Asian Macro Initial Thoughts: Expect Asia to follow the US lower, Auto makers -VE on more tariffs. China industrial data in focus; Govt suggests more stimulus but investors want action not words.

NZX opened lower but rallied into lunch. ASX opened lower and tested down to 7,940 before a bounce.

Overview
Trump in seeking to deflect attention from the Signal security breech announced additional 25% of foreign auto’s effective April 2; -VE for US and S Korean auto makers in the short term. But he still got questioned on the security breech; replying that he wasn’t there or he didn’t know … which is amazing if true and could reflect that he is not in the loop? On Tic Tok Trump said he might lower tariffs on China for a deal on the future of the company.

Factory orders in the US declined … that surprised the market and underline how businesses are turning cautious about the future until the impact of tariffs is really understood.

The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization.

China hinting that it will increase stimulus if momentum eases at Boao, which enters its last day. I would suggest that it already has; and that investors want to see action not hear more ‘words’.

Housekeeping
On Monday morning I was on RTHK’s Money Talk with Hao Zhou, Chief Economist, GTJAI and host Andrew Work. If you want to listen to the show you can find it here

https://www.rthk.hk/radio/radio3/programme/money_talk

Today Thursday I will be on Peter Lewis’ Money Talk which you can find on Substack or whether you get your podcasts. https://peterlewismoneytalk.substack.com/

Later today I will be on RTHK’s The Close, If you want to listen to the show or ask a question you can find the show here:

https://www.rthk.hk/radio/radio3/programme/the_close

For leading independent research, click on http://ERI-C.com it is a great research source 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; Recent highlights include

Sean Maher of Entext ‘AI led Structural Deflationary Shock - Incoming from 2026?’ ,
Gerard Minack of Minack Advisors ‘2025 could be the top for US outperformance’ and
James Burgas of Commodity Intelligence ’The New World Order for Commodities’

Mark Tinker recently posted the Latest thoughts from Market Thinker - Risk off as uncertainties risk. Bitcoin has its own ‘drivers’, but recently has been a great proxy for the Retail ‘Trump trade’ since last October and illustrates the recent downturn in risk appetiteThe arrival of Trump 2.0 pushed most asset allocators to the sidelines, waiting for some greater clarity on the difference between campaign rhetoric and reality. Traders and retail had no such qualms however, and aggressively chased ‘more of the same’ in meme stocks, themes stocks and Bitcoin. Indeed, we would regard Bitcoin as a good proxy for the MAGA trade euphoria. January saw most allocators commit cash, but again into more of the same, albeit with the start of some diversification away from Mag 7, anticipating a bigger decision around the March options expiry (when we have observed over the years that the real allocations are made.

Towards the end of February however, momentum stocks began to run out of, well, momentum, with high frequency traders and CTAs regularly flattening risk on a Friday in case anything radical came out over the weekend. Meanwhile a lot of the leveraged ETFs started to hurt and triggered margin calls and profit taking’. Well worth a read

Market opening indications and data

New Zealand - No Data Due

The NZX50 opened lower but found support at the 12,300 level and then spiked into lunch; currently up 19pts 0.15% at 12,353

Australia - No Data Due
ASX200 opened lower in the staggered open testing 7,940 after the futures indicated -42pts -0.5% at 8,008 downside limited by energy names. Miners mixed with iron ore higher but gold lower.

Japan
Futures indicate market opening -360pts -0.95% 37,440
Chicago Nikkei Futures -175pts -0.47% at 37,375
Yen closed US 150.54 as the USD strengthened. Opened 150.3 level in Asia

Data out pre market
Foreign Bond Investment Mar 22 vs ¥-87.6B prior
Foreign stock Investment Mar 22 vs ¥-1806.2B prior
Lunchtime
40 year JGB Auction vs 2.57% prior

S Korea - No Data Due
Market to open lower following the sell off in the US with Auto and Tech under pressure.
Shares closed higher on Wednesday; Trade volume was moderate at 499.76 million shares worth 7.56 trillion won ($5.5 billion), with gainers outpacing decliners 458 to 413. Institutions and foreigners net bought while retail net sold.

Taiwan
Expect market to open lower concerns over demand for data centre equipment will put tech under pressure
Data Due after the open
Consumer Confidence Mar vs 72.59 Feb (F/cast is -16.5%)

China
Market to open higher after the Golden Dragon China Index closed up 56pts 0.72% at 7,850 although key will be the Industry Profit data to be released on the open.
Data due on the open
Industrial Profits (YTD) Feb YoY vs -3.3% January (F/cast is 4%)

