Things to know before trading Asia on Monday


10 Jan

Expectations of more US stimulus buoyed the market on Friday that is likely to continue this week too.
Auto’s weak as Chip scarcity forces carmakers to slow or halt production, a global issue.
Consumer Electronics Show takes place this week and will be an entirely virtual affair but will it still generate new business?
Pfizer and BioNTech vaccine said to be effective against the new covid mutations.   Comes as Japan find another new mutation, this time in travellers from Brazil.
US lifting self-imposed restrictions on relationship with Taiwan.  A move that will annoy China and could pave the way to Taiwan establishing new diplomatic relations  with more countries.  Sec of State Pompeo said the US had made these restrictions to appease the Communist regime. Implying that as Beijing had taken advantage of the situation; the US would not be bound by them either.  China says that the US is playing with fire.  I think it will be important now for other countries to also recognise Taiwan in order to make it very clear that military action against Taiwan in internationally unacceptable.
US, Canada, Britain and Australia condemn Hong Kong opposition arrests.  The  Foreign ministers of the four countries issue joint statement condemning dawn raids last week; saying that the National security law being used to eliminate dissent.  Also saying the the national security law was a clear breach of the Sino-British Joint Declaration, undermining the ‘One Country, Two Systems’ framework. The HK Govt issued a rebuttal https://www.news.gov.hk/eng/2021/01/20210107/20210107_204718_901.html?type=ticker
US House Speaker Nancy Pelosi asked President Donald Trump to resign as he needs to be accountable for the mob breaching into the US Capitol earlier on, or else she will tell Democrats to move forward with impeachment.  Pelosi spoke on phone with Army General Mark Milley, the chairman of the Joint Chiefs of Staff, that the latter should stop Trump in case he decides to launch a nuclear weapon.Good earnings from TSMC and LG Electronics likely to keep Tech in favour.

DOW +0.18%, NDX +1.03%, S&P +0.55%, Russel 2K -0.25% Markets opened higher; but drifted lower hitting lows around 1:30pm before rebounding.  News that rhe economy lost 140k jobs was a surprise. But some think that will mean more stimulus from the Biden team when they take over
Banks JPMorgan Chase +0.1%, Citigroup -1% and Wells Fargo -0.7%, AMEX flat
Work from home: Facebook -0.4%, Apple +0.9%, Amazon +0.7%, Netflix +0.3%,  Disney +0.1%, Zoom Video +2.1%, Alphabet +1.3% and Microsoft +0.6%,
Tech NXP unch, Nvidia -0.5%, Micron -2.1%, AMD -0.6%, Skyworks +0.5%
Re-opening stocks  Boeing -1.3%, Caterpillar unch, Simon Property +1.6%, Kohl’s +0.1%, Nordstrom +1.7%, Gap -0.4%, United Airlines -0.8%, Carnival -1.3%, Wynn Resorts -0.7%, Chevron +1%, Exxon Mobil +1.1%,  
Lock down names Campbell Soup -0.8% General Mills -2.7%, JM Smucker -0.6%
DATA
Non Farm Payrolls Dec -140k vs +336k Nov revised (F/cast was +112k)
Unemployment Rate Dec 6.7% vs 6.7% Nov (F/cast was 6.7%)
Average Weekly Hours Dec 34.7 vs 34.8 Nov (F/cast was 34.8)
Average Hourly Earnings Dec +5.1% YoY vs +4.4% Nov (F/cast was +4.3%)
Average Hourly Earnings Dec +0.8% MoM vs +0.3% Nov (F/cast was +0.1%)
Participation Rate 61.5% vs 61.5% (F/cast was 61.6%)
Wholesale Inventories Nov 0% MoM vs +1.3% Oct revised (F/cast was -0.1%)
Baker Hughes Total Rig Count 360 vs 351 prior
Consumer Credit Change Nov $15.27b vs 4.54b Oct revised (F/cast was 10.2b)
USD was slightly stronger vs Yen & Euro. Bitcoin +0.8% @ 41,134.75, VIX -3.6% @ 21.56, US T10 @ 1.119%
OIL Brent +1.8%, WTI +2.8% continued to rise after Saudi pledged a production cut.
Gold -3.3%, Silver -6.5%, Copper -0.1% as political risks associated with the handover of power are deemed to have eased.
AHEAD Consumer Inflation Expectations

