Asian Macro Initial Thoughts: A data light day in Asia, the third anniversary of Russia's invasion of Ukraine. US tariffs and China policy remain the focus. Update .. I missed Japan closed today.
NZX and ASX opened lower. NZX found support at 12,500 but sentiment is weak. ASX tested 8,220 but then bounced. Japan closed today which is lucky considering the futures were very weak.
Overview
Today is the third anniversary of Russia’s unprovoked invasion, the French president is visiting Washington, to be followed later in the week by Britain’s prime minister but they are unlikely to be able to persuade Trump that his current view is wrong and risk further annoying him. In the face of Trump’s falsehoods President Zelenskyy has said he is willing to step down as Ukraine’s president if it would secure lasting peace for his country. “If it brings peace for Ukraine, if you really need me to leave my post, I’m ready. I can exchange it for Nato [membership],” Zelenskyy told reporters at a press conference in Kyiv on Sunday. “If such conditions exist [I will step down] immediately.” Speaking ahead of the third anniversary of Russia’s full-blown invasion of Ukraine on Monday, Zelenskyy also said he wanted US President Donald Trump to be a close partner to Ukraine and not just a mediator between Kyiv and Moscow.
The US Treasury secretary Scott Bessent has defended Donald Trump’s push for an agreement with Ukraine in an FT article; to develop Ukraine’s natural resources and critical minerals, saying the plan would fuel postwar growth in the country and did not involve any coercive economic pressure. But Ukraine has pushed back but US officials are applying intense pressure on Kyiv in their push for a deal.
Investors are waiting for the official German election results; it appears that Friedrich Merz will become the next chancellor, after negotiations for a coalition. (And those points are fine indeed: what that coalition might be depends, among other things, on how many smaller parties scrape past the 5% threshold needed to enter the Bundestag. The Euro strengthened on the news.
The Trump administration told Mexican officials that they should put their own duties on Chinese imports as part of their efforts to avoid tariffs threatened by US President Donald Trump, while China called on the US to stop politicizing and weaponizing economic and trade issues. Commerce Secretary Howard Lutnick was among US officials who conveyed that message at a meeting Thursday in Washington with Mexican delegation, including Economy Minister Marcelo Ebrard, sources said. US Trade Representative nominee Jamieson Greer and White House economic adviser Kevin Hassett also attended the meeting. Mexican President Claudia Sheinbaum has ramped up efforts to crack down on cheap imports from China, a move to support domestic industries as well as appease a Trump administration that's threatening 25 percent tariffs on its North American trade partners. Mexico didn't make any commitment on China during the meeting, the people said, which ended with an agreement to establish a working group from both countries to continue exploring trade and tariff issues.
Worth noting OpenAI has removed accounts of users from China and North Korea who the artificial intelligence company believes were using its technology for malicious purposes including surveillance and opinion-influence operations, the ChatGPT maker said on Friday.
The activities are ways authoritarian regimes could try to leverage AI against the U.S. as well as their own people, OpenAI said in a report, adding that it used AI tools to detect the operations.
Housekeeping
Monday morning I was on RTHK’s Money Talk with host Andrew Work and Hao Zhou Chief Economist of GTJAI. If you have a topic you want discussed let me or then know or if you just want to listen you can find the show here
https://www.rthk.hk/radio/radio3/programme/money_talk
Last Thursday afternoon I was on RTHK’s The Close; with host Nitin and Xiaolin Chen of KraneShares If you want to listen to the programme you can find it here: https://www.rthk.hk/radio/radio3/programme/the_close.
For leading independent research, click on http://ERI-C.com it is a great platform where independent research vendors list their research and trading analysis. ERI-C is free to access, you can browse different independent research providers, most offer free trials; so worth a look.
Mark Tinker recently posted the Latest thoughts from Market Thinker - Eternal and Perpetual National Interests are perpetual but so may US Treasuries be... Drawing on a quote from Lord Palmerston. 'Therefore I say that it is a narrow policy to suppose that this country or that is to be marked out as the eternal ally or the perpetual enemy of England. We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow.'
MARKET INDICATIONS
New Zealand
Market open slightly in the green but trended lower following the weakness on Friday in the US. Retail sales data was better than expected but the market continued to trend lower; currently testing 12,550 level.
Data out
Retail Sales Q4 0.9% QoQ vs -0.1% Q3 (F/cast was 0.5%)
Retail Sales Q4 0.2% YoY vs -2.5% Q3 (F/cast was -1.8%)
Due later
Credit Card Spending Jan YoY vs -1.4% Dec (F/cast was -1.2)
Reserve Bank of New Zealand Deputy Governor Christian Hawkesby scheduled to speak in Wellington.
Australia - No Data Due
ASX opened lower in the staggered open after futures indicated -64pts -0.8% at 8,203 with oil, gold and iron ore all closing lower on Friday. Wisetech -18.5% as most board directors resign.
Earnings Ampol Ltd, Bubs Australia, Hutch Tel Australia, Iress Ltd, Lovisa Holdings Ltd, and NIB Holdings Limited amongst those releasing numbers.
Watch Block Inc whose shares are likely to sell after Wall Street responded poorly to its results release. The payments giant's NYSE shares ended the session almost 18% lower. This could mean a double digit decline for its ASX shares, building on their 6% decline on Friday.
Japan - No Data Due. Market closed for the Emperor’s Birthday - re-opens Tuesday
Nikkei Futures -627pts -1.6% at 38,150
Chicago Futures +40pts 0.1% at 38,195
Yen closed at 149.29 in the US. Opening 149.22 in early trading.
Watch the trading houses after Buffett said on Saturday that he will likely increase its ownership in the five Japanese trading houses it holds. Itochu (8001.T), Marubeni (8002.T), Mitsubishi (8058.T), Mitsui (8031.T) and Sumitomo (8053.T) agreed to "moderately relax" limits that capped Berkshire's ownership stakes below 10%.