Hong Kong - No Data Due
Expect HSI to open lower\ after ADR’s closed -34pts -0.15% at 23,449 in the green were HSBC, ICBC, AIA, BoC HK. But key will be the Chinese Industrial Profits data out on the open. Also note short selling increased significantly on Wednesday so the chance of a short squeeze is elevated.
Futures indicate flat -29pts -0.12% at 23,418
IPO Soft International(02569.HK), debuts today, opened up 5.9% to $0.54 on gray market. Peaking/ bottoming at $0.54/0.45, it closed at $0.5, down 2% or $0.01 from the listing price, on volume of 13 million shares and turnover of $6.39 million, according to PhillipMart data. Excluding handling fee, the book loss was $50 per board lot size of 5,000 shares. On the Futu platform it opened up 2% to $0.52 on gray market. Peaking/ bottoming at $0.53/0.46, it closed at $0.5, down 2% or $0.01 from the listing price, on volume of 12.09 million shares and turnover of $6 million. Excluding handling fee, the book loss was $50 per board lot size of 5,000 shares.
Turnover dropped to $199.77 below on Wednesday still elevated but down around 20% DoD. Short selling increase dramatically Wednesday to 20.7%.
Earnings include: Shangri-La Asia, China Everbright, K Wah Int, Minmetals, Jiangxi Copper, SOHO China, Nanjing Panda, Travelsky, Air China, Tianneng Power, CNOOC, Lee’s Pharmaceutical, Huadian Power, Wynn Macau, Milan Station, China Railway Construction, New China Life, PICC, Hua Hong Semi, Li Ning, Weichai Power, Comba Telecom, Sinotruk, Haier Smarthome and others

Macau - No Data Due
After market Wednesday
Balance of Trade Feb MOP -7.9B vs MOP -9.6B Jan (F/cast is MOP -60B)

Singapore - No Data Due

Malaysia - Data Due Late morning
PPI Feb YoY vs 0.8% Jan (F/cast was 0.5%)

Thailand - No Data could get
New Car Sales Feb YoY vs -12.26%
Thailand’s Prime Minister Paetongtarn Shinawatra survived a no-confidence vote Wednesday, after the country’s main opposition accused her of being unqualified and allowing her father to wield influence over her administration.

Myanmar - Armed Forces Day to commemorate the start of a national rebellion against Japanese occupation during World War II. No Data Releases scheduled this week
Indonesia - No Data Due
Philippines - No Data Due
Cambodia - No Data Releases scheduled this week
Vietnam - No Data Releases scheduled this week
India - No Data due

Europe Data Due
Eurozone ECB Council Meeting, Loans to Companies, Loans to Households, M3 Money Supply
Germany No Data Due
France No Data Due
United Kingdom Car Production, 7 year Treasury Gilt Auction

United States
Futures indicate Dow -120pts -0.2%, S&P -0.39% and NDX -0.48%;
Data due GDP Growth Rate, Price Index & Sales. Corporate Profits, Initial & Continuing Initial Claims, Jobless Claims 4 week average, Retail Inventories ExAuto, Wholesale Inventories, Core & PCE Prices, Real Consumer Spending, Pending Home Sales, Leading Index, EIA Gas Report, Kansas Fed Composite and Manufacturing Index, 4 & 8 week Bill Auction, 15 & 30 year Mortgage Rate, 7 year Note Auction, Feds Barkin speaks, Fed Balance Sheet.

HEADLINES & NEWS

AUSTRALIA
Australia's monthly Consumer Price Index (CPI) advanced 2.4% y/y in February, easing from January's four-month high of 2.5%, and below forecasts of 2.5%. It marked the lowest inflation rate since last November, with food prices moderating (3.1% vs 3.3%).

‘Feeling targeted’: Hairdressers are fighting to keep this fine print in staff contracts. Small business advocates and corporate heavyweights are railing against the Albanese government’s proposed ban on non-compete clauses.

Jeanswest to shut all stores, with 600 jobs on the line. The Australian-founded, foreign-owned denim label is aiming to keep operating as an online retailer, as tough trading conditions force it to close physical stores.

Federal decision on Woodside’s North West Shelf delayed until after election. The new deadline of May 31 was uploaded to the Department of Climate Change, Energy, the Environment and Water website on federal budget day.

Net zero mandates could make airfares too expensive for most: Qantas boss. The higher costs of clean fuel could push up airfares and make flying “something for the privileged,” Vanessa Hudson says.

The Vintage Cellars and First Choice Liquor Market store names will disappear across the country this year as they are absorbed into the better-known Liquorland brand, with Coles fighting to close the gap to rivals Dan Murphy’s and BWS.

JAPAN
The Bank of Japan (BoJ) may consider monetary tightening if a surge in food prices triggers broader inflation, Governor Kazuo Ueda told a parliamentary committee on Wednesday.

New Bank of Japan board member Junko Koeda said the country's real interest rates are currently "extremely low," as inflation accelerates backed by solid growth in wages. While she declined to comment on how soon the central bank should raise interest rates, Koeda said underlying inflation was key to judging whether Japan could sustainably meet its 2% price target.