DAX +0.58%, CAC +0.65%, FTSE +0.24%  Markets opened higher following the US and Asia; with the DAX hitting a new high.  It and the CAC then traded sideways above yesterdays close.  FTSE traded around flat.  Tech lead the gains with Auto’s the laggards with reports of a industry shortage of semiconductors causing companies to slow or halt production.
Credit Suisse -3.6% after forecasting a net loss for Q4 on the back of a $850m provision for a long running dispute in the US over a residential mortgage backed security.
Deutsche Bank AG -0.7% will pay nearly US$125 million to avoid U.S. prosecution on charges it engaged in foreign bribery schemes, including in China, and manipulated precious metals markets, the latest blow for the bank as it tries to rebound from a series of scandals, Reuters reports.
Sodexo +10.5% on better than depicted earnings and it gave an upbeat outlook.Tui +27% after announcing a 545 million euro ($666.3 million) capital raise to shore up its finances.
STMicroelectronics +1.9% after announcing its preliminary net revenues for the fourth quarter of last year were above the outlook range previously provided in October. Fourth-quarter revenues were now expected to hit $3.24bn, higher than the $2.99bn previous forecast.
UK to resume trading of Swiss shares in the coming weeks, comes as a significant amount of trading moves to European bourses because the EU will not grant ‘equivalence’ to UK systems. Which is ludicrous since they were the same until 31 Dec and nothing except for the Brexit deal has changed. The result is likely to be that the UK will seek new opportunities.
DATA
EUROZONE
Unemployment Rate Nov 8.3% vs 8.4% Oct (F/cast was 8.5%)
GERMANY
Balance of Trade Nov Euro 17.2b vs 19.4b Oct (F/cast was 17.6b)
Exports sa Nov +2.2% MoM vs +0.9% Oct revised (Consensus was +0.8%)
Imports sa Nov +4.7% MoM vs +0.4% Oct revised (Consensus was +0.4%)
Current Account Nov Euro 21.3b vs 22.9b Oct revised (F/cast was )
Industrial Production Nov +0.9% vs +3.4% Oct revised (F/cast was 1.1%)
FRANCE
Industrial Production Nov -0.9% MoM vs +1.9% Oct revised (F/cast was -1.6%)
Balance of Trade Nov Euro -3.6b vs -4.6b Oct revised (F/cast was -4.4b)
Current Account Nov Euro -1.4b vs -3.8b Oct revised (F/cast was -3.4b)
Household Consumption Nov -18.9% MoM vs +3.9% Oct (F/cast was -12.6%)
UK
Halifax Price Index Dec +0.2% MoM vs +1% Nov revised (F/cast was +0.8%)
Halifax Price Index Dec +6% YoY vs +7.6% Nov (F/cast was +6.8%)
AHEAD
EUROZONE No data Lagarde speaks
GERMANY No data due
FRANCE No data due
UK No data due

JAPAN Expect Nikkei to open higher having closed Friday at a new 30 year plus high. Yen closed 103.93  Heavy snow over the weekend may cause some disruption but unlike to impact the markets.
No data due 
Tokyo reported 2,268 new covid cases on Saturday, a third day above 2,000 but lower than Friday’s 2,392,.  Nation-wide total was 7,779More prefectures are asking the government to expand the State of Emergency; as it is extended to Osaka, Kyoto and Hyogo prefectures. Kansai being considered.  Overall raising concerns that the economy will hit a double dip recession.
A new coronavirus variant was detected in four travellers from Brazil, Japan’s Health Ministry said on Sunday, marking an advance in changes to the pandemic virus. The new variant is different from those first found in Britain and South Africa, although the three of them share some common mutation, said Takaji Wakita, head of the National Institute of Infectious Diseases.
Tension with S Korea rising after the Seoul central district court has ordered Japan to pay Won100m ($91,600) each to 12 former sex slaves. “It’s extremely regrettable. There’s absolutely no way we can accept this,” said Katsunobu Kato, Japan’s chief cabinet secretary. “We strongly request that South Korea as a nation takes measures to cease its violations of international law.”
Japan Post Bank will scrap its cashless payment card service due to major security flaws and launch a new service around spring 2022, its President Norito Ikeda said Friday.  Ikeda also announced that he will voluntarily return 10% of his monthly pay for three months to take responsibility for fraudulent transfers of customer deposits using the service, known as mijica.  “We apologize to our customers for causing inconvenience and trouble as we failed to conduct customer-oriented operations, including those related to compensation payment,” he said. -VE