S Korea
Market to open lower following the big sell off in the US on Friday
Data Due Later
5 Year KTB Auction vs 2.725% prior
Taiwan
Expect market to open lower with Tech under pressure.
Data Due after market
M2 Money Supply Jan YoY vs 5.51% Dec
China - No Data Due
CSI300 to open higher after the Golden Dragon Index closed up 130pts 1.65% at 7,982
The only economic data due this week are the PMI’s on Saturday but investors will be looking for any indications about Beijing looking to support the economy and anything to do with relations with China.
Hong Kong - No Data Due
HSI to open flat as ADR’s closed -4.3pts -0.02% @ 23,473; with only HSBC, SHKP, AIA, Tencent, BABA and Xiaomi in the green. Comes after HK saw a strong rally Friday lead by Tech/AI related names.HSI Futures -78pts -0.3% at 23,400
Earnings Trip com, Web3 Meta Ltd, Natural Beauty BioTech
Macau - Data out after market Friday
Inflation Rate Jan 0.17% MoM vs 0.2% Dec (F/cast is 0)
Inflation Rate Jan 0.57% YoY vs 0.23% Dec (F/cast is 0.4%)
Singapore - Data Due
Core Inflation Rate Jan YoY vs 1.8% Dec (F/cast is 1.7%)
Inflation Rate Jan MoM vs 0.3% Dec (F/cast is -0.1%)
Inflation Rate Jan YoY vs 1.6% Dec (F/cast is 2.1%)
Singapore's regulator has announced a significant plan to inject US$3.7 billion into the stock market. To try and revitalizing the equity market and positioning Singapore as a prime destination for IPOs and other financial activities. Among the proposals, which included tax incentives for companies and investors, along with a more streamlined listings process, was a plan to invest S$5bn (US$3.7bn) in funds that are focused on the local equity market
Indonesia - Data Due
M2 Money Supply Jan YoY vs 4.4% Dec
Thailand - Data Due
Balance of Trade Jan vs $-0.01B Dec (F/cast is $-1.8B)
Exports Jan YoY vs 8.7% Dec (Consensus is 7.6%)
Imports Jan YoY vs 14.9% Dec (F/cast is 2.95%)
Malaysia - No Data due
Philippines - No Data Due
Vietnam - No Data Scheduled this week
Cambodia - No Data Scheduled this week
India - No Data Due
Europe
Eurozone Inflation Rate & Core, CPI Final
Germany Ifo Business Climate, Current Conditions & Expectations, Bundesbank’s Balz Speaks, 3 & 9 month Bubill Auction, Bundesbank Monthly Report
France 12, 3 & 6 month BTF Auction
United Kingdom BoE’s Lombardelli & Ramsden speak.
United States
Futures Dow up 32pts 0.1% S&P 0.12% and NDX 0.1%.
Data Due Chicago Fed National Activity Index, Dallas Fed Manufacturing Index, 3 & 6 month Bill Auction, 2 year Note Auction, Fed’s Logan speaks
HEADLINES & NEWS
AUSTRALIA
Sites near some of Australia’s largest coal-fired power stations may house giant domes filled with carbon dioxide, which could store solar energy and help drive the grid’s shift away from fossil fuels.
US platform Turo says it has become Australia’s largest car-sharing marketplace, and despite some road bumps its global boss is confident of avoiding the pitfalls that have plagued other sharing economy giants.
US property giant makes $2.7b bid for Domain. Shares in Nine and Domain surged on Friday after US property titan CoStar lobbed a takeover offer.
Insurance boss says forced break-up won’t lower premiums. The chief executive of insurance giant QBE says the sector doesn’t need intervention, with inflation the real culprit behind higher premiums.
Waverley Park up for sale as Hawks fly south to new training base. With the AFL club’s new HQ almost ready, Hawthorn have put their Waverley headquarters and training facility on the block.
JAPAN
Foxconn (2317.TW) has proposed forming a partnership with Japan's Honda Motor (7267.T) aiming to create a tie-up framework that also includes rival carmakers Nissan Motor (7201.T) and Mitsubishi Motors (7211.T) the Nikkei newspaper reported on Friday. The chairman of Foxconn, the world's largest contract electronics manufacturer, earlier this month said it would consider taking a stake in Nissan for cooperation, after the merger talks between Nissan and Honda collapsed.
A high-level Japanese group that includes a former prime minister has drawn up plans for Tesla (TSLA.O) to invest in Nissan (7201.T), opens new tab after the collapse of its merger talks with Honda (7267.T) the Financial Times said on Friday. A separate Nikkei newspaper report said Taiwan's Foxconn (2317.TW) has proposed forming a partnership with Honda with an ultimate aim of creating a four-way framework that would also include Nissan and Mitsubishi Motors (7211.T). The Japanese group behind the plans for Tesla to invest in Nissan hopes the Elon Musk-led company will become a strategic investor, believing it is keen to acquire Nissan's plants in the United States, according to the Financial Times. The proposal is being led by former Tesla board member Hiromichi Mizuno with support from ex-premier Yoshihide Suga and his former aide Hiroto Izumi, the newspaper said, citing unidentified sources. Some analysts, however, are doubtful of Tesla's interest in acquiring U.S. plants, citing its ample capacity at existing factories and first decline in yearly deliveries in 2024.
Moody's Ratings said on Friday it has downgraded its rating of Nissan Motor's (7201.T) credit by one notch to junk status, citing a weak and worsening outlook for the Japanese automaker's credit profile. The credit-rating firm cut Nissan's senior unsecured rating to Ba1 from Baa3 and maintained its negative outlook. In a report, senior analyst Dean Enjo cited "risks associated with the implementation of its new restructuring plan, the renewal of its aging product range and global trade policies”.