Osaka Gas (9532.T) has no immediate need to buy more liquefied natural gas from the United States, its president said on Wednesday, as the company already has supplies to last through to around the middle of the next decade. U.S. President Donald Trump is pushing energy sales to Asian allies while threatening trade tariffs, reviving Alaska's stalled LNG ambitions. Last month, Japanese PM Ishiba and Trump discussed the 20 million tons per year Alaska LNG project, which would transport gas via a $44 billion 1,300 km (800 mile) pipeline and ship it to Japan, South Korea and Taiwan. "Even if we were suddenly asked to buy more LNG from the U.S., we do not have the capacity to do so immediately," Osaka Gas President Masataka Fujiwara told a news conference. Fujiwara declined to comment on the Alaska LNG project specifically, citing a lack of public details. He also said he did not expect to meet any Alaska LNG officials during a scheduled visit to Japan this week. The company already purchases the super-chilled fuel from Freeport LNG in Texas, he said, and that a diversified fuel procurement portfolio would remain a key part of its strategy. Osaka Gas, Japan's second-biggest city gas provider, signed a 15-year sales and purchase agreement last month to buy LNG from Abu Dhabi National Oil Company's (ADNOC) Ruwais project.

Tokyo Gas (9531.T) aims to nearly double its net profit in the 2025/26 fiscal year and plans to expand in the United States, Japan's biggest city gas provider said on Wednesday. The company said it expects net profit to grow to 131 billion yen ($871 million) in the 2025/2026 fiscal year, which begins on April 1, from 72 billion yen for the year ending this month. It sees its dividend rising by 10 yen to 80 yen per share in the current fiscal year. It also plans a new share buyback of up to 120 billion yen in the first half of the 25/26 fiscal year, it said. Tokyo Gas said it wants to increase coordination between its liquefied natural gas trading and shale gas businesses in the United States and expand there, while also building its LNG trading worldwide, mainly through Singapore and London. The company also outlined its basic policy for formulating a new 3-year business plan starting in April 2026. During this period, it aims to invest over 1.1 trillion yen and plans shareholder returns of over 200 billion yen. It may also sell around 100 billion yen worth of real estate, it said.

Tokyo Gas, which acquired U.S.-based natural gas producer Rockcliff Energy in 2023, plans to spend at least $1.9 billion on its U.S. shale business during the three years to March 2029.

Nissan (7201.T) plans to dramatically cut its car development time to boost its competitiveness, the struggling automaker's incoming CEO Ivan Espinosa said on Wednesday. Japan's third-largest automaker currently takes about 55 months to develop a completely new vehicle. "We are slow. This is one of the things we have to face," Espinosa, currently chief planning officer, told reporters at an event about its product plans. He said he wants to cut development for the first car in a family of cars to 37 months while the second car or third car would take just 30 months. Espinosa, a two-decade company veteran known as a passionate product person, takes the helm on April 1. He is expected to refocus the automaker's priorities on developing vehicles more in tune with customers' tastes as he seeks to steer the company out of a deep sales slump. Nissan has several gaps in various markets, Espinosa said, adding that a key part of his vision was to have "five or six brand-oriented models" that would go into as many markets as possible. Underscoring the depth of its pain, Nissan has cut its earnings estimates three times for the year ending this month, has seen its debt rating reduced to "junk" and risks losing its rank as Japan's No. 3 automaker to Suzuki (7269.T). Espinosa said the company was considering additional measures, but declined to give details.

Hillhouse Investment has hired co-heads for its Japan real estate investment business, a person familiar with the matter said, as it bulks up its operations there. Hillhouse has hired Jeremy Bleackley and Wataru Goto as co-heads of Japan for Rava Partners, the person said. The two join from Blackstone (BX.N) where they were managing directors of the Real Estate Group. Hillhouse is expanding in Japan, which has become a focus for investors as a drive to improve corporate governance encourages asset sales and take-private transactions. The asset manager is looking to invest $1 billion to $2 billion annually in Japan and roughly double its headcount in there, Reuters reported earlier this month. Hillhouse was founded by China-born dealmaker Zhang Lei in 2005. It is known for its hedge fund and private equity investments and has also moved into real estate and private credit. Hires in Japan by Hillhouse include former Bain Capital partner Tomohiro Kikuta to lead the Japan operations and Wern-Yuen Tan, a former executive at PepsiCo (PEP.O) Hillhouse's investments in Japan include real estate developer Samty Holdings, which was valued at over $3 billion on an enterprise basis, and restaurant software business Dinii. Rava Partners was established in 2020 and has invested more than $3 billion in 18 real estate companies in Asia, a source said.

SOUTH KOREA
Hyundai Motor Group on Wednesday held the grand opening ceremony of Hyundai Motor Group Metaplant America, an $8 billion cutting-edge automotive manufacturing plant in Bryan County, Georgia, signifying the Korean auto giant’s local expansion bid to countermeasure the second Trump administration’s strict tariff polices. “Our unwavering belief in this community and in strengthening the American auto sector is what inspired Hyundai’s plans for Metaplant from the start,” said Hyundai Motor Group Executive Chair Chung Euisun during the event held at the 11.76 million-square-meter site in Ellabell.

LG Group Chairman Koo Kwang-mo vowed to foster the battery business as a core pillar of the conglomerate alongside its key future growth areas — artificial intelligence, biopharmaceuticals and clean tech — during the group’s regular shareholders’ meeting on Wednesday. “Industries like batteries are national industries of the future and must become key growth engines for LG Group,” Koo said in a written address delivered at LG Corp.’s 63rd general shareholders’ meeting, held at LG Twin Tower, the group’s headquarters in Yeouido, Seoul. “To that end, we will continue to develop innovative solutions in next-generation battery and manufacturing technologies to overcome market and technical challenges.” Koo’s remarks come amid mounting pressure on the battery industry from Chinese competitors and slowing demand in the electric vehicle market.

