Jan 12 ASIAN MACRO INITIAL THOUGHTS Mixed day again for Asia


12 Jan

Asian Futures Nikkei Futures moving higher currently +70pts,  HK ADR’s -72pts and Australia moving higher in early trades.  
US Futures opened Dow +30pts, S&P -0.1% and NDX +0.2%

DOW -0.29%, NDX -1.25%, S&P -0.66%, Russel 2K -0.03% Markets opened lower from Friday’s highs as relations with China deteriorate. But rallied on the expectation of more stimulus from the Biden administration.  News that the Democrats have started the impeachment action against Trump taken with ease by the market. But from midday markets eased back and NDX and S&P traded lower while the Dow traded sideways just below Friday’s closng level.  Evidence of caution/profit taking as Tesla and Bitcoin both pulled back.
Banks JPMorgan Chase +1.5%, Citigroup +1.6%, Wells Fargo +0.2%, AMEX -0.6%
Work from home names: Facebook -4%, Apple -2.3%, Amazon -2.2%, Netflix -2.2%,  Disney +0.2%, Zoom Video -3.4%, Alphabet -2.3% and Microsoft -1%,
Tech NXP -1.%, Nvidia +2.6%, Micron +1.6%, AMD +2.8%, Skyworks -0.9%
Re-opening stocks  Boeing -1.5%, Caterpillar -0.2%, Simon Property -3.9%, Kohl’s +1.9%, Nordstrom +1.6%, Gap +4.5%, United Airlines -1.4%, Carnival -1.6%, Wynn Resorts -0.9%, Chevron +0.6%, Exxon Mobil 3%,  
Lock down names Campbell Soup -1.8% General Mills -1.5%, JM Smucker -1.7%
DATA
Consumer Inflation Expectations Dec 3% vs 2.96% Nov (F/cast was 3%)
USD was stronger vs Yen & Euro. Bitcoin -9.5% @ 33,909.00, VIX +11.7% @ 24.08, US T10 @ 1.144%
OIL Brent -0.68%, WTI -0.11% as renewed lockdowns hit demand.
Gold +0.5%, Silver +1.6%, Copper -3.2%
AHEAD Redbook, JOLT’s Job Openings, IBD/TIPP Economic Optimism.  
After mkt API Crude Oil Stock Change
Earnings: KB Homes, Albertsons

DAX -0.8%, CAC -0.78%, FTSE -1.1%  Markets opened flat/lower with caution following a mixed day in Asia; with concerns over US/China/Taiwan relations. They then tracked lower for most of the day.  DAX and CAC rallied in the last couple of hours. FTSE initially rallied in line but then sold down again in the last hour. Investors watching for indications from Biden regarding additional stimulus.  News that the Democrats had moved to impeach Trump came after the markets closed.Basic Resources and Autos weak and Healthcare firm.  Covid cases still a concern
Tui weak in early trading following Friday’s news of a capital raise.
Jeronimo Martins strong along with JD Sports after a strong trading update
Tele2 +4.2% on entering a JV with Nokia for 5G
British Land sank after the real estate group revealed that it had collected 46 per cent of December retail rents as of January 7.
AHEAD
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK No data due

JAPAN Nikkei futures opened +20pts and are moving higher currently +80pts ahead of the market reopening.  Yen weaker currently 104.19, slight +VE Exporters Data due 
Pre market Current Account, Bank Lending,  
At midday Eco Watchers Survey (Current & Outlook).
Tokyo reported 1,219 new covid cases on Monday (275 less than Sunday). Nationwide the total was 4,877
Government preparing to expand the state of emergency to Osaka, Kyoto and Hyogo by the end of the week press reports.
U.S., Britain to promote Japanese equipment for 5G networks +VE for NEC and Fujitsu.
Japanese firms take e-commerce livestream plunge as Chinese splash out good for teleconferencing companies.
The Federation of Electric Power Companies of Japan has called for cooperation for power saving as the supply-demand balance becomes tight amid a cold snap hitting the country.

