Asian Macro Initial Thoughts Japan closed for Vernal Equinox. Expect caution ahead of FOMC decision. Chinese still like property just not in China ... +VE for HK developers

Markets open NZX opened lower but rebounding. ASX opened higher

ASIA
Today is International Day of Happiness; we will see if it is for the markets. It is also Vernal Equinox, marking the first day of spring.

We have to wait for the reaction in Japan to its new financial framework with market closed  for vernal EquinoxDay.  But worth noting that In the short term very little will really change but in time as Japanese rates slowly rise it will have a big implications for the Fed and other central banks;  as Japanese money will no longer necessarily flow overseas. 

Today the FOMC is in focus; I expect them to remain on hold, recent inflation data has been mixed which will not give the FOMC members the assurance they need that inflation is definitely heading towards their 2% target.

The UN’s  World Meteorological Organization (WMO) in its annual “State of the Global Climate” report, outlined how extreme weather events in 2023 wreaked havoc for millions of people across the globe and inflicted billions of dollars in economic losses.  Warning that the planet is now on the brink of surpassing a key warming threshold. 

Housekeeping 
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Russell Napier’s latest Solid Ground Newsletter “Another Brick in The Wall: UK Chancellor Announces Less Capital For Foreigners”.

John Greenwood of International Monetary Monitor on Nominal slowdowns in major economies so far…. He is the man who designed the Hong Kong peg

Chris Roberts Independent Technical Strategist & Madness of Crowds Newsletter. "What Next 2024: The Good, The Badass or The Ugly?”

Sean Maher of ENTEXT Economics & Research looks at the complacency in markets; the extending rally in Japan and Grid Capex tailwinds amongst other things:  Sean has some excellent insights into how to invest in the AI sector; well beyond the chip names.

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MARKET OPENING INDICATIONS 
New Zealand
Opened lower around 11,780 level and traded sideways around that level before spiking higher around noon; currently. -11pts 0.1% at 11,807
Data out 
Current Account Q4 NZ$-7.837B vs NZ$-11.465B Q3 (F/cast was NZ$-7.7B)
and could get Global Dairy Trade Price Index

Australia 
ASX 200 staggered open, first printwas 23pts higher (futures had indicated up 17pts 0.2% at 7,719, Energy names +VE as oil rose overnight, Gold lower, Iron Ore lower.  Market trend higher to test 7,740 but saw resistance and currently up 26pts 0.3% at 7,730
Data out after the open 
Consumer Inflation Expectations  Mar vs 4.5% Fed (F/cast was 4.4%)
RBA Chart Pack

Japan 
Equity Market closed for Vernal Equinox Day re opens Thursday.
Futures trading in equities and bonds; Chicago futures opened up 45pts 0.11% at 39,930 but have risen and now up 80pts 0.2% at 39,965
Yen closed in US 150.8 opening today 150.8
No Data Due 

S Korea 
Kospi to open lower with continued weakness in Tech following the US but overall expect caution ahead of the US FOMC rate decision. 
No data due 

Taiwan 
Taiex to open lower after weakness in US tech names after the Nvidia new chip announcement; market likely to be rangebound but watch for bargain hunting in TSMC and others.
Data due after market
Export Orders Feb YoY vs 1.9% Jan (F/cast is 3.7%)

China 
CSI 00 to open lower Golden Dragon Index closed -37pts -0.59% at 6,234.  FTSE A50 China Futures up 8pts 0.07% at 12,161 but no news to dive the market unless 'Team China' comes back.
Data due pre market
Loan Prime Rate 1 and 5 year expected to be left unchanged 1yr 3.45% and 5 yr 3.95%
Still waiting for
FDI (YTD) Feb YoY vs -11.7% Jan (F/cast is -19%)