SK Telecom CEO Ryu Young-sang on Wednesday said the company plans to adopt Nvidia’s latest Blackwell graphics processing units for its data center, citing their efficiency compared to the H200 series. “The Blackwell GPUs appear to be more efficient than the H200, so we plan to adopt them to meet demand,” Ryu told reporters following the company’s annual general shareholders meeting held at its headquarters in central Seoul. The country's largest wireless carrier had initially planned to adopt Nvidia's H200 GPUs this year for its data center in Gasan, Seoul, but it appears to have decided to pivot to the newly unveiled Blackwell chips. Ryu projected the Blackwell GPUs would be introduced in the second or third quarter of this year for its AI data center.

LG CNS said Wednesday it showcased groundbreaking generative artificial intelligence applications across various industries at the Microsoft AI Tour in Seoul earlier in the day. At its showroom, the IT solutions provider showcased solutions that leverage Microsoft Copilot to enhance workplace efficiency. The company also introduced consulting programs and shared case studies of its AI-driven intelligent search services of manufacturing enterprises using Microsoft Azure Cloud. The Azure-based intelligent search service enables employees to input queries during work processes, with generative AI analyzing product design manuals and past cases to deliver the most optimal responses.

KT&G is set to strengthen its global leadership by diversifying beyond its traditional cigarette business into the heat-not-burn tobacco sector and e-cigarettes, in response to the rapidly changing market landscape. "By fully leveraging our capabilities to develop overseas markets last year, the global cigarette division played a key role in driving the company’s overall profit growth," KT&G CEO Bang Kyung-man said during the general shareholders' meeting held Wednesday at the company’s Daejeon Talent Development Center.

TAIWAN
Four former military personnel, including three who were responsible for security at the Presidential Office Building, were yesterday sentenced to imprisonment of up to seven years on charges of selling state secrets to China. Three of the men, sergeant Lai Chung-yu, sergeant Lee Yu-hsi and corporal Lin Yu-kai served in the 211th Military Police Battalion,which guards the Presidential Office Building, while a fourth, Chen Wen-hao, served in the Ministry of National Defense’s Information, Communications and Electronic Force Command.

Two more Chinese influencers who are married to Taiwanese nationals have been ordered to leave the nation by Monday or face deportation, after making controversial “reunification” comments on social media, the Ministry of the Interior said yesterday. Xiaowei and Enqi have had their dependent-based residency permits revoked and cannot reapply for five years, the National Immigration Agency (NIA) said in a statement. The announcement comes after Chinese-born influencer Liu Zhenya, who goes by “Yaya in Taiwan” , left Taiwan on Tuesday evening for China’s Fuzhou after receiving the NIA’s deportation order to leave by midnight yesterday for advocating “unification by force” on social media.

The central bank yesterday suggested that the government approach Taiwan’s trade surplus with the US carefully, as the administration of US President Donald Trump plans to introduce reciprocal tariffs to address its trade imbalances with other nations. Central bank Deputy Governor Chu Mei-lie is to give a special report to the legislature’s Finance Committee today on potential US tariff hikes and Taiwan’s inclusion on the “Dirty 15” list of trade surplus nations. Last year, the US recorded a US$73.9 billion trade deficit with Taiwan, making it the sixth-largest trade surplus source after China, Mexico, Vietnam, Ireland and Germany, the central bank said.

The Taipei International Cycle Show (Taipei Cycle) yesterday opened at the Taipei Nangang Exhibition Center, with the event’s organizer expecting a steady recovery in the industry this year following a tough last year. This year, 980 companies from 35 countries are participating in the annual bicycle trade show, showcasing technological breakthroughs and market development trends of the bicycle industry at 3,600 booths, the Taiwan External Trade Development Council (TAITRA) said in a statement. Under the theme “Ride the Revolution,” the exhibition has attracted more than 3,500 international buyers from 80 countries to preregister for the four-day event, which is expected to bring business opportunities to local firms, TAITRA said. TAITRA chairman James Huang said in his opening speech that Taiwan’s bicycle industry experienced a decline in exports of conventional and electric bicycles last year due to inventory adjustments. However, the average selling price of exported bicycles has increased more than ever before, indicating that Taiwanese firms are striving to move toward high-end and high-value-added models, he said. Describing Taipei Cycle as the world’s second-largest and Asia’s largest professional bicycle show, Huang said he hoped this year’s event would help the local supply chain secure more international orders than last year.

The Ministry of Economic Affairs (MOEA) is planning measures to cultivate 200,000 people with artificial intelligence (AI) skills, Minister of Economic Affairs J.W. Kuo said yesterday. Speaking at the opening ceremony of the AI EXPO Taiwan exhibition in Taipei, Kuo said AI talent is key to economic and industrial development, and to integrating AI into Taiwan’s industrial transformation. The ministry is planning tax incentives, encouraging industry-academic cooperation and competitions attractive to younger generations to encourage the spawning of AI talent, he said.

