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Asia looking at another +VE opening with the Japan leadership race in focus. Trade Data from China out mid-morning will also be watched along with the RBA rate decision.
Australia Futures indicate market to open +13pts, but the weak Service Index may put that under pressure; expect caution ahead of the RBA rate decision. Oil names +VE, Gold -VE and Iron Ore -VE too. Plus a number of companies going Ex Div; including steel producer BlueScope Steel Limited (ASX: BSL), clean energy miner IGO Ltd (ASX: IGO), financial services company IOOF Holdings Limited (ASX: IFL), energy company Origin Energy Ltd (ASX: ORG), and healthcare company Sonic Healthcare Limited (ASX: SHL). Key will be the RBA decision.
Data out Services Index Aug 45.6 vs 51.7 Jul (F/cast was 53)
Due Later Building Permits, RBA Interest Rate Decision
Japan Nikkei Chicago Futures +500pts to 30,100 with a further ramp up on the expectation of new policies post the LDP leadership contest. Mixed pre market data unlikely to have much impact
S Korea Expect markets to open higher with continued +VE momentum supported by good earnings growth. Battery names in focus as BMW expands its orders
Taiwan Expect market to open higher with good earnings and encouraging outlook especially for the Tech names
China Market to open flat with caution ahead of the Trade Data which is expected to show further signs of slowing. The question is whether the Govt or PBOC will announce further stimulus or support measures.
HK Expect market to open higher on hopes of more stimulus and headlines about China further opening its economy, the problem is that investors are aware of the potential for regulatory change risk.
Opened Dow +82pts, S&P +0.21% and NDX+0.31%
US Markets closed for Labour Day re-open Tuesday
Data due LMI Logistic Managers Index Current
DAX +0.96%, CAC +0.8%, FTSE +0.68%
Markets opened higher and traded sideways/higher through the day. With invetors +VE on the delaying of US interest rates and hopes of more stimulus in Japan and China. All sectors closed higher.
German Auto show has begun so Auto’s in focus. Later this week we have the ECB meeting.
Teamviewer +3.4% but French engineering group Spie -4.6% after submitting an offer to buy Engie’s services unit.
Dechra Pharmaceuticals -3.9% after its full-year results.
Construction PMI Aug 49.5 vs 49.8 Jul (F/cast was 50.6)
Factory Orders Jul +3.4% MoM vs +4.6% Jun revised (F/cast was -1.2%)
Construction PMI Aug 44.6 vs 47.1 Jul (F/cast was 48.9)
New Car Registrations Aug YoY vs -24.9% Jul (F/cast was -18%)
Construction PMI Aug 44.9 vs 48.5 Jul (F/cast was 49.9)
New Car Sales Aug -22% vs -29.5% Jul (F/cast was -16%)
Construction PMI Aug 55.2 vs 58.7 Jul (F/cast was 56.5)
EUROZONE Employment Change, GDP Growth Rate, ZEW Economic Sentiment Index
GERMANY ZEW Economic Sentiment Index & Current Conditions
FRANCE No data due
UK BBA Mortgage Rate
Nikkei Chicago Futures +500pts to 30,100 with a further ramp up on the expectation of new policies post the LDP leadership contest. Mixed pre market data unlikely to have much impact.
Household Spending Jul -0.9% MoM vs -3.2% Jun (F/cast was +1%)
Household Spending Jul +0.7% YoY vs -5.1% Jun (F/cast was +2.7%)
Ave Cach Earnings Jul +1% vs +0.1% Jun (F/cast was +0.7%)
Pre Mkt Foreign Exchange Reserves
Later Coincident Index, Leading Economic Index
Tokyo reported 968 new covid cases (-885 DoD) dropping below 1,000 for the first time since July 19. National total was 8,234.
Kono seen as top contender to replace PM Suga in polls.
Aftermarket Monday it was announced that Nikkei 225 rebalance
Adds Nintendo (7974), Keyence (6861) and Murata (6981)
Deletes Nisshinbo (3105), Toyo Seikan (5901) and Sky Perfect (9142)
Effective 1 October. This will be a significant rebalance.
Eneos Holdings plans to sell its listed subsidiary Nippo Corp for more than 250 billion yen ($2.28 billion), business weekly Diamond reported in its online edition.
Honda Motor (7267.T), Nissan Motor (7201.T) and Toyota Motor (7203.T) saw their sales in China tumble in August as a chip shortage hit vehicle production in the world's biggest car market.
Honda said it sold 91,694 vehicles in China last month, down 38.3% from a year earlier due to the COVID-19 pandemic and a shortage of components.
Nissan said it sold 113,166 cars in China in August, down 10.6%, due to "external headwinds including on-going pandemic, material shortage and natural disasters across the country".
