Jan 22 Asian Macro Initial Thoughts Asia to see consolidation ahead of weekend


22 Jan

Asian Futures Nikkei Futures opened flat but currently -40pts,  HK ADR’s -23pts and Australia lower in early trades.  
US Futures opened flat DOW -27pts S&P slightly +VE NDX -0.1%

DOW -0.04%, NDX +0.55%, S&P +0.03%, Russel 2K -0.89% Markets opened flat. Nasdaq worked higher and hit a new high.  Dow and S&P traded around flat.  Initial claims improved along with Housing Starts and Building Permits (+VE for Techtronics 669 HK) although Property names were weak.
Biden outlined plans to accelerate vaccine roll out +VE
“We see the pace of vaccinations as a key driver of equities through 2021, similar to how shifts in mobility and Covid cases drove equities in 2020,” Keith Parker, head of equity strategy at UBS, said in a note. “Removing bottlenecks for administering doses would present an upside case near-term.”But worth noting S&P now trading at 22.8x forward earnings near 2000 Dotcom bubble level.
Pre market movers  Travelers +2.6%, Truist Financial -1.1%, KeyCorp -0.7%, Baker Hughes -1.5%, Kinder Morgan -2.1%, Alcoa -12.4%, Discover Financial -5.7% and Plexus -5.6% beat forecasts and were initially higher BUT United Airlines -5.7% missed (-VE cross read to other airlines). Tesla -0.6% despite the jump in Q4 registrations.
After Hours IBM fell more than 6% Q4 sales missed and revenue was -6%pa a fourth quarter of declines. -VE
FT reports  Intel +6.5%  (but -4.8% in after hours trading) said it was the victim of a hacker who stole financially sensitive information from its corporate website on Thursday, prompting the company to release its earnings statement ahead of schedule.Biden warns US covid deaths to top 500k next month but is spending up vaccine roll out.
Banks JPMorgan Chase -0.8%, Citigroup -2.2% and Wells Fargo -1.4%, AMEX -1.2%
Work from home names: Facebook +2%, Apple +3.7% +VE broker comments ahead of earnings , Amazon +1.3%, Netflix -1.1%,  Disney -1.4%, Zoom Video unch, Alphabet +0.2% and Microsoft +0.3%,
Tech NXP -0.5%, Nvidia +3.8%, Micron +1.8%, AMD +3.1%, Skyworks +0.4%
Re-opening stocks  Boeing -1.9%, Caterpillar -0.1%, Simon Property -0.9%, Kohl’s +2.5%, Nordstrom +1%, Gap +1.7%, United Airlines -5.7%, Carnival -0.1%, Wynn Resorts -0.8%, Chevron -3.5%, Exxon Mobil -2.9%,  
Lock down names Campbell Soup +1.3% General Mills -0.1%, JM Smucker -0.6%
DATA
Initial Claims 900k vs 926k prior revised from 965k (F/cast was 915k)
4 week average Claims 848k vs 834.25k prior (F/cast was 861.5k) Continuing Claims 5.054m vs 5.271m prior (F/cast was 5.54m)
Philadelphia Fed Manufacturing Index Jan 26.5 vs 11.1 Dec (F/cast was 12)
Building Permits Dec +4.5% MoM vs +5.9% Nov (F/cast was +0.1%)
Housing Starts Dec +5.8% MoM vs +1.2% Nov (F/cast was +0.2%)
10 year TIPS auction -0.987% vs -0.867% prior
USD was weaker vs Yen & Euro. Bitcoin -11.9% @ 31,108, VIX -1.2% @ 21.32, US T10 @ 1.107% rising
OIL Brent -0.12%, WTI -0.54% as US inventories unexpectedly rise
Gold +0.17%, Silver +1.04%, Copper +0.19%
AHEAD PMI Flash (Manufacturing,Services and Composite), Existing Home Sales EIA Natural Gas and Oil report, Baker Hughes Rig count data.
Senate expected to confirm former Fed Chair Janet Yellen as Biden’s Treasury secretary.

