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Commodities (including crops) continued to see weakness overnight but are looking more stable this morning in Asia.
The UN Intergovernmental Panel on Climate Change (IPCC) issued a code red on global heating; it predicts average temperature will reach 1.5 degrees Celsius above preindustrial levels around 2030, a decade earlier than projected only three years ago. Expect alternative energy names +VE
Australia Futures indicate market to open +25pts; Oil and Gold weak, earnings remain in focus but upside limited by the covid cases.
Data due New Home Sales, Business Confidence and Building Permits
Japan Nikkei local futures opened flat, Chicago Futures +25pts earnings in focus and concerns over PM Suga’s future
S Korea Expect markets to open slightly lower. Focus on the Krafton IPO debut it was priced at the top of the range. Samsung’s Jay Y Lee granted parole slight +VE
Taiwan Expect market to open higher on good local trade data and local earnings
China Expect market to open lower as PBoC plays down the strong PPI. Key for China is going to be job creation. Alternative energy names likely to see the main interest. Covid and credit issues remain overhangs.
HK ADR’s +89pts at 26,372 broad recovery but Chinese Banks still seeing weakness. Ecommerce names seeing interest.
Opened Dow +22 points, or 0.04%. S&P 500 futures ticked up 0.01% and Nasdaq 100 futures slid 0.03%.
DOW -0.3%, NDX +0.16%, S&P -0.1%, Russel 2K -0.58%
Markets opened around flat and traded sideways. Infrastructure bill in focus as it moved forward. An investors watch for inflation data. Earnings season wraps up with key names including Tyson Foods, AMC Entertainment, Coinbase, Lordstown Motors, Bumble, Palantir, Disney, Airbnb and DoorDash set to report quarterly earnings this week.
Norwegian Cruise Line weak after a federal judge ruled that the cruise line can ask passengers for proof of COVID-19 vaccination; -VE cross read to other travel names.
Tesla +2.1% after Jefferies upgraded the stock and predicted a rally of more than 20% over the next 12 months.
Berkshire Hathaway’s B shares +0.6% after a solid earnings report.
Banks JPMorgan Chase -0.1%, Citigroup -0.8% Wells Fargo -0.3%, Amex -0.3%
Work from home names: Facebook -0.52%, Apple -0.03%, Amazon -0.1%, Netflix -0.11%, Disney -0.23%, Zoom Video -0.03%, Alphabet +0.87% and Microsoft -0.4%,
Tech NXP Semi +1.6%, Nvidia -0.4%, Micron -2.2%, AMD -2.3%, Skyworks -0.2%
Re-opening stocks Boeing +0.4%, Caterpillar +0.3%, Simon Property -1.7%, Kohl’s +1.2%, Nordstrom -0.1%, Gap -0.3%, United Airlines -2.5%, Carnival -1.6%, Wynn Resorts -2.8%, Chevron -1.7%, Exxon Mobil -1.1%,
Lock down names Campbell Soup +0.7% General Mills +0.8%, JM Smucker +0.9%
JOLTs Job Openings Jun 10.073m vs 9.483m May revised (F/cast was 9m)
Consumer Inflation Expectations Jul 4.8% vs +4.8% Jun (F/cast was 4.7%)
USD was slightly stronger vs Yen & Euro. Bitcoin +4.9% @ 45,791.41, VIX +3.5% @ 16.72, US T10 @ 1.325%
OIL Brent -2.01%, WTI -2.09%
Gold -1.8%, Silver -3.6%, Copper -1.3% Platinum -0.02%, Palladium -1.1%.
AHEAD NFIB Business Optimism Index, Unit Labour, Non Farm Productivity, Redbook, API Crude Oil Stock Change
DAX -0.1%, CAC -0.06%, FTSE +0.13%
Markets opened around flat and traded sideways as a strong earnings season ends and investors watch covid and the weakness in commodities on the back of a strong US jobs number and weakness in China’s recovery. Utilities and Health stocks +VE but weakness in Autos.
Deliveroo +4.5% after disclosing that German peer Delivery Hero had taken a 5.09% stake in the company.