SOUTH KOREA Expect markets to open higher following the US with sentiment encouraged by the emergency cash handout programme and the rise in credit loans.
No data due
South Korea plans to kick-off a 4.1 trillion won ($3.7 billion) emergency cash handout program Monday for small business owners, freelancers and special contract laborers hit by the third wave of coronavirus here, the Finance Ministry said Sunday. +VE
KDCA announced Sunday 665 new covid cases vs 641 on Saturday the lowest since Dec 8 and the sixth day below 1,000.Credit loans climbed back up in the first week of 2021, fueled by a bullish stock market and eased bank loan rules, data showed Sunday.   Money likely to be channelled into the stock market.
The National Assembly on Friday passed a bill to enhance employer liability in industrial accidents, amid persistent backlash from business circles.  -VE for business sentiment but good for progress.
Hyundai Motor Group, said Sunday that it will carry out a pilot project to reuse batteries used for electric vehicles (EVs) at solar power plants. The move follows the Ministry of Trade, Industry and Energy's recent decision to give regulatory exemptions for new business models based on reusing EV batteries. Before, it was difficult for companies to push for such projects as the country has no regulations related to the reuse of worn-out EV batteries. +VELG Electronics logged a record-high operating profit in 2020, surpassing 3 trillion won ($2.75 billion) for the first time in its history, the company said in its regulatory filing Friday.  Its operating profit for the whole of last year has been estimated at 3.19 trillion won, breaking the previous record of 2.7 trillion won in 2018.
LG Electronics Inc. said Friday it will feature a virtual human as a speaker at the world's largest tech expo this week as the South Korean tech powerhouse aims to show off its artificial intelligence (AI) capabilities.  LG said an artificial human, named Reah Keem, will deliver a three-minute presentation at its press event for the all-digital Consumer Electronics Show (CES) 2021 on Monday.  Sunday LG Electronics unveiled its full lineup of TVs for 2021, including the first 83-inch organic light-emitting diode TV model with advanced self-emissive lights, to cement its leadership in the growing OLED TV market.  +VE
Samsung Display to ink 1st collective agreement with labor union.  The management and labor union of Samsung Display Co. said Sunday that they will sign a collective agreement this week for the first time among the electronic affiliates of Samsung Group, which declared it would scrap its "no labor union" policy last year.
Samsung SDI said Friday that it had recently conducted an executive-level reshuffle to appoint a new electric-car battery chief.  The reshuffle included major posts -- chief financial officer, head of the medium-to-large-battery division and head of the small-battery division. Kwon Young-no, chief of the business management office, has been replaced by Kim Jong-sung, who had previously worked at Samsung Electronics’ video display division. Kim will also take post as CFO.
Ssangyong Motor is managing to keep its manufacturing operations afloat, as some suppliers are temporarily providing a minimal amount of necessary parts while the automaker works on finding a new investor. Slight +VE

TAIWAN Expect market to open higher after good earnings from TSMC and Trade Balance on Friday.  Tech and Apply Supply chain names still leading the market higher.
No data due but after market Friday 
Balance of Trade Dec $5.76b vs 5.27b Nov (F/cast was 5.1b)
Exports Dec +12% YoY vs 12% Nov (Consensus was +9.2%)
Imports Dec +0.9% YoY vs 10% Nov (Consensus was +4.1%)
Driven by 5G smartphones and other new technology applications ramped up business for local component suppliers, the Ministry of Finance (MOF) said. The growth momentum might gather further strength this month with increases from 19 percent to 23%, aided by three more working days in January this year compared with last year, the ministry said. “The factors driving the growth look sustainable and the timing of the Lunar New Year holiday will also lend support,” Department of Statistics Director-General Beatrice Tsai told a news conference in Taipei. +VE
The Central Epidemic Command Center (CECC) yesterday reported three new imported covid cases, arrivals from Nigeria, Egypt and the US, bringing the total number of cases in Taiwan to 825.
Taiwan Semiconductor Manufacturing Co (TSMC, Friday reported record quarterly revenue, joining other Apple Inc suppliers in signaling strong demand for the new 5G iPhones. The world’s largest contract chipmaker said that sales totaled NT$117.4 billion (US$4.13 billion) last month. Revenue last quarter reached a record NT$361.5 billion, according to Bloomberg News’ calculations based on previously released monthly sales figures. That came in slightly below the average estimate of NT$364 billion, which had risen in the past few months as expectations of iPhone sales grew. +VE and +VE cross read for other supply