Hong Kong 
ADR’s closed up 87pts 0.52% at 16,824; a broad bounce.  In the red only SHKP, ICBC, BoC and CK Hutch.  HK turnover dropped on Tuesday and short interest rose so we might see an initial short squeeze but I expect the trend to be lower.  Earnings remain in focus.
Earnings today include; HK & China Gas, Power Assets, Geely Auto, Luke Group, Bossini, Kerry Properties, Tencent, China Resources Power,  CK Infrastructure,  3SBio, China Coal, Prudential, Sunny Optical, Solomon Systech, Hengdeli, Kingsoft Corp & Cloud, JD Health
No data due

Singapore 
No data due 

India 
Data due 
M3 Money Supply Mar vs 10.9% YoY Feb

Europe 
Eurozone ECB’s Lagarde and Lane speak. Construction Output, 3 & 6 month Bill Auction, ECB’s Schnabel speaks after market, Consumer Confidence Flash
Germany PPI, 30 year Bund Auction
France No data due
United Kingdom Inflation Rate and Core Inflation Rate, PPI and Core PPI Input & Output, Retail Price Index

United States
Futures indicate Dow flat,  S&P -0.02% and NDX 0.06% 
Data due MBA (Mortgage Applications, 30 yr Mortgage Rate, Market Index, Reference Index, Purchase Index), EIA Oil Report, 17 week Bill Auction, FOMC rate decision, Economic projections and press conference.

Key Earnings  BioNTech Q4, Computacenter FY, General Mills Q3, Investec pre-close trading update, Micron Technology Q2, Prudential FY, Tencent Q4

HEADLINES

AUSTRALIA 
‘Not the brightest bulb’: Trump savages ‘nasty’ Rudd.    Donald Trump suggested Kevin Rudd may not be able to remain as Australia’s ambassador to the US “if he’s at all hostile” under a second Trump presidency.  Which has already prompted Nationals Senator Matt Canavan has offered his services as ambassador to the US if Kevin Rudd is unable to have a relationship with former US president Donald Trump.

Timeshare holidays are back and targeting Millennials and Gen Z
Big investment dollars are rolling into the long forgotten holiday model that is now aimed at the generation that puts holidays above homeownership, and experiences over possessions.

Ukraine envoy slams ABC over ‘bowl of vomit’ documentary
Ukraine’s top representative in Australia has labelled the Four Corners documentary focusing on the perspective of Russian troops fighting in the country “total garbage”.

JAPAN 
PM Kishida on Tuesday described the Bank of Japan's overhaul of its unorthodox monetary easing framework designed to end deflation as "appropriate," promising to keep working with the BOJ to stabilize prices.  The central bank's policy shift "has stepped into a new phase to generate positive economic outcomes" while "maintaining an accommodative environment," Kishida told reporters at his office after meeting with BOJ Governor Kazuo Ueda. Kishida also quoted Ueda as saying during their talks that the BOJ is confident about the prospect of its 2 percent inflation target being achieved stably and sustaina

Images taken by miniature drones from deep inside a badly damaged reactor at the Fukushima nuclear plant show displaced control equipment and misshapen materials but leave many questions unanswered, underscoring the daunting task of decommissioning the plant.   Earlier attempts with robots were unable to reach the area. The two-day probe using tiny drones was completed last week by Tokyo Electric Power Company Holdings, or TEPCO, which released the photos on Monday.

Japan welcomed 2.79 million visitors in February, a record for the month and the most for any month since the COVID-19 pandemic began, boosted by travel during Lunar New Year holidays.  The number of foreign visitors for business and leisure was up from 2.69 million in January, data from the Japan National Tourism Organization (JNTO) showed on Tuesday.  Arrivals in February were 7.1% higher than in 2019, when the Lunar New Year also fell in the second month of the year rather than the first. For all of 2019, Japan welcomed a record 31.9 million visitors before the pandemic struck.

SOUTH KOREA 
The South Korean government and local banks on Tuesday pledged to jointly invest 452 trillion won ($337.4 billion) until 2030 to tackle the climate crisis.  The move aligns with the country's intensified efforts to achieve carbon neutrality by 2050 and bolster domestic firms' competitive edge in overseas markets.  "This unprecedented climate crisis we face today demands action not only to enhance our companies' competitiveness but also for the generations to come," said Kim Joo-hyun, head of the Financial Services Commission, adding, "Through this collaborative effort, we are taking a meaningful first step in tackling climate challenges.”

