Asian Marco Initial Thoughts; markets to open higher but cautious trading into 1H end this week .

This and previous notes can be found at asianmarketsense.com   
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Asia Summary
Markets likely to open higher as Friday’s US inflation data was less than expected. This week we have a shortened trading week for Hong Kong (closed Thursday). Also the Chinese Communist Party anniversary on 1 July, so I expect Team China to ensure stability in the Chinese markets.


Australia Futures indicate +5pts but sentiment weak as new 2 week lock down starts. Oil & Gold prices firm. Results from Metcash and trading resumes for Costa group  
Japan  Futures opened +30pts (Chicago +15pts) following US markets on Friday.
S Korea Expect markets to open slightly higher building on Fridays record close as US inflation comes in slightly lower than forecast. 
Taiwan  Expect market to open higher following the US markets. Sentiment improving as covid cases drop.
China Expect market to open slightly higher but Industrial Profits data on Sunday showed growth slowed and the govt warned about a two speed recovery. With the party anniversary on1 July I would expect ‘Team China’ to ensure stability in the market. 
HK ADR’s -67pts at 29,221 with weakness in some Chinese Financials. After initial weakness I would expect the market to trade around flat. Market will be closed Thursday for SAR day 
US 
Futures opened higher Dow +47pts, S&P +0.1% and NDX flat.

Bitcoin may be under pressure as Binance is banned in the UK for not following money laundering practices. At present Bitcoin stable.  

JAPAN 
Futures opened +30pts (Chicago +15pts) following US markets on Friday.
Yen currently 110.77
Data due BoJ Summary of Options
Earnings  Asahi Co. (3333 JP), Halows Co. (2742 JP), Shimamura Co. (8227 JP), Zojirushi Corp. (7965 JP)
Tokyo reported 386 new covid cases Friday (-148 DoD), the nationwide number was 567 (-10 DoD). It was also announced that the Govt to ask athletes from high risk areas for more covid tests.
Yasutoshi Nishimura, the minister in charge of COVID-19 measures, said Sunday the government will consider suspending alcohol sales at restaurants and other establishments as part of other options to strengthen measures against the novel coronavirus, in light of the recent increase in the number of people going out in Tokyo. 
Japan ratified on Friday the Regional Comprehensive Economic Partnership, a mega trade agreement also involving China, Australia and the Association of Southeast Asian Nations, the Foreign Ministry said. +VE
Prices of foodstuffs have been on the rise recently in Japan due in part to a spike in demand in China; impacting cooking oil, flour, imported meat and other foods -VE household finances. Nisshin Oillio Group Ltd., J-Oil Mills Inc. and Showa Sangyo Co. plan to hike prices of household-use cooking oil by about ¥50 per kilogram in August. +VE to see inflation in Japan
Assets held by Japanese households rose 7.1% YoY to a record 1,946 trillion yen ($17 trillion) at the end of March as consumers reduced spending amid the pandemic and stock prices recovered, the Bank of Japan said Friday.
Toshiba Corp shareholders ousted the chairman of the board on Friday, delivering a powerful rebuke to the companycorporate Japan and the Govt. Comes after the management was found to have colluded with the Japanese government to put pressure on foreign investors. I think the message to corporate Japan is that the board is there to serve shareholders. CEO was appointed as interim Chairman. Company plans a full review. +VE
Panasonic Corp (6752.T) stock closed 4.9% Friday after revealling it sold its stake in electric car maker Tesla Inc (TSLA.O) for about 400 billion yen ($3.61 billion) in the year ended March.
Japan's population including foreign residents fell 0.7 percent from 2015 to 126,226,568 as of Oct. 1, 2020, dropping out of the world's top 10 in size for the first time since 1950, the latest census and U.N. estimates showed Friday.
Japan's cigarette sales in fiscal 2020 fell below 100 billion for the first time in decades, as more smokers apparently opted to use heated tobacco products amid the spread of teleworking due to the coronavirus pandemic, industry data showed. -VE Japan Tabacco and Philip Morris etc.
Demae-Can (2484): 9-month operating loss 12.9b yen; widens full-year loss forecast to 19b yen from 13b yen
Ichibanya (7630): 1Q operating profit 684m yen vs 330m yen year ago
MS&AD (8725): Won’t provide insurance for new coal-fired power plants
NH Foods (2282): Unit to Test Carbon Neutral Beef Market in Uruguay Deal
Nippon Sharyo (7102): Wins order for 64 train cars from JR Central, no financial terms released
Okuwa (8217): 1Q operating profit -48% y/y to 1.05b yen
Seven & i Holdings (3382): 7-Eleven Ordered to Sell 293 Stores Bought in Speedway Deal (1)
SoftBank (9984): Integrating ESG into investment process
Takashimaya (8233): 1Q operating loss 717m yen vs estimate 1.3b yen loss (2 analysts)