CHINA Expect market to open lower with concerns over US/China relations as US says its abandoning restrictions on contact with Taiwan and the new repsonse to foreign sanctions.
Data due 
Inflation Rate Dec (Nov was -0.5% YoY (-0.6% MoM) F/cast is flat YoY and +0.5% MoM)
PPI Dec Nov was -1.5% F/cast is -1%
China will provide COVID-19 vaccines free of charge once they become available to the general public, government authorities said on Saturday.  As the Chinese premier Li Keqiang says transparency and correct reporting essential to containing the spread.  Comes as the number of infections continues to rise in Hebei neighbouring the nation’s capital. On Saturday, mainland China reported 69 new cases, more than double the 33 reported a day earlier. Most of the locally transmitted cases – 46 out of 48 – were in Hebei.
China says it is ready and open for the WHO team to visit Wuhan. Almost a year after the outbreak occurred.
China’s Ministry of Commerce on Saturday published new rules for countering “unjustified” laws and restrictions imposed by foreign countries on Chinese companies and citizens, as economic relations between Beijing and Washington deteriorate. The rules on “unjustified extra-territorial application of foreign legislation” were posted on department’s website and established a “working mechanism” to assess the legal implications of such incidents.  According to the notice, a Chinese person or organisation that is restricted by foreign legislation from “engaging in normal economic, trade and related activity with a third State or its citizens,” may report it to the commerce department within 30 days.  The commerce department will then assess a case for its potential violation of international law, impact on China’s sovereignty and national security, and impact on Chinese citizens. The regulations prohibit Chinese companies and individuals from complying with punitive measures mandated by foreign governments and take effect immediately.  If companies do comply with foreign sanctions which are then deemed illegal by the commerce department they could also be sued for compensation in Chinese courts.  That could potentially expose foreign investors to significant liabilities but it will also create a new headache for Hong Kong listed banks and other companies.
An annual central conference for China’s judicial, prosecution and public security work promised to strengthen law enforcement and judicial work against monopolies and unfair competition in 2021. The meeting was held Saturday and Sunday in Beijing, according to a statement on the WeChat account of the Commission for Political and Legal Affairs of the Communist Party Central Committee, Bloomberg reports. The authorities urged Internet platforms to regulate businesses according to laws. Government agencies will remain highly vigilant against risks from private funds, online lending and apartment renting platforms amid the coronavirus outbreak.
China Banking and Insurance Regulatory Commission (CBIRC) announced that it will solemnly mount investigation on a series of law violations, and will impose administrative penalty on multiple financial institutions and related responsible personnel, including China Development Bank (CDB), China Development Bank Leasing, ICBC and PSBC. The penalty aggregated RMB199.5 million.
Press reports that Beijing tried to insert a Huawei/ZTE  revenge clause in the EU trade deal agreement but it was struck out.  
China has begun building a $900 million facility it hopes will be the envy of eSports and seal its push to make Shanghai the global capital of the fast-growing professional gaming industry. The Shanghai International New Cultural and Creative E-sports Center is scheduled for completion in 2023
Chinese solder held by Indian troops after straying across the disputed border; a reminder that China is facing sides.
Some venues in Shanghai's Lujiazui have switched on trials for digital RMB, said Chinese media.  Ant Group replied that there is no more information available as the trial is still at the initial stage.

HONG KONG  ADR’s +275pts at 28,153 only HSBC and Petrochina, Sinopec and Unicom seeing weakness.  But that was before the new Chinese rules designed to protect Chinese companies from unjustified sanctions; -VE for HK Banks especially.
No data due
SHORT SELLING Friday 9.2% vs 13.8% Thursday 
Top Shorts: Hang Lung Property (101) 40%, Hengan (1044) 40%, MTRC (66) 40%, Hang Seng Bank (11) 40%,  Wharf REIC (1997) 37%, Ping An (2318) 35%, CLP 92) 32%, HK & China Gas (3) 32%, Henderson Land (12) 32%, Bud APAC (1876) 30%,Sunny Optical (2382) 27%.