SOUTH KOREA Expect markets to open slightly lower following the US but the increase in retail buying should limit the downside but institutional buyers likely to be cautious ahead of optics expiry.
No data due
On Monday markets closed lower but with retail investors hitting a record net buying amount but Institutional and Foreign investors were sellers ahead of stock option expiry later this week.
Samsung Electronics is expected to rack up strong earnings in 2021 on the back of the “semiconductor supercycle,” according to local analysts on Monday.   Demand for 5G communication chips, mobile applications processors and image sensors will be strong for the next two to three years, aiding the South Korean chipmaker, they said.
LS Electric, a South Korean producer of power solutions, aims to grow 10 percent annually and generate 70 percent of its earnings from overseas, the company said Monday.
Korea Shipbuilding & Offshore Engineering Co. said Monday that it has won a combined 288 billion won ($263 million) in orders from three companies in Liberia, Oceania and Asia.
Doosan Infracore Co. said Monday that its excavator sales in China rose 22% YoY earlier on the back of infrastructure investment expansion by the Chinese government.

TAIWAN Expect market to open lower with some consolidation but downside limited by the positive outlook for Tech Exports.
No data due 
Taiwan rolled out a newly redesigned passport on Monday that gives greater prominence to the island's day-to-day name, aiming to avoid confusion with China amid the COVID-19 pandemic and Beijing's stepped-up efforts to assert sovereignty
Fubon Financial Holding yesterday reported net profit of NT$90.85 billion (US$3.19 billion) for last year, +55% from 2019 and hitting a new high, on the back of rising contributions from its subsidiaries amid a bullish stock market.+VE
Lotus Pharmaceutical one of the nation’s leading specialty generic drug developers, yesterday said revenue last year hit a record NT$10.58 billion (US$371.4 million) on the back of robust exports. +VE
UMC said it and a small number of customers could encounter adjustments to wafer shipment dates, after an abnormality on Saturday caused a power outage in its gas insulated switchgear equipment that led to a short-term electrical interruption at two of its fabs in the Hsinchu Science Park. In a statement posted on the company’s Web site on Sunday, UMC said that it “will closely monitor the situation and update the latest shipment status to customers accordingly if this happens.” -VE

CHINA Expect market to open lower as US/China relations deteriorate. 
No data due
Xi Jinping says ‘time and momentum on China’s side’ as he sets out Communist Party vision for the next three decades. President calls for conviction and confidence amid unprecedented global challenges during top-level meeting on Monday. He was addressing leading cadres at a meeting on the fifth plenum – an important closed-door gathering in October on China’s medium- and long-term plans for social and economic development to 2025.  Analyst says remarks show Xi sees ‘the conditions are right for the previously slumbering lion to roar and he will see to it that it does’
China condemned the United States on Monday for scrapping curbs on interactions with Taiwan officials, saying nobody could prevent China’s “reunification”, while Taiwan’s foreign minister hailed the U.S. move as a sign of “global partnership”.
China plans to ask tech powerhouses including Ant Group, TENCENT (00700.HK) and JD-SW (09618.HK) to share consumer loan data, aiming to deter excess borrowing and fraud, Reuters citing insiders.  I think this is one of the main reasons for the clamp down on E Commerce.  The Government wants to track if spending matches declared income; its not about excess borrowing or fraud because the Tech companies are already on top of that.
A World Health Organization (WHO) team of international experts tasked with investigating the origins of the COVID-19 pandemic will arrive in China on Jan. 14, Chinese authorities said on Monday. Lack of authorisation from Beijing had delayed the arrival of the 10-strong team on a long-awaited mission to investigate early infections, in what China’s foreign ministry called a “misunderstanding”.
China’s Sinovac Biotech showed a general efficacy of less than 60% in its late-stage trial in Brazil, a news website reported on Monday, citing two people who seen the results.
Indonesian BPOM today allowed Sinovac's vaccines for emergency use, foreign media reported.  The country extended the entry ban on foreigners by 14 days.
Britain will tighten the law on importing goods linked to alleged human rights abuses in China as ministers take a tougher stance on Beijing, The Telegraph reported on Monday.Foreign Secretary Dominic Raab will make a statement on Tuesday in the House of Commons on the government's response to allegations of forced labour in China's Xinjiang province, home to about 12 million Uighur Muslims, the report bit.ly/2LKt2Fe added.
India returned the Chinese soldier who stayed across the disputed border.