DAX -0.11%, CAC -0.67%, FTSE -0.37%  Markets opened higher on optimism over the Biden administration taking over, but drifted lower in early trades and then traded sideways before seeing selling into the close.  Banks and Autos initially leading but tech rallied in the afternoon. Petrochems led the laggards.
ECB left rates unchanged but said it was ready to act if needed.
Zur Rose Group +8.8% after robust full-year results.
Bankinter +4.3% after an upbeat 2021 forecast.
Unibail-Rodamco-Westfield -8.4% on the expectations that more lockdowns will hurt the mall operator.
Ambu -5.6% after ABG and SEB both downgraded its stock.
IG Group -8.6% said it would buy U.S. online trader Tastytrade in a $1 billion cash-and-stock deal.
Data 
EUROZONE 
ECB Interest Rate Decision unchanged at 0% as expected
Consumer Confidence Flash Jan -15.5 vs -13.9 Dec (F/cast was -16)
FRANCE  

Business Confidence Jan 98 vs 94 Dec revised  (F/cast was 95)
Business Climate Indicator Jan 92 vs 91 Dec revised (F/cast was 88)
UK 
CBI Business Optimism Q1 -22 vs 0 Q4 (F/cast was -8)
CBI Industrial Trends Orders Jan -38 vs -25 Dec (F/cast was -30)
BoE Credit Conditions Survey out
AHEAD
EUROZONE PMI Flash (Manufacturing,Services and Composite)
GERMANY PMI Flash (Manufacturing,Services and Composite)
FRANCE PMI Flash (Manufacturing,Services and Composite)
UK Consumer Confidence, Retail Sales, Public Sector Net Borrowing PMI Flash (Manufacturing,Services and Composite)

JAPAN Nikkei futures opened flat, currently -40pts Yen currently 103.48.Pre market inflation data was slightly worse than expected 
Data out
Inflation Rate Dec -1.2% YoY vs -0.9% Nov (F/cast was -1%)
Inflation Rate Dec -0.3% MoM vs -0.4% Nov (F/cast was +0.1%)
Inflation Rate Ex Food & Energy Dec -0.4% YoY vs -0.3% Nov (F/cast was -0.3%)
Core Inflation Dec -1% YoY vs -0.9% Nov (F/cast was -1.1%)
Later PMI Flash (Manufacturing,Services and Composite)
Tokyo reported 1,471 new covid cases on Thursday, with the daily count exceeding 1,000 for the ninth straight day
The Bank of Japan on Thursday revised its growth outlook upwards for the next two years and maintained its ultra-loose monetary policy as it warned that the pandemic makes clear forecasts less likely. However, for the current fiscal year to March the central bank expects the economy to shrink 5.6 percent, against its October estimate of a 5.5 percent contraction. Slight -VE
Listed companies in Japan offered voluntary early retirement to at least 18,635 employees in 2020, marking the highest level in 11 years, Tokyo Shoko Research Ltd. said Thursday. The number of companies that made public voluntary retirement offers stood at 93, 2.6 times the previous year’s level, the private credit research agency said. -VE
Moderna Inc’s COVID-19 vaccine was administered to the first test subject in Japan on Thursday, its distributor said, a critical step toward securing enough shots to inoculate the nation’s population.  Takeda Pharmaceutical Co announced the start of a combined phase I and II study of 200 adult volunteers in Japan. The government has purchased 50 million doses of the vaccine, enough for 25 million people, contingent on its regulatory approval. +VE
Japan expects to secure 310 million shots of COVID-19 vaccines, including those to be supplied by U.S. drugmaker Pfizer Inc., PM Suga said Thursday  at a plenary meeting of the House of Councilors. +VE
Panasonic Corp. said Thursday it has developed a cold box capable of storing and transporting vaccines against the novel coronavirus. The box is capable of storing materials at a temperature of minus 70 degrees Celsius for up to 18 days using refrigerants such as dry ice and does not need any electric power source, according to the company. +VE