CHINA
China’s ambassador warned the Canadian government against using it as a “bargaining chip” in trade negotiations with the US, but said it’s ready to pursue a bilateral free trade agreement if Canada removes barriers to Chinese investment. Wang Di, who became Beijing’s representative in Ottawa last year, said that China firmly respects Canada’s sovereignty and territorial integrity.

U.S. Trade Representative Jamieson Greer held "candid" talks with Chinese Vice Premier He Lifeng on trade issues during an introductory meeting, Greer's office said as U.S. President Donald Trump prepares to raise tariffs on Chinese imports further. Greer outlined Trump's trade policy goals in the video conference with He, USTR said, describing them as aiming to promote domestic investment and productivity, enhance U.S. industrial advantages, protect American workers and defend economic and national security. He also expressed serious concerns about what he called China’s unfair and anticompetitive trade policies and practices, the statement said, describing the talks as "candid". China's Xinhua news agency reported that He expressed "solemn concerns" over U.S. tariffs and Trump's planned "reciprocal" duties. Xinhua also described the call as a "candid and in-depth" exchange of views on key economic and trade issues, adding that they agreed to maintain communications.

China wields significant policy room to stimulate its economy this year while some reform was needed to boost consumption, Huang Yiping, an advisor to China's central bank and a professor at Peking University, said on Wednesday. China has unveiled fresh fiscal measures, including a rise in its annual budget deficit, to help hit an economic growth target of around 5% this year, which analysts have described as ambitious. The central bank has pledged to cut interest rates and pump more money into the economy at an appropriate time. "There is still very big space in terms of macro policies," Huang told Reuters on the sidelines of the annual Boao forum. Macro policies will help tackle cyclical problems, while some structural challenges could be resolved in the future, he said. Some reform measures, including those to increase people's incomes and confidence, are needed to boost consumption, on top of recent moves unveiled by the government, Huang said. Peng Sen, chairman of the China Society of Economic Reform, told the Boao Forum on Tuesday that China should take steps to boost consumption as a share of gross domestic product to 70% by 2035 from around 55% currently, narrowing the gap with developed nations. Wider structural reforms include changes in institutional frameworks, income distribution, and fiscal and taxation systems will be needed to help boost spending, Peng said. Huang also told the forum that globalisation, which has benefited many Asian economies, could be reversed.

China would continue to invest more in new computer chipmaking equipment than any other geographical region this year, despite a significant year-over-year decline, followed by Taiwan and South Korea, industry group SEMI said in a report yesterday. In its fabrication plant spending forecast, SEMI said global investments in gear would rise 2 percent this year to US$110 billion, the sixth consecutive year in a row of growth, due to investment in tools needed to make chips for artificial intelligence (AI). The impact of AI would likely be even stronger next year, SEMI added, when investment is expected to grow by another 18 percent. China is the largest consumer of chips, and firms there have been expanding chipmaking capacity for years, but they began a huge sprint in mid-2023 and last year with government support, as part of a drive to lessen dependence on imported chips in response to restrictions imposed by the US government. ASML Holding NV, the largest chip equipment manufacturer, forecasts sales of 32 billion to 38 billion euros (US$34.5 billion to US$40.9 billion) for this year, implying market share of more than 25 percent for its sub-sector, lithography, where it enjoys a dominant position. Other top equipment firms include Applied Materials Inc, KLA Corp, LAM Research Corp and Tokyo Electron Ltd, though Chinese equipment makers such as Naura Technology Group Co, Advanced Micro-Fabrication Equipment Inc (AMEC) and Huawei Technologies Co affiliate SiCarrier Technologies Co are growing fast. Chinese spending is expected to fall to US$38 billion this year, down 24 percent from US$50 billion last year, but still ahead of US$21.5 billion in South Korea, where SK Hynix Inc and Samsung Electronics Co are expanding capacity for memory chips. Spending in Taiwan, where leading foundry TSMC manufactures AI chips for Nvidia Corp and others, is projected at US$21 billion. Among other regions, the Americas and Japan are each expected to spend US$14 billion this yaer, while Europe would spend US$9 billion, SEMI said.

CITIC Securities Co (600030.SS) reported a 10% rise in net profit in 2024, driven by growing investment gains as domestic stock markets rebounded. Profit was 21.704 billion yuan ($2.99 billion) last year，compared to 19.721 billion yuan in 2023, the filing showed. The 2024 net profit was above the median estimate of 21.531 billion yuan, according to LSEG data. Investment gains grew 71.8% year-on-year to 32.49 billion yuan, according to the filing, as recovered market confidence boosted a rebound in domestic stock markets late last year. Chinese stocks registered their first annual gain last year following an unprecedented three-year decline set off by the COVID-19 pandemic, as Chinese authorities have implemented some of the boldest measures since September to revive the economy.
Fees and commissions earned from brokerage business rose 4.8% to 10.7 billion yuan, the filing showed.
Fees and commissions from investment banking business dropped by 33.9% year-on-year to 4.16 billion yuan, as equity issuance dropped more than 70% in the A-share market last year, according to the filing.

