Nov 27 Asian Macro Initial Thoughts Asia opening lower


02 Dec

Asian Futures Nikkei Futures -130pts pre market; Tokyo CPI missed,  HK futures -50pts and Australia trading lower in early trades.  China Industrial Production data on the open but expect a weak open on news China is missing its agreed US purchases under the Phase 1 trade deal.  

US Futures DOW and S&P futures opened slightly lower

US Markets closed, shortened trading on Friday.
No data due
Trump says he will handover power
if the Electoral College votes in favour of Biden next month.
Concerns that Thanksgiving travelling could prompt a rise in covid cases -VE for sentiment comes as domestic air travel showed a significant rise.

DAX -0.02%, CAC -0.08%, FTSE -0.44% on light volumes as US markets were closed. Having opened slightly higher but sold down; CSC and DAX to flat and then traded sideways. FTSE was slightly weaker.
Aviva -0.2% but off morning lower; after saying it expects to pay a total dividend for 2020 of 21 pence (28 cents) and is exploring options for divesting its remaining businesses in Asia and continental Europe in order to focus on Britain, Ireland and Canada.
Britvic +1.4% after earnings were better than expected
AstraZeneca -0.7% on questions over the way Astrazeneca and Oxford University tested their coronavirus vaccine, with expectations that it will have to carry out new global trials
Remy Cointreau -1.8% after reporting a 23% fall in first-half operating profit. It forecast real recovery in the second half, driven by a rebound in demand from the US and China.
Repsol -3.5% after it cut its dividend by 40 per cent in the wake of lower oil prices and the need to fund new investments in renewable energy projects. The group outlined a five-year plan for adapting to depressed oil prices and the possibility that crude demand could peak within the next 10 years.
DATA
EuroZone
Lons to Households Oct +3.1% YoY vs 3.1% Sept (F/cast was 3%)
Loans to Companies Oct +6.8% YoY vs 7.1% Sept (F/cast was 7%)
M3 Money Supply Oct 10.5% vs 10.4% Sept. (F/cast was 10.1%)
Germany Consumer Confidence Dec -6.7 vs -3.2 Nov Revised (F/cast was -5)
French Consumer Confidence Nov 90 vs 94 Oct (F/cast was 92)
UK Car Production Oct -18.2% YoY vs -5% Sept (F/cast was -8.1%)
AHEAD
EUROZONE Economic Sentiment, Consumer Confidence, Inflation Expectations, Industrial & Services Sentiment. ECB speakers Panetta, Schnabel
GERMANY Import Prices Bundesbank speaker Balz.
FRANCE Inflation Rate, GDP Growth Rate, Household Consumption, PPI
UK Nationwide Housing Prices


JAPAN Expect Nikkei to open higher Futures -120pts Watch for bargain hunting in Tech names. Yen currently 104.25.
Data out 
Tokyo CPI Nov -0.7% YoY vs -0.3% Oct (F/cast was -0.4%)
Tokyo Core CPI Nov YoY vs -0.5% Oct (F/cast was -0.6%)
Due later Foreign Stock & Bond Investment
Tokyo confirmed 481 new cases of covid on Thursday, exceeding 400 for the second day in a row. Nation-wide the number was 2,501. Raising concerns that Japan will need to call a state of emergency. Nagoya said Thursday it will ask stores that serve alcohol to shorten their operating hours to prevent the spread of the coronavirus, joining the ranks of Tokyo, Osaka and Sapporo
Bird flu has been detected in a third Japanese prefecture, the agriculture ministry said, as a wave of infections at poultry farms sparks the country's worst outbreak in more than four years.
Japan will not accept China's proposal to ease bilateral tensions over the sovereignty of the Senkaku Islands, the government's top spokesman said Thursday, dismissing it as part of an attempt to advance Beijing's claims to Tokyo's territory.
Japan's state-owned export credit agency has agreed to give Nissan Motor Co up to $2 billion as part of a credit agreement to help it finance car sales in the United States.
Japan plans to implement tax incentives for long-term foreign residents as part of efforts to turn the country into a major international financial hub, government sources said
Mitsui Sumitomo Insurance Company, a subsidiary of Japan's MS&AD Insurance Group, will invest $350 million in U.S. home insurance technology company Hippo Enterprises to fund its next stage of growth, the companies said in a joint statement.