SHARE BUYBACK / INSIDER DEALING
CH OUTFITTERS (01146.HK) announced that it was informed by Orchid Asia, a shareholder of the Company, that on 7 January 2021, Orchid Asia disposed of 130 million shares of the Company, representing approximately 3.77% of the issued share capital of the Company to Huang Xiaoyun, an executive director of the Company, for a consideration of HK$15.6 million.
PROFIT WARNING / ALERTS 
POLY CULTURE (03636.HK) Profit Warning  Due to the continuous impact of the COVID-19 pandemic, it is expected to record a loss for the year ended 31 December 2020 of RMB300 million to RMB400 million, as compared to a profit of RMB49.7 million for the year ended 31 December 2019.
BIRMINGHAM SPTS (02309.HK) Positive Profit Alert  It is expected that the Group will record a profit of approximately HK$30 million for the six months ended 31 December 2020 as compared to the consolidated loss of HK$64.8 million for the corresponding period in 2019.
WATCH
SUNNY OPTICAL (02382.HK) announced that the shipment volume of handset lens sets and vehicle lens sets in December 2020 was 130 million and 5.736 million units, up 2.5% and 37.3% yearly.
SMIC (00981.HK) announced that approximately 55.4218 million restricted A shares will be listing and circulating from 18 January.  It announced that the JV SMEC introduced new strategic investors. As a result, Xinjiang Dongpeng, Qingdao Yingke, Suzhou HuYangLin, Qingdao Cowin, Shangrong Chuangxin, IPV Global, Ningbo Wanxin, Qingdao Ruanxin, Guangzhou SunTour, Haitong ITG, Tianjin Yuanfeng, CMBI Growth, Qingdao Juyuan Xinyue, Qingdao Juyuan Xinyue II, Shenzhen Capital, Masterwell, Shanghai Hongcheng, Suzhou Heji and Zhuzhou Ruilian became the new shareholders of SMEC.  SMEC is principally engaged in integrated circuit chip manufacturing with a registered capital of RMB7.05 billion. As SMIC Holdings did not make further capital contribution in SMEC, the Company’s equity interest in SMEC, through SMIC Holdings, deceased from approximately 22.26% to 19.57%.
CSPC PHARMA (01093.HK) announced that NBL-012, a fully human antibody drug independently discovered and developed by NovaRock Biotherapeutics Limited, a subsidiary of the Company, obtained approval of its Investigational New Drug Application (IND) from the U.S. Food and Drug Administration (FDA).  NBL-012 is for treating chronic inflammatory diseases such as psoriasis, hidradenitis suppurativa (HS), inflammatory bowel disease (IBD) and other autoimmune diseases. The Phase I clinical trials will evaluate the safety and tolerability and pharmacokinetic profile of NBL-012.
GREATWALL MOTOR (02333.HK) announced that for 2020, the total production +1.3%to 1.0991 million units  and sales volume +4.8% to 1.1116 million units.
LOGAN GROUP (03380.HK) announced that for the twelve months ended 31 December 2020, the contract sales were RMB120.69 billion, +31.9% YoY  and the gross floor area of contract sales was approximately 7.452 million sq.m..
SEAZEN (01030.HK) announced that the aggregate contracted sales from January to December 2020 amounted to RMB250.963 billion, -7.3% yearly. The aggregate sales area was approximately 23.4885 million sq.m.
RSUN PPT (01996.HK) announced that from January to December 2020, the aggregated contracted sales of the Group was RMB86.5 billion, +32.8% yearly.
BONJOUR HOLD (00653.HK) announced that it noted a press release from Ming Pao dated 7 January 2021 stated that the Company, in December 2020, had sold a property located at shops 2 & 3A on G/F of Dang Fat Mansion, 10-16 and 20 Tai Ho Road, 8-12 Dung Fat Street, 7-11 On Wing Street, Tsuen Wan, New Territories at the consideration of HK$105 million. It also noted a copy of a provisional sale and purchase agreement dated 17 December 2020 regarding the transfer of the Property between Wealthy Train Limited and a potential purchaser, which has not yet been delivered by the Company and its subsidiaries, was filed in the Land Registry without the Group’s knowledge The company clarified that so far the terms of the Alleged Disposal have not been finalised, and the Group has not formally taken any deposit from the potential purchaser and the parties are still negotiating the terms of the Alleged Disposal.  The company applied for a trading resumption with effect from next Monday (11 January).
Pruden's Executive Director & Corporate Development Director (Valuation & Property Management) Leo Cheung commented that the residential site at No. 9 and 11, Mansfield Road, to close tender on 5 February, enjoys ideal landscape and location.   The land premium was modeled at roughly $6.8 billion, and floor price at $47,000/ sq. ft..
Stewart C K Leung, Chairman of Wheelock Properties, forecast 5-10% increment in local housing prices this year, contingent on the overall economic environment in Hong Kong. As long as the economy revives, the housing prices will advance. In Leung's view, the situation will get better if it can make trough the Chinese New Year.  The group had earlier won a land parcel at Mansfield Road. As to another site at the same road to be launched by the government, Leung said the company will consider the tender, opining the two parcels can be merged for development.
SUNNY OPTICAL (02382.HK) announced that the shipment volume of handset lens sets and vehicle lens sets in December 2020 was 130 million and 5.736 million units, up 2.5% and 37.3% yearly.
CCL last printed at 178.13, +1.08% WoW to a 19-week peak, said Centaline Property.  
CCL Mass last posted at 180.48, +0.66% weekly;
CCL (small-to-medium flats) last reported at 177.99, +0.74% weekly;
CCL (large units) last stood at 178.83, +2.89% weekly.

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