Morgan Stanley (MS.N) raised on Wednesday its index targets for Chinese shares for the second time this year, citing improved earnings growth forecasts and a more optimistic outlook for the economy and currency. The bank upgraded its year-end index targets for Hong Kong's benchmark Hang Seng Index (.HSI) Hang Seng China Enterprises index (.HSCE), MSCI China index (.dMICN00000PUS), and China's blue-chip CSI300 index (.CSI300) to 25,800, 9,500, 83, and 4,220 points, respectively.

HONG KONG

Privatisation
ENN ENERGY (02688.HK) announced that its controlling shareholder, ENN (600803.SH) proposed a privatization to the company through a scheme of arrangement. The offer values each ENN ENERGY share at 2.9427 ENN ENERGY H-shares plus a cash consideration of HKD24.5. This cancellation price represents a premium of approximately 34.57% over the closing price of HKD59.45 per ENN ENERGY Share as quoted on the Hong Kong Stock Exchange on the Last Trading Day. Upon the Scheme becoming effective, all Scheme Shares will be cancelled. ENN ENERGY will apply to the Hong Kong Stock Exchange for the withdrawal of the listing of its shares on the Hong Kong Stock Exchange. At the request of ENN ENERGY, trading in the ENN ENERGY Shares and the Notes on the Hong Kong Stock Exchange was halted with effect from March 19, 2025. Application has been made to resume trading from Thursda (27th).

Earnings
BANK OF CHINA (03988.HK) announced its full-year results for the year ending December 31, 2024. Operating income reached RMB632.771 billion, up 1.4% YoY. Net profit rose 2.6% YoY to RMB237.841 billion, topping the consensus forecast of six brokers compiled by this website, which ranged between RMB228.485 billion and RMB234.719 billion. EPS was RMB0.75. The final dividend was RMB1.216 per 10 shares. This, combined with an interim dividend of RMB1.208 per 10 shares, totaled RMB2.424 per 10 shares for the year. This compares to RMB2.364 per 10 shares for 2023. The dividend aligned with the median DPS forecast of RMB0.24 from a consensus of six brokers compiled by this website, up 1.5% YoY.

BOC HONG KONG (02388.HK) announced its annual results for the year ended December 2024, with a net profit of $38.233 billion, up 16.8% YoY. EPS were $3.6162. A final DPS of $1.419 was declared. Together with the interim dividend, this takes the annual DPS to $1.989, up 19% YoY. The dividend payout ratio increased by 1 ppt to 55%. The Company proposed to declare dividends on a quarterly basis starting from 2025.

SENSETIME-W (00020.HK) has announced its annual results for the year ended December 2024. The company’s turnover rose by 10.8% YoY to RMB3.772 billion, while its loss narrowed from RMB6.44 billion in the corresponding period of the previous year to RMB4.278 billion, with LPS standing at RMB0.13. No dividend has been declared by the company.

ENN ENERGY(02688.HK) announced its annual results for the year ended December 2024, with a revenue of RMB109.853 billion, down 3.5% YoY. Net profit amounted to RMB5.987 billion, down 12.2% YoY, with an EPS. of RMB5.35. A final DPS of $2.35 was declared, compared to $2.31 in the same period last year. Together with the interim dividend already declared, 2024 total annual dividend amounted to $3, the payout ratio is about 45% of the Group's core profits.

Economy
Hong Kong's central bank head said on Wednesday that he expects Chinese capital inflows to Hong Kong to provide the biggest opportunity for the financial hub's capital markets in the next few years. Hong Kong is planning to further relax rules on a wealth connect programme with China's Greater Bay area and is exploring whether it can extend its coverage to more mainland cities, Eddie Yue, chief executive of Hong Kong Monetary Authority, said at HSBC's Global Investment Summit in Hong Kong. China still places strong capital controls to manage flows in and out of the border, with a few connect schemes permitting capital to be deployed in some key offshore market such as Hong Kong. Global investors have been accessing Chinese assets through the offshore investment hub, but a weaker outlook for the world's second-biggest economy and geopolitical uncertainties have slowed foreign capital inflows in recent years.

Chinese investments overseas, however, have picked up and Hong Kong has benefited from these capital flows. Yue said the easing of rules governing the wealth connect scheme, launched in 2021, had helped boost capital flows into the city. The number of Chinese investor accounts under the scheme shot up from 25,000 to 95,000 in four months following the relaxation of the rules in February last year. Yue didn't disclose more up-to-date figures, but added that authorities plan to further relax the scheme's investment rules. "We will also explore whether it is possible to even extend the scheme geographically to other parts of China," he said. Between 20% and 30% of Hong Kong stock market's turnover is capital flowing from China through the stock connect, according to Yue. That trend is expected to strengthen in the years ahead, Yue added, as Chinese investors continue to utilise stock, bond and wealth management connect channels to invest in the offshore investment hub. "I'm quite hopeful that all these Southbound capital coming out from China into the world through Hong Kong will help provide the next push for Hong Kong's capital markets," he said.

