Asian Macro Initial Thoughts A data dump day BoJ and FOMC rate decisions, Australian inflation, China PMI's, Singapore Banks & Unemployment, Thai Current Account & Retail Sales plus Samsung #s due
Market opened lower and tested down to 12,370 bounced but sold down again after the Building permits data missed expectations. S Koean Industrial Production much stronger than expected.
Asia
A data dump day with lots to watch. China politburo statement out but investors will wait to see action.
Housekeeping
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MARKET OPENING INDICATIONS
New Zealand
Market opened lower and tested down to 12,370 bounced but sold down again after the Building permits data missed expectations.
Data out 45 minutes after the open
Building Permits Jun -13.8% vs -1.9% May revised from 1.7% (F/cast was 1.2%)
Australia
ASX to open higher, futures indicate up 29pts 0.37% at 7,943 weakness in Energy and Miners mixed with Gold higher. Expect initial caution ahead of inflation data. Rio Tinto in focus as it releases interims
Data due after the open
Monthly CPI Indicator Jun vs 4% May (F/cast is 3.9%)
Housing Credit Jun MoM vs 0.4% May (F/cast was 0.4%)
Inflation Rate Q2 QoQ vs 1% Q1 (F/cast is 1%)
Inflation Rate Q2 YoY vs 3.6% Q1 (F/cast is 3.8%)
RBA Trimmed Mean CPI Q2 QoQ vs 1% Q1 (F/cast is 0.9%)
RBA Trimmed Mean CPI Q2 YoY vs 4% Q1 (F/cast is 4%)
RBA Weighted Median CPI Q2 QoQ vs 1.1% Q1 (F/cast is 1%)
RBA Weighted Median CPI Q2 YoY vs 4.4% Q1 (F/cast is 4.3%)
Retail Sales Jun MoM vs 0.6% May (F/cast is 0.4%)
CPI Q2 vs 137.40 Q1 (F/cast is 138.8)
Private Sector Credit Jun MoM vs 0.4% May (F/cast is 0.3%)
Private Sector Credit Jun YoY vs 5.2% May (F/cast is 5.4%)
Japan
Futures indicate Nikkei to open lower; -476pts -1.2% at 38,050 with caution ahead of the BoJ rate decision
Chicago Futures -5pts -0.01% at 38,160
Yen 152.58 strengthens on hopes of BoJ rate hike announcement today.
Data due
Industrial Production Prelim Jun MoM vs 3.6% May (F/cast was -5%)
Industrial Production Prelim Jun YoY vs 1.1% May (F/cast was 2.2%)
Retail Sales Jun YoY vs 3% May (F/cast was 2.2%)
Retail Sales Jun MoM vs 1.7% May (F/cast was 0.4%)
Lunchtime
BoJ Interest Rate Decision
Quarterly Outlook
Afternoon
Consumer Confidence Jul vs 36.4 Jun (F/cast was 36.1)
Housing Starts Jun YoY vs -5.3% May (F/cast was -3.6%)
Construction Orders Jun YoY vs 2.1% May (F/cast was 6%)
S Korea
Market to open lower with caution ahead of the FOMC rate decision but the stronger than expected industrial production numbers (driven largely by the chip makers) likely to give support and could drive the market higher. Retail sales in line; so little impact.
Samsung numbers due and will be watched closely.
Data out 60 minutes before the open
Industrial Production Jun 0.5% MoM vs -1.2% May (F/cast was -0.5%)
Industrial Production Jun 3.8% YoY vs 3.5% May (F/cast was 2.5%)
Retail Sales Jun 1% MoM vs -0.2% May (F/cast was 1%)
Taiwan
Market to open lower after the weakness in Tech overnight in the US. But the strong S Korean Industrial production numbers could support the chip makers.
Data due after market
GDP Growth Rate Adv Q2 YoY vs 6.56% Q1 (F/cast is 4.3%
China
CSI 300 to open Lowe after Golden Dragon Index closed -85pts -1.5% at 5,606
FTSE A50 futures up 13pts 0.11% at 11,645
PMI data on the open could be key but a lot of investors watching to see whether the politburo statement will result in actions that will really impact the state of the economy. Investors looking for actual actions and are not likely to react to the words. BoJ decision will also impact the strength of the Yen which has implications for the Yuan and Chinese exports.