SK hynix said Tuesday it has begun mass production of its latest HBM3E chips, the next-generation top-performing DRAM for artificial intelligence applications, solidifying its leadership position in the High Bandwidth Memory market.  The chip maker said it will deliver the new chips to its clients at the end of this month after finishing the verification process. SK hynix is a major supplier to the US AI chip leader Nvidia but declined to reveal the client for the first shipment.  The announcement comes about seven months after the Korean company announced the development of the fifth-generation HBM3E chips in August. SK hynix said it is the first provider of HBM3E products, and mass production of the latest chips will extend its earlier success with the previous HBM3 chips.

Drugmakers feeling pinch from doctors’ walkout According to officials from local pharmaceutical companies, the ongoing walkout of local doctors is causing a short-term decrease in the overall use of drugs and medical supplies at local hospitals where surgeries are being postponed and appointments are canceled due to a shortage of doctors who can manage them.  According to several sources, drug companies are noticing decreases in use of antibiotics, intravenous fluids and injections used in medical operations, mainly as large hospitals have cut their surgeries by more than a third.

One in 10 couples who tied the knot in South Korea last year included a partner of foreign nationality. The growing number of international marriages helped the total number of newly married couples last year to rebound for the first time in 12 years.  The number of international marriages stood at 19,700 in 2023, taking up 10.2 percent of the total number of newlywed couples -- 193,700 -- tallied last year, according to Statistics Korea on Tuesday.

TAIWAN 
Hon Hai Technology Group yesterday showcased its latest liquid-cooled server racks at Nvidia Corp’s developers’ conference in San Jose, California, with the products aimed at helping customers build artificial intelligence (AI) data centers. The racks are developed by Hon Hai subsidiary Ingrasys Technology Inc and support Nvidia’s new GB200 flagship chip, Hon Hai said in a statement. “Our collaboration with Nvidia helps us deliver the latest accelerated computing technologies to our customers so they can build AI-powered data centers to suit a wide range of applications,” Ingrasys president Benjamin Ting said.

TSMC long term I expect it to benefit from Nvidia’s new chips.  But closed lower Tuesday on news that at least five suppliers to it and Intel have postponed construction of plants in Arizona, the U.S., Nikkei Asia reported. This reflected the greater-than-expected challenge of rebuilding the chip supply chain in the country.  Most of the affected suppliers reportedly blamed the delays on soaring construction material and labor costs; a shortage of construction workers; an influx of investment into Arizona from a variety of industries, including chips and automobiles, which squeezed the local construction industry; and slower-than-anticipated expansion at TSMC and Intel.

State-run Mega Financial Holding Co Tuesday said that it expects loan growth this year, helped by an export-driven economic recovery, and is eyeing solid gains in wealth management amid a pickup in investment sentiment. “We would seek to remain the best performer in terms of earnings ability this year among state-run peers,” Mega Financial chairman Lei Chung-dar told an online investors’ conference.  The group would consolidate its leadership position in syndicated loans, corporate banking and foreign currency operations, Lei said.

The Smart City Summit & Expo (SCSE) and the Net Zero City Expo kicked off yesterday in Taipei, welcoming approximately 500 foreign guests from 112 cities in 46 countries.  The SCSE is being held for the 11th year, while the Net Zero City Expo is in its second year, jointly welcoming 495 city heads and city administrators from 112 cities and over 1,697 international professional buyers, Paul Peng , chairman of the event organizer Taipei Computer Association, said at the opening ceremony.  The two expositions have been held together since last year, and involve enterprises and government departments sharing how 5G and artificial intelligence of things (AIOT) have been applied to building smarter and cleaner cities, Peng said.

