ASIAN MACRO INITIAL THOUGHTS Most of Asia to open higher, HK and China the exceptions.


08 Jan

Asian Futures Nikkei Futures 85pts,  HK ADR’s -207pts and Australia trending higher in early choppy trading.  Expect most of Asia to open higher but HK and China may be the exceptions due to the US/China relations deteriorating For the rest I think with Biden confirmed and having control of both congressional houses more stimulus is likely +VE for Asian exporters.
US Futures opened Dow -17pts, S&P and NDX flat after Thursday’s record breaking session.

DOW +0.69%, NDX +2.56% above 13K for first time, S&P +1.48%, Russel 2K +1.89% opened higher; with markets hitting record highs as Biden is confirmed as the next US President.  Tech and Consumer Discretionary leading the markets higher; with the expectation that there will be additional fiscal aid now the Democrats have control of both congressional chambers. Initial claims data was mixed but ISM Non Manufacturing data was better than expected.
Focus now turning to earnings.Federal prosecutor does not rule out charging Trump with inciting Capital riot. Trumps final days in office could still be disruptive. As Sen Schumer asks for Trump to be removed for office and face impeachment.
Earnings 
Bed Bath & Beyond -10.9% but off initial low after earnings disappointed
Constellation Brands +2.3% but off initial highs post earnings
Walgreens Boots Alliance +5.2% as earnings better than forecast.
Conagra Brands -5.5% after earnings
Micron +1.3% after hours (was +2.6% in normal hours) reported after the bell.
Banks JPMorgan Chase +3.3%, Citigroup +1.2%, Wells Fargo +2.3%, AMEX -1.2%
Work from home names: Facebook +2.1%, Apple +3.4%, Amazon +0.8%, Netflix +1.7%,  Disney -0.3%, Zoom Video +0.6%, Alphabet +3% and Microsoft +2.9%,
Tech NXP +3.7%, Nvidia +5.8% British regulators are investigating its purchase of chip designer Arm over concerns about its effect on competition. AMD +5.4%, Skyworks +2.6%
Re-opening stocks  Boeing +0.8% but -1.1% in after hours on fine over Max 737, Caterpillar +0.2%, Simon Property unch, Kohl’s +1.1%, Nordstrom +0.6%, Gap +0.4%, United Airlines +0.2%, Carnival +1.6%, Wynn Resorts -1%, Chevron +0.5%, Exxon Mobil +0.8%,  
Lock down names Campbell Soup -0.7% General Mills -0.8%, JM Smucker -1.3%
DATA
Challenger Job Cuts Dec 77.03k vs 64.797k Nov (F/cast was 69k)
Balance of Trade Nov $-68.1b vs 63.1b Oct (F/cast was -67.6b)
Initial Claims 787k vs 790k prior revised (F/cast was 755k)
Initial Claims 4 weeks ave 818.75k vs 837.5k prior (F/cast was 810k)
Continuing claims 5.072m vs 5.198m prior (F/cast was 4.98m)
Exports Nov $184.2b vs 182.0b Oct (F/cast was 183.4b)
Imports Nov $252.3b vs 245.1b Oct (F/cast was 251b)
ISM Non Manufacturing data
Business Activity Dec 59.4 vs 58.0 Nov (F/cast was 56.8)
New Orders Dec 58.5 vs 57.2 Nov (F/cast was 55.1)
Prices Dec 64.8 vs 66.1 Nov (F/cast was 62.2)
Employment Dec 48.2 vs 51.5 Nov (F/cast was 49.5)
PMI Dec 57.2 vs 55.9 Nov (F/cast was 54.5)
EIA Natural Gas Stocks Change -130Bcf vs -114Bcf prior
USD was slightly weaker vs Yen & Euro. Bitcoin +6.3% @ 39,470 having briefly touched 40k, VIX -10.8% @ 22.37, US T10 @ 1.081% holding above 1% as Biden confirmed as next president.
OIL Brent +0.28%, WTI +0.59%
Gold +0.33%, Silver +0.79%, Copper +1.55%
AHEAD Non Farm Payrolls, Unemployment Rate, Average Weekly Hours, Average Hourly Earnings, Participation Rate, Wholesale Inventories, Baker Hughes Total Rig Count, Consumer Credit Change.