SOUTH KOREA 
Expect markets to open slightly higher building on Fridays record close as US inflation comes in slightly lower than forecast. 
No data due
KDCA reported 614 new covid cases the fifth day above 600. 
This Thursday social distancing rules are due to be eased to level 2 for Seoul and level 1 for the regions. It also reported that as of Saturday 29.8% of the population had received one vaccine dose; slight +VE
South Korean refiners are increasing investments in the burgeoning hydrogen market to secure their place in a world shifting away from fossil fuels and to get ahead of the next big change in the energy industry. +VE SK Innovation, GS Caltex, Hyundai Oilbank, S-Oil. 
KaKakaoBank said Sunday that it would join forces with industry partners to launch a credit scoring service specialized in mom-and-pop stores as a means to expand loans for low credit holders. +VE
Choi In-hyuk, chief operating officer of Naver on Friday announced that he will step down from his post, apologizing for an employee’s suicide, who left a message implying that they had suffered from workplace bullying within the internet giant.
Posco is working with Chinese steel producer HBIS Group Co. to produce and sell automotive galvanized steel sheets, the company said Friday. “From our collaboration with HBIS Group we plan to reinforce our position as the most competent automotive steel sheet supplier in China, where it has the world’s biggest market for automotive steel sheets,” Choi said during the signing ceremony. Posco and HBIS Group said they will invest a total of $600 million -- $300 million each -- to build a galvanized steel sheet production plant with a producing capacity of 900,000 tons in Tangshan, Hebei Province.
Shinsegae Department Store will build a new department store in the envisioned Suseo Station Transit Center Complex, the company said Friday.  According to the retail giant, a consortium led by Hanwha Engineering and Construction and participated in by Shinsegae has been chosen as the preferred candidate for the Suseo Station Transit Center Complex Development Project, which is worth about 1.2 trillion won.
Krafton, a South Korean game maker seeking an initial public offering in the country’s main stock market, faces delay in its listing plan. On Friday, the Financial Supervisory Service, the country’s financial regulator, ordered the game developer to correct its registration statement. 
Banks in South Korea have asked the financial authorities not to hold them responsible for money laundering or other fraud involving digital coins, at a time when they are under pressure to screen the digital exchanges for authenticity amid high volatility. The banks apparently remain reluctant to issue real-name accounts for local cryptocurrency exchanges’ virtual asset customers. -VE