Hargreaves Lansdown -10% after its earnings report.
Balance of Trade Jun €16.3B vs €12.5B May revised (F/cast was €16.8B)
Exports sa Jun +1.3% MoM vs +0.4% May revised (Consensus +0.4%)
Imports sa Jun +0.6% MoM vs +3.4% May revised (Consensus +0.5%)
Current Account Jun €22.5B vs €13.9B May (F/cast was €17.4B)
EUROZONE Zew Economic Sentiment Index
GERMANY Zew Economic Sentiment Index and Current Conditions
FRANCE No data due
UK No data due
Nikkei local futures opened flat, Chicago Futures +25pts earnings in focus and concerns over PM Suga’s future
Yen currently 110.31
Data due Pre Market Current Account, Bank Lending,
Later Eco Watchers Survey (Current and Outlook)
Tokyo reported 2,884 new covid cases (-1,183 DoD) with the nationwide total reaching 12,073
With the Olympics over there will be more focus on PM Suga and the forthcoming election.
Softbank earnings due out and will be the focus of attention especially on buybacks and its unlisted China investments.
Dai-ichi Life Holdings (8750.T) confirmed it bought Westpac Banking Corp’s (WBC.AX) the life insurance business, for A$900 million ($660 million). Slight +VE
Expect markets to open slightly lower. Focus on the Krafton IPO debut it was priced at the top of the range. Samsung’s Jay Y Lee granted parole slight +VE
No data due
KDCA reported 1,492 new covid cases on Monday (-237 DoD) below 1,700 for the first time in 5 days. slight +VE
Samsung +VE on news that JY Lee to be released on parole with the expectation that it will result in investments and M&A. He still needs the Justice Ministers special permission to return to the office since he is on parole not a pardon. He is also still facing other court battles.
Hanwha Solutions said Monday it has acquired a 100 percent stake in renewable energy developer RES France at 727 million euros ($855.2 million) to expand its business portfolio in Europe. +VE
Renault Samsung Motors said Monday it will partner with Lynk & Co. to develop an environment friendly vehicle in the Korean market. A joint venture with Geely, the Chinese owner of Volvo Cars, to develop a Renault-brand hybrid passenger car for sale in China and a Lynk & Co-brand eco-friendly model for Korea, a company spokesman said over the phone. +VE
Hyundai Motor Co. said Monday it has resumed production at one of its seven domestic plants after a four-week suspension to prepare for the production of an electric vehicle. +VE
Kia said Monday it will invest 10 billion won ($8.7 million) into local fintech company Bank Salad in a bid to set foot in the mobility data business. Slight +VE
Expect market to open higher on good local trade data and local earnings
Data due GDP Growth Rate
After market Monday
Balance of Trade Jul $5.9b vs 5.15b Jun (F/cast was 4.9b )
Exports Jul +34.7% vs 35.1% Jun (Consensus was 29.5%)
Imports Jul +41% vs 42.3% Jun (Consensus was 35%)
American Institute in Taiwan (AIT) Director Sandra Oudkirk yesterday said she looked forward to “expanding and deepening” the Taiwan-US partnership, in her first formal meeting with Minister of Foreign Affairs Joseph Wu. +VE
Taiwan Mobile Monday said it has invested US$20 million in series E round of funding for Vietnam’s biggest e-commerce company, Tiki Corp, as it seeks to gain a foothold in rapidly growing greater Southeast Asian (GSEA) markets. +VE
Formosa International Hotels Corp Monday said that its net income last quarter grew 8.92 percent from a year earlier to NT$113 million (US$4.06 million), as food and beverage (F&B) sales improved, but the pace of growth lost steam following spikes in local COVID-19 infections and restrictions on gatherings. +VE
Teco Electric and Machinery Co, on Friday reported net profit of NT$1.44 billion (US$51.75 million) for last quarter, up 30.4 percent quarter-on-quarter, but down 2.84 percent year-on-year. Earnings per share were NT$0.68, compared with NT$0.53 in the previous quarter, but down from NT$0.76 a year earlier. While the company’s profit fell from a year earlier, its sales continued to rise both quarterly and annually. +VE
United Renewable Energy Co yesterday gave a positive outlook for the second half of this year after losses narrowed last quarter, thanks to price increases and a better product portfolio. URE’s loss during the April-to-June period improved to NT$225 million, compared with a net loss of NT$530 million in the first quarter and NT$641 million in the second quarter of last year, the company said. The company said in a statement that it posted monthly profits last quarter as strong demand boosted average selling prices and raw material costs stabilized. +VE
Acer Inc was the world’s third-largest Chromebook vendor in the second quarter, market information advisory firm International Data Corp (IDC) said on July 30. In the April-to-June period, Acer shipped 1.9 million Chromebooks, up 21.7 percent from a year earlier, capturing a 15.3 percent share of the global market. The second quarter was a good time for Chromebook suppliers worldwide, as aggregate sales revenue increased 68.6 percent year-on-year thanks to a booming stay-at-home economy, which increased shipments of technology devices for educational use, IDC said. +VE
Expect market to open lower as PBoC plays down the strong PPI. Key for China is going to be job creation. Alternative energy names likely to see the main interest. Covid and credit issues remain overhangs.
