This and previous notes can be found at Substack ( Asian Market Sense )
Check out ERI-C.com for your research needs
Market sold down to 7,476 in early trades on weak Material and Consumer Stock and some companies going Ex Div but Financials +VE. Market worked better from the early prints but saw resistance around 7,530 level and then trended slightly lower to close -18pts (-0.2%) @ 7,512.
Iron ore prices rebounded but Oil and Gold remain weak.
Nikkei opened lower but rallied to test 30,200 pre lunch on good GDP data pre market. PM opened lower and trading sideways around the 30,050 level but then rallying into the close currently +245pts (+0.8%) @ 30,162.
Topix trading in a similar fashion currently +13pts (+0.6%) @ 2,076
GDP Growth Data
Growth Rate Q2 +0.5% QoQ vs -1.1% Q1 revised (F/cast was +0.3%)
Growth Annualised Q2 +1.9% vs -4.2% Q1 revised (F/cast was +1.3%)
Capital Expenditure Q2 +1.4% QoQ vs -0.9% Q1 revised (F/cast was +1.7%)
Price Index Q2 -1.1% YoY vs -0.2% Q1 revised (F/cast was -0.7%)
External Demand Q2 -0.3% QoQ vs -0.2% Q1 (F/cast was -0.3%)
Private Consumption Q2 +0.9% QoQ vs -1.3% Q1 revised (F/cast was +0.8%)
Current Account Jul ¥1910.8B vs 905.1b Jun (F/cast was 2000b )
Bank Lending Aug +0.6% YoYvs 1% Jul (F/cast was 1%)
Eco Watchers Outlook Aug vs 47.7 Jul (F/cast was 48)
Eco Watchers Current Aug vs 48.4 Jul (F/cast was48.6)
Kospi opened lower and tested to 3,168 in early trades before rallying to test Tuesday’s close but failed to break above. Then sold down to 3,157 before trading sideways and closed -24pts (-0.8%) @ 3,163.
Kosdaq Initially sold down to the 1,045 level before a bounce but then sold down to 1,040 level and traded sideways around that level; currently -14pts (-1.4%) @ 1,040
Taiex opened flat but trended lower through the session to close -158pts (-0.9%) @ 17,271
CSI 300 opened lower but rallied to test 5,013 a couple of times before reversing found support around 4,980 level going into lunch. PM opened lower and selling down some support at 4,960. Concerns about the impact of ‘common prosperity’ as the Peoples Daily publishes and article confirming China’s commitment to opening up its economy to foreign investors. Apple supply chain names +VE Expect caution to continue ahead of PPI and Inflation data tomorrow
Pre market opened @ 26,396 +43pts -11pts ADR’s
Market rallied to 26,560 but then reversed and sold down heavily; without a clear indication. PM market trended higher but seeing resistance as it approached flat.
Evergrande weak as it sees a downgrades; from Fitch and GS. Macau names +VE on new border opening
Futures indicating a lower open
France Non Farm Payrolls, Private Non Farm Payrolls, Balance of Trade, Current Account.
Opened in Asia; Dow -15 pts. S&P 500 and Nasdaq 100 futures unch. Dow now -6pts S&P and NDX unch
FT Key articles
Missing Chinese entrepreneur briefly surfaces
'Chinese entrepreneur Duan Weihong who struck deals with some of the country’s most powerful officials and their families has briefly surfaced after a four-year disappearance, according to her former husband and business partner.'
Her re-appearance seems to be related to the publishing of her husbands book ‘Red Roulette’s’ which recounts the couples dealings with well connected members of the communist party.
It notes “Whitney told me that she’s on temporary release and could be re-detained at any time. She asked me to cancel the book’s publication . . . [and] used the Chinese warning: ‘No good comes to those who oppose the state’.”
‘It is still unclear who has been holding Duan. While it is common for senior Chinese business and political figures to disappear for long periods during party or national security investigations, their detentions are usually confirmed by either the party’s Central Commission for Discipline Inspection or the prosecutors and courts that deal with their cases.
In January 2017, Xiao Jianhua, a financier with links to senior party officials, was abducted from the Four Seasons Hotel in Hong Kong by Chinese public security agents and taken across the border, according to people familiar with his disappearance. His whereabouts are unknown.’
FT BIG READ. CHINA & BIG TECH
Xi’s blueprint for a digital dictatorship
By extending control over a huge volume of data, Beijing is conducting a grand experiment in 21st century authoritarian governance. Large Chinese groups, multinationals and financial markets all face disruption.
An interesting look on how China intends to control and use data going forward despite some public opposition. Again another example of how the party is intending to rewrite the social contract but it is not clear if the general public will agree.
Evergrande woes shake China’s real estate sector
Looks at how the bonds were suspended for a second time. Overnight the equities are seeing downgrades putting more pressure on the stock.
At the moment Evergrande is the main focus but it mentions how attention is moving to other names in the sector; like R&F and Fantasia Group. The big concern is the fact that property companies hold the majority of the off-shore debt and with property no longer seen as a key sector for growth the outlook is worrying.
SoftBank pushes Nikkei past 30,000 amid election fever
Prime minister’s resignation and stimulus hopes help drive gains for stocks, say analysts
Worth a read today’s encouraging GDP data helping but key remains the hope for new policies post the LDP party leadership election.
Toyota set for $13.6bn outlay on batteries in next 10 years
• Effort to silence critics of EV effort
• Next-gen solid state tech by 2025
Worth also reading Battery recalls and rising costs challenge electric car revolution