TAIWAN 
Expect market to open higher following the US markets. Sentiment improving as covid cases drop.
No data due
CECC reported 89 new covid cases on Sunday 
and confirmed that two more previously reported cases involved the highly infectious Delta variant of the disease; Slight +VE 
Trade negotiations between Taiwan and the US under the Trade and Investment Framework Agreement (TIFA) 
mechanism are to resume on Wednesday next week after a four-year hiatus, the American Institute in Taiwan (AIT) said yesterday. The 11th TIFA council meeting is to be held via videoconference, the AIT said in a statement.
Business confidence last month declined among the manufacturing, service and real-estate sectors, affected by a spike in local COVID-19 infections that chilled consumer activity, a survey by Taiwan Institute of Economic Research showed yesterday. Slight -VE
IBF Financial Holdings Co on Thursday said that its Japanese joint-venture partner has agreed to waive a non-competition clause, paving the way for the company to invest in a commercial bank in Taiwan.  The partner is Japan-based e-commerce company Rakuten Group Inc, which, through its wholly owned subsidiaries Rakuten Bank and Rakuten Card, set up a virtual bank, Rakuten International Commercial Bank Co, in partnership with IBF.
Trade negotiations between Taiwan and the US under the Trade and Investment Framework Agreement (TIFA) mechanism are to resume on Wednesday next week after a four-year hiatus, the American Institute in Taiwan (AIT) said yesterday. The 11th TIFA council meeting is to be held via videoconference, the AIT said in a statement.
The MIH electric vehicle (EV) alliance initiated by Hon Hai Precision Industry Co yesterday announced its formal establishment as the MIH Consortium, with more than 1,600 companies joining the open standard since its launch in October last year.  Hon Hai conceived the MIH as “the Android of EVs,” and the consortium’s mission is to push the MIH EV platform open standard and support its members in the development of EV-related business, it said. MIH Consortium is a foundation that is “neutral, open and independent of Hon Hai,” and a new board would be assembled within the next six months to be “more diverse,” Hon Hai chairman Young Liu said at the inaugural event.
Yang Ming Marine Transport Corp on Friday took delivery of a new 2,800 twenty-foot-quivalent unit (TEU) Feedermax container vessel from CSBC Corp. The new vessel, YM Continuity, is the ninth delivery of an order of 10 Feedermax vessels placed with CSBC. It uses new technology to optimize the ship’s hydrodynamic performance and has a newly developed fuel control system to help enhance energy efficiency, Yang Ming said in a news release. +VE for the company valuation.
Taiwan's Coast Guard Administration (CGA) on Friday took delivery of a new missile corvette, the Chenggong which will be deployed in eastern Taiwan to protect Taiwan's maritime rights and the interests of local fishermen. A symbolic handover ceremony was held in a shipyard owned by Kaohsiung City-based Jong Shyn Shipbuilding Group.
CPC Corp, Taiwan and Formosa Petrochemical Corp on Sunday announced that they would increase gasoline and diesel prices by NT$0.3 per liter this week to reflect higher crude oil prices in the global market.
The increases follow both companies’ gasoline and diesel price increases of NT$0.1 per liter last week and is the seventh weekly increases in a row +VE.
The number of day traders surpassed 3 million for the first time last month, accounting for a record 14.5 percent of all investors, as more embraced day trading amid a bullish stock market, Financial Supervisory Commission (FSC) data showed this week. The number of day-trading accounts grew 41 percent from 2.19 million a year earlier to 3.09 million at the end of last month, compared with an annual rise of 7.5 percent of stock-trading accounts to 21.29 million, the data showed.

CHINA 
Expect market to open slightly higher but Industrial Profits data on Sunday showed growth slowed and the govt warned about a two speed recovery. With the party anniversary on1 July I would expect ‘Team China’ to ensure stability in the market.

Data out Sunday
Industrial Profits (YTD) May 83.4% vs 106.1% Apr (F/cast was 82%)
Industrial Profit May +36.4% YoY vs 57% Apr.
Larger businesses doing better and commodity prices impacting.
No data due but PMI data due tomorrow
China's current account surplus amounted to USD69.4 billion in the first quarter of 2021, standing at a reasonable territory, said SAFE Deputy Administrator and Press Spokesperson Wang Chunying.
China confirmed 25 additional COVID-19 cases, all being imported infections, announced by National Health Commission of the PRC.
S&P Global Ratings said on Friday that it affirmed China's ratings at A+/A-1 with a stable outlook, saying the country was likely to maintain above-average economic growth relative to other middle-income economies in the next few years, Reuters reports. "This is in part due to its effective containment of the COVID-19 pandemic and rapid vaccine rollout," S&P said in a note on Friday. "We expect real GDP growth to come in at 8.3 percent this year, before moderating to about 5 percent from 2022-2024," it added +VE for sentiment
Antony Blinken does not plan to meet China’s foreign minister at G20 session next week. It had been rumoured that they would meet -VE for sentiment as it could indicate a continued hard line stance between the two.
The virus that causes COVID-19 could have started spreading in China as early as October 2019, two months before the first case was identified in the central city of Wuhan, a new study showed on Friday.
Researchers from Britain's University of Kent used methods from conservation science to estimate that SARS-CoV-2 first appeared from early October to mid-November 2019, according to a paper published in the PLOS Pathogens journal. The most likely date for the virus's emergence was Nov. 17, 2019, and it had probably already spread globally by January 2020, they estimated.
Didi Global Inc's $4 billion initial public offering (IPO) received enough investor demand to clinch its targeted price range on Friday, vindicating a lowering of valuation expectations, people familiar with the matter said. The listing in New York, which will be the biggest U.S. share sale by a Chinese company since Alibaba raised $25 billion in 2014, is expected to price on Tuesday, and the shares to start trading on Wednesday.
The United Nations human rights chief should document her own findings on the plight of Uyghurs in Xinjiang even without China's blessing for a visit, activists and Western diplomats say, amid signs that her patience may be running out.  Michelle Bachelet, U.N. High Commissioner for Human Rights, said on Monday that she hoped to agree on terms for a long-sought visit to China this year to look into allegations of mass detention, torture and forced labour.
A human rights group that attracted millions of views on YouTube to testimonies from people who say their families have disappeared in China's Xinjiang region is moving its videos to little-known service Odysee after some were taken down by the Google-owned (GOOGL.O) streaming giant, two sources told Reuters.  The group, credited by international organizations like Human Rights Watch for drawing attention to human rights violations in Xinjiang, has come under fire from Kazakh authorities since its founding in 2017.
A human rights group that attracted millions of views on YouTube to testimonies from people who say their families have disappeared in China's Xinjiang region is moving its videos to little-known service Odysee after some were taken down by the Google-owned (GOOGL.O) streaming giant, two sources told Reuters.
The group, credited by international organizations like Human Rights Watch for drawing attention to human rights violations in Xinjiang, has come under fire from Kazakh authorities since its founding in 2017.
Tesla will recall over 285,000 cars from the Chinese market after an investigation found issues with its assisted driving software that could cause road collisions, a government regulator announced. -VE