Seven & i Holdings Co is expected to make U.S. private equity firm Bain Capital the preferred buyer for its intermediate subsidiary operating Ito-Yokado supermarket chain, a source familiar with the matter said Saturday. The Japanese retail giant is aiming to shed its noncore operations and focus on its 7-Eleven convenience stores business, as it tries to fend off a takeover bid from Canadian convenience store operator Alimentation Couche-Tard Inc. Seven & i is aiming to reach a final agreement with the private equity firm in March. The two other potential buyers competing for the sale of the intermediate subsidiary York Holdings Co, are Kohlberg Kravis Roberts & Co and Japan Industrial Partners, Inc. Bain Capital is reported to have made an acquisition proposal based on a valuation of over 700 billion yen for the subsidiary, which operates 31 retailers including the Ito-Yokado business. Seven & i has said it plans to sell a majority stake in the subsidiary by February 2026, turning it into an equity-method affiliate.
Tokyo Gas (9531.T) Japan's biggest city gas supplier, will sell its 25% stake in an Eagle Ford shale gas project in south Texas to Shizuoka Gas (9543.T) for $130 million under an asset portfolio review to improve efficiency, it said on Friday. The move will leave it to focus on its U.S. unit, TG Natural Resources, which has assets in east Texas and north Louisiana, Tokyo Gas said in a statement. Shizuoka Gas said in a separate statement that the deal marks its first acquisition in a U.S.-based business and entry into the upstream natural gas sector. The volume of shale gas production attributable to Shizuoka Gas is projected at 400,000 metric tons per year in liquefied natural gas (LNG) equivalent. The gas produced from the project, which is operated by Lewis Energy Group, will be sold in the United States, Shizuoka Gas said. "Starting with this project, we will consider further business development in the U.S.," Shizuoka Gas said. The company has set a target to expand its overseas business to generate 14% of its recurring profit by 2030.
Eneos Corp, and trading house Mitsubishi Corp (8058.T) said on Friday they would move forward with front-end engineering design (FEED) for sustainable aviation fuel (SAF) production at the Wakayama plant. The plant is expected to produce about 300,000 metric tons (400,000 kilolitres) of SAF annually, along with some naphtha and light oil fractions, from fiscal 2028. The feedstock will mainly consist of waste products and by-products, such as used cooking oil and tallow. The two companies will accelerate discussions to establish a system for mass producing and supplying domestically produced SAF, they said in a joint statement. They will combine Eneos' expertise in manufacturing technology, raw material procurement and sales network with Mitsubishi's expertise in SAF raw-material sourcing both in Japan and overseas, they added.
A team of researchers in Japan says it has developed a robot hand that moves using cultivated human muscle tissues and is the largest of its kind yet developed, with the hope of applying the technology to prosthetic hands. The biohybrid hand has five fingers that move individually using multiple joints and can perform complex finger movements, such as grasping and moving the tip of a small object, said the researchers at the University of Tokyo and Waseda University. It measures 18 centimeters in length, including a forearm section. Like muscle tissues in human bodies, the contracting force of the robot's tissues decreased and showed signs of fatigue after 10 minutes of action but recovered after an hour of rest, the team said. Previous biohybrid devices could only make a single-joint movement and were limited to about 1 cm in size as thick muscle tissues for moving larger limbs suffered tissue loss due to nutrients not reaching the center.
SOUTH KOREA
In an increasingly polarized political landscape, South Korea’s two major political parties currently share a common goal — wooing moderate voters. Experts believe moderates account for around 40 percent of the roughly 44 million eligible voters in South Korea, making them a crucial demographic for any party with eyes on the presidency. Observers say that the Constitutional Court is likely to deliver a verdict on whether to remove impeached President Yoon Suk Yeol from office or reinstate him by mid-March. If the court decides to uphold the parliament's impeachment decision, an early election will be held 60 days later. With the possibility of a May election, both the left-leaning main opposition party and the ruling conservative party have been moving to appeal to the political centerground in the past month. But they have also been caught in a dilemma: Should they appeal to moderate voters even if it upsets their staunchest supporters?
Chey Tae-won, chairman of SK Group who also serves as the head of the Korea Chamber of Commerce and Industry (KCCI), has said the chips-to-battery conglomerate could consider making more investments in the United States should there be incentives to do so under the new Donald Trump administration. Chey made the remark when asked if his group had more investment plans in the US while meeting with reporters on the sidelines of a forum hosted by the Chey Institute for Advanced Studies, a think tank affiliated with the SK Group, in Washington on Friday.
Fueled by the world’s fastest aging population, South Korea's national debt is projected to surge sixfold to 7,000 trillion won ($4.87 trillion), while the country’s productivity is expected to nearly stagnate by 2072. The National Assembly Budget Office detailed this grim outlook in its "Long-term Fiscal Outlook Report for 2025-2072," highlighting the significant impact of demographic shifts driven by a rapidly aging population and a declining workforce. The forecast is based on the assumption that existing laws and systems will remain unchanged. According to the report, by 2050, the national debt is expected to reach a level where the country’s production will no longer be sufficient to cover it, with the debt-to-GDP ratio projected to surpass 100 percent. Currently at 48 percent, the ratio is forecast to surge to 173 percent by 2072, meaning the country's debt will be 1.73 times its annual economic output. The country's national debt is expected to increase nearly sixfold by 2072, rising from the current 1,270 trillion won to 7,300 trillion won. In the same period, the gross domestic product growth rate is projected to plummet to 0.3 percent by 2072, down from the anticipated 2.2 percent this year. The report highlights that increased spending driven by the world’s fastest-aging population is a key factor in the explosive growth of national debt.