DAX +0.55%, CAC +0.7%, FTSE +0.22%  Markets opened higher DAX and CAC initially traded sideways just above yesterday’s closing level before working better as the US opened higher.  The FTSE initially sold down into the red, traded sideways for much of the day but worked better from mid afternoon.  Construction and material stocks lead the gains. Travel and leisure sector weak.
DATA
EUROZONE
Consumer Confidence Dec -13.9 vs -17.6 Nov (F/cast was -13.9)
Core Inflation rate Dec +0.2% vs +0.2% Nov (F/cast was +0.1%)
Economic Sentiment Dec 90.4 vs 87.7 Nov revised (F/cast was 89.5)
Inflation Rate Flash Dec -0.3% YoY vs -0.3% Nov (F/cast was -0.4%)Inflation Rate Flash Dec +0.3% MoM vs -0.3% Nov (F/cast was +0.2%)
Retail Sales Nov -6.1% MoM vs +1.4% Oct revised (F/cast was -3.8%)
Retail Sales Nov -2.9% YoY vs +4.2% Oct revised (F/cast was +0.6%)
Services Sentiment Dec -17.4 vs -17.1 Nov revised (F/cast was -16)
Industrial Sentiment Dec -7.2 vs -10.1 Nov (F/cast was -8.6)
Consumer Inflation Expectations Dec 14.8 vs 15.4 Nov (F/cast was 15.9)
GERMANY
Factory Orders Nov +2.3% MoM vs 3.3% Oct revised (F/cast was -1.2%)
FRANCE
Retail Sales Nov -18% MoM vs +2.5% Oct revised (F/cast was -3.2%)
Retail Sales Nov -15.7% YoY vs +5.2% Oct revised (F/cast was +4.2%)
AHEAD
EUROZONE Unemployment Rate
GERMANY Balance of Trade, Exports, Imports, Current Account Industrial Production,
FRANCE Industrial Production, Balance of Trade, Current Account, Household Consumption.
UK Halifax Price Index.

JAPAN Nikkei futures opened +VE and have risen to +85pts, Yen currently 103.78 Pre market data was better than expected. 
Data due 
Household Spending Nov +1.1% YoY vs +1.9% Oct (F/cast was -1.2%)
Household Spending Nov -1.8% MoM vs +2.1% Oct (F/cast was -1%)
Due pre market Foreign Exchange Reserves Dec (Nov was 1384.6b)
Due later Coincident Index and Leading Economic Index
PM Suga Thursday evening declared state of emergency for Tokyo and Kanagawa, Saitama and Chiba valid until Feb 7.  Gives local governments power to urge citizens to stay at home and order some business to close of restrict opening hours. -VE
Tokyo reported 2,447 new cases of covid Thursday above 2k for the first time. National cases in excess of 7,500. Slight -VE
Govt approval of Moderna’s vaccine unlikely until May -VE for sentiment.Yomiuri poll shows 80% of business leaders expect a slow recovery.
Shortage of containers is driving up shipping costs and impending exports; largely driven by the demand for Chinese goods. -VE
Japan's Kirin Holdings said on Thursday it was undecided on the future of its Myanmar beer business after a third-party probe into its local partner's military connections ended with inconclusive results.