SOUTH KOREA 
Expect markets to open flat after the Kospi hit a new high yesterday but see profit taking ahead of the weekend
No data due
Korea reported 401 more new cases of COVID-19 on Thursday -- 380 locally transmitted and 21 imported. The cumulative tally of official cases stands at 73,918.
South Korea expects its first batch of coronavirus vaccines from global vaccine-sharing scheme COVAX within weeks and has begun setting up vaccination centres, an interior ministry spokesman said on Thursday. +VE
LG Energy Solution topped the global market of electric vehicle batteries in 2020, while Hyundai Motor and its sister company Kia have ranked fifth in the global electric vehicle market.   According to market tracker EV-Volumes, the country’s battery giant LG Energy Solution deployed the most electric vehicle batteries in the world – a total of 34.5 gigawatts, or enough to power 700,000 electric vehicles. LG was followed by China’s CATL and Japan’s Panasonic, which sold batteries worth 32 gigawatts and 29 gigawatts.
ULikeKorea on Thursday announced that it had signed a memorandum of understanding with Sumitomo Corporation Korea to develop a health care tracker chip for pets in Japan. +VE
Samsung heir Lee Jae-yong finally broke his silence, three days after he was sent back to prison on Monday for bribing former President Park Geun-hye.   In a message sent via his attorneys on Thursday, the Samsung Electronics vice chairman reaffirmed the importance of his ongoing drive to establish a law-abiding culture at the conglomerate.
Posco’s LNG-powered bulk carrier successfully finishes first trip.  The world’s biggest LNG-powered bulk carrier has successfully returned from its first trip to bring in iron ore to South Korea, the country’s leading steelmaker said Thusday. +VE
South Korea's trade commission decided Thursday to uphold the existing anti-dumping tariff on imported Chinese H-shaped steel beams. The move will extend the anti-dumping tariff, which has been in force since July 2015, by another five-year period, according to the Ministry of Trade, Industry and Energy.
Samyang Foods on Thursday unveiled a new corporate management vision that focuses on environment, society and improved corporate governance.  The company, known globally for its popular Buldak Spicy Chicken noodles, said it plans to launch an audit committee and a compensation committee in March to actively promote transparency and environment-friendly values in business management. +VE

TAIWAN Expect market to open flat with caution ahead of the weekend.
Data due after market Unemployment Rate
Government yesterday reported three imported cases of COVID-19 from the Philippines and Denmark.
The Ministry of Economic Affairs (MOEA) has set up a working group to meet with US representatives at a meeting of the US-Taiwan Economic Prosperity Partnership dialogue early next month, the ministry said yesterday. +VE
Most US companies in Taiwan are upbeat about revenue growth this year and the next three years, as the local economy is expected to continue benefiting from strong demand for technology products amid the COVID-19 pandemic, the American Chamber of Commerce in Taiwan (AmCham) said yesterday. +VE
GoShare Taiwan Ltd yesterday expanded its electric scooter sharing services to Kaohsiung with 700 electric scooters, in an effort to scale up its customer base, while joining three other peers to vie for a share of the growing sustainable mobility market. +VE

CHINA Expect market to open lower as investors try to work out what Biden means for US/China relations and concerns on covid ahead of the Chinese New Year.  But downside limited by Team China being in action 
No data due but China Passenger Car Association (CPCA), estimated China's PV retail sales to burgeon 8% and auto sales to grow 4% this year.
China struck an optimistic tone toward President Joe Biden’s new administration on Thursday, saying “kind angels can triumph over evil forces” and playing down early irritants as the result of an atmosphere poisoned by Donald Trump’s term in office.
China last year failed to meet its trade deal targets with the US amid pandemic-related disruptions and an increasingly tense relationship with former US president Donald Trump’s administration. By the end of last month, China had purchased about 58.1 percent of the US$172 billion of goods that it pledged to buy last year under the “phase one” agreement with Washington, Chinese Customs Administration data showed. -VE
Pakistan’s Foreign Minister Shah Mehmood Qureshi said on Thursday that China has agreed to provide half a million doses of the Chinese Sinopharm COVID-19 free of cost to Pakistan by January 31.
EU Parliament condemns China deal over Hong Kong crackdown; MEP’s say EU has lost credibility on human rights by agreeing investment pact an called for targeted sanctions.