Data due on the open
PMI’s
Manufacturing Jul vs 49.5 Jun (F/cast is 49.2)
Non Manufacturing Jul vs 50.5 Jun (F/cast is 50.1)
General Jul vs 50.5 Jun (F/cast is 50.1)
Hong Kong
HSI to open flat after the ADR’s closed up 31pts 0.18% at 17,033 with only HSBC (reports today) CLP, AIA, BoC HK and Meituan in the green. Expect caution ahead of the FOMC.
HK Futures indicating up 65pts 0.4% at 17,068
Tuesday saw light volumes and increased short selling setting up the market for a short squeeze.
Worth noting press reports aound 40 percent of employees in Hong Kong still consider their current financial situation to be less than "well prepared", according to a survey by Endowus. The survey took in 1,000 employees aged between 23 and 43 in May and June, and they were equally split between Hong Kong and Singapore. Financial preparedness in the survey is defined as the ability to handle obligations and unexpected expenses with enough personal wealth to ensure financial security.
Data due after market
GDP Growth Rate Adv Q2 QoQ vs 2.3% Q1 (F/cast is 0.5%)
GDP Growth Rate Adv Q2 YoY vs 2.7% Q1 (F/cast is 3%)
Singapore
Data Due
Bank Lending Jun vs S$796.7B May (F/cast is S$816.1B)
Unemployment Prelim Q2 vs 2.1% Q1 (F/cast is 2.2%
Business Confidence Q2 vs 22 Q1 (F/cast is 17)
Thailand
Data Due
Current Account Jun vs $0.7B May (F/cast is $0.75B)
Private Consumption Jun MoM vs 0.3% May (F/cast is 0.7%)
Private Investment Jun MoM vs -3% May (F/cast is 0.8%)
Retail Sales May YoY vs 15.3% Apr (F/cast is -5%)
MALAYSIA
Data Due
M3 Money Supply Jun vs 5.8% May
India
Data Due
Infrastructure Output Jun YoY vs 6.3% May (F/cast is 5.7%)
Govt Budget Value Jun INR vs -506.2B (F/cast is -675B)
M3 Money Supply Jul 12 YoY vs 9.7% May (F/cast is 9.5%
Europe
Data Due
Eurozone Flash Inflation Rate, Flash CPI
Germany Retail Sales, Import Prices, Unemployed Persons, Unemployment Change & Rate, 7 year Bund Auction
France Inflation Rate & Harmonised, PPI
United Kingdom No data due
United States
Futures Dow -164pts -0.4%, S&P -0.07%, NDX 0.22%.
After Market moves
AMD 6.9% gave an upbeat outlook
Microsoft -3.7% off earlier lows; after disappointing earnings from its Azure division
and but better returns from its AI.
Starbucks +5% despite sales fell for a second quarter
Intel +1.2% cutting jobs; could be announced this week.
Data due MBA (Mortgage Applications, 30 yr Mortgage Rate, Market Index, Reference Index, Purchase Index), ADP Employment Change, Employment Costs (Benefits, Wages, Index), Treasury Refunding Announcement, Chicago PMI, Pending Home Sales, EIA Crude Oil Stocks Change. Fed Interest Rate Decision & Press Conference.
Earnings include : Meta Platforms, Qualcomm, Boeing
HEADLINES and NEWS
AUSTRALIA
Rex Airlines enters voluntary administration. The airline has stopped running its domestic 737 services with Virgin Australia offering affected Rex passengers free rebooking.
Weaker profits on the cards with miners to feel the heat. The upcoming reporting season will offer plenty of downgrades, with investors likely to punish earnings misses rather than reward better than expected numbers.
JAPAN
The Bank of Japan is expected to detail plans to taper its huge bond buying on Wednesday and debate whether to raise interest rates, signalling its resolve to steadily unwind a decade of massive monetary stimulus. The decision comes as the U.S. Federal Reserve looks to cut interest rates, possibly as early as September, reversing an aggressive rate-hike cycle that drove up the dollar and caused a painful yen sell-off for Japan.