Toyota said it sold 144,800 cars last month there, down 11.9% from the same month last year. -VE
Japan’s 99 regional banks logged an aggregate net profit of ¥328.4 billion in April-June, up 46.1% from a year before, according to data compiled by Jiji Press. The rise mainly reflected lower credit costs for possible loan defaults. On the other hand, many banks are taking a cautious stance toward their borrowers earnings outlooks amid the variant strain-fueled resurgence of novel coronavirus infection cases, with an official of Okinawa Kaiho Bank saying, The situation does not allow optimism. +VE
Tokyo Electron Device Raises 1H current profit forecast 33% to 2B Yen and boosts 1H dividend to 95 yen/share from 80yen +VE
Expect markets to open higher with continued +VE momentum supported by good earnings growth. Battery names in focus as BMW expands its orders
Current Account Jul $8.21bn vs 8.85bn (F/cast was $9bn)
Chinese Foreign Minister Wang to visit Seoul next week comes ahead of S Korea making a decision on Five Eyes.
South Korea has received a fresh invitation from the world’s most exclusive intelligence-sharing alliance, the so-called Five Eyes, but experts warn there is no such thing as free lunch in diplomacy. Last week, the US House of Representatives submitted a draft bill to the National Defense Authorization for the 2022 fiscal year, asking the US administration to consider expanding the Five Eyes program that currently consists of five English-speaking democracies: the US, UK, Canada, Australia and New Zealand. Along with Korea, three other nations, including Japan, India and Germany, were proposed as possible new members.
Hyundai Heavy Industries has raised $935 million after pricing its IPO at the top of its indicative range, with much of the proceeds set to fund investments in new technology. It offered 18 million new shares or 20% of shares outstanding in a range of 52,000-60,000 won per share. It is expected to list on the KOSPI on Sept. 16.
According to news reports and industry sources on Monday, Samsung will soon make its decision on the location of a $17 billion chip plant in the US. Along with Austin, the state capital of Texas, Taylor in Williamson County, Texas, has recently risen as a possible candidate according to public documents.
Expect market to open higher with good earnings and encouraging outlook especially for the Tech names
Data due After Market Balance of Trade, Exports and Imports, Inflation Rate, Wholesales Prices.
Out Monday after market
Foreign Exchange Reserves Aug $543.578bn vs 543.076bn Jul
The latest balance suggested an increase of US$502 million, even though foreign portfolio managers wired US$3.48 billion of cash dividends abroad, Department of Foreign Exchange Director-General Eugene Tsai told an online news conference. “The foreign exchange market saw roughly balanced supply and demand for the local currency and US dollar,” Tsai said, declining to comment on alleged central bank interventions.
China has stepped up military incursions into Taiwan’s air defense identification zone (ADIZ) over the past year, which has heightened regional tensions, the Democratic Progressive Party (DPP) caucus’ new secretary-general Tsai Shih-ying (蔡適應) said yesterday. “The situation has put the spotlight on our nation’s self-defense and the importance of boosting the budget of our armed forces,” he told a news conference. Nineteen Chinese military aircraft, including fighter jets, on Sunday flew into Taiwan’s southwestern ADIZ, the fourth time this month, the Ministry of National Defense said.
Hon Hai Precision Industry yesterday reported revenue of NT$400.05 billion (US$14.46 billion) for last month, down 4.3 percent from July’s NT$418.02 billion and 4.87 percent less than the NT$420.55 billion it posted for the same month last year. Last month’s figure marked Hon Hai’s second-highest August, which the company attributed to a strong showing from its consumer electronics business, followed by its components, cloud network and computer segments. Year-to-date revenue totaled NT$3.52 trillion, up 22.09 percent from the NT$2.88 trillion it reported for the same period last year, the company said. +VE
Hon Hai Precision Industry Co is to produce new-generation silicon carbide (SiC) chips used in electric vehicles (EVs) as it seeks to resolve key choke points in global EV supply chains, company chairman Young Liutold a technology forum yesterday.
Long battery charging times, relatively short driving distance and higher sales tags than vehicles powered by gasoline hinder the swift uptake of EVs, Liu told the virtual forum arranged by SEMI, an association that represents the global semiconductor sector. “We want to help our customers solve those problems. That is why we bought a 6-inch fab in Hsinchu from Macronix International Co in August,” Liu said. +VE
Machinery exports grew 26.9 percent annually to US$15.6 billion in the first seven months of the year, due to surging demand amid rising COVID-19 vaccination rates worldwide, the Ministry of Economic Affairs (MOEA) said yesterday. Exports for the whole year are expected to surpass those of last year and 2019, the ministry said, adding that it was “not sure” if it would break a sales record set in 2018, when exports reached US$25.6 billion +VE.