Korea's retail industry is pinning hopes on China's potential removal of a ban on Korean entertainment content, looking forward to a boost from Asia’s largest consumer market that could help compensate for sluggish domestic demand in recent years. The Chinese government's move to ease restrictions on foreign companies has fueled expectations among Korean companies for a potential end to the "Korea limitation order" -- an unofficial policy implemented eight years ago by Chinese authorities that has impacted trade, tourism and the entertainment sector. "We've seen that alongside K-content, everything it features -- such as K-food, fashion and makeup -- has been absorbed by foreign consumers, driving increased local spending," said a fashion industry official working in Seoul. "If the ban is lifted, it will trigger a chain reaction of consumption across a range of sectors. This trend would likely go viral, influencing tourists from one country to another.” China's state-run Xinhua News Agency reported on Thursday that the General Office of the State Council announced the foreign investment action plan for 2025, which experts see as a response to concerns over China's economic slowdown, driven by declining foreign investment.
LG Energy Solution, the largest battery maker in Korea, announced Sunday that it would showcase its new lineup of 46-millimeter diameter electric vehicle battery cells at InterBattery 2025, Korea’s premier battery industry exhibition. The event will take place at Coex in southern Seoul from March 5-7. At the exhibition, LG Energy Solution will present its 4680 model, measuring 80 mm in length, a concept made public after Tesla announced in 2020 that it would use the battery cells in future car models. The company will also display two longer cells, measuring 95 mm and 120 mm in length, respectively, demonstrating its ability to customize the product according to customer specifications. This marks the first time LG’s 46-series battery cells will be presented to the public.
Samsung SDI aims to strengthen its leadership in prismatic electric vehicle batteries by showcasing advanced safety-enhancing technologies at InterBattery 2025, the largest battery industry exhibition in Korea. The annual event will take place at Coex in southern Seoul from March 5 to 7, featuring a record 640 companies from the global battery industry. Samsung SDI announced Sunday that it will highlight its commitment to safety by presenting innovations for its prismatic batteries, which are renowned for their superior durability and resistance to external impacts compared to cylindrical and pouch-type batteries. As part of this effort, Samsung SDI’s display will feature a new technology designed to physically block heat transfer between battery cells during abnormalities, along with the latest advancements in its all-solid-state battery development.
Samsung Display has signed a memorandum of understanding with the US semiconductor manufacturer Intel to engage in joint efforts targeting the next-generation artificial intelligence-powered PC market. Under the agreement inked on Friday, Samsung Display plans to develop display solutions optimized for Intel’s processor chips, which enable enhanced artificial intelligence capabilities. The two firms will also tap opportunities in high-performance IT devices and premium laptops, including AI PCs. Lee Ho-jung, executive vice president at Samsung Display and head of the product planning team in the Small and Medium-sized Display Division, met with David Feng, vice president of Intel's Client Computing Group, to sign the memorandum at Samsung Display Research in Giheung.
South Korea's semiconductor technology trailed behind that of China in all key areas as of last year, marking a shift from previous assessments, a survey showed Sunday. According to the survey of 39 local experts conducted by the Korea Institute of S&T Evaluation and Planning, South Korea ranked second in high-intensity and resistance-based memory technology, scoring 90.9 percent, compared with China's 94.1 percent, with the world's top technology level set at benchmark 100 percent. Also in the field of high-performance and low-power artificial intelligence semiconductors, South Korea received a score of 84.1 percent, lagging behind China's 88.3 percent, the survey showed. The findings mark a reversal from a similar survey conducted in 2022, when South Korea was assessed to be ahead of China in semiconductor technology. The report pointed to growing uncertainties in the local semiconductor industry, citing the rise of Japan and China, potential trade sanctions under the new US administration and intensifying competition from Southeast Asian countries. To maintain the country's competitive edge, the report stressed the need to secure advanced semiconductor manufacturing technologies, foster high-caliber talent and prevent the outflow of skilled professionals.
South Korea's exports of auto parts to the United States hit a record high last year, data showed Sunday, as experts weigh the potential impact of incoming auto tariffs from the United States. Exports of automotive parts to the US totaled $8.22 billion in 2024, up from $8.08 billion the previous year, according to data compiled by the Korea Auto Industries Coop. Association. The figure has been on a steady increase from $6.91 billion in 2021 and $8.03 billion in 2022. In 2024, shipments to the US accounted for 36.5 percent of the country's total auto parts exports at $22.55 billion, according to the data. The European Union was the second-largest destination of South Korean auto parts, accounting for 17.3 percent of overall exports last year, followed by Mexico with 9.5 percent and China 6.4 percent. The report comes amid concerns that the Donald Trump administration's plan to impose 25 percent tariffs on all auto imports may seriously dent South Korea's exports and auto industry.
TAIWAN
Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker TSMC and other major manufacturers to boost global expansion, the central bank said on Thursday. The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed. Chen Fei-wen, deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan. Investments by Vanguard International Semiconductor Corp a smaller contract chipmaker, semiconductor distributor WT Microelectronics Co and iPhone assembler Hon Hai Precision Industry Co were also factors, Chen said. The central bank said the portfolio investment account posted a net asset increase of US$66.33 billion last year, down US$5.59 billion from a year earlier. As a result, Taiwan’s net fund outflow, which measures the flow of direct and portfolio investments, reached US$94.39 billion in the year, an increase of US$9.02 billion from the previous year. In the fourth quarter of last year, the country’s net fund outflow totaled US$30.70 billion, an increase of US$2.53 billion from the previous year, the 58th consecutive quarter of net fund outflows — the longest streak in Taiwan’s history. As Taiwan continues to report net fund outflows in its financial account, concerns over sustained massive overflows have deepened. About concerns that investors might continue moving funds out of the country, the central bank said that net financial account outflows are not unusual in a country such as Taiwan, which has a long-standing current account surplus.