SOUTH KOREA Expect markets to open higher having closed higher Thursday with good foreign and institutional buying and high trading volume which I expect will continue on the expectation of more US stimulus.   Pre market Current Account data weak but unlikely to impact the market direction today.
Data out 
Current Account Nov $8.97b vs 11.66b Oct (F/cast was 9.5b)
KDCP announced 870 new covid cases (vs 840 Wednesday and 715 Tuesday)
Government rolled out mass testing for 52 prisons in the country after a massive prison outbreak and decided on Wednesday to extend flight suspensions from Britain for two weeks as part of efforts to prevent the spread of coronavirus infections. Also from today Govt is mandating negative COVID-19 test results for foreigners arriving in Korea, with the tests to be taken within 72 hours of departure. Arriving passengers will also be required to undergo additional testing throughout their two-week mandatory self-quarantine.
Govt reviewing whether to make a fourth provision of emergency relief funds and the social distancing guidelines.
The National Assembly‘s legislation subcommittee on Thursday passed the controversial bill on punishing owners of businesses in cases of workplace disasters. The bill will be voted on at the plenary session on Friday to be enacted.
Govt delegation is heading to Iran on Wednesday to seek the release of a chemicals tanker and its 20-member crew seized in Gulf waters by Iranian forces
SK Telecom has relocated its artificial intelligence service division under the company’s main business that operates mobile networks and information technology solutions, in a gesture to add full momentum to digital innovation, the company said Thursday.
SK Group said Thursday it would acquire a 9.9 percent stake worth $1.6 trillion won ($1.5 billion) in the US hydrogen fuel cell maker Plug Power to jointly take the initiative in Asian hydrogen markets. SK Holdings and a natural gas subsidiary SK E&S will invest 800 billion won each into Plug Power, which will make SK Group the largest stakeholder in the New York-based hydrogen company.  SK Group is expected to finalize the deal in the first quarter this year.
LG Display will shine a light on the role of displays in the post-COVID-19 contactless society at this year’s Consumer Electronics Show 2021, set to take place from Monday, the company said Thursday.
LG Electronics announced Thursday has acquired a controlling stake of more than 50 percent in US data analytics firm Alphonso, in an $80 million deal for its TV business.  Based in Silicon Valley, Alphonso is a data analytics startup that specializes in TV commercials and various media content.
Starbucks Coffee Korea on Thursday launched a set of limited edition Playmobil toy figurines, hoping to re-create the successes of their previous merchandise collections.
With a nationwide vaccination campaign scheduled for next month, South Korean manufacturers are looking ahead to the mass production of syringes. But challenges remain, as the government has yet to designate the type of syringes to be used.  Impacts firms like Sungshim Medical, Shin Chang Medical, Sang-A Frontec

TAIWAN Expect market to open higher with Tech still in focus. Yesterdays after market data was good.  
Data due after market Balance of Trade, Exports and Imports
After Market Thursday
Wholesale Prices Dec -5.1% YoY vs -5.94% Nov revised (F/cast was -6.5%)
Inflation Rate Dec +0.17% vs +0.36% Nov revised (F/cast was +0.2%)
Inflation Rate Dec +0.06% vs +0.09% Nov (F/cast was +0.1%)
CPI last month edged up YoY and in positive territory for the second straight month driven by higher prices for food, airplane tickets and other items. Stabilization of international oil prices helped, even though fuel prices remained a drag. Of the major consumer product categories, garment prices reported the fastest increase, 1.17%, as retailers offered fewer discounts than a year earlier, the report said.
The Central Epidemic Command Center (CECC) yesterday confirmed that a fifth person in Taiwan is infected with a COVID-19 variant first detected in the UK. A British man in his 30s, who arrived on Wednesday last week to work, tested positive for the disease on Saturday while in quarantine at a government center, the CECC said.
Medigen Vaccine Biologics Corp on Wednesday said it plans to begin phase 2 clinical trials next week for its COVID-19 vaccine candidate and expects to apply by the end of June for emergency use authorization for the drug.Kelly Craft, the U.S. ambassador at the United Nations, will visit Taiwan, Secretary of State Mike Pompeo announced on Wednesday, angering China, which claims the island as its own territory with no right to state-to-state ties.
Yageo Corp yesterday reported that revenue last month -4.5% MoM due to lower shipments during the year-end holiday season, but said that it has a positive outlook regarding end demand this quarter. The factory utilization rate for tantalum capacitors this quarter is expected to reach 100%, while the rate should climb to 89%  for multilayer ceramic capacitors and 80% for resistor chips, the firm said in a statement. To handle rising demand, Yageo said that it plans to adjust personnel at its Chinese factories during the Lunar New Year holiday. +VE
Sercomm Corp yesterday reported revenue of NT$3.31 billion (US$116.43 million) for last month, -8.62% MoM and -0.57% YoY However, revenue last quarter increased 11% YoY and 12% QoQ to NT$10.58 billion, setting a company record, Sercomm said. For the whole of last year, revenue was NT$36.1 billion, +13.54% from NT$31.8 billion in 2019, it said, attributing the increase to the remote-working and distance-learning trends amid the COVID-19 pandemic, as market demand for faster data transmission and larger bandwidth increases. +VE
Restaurant operator Hi-Lai Foods Co Ltd yesterday reported that revenue last month saw record growth for a sixth consecutive month, reaching NT$357 million. Up 3 percent annually, the month lifted last quarter’s sales 6 percent from a year earlier, the company said. With the local COVID-19 situation under control, business boomed in the second half of the year, largely offsetting the weak revenue in the first half, when consumer consumption was devastated by the pandemic, it said. Hi-Lai posted revenue of NT$2.01 billion in the July-to-December period, up 39 percent from the first half and up 7 percent from 2019. The company said that it closed out the year with total revenue of NT$3.46 billion, down 8.37 percent from 2019.
Adimmune Corp yesterday reported that fourth-quarter revenue rose 30 percent to NT$821 million, driven by strong sales of its flu vaccines in October last year. Marketing approval has been obtained for its quadrivalent flu vaccines from the Thai regulator and approval is expected from the Chinese regulator this year, he said. The firm is still waiting for the Food and Drug Administration’s permission to launch phase 2 clinical trials for its COVID-19 experimental vaccine, which aims to enroll at least 3,000 participants, he added. +VE