HONG KONG  ADR’s -23pts at  29,904; weakness in Petrochems, E Commerce and Chinese Financials
Data due  Business Confidence.After market Thursday Inflation Rate Dec -0.7% YoY vs -0.2% Nov (F/cast was -1.2%)The sixth straight month of deflation amid subdued demand conditions. Looking ahead, overall price pressures should remain very mild in the near term as global and local economic conditions are still challenging amid the continued threat of COVID-19, a Government spokesman said.
SHORT SELLING  Thursday 18.1% vs 20.5%  Wednesday
Top Shorts: Hengan (1044) 42%, Power Assets (6) 41%, WH Group (288) 32%, Bud Apac (1876) 32%,  MTRC (66) 31%, Ping An (2318) 31%, Baba -SW (9988) 30%,  Wharf REIC (1997) 28%, CSPC Pharma (1093) 28%, Country Garden (2007) 28%, Hang Seng Bank (11) 27%.

NATIONAL SECURITY  
District councillors will be required to take an oath to uphold the Basic Law, with an amendment bill facilitating the arrangement to be tabled to the Legislative Council after the Lunar New Year holiday.
New Bar Association chairman Paul Harris said he will do his utmost to persuade the government to modify the national security law in the hope of reinstating Hong Kong's extradition agreements with foreign governments.  The 68-year-old human rights lawyer, who succeeds Philip Dykes, hopes to explore whether there is any chance - although the chance is slim, he admitted - of getting the government to agree to some modifications to the national security law so extradition arrangements can be reinstated.

WATCH
PEIJIA-B (09996.HK) to raise up to $823 million by placement, reported IFR. It intended to place 28 million shares, representing 4.2% of the share capital as enlarged.  The guided price ($28.28-29.38) represented a discount of 1.9%-5.6% to the closing price Thursday.
On 18 January, TENCENT (00700.HK) President Martin Lau disposed of 100,000 shares of the company, involving $65.9751 million, according to shareholding disclosures at the Stock Exchange.
Wheelock Properties' MONACO in Kai Tak tendered 13 flats this morning and received 31 tenders. With all of the 13 flats sold out, the company booked $257 million. It also sold 90 out of 120 units on offer at its Monaco development in Kai Tak yesterday. The developer had received 2,270 checks for the 120 flats, making the batch 18 times oversubscribed. The 120 units were offered at an average price of HK$24,216 per sq ft after discounts with the cheapest unit costing HK$6.62 million.
Nan Fung Group has received about 5,160 checks for 179 units on offer at LP10 in Lohas Park, making the units 27 times oversubsubscribed.
MTR Corporation (0066) named its Wong Chuk Hang Station property development The Southside, which can accommodate 5,200 flats and includes a shopping mall which is expected to open in 2023.
HKEX (00388.HK)  announced the launch of a cash-settled Mini USD/CNH (US dollar/Offshore Renminbi, or RMB) Futures contract -- a smaller-sized contract to complement the popular USD/CNH derivatives products, further diversifying HKEX’s suite of currency derivatives to support the risk-management needs of global investors.  Likely 1H 21. +VE
S HARBOURHOLD (01663.HK)  announced that Chairman Wong Lam Ping had acquired an aggregate of 628,000 ordinary shares in the open market at an average price of approximately HK$0.154 per share on 21 January 2021.
CASH FIN SER GP (00510.HK) announced that on 20 and 21 January 2021, the Group acquired an aggregate of 230,000 CHINA MOBILE (00941.HK) Shares through the open market at an aggregate consideration of approximately HK$11.3 million.
US Teachers Insurance and Annuity Association (TIAA)'s US$1.1-trillion asset management arm, Nuveen, emailed Reuters that it has sold out Chinese companies affected by the US investment ban.
The valuation of Ant Group is estimated to be further reduced under China's new moves to contain market concentration in the online payments market, according to Bloomberg Intelligence. The fintech giant may be worth less than RMB700 billion or USD108.0 billion, with Alipay's value halved, according to the estimates.
SMOORE INTL (06969.HK)  POSITIVE PROFIT ALERT For the year ended 31 December 2020, it is expected that the profit and total comprehensive income will increase by approximately 10% to 15% yearly. It is expected that the adjusted net profit for FY2020 will increase by approximately 70% to 75% yearly.
Fubon Bank (Hong Kong) Limited and HKT-SS (06823.HK) have signed a memorandum of understanding (MoU) to promote and foster the development of Fubon Bank’s digital banking services. Fubon Bank is planning to launch Fubon GO, a remote account opening mobile app which is developed by HKT and currently being run as a pilot trial under the Fintech Supervisory Sandbox of the Hong Kong Monetary Authority.

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