Radiant Opto-Electronics Corp has obtained approval to join the government’s reshoring initiative by investing NT$13.3 billion (US$406.2 million) in building research centers and high-standard cleanrooms in Taiwan, the Ministry of Economic Affairs said on Friday. The company’s backlight modules are used in displays of information technology products and automotive, and in wearable devices. To accelerate business transformation and strengthen core technology, the company built research centers and cleanrooms, similar to those for chip manufacturing, in Kaohsiung’s Cianjhen Technology Industrial Park and Miaoli County’s Zhunan Science Park the ministry said in a statement. The new investment is expected to enhance the company’s manufacturing and research capability for wafer-level optical components and help it provide added value to display, wearable device, automotive, robotics and biomedicine customers, the ministry said. The wafer-level optical components that the company would develop can significantly reduce product size and are compatible with the chipmaking process, which is more conducive to back-end integration and packaging. The company would also introduce artificial intelligence (AI) manufacturing, including equipment pre-diagnosis and yield analysis, to improve quality and efficiency, the ministry said, adding that the investment is expected to create 480 jobs. Radiant Opto-Electronics has been collaborating with Apple Inc for a long time, exclusively supplying backlight modules for MacBooks for seven years. The company’s revenue last year increased 17.1 percent year-on-year to NT$51.62 billion. The company was one of six local firms that the InvesTaiwan Service Center last week approved to join the government’s three major investment incentive programs, the ministry said.
Gasoline and diesel prices are to remain unchanged this week, CPC Corp, Taiwan (CPC) and Formosa Petrochemical Corp said Sunday, as international crude oil prices fluctuated within a narrow range last week. CPC said that based on its floating oil price formula, the cost of crude oil edged up 0.08 percent last week from a week earlier, as the geopolitical tensions between Russia and Ukraine continued, while US crude oil stockpiles rose. The company decided to keep prices the same and absorb part of the cost increases, to comply with a government policy of keeping domestic fuel prices lower than in major neighboring markets, it said.
Confidence in the local economy appeared mixed this month, with the index gauging current conditions rising, while another index assessing the economic outlook declined, Cathay Financial Holding Co said on Thursday. Citing a survey conducted from Feb. 1 to Feb. 7, Cathay Financial said about 29.3 percent of respondents thought the economy improved this month, while 35.7 percent felt it worsened. That translated into an economic optimism index of about minus-6.4 this month, an improvement from minus-8.7 last month. However, the economic optimism index for the next six months fell to minus-11.2 this month from minus-5.8 last month, following a decline in December leading indicators, the survey showed. Amid volatility in global stock markets and US President Donald Trump’s tariff threats, the index measuring optimism toward the local stock market dropped sharply from 16.5 last month to 9.2 this month, the survey found. Meanwhile, the index gauging the appetite for risk in the stock market increased slightly from 17.2 last month to 19.3 this month. Cathay Financial said that 34 percent of respondents believed the tariff war could affect global trade and impact Taiwan’s economic growth, while 43.1 percent said the performance of US stock markets is expected to influence Taiwan’s equity market. Respondents also projected GDP to grow 2.84 percent this year, with 53 percent expecting annual growth to be below 3 percent, it said, adding that it was more conservative than the Directorate-General of Budget, Accounting and Statistics’ (DGBAS) forecast of 3.29 percent. Respondents expected growth in the local consumer price index (CPI) to reach 2.28 percent this year, with about 66 percent anticipating the CPI would average more than 2 percent for the year, above the central bank’s forecast, Cathay Financial said. The DGBAS forecast that inflation would slow from 2.18 percent last year to 1.93 percent this year.
CHINA
Spot USD/CNY rose 62 bps to close at 7.2554 Friday (21st). As of 4:37 pm, USD/CNY in the night session grew 31 bps. Meanwhile, USD/CNH declined 174 bps to 7.2521, trading 33 bps higher than USD/CNY.
President Donald Trump signed a memorandum on Friday that directs the Committee on Foreign Investment in the United States to restrict Chinese investments in strategic areas, a White House official said. The national security memorandum is aimed at promoting foreign investment while protecting U.S. national security interests from threats posed by foreign adversaries like China, the official said. The order says that China is "exploiting our capital and ingenuity to fund and modernize their military, intelligence, and security operations, posing direct threats to United States security," the official said. Under the directive, the United States will establish new rules "to curb the exploitation of its capital, technology, and knowledge by foreign adversaries such as China to ensure that only those investments that serve American interests are allowed," the official said.
The official also said the Trump administration will consider new or expanded restrictions on U.S. outbound investment to China in sensitive technologies, including semiconductors, artificial intelligence, quantum, biotechnology, aerospace and more. The United States should stop "politicizing" and "weaponizing" economic issues, the Chinese commerce ministry said in a statement on Saturday, adding that China would closely monitor the situation and take necessary measures to defend its legitimate rights and interests. The steps threaten to heighten economic tensions with China after the president increased tariffs on Chinese imports as one of his first moves in office. CFIUS, which scrutinizes foreign investment in the United States for national security risks, has already overseen a sharp decrease in Chinese investment in the United States. According to the Rhodium Group, annual Chinese investment has dropped from $46 billion in 2016 to less than $5 billion in 2022. The order noted that foreign entities and individuals hold roughly 43 million acres of U.S. agricultural land, which is nearly 2% of all land in the United States, the official said. China owns more than 350,000 acres of farmland across 27 states, the official said. Farm groups and lawmakers have expressed concerns in recent years that land buys by investors and foreign countries are driving up farmland prices and threatening national security. The White House official also noted that Chinese hackers have repeatedly targeted U.S. entities, including recently breaching the Treasury Department’s CFIUS office, the entity responsible for reviewing foreign investments for national security risks. The outbound regime could expand on an executive order, unveiled in 2023 by the Biden administration, to start prohibiting some U.S. investments in certain sensitive technologies in China, and requiring government notification of other investments.