HONG KONG 
ADR’s -67pts at 29,221 with weakness in some Chinese Financials. After initial weakness I would expect the market to trade around flat. Market will be closed Thursday for SAR day 
Data due after market 

Balance of Trade, Exports and Imports after market 
Earnings China Gas Holdings (384 HK)

Short Selling Friday 16.5% vs 16.4% Thursday 
Top Shorts  
Bud APAC (1876) 44%, Geely (175) 33%, Hang Seng Bank (11) 32%, CLP(2) 31%, Bank of China (3988) 31%, Petrochina (857) 28%, AIA (1299) 28%, Hengan (1044) 27%, MTRC (66) 27%, Sunny Optical (2382) 27%, Henderson Land (12) 26%.

BUYBACK
Li Ka-shing and Victor Li Tzar-kuoi raised their stakes in CK Asset (1113), again. Through the Li Ka Shing Foundation, they acquired a total of 2,080,500 shares in CK Asset at the average price of HK$52.4725, HK$52.8527 and HK$53.3041 per share on 21 June, 22 June and 24 June 2021, respectively. As a result, Li Ka-shing's stake in CK Asset increased from 45.51 percent to 45.57 percent, and that of Victor Li increased from 45.85 percent to 45.63 percent. The Li Ka Shing Foundation's stake in CK Asset increased from 10.82 percent to 10.88 percent.

WATCH

LI NING (02331.HK) Profit Alert announced that the Group is expected to record a net profit of not less than RMB1.8 billion for the six months ending 30 June 2021 as compared with that of RMB683 million for the corresponding period in 2020. The improvement in the performance of the Group is mainly due to a growth of over 60% in revenue as well as the continuous improvement in operating margin +VE

China Overseas Land and Investment (0688) expects to release about 100 flats in the second price list of One Victoria in Kai Tak soon. The developer has received around 2,600 registrations of intent from potential buyers for 212 flats in the first list, making them more than 11 times oversubscribed. The 212 flats, measuring between 329 square feet and 643 sq ft, are offered at an average price of HK$22,977 per sq ft, after a maximum 13.5 percent discount is applied. The cheapest flat, measuring 330 sq ft, is offered at HK$6.56 million, or HK$19,888 per sq ft after discounts. +VE

New World Development (0017) has collected about HK$1 billion after selling 81 out of 95 flats on offer at the first and second phases of The Pavilia Farm atop Tai Wai Station over the weekend. A 264-sq-ft flat at the second phase fetched HK$8.74 million, or HK$33,117 per sq ft. The third phase of the project received about 30,500 registrations of intent from potential buyers in the third round of sale, the highest number of registrations since 1997. +VE

Secondary market, Centaline Property Agency reported 15 secondary deals at 10 blue-chip housing estates over the past weekend,  down by 1 transaction from a week before. +VE 

Evergrande (3333 HK): Evergrande Unit to Sell 29.9% of China Calxon for 2.76b Yuan +VE

GEELY AUTO (00175.HK) announced that the board of ZEEKR Intelligent Technology, a JV Company of GEELY AUTO, passed a resolution to explore different external financing options for the sustainable development of ZEEKR Intelligent Technology. So far, no concrete timetable or detailed plans of the above External Financing Options have been concluded.