Buybacks
HSBC (00005.HK) repurchased around 2.0167 million shares in the UK market at prices ranging from GBP8.75 to GBP8.926 per share, involving a total of GBP17.8874 million. The bank also purchased 2.0572 million shares on the Hong Kong Stock Exchange at prices ranging from $88.25 to $88.85 per share, involving a total of nearly $182 million.

TENCENT (00700.HK) repurchased 990,000 shares Wednesday (26th) at prices ranging from $502 to $509.5 per share, involving more than $500 million. Since the repurchase mandate resolution was passed on May 14, 2024, the group has repurchased more than 270 million shares, accounting for 2.87019% of the issued shares.

SINOPEC CORP (00386.HK) repurchased 2.88 million shares on the Hong Kong Stock Exchange Wednesday (26th) at prices ranging from $4.09 to $4.11 per share, involving $11.797 million. Since the repurchase mandate resolution was passed on June 28, 2024, the company has repurchased nearly 324 million H-shares, accounting for around 0.27% of the issued share capital.

HSI Short Selling Wednesday 20.7% vs 12.4% Tuesday
Top shorts Power Assets (6) 54%, Xinyi Glass (868) 50%, Bud APAC (1876) 46%, MTRC (66) 46%, China Res Power (836) 46%, Nongfu Spring (9633) 44%, Galaxy Ent (27) 38%, CKI (1038) 38%, Hengan (1044) 37%, Li Auto (2015) 36%, SHKP (16) 35%, BYD (1211) 34%, Haidilao (6862) 34%, CM Bank (3968) 33%, Sino Biopharm (1177) 33%, BYD Electronic (285) 32%, Sunny Optical (2382) 32%, Tingyi (322) 31%, Zijin Mining (2899) 30%, Kuaishou (1024) 30%, New Oriental (9901) 29%, Sands China (1928) 29%, Sinopharm (1099) 28%, Lenovo (992) 28%, Henderson Land (12) 27%, CK Assets (1113) 27%, JD Health (6618) 27%, HK & China Gas (3) 27%, Bidu (9888) 26%, Haier SmartHome (6690) 26%, Wharf REIC (1997) 26%, China Shenhua (1088) 25%, Ali Health (241) 25%.

WATCH
Globalisation in its current form “may have now run its course”, said HSBC chair Sir Mark Tucker in his speech to the bank’s Global Investment Summit in Hong Kong Tuesday. Tucker said trade tensions created uncertainty that posed a “serious potential risk to global growth” but would lead to new opportunities and stronger economic ties between regional groups and trade blocs.

On 26 March, CHINA RES LAND (01109.HK) as borrower, entered into a facility agreement with one bank for a term loan facility in the amount of US$100 million, according to CHINA RES LAND's announcement. The loan facility is for a term of 3 years commencing from the date of which the advance of the loan facility is made or is intended to be made.

National Business Daily learned from China Mobile that China Mobile and Alibaba held a strategic cooperation agreement signing ceremony in Beijing Wednesday (26th). Pursuant to the agreement, the two parties will carry out in-depth cooperation in digital infrastructure, application ecology, science and technology innovation capabilities and international business, jointly build and operate advanced AI data center, helping both parties to enhance the scale and efficacy of cloud computing and AI services, deepening the technical exchanges and ecological co-construction of China Mobile's “Jiutian” and Alibaba's “Qwen” AI models, so as to promote the deep integration of AI and industries and create greater industrial value.

HKEX (00388.HK) collaborates with the World Economic Forum (WEF) to host WEF’s financial symposium in Hong Kong Wednesday (26th). The symposium welcomed top business and public leaders, tech pioneers and academics from around the world to discuss global themes and megatrends that are particularly relevant to Asia today; these include emerging technologies, fintech, growth financing and sustainability. Carlson Tong, Chairman of HKEX, said that this event presents Hong Kong with a unique opportunity to bring Asian perspectives to the forefront, and they look forward to furthering their collaboration with international partners to explore solutions to key global issues.

Rumor spread that GAC Group’s Huawang Automotive (GH) project might acquire EVERG VEHICLE (00708.HK)'s Nansha factory. China Securities Journal quoted a source from GAC GROUP (02238.HK) (601238.SH) as responding that GH will prioritize utilizing its existing production capacity and, at least for now, has no plans to integrate external capacity. EVERG VEHICLE's shares shot up as much as 2.3 times to peak at HKD0.4 during the afternoon session Wednesday (26th), closing up 74.79% at HKD0.208.

Wang Ning, chairman and CEO of POP MART (09992.HK) stated at the 2024 financial results conference that he expected the group's sales to grow by over 50% YoY to more than RMB20 billion in 2025. Wang also anticipated that sales in overseas as well as in Hong Kong, Macau, and Taiwan regions would surge by over 100% YoY to more than RMB10 billion, while the North American market can match the group's 2020 sales level in 2025.

BYD COMPANY (01211.HK) Chairman, Wang Chuanfu, said at an analyst meeting that the Company aims to double its overseas sales to over 800,000 units this year, and will tackle tariffs through localized assembly, Reuters quoted its minutes of meeting as saying. BYD COMPANY sold 417,200 units overseas in 2024. Wang expected the Company's market share in the UK to rise significantly because the UK is very open to competitive Chinese products.

CK Hutchison Holdings plans to sell two Panama ports to a BlackRock led group is moving ahead as scheduled, with the parties working on finalizing deal terms and aiming to sign an agreement by April 2

Alibaba (9988) and BMW will team up to produce AI for cars in China, as the tech giant looks to monetize its emerging products and the German automaker seeks to catch up to local brands that are dominating the key market. BMW will adopt AI cockpit technology from Alibaba-backed Banma for its upcoming models tailored for the Chinese market, the companies said in a joint statement. Banma's technology is the product of collaboration with Alibaba's own Qwen model team. BMW, which relies on China as a major market, saw sales of its namesake brand and Mini fall 13.4 percent there last year and expects deliveries to remain muted this year. To better compete, Alibaba will help BMW build a new intelligent personal assistant with enhanced voice recognition and trip planning features that will be rolled out next year in new models produced in China. The in-car AI agent can offer parking and nearby restaurant recommendations as well as real-time traffic light information.

Wednesday closings in EUROPE & US

DAX -1.17%, CAC -0.96%, FTSE 0.3%
Markets opened higher, FTSE traded sideways in a tight range just above flat all day. DAX and CAC dipped into the red and the traded sideways in a broad range before selling down into the close. Auto weak ahead of announcement by Trump on Auto tariffs due after market in the US. Defence stocks seeing good interest.

Consumer confidence in France fell slightly in March vs February (F/cast was for it to rise) with people feeling more pessimistic about their personal financial situations, capacity to save and overall standard of living, Insee said.

UK inflation print pre market showed price rises cooled to 2.8% in February, fueling hopes for a more decisive path of rate cuts from the Bank of England this year and driving sterling lower against the U.S. dollar and the euro. U.K. Finance Minister Rachel Reeves early afternoon delivered her spring budget update, confirming expectations for billions of pounds worth of spending cuts targeting welfare and overseas aid, along with measures to crackdown on tax evasion. The government meanwhile reiterated its commitment to increase defense spending to 2.5% of GDP and reform planning rules to boost growth, while sticking to its “fiscal rules.” Following Reeves’ speech, the U.K.’s Debt Management Office announced it planned to issue £299.2 billion ($385.5 billion) in gilts for the 2025-2026 year, slightly higher than during the previous year, but just below the £304 billion estimated in a survey of financial institutions by Reuters. As anticipated, it contained a significant reduction in the proportion of increasingly less-popular longer-dated gilts, easing oversupply concerns.

DOW -0.31%, NDX -2.04%, S&P -1.12%, Russel 2K -1.03%
US markets opened higher but then sold down through the day, with a slight uptick into the close. Major tech names dropped more than 2%, while Alphabet lost more than 3%. Tesla slid more than 5%. On concerns that Data Centres could be re-arranged (as shown by Deepseek) and so reduce equipment demand.

Durable goods orders were much stronger than expected in February at 0.9% down from the upwardly revised 3.3% level in January but much better than the Dow Jones consensus forecast for a 1% decline. Excluding transportation, orders rose 0.7%, while the increase was 0.8% when excluding defense. However, nondefense capital goods order, a closely watched metric of demand, saw a 0.3% decline for the month, indicating softening capital spending plans.

Stocks hit session lows after the White House said President Trump will unveil new tariffs on auto imports during a press conference at 4 p.m. ET. General Motors and Stellantis each tumbled more than 3%. Although it proved this was just trying to deflect attention from the ’Signal Gate’ incident and the pressure for high level resignations from the breech. Something Trump calls a 'witch hunt’ despite the release of the texts.

Banks JPMorgan Chase -0.4%, Citigroup -1.65% Wells Fargo -1.04%, Amex -1.17%
Ecommerce Meta -2.45%, Apple -0.99%, Amazon -2.23%, Netflix -2.67%, Disney -0.82%, Zoom Video -0.45%, Alphabet -3.27% and Microsoft -1.31%,
Tech NXP Semi -2.64%, Nvidia -5.74%, Micron -2.18%, AMD -4.02%, Skyworks -0.91%
Industrial/Discretionary Boeing -2.21%, Caterpillar -0.44%, Simon Property 1.62%, Kohl’s -2.19%, Nordstrom 0.25%, Gap -0.83%, United Airlines -1.31%, Carnival -1.55%, Wynn Resorts -0.23%
Energy Chevron 1.22%, Exxon Mobil 1.44%,
Consumer Staples Campbell Soup 2.51% General Mills 2.21%, JM Smucker 2.81%

DAILY DATA
USD stronger, Bitcoin -1.19% at 87,043.95 , VIX 6.88% at 18.33
US T10 up 4 bpts at 4.352% and T2 up 3.5 bpts at 4.019%
OIL Brent 1.05%, WTI 0.94%
Gold -0.1%, Silver -0.3%, Copper -0.06% Platinum -0.1%, Palladium 1%.