China's Supreme People's Procuratorate (SPP) announced that the case of Ding Wei, former member of the party committee and vice president of CM BANK (03968.HK) (600036.SH) suspected of accepting bribes, has been concluded by the Haidong City Supervisory Committee in Qinghai Province and transferred to the procuratorate for examination and prosecution. Under the jurisdiction designated by the SPP, the case will be examined and prosecuted by the Haidong City People's Procuratorate in Qinghai Province.
Gamma Data released its monthly game industry report, which showed that the mainland China game market charted revenue of RMB31.077 billion in January 2025, representing a MoM growth of 7.54% and a YoY growth of 27.65%. Among which, the mainland mobile game market had actual sales revenue of RMB22.970 billion, marking a MoM rise of 7.75% and a YoY increase of 29.87%; the mainland client-end game market posted actual sales revenue of RMB6.671 billion, notching a MoM hike of 9.57% and a YoY leap of 19.11%. Mainland China's self-developed game overseas market reported actual sales revenue of US$1.675 billion, up 2.72% MoM and up 28.65% YoY.
Shenzhen has released the details of its car replacement and renewal subsidy. Individual consumers who transfer vehicles registered under their names and purchase new energy vehicles (NEVs) or fuel vehicles meeting the National VI emission standard within Shenzhen will receive a one-time car purchase subsidy.
For car purchase prices between RMB40,000-70,000, a subsidy of RMB4,000 is provided for each fuel vehicle, and RMB5,000 for each NEV.
For car purchase prices between RMB70,000-150,000, a subsidy of RMB8,000 is provided for each fuel vehicle, and RMB9,000 for each NEV.
For car purchase prices between RMB150,000-250,000, a subsidy of RMB12,000 is provided for each fuel vehicle, and RMB13,000 for each NEV.
For car purchase prices of RMB250,000 or above, a subsidy of RMB13,000 is provided for each fuel vehicle, and RMB15,000 for each NEV.
China notched a record 9.02 billion domestic trips during the 40-day Lunar New Year travel rush, the state Xinhua news agency reported on Sunday, surpassing the 8.4 billion trips taken in the same holiday period a year earlier. The travel rush during China's biggest holiday is often read as a barometer for the country's economic health and a pressure test for its vast transportation system. The rise in travel was in line with expectations. Some 513 million train trips were taken during the Spring Festival, as the holiday is known in China, up 6.1% on last year, while 90.2 million passengers travelled by air, up 7.4%, according to Xinhua. Annual tallies of trips made during the annual travel rush have jumped since the Ministry of Transport revised the metric before the 2023 Lunar New Year to include self-driving road trips on major national expressways. A total of 2.98 billion trips were recorded in the 2019 Spring Festival travel rush, the year before COVID-19 pandemic restrictions hampered travel.
China defence ministry spokesperson Wu Qian said on Sunday that Australian complaints over recent Chinese live-fire naval drills in international waters between Australia and New Zealand were "hyped up" and "inconsistent with the facts”. Australia Defence Minister Richard Marles said on Saturday that Beijing had failed to give satisfactory reasons for what he called inadequate notice for live-fire drills a day earlier, which he said had forced airlines to divert flights. Qian said in a post from the Chinese defence ministry that China had issued repeated safety notices in advance, and that its actions complied with international law and did not affect aviation flight safety. "Australia, fully knowing this, made unreasonable accusations against China and deliberately hyped it up," Qian's post said. "We are deeply surprised and strongly dissatisfied.” New Zealand said on Saturday it had also observed the Chinese navy conducting a second day of live-fire exercises and that it was monitoring a fleet of Chinese vessels.
A newly discovered bat coronavirus uses the same cell-surface protein to gain entry into human cells as the SARS-CoV-2 virus that causes COVID-19, raising the possibility that it could someday spread to humans, Chinese researchers have reported. The virus does not enter human cells as readily as SARS-CoV-2 does, the Chinese researchers reported in the journal Cell noting some of its limitations. The scientists said that like SARS-CoV-2, the bat virus HKU5-CoV-2 contains a feature known as the furin cleavage site that helps it to enter cells via the ACE2 receptor protein on cell surfaces. In lab experiments, HKU5-CoV-2 infected human cells with high ACE2 levels in test tubes and in models of human intestines and airways. In further experiments, the researchers identified monoclonal antibodies and antiviral drugs that target the bat virus. Bloomberg, which reported on the study earlier on Friday, said the paper identifying the bat virus had moved shares of COVID vaccine makers. Pfizer (PFE.N) shares closed up 1.5% on Friday, Moderna (MRNA.O)climbed 5.3% and Novavax (NVAX.O) was up about 1% on a down day for the broader market.
U.S. Treasury Secretary Scott Bessent traded policy complaints with Chinese Vice Premier He Lifeng on Friday, telling Beijing to do more to curb fentanyl trafficking and rebalance its economy, while hearing He's concerns about President Donald Trump's new tariffs, the two governments said. The top economic officials from the world's two largest economies agreed to keep up communications going forward, the Treasury said in a readout of the introductory video call.
HONG KONG
Index Review
Hang Seng Indexes Company announced the results of its review of the Hang Seng Family of Indexes for the quarter ended 31 December 2024.
There is no change to the HSI. The total number of constituents remains unchanged at 83.