No data due
U.S. Secretary of State Antony Blinken called out bullying in the South China Sea on Monday and warned the U.N. Security Council that a conflict "would have serious global consequences for security and for commerce," sparking a strong rebuke from China. The South China Sea has become one of many flashpoints in the testy relationship between China and the United States, with Washington rejecting what it calls unlawful territorial claims by Beijing in the resource-rich waters.
"Conflict in the South China Sea, or in any ocean, would have serious global consequences for security, and for commerce," Blinken told a Security Council meeting on maritime security. "When a state faces no consequences for ignoring these rules, it fuels greater impunity and instability everywhere." -VE for sentiment
Goldman Sachs (GS.N), JPMorgan (JPM.N) and Morgan Stanley (MS.N) all cut their China growth forecasts on Monday, after export growth slowed unexpectedly and on concerns that the resurgent coronavirus could crimp economic activity. Chinese trade data released over the weekend undershot forecasts, while figures out on Monday showed inflation rising in the country's factory sector, potentially adding extra strains. -VE for sentiment
State-owned enterprises in China from weaker regions still face high repayment pressure in the second half of 2021, due to large amounts of maturities and tighter liquidity position, Fitch Ratings expects.
Zhang Shuncheng, associate director of China corporate research explained that the default of Henan’s Yongcheng Coal in November last year damaged investor confidence to buy SOEs bonds from weaker regions like Henan, Hebei, Shanxi, Tianjin, Yunnan and Liaoning.
It led to a contraction in local net onshore bond insurance in the first half of 2021, but that in Henan, Hebei and Yunnan turned positive, and contraction in the remaining regions was at a slower pace, Zhang added -VE.
Alibaba Group Holding Ltd (9988.HK), on Monday said it had fired a manager accused of sexual assault, and promised policies to prevent sexual harassment, but was blasted by state media for not acting until the accuser went public. -VE
ADR’s +89pts at 26,372 broad recovery but Chinese Banks still seeing weakness. Ecommerce names seeing interest.
No data due
SHORT SELLING Monday 13.2% vs 13.3% Friday
Top shorts Bud Apac (1876) 62%, Wharf REIC (1997) 40%, CKAssets (1113) 38%, Country Garden (2007) 37%, AAC Tech (2018) 35%, NWD (17) 34%,Power Assets (6) 34%, Hang Lung Ppty (101) 31%, BoC (3988) 31%, Baba (9988) 30%, Sunny Optical (2382) 29%, Sands China (1928) 29%, WuxiBio (2269) 26%, MTRC (66) 25%, CSPC Pharma (1093) 25%.