AEON CREDIT (00900.HK) announced annual result for the three months ended 31st May 2021. The net profit amounted to HK$96.96 million, up 28.8% yearly. EPS was HK23.15 cents.

KING FOOK HOLD (00280.HK) announced annual result for the year ended 31 March 2021. The net profit amounted to HK$28.62 million, up 403% yearly.
EPS
was HK3.13 cents. A final dividend of HK1 cent was declared, against HK0.2 cents in the year-ago period.

CHI KAN HLDGS (09913.HK) announced annual result for the year ended 31 March 2021. The net profit amounted to HK$42.77 million, up 8% yearly. EPS was HK4.71 cents. No final dividend was declared. +VE

WEALTHKING INV (01140.HK) announced the results for the year ended 31st March 2021. Net profit was $373 million, against the loss of $1.373 billion from a year ago. EPS was 13 cents. No final dividend was declared. +VE

CHEVALIER INT'L (00025.HK) announced annual result for the year ended 31 March 2021. The net profit amounted to HK$641 million, up 20.2% yearly. EPS was HK$2.12. A final dividend of HK39 cents was declared, against HK32 cents in the year-ago period. +VE

BABA-SW (09988.HK)'s new retail platform Hema was fined RMB500,000 for false advertising,
 according to the Administration for Market Regulation of Pudong New Area of Shanghai city -VE.

SAICMOBILITY under SAIC MOTOR (600104.SH) announced to have reached an agreement with BABA-SW (09988.HK)'s Ali Cloud on a strategic alliance,
 entailing extensive collaborations on aspects like smart travel, safety and risk control, etc., to ensure safer and better travel services for its users +VE.

Centa-City Leading Index (CCL) last stood at 188.1, hitting a 96-week high and up 0.81% weekly. 

For 1H21, CCL +6.74% / CCL Mass +6.46% / CCL (small-and-medium flats) +6.64% / CCL (large units) +7.22%.
CCL will soon return to its 190.48 historical high, being just 1.25% below the peak right now.
CCL Mass for New Territories West last printed at 175.81, up 0.34% weekly, said the research department of Centaline Property. The index had thrived 3.62% in seven straight weeks for the first time in 479 weeks.

The Lands Department received 17 bids for a residential site in Kwu Tung, Fanling after closing the tender today (25th).
According to the on-site witness, KOWLOON DEV (00034.HK), SINO LAND (00083.HK), CK ASSET (01113.HK), EMPEROR INT'L (00163.HK), HON KWOK LAND (00160.HK), KAISA GROUP (01638.HK), HENDERSON LAND (00012.HK), and others, have submitted tenders.

The Urban Renewal Authority (URA) announced that 36 expressions of interest (EOIs) had been received for the To Kwa Wan Bailey Street/ Wing Kwong Street Development Project, the invitation of which had been closed today (25th). Interested developers included GREAT EAGLE H (00041.HK), China Overseas and CHI MER LAND (00978.HK), EMPEROR INT'L (00163.HK), Kaisa Group, FE CONSORT INTL (00035.HK), CIFI HOLD GP (00884.HK), Chinachem, Nan Fung, SEA HOLDINGS (00251.HK) and others.

DOW +0.69%, NDX -0.06%, S&P +0.33%, Russel 2K +0.03%
Mixed opened; DOW and S&P higher and traded sideways in the green but NDX opened slightly higher but dipped and traded around flat all day. Banks strong after beating stress tests which paves the way to buybacks and increased dividends. Sentiment encouraged by the slightly weaker than expected inflation data although the rate of increase was the fastest since the early 1990’s. Generally taken to be in-line with the Fed’s view that inflationary pressures are transitory.
Nike +15.5% on good earnings and forecast despite the slowing of sales in China.
FedEx -3.6% despite good earnings and a strong outlook.
Infrastructure plays eased from Thursdays rally on the news that Biden’s smaller infrastructure bill gets bipartisan support. 