The HSCEI added ZTO EXPRESS-W (02057.HK) and BEIGENE (06160.HK) and removed SINO BIOPHARM (01177.HK) and LI NING (02331.HK). The number of constituent stocks remains at 50.
The HSTECH added TME-SW (01698.HK) and HORIZONROBOT-W (09660.HK) and removed EAST BUY (01797.HK) and ZA ONLINE (06060.HK). The total number of constituents remains unchanged at 30.
All changes will be implemented after the close of trading on Friday, March 7, 2025 and will be effective on Monday, March 10, 2025.
Index Charges
HKEX (00388.HK) announced enhancements to the securities market stock settlement fee structure that are aimed at boosting market efficiency and ensuring consistent fee application across all trade sizes. The current stock settlement fee structure, which includes a minimum fee of $2 and a maximum fee of $100, disproportionately impacts lower-value trades. To address this, HKEX will remove the minimum and maximum fee components, and adjust the ad valorem rate to 0.42 bps (0.0042%) for each trade. The new fee structure is designed to be cost-neutral to the market as a whole, creating a more equitable fee structure across all trade sizes. In addition, the stock settlement fee for eligible market making trades for Exchange Traded Products (ETPs) will be set at a rate of 0.20 bps (0.0020%), removing the minimum and maximum fees. This adjustment aligns with the historical costs of ETP market-making activities and aims to ensure the ongoing provision of liquidity to the ETP market.
Based on HKEX data, about 77% of all securities trades conducted between 2019 and 2024 would benefit from lower fees under the new structure. The new fee structure, which has been approved by the Securities and Futures Commission, will take effect in June 2025, ahead of the implementation of Phase 1 of the minimum spreads reduction, subject to market readiness. The reduction of minimum spreads would encourage trades to be executed in smaller sizes, thus benefiting from the new fee structure.
Earnings
SANDS CHINA LTD (01928.HK) announced preliminary results for the year ended December 31, 2024. Total net revenues increased by 8.4% YoY to US$7.08 billion. It recorded a net profit of US$1.045 billion, up 51% YoY. EPS was US12.91 cents. A final dividend of HK25 cents per share was declared. Adjusted property EBITDA added by 4.7% YoY to US$2.33 billion. Operating profit was US$1.366 billion, an increase of 11.5% YoY. As of the end of 2024, the Group had 10,487 hotel rooms and suites. Construction of The Londoner Macao Phase 2 is ongoing and is expected to be substantially completed in 1H25. Robert Glen Goldstein, Chairman of the Company, said that the Company remains deeply confident in the future of Macao and considers Macao an ideal market for additional capital investment. The Company is committed to spending approximately US$4.5 billion on a combination of capital and operating investments in Macao during the current concession period from 2023 through 2032.
PCCW (00008.HK) announced its annual results for the year ended December 2024. Loss attributable to shareholders narrowed to $300 million, compared to a loss of $471 million in the same period of 2023, with a LPS of $3.88 cents. Final DPS was $28.48 cents, compared to $28.48 cents in the same period last year, bringing the full-year DPS to $38.25 cents, flat YoY.
STANCHART announced its 2024 results after the Hong Kong stock market closed at noon, with reported profit before tax (PBT) of US$6.014 billion, up 18% YoY, below the lower limit of US$6.104 billion in the forecast from six brokers as summarized by our reporters.
Buybacks - Non announced
HSI Short Selling Friday 15.9% vs 18.6% Thursday
Top shorts BYD (1211) 42%, CM Bank (3968) 39%, CK Assets (1113) 39%, Chow Tai Fook (1929) 34%, Li Auto (2015) 33%, Sands China (1928) 33%, China Res Power (836) 32%, Xinyi Glass (868) 31%, NTES-S (9999) 30%, Hengan (1044) 29%, JD Health (6618) 28%, Wharf REIC (1997) 28%, Power Assets (6) 28%, China Overseas (688) 28%, Bud APAC (1876) 28%, China Res Beer (291) 27%, Citic (267) 27%, Wuxi Bio (2269) 26%, Bank of China (3988) 25%, Kuaishou (1024) 25%, MTRC (66) 25%.
WATCH
Weekend sales of new homes in Hong Kong rose ahead of the annual budget address on Wednesday, with Hava in Yuen Long selling all 250 flats on the same day of its launch. Hava's developer Kerry Properties (0683) had received more than 14,000 subscriptions for the 250 flats on offer, making them 56 times oversubscribed. They were priced from HK$2.65 million to HK$5.06 million or HK$8,898 to HK$13,558 per square foot after discounts. The 250 flats sold for a total of HK$960 million.
Also in Yuen Long, High Park II by Asia Standard International (0129) sold 39 flats over the weekend.
In Ap Lei Chau, Wang On Properties' (1243) Coasto launched 30 flats after receiving over 300 applications on the first day of registration. The new batch offers 20 one-bedroom and 10 two-bedroom units priced from HK$4.44 million to HK$7.24 million or HK$16,032 to HK$19,501 per sq ft after discounts.
In Cheung Sha Wan, Henderson Land Development's (0012) Belgravia Place phase two launched its second price list with an average price of HK$15,988 per sq ft after discounts, 0.1 percent higher than the previous list. The list has 68 flats whose prices range from HK$5.04 million to HK$8.87 million or HK$15,090 to HK$17,217 per sq ft after discounts.
Another Henderson project, Eight Southpark in Kowloon City, received 1,700 subscriptions for 63 flats, making them 27 times oversubscribed. The first batch was priced at an average of HK$17,388 per sq ft after discounts, nearly 30 percent lower than that of nearby new homes launched more than two years ago.
In Kai Tak, Double Coast I, co-developed by four developers including Wheelock Properties and Henderson, sold one flat for HK$7.8 million.