Nomura Holdings (8604.T) Japan's largest brokerage and investment bank, reported a 195% jump in first-quarter profit on Tuesday as the rally in global markets and return of domestic inflation bolstered demand for its wealth management services. The results show the progress Nomura has made in shifting toward a fees-based profit model in order to secure more consistent revenue that is less subject to market swings.
Trading house Sojitz (2768.T). said on Tuesday it had bought the takeout sushi businesses of Sushi Avenue Inc in the United States for an undisclosed sum, as part of a drive to expand its seafood operations. Sojitz is aiming to boost annual net profit from seafood operations to 4 billion yen ($26 million) in the year to March 2027 from 1.2 billion yen in the year ended March 2024. "We are taking on the challenge of becoming the world's No.1 distinctive marine products group, with strength in tuna and sushi products," finance chief Makoto Shibuya told reporters.
SOUTH KOREA
Qoo10 CEO Ku Young-bae pledged a "complete recovery of damages" related to the payment delays affecting its struggling e-commerce affiliates, Tmon and WeMakePrice, with government support. Addressing the National Assembly’s Political Affairs Committee on Tuesday, Ku's commitment followed the companies' court receivership filing the previous day. "We will be at a standstill if business operations halt now," Ku said, adding that, with minimal assistance, complete recovery of damages is achievable. However, Ku's assurances have been met with skepticism as he and the companies have yet to present a clear plan for extending capital, despite the escalating damage to consumers and vendors. At Tuesday's hearing, Ku revealed that only up to 800 billion won in capital from the group is available, with the exact amount that can be effectively utilized remaining unclear. Ku's promise to use his 38 percent stake in Qoo10 also appears insufficient, as the value of these shares -- once worth 500 billion won, as per Ku -- should have significantly declined. Under such circumstances, concerns about increased risks for vendors have only heightened following Tmon and WeMakePrice's filing for court receivership.
NCSoft announced Tuesday that it had invested $3.5 million in Swedish game studio Moon Rover Games, as the Korean game company continues seeking future growth engines to expand its gaming portfolio and global market. Moon Rover Games was established in 2022 by a group of developers who had taken part in creating global hit first-person shooters such as the Battlefield series, Far Cry and Tom Clancy’s The Division. Moon Rover Games is currently developing an FPS titled Project Aldous, based on new intellectual property.
SK hynix on Tuesday unveiled its next-generation GDDR7 graphics memory chip that boasts the industry’s most outstanding performance in terms of operating speed and power efficiency. The company said it will start mass production in the third quarter. GDDR is a type of high-performance memory commonly used in graphics cards. It has recently gained popularity as graphics cards are increasingly used to power artificial intelligence workloads. The memory chip maker introduced its new chip prototype at GTC 2024, a developer conference hosted by US chip giant Nvidia, in March, and Computex 2024, Asia’s largest IT exhibition in Taiwan, in June.
STX Heavy Industries has officially been rebranded as HD Hyundai Marine Engine under the umbrella of HD Hyundai. At a shareholders' meeting held on Tuesday, all proposed agenda items were approved, including amendments to the articles of association, a name change and the election of new directors.
SK Group and SK On are reportedly fast-tracking their collaboration with China’s Zhejiang Geely Holding Group, a leading multinational automotive conglomerate. Industry sources reported that executives from Geely Auto responsible for technology, research and development, and international cooperation, visited SK Building headquarters in Seoul on Monday. The delegation, which included the CEO of Zeekr, Geely Auto’s premium EV brand, met SK Group Executive Vice Chairman Chey Jae-won and SK On CEO Lee Seok-hee.
Lotte Wellfood announced Tuesday it plans to merge its Indian subsidiaries, Lotte India and Havmor Ice Cream, to improve operational efficiency and enhance its presence in the Indian market. According to the company, the boards of both affiliates approved the decision in meetings held Monday. Under the merger agreement, Lotte India will acquire Havmor Ice Cream, and both brands will continue their product lines.