CHINA Expect market to open flat with concerns over US/China relations and the potential for Trump to sanction more firms in his final days in office.  Countering that will be the fact that now the US Democrats have control of both congressional houses more fiscal stimulus is expected.
No data due but on Monday we get Inflation Rate and PPI
Shijiazhuang the capital and largest city in northern China’s Hebei province barred people from leaving on Thursday in an effort to curb the spread of the coronavirus as the country reported the biggest rise in daily infections in more than five months. Hebei accounted for 51 of the 52 local cases reported by the National Health Commission on Thursday. This compared with 20 cases reported in the province, which surrounds Beijing, a day earlier.
U.S. Secretary of State Mike Pompeo said Washington is considering sanctions and other restrictions on those involved in the arrest of over 50 people in Hong Kong and warned it could target the territory’s economic and trade office in the United States, Reuters reports.
China National Biotec Group (CNBG) has administered more than 4 million COVID-19 vaccine doses as of Jan. 4 via China’s emergency use program, the company said late on Thursday. Two vaccines respectively from two institutes owned by CNBG, a unit of state-backed China National Pharmaceutical Group (Sinopharm), are included in China’s emergency vaccination scheme, which was officially started in July targeting specific groups of people facing a high infection risk.
Baidu Inc plans to form a company to make smart electric vehicles (EV),  with manufacturing to be carried out at plants owned by automaker Geely, two sources familiar with the matter said.
A Chinese lawyer has been suspended for a year after he posted videos on social media that allegedly showed police using torture to extract confessions from witnesses and a defendant he was representing. The justice bureau in Beijing’s Chaoyang district on Thursday handed down the suspension to Zhou Ze, 51, for breaking a government regulation on lawyers’ conduct.  Zhou, who has been practising law since 2003, said he would appeal the ruling.  It comes as scores of lawyers in mainland China – some of whom have taken on politically sensitive cases – face pressure from the authorities to drop cases or risk losing their licences.

