Nov 24 Asian Macro Initial Thoughts Asia to open mainly higher, US Future higher


27 Nov

Asian Futures Nikkei Chicago Futures 26,013 indicating a higher open  HK ADR’s flat but Australia Futures indicating higher.  

US Futures opened higher; Dow +160pts, S&P +0.4% and NDX +0.3% +VE reaction to Biden’s selection of key appointees

Trump’s administration announces it is prepared to start the hand over process to Biden’s team BUT Trump tweets he is continuing his campaign to overturn the election results. Overall Slight +VE for sentiment.

Regional Top Glove's factories in Malaysia will be closed after more than 2,000 workers tested positive, it was announced on Monday.


DOW +1.12%, NDX +0.22%, S&P +0.56%, Russel 2K +1.85% Markets opened higher, initially dipped and then worked higher with cruise lines and airlines rallying on the new vaccine news. News in the final hour; Biden to appoint Janet Yellen as Treasury Sec seem as +VE
PMI data was much better than expected also helping sentiment. But the number of covid cases remains a concern as California issued a limited stay at home order.
Goldman’s lowered its economic growth estimates for Q4 2020 to 3.5% from 4.5% and Q1 2021 to 1% from 3.5%.
Trump’s hopes of over turning the election results diminished at Michigan confirms Biden’s victory
Banks JPMorgan Chase +2.9%, Citigroup +3.2% and Wells Fargo +3.2%, AMEX +3.1%
Work from home names: Facebook -0.5%, Apple -3%, Amazon unch, Netflix -2.4%, Zoom Video -2.1%, Alphabet -0.5% and Microsoft -0.1%,
Nvidia +0.4%, Micron +4.5%, AMD -0.8%, Skyworks -1.7%
Re-opening stocks Boeing -6%, Caterpillar +1.5%, Simon Property +5.3%, Kohl’s +9%, Nordstrom +10%, Gap +6.9%, United Airlines +2.6%, Carnival +4.6%, Wynn Resorts +0.2%, Chevron +6%, Exxon Mobil +6.6%,
Lock down names Campbell Soup +0.3% General Mills -0.6%, JM Smucker -0.2%
DATA
Chicago Fed National Activity Index Oct 0.83 vs 0.32 Sept revised (F/cast was 0.1)
Flash Manufacturing PMI Nov 56.7 vs 53.4 Oct (F/Cast was 52.9)
Flash Services PMI Nov 57.7 vs 56.9 Oct (F/Cast was 55.1)
Flash Composite PMI Nov 57.9 vs 56.3 Oct (F/Cast was 54.5)
USD was stronger vs Yen & Euro. Bitcoin +0.79% @ 18,390.50, VIX -4.3% @ 22.66, US T10 @ 0.855%
OIL Brent +1.8%, WTI +0.97%
Gold -2% a four month low, Silver -3.1%, Copper -0.84%
AHEAD Redbook, Case-Swiller home Price, House Price Index, CB Consumer Confidence, Richmond Fed Manufacturing Index, API Crude Oil Stock Change. Fed Speakers Bullard and Williams.