CHINA
Russian President Putin said late on Tuesday that he will consider China for his first overseas trip during his new presidential term that he secured in weekend election.

Foreign Minister Wang Yi, met with his Australian counterpart Penny Wong in Canberra on Wednesday for talks which Australia said would include human rights, tariffs and regional security.  Australia and China, its largest trading partner, are rebuilding ties after a period of strained relations which hit a low in 2020 after Canberra called for an independent investigation into the origin of COVID-19.  Beijing responded by imposing tariffs on billions of dollars worth of Australian commodity imports, most of which have been lifted since a change of government in Canberra two years ago. "I look forward to speaking frankly with you about Australians detained in China, human rights, maritime security and safety, as well as regional and international issues, such as the Pacific, Russia's invasion of Ukraine and the conflict in the Middle East," Wong said in her opening remarks reported by the Australian Broadcasting Corp.
The last time a Chinese foreign minister visited Australia was in 2017 and Wang's visit signals a thaw in diplomatic ties.

Wall Street Journal, citing sources, reported that China has hinted to TikTok's parent company, ByteDance, that it would prefer TikTok to be banned in the US rather than have ByteDance sell it.  The US House of Representatives previously passed a bill that would require ByteDance to sell TikTok or for the app to face a ban. US President Joe Biden has said he will sign the bill into law if it passes the Senate.  A spokesperson for China's Ministry of Commerce argued that the US should stop its unjustified suppression of TikTok, and that "all parties concerned" should strictly abide by Chinese laws and regulations. According to the sources, ByteDance executives believed the comments from the Commerce Ministry spokesperson have reinforced the Chinese government's message to the company, i.e. it will face regulatory hurdles if it tries to divest itself of TikTok. ByteDance founder Yiming Zhang has also not indicated that he is in any talks with an outside buyer to sell TikTok.

Fund manager Fidelity International is planning to lay off 20 people at its main China business unit, Reuters reported, citing sources.  This comes amid a downturn in China’s markets as well as a global downsizing by the firm, the report said. Fidelity’s China fund unit currently houses about 120 employees.

Many hospitals in China have stopped offering newborn delivery services this year, state-backed news outlet Daily Economic News reported, with industry experts warning of an "obstetric winter" due to declining demand amid a record drop in new births. Hospitals in various provinces including in eastern Zhejiang and southern Jiangxi have in the past two months announced that they will close their obstetric departments, according to notices viewed by Reuters.

A Canadian resident of China has been arrested in the United States for allegedly stealing electric car manufacturer Tesla's trade secrets and conspiring to sell them to undercover law enforcement officers.  Klaus Pflugbeil, the operator of a China-based business that sells technology used in electric vehicles, was arrested on Tuesday in New York, federal prosecutors in Brooklyn said.  He had traveled for a meeting with undercover agents whom he had believed were Long Island businesspeople, prosecutors said.

China said Tuesday the United States had "no right" to interfere in the South China Sea, after Secretary of State Antony Blinken said Washington stood by its commitments to defend the Philippines against armed attack in the disputed waterway.   "The United States is not a party to the South China Sea issue and has no right to interfere in maritime issues that are between China and the Philippines," foreign ministry spokesman Lin Jian told a regular press conference in Beijing.  Blinken is in the Philippine capital Manila -- his second visit since President Ferdinand Marcos took office in 2022 -- as part of a brief Asia tour to reinforce US support for regional allies against China.

HONG KONG  
Earnings after market
TONGCHENGTRAVEL (00780.HK) announced the annual results ended December 2023. The turnover shot up 80.67% year on year to RMB11.896 billion. It recorded a profit of RMB1.554 billion, against a loss of RMB146 million over a year ago. EPS was RMB0.69. A final DPS of HKD0.15 was declared. 