Evergrande Group (3333 HK) is in talks with state-owned and private companies to sell stakes in its electric vehicle (EV) and property management businesses, a source close to the matter said on Monday. The talks over the sale of stakes in China Evergrande New Energy Vehicle Group and Evergrande Property Services Group, both listed in Hong Kong, are “advancing smoothly”, the source added. Slight +VE
SINO-OCEAN GP (03377.HK) announced that from January 2021 to July 2021, the accumulated contracted sales amounted to approximately RMB62.75 billion, up 23.33% yearly. +VE
SUNNY OPTICAL (02382.HK) Short selling $291.74M; Ratio 28.769% announced the details of the shipment volume of the Company in July 2021. The shipment of handset lens sets declined 22.9% yearly to 104,800 units, mainly due to the slowing demand from the overall smartphone market compared to the same period of last year. The shipment of handset camera modules hiked 0.8% yearly to 55,300 units. Slight +VE
NEW WORLD DEV (00017.HK) Short selling $23.19M; Ratio 34.189% said it had repurchased 303,000 shares of the company on the Stock Exchange today (9 August), involving $11.2591 million. +VE
YUEXIU REIT (00405.HK) announced that the total interim distribution amounted to RMB340 million for the six months ended 30 June 2021, up 6.7% YoY. Interim distribution per unit was 10.25 fen, equivalent to HK12.33 cents, representing a 3.5% YoY increase in RMB terms and a 12.3% YoY rise in HKD terms. +VE
Macau Responsible Gaming Association (MRGA)'s president Billy Song revealed that the latest COVID-19 outbreak has caused the casino traffic to plunge significantly, and that Macau's gaming corporates have already launched short-term unpaid leave arrangements to cope with recent resurgence, reported Radio Macau. Song added that the situation of unpaid leave in the gaming sector has eased up until the latest wave of outbreak and that the gaming operators will likely adjust relevant arrangements according to the pandemic development.
CATHAY PAC AIR (00293.HK) Short selling $12.77M; Ratio 41.359% 's board announced that with respect to the dividend which is due to be payable to the holder of the preference shares on 12 August 2021, it has resolved to defer the payment of such dividend.
14 Xi'an ridesharing platforms with business licenses had been summoned to a seminar earlier, where 13 of them released a joint statement of legal operation commitment under anti-epidemic requirements. Didi Chuxing's Xi'an branch did not ink the joint statement, the people said.
HSBC announced to have recorded robust growth in its Asia wealth management operation over 1H21, with the Asia wealth balance setting a new high of USD810 billion, representing around 49% of the global wealth balance. HSBC expressed that it would continue to enhance the manpower of its frontline Asia wealth management work force as the bank has already hired approximately 600 full-time employees over 1H. The bank is now planning to recruit 100 additional wealth planners on top of the original number, with the possibility of amassing over 1,000 Asia wealth management talents by the end of this year.
Macau's gambling sector is associated with national security, especially in terms of law and order, economy and finance, according to the gaming license renewal report by a Macau Legislative Assembly subcommittee. China's law revision to step up overseas gambling clampdown and fund outflow curb could be a warning to gambling industries in Southeast Asia and around the world. Accordingly, Macau's VIP segment may find it hard to maintain its current operation mode. Hence, the subcommittee reminded the Macau government to pay attention when amending the gaming law.
CHINA TOWER (00788.HK) Short selling $49.14M; Ratio 33.700% 's 1H21 CAPEX approximated RMB10.36 billion, down 27.6% YoY, with the ratio to revenue dropping to 24.3% from a year ago's almost 36%. Chief Accountant Gao Chunlei elaborated that the ratio reduction was due to effective control on capital application during the period. So far, the company has not planned to change the full-year CAPEX budget of RMB30 billion. Also its energy business had achieved a turnaround to earnings in the first half of 2021, said Chairman Tong Jilu. The firm is facilitating the mixed-ownership reform plan of its energy subsidiary, Energy Tower, intending to introduce strategic investors for synergies and boosting business competitiveness. The company has no plan to stage an A-share comeback for now, he added.
NEXT DIGITAL (00282.HK) announced that the Group’s subsidiary has issued, without admission of any alleged violations of Lease conditions, a surrender notice to the Hong Kong Science and Technology Parks Corporation (HKSTP) to offer to surrender the Lease. Under the Lease, the HKSTP may accept the Surrender Notice on or before 17 September 2021 and if so accepted, the lessor and lessee may enter into negotiation on the consideration payable under the Lease.