TAIWAN
The Ministry of Transportation and Communications plans to double down on perks and subsidies to boost tourism as recent natural disasters have curbed the number of domestic and foreign visitors, it said yesterday. The number of international visitors to Taiwan dropped by 500,000 in the first two quarters of this year due to the April 3 earthquake in Hualien County, which damaged Taroko National Park, resulting in its closure, Minister of Transportation and Communications Li Men-yen told a news conference. The government has prepared tourism stimulus policies and an advertising campaign in response to Typhoon Gaemi, which has also affected the nation’s tourism sector, Lee said.
Authorities on both sides of the Taiwan Strait yesterday said that a settlement had been reached regarding two Chinese men who died while being chased by a Coast Guard Administration (CGA) vessel in waters off Kinmen County five months ago. “We will implement the agreement,” CGA Deputy Director-General Hsieh Ching-Chin told reporters after a one-hour negotiation held at Golden Lake Hotel in Kinmen. However, Hsieh said the CGA was “currently unable to disclose” the details of the deal, “out of respect for the families involved and [due to] the consensus reached in the cross-strait agreement.”
Plans to extend the high-speed rail (HSR) network to Pingtung County could be finalized by the end of the year, Minister of Transportation and Communications Li Men-yen said yesterday, adding the ministry is also considering extending the HSR network to Taitung County. The ministry is considering a route that would pass through Kaohsiung and possibly go underground to avoid reducing farmland, Li said. The plan could expedite urban renewal projects for rural Kaohsiung, Li added.
Housing transactions in the first six months of this year soared 27 percent from a year earlier to 177,000 units, two separate surveys showed, despite steep price increases in some major urban centers. Sinyi Realty, Taiwan’s only listed broker, yesterday said that there was an increase in transactions for new and existing houses as buyer interest spiked. More increases are expected, Sinyi Realty said.
Yageo Corp yesterday reported that net profit for the second quarter of this year was the highest in the past seven quarters. For the April-to-June quarter, the company’s net profit was NT$5.453 billion (US$166.02 million), up 18.3 percent quarter-on-quarter and 46.6 percent year-on-year, the company said in a regulatory filing. That represented the firm’s highest profit since the third quarter of 2022, when it made NT$6.402 billion, company data showed. Earnings per share (EPS) were NT$13.02 last quarter, compared with NT$11.02 the previous quarter and NT$8.9 a year earlier. It was the highest since the third quarter of 2021, when EPS were NT$13.88. Yageo is the world’s largest manufacturer of chip resistors and tantalum capacitors, and the third-largest manufacturer of multilayer ceramic capacitors and inductors.
The Financial Supervisory Commission (FSC) yesterday announced draft guidelines that would allow securities brokerages to issue active exchange-traded funds (ETFs) and passive multi-asset ETFs in Taiwan, paving the way for the new instruments to be listed on local bourses next year and offering investors a diversified mix of investments. It would take several months for the commission to amend securities investment trust regulations, as well as for stock exchanges and brokerages to adjust their measures and update their back-end systems to accommodate the new ETFs, the commission said in a statement on its Web site. Taiwan has so far allowed securities brokerages to issue ETFs that track particular indices or sectors with underlying targets, including stocks, bonds and futures. Such funds are known as “passive ETFs” and are popular among investors due mainly to their relatively low management fees, the commission said.
CHINA
Spot USD/CNY rose 105 bps to close at 7.2472 Tuesday (30 July). As of 4:51 pm, USD/CNY in the night session grew 100 bps. Meanwhile, USD/CNH surged 121 bps to 7.2575, trading 103 bps lower than USD/CNY.
The Politburo of the Chinese Communist Party convened a meeting Tuesday (30th) to analyze and study the current economic situation, deploy the economic work for 2H24, and consider the “Certain Provisions on Rectification of Formalism to Reduce Burdens on Community-level Officials”. Xi Jinping, general secretary of the CPC Central Committee, presided over the meeting. The meeting emphasized the need to step up efforts to safeguard and improve people's livelihood. The authorities had to strengthen the employment priority policy, and strived to the employment of college graduates and other key groups. The authorities also needed to fully prepare for flood control, flood fight and relief work, as well as energy and power supply during the summer peak period, so as to ensure safe production, and seriously solve issues such as food safety and social security, etc..
It would review the “Regulations on Reducing the Burden on the Grassroots by Rectifying Formalism”. Chinese President Xi Jinping presided over the meeting. The meeting emphasized the need to expand domestic demand by boosting consumption, and the focus of economic policy should be shifted more towards benefiting people's livelihoods and promoting consumption, while further mobilizing the enthusiasm of private investment and expanding effective investment. It was also pointed out at the meeting that China needed to cultivate and strengthen emerging industries and future industries, vigorously promote a high level of scientific and technological self-reliance and self-improvement, strengthen the key core technology R&D, and promote the transformation and upgrading of traditional industries. In order to promote a stable recovery in the use of foreign capital, it is necessary to facilitate a high level of openness to the world and further create a first-class business environment that is market-oriented, rule-of-law-oriented, and internationalized.
The meeting pointed out that macro policy must continue to be reinforced. It is necessary to strengthen counter-cyclical adjustment, implement proactive fiscal policy and prudent monetary policy, accelerate the full implementation of the policies and measures that have been determined, and make early preparations for and timely launch a batch of incremental policies and measures. China should accelerate the progress of issuing and using special bonds, make good use of ultra-long-term special government bonds, support the construction of national security capabilities in major strategic and key areas, and promote large-scale equipment upgrades and the replacement of old durable consumer goods with new ones. China should also comprehensively use a variety of monetary policy tools to increase financial support for the real economy and promote a stable decline in the overall financing costs of society. It should maintain the basic stability of the RMB exchange rate at a reasonable and balanced level, and effectively enhance the consistency of macro policies and form a strong synergy among all parties to jointly promote high-quality development.
China's Vice Premier He Lifeng stressed the need for a well-coordinated government and efficient market to develop the country's "new productive forces", state media said on Tuesday. President Xi Jinping introduced the term last year, focusing on scientific research and technological advancements within China's vast industrial sector. The recent key Communist Party meeting reaffirmed this approach.
China’s National Administration of Financial Regulation (NAFR) has issued the “Measures for Anti-Insurance Fraud”, according to the website of NAFR. The Measures mentioned that insurance institutions should strengthen integrity education and compliance culture building, improve the mechanism for selecting and appointing personnel and inspecting their performance on the job, strengthen employee behavior management, carry out investigations into the abnormal behavior of employees, and strictly prevent insider fraud
The Shenzhen Municipal Government released the “Action Plan for Shenzhen to Accelerate the Building of an AI Pioneer City” saying that it will accelerate the construction of advanced computing infrastructure, including the promotion of the connection between “Pengcheng Cloud Brain Ⅲ” and national resources, to construct the core node. The Shenzhen government also planned to advance the construction of an open AI data center, which is expected to be completed and put into use this year, with a computing power scale of 4,000PFLOPS.
China’s richest man risks losing crown after $20 billion wipeout. Besieged by a price war in China’s bottled water market, Zhong Shanshan’s company has found itself on the wrong side of the country’s increasingly nationalistic consumers.
Chinese brands last month captured 11 percent of the European electric vehicle (EV) market, notching record registrations as manufacturers raced to beat stiff EU tariffs that took effect early this month. SAIC Motor Corp led the charge, shipping its MG4 hatchback to dealers in volume, according to analysts at researcher Dataforce, which compiled the figures. Vehicles registered before July 5 could be sold to customers without the added duties on imported EVs. Chinese brands registered more than 23,000 battery EVs across the region during the month, the most ever, Dataforce figures showed. Their 72 percent sequential jump from May was twice the gain in overall European EV registrations for last month. Chinese-made imports from Western manufacturers, including Volvo Car AB, BMW AG and Tesla Inc, are also subject to the new duties.
BYD (002594.SZ) is looking to enter the Canadian automotive market, according to a regulatory document filed earlier this month, even as Canadian officials consider imposing tariffs on vehicles imported from China. Canada, following in the footsteps of the United States and the European Union, said in June it was considering imposing tariffs on Chinese-made electric vehicles as it seeks to align itself with its allies against what the West views as a heavily subsidized Chinese industry.
Record rainfall and widespread flooding killed four people in China's southern province of Hunan, with roads in rural areas damaged and access to electricity and the internet disrupted, state media said on Tuesday. Days of heavy rains from the remnants of Typhoon Gaemi have breached major dikes and dams and flooded swathes of cropland, with state broadcaster CCTV saying the finance ministry has earmarked funds of 238 million yuan ($33 million) for disaster prevention and agricultural aid.
