS MOBILE (01362.HK)  expects to record a net profit of not less than HK$6 million for the six months period ended 30 June 2021 compared with the net loss of HK$3.38 million for the corresponding period ended 30 June 2020.

CHINA STARCH (03838.HK) For the six months ended 30 June 2021,  is expected to record a substantial growth in revenue and profit before taxation by approximately 48% and 58% respectively as compared to the corresponding period in 2020.

CHINA STRATEGIC (00235.HK) expects to record a loss for the six months ended 30 June 2021 of not more than HK$200 million as compared with the profit of HK$52 million recorded for the six months ended 30 June 2020.


CHINA OVERSEAS (00688.HK) announced that COHL, a controlling shareholder of the Company, acquired an aggregate of 500,000 shares 
of the Company in the market on 20 and 21 July.

CHINA BLUECHEM (03983.HK) issued a positive profit alert
, announcing that the group expects to record a net profit of approximately from RMB1.23 billion to RMB1.26 billion for the six months ended 30 June 2021 as compared to the net profit of approximately RMB310 million for the six months ended 30 June 2020.

FIH (02038.HK) is likely to record a consolidated net loss of around, or below, US$30 million
for the first half of 2021, compared with a consolidated net loss of around US$101 million for the first half of 2020.

The Lands Department received 12 bids for a residential site, Fanling Sheung Shui Town Lot No. 278 at Area 24, Kwu Tung, New Territories after closing the tender today (23rd).

Suitors included sole bidders CK ASSET (01113.HK), KAISA GROUP (01638.HK), K. WAH INT'L (00173.HK), HENDERSON LAND (00012.HK), FE CONSORT INTL (00035.HK), SHK PPT (00016.HK), KERRY PPT (00683.HK) and Wheelock. Chinachem Group and HYSAN DEV (00014.HK) submitted a joint bid.CHINA RAIL CONS (01186.HK) announced that the value of newly-singed contracts for 2Q21 amounted to approximately RMB595.635 billion, up 11.2% YoY.Following HKMA's enquiry, HSBC and BOC HONG KONG (02388.HK) are reconsidering their decision to suspend mortgages to buyers of EVERGRANDE (03333.HK)'s uncompleted residential projects in Hong Kong, Bloomberg citing sources.

The e-commerce platform for fresh food products Meicai is considering switching the location of its IPO from the U.S. to Hong Kong,
reported Bloomberg News, citing people familiar with the matter. The sources suggested that the company has begun preliminary preparations for Hong Kong listing but is still possible to resume its U.S. IPO plan later. According to reports, Meicai may raise hundreds of millions of U.S. dollars through an IPO.CHINA RE (01508.HK) issued a positive profit alert, announcing that the interim net profit of the group may increase by approximately 55% to 65% as compared to the corresponding period for the year 2020.SSY GROUP (02005.HK) announced that Jiangsu Best (a wholly-owned subsidiary in the Group) and Shanghai Lepure Biotech entered into a “Strategic Cooperation Memorandum” on 23 July 2021. Both parties agreed to carry out all-round cooperation in areas including research & development, testing and promotion of application of bioprocessing films and related products, and to jointly develop the international and domestic markets of bioprocessing films, so as to strive to maximize the win-win cooperation.Chaoyang People's Procuratorate has pressed a criminal charge against Qi Yumin, former Chairman of Huachen Automotive Group, of alleged bribery, misappropriation of public funds, and abuse of power by SOE staff at Chaoyang Intermediate People's Court, according to the website of Supreme People's Procuratorate.

China is weighing to request institutions which provide tutorial classes to transform themselves into non-profit organizations (NPOs), as Bloomberg cited sources.  
Such platforms may not be allowed to raise funds or go listing any longer, pursuant to the proposed regulation. Also, listing companies may be banned in investment or acquisition of education companies which teach school subjects, whilst foreign capital may also be forbidden foray into the industry.

JD-SW (09618.HK) and JD Technology have recently formed a strategic alliance with the Huadu District government of Guangzhou city
on building the "JD (GBA) smart city", which includes the building of a GBA R&D operating center, air cargo business center of southern China, advanced manufacture park, etc., reported Guangzhou Daily. The partnership entails a fixed assets investment of no less than RMB100 billion with a target of annual production revenue also set at RMB100 billion.Centa-City Leading Index (CCL) last stood at 186.89, -0.52% WoW
CCL Mass last stood at 189.15, -0.75% weekly.
CCL (small-and-medium units) last stood at 187.08, -0.66% WoW
CCL (large units) last posted at 185.93, +0.24% weekly.

The Urban Renewal Authority (URA) today (23 July 2021) invites a total of 33 property developers/ consortia to tender for the development of the Bailey Street / Wing Kwong Street development project in To Kwa Wan.

Information from Macau's Statistics and Census Service (DSEC) indicated that Macau's composite CPI for June 2021 (102.50) went down by 0.08% YoY, 
smaller than the decrease in May (-0.51%) by 0.43 percentage points. For the 12 months ended June 2021, Macau's average composite CPI decreased by 0.58% from the previous period (July 2019 to June 2020).