DAX -0.08%, CAC -0.07%, FTSE -0.28% Markets opened higher but drifted lower through the session. AstraZeneca -3% despite announcing its vaccine was 70% effective (key is that it cane kept at normal fridge temperatures) but the healthcare sector generally under pressure along with Telcos. Recovery names in focus on vaccine hopes along with resources.
PMI data was mixed; French and Eurozone weaker than expected, German slightly better, UK much better.
Credito Valtellinese strong after it received a €737m takeover offer from Crédit Agricole, valuing the Italian bank at €10.5 per share, a 21% premium to its closing price on Friday.
Thyssenkrupp +9.5%, Repsol +7.9% and Rolls Royce +7.7%. But Latour -5.9% and Hellofresh -4.7%
UK said the lockdown would end Dec 2 with conditions.
DATA
EUROZONE
Flash Manufacturing PMI Nov 53.6 vs 54.8 Oct (F/Cast was 53.6)
Flash Services PMI Nov 41.3 vs 46.9 Oct (F/Cast was 43.7)
Flash Composite PMI Nov 45.1 vs 50 Oct (F/Cast was 46.1)
GERMANY
Flash Manufacturing PMI Nov 57.9 vs 58.2 Oct (F/Cast was 55.9)
Flash Services PMI Nov 46.2 vs 49.5 Oct (F/Cast was 46.5)
Flash Composite PMI Nov 52 vs 55 Oct (F/Cast was 49.7)
FRANCE
Flash Manufacturing PMI Nov 49.1 vs 51.3 Oct (F/Cast was 50.0)
Flash Services PMI Nov 38 vs 46.5 Oct (F/Cast was 40.1)
Flash Composite PMI Nov 39.9 vs 47.5 Oct (F/Cast was 34.6)
UK
Flash Manufacturing PMI Nov 55.2 vs 53.7 Oct (F/Cast was 50)
Flash Services PMI Nov 45.8 vs 51.4 Oct (F/Cast was 42)
Flash Composite PMI Nov 47.4 vs 52.1 Oct (F/Cast was 42.2)
AHEAD
EUROZONE ECB speakers Schnabel, Lagarde and Lane
GERMANY GDP Growth Rate, Ifo Business Climate, Current Conditions & Expectations. Bundesbank speaker Mauderer
FRANCE Business Confidence, Business Climate Indicator
UK CDI Distributive Trades, BoE’s Haskel speaks

JAPAN Market re-opens Nikkei Futures Chicago 26,013 vs 25,527 last close, Yen currently 104.47. Expect an initial spike and then rangebound trading with recovery names in focus.
No data due
A panel of human rights experts working with the United Nations said Monday that former Renault-Nissan boss Carlos Ghosn was wrongly detained
in Japan and has urged “compensation” for him from the Japanese government. Slight -VE for the Government.
Japan's Business Federation aims to have women occupying more than 30% of the executive positions at major companies by 2030, the latest sign that the private sector is gearing up to diversify the workforce to stay competitive.
General Motors will recall about 7 million big pickup trucks and SUVs worldwide to replace potentially dangerous Takata air bag inflators. The announcement came Monday after the U.S. government told the automaker it had to recall 6 million of the vehicles in the US
Key weekend headlines
Japanese health experts said the government should consider pausing its domestic travel campaign in some regions amid a record surge in COVID-19 cases and as the nation heads into a holiday weekend.
PM Suga said on Sunday that his country will lead international efforts to combat climate change, in comments on the sidelines of the G20 summit.
The government is considering child benefit cuts for high-income households from fiscal 2021, with the idea of using the savings to increase the capacity of child care services and reduce the number of children on nursery school waiting lists. +VE
Kirin Holdings Co. plans to sell its Australian subsidiary Lion Pty Ltd.’s beverage business to Australian dairy giant Bega Cheese Ltd. for more than ¥40 billion, according to sources. +VE


SOUTH KOREA Futures indicate markets to open higher and pre market Consumer Confidence data +VE. Expect markets to continue to work higher.
Data out
Consumer Confidence Nov 97.9 vs 91.6 Oct (F/cast was 82)
Korea Disease Control and Prevention Agency (KDCA) reports 271 new cases Monday vs 330 Sunday. Govt strengthening the social distancing rules from today with the closure in greater Seoul of bars and nightclubs, limiting religious gatherings and restrict on-site dining at restaurants and cafes. -VE
Samsung Heavy Industries has won orders worth $2.5 billion from European shipowners, according to the firm’s regulatory filings Monday. It is the shipbuilder’s largest single order achieved since its establishment in 1974. +VE
The South Korean government on Monday opened the 15th Job Fair for Foreign-Invested Companies. The job fair this year will be held online through Friday, according to the organizers.
US President-elect Joe Biden’s ambitions to curb carbon emissions are set to bring significant changes to the economic landscape for South Korea’s exporters. Areas of most impact; Batteries, Solar and Wind power, Steel, Autos, Petrochems.
Nexon After a major regulatory setback in China is striving to turn things around in other regions by releasing a new first-point-shooter game that offers a twist on Krafton’s PlayerUnknown’s Battlegrounds, a battle royale shooter that pits 100 players against each other.
Oriental Brewery said Monday it will brew beer with solar power to pursue RE100, a global initiative to source 100 percent of electricity consumption from renewable energy sources.

TAIWAN Expect market to open higher after US rallied and good local data after market Monday. Foreigners turned net buyers last week with focus on buying UMC, Macronix and Yuanta Financial, while the top three sold were Innolux, E.Sun Financial and China Petrochemical Development Corp, the exchange said
Data due after market
M2 Money Supply
After market Monday
Unemployment Oct 3.77% vs 3.78% Sept (F/cast was 3.8%)
Industrial Production Oct 7.06% vs 10.73% Sept (F/cast was 6.5%)
Retail Sales Oct 3.26% vs 3.14% Sept (F/cast was 3.1%)
Industrial production last month was the ninth straight month of continuous year-on-year growth for industrial production, as demand for information and communications technology products remained strong, the ministry said, but added that demand might have peaked. Ministry said the outlook remained positive.
Cathay Consolidated Inc to debut its shares on the Taiwan Stock Exchange today, becoming the fifth domestic company to list on the main board this year, the exchange said yesterday. Cathay Consolidated produces thermoplastic polyurethane for the healthcare and aviation sectors. The company has set its initial public offering price at NT$55 per share. It reported earnings per share of NT$2.20, NT$2.80 and NT$3.08 from 2017 to last year respectively. In the first three quarters of this year, it posted earnings per share of NT$2.65, compared with NT$2.56 in the same period last year.
Formosa SUMCO Technology Corp yesterday said that wafer prices are likely to hold steady for long-term supply contracts this quarter from last quarter, driven by robust demand for 8-inch wafers for power management ICs and driver ICs for displays. Growth momentum for 8-inch wafers is expected to extend to the end of this year, the company said. +VE
CTBC Bank yesterday said that its overseas units’ profit momentum continued to slow last quarter, due to bad loans amid the COVID-19 pandemic, but it remains upbeat for next year in light of positive steps in vaccine development. Slight +VE

CHINA Expect market to open higher following the US but concerns still remain over the SoEs and the credit markets.
No data due
China hailed as a success its pre-dawn launch on Tuesday of a robotic spacecraft to
bring back rocks from the moon in the first bid by any country to retrieve lunar surface samples since the 1970s +VE for sentiment.
Pope Francis for the first time, in a new book, calls China's Muslim Uighurs a "persecuted" people, something human rights activists have been urging him to do for years. -VE for China’s international image but unlikely to impact trading.
The World Health Organization (WHO) has had assurances from China that an international field trip to investigate the origins of the new coronavirus will be arranged as soon as possible, its top emergency expert said on Monday. Comes almost 12 mths after the initial reports.
Biden expected to appoint Antony Blinkin as Sec of State which many think shows he is looking to appoint someone who can work with China.
The US government is close to declaring that 89 Chinese aerospace and other companies have military ties, restricting them from buying a range of US goods and technology, according to a draft copy of the list seen by Reuters.
SCMP asks Can China maintain overseas funding as worries mount at home?

HONG KONG ADR’s -2pts to open at 26,484 with E Commerce and Financials weak.
Data due After market
Balance of Trade, Exports and Imports

SHORT SELLING Monday 17.4% vs 17% Friday 
Top Shorts Bank of China (3988) 51%, Sinopec (386) 48%, Ping An (2318) 48%, BoC HK (2388) 43%, CCB 9939) 41%, Hang Seng Bank (11) 38%, Galaxy Ent (27) 38%, Country Garden (2007) 36%, HSBC (5) 35%, Citic (267) 33%, Swore Pac A (19) 30%, WHARF REIC (1997) 29%, MTRC (66) 29%, HK & China Gas (3) 29%, Hang Lung Ppty (101) 26%, Henderson Land (12) 25%, Hengan (1044) 25%

SECURITY LAW Britain is considering pulling its judges out of Hong Kong's highest court, Foreign Secretary Dominic Raab said on Monday, in its latest response to what it considers China's breaches of its international obligations in the territory.

WATCH
ALIBABA Chairman praised Chinese regulators
Monday in a possible attempt to repair ties after the stock market debut of its former financial services arm was suspended following criticism of them by billionaire Alibaba founder Jack Ma.
CSC (06066.HK) announced that the Beijing State-owned Capital Operation and Management Center (BSCOMC), being the largest shareholder of the Company, proposed to gratuitously transfer the 2.684 billion A shares of the Company (representing 35.11% of the total share capital) held by it to Beijing Financial Holdings Group Limited. The Gratuitous Transfer will be beneficial for Beijing Financial Holdings Group to further implement the strategic deployment of strengthening and optimizing the financial industry of Beijing. Recently, the Company has received the letter of undertaking from BSCOMC, which made further undertaking for the Gratuitous Transfer that: from the date when Beijing Financial Holdings Group became a shareholder of the Company to the date when the original share lock-up period would expire (i.e. June 20, 2021), would not actively transfer its equity interests in Beijing Financial Holdings Group, except for the gratuitous transfer of state-owned assets approved by the government or state-owned assets management departments.
Law Chi-kwong, Secretary for Labour and Welfare, said the government will shower a one-off $5,000 compassionate allowance to each local grass-root resident who is diagnosed with coronavirus after 22 November and required to undergo quarantine treatment at hospital. Diagnosed patients could make request to social workers at hospitals for the allowance, tentatively from 27 November. Applicants should be employees or self-employed individuals who are not entitled to any pay leave, Law said, adding they should also claim their salary is reduced for hospital stay.
CHINA RES LAND (01109.HK) announced that, in relation to the proposed spin-off and listing of China Resources Mixc Lifestyle on the Main Board, it has determined the basis of the Assured Entitlement of Qualifying Shareholders to the CR Mixc Lifestyle Shares in the Preferential Offering. The basis of the Assured Entitlement is one Reserved Share for every integral multiple of 130 Shares held by Qualifying Shareholders at 4:30 p.m. on November 18, 2020, being the Record Date.
TONGHAI FIN (00952.HK) announced that ZHANG Bo ceased to be the deputy chairman and the chairman of the executive committee of the Company with effect from 23 November in order to devote more time to his personal affair. FANG Zhou, currently an executive Director, has been appointed as the deputy chairman of the Company.
YAU LEE HOLD (00406.HK) interim results ended September 2020. Net profit amounted to HK$75.662 million, up 978.3% yearly. EPS. equaled HK17.27 cents. Interim DPS was HK1 cent.
The Securities and Futures Commission (SFC) mentioned the high concentration of shareholding in GREAT HARVEST (03683.HK) Findings suggested that as at 6 November, 18 shareholders held an aggregate of 155 million shares, representing 16.27% of the issued share capital. Such shareholding, together with 766 million shares held by 2 Executive Directors and a substantial shareholder of the Company, represented 96.66% of the issued share capital.
The Commercial Properties Committee (CPC) of the Hong Kong Housing Authority (HA) today (November 23) approved to maintain the existing charges of the HA's car parks for one year from January 1, 2021, to December 31, 2021.  Last year, due to the difficult economic environment, the HA maintained its car park charges for a year. This year, car park charges are maintained again.
TONGCHENG-ELONG (00780.HK) results for the first three quarters ended September 2020. Net profit amounted to RMB248 million, -15.8% yearly.
SHK PPT (00016.HK) to inject nearly $20 million for Christmas promotion in YOHO MALL, Metroplaza and MOKO, including $10-million spending rebate and limited edition of souvenir to encourage spending.

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