HONG KONG
Earnings HSBC, Emperor International, New Oriental Education
Results Out Tuesday
HUTCHTEL HK (00215.HK) announced that it recorded total revenue of $2.058 billion for the six months ended 30 June 2024, down 12% YoY, with a loss of $12 million compared to a loss of $19 million in the same period last year. Its loss per share stood at HK0.25 cents, with a dividend of HK2.28 cents per share. The company's roaming service revenue increased by 31% YoY to $308 million in 1H24, but this growth was restrained by a 44% lower hardware revenue as a result of prudent market sentiment and a prolonged mobile phone replacement cycle. Its EBITDA remained steady at $728 million in 1H, mainly attributable to lower operating expenses driven by effective cost saving initiatives, which were partially offset by higher CACs.
HANG LUNG PPT (00101.HK) saw its interim profit crash by 56% and its interim dividend was cut by 33%. Its shares collapsed 11.7% to $5.64 after it announced its interim results at noon today and declared an interim dividend of 12 cents, a 33% YoY slash. After midday, its share price plummeted, once slipping more than 15% to a 20-year low of $5.42. Chairman Adriel Chan remarked that the reduction in dividend was a well-considered, responsible and pragmatic decision for the company's sustainable development in the future. The cut was tied to the challenging environment in face of the group, and the fact that situation in 1H24 was worse than expected. He messaged that the company will have to respond sturdily ahead.Chan continued that HANG LUNG PPT has always had a high dividend payout ratio, which is above the average of its peers. Therefore, in order to maintain a sustainable dividend payout in the long run, the company needs to make adjustments. Besides, the management has actively managed the company's balance sheet and worked hard to reduce the debt ratio. He also highlighted that this year is a year of growth for Hang Lung, and the ultimate goal is to allow the company to advance further in the future. The Group did not have a large inventory of Hong Kong properties. Therefore, it is not in a hurry to cash in, and will decide on the timing of sales depending on the market situation and demand, in the hope that there will be breathing room for the property market in the wake of the interest rate cuts in the future, Weber Lo, Chief Executive Officer of HANG LUNG GROUP and HANG LUNG PPT, said. For retail, Lo expected that Hong Kong will continue to face strong headwinds in the next 12 months, and the growth momentum remains to be seen.
Hong Kong remains a super-exciting financial market, said Bill Winters, CEO of STANCHART (02888.HK), at the online presentation of STANCHART's 2Q results. He feels good about Hong Kong as a growing center for wealth management and as an increasingly important offshore financial center for China, and this has nothing to do with the changes he's seen in the wake of the coronavirus outbreak. In response to certain media's portrayal of Hong Kong's economic activity as sluggish, Winters believed that the Hong Kong real estate market is undoubtedly still in the doldrums, and that this has had a greater impact on STANCHART's current business in Hong Kong. However, as an important offshore financial center in China, Hong Kong is supported by all policy actions of the central government, and all market liberalization measures in mainland China will be carried out through Hong Kong. Therefore, his view on Hong Kong remained optimistic. Hong Kong is STANCHART (02888.HK) 's primary market, and remained confident in Hong Kong's future, especially as an international financial center. STANCHART will invest more in Hong Kong and bring in more talent in the future, Jose Vinals, Chairman of STANCHART, said. n addition, Vinals expected an interest rate cut by the US Fed in September and November 2024 each, with 4 rate cuts in 2025.
Buybacks
AIA (01299.HK) announced that it repurchased 5.8172 million shares of the company on the Stock Exchange of Hong Kong Tuesday (30th) at $52.15-52.85 per share, involving a total of approximately $306 million. Since the passing of the ordinary resolution, the company has repurchased a total of approximately 175 million shares, accounting for 1.556% of its share capital.
YUM CHINA (09987.HK) (YUMC.US) announced that it repurchased 79,700 shares of the company on the New York Stock Exchange Monday (29th) at US$29.95-30.25 per share, involving a total of US$2.3999 million. In addition, the company repurchased 20,150 shares on the same day on the Hong Kong Stock Exchange, at HK$232.2-235 per share, involving a total of HK$4.6953 million. Since the resolution on the repurchase mandate was passed, the company has repurchased a total of 4.1736 million shares, accounting for 1.07% of its issued share capital.
