Asia started +VE but turned mixed. FT focus on the next Japan PM and Chinese tightening

This and previous notes can be found at asianmarketsense.com and Substack ( Asian Market Sense )
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Australia 
Market traded down to 7,440 in early trades as a number of companies went ExDiv, but then worked better through the session Currently -22pts(-0.3%) @ 7,501 Iron ore ticked higher but oil remains weak.
Data Job Ads Aug -2.5% MoM vs -1.3% Jul Revised (F/cast was -0.3%)
Japan 
Nikkei opened higher building on Friday’s gains and traded slightly higher through the session. Currently +513pts (+1.8%) @ 29,641
Topix traded in a similar fashion +25pts (+1.2%) @ 2,047
Leaders Shippers, Machinery, Info Tech and Cyclicals.
Laggards were Utilities.
Nikkei 225 rebalance announcement expected at any time
S Korea
KDCA  announced 1,375 new covid cases
Foreigners and Local Institutions small net buyers
Kospi opened lower but worked back to flat in choppy trading.
Kosdaq opened higher but sold down to 1,050 before rebounding but trending lower after midday; currently -1.7% (-0.2%) @ 1,052
Leaders Tech and Chem
Laggards Financials as Kakao Bank continues to correct as lock up on share sales expires. Apparel also weak.
Taiwan 
Taiex opened higher, initially dipped to 17,461 before working better initial resistance at 17,600. Trenched back to 17,530 before testing higher to 17,633 but currently easing back +40pts (+0.3%) @ 17,565.
Leaders Tech and Real Estate
Laggards Industrials
China 
CSI 300 opened flat but worked higher through the morning +93pts (+1.9%) 2 4,936
HK 
Pre market opened 25,827 -75pts vs -26pts ADR’s but rallied to 26,680 in initial trades. Then traded sideways in a tight range around the 26,000 level to close at lunchtime +132pts (+0.5%) @ 26,034
Tencent +3% ahead of the release of League of Legends. Most Ecommerce names +VE Healthcare names weak but Pharma +VE
BYD +VE as MIIT said it was aiming to have hybrids be 50% of overall car sales by 2035.
Europe 
Expect a cautious open after the weak US jobs data. The construction PMI’s will also influence sentiment
Eurozone Construction PMI 
Germany  Factory Orders, Construction PMI, New Car Sales
France Construction PMI 
UK  New Car Sales, Construction PMI 
US Markets closed

Front Page
M&A on track to break records after $4tn of deals so far this year

• Almost 40,000 tie-ups agreed • Frenzied summer of activity • Tech sector leads way
Key reasons seem to be access to inexpensive debt and high share prices. Whilst that continues the M&A boom is expected to continue.

Top British schools with links to China squeezed by Beijing’s tightening grip
A part of President Xi tightening grip on everything, foreign schools are under pressure from the ‘common prosperity’ policy. The aim being to reduce the number of children privately educated. The worry is that these policies will alienate the middle class from the party. The popularity of the schools reflects the fact that people want the best for their children and foreign schools are seen as a stepping stone to having their children attend university overseas. That would also suggest that people are not satisfied with the state education system.

INSIDE

Suga’s exit fires starting gun on reshaping Japanese politics
Covid in focus as PM’s resignation sees new generation join succession battle.
Well worth a read. Will we see the status quo remain or a radical change. The LDP has seen its popularity decline in recent elections and polls so this event will be important in setting out its policies as it tries to rebuild its relationship with the people.
Read also Editorial Japan requires a different kind of leader
Next premier needs communication skills and a compelling plan.
Concludes ‘Candidates must do better than a list of populist spending pledges. The LDP electorate, too, should resist the temptation to plump for a compromise choice. What is needed for the party election, and then the general election, is a leader with the vision to take on the tasks confronting the country, and the political skills to carry the Japanese public with them. Such a figure would stand the best chance of restoring the kind of stability Japan enjoyed under Abe, rather than the revolving door of premiers it experienced before.’
Also Six challenges Suga leaves for Japan’s next prime minister By Leo Lewis.

Soldiers in mineral-rich Guinea claim overthrow of new president The true picture of what is happening on the ground is unclear but it has impacted Aluminium names with Chalco up as much as 10% in early trades and currently +7.3%

Companies & Markets
Chipmakers must adapt to Covid waves, warns Renesas

• Alternatives to shutdowns sought
• Integration test for Japanese group
Not just chipmakers but all companies are reviewing how they are going to work on the basis that covid is not going to be eliminated.

High summer US retail investors a ‘dominant force’ in driving the growth of stock markets
Reviews the latest JP Morgan report and notes that the key is whether it trend will continue. It concludes that rising retail flows cannot continue forever. That would suggest that the US markets will see pullback. But the timing of that remains unknown.

China’s player limits look set to hurt the long game
Restrictions on children’s access pose risk to revenues for Tencent and NetEase.
Makes the point that by restricting the amount of time children can spend playing video games there is the potential that by the time they reach 18 and are no longer limited that they will have found other ways to spend their time and that will impact the future gaming revenues.
I am sure that is likely and will mean that gaming companies will have a explore new ways to attract players. In the meantime the valuations should be under reviewed.

FT BIG READ. INTERNATIONAL FINANCE
Emerging markets take a punt on crypto
Sometimes dismissed as a speculative fad in many advanced economies, cryptocurrencies hold more appeal in countries with a history of financial instability and a lack of trust in national currencies.