Sinbon Electronics Co, which produces cables, connectors and modems, yesterday reported record revenue of NT$2.22 billion for last month, led by rising shipments of products used in the automotive segment, medical and personal care devices, and communication and electronic peripheral components. Last month’s figure increased 0.78 percent from July and 13.11 percent from the same month last year, the company said. Cable assemblies contributed 73.94 percent of the company’s total sales last month, while connectors and other components and accessories made up 26.06 percent, the company said. Cumulative revenue for the first eight months of the year was NT$16.91 billion, up 23.2 percent year-on-year, it said. +VE
Zhen Ding Technology Holding Ltd, which makes printed circuit boards for Apple Inc’s iPhones, yesterday reported that revenue for last month reached the highest August level in the company’s history, and it expects momentum to continue as the consumer electronics sector enters the high season in the second half of the year. Revenue for last month rose 24.63 percent month-on-month and 40.84 percent year-on-year to NT$14.52 billion. Cumulative revenue in the first eight months increased 28.87 percent year-on-year to NT$83.13 billion, the company said. +VE
Market to open flat with caution ahead of the Trade Data which is expected to show further signs of slowing. The question is whether the Govt or PBOC will announce further stimulus or support measures.
Data due Balance of Trade, Exports and Imports.
After Market Foreign Exchange Reserves
China will set price ranges for after-school tutoring classes and will probe institutions’ costs like teacher salaries, the state planner said on Monday, after the country barred for-profit tutoring in any school subject earlier this year. Local authorities will set benchmark fee standards and floating ranges that will take into account factors such as local economic conditions and family affordability, the National Development and Reform Commission (NDRC) said in a statement.
The People's Bank of China announced the payment business statistics for the second quarter of 2021. During the quarter, Chinese non-banking payment institutions handled 260.83 billion online payment transactions, totaling RMB87.32 trillion, representing a year-on-year increase of 28.17% and 24.37% +VE.
China will further open its capital markets to foreign investors, the country’s top securities regulator said on Monday, adding that it will pursue pragmatic cross-border cooperation to regulate overseas-listed Chinese companies. Global investors have been spooked in recent months by a flurry of Chinese regulations targeting sectors ranging from technology to private tutoring. U.S. plans to kick non-compliant Chinese firms off American exchanges has fuelled concern. “Opening-up and cooperation is the inevitable trend in the integrated development of global capital markets,” China Securities Regulatory Commission (CSRC) Chairman Yi Huiman told a conference organised by the World Federation of Exchanges +VE.
China’s Vice Premier Liu He vowed the government would keep supporting the private sector amid growing concern a regulatory crackdown on a wide range of industries was hurting businesses. Liu said, “guidelines and policies for supporting the private economy have not changed... and will not change in the future,” according to a report from Xinhua news agency. He was speaking via video at a forum on Monday on the digital economy held in China’s northern province of Hebei.
Liu appeared to be signalling reassurance to businesses during a crackdown on a range of industries, which has roiled markets and left startups and decades-old firms operating in an uncertain environment in the world’s second-largest economy.
The Berlin-based European Centre for Constitutional and Human Rights (ECCHR) accuses Lidl, Hugo Boss (BOSSn.DE) and other retailers of abetting and profiting directly or indirectly from forced labour in Xinjiang's cotton industry, according to the 96-page complaint received by prosecutors in the Karlsruhe federal court. China denies Western countries' accusations that it mistreats minority Uyghur Muslims in Xinjiang, or that forced labour is carried out there. Slight -VE for sentiment.
BMW is confident that sales in China will increase next year, finance chief Nicolas Peter told Reuters on Monday, attributing high demand for premium cars to travel restrictions that have left consumers with more money to spend. Car sales in China have fallen in recent months as floods, COVID-19 outbreaks and a semiconductor shortage hit the domestic market, but BMW has bucked the trend, reporting a 12% rise in sales there in its second-quarter. +VE
Prices for aluminium ore bauxite from Guinea hit their highest in almost 18 months in top metals consumer China on Monday as buyers fretted about supply after a coup in the West African country, though no mines reported any disruption. Guinea is the world’s second-biggest producer of the raw material that is refined into alumina, a substance used to make aluminium metal, and is the top supplier to China. Guinean bauxite for delivery to China was last assessed by Asian Metal at $50.50 a tonne, up 1% from Friday and the highest since March 16 last year. Prices are up about 16% this year.
JD.com said on Monday founder and chief executive Richard Liu will switch his focus to the e-commerce giant’s long-term strategy, creating the new role of president to run the company’s day-to-day operations.
A special zone in Shenzhen which emphasizes on cooperation with Hong Kong will increase its size for more than seven times, State Council announced. Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone will grow from 14.92 square kilometers to 120.56 square km. Slight +VE
Sanya authorities restricted the average price of filed commercial housing in the city, and said it cannot be raised within the first year. The local regulator said that for projects that have been filed before September 1, the price of unregistered properties need to be filed again, and the overall average price must not exceed the recent price of the project. And for housing projects with file prices that have been approved, the average prices cannot be increased during the first year. -VE
HONG KONG Expect market to open higher on hopes of more stimulus and headlines about China further opening its economy, the problem is that investors are aware of the potential for regulatory change risk.