HSI Short Selling Tuesday 22.4% vs 16.7% Monday
Top shorts New World Development (17) 50%, Bud APAC (1876) 49%, Zhong Sheng (881) 45%, JD Health (6618) 43%, Bank of China (3988) 42%, MTRC 966) 41%, HSBC (5) 41%, Haidilao (6862) 41%, Xinyi Glass (868) 40%, SHKP (16) 40%, Wharf REIC (1997) 38%, Haier Smarthome (6690) 36%, Ali Health (241) 35%, HK & China Gas (3) 35%, ICBC (1398) 35%, Link REIT (823) 39%, Galaxy Ent (27) 35%, Citic (267) 34%, China Res Mix (1209) 32%, Hang Seng Bank (11) 32%, BYD (1211) 30%, China Overseas (688) 30%, BYD Electronic (285) 30%, CK Asset (1113) 30%, WH Group (288) 28%, Wuxi Bio (2269) 28%, Anta Sports (2020) 28%, Xinyi Solar (968) 28%, CLP (2) 28%, Lenovo (992) 27%, CM Bank (3968) 27%, Geely Auto (175) 27%, OOIL (316) 27%, Bidu (9888) 27%, China Life (2628) 26%, BoC HK (2388) 26%, Longfor (960) 26%, CCB (939) 25%, Nongfu Spring (9633) 25%
WATCH
Lin Jinwen, Vice President of ZEEKR Intelligent Technology, a subsidiary of GEELY AUTO (00175.HK), announced that ZEEKR 009 has received over 6,000 orders in just 10 days since its Hong Kong debut on 19 July. To meet market demand, ZEEKR's factory has fine-tuned its production line to expand production capacity in preparation for large-scale deliveries next month, he said. At the same time, ZEEKR plans to launch two new products in 2H24, including the first mid-to-large SUV ZEEKR 7X and the large five-seat ZEEKR MIX.
The Exchange Fund recorded an investment income of $104 billion in 1H24, which included $6.6 billion of gains on Hong Kong equities, according to the Hong Kong Monetary Authority (HKMA)'s announcement. In 2Q24 alone, investment income on Hong Kong equities amounted to $8.9 billion, compared to a loss of $2.3 billion in 1Q24, representing a reversal from losses for 4 quarters. In 2Q24, gains on other equities was $11.5 billion, while gains on bonds was $32.8 billion, with a negative currency translation effect of $11.5 billion. Total investment income in 2Q24 amounted to $41.7 billion, compared with $62.3 billion in 1Q24.
BABA-SW (09988.HK)'s Alibaba Cloud partnered with Olympic Broadcasting Services (OBS) to launch OBS Cloud 3.0 for the Paris 2024 Olympics. For the first time in history, “Olympics Live Cloud” replaced satellite transmission as the primary means of remote distribution for licensed media. About two-thirds of the booked remote services for Paris 2024 Olympics, involving 54 broadcasters, are already using Olympics Live Cloud, with 379 video streams and 100 audio signals to be transmitted via Live Cloud.
David Webb, an independent stock commentator, recently wrote that the consultation paper on the Corporate Governance Code published by the HKEX (00388.HK) last month did not address the problem of non-independence of independent non-executive directors (INEDs) of listed companies. He criticised the new consultation paper as meaningless "Board" games. Webb suggested that the HKEX has failed to realise that such poor standards of corporate governance are driving investors away from Hong Kong, lowering the valuation of Hong Kong stocks, raising the cost of capital and undermining China's prosperity. Webb also pointed out that the HKEX's proposed restriction that each INED can only serve as a director of no more than six listed companies only affects 23 people as of the end of last year, and that if the above restriction is aligned with that of the Mainland, which is set at no more than three, it will affect 270 people. He pointed out that about 90% of listed companies in Hong Kong had controlling shareholders who had the right to vote for INEDs, and considered that the independence and competence of INEDs depended only on the wishes of the controlling shareholders. Even good INEDs were subject to the control of individuals, families or the government who controlled the companies.