Banks JPMorgan Chase +1%, Citigroup +0.3% Wells Fargo +2.7%, Amex +0.7%
Work from home names: Facebook -0.5%, Apple -0.2%, Amazon -1.4%, Netflix +1.7%,  Disney +0.2%, Zoom Video -0.3%, Alphabet flat and Microsoft -0.6%.
Tech NXP Semi +0.2%, Nvidia -0.9%, Micron +1.8%, AMD +0..6%, Skyworks +0.5%
Re-opening stocks  Boeing -0.9%, Caterpillar -1.4%, Simon Property +0.3%, Kohl’s +1.2%, Nordstrom +1%, Gap +2.7%, United Airlines -0.9%, Carnival +2.4%, Wynn Resorts flat, Chevron +0.2%, Exxon Mobil +0.2%,  
Lock down names Campbell Soup +1.2% General Mills +0.8%, JM Smucker +0.7%

DATA
Personal Income May -2% MoM vs -13.1% Apr (F/cast was -3%)
Personal Spending May 0% MoM vs +0.9% Apr revised (F/cast was +0.4%)
PCE Price Index May +3.9% YoY vs +3.6% Apr (F/cast was +4.2%)
PCE Price Index May +0.4% MoM vs +0.6% Apr (F/cast was +0.8%)
Core PCE Price Index May +3.4% YoY vs +3.1% Apr (F/cast was +3.5%)
Core PCE Price Index May +0.5% MoM vs +0.7% Apr (F/cast was +0.6%)
Michigan Final 
Inflation Expecations Jun +4.2% vs +4.6% May (F/cast was +4%)
Consumer Sentiment Jun 85.5 vs 82.9 May (F/cast was 86.4)
5yr Inflation Expectations Jun +2.8% vs 3% May (F/cast was +2.8%)
Consumer Expectations Jun 83.5 vs 78.8 May (F/cast was 83.8)
Current Conditions Jun 88.6 vs 89.4 May (F/cast was 90.6)
Baker Hughes Total Rig Count 470 vs 470 prior
Baker Hughes Oil Rig Count 372 vs 365 prior revised
NY Fed Treasury Purchases (2.25 - 4.5 yrs).
USD was slightly stronger vs Yen & Euro. Bitcoin -8.4% @ 31,891.71,  VIX +2.2% @ 15.62,  
US T10 @ 1.524% breaking out again.
OIL Brent +0.2%, WTI +0.4% 
Gold +0.29%, Silver +0.54%, Copper -0.81% Platinum +1.28%, Palladium +0.04%.
AHEAD
Dallas Fed Manufacturing Index

DAX +0.12%, CAC -0.13%, FTSE +0.37%
Markets basically traded sideways around flat all day and ticked up slightly into the close as US inflation numbers were slightly weaker than forecasts. Sentiment encouraged by the UK easing travel restrictions on vaccinated people.
Adidas +6.4% after good results and a strong forecast from Nike. Vifor Pharma -5% further selling after announcing Thursday that it would revise a key study after the pandemic affected the recruitment of participants, with data now expected 2H 2022.
DATA
Eurozone 
Loans to Households May +3.9% YoY vs +3.8% Apr (F/cast was +4%)
Loans Companies May +1.9% YoY vs +3.2% Apr (F/cast was +3.4%)
M3 Money Supply May +8.4% YoY vs +9.2% Apr (F/cast was +8.8%)
Germany 
Consumer Confidence Jul -0.3 vs -6.9 Jun Revised (F/cast was -3)
France 
Unemployment Benefit Claims May -133k vs +65.9k Apr (F/cast was -42k)
Jobseekers Total  May 3.4901m vs 3.6238m Apr (F/cast was 3.5818m) 
UK 
Consumer Confidence Jun -9 vs -9 May (F/cast was -7)
CBI Distributive Trades Jun 25 vs18 May (F/cast 15)
BoE Quarterly Bulletin. 

AHEAD
EUROZONE No data due
GERMANY Import Prices  
FRANCE No data due on Sunday French elections 2nd round
UK  No data due