HONG KONG  ADR’s -72pts at  27,837 with a broad weakness as investors worry about the implications of deteriorating US/China relations; especially over Taiwan.
No data due
SHORT SELLING Monday 11.1% vs 9.2% Friday 
Top Shorts: Bud APAC (1876) 53%, Hengan (1044) 39%, Hang Seng Bank (11) 36%,  Galaxy Ent (27) 34%, Ping An (2318) 33%, CK Assets (1113) 32%, Sunny Optical (2382) 30%, Wharf REIC (1997) 29%, HSBC (5) 27%, WH Group (288) 26%.
PROFIT ALERTS 
VALUE PARTNERS (00806.HK) POSITIVE PROFIT ALERT  expecting the consolidated profit attributable to owners to increase significantly to about HK$1.3 billion for the year ended 31 December 2020 as compared to HK$513.4 million for the year ended 31 December 2019.

BUYBACKS/INSIDER DEALING 
SUNAC (01918.HK) Chairman Sun Hongbin on 5 January, acquired 940,000 shares of the company, involving $25.716 million, according to the equity disclosure of HKEX. Subsequently, Sun's shareholding in the company boosted to 45.21%.
WATCH
China is pondering to allow certain commercial banks to sell their non-performing loans (NPLs) to NPL asset managers as soon as this month, Bloomberg cited sources.  At the top-tier national financial meeting last month, Chinese banks and NPL asset managers were asked to speed up preparation for smooth pilot program this month, sources said.  ICBC (01398.HK) will be the first bank selling the related assets. The trial details remain yet set in stone, subject to China Banking and Insurance Regulatory Commission (CBIRC)'s greenlight.  As a result, Chinese banks are expected to offload RMB1 trillion NPLs, according to estimate by mainland research house.
The PC shipment +13.1% yearly last year to nearly 303 million units, IDC wrote in its report. In terms of brands, LENOVO GROUP (00992.HK)'s shipment +12% to 72.669 million units last year, followed by HP and Dell.
BABA-SW (09988.HK) announced that up to 200 million new products had their debut in TMall in 2020, up roughly 100% yearly.  During the year, roughly 1,000 brands realized over RMB100 million in turnover on TMall.
ABC (01288.HK)'s Shenzhen branch has launched the digital yuan deposit and withdrawal functions at ATMs, reported Shenzhen Special Zone Daily. In future, the pilot program will be expanded to public utility payment, people's livelihood improvement, urban development, smart government administration and so on.
Xin Guobin, deputy head of the Ministry of Industry and Information Technology (MIIT), accentuated at a meeting that automakers and battery companies are reminded of the need to beef up their technology, such as enhancing the low-temperature driving performance of electric vehicles to better user experience.
Midland Confidence Index last printed at 57.1, up 1.3 pts or around 2.3% weekly.  Midland Property Price Index last printed at 163.20, down 0.17% weekly.
Nintendo has shipped 1 million Switch consoles in China, surpassing Microsoft and Sony, since the introduction at the end of 2019, said its Chinese partner TENCENT (00700.HK)
CHOW TAI FOOK (01929.HK) announced that Same Store Sales (SSS) growth in Mainland China +12.2% YoY and Hong Kong/ Macau -31% YoY for the three months ended 31 December 2020.
ByteDance's Douyin and TikTok garnered nearly US$142 million in user spending worldwide from App Store and Google Play in December 2020, up 3.3 times yearly, according to Sensor Tower.
The Strategic Planning Committee of the Hong Kong Housing Authority (HA) approved at its meeting on January 11 to convert the public rental housing (PRH) development at Diamond Hill Comprehensive Development Area Phase 2 at Wong Tai Sin to a Green Form Subsidised Home Ownership Scheme (GSH) project for sale in 2021. This GSH project will provide 2,112 flats in three residential blocks. Subject to smooth progress of the preparatory work, the authority plans to launch the sale of the GSH flats around May this year, said a spokesperson. The flats are estimated to be ready for occupation in the first quarter of 2024.CHINA RAIL CONS (01186.HK) announced that the President of the US issued an executive order to prohibit any transaction by any United States person in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of certain Chinese companies. The prohibition of the Executive Order will become effective beginning 9:30 a.m. on 11 January 2021. The Company is in normal production and operation. The Company is conducting a comprehensive assessment of the potential impact of the Executive Order CNOOC (00883.HK) announced that the Company noted that the Office of Foreign Assets Control (OFAC) of the Department of the Treasury of the United States of America added the Company to its list of Chinese companies with alleged ties to the Chinese military on 8 January. The Company regrets the aforesaid decision and action of OFAC. Since its listing in February 2001, the Company has strictly complied with the laws, regulations and regulatory requirements of its listing venues and has been operating in accordance with laws and regulations.

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