In the secondary market, the top 10 housing estates recorded 12 deals over the weekend, up 33 percent from last week to a 10-week high, according to Centaline Property.
A Haier Group company became a controlling shareholder of AUTOHOME-S (02518.HK), while Senior Vice President Song Yang was appointed as AUTOHOME-S' executive Director and CEO. Today, Yang issued an internal letter emphasizing that the Company will not cut down the staff due to the changes in the transaction, nor will it affect the stability of their positions and salary and benefits, as the Company's business will operate normally.
TENCENT (00700.HK)'s mobile game, Game for Peace, announced its official access to DeepSeek, making it TENCENT's first game to link to DeepSeek. It is reported that Gilly, the digital interlocutor of Game for Peace, will be infused with AI. Game for Peace will start the grey box test next Tuesday (25th) and open to all users in a short period of time.
The HK government weighs to introduce a preliminary plan, which involves three review measures, for the Government Public Transport Fare Concession Scheme for the Elderly and Eligible Persons with Disabilities (the $2 Scheme), local media quoted sources as saying. Such measures include maintaining the eligibility requirement that passengers should age 60 or older; limiting each eligible person to eight rides per day; and calculating fares at a 20% discount if the fare is more than $10 and continuing to charge $2 for fares under $10.
BYD FangChengBao Bao 5 Smart Driving edition is officially launched Friday (21st), and the FangChengBao brand is now equipped with smart driving system as its standard configuration for the whole series. The Bao 5 Smart Driving edition is available in 4 models, with an official guide price of RMB239,800 to RMB329,800. Meanwhile, customers who purchase the model before the end of March will also enjoy six fold limited time car purchase benefits, including a maximum of RMB28,000 replacement subsidy.
Geely Automobile Group, QIANLI TECHNOLOGY(601777.SH) and Stepfun announced at the 2025 Global Developer Conference (GDC) that they will further strengthen their existing technology partnership, promoting the in-depth fusion of “AI+ car”, and opening up a new era of comprehensive auto intelligence. Based on Geely's infrastructural strengths in areas such as car manufacturing, intelligent computing platform and satellite internet, combined with QIANLI TECHNOLOGY's product innovation capabilities and Stepfun's solid technical accumulation in foundation models, the three parties will work together to inject new momentum into the change of auto intelligence.
Friday closings in EUROPE and US
DAX -0.12%, CAC 0.39%, FTSE -0.04%
European markets opened around flat and traded sideways in a tight range all day as a busy week for earnings came to a close. Germany headed into its election.
Firms Kingspan, Air Liquide, Sika AG and others reported their fourth-quarter earnings Friday. Standard Chartered beat market expectations, and added nearly 4%.
London-listed miner Ferrexpo 15% after it lost nearly a third of its value on Thursday after news emerged of the Ukrainian government’s decision to move ahead with the nationalization of the company’s Poltava mining and processing plant. Reuters news agency reported that the Ukrainian State Bureau of Investigations was awaiting court approval to seize the assets, amid allegations of misappropriation of funds related to illegal mining.
Standard Chartered beat market forecasts with its latest results, as the bank made $1.6 billion for Q4 before setting aside money for bad loans. The bank did particularly well in its wealth management arm. It plans to buy back £1.5 billion ($1.9 billion) of its shares from investors, which is more than the $1.1 billion expected.
DOW -1.69%, NDX -2.2%, S&P -1.71%, Russel 2K -2.94%
US markets trended lower for most of the day. After mixed data; existing home sales were weaker than expected, Flash PMI data was mixed, services sector dropped into contraction territory and the Michigan Data showed a steep decline. Sparking concern about a slowing economy and sticky inflation, leading them to rotate into safer assets.
The University of Michigan consumer sentiment index fell to 64.7 in February, a decline of nearly 10% and a steeper drop than expected as consumers raised concerns about higher inflation ahead from possible new tariffs. The five-year inflation outlook in the survey was 3.5%, the highest since 1995. On top of that, existing home sales in the U.S. fell more than expected last month to 4.08 million units. The U.S. services purchasing managers’ index also dropped into contraction territory for February, according to S&P Global.
Walmart -2.5% a second day of declines after the company issued a weaker-than-expected forecast that also soured the outlook for the consumer and the economy. Nvidia and Palantir saw steep losses on Friday as traders shifted toward traditionally safer assets. Procter & Gamble 1.8%, while General Mills and Kraft Heinz advanced more than 3% each.
Traders closing positions rather than staying long going into the weekend and possible further Trump announcements.
Banks JPMorgan Chase -0.96%, Citigroup -2.08% Wells Fargo -1.44%, Amex -2.78%
Ecommerce Meta -1.62%, Apple -0.11%, Amazon -2.83%, Netflix -2.09%, Disney -1.71%, Zoom Video -1.14%, Alphabet -2.71% and Microsoft -1.9%,
Tech NXP Semi -3.8%, Nvidia -4.05%, Micron -4.21%, AMD -2.92%, Skyworks -0.16%
Industrial/Discretionary Boeing -2.06%, Caterpillar -2.61%, Simon Property -1.56%, Kohl’s -0.08%, Nordstrom -0.12%, Gap -0.76%, United Airlines -6.44%, Carnival -5.46%, Wynn Resorts -2.9%,
Energy Chevron -1.18%, Exxon Mobil -1.17%,
Consumer Staples Campbell Soup 3.18% General Mills 3.06%, JM Smucker 2.53%
DAILY DATA
USD stronger, Bitcoin -0.69% at 95,908.66, VIX 16.28% at 18.21,
US T10 down 7 bpts to 4.427% and T2 down 6 bpts at 4.202%
OIL Brent -2.68%, WTI -2.87%
Gold -0.22%, Silver -1.97%, Copper -1.65% Platinum -1.03%, Palladium -2.7%.