No ADR’s as US markets were closed
Data due Foreign Exchange Reserves
SHORT SELLING Monday 11.3% vs 15% Friday
Top shorts Wharf REIC (1997)34%, Shenzhou (2313) 34%, Haidilao (6862) 31%, Sands China (1928) 31%, Bud Apac (1876) 28%, CK Assets (1113) 26%, Ali Health (241) 26%, Bank of China (3988) 25%, Galaxy Ent (27) 24%
As of 6 September, 63 Chinese companies have issued announcements to express their support for the government notice on preventing minors from developing online game addiction, including TENCENT (00700.HK), NTES-S (09999.HK), 37 HUYU (002555.SZ), BILIBILI-SW (09626.HK), BIDU-SW (09888.HK) and IDREAMSKY (01119.HK), according to the data from CGIGC, a state-affiliated game publishing authority.
Geely Automobile (0175) said its sales volume in August fell 22 percent to 88,348 cars, a decrease of 11 percent compared to the previous month. Of the total sales volume in August, 8,201 units were new energy and electrified vehicles, up 24 percent from the same period last year, according to an exchange filing. The total sales volume in the first eight months was 817,860 units, up 9 percent from an earlier year, achieving 53 percent of the company's annual target of 1,530,000 units. Slight -VE
CHINA OVERSEAS (00688.HK) announced that for August 2021, the contracted property sales of the China Overseas Series of Companies amounted to approximately RMB25.023 billion, with a year-on-year decrease of 13.1%; and the corresponding gross floor area sold was approximately 1.3451 million square meters, with a year-on-year decrease of 1.7%. Slight +VE
CH OVS G OCEANS (00081.HK) announced that for August 2021, the property contracted sales amounted to RMB4.465 billion and the contracted GFA reached 447,200 square meters, with a year-on-year increase of 0.4% and 21.9% respectively. +VE
YUEXIU PROPERTY (00123.HK) Short selling $2.58M; Ratio 28.919% announced that in August 2021, the value of the Company’s contracted sales amounted to approximately RMB12.669 billion, representing a year-on-year increase of approximately 65%. +VE
JD-SW (09618.HK) Short selling $244.06M; Ratio 30.826% 's PLUS members announced an in-depth collaboration with BILIBILI-SW (09626.HK) Short selling $166.38M; Ratio 34.334% , partnering to launch the PLUS members + Bilibili joint membership card, which would enable holders to enjoy shopping rebates and discounts on JD-SW's platform as well as the exclusive sneak peek and high-speed download features on Bilibili. +VE
Unclogging the capital flow in China and facilitating the RMB internationalization are keys to Hong Kong's financial development under the 14th Five-Year Plan, wrote Joseph Yam, an Executive Councillor and former HKMA Chief Executive, in an article. Yam advised Hong Kong people and financial sector to better seize this opportunity to work out the best strategy.
Citigroup, Inc. (C.US) 's commercial banking unit established a China service desk in Singapore with the aim to aid Chinese companies to expand their business operation into ASEAN countries, including Singapore, reported CNBC. Citi's potential clients are primarily mid-scaled growth type companies with annual revenues of up to USD1 billion. At the moment, prominent Chinese firms which have ventured into the Singaporean market includes TENCENT (00700.HK) , ByteDance and iQIYI, Inc. (IQ.US) .
CAFE DE CORAL H (00341.HK) saw fierce sales and sharp improvement in August as restaurant footfall had been shored up by consumption vouchers, mentioned CEO Peter Lo Tak-shing after the shareholders' meeting. However, the group's sales dwindled in July, a traditional peak season. Lo stayed cautiously optimistic about this year, citing double-digit business growth and a per capita consumption rise of $1 for the first four months of the fiscal year.
MTR CORPORATION (00066.HK) -0.100 (-0.228%) Short selling $22.39M; Ratio 16.362% announced that it will enhance train service on the Mid-Autumn Festival (21 September 2021) by operating over 250 additional train trips on the heavy rail lines (except Airport Express and Disneyland Resort Line) during non-peak periods to provide greater convenience to the public to enjoy the festival. After very prudent consideration of the latest COVID-19 pandemic situation, the time arrangement of festive activities in the evening of the Mid-Autumn Festival, and also the Government’s anti-pandemic measures on avoiding gathering of crowds, it was decided that normal operating hours will be maintained on the Mid-Autumn Festival and no overnight train service will be provided.
After years of exploration, the time is ripe for formulating the listed company regulation law, said Li Ming, Director of the Listed Company Supervision of the China Securities Regulatory Commission (CSRC). The watchdog will seize the opportunity to roll out the law, he furthered.