XPENG-W (09868.HK) announced the 4Q23 results. Quarterly total revenues were RMB13.05 billion, up 153.9% yearly or 53% quarterly. Vehicle sales revenues rallied 162.3% yearly or 55.9% quarterly to RMB12.23 billion.  Net loss attributable to ordinary shareholders was RMB1.35 billion in 4Q23, compared to RMB2.36 billion in the same period of 2022 and RMB3.89 billion in 3Q23. Non-GAAP net loss attributable to ordinary shareholders was RMB1.77 billion, compared to RMB2.21 billion for the same period in 2022 and RMB2.79 billion for the 3Q23. Basic and diluted net loss per ordinary share was RMB0.75; and non-GAAP basic and diluted net loss per ordinary share were both RMB0.99.  Total deliveries of vehicles were 60,158 for 4Q23, representing an increase of 170.9% from that in the corresponding period of 2022. XPENG’s physical sales network had a total of 500 stores, covering 181 cities as of December 31, 2023. XPENG's self-operated charging station network reached 1,108 stations, including 902 XPENG self-operated supercharging stations and 206 destination charging stations as of December 31, 2023. 
For the full year of 2023, net loss attributable to ordinary shareholders was RMB10.38 billion, compared to RMB9.14 billion in 2022. Basic and diluted net loss per ADS were both RMB11.92. Non-GAAP net loss attributable to ordinary shareholders was RMB9.44 billion, compared to RMB8.43 billion in 2022.

CKLIFE SCIENCES (00775.HK) announced its annual results ended December 2023. The turnover inclined 0.9% YoY to $5.323 bn. Net profit amounted to $17.25 mn, crumpling 86.9%. EPS was HK$0.18 cents. No dividend was declared.

XIAOMI-W(01810.HK) released its annual results for the year ended December 2023, with turnover of RMB270.97 billion, down 3.2% YoY. It recorded a net profit of RMB17.475 billion, up 606.3% YoY, with an EPS of RMB0.7. No dividend was declared.
On a non-IFRS basis, the adjusted net profit rallied 126.3% YoY to RMB19.273 billion.During the period, gross profit increased 20.81% YoY to RMB57.476 billion. Gross profit margin of 21.2% improved by 4.2 ppts YoY.  In addition, revenue from the company's smartphones segment decreased by 5.8% to RMB157.5 billion for the year ended December 31, 2023, primarily due to decreases in both its smartphone shipments and ASP.
The gross profit margin from the company's smartphones segment increased from 9% for 2022 to 14.6% for 2023, mainly due to the improved product mix, the decrease in cost of key components, as well as the decrease in inventory impairment provisions in the overseas markets

Its 4Q results ended December 2023.  Turnover rose 10.9% YoY to RMB73.244 billion, in line with the forecasts of 15 brokers summarized by our reporters ranging from RMB69.5 billion to RMB77 billion, with a median of RMB72.805 billion. Net profit surged by 50.3% YoY to RMB4.724 billion.  On a non-IFRS basis, XIAOMI-W's adjusted net profit for 4Q23 was RMB4.91 billion, up 236.1% YoY, which included RMB2.4 billion in expenses related to its smart EV business and other new initiatives, beating the forecasts of 13 brokers consolidated by our reporters ranging from RMB3.8 billion to RMB4.096 billion, with a median of RMB4 billion.

CHINA UNICOM (00762.HK) declared a final DPS of RMB13.36 cents, meaning a total DPS of RMB33.66 cents for the year, up 22.8% YoY. The dividend payout ratio for the year was 55%, up 5 ppts YoY to a record high.  Li Yuchao, Executive Director and CFO of UNICOM, said SASAC's introduction of the guideline for assessing the effectiveness of market capitalisation management of central SOEs is in line with the company's philosophy of "value creation at the core" for market cap management. In the future, the company will insist on enhancing its investment value. Li also promised that the dividend payout ratio for 2024 will not be lower than that in 2023.  Chairman and CEO Chen Zhongyue voiced his confidence that UNICOM would maintain steady growth in revenue and double-digit percentage growth in total profit during 2024, and that the company's capital expenditure would be RMB73.9 billion in 2023, down from RMB74.2 billion in 2022. He believed that the company's network investment has reached an inflexion point, and expected capital expenditure to further drop by more than 10% this year. UNICOM's annual fixed asset investment is estimated to be around RMB65 billion. Of which, investment in communication networks will be significantly reduced, while investment in computing networks and digital intelligence is expected to rise moderately as the company intends to strengthen deployment in that sector.  Chen added that the network infrastructure for the online communications business is already very complete, with more than 3.2 million base stations already built and shared. Investment in the 5G network is therefore expected to slow in the future, with development accelerating instead in important areas such as AI. He believed that as the value of the network operation is increased, UNICOM will bring better and better returns to shareholders.