HONG KONG  ADR’s -207pts at 27,341 with weakness in ECommerce, Telco’s and  Petrochems on US delisting threat.  Chinese Financials also seeing weakness.  Concerns that US will impose more sanctions on Hong Kong after yesterday’s mass arrests under the national security law a worry
No data due
SHORT SELLING Thursday 13.8% vs 14% Wednesday 
Top Shorts: Ping An (2318) 43%, Hengan (1044) 40%, Anta Sports (2020) 31%, Henderson Land (12) 30%, CK Asset (1113) 30%, Bud APAC (1876) 30%, Hang Seng Bank (11) 28%, MTRC (66) 28%, Wharf REIC (1997) 25%, Mengniu Dairy (2319) 25%.
BUYBACKS/INSIDER DEALING 
Li Ka-shing and Victor T K Li, through Li Ka Shing Foundation Limited, acquired a total of 210,000 shares in CK ASSET (01113.HK) at the average price of HK$39.7428 and HK$40.1500 per share on 31 December 2020 and 6 January 2021.  As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK ASSET have respectively increased from 35.89% to 35.90% and from 35.96% to 35.97%.
SUNAC (01918.HK) said on 4 January; Chairman Sun Hongbin acquired on-market 2.90 million shares, involving $77.9572 million.  Subsequently, Sun's shareholding was boosted to 45.19%.

WATCH
Wheelock Properties opened show flats for Monaco in Kai Tak today and plans to launch sales next week. The developer will release the first price list today. Monaco is expected to be the first new project to kick off sales in the primary market this year. The project offers 399 units, ranging from 280 to 760 square feet.
Henderson Land Development (0012) applied for presale consent for the second phase of 7 Muk Tai Street Project, which will offer 301 units.
Regarding Macau government's 2021 GGR forecast of MOP130 billion, Secretary for Economy and Finance Lei Wai Nong expected the stable GGR uptrend assumption to remain intact, reported Radio Macau (TMD).  He will keep close tabs on market changes as well. +VE
EVERG SERVICES (06666.HK) Positive profit alert, expecting profit attributable to the shareholders at approximately RMB2.6 billion for the year ended 31 December 2020, representing an upsurge yearly.  The net profit and the profit attributable to shareholders are both expected to be approximately 2.8 times of that of last year.
Snow Lake Capital suggested MGM China (2282) introduce Chinese enterprises like Meituan (3690) and Sunac China (1918) as a possible 20% strategic investor after it raised its stake in MGM China.
HSBC will slash bonus for entry level employees by 22%, Hong Kong Economic Times reported. According to an internal notice seen by the media which sent to entry level employees at grades 6-8, their bonus for 2020 will be cut by 22% at maximum uniformly, due to the material repercussion from external environment on the bank's business and results.  The HSBC spokesman replied local media's inquiry that the Group’s reported profit after tax decreased by 62% and adjusted profit before tax fell by 44%, hence the bank decided to make the adjustment on bonus. Yet, the overall salary of related staff will be broadly flattish or inch up, considering their devotion during hardship. Slight -VE
HKBN Enterprise Solutions (HKBNES) announced to team up with leading local software solutions expert Achiever Technology Limited (Achiever) to introduce a remote-enabled human resources (HR) management system for SMEs.
L'OCCITANE (00973.HK) announced that it had in December 2020 transferred out of treasury 1.9219 million ordinary shares of the Company, with an aggregate nominal value of EUR57,700.
BYD ELECTRONIC (00285.HK) announced that it had on 7 January (after trading hours) entered into the Assets Purchase Agreement with its controlling shareholder BYD, comprising die-casting machines and peripheral supporting equipment, vertical machining center, drilling machining center and six-axis robot.
The Lands Department (LandsD) issued 10 pre-sale consents for residential developments and two pre-sale consents for non-residential developments in the fourth quarter of 2020.  The 10 pre-sale consents for nine residential developments (of which five are phased developments) involve a total of 4,491 residential units.  Taking into account the pre-sale consents issued in the first three quarters in 2020, the LandsD issued a total of 33 pre-sale consents for residential developments involving 12,898 residential units in 2020.
New York Stock Exchange will maintain its decision to delist the ADRs of China's top-three telcos. Chinese Foreign Ministry Spokeswoman Hua Chunying replied that various international media has noticed NYSE's flip-flop saga, citing a Nikkei commentary on the capital market confusion led by NYSE's U-turns.
Centa Valuation Index (Major Banks) (CVI) last printed at 34.77, down 0.19 pts weekly. CVI has seen narrower volatility since the 4th Covid outbreak, said Centaline Property. The index plunged 8.72 pts in the first week, gradually shrinking to a 0.19-pt fall this week.


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