SOUTH KOREA Expect markets to open higher with Futures +3.8pts KRW strengthened.
No data due but Govt reported 583 new coronavirus cases on Thursday, the highest since March, as it grapples with a third wave of infections that appears to be worsening despite tough new social distancing measures. -VE
South Korea and China agreed on Thursday to prepare for a visit to South Korea by Chinese President Xi Jinping and to cooperate on stalled talks on North Korea's nuclear programme and on tackling the novel coronavirus.
LG Corp said on Thursday it would spin off five affiliates into a new holding company next year, the latest reorganisation at one of South Korea’s family-led conglomerates as they pass to a new generation of leaders.
LG Electronics, said it will set up a new business unit in the United States to seek future growth opportunities. LG's North American Innovation Center will be based in Silicon Valley, California, with the task of exploring new business opportunities and cooperating with leading tech firms there, the company said. +VE
Samsung Electronics maintained its top spot in the global NAND flash market in Q3 with a 33.1% market share (+1.7 points from a quarter earlier) on the back of increased revenue, a TrendForce report showed Thursday. +VE
Daesang said Thursday that it is branching out into the Middle Eastern market, which serves a population of about 4 billion, with popular food products such as halal-certified kimchi and tofu. +VE
Daewoo Shipbuilding & Marine Engineering Co. said Thursday that it has succeeded in a ship-to-ship liquefied natural gas (LNG) loading test for the first time in the global shipbuilding industry. +VE
Korean Air Lines Co., South Korea's biggest carrier, said Thursday it has received a 290 billion won ($260 million) F-16 maintenance order in the United States. +VE

TAIWAN Expect market to open higher with continued interest in Tech names as covid cases rise globally
Data due after market
GDP Growth Rate
Shin Kong Life Insurance has reduced its overseas investment ratio to 39 percent to comply with the Financial Supervisory Commission’s (FSC) requirements, the company said yesterday. To offset the impact of the adjustment, the insurer said it is looking at new investment targets, eyeing the local real-estate market. The commission on Sept. 15 demanded that the life insurer lower its overseas investment ratio from 43% to 39% given the firm’s poor internal controls and reckless investing, which endangered its solvency. It was a severe punishment for a life insurer, as they typically rely on foreign investments for high returns. -VE
Kwang Yang Motor Co which sells its products under the brandname KYMCO, yesterday unveiled a new electric sport scooter, dubbed F9, to target eco-conscious riders. The F9 is the first electric scooter designed by the company from scratch, it said. +VE
Hon Hai Precision has been focused on securing critical standard 5G patents to boost its competitiveness in the field, company chairman Liu Young-way said on Wednesday. The company has also started research and development of 6G chips to stay ahead of the game in emerging technologies, Liu told a smart industry development forum in Taipei. +VE
Government warnings dampen property sales: report showed presale and new housing projects slowed last month as developers and builders turned cautious after government agencies raised concerns about rising property prices and talked of measures to cool the market -VE

CHINA Expect market to open flat but the Industrial Profits data will be a key to determining market direction.
Data due
Industrial Profits YTD Oct (Sept was -2.4% YoY, forecast is -0.6%)
China is failing to meet the requirements of the Phase 1 trade deal as imports of US products slowed in October. Could raise tension with the US and especially Trump in his final days in charge.
State Media says interest rates likely to remind low for some time +VE for sentiment and suggests that Government support for restarting the economy to be accommodative for some time.
Foxconn building a new plant in Vietnam for production of Apple’s iPad tablet and MacBook laptop at its plant in Vietnam’s northeastern Bac Giang province, to come online in the first half of 2021 +VE for Foxconn but -VE for China.
The state of Sao Paulo could roll out the COVID-19 vaccine developed by China’s Sinovac even without approval from Brazil’s health regulator, the state’s governor said in an interview on Thursday.
China’s biggest wholesale food market (Xinfadi market in Beijing,) has suspended the sale and storage of chilled and frozen meat and seafood as the government ramps up inspections of cold-chain goods after several new cases of coronavirus infections. -VE
World Health Organization would like to go back to a wholesale food market in Wuhan in China to follow up initial cases of COVID-19 which emerged in the city and investigate how the virus probably first spread from bats. Comes as State Media is promoting various theories that suggest the virus did not start in China.
China has started speeding up imports of American crude oil, propane and liquefied natural gas (LNG) since July, reported Reuters. For the first ten months of 2020, however, Beijing's purchases of U.S. energy products added up to US$6.61 billion only, i.e. 26% of the US$25.3-billion target under the first-phase trade deal.
In its 3Q20 Chinese monetary policy execution report, the PBoC stated that in the next step, it will inject higher flexibility and clearer direction in the robust monetary policy in accordance with the central government's deployment. It will brush up the cross-cyclical policy design and the coordination mechanism of monetary supply while giving full play to the role of monetary base injection in nudging high-quality economic development. It noted the RMB9 trillion worth of monetary policy and response measures rolled out year-to-date. For 10M20, financial authorities have forgone around RMB1.25 trillion of profits for the sake of the real economy.
Joe Biden’s choice of Linda Thomas-Greenfield as ambassador to the United Nations is the latest signal that he will seek to re-engage with international bodies but while this may herald a change of tone towards China, many observers believe the administration will seek to keep up the pressure over issues such as human rights, Xinjiang and Hong Kong. Slight +VE fro sentiment.


HONG KONG No ADR’s but futures indicate -50pts; sentiment remains cautious as covid cases continue at elevated levels both locally and globally.
Expect light volumes with US markets shut Thursday.
No data due


SHORT SELLING Thursday 22.1% vs 19.7% Wednesday 
Top Shorts Ping An (2318) 52%, Bank of China (3988) 48%, Henderson land (12) 47%, BoC HK (2388) 43%, Hang Seng Bank (11) 38%, Wharf REIC (1997) 37%, Galaxy Ent (27) 36%, CCB (939) 35%, CLP (2) 35%, Swire Pac (19) 33%, AIA (1299) 33%, China Unicom (762) 30%, Power Assets (6) 29%, Country Garden (2007) 29%, Sinopec (386) 28%, CNOOC (883) 26%, HSBC (5) 26%, MTRC (66) 26%, Sunny Optical (2382) 25%, Hengan (1044) 25%.

BUYBACKS/INSIDER DEALING
Li Ka-shing and Victor T K Li, through Li Ka Shing Foundation Limited, acquired a total of 702,500 shares in CK ASSET
(01113.HK) at the average price of HK$43.4733, HK$42.831, HK$43.3566 and HK$43.9265 per share on 20 November, 23 November, 24 November and 25 November 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset increased from 35.77% to 35.79%, and increased from 35.83% to 35.85%, respectively.

WATCH
Govt looking at making developers pay for reclamation costs 
- following the approach of the City One development project in Sha Tin - will be one financing option to be considered for the Lantau Tomorrow Vision, says Secretary for Development Michael Wong. Saying yesterday there are various methods that "do not involve money from the public coffers" to finance the mega-reclamation and development off Lantau, which will cost more than HK$600 billion. Development rights for City One were tendered in 1979 to a consortium of developers, which bore the cost of reclaiming land. Of the 56 hectares reclaimed, the developers kept 30% for private estates. A slight -VE for Developers.
Almost 180,000 civil servants must sign pledges of allegiance to the Basic Law in one go - and any who refuse could hurt their chances of promotion. That was the word yesterday from Secretary for Civil Service Patrick Nip Tak-kuen. -VE for sentiment.
Next Digital (0282) has signed a letter of intent with a buyer - an independent third party - to sell a property in Taipei for NT$1.75 billion (HK$471 million).
LUK FOOK HOLD (00590.HK) interim result ended September 2020. The revenue declined 47% year on year to HK$3.344 billion. The net profit amounted to HK$291 million, down 41.3%. EPS was HK$0.5. A total dividend of HK$0.5 was declared, including an interim dividend of HK$0.225 and a special dividend of HK$0.275, staying flattish yearly.
CAFE DE CORAL H (00341.HK) CEO Lo Tak Shing, Peter revealed during the results conference that the company is now having more room to negotiate renewal rents with landlords, yet viewed there will not be material rental cut if it does not sign short-term contract. Therefore, the CEO has not witnessed any sharp rental fall so far. The company has recently obtained $680 million of mid-to-long-term capital from banks, by which the network and shops could be expanded. As there is still unused capital from banks, the company's cash flow remained positive despite lacking Employment Support Scheme (ESS) in the second half of the financial year.
LEE'S PHARM (00950.HK) announced the first three quarters result ended September 2020. The net profit amounted to HK$122 million, up 51.9% yearly.
EPS was HK20.75 cents. No dividend was declared.
DICKSON CONCEPT (00113.HK) interim results ended September 2020. Net profit amounted to $133 million, up 12.1% yearly. EPS equaled 33.9 cents. Interim DPS was 8 cents.
TAI CHEUNG HOLD (00088.HK) interim result ended September 2020. The Company swung into loss of HK$10.6 million from profit of HK$70.4 million over a year ago. LPS was HK1.7 cents. An interim dividend of HK12 cents was declared, flattish year-on-year.
Global Brands (0787) yesterday said its half-year loss expanded by 37% to HK$122 million year on year with no interim dividend declared. Its revenue dived by 46.1 percent to HK$290 million due to the pandemic.
SAIC MOTOR (600104.SH) announced that, in order to create its own high-end smart BEV brand, the firm intends to partake in the set-up of Shanghai Yuanjie Intelligent Technology Equity Investment Fund Partnership by contributing RMB5.399 billion in capital. The Fund planned to invest in high-end smart pure electric vehicle projects with Alibaba.com.
JD HEALTH (06618.HK), the spin-off of JD-SW (09618.HK), registered margin of almost $70.7 billion from brokers as at 6 pm 26 November. Based on the fundraising amount of $1.347 billion from the public offering, the margin was oversubscribed by approximately 51.5 times. The stock initiated public offering in Hong Kong today.
Jiayuan Services (01153.HK) intended to utilize 70% of its listing proceeds on selective strategic investment and acquisition opportunities. The company said it will continue to tweak the structure for third-party projects, aiming the proportion of related projects to surpass its parent's in next two years.
The Chinese property developer Datang Group (02117.HK) unveiled the IPO
details. 
It will commence IPO from tomorrow (27 November) to next Friday (4 December). It planned to issue 333.4 million shares at $3.6-4.6 each.  Excluding handling fee, the entry fee is approximately $4,646.35 per board lot size of 1,000 shares. The company is projected to list on 11 December.
Centa Valuation Index (Major Banks) (CVI) last printed at 44.40, up 1.82 pts weekly, said Centaline Property. The index managed stand firm aloft 40, hinting at resilient support force.

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