TME-SW(01698.HK) released its unaudited financial results for the year ended December 2023. Turnover amounted to RMB27.752 billion, down 2.1% YoY. Net profit amounted to RMB4.92 billion, up 33.8% YoY.  EPS was RMB1.58. Non-IFRS net profit attributable to equity holders of the Company was RMB5.92 billion, up 24.8%.

CALC (01848.HK) announced its annual results for the year ended December last year, with revenue of $4.764 billion, up 14.2% YoY. Net profit was $28.256 million, falling 61.6% YoY, with an EPS of $3.8 cents. A final dividend of $0.15 was declared, compared to $0.15 in the same period last year. Total dividend for the year was $0.3.

HK ELECTRIC-SS (02638.HK) announced its annual results for the year ended December last year, with revenue of $11.406 billion, up 5.7% YoY. Net profit was $3.156 billion, up 6.8% YoY, implying an EPS of $35.72 cents.  A second interim distribution of $16.09 cents was paid in lieu of a final distribution, compared to $16.09 cents paid in the same period last year. Together with the interim distribution of $15.94 cents, the full-year distribution of $32.03 cents was unchanged YoY.  HKELECTRIC received government approval to move forward with its next Development Plan covering capital expenditure for 2024-28. The company will invest another $22 billion to further improve emissions performance and strengthen the power grid to meet the city’s development, while maintaining system reliability to withstand extreme weather conditions.  HKELECTRIC's Basic Tariff increased by $5 cents to $119.5 cents per unit of electricity in 2024 due to the extensive capital works planned, but the easing of international fuel prices has allowed the electricity provider to reduce the Fuel Clause Charge. As a result, the Net Tariff for January 2024 was set at $165.5 cents per unit of electricity, 16% lower than that in January 2023.

PA GOODDOCTOR (01833.HK) announced the annual results ended December 2023. The turnover. declined 24.7% year on year to RMB4.674 billion. The loss narrowed from RMB636 million in the corresponding period of previous year to RMB323 million. LPS was RMB0.3. No dividend was declared.

Security 
Hong Kong’s Legislative Council on Tuesday passed tough new national security legislation under Article 23 of the Basic Law which authorities say is necessary for stability and comes into force this Saturday.

The new law also targets the theft of “state secrets” with a penalty of up to 10 years in prison. State secrets have been defined under the draft law as information concerning the economic, social, technological or scientific development of Hong Kong or the mainland. Also of concern is the provision that allows the chief executive to broaden the category of “public officers” who could be penalised for revealing state secrets, and police will have expanded capacity to detain and investigate national security suspects.

That could be further blow to HK rebuilding its position as an international finance centre if it cannot be relied on for such information.

Buybacks
YUM CHINA (09987.HK) announced that it repurchased 14,100 shares of the company on the Stock Exchange of Hong Kong on 18 March (Monday) at HK$327-333.2 per share for a total consideration of about HK$4.6568 million.  In addition, the company repurchased 57,900 shares on the New York Stock Exchange on the same day at US$41.02-42.24 per share for a total consideration of approximately US$2.4 million.

AIA (01299.HK) repurchased 5.8476 million shares on the Stock Exchange Tuesday (19th) at a price per share ranging from $57.1 to $58.1, involving approx. $337 million, according to AIA's announcement. Since the ordinary resolution was approved, the Group has repurchased approx. 338 million shares, accounting for 2.9059% of the number of shares in issue.