EUROPE & US RECAP
DAX 0.49%, CAC 0.42%, FTSE -0.22%
Markets opened mixed FTSE slightly lower and the DAX and CAC higher but all worked slightly better through the day, until late afternoon when the dipped into the close ahead of the BoJ and FOMC rate decisions. Most sectors +VE; Construction and materials stocks added 1.37%, while mining stocks shed 1.22%. With earnings still in focus
Diageo -4.9% but off the -10% earlier after its first sales decline since 2020.
Standard Chartered 6% higher after the U.K. bank announced its biggest-ever share buyback, of $1.5 billion, and raised its outlook in half-year results.
BP ended the day slightly lower, reversing earlier gains, after hiking its dividend, as it beat second-quarter earnings estimates.
Data showed Q2 GDP for the euro zone came in at 0.3%, according to a flash reading vs 0.2% increase on a quarterly basis. Q1 GDP was at 0.3%, unchanged from the initial reading announced earlier in the year.
German inflation unexpectedly rose to 2.3% in July vs 2.2% June’s
DOW 0.5%, NDX -1.28%, S&P -0.5%, Russel 2K 0.35%
US markets opened higher again and the Dow traded sideways in a tight range in the green with a spike into close. S&P and NDX sold down through the morning but worked better in the PM but failed to break back into the green despite a spike into the close.
Job openings edged lower in June while the hiring rate hit its highest level, excluding Covid-impacted data, in nearly 11 years. Available jobs totaled 8.18 million for the month, a decrease from the upwardly revised 8.23 million in May, according to the Labor Department’s Job Openings and Labor Turnover Survey released Tuesday. Economists surveyed by Dow Jones had been looking for 8.1 million. The ratio of openings to unemployed workers held around 1.2 to 1. While the openings number was little changed, the hiring level tumbled by 314,000, taking the rate as a share of the workforce down to 3.4%. The last time it was lower, excluding April 2020 and the mass Covid-related layoffs, was October 2013.
Conference Board’s consumer confidence index rose to 100.3 this month from 97.8 in June, even as consumers felt less optimistic about current business and labor market conditions
Nividia -7% dropped into a bear market have lost 20% from it's highs.
JetBlue soared almost 20% intraday after reporting Q2 earnings that beat analysts’ expectations.
Procter & Gamble -4.8% after posting its third consecutive revenue miss for the first time since 2016. Organic sales growth also modestly missed Wall Street expectations, rising 2% versus an estimate of 3.2%. Poor demand in China hurting its performance.
Bill Ackman is looking to raise $2 billion in the initial public offering of his new closed-end fund, called Pershing Square USA; less than had been earlier announced.
CrowdStrike -9.7% after CNBC reported that Delta Air Lines hired attorney David Boies to seek damages from the cybersecurity company
Banks JPMorgan Chase 2.06%, Citigroup 2.44% Wells Fargo 0.7%, Amex 1.85%
Ecommerce Meta -0.54%, Apple 0.26%, Amazon -0.81%, Netflix -0.7%, Disney 1.79%, Zoom Video 1.21%, Alphabet 0.43% and Microsoft -0.89%,
Tech NXP Semi -1.61%, Nvidia -7.04%, Micron -4.9%, AMD -0.94%, Skyworks 0.24%
Industrial/Discretionary Boeing 0.77%, Caterpillar -0.82%, Simon Property 1.3%, Kohl’s -0.24%, Nordstrom 1.95%, Gap 2.43%, United Airlines -0.32%, Carnival -0.75%, Wynn Resorts 0.01%
Energy Chevron 1.9%, Exxon Mobil 1.78%,
Consumer Staples Campbell Soup 1.34% General Mills 1.6%, JM Smucker 0.78%
DAILY DATA
USD eases vs Yen on hopes of BoJ rate hike, Bitcoin -1.71% at 66,228.59 , VIX 6.57% at 17.69
US T10 down 3 bpts at 4.142% and T2 down 3 bpts at 4.35%
OIL Brent -1.44%, WTI -1.42% continued worries about Chinese demand.
Gold 0.09%, Silver 0.07%, Copper 0.13% Platinum 0.07%, Palladium -0.19%.