HSI Short Selling Tuesday 23.4%  vs  21% Wednesday 
Top shorts Henderson Land (12) 50%, Nongfu Spring (9633) 49%, Galaxy Ent (27) 48%, Hang Seng Bank (11) 46%, Bank of China (3988) 43%, Shenzhou (2313) 43%, SHKP (16) 42%, JD Health (6618) 41%, OOIL (316) 41%, China Life (2628) 40%, Hang Lung Ppty (101) 39%, Xinyi Glass (868) 39%, MTRC (66) 39%, HSBC (5) 35%, CKI (1038) 35%, CK Asset (1113) 34%, BoC HK (2388) 34%, Chow Tai Fook (1929) 33%, Haidilao (6862) 33%, CCB (939) 32%, Techtronics (669) 32%, Tingyi (322) 31%, Petrochina (857) 30%, CLP (2) 30%, BYD (1211) 30%, Xiaomi (1810) 30%, Power Assets (6) 29%, China Res Beer (291) 29%, China Res Power (836) 29%, Sinopec (386) 29%, CM Bank (3968) 28%, ICBC (1398) 28%, CNOOC (883) 28%, HK & China Gas (3) 28%, Mengniu Dairy (2319) 28%, JD SW (9618) 28%, Sands China (1928) 27%, Sino BioPharm (1177) 27%, Sunny Optical (2382) 27%, New World Development (17) 27%, WH Group (288) 27%, CITIC (267) 27%, CKH (1) 27%, Ping An (2318) 26%, China Shenhua (1088) 26%, CSPC (1093) 26%, Meituan (3690) 26%, CG Services (6098) 26%. 

WATCH
Reuters reports mainland Chinese are snapping up homes in Hong Kong, accounting for up to a third of new property sales weeks after the city removed all additional stamp duties on foreign buyers.  But even though sales have risen, prices remain suppressed as developers offer discounts to clear inventory.   An interesting dynamic which suggests the Chinese still like property as a store of value just not Chinese property.

Wheelock Properties and Wong Sun Hing yesterday raised the prices of new batches of their respective projects in light of "warm" responses to initial sales.  These came as a special unit with a swimming pool in Kai Tak was sold for nearly HK$70,000 per square foot, a new high in the area.  Wheelock Properties yesterday released the third price list to offer 108 more units at Seasons Place in Lohas Park. The latest average unit price is HK$15,095 per sq ft after discounts, up by 3.2 percent from the second list and 6.4 percent from the first. With two successive increases, Wheelock Properties has gradually elevated the selling prices of Seasons Place from a five-year low in Lohas Park over the space of only five days. Nonetheless, the average of the third list is still 11 percent lower than that of the nearby Villa Garda III launched last August. The 108 units cost between HK$4.86 million and HK$10.81 million after discounts. The developer is set to start the first round of sale involving 368 units on Saturday this week. As of Monday, almost 6,000 checks were received for the first two batches, making them five times oversubscribed.

Developer Wong Sun Hing set the price for the third batch of units at Uptown East at HK$15,643 per sq ft, or 0.6 percent higher than the second.  The latest release includes 132 units. A total of 6,899 checks had been received for the first two batches involving 336 flats.  In the third price list, Wong Sun Hing also raised the maximum discount for units under construction to 20 percent from as low as 14 percent previously to attract buyers to the pre-sales.

CK Assets (1113) may soon announce the first price list of Blue Coast in Aberdeen, or Phase 3B of The Southside, to join the new project sale race initiated by the removal of housing curbs three weeks ago.

As increased transactions were reported in the primary market, Sun Hung Kai Properties (0016) disclosed that a special unit at Cullinan Harbour in Kai Tak was sold for HK$149 million, or HK$67,946 per sq ft, a new high in the area.  The property includes a swimming pool. SHKP expected property prices to rise 5 to 10 percent this year.  In Happy Valley, SHKP's only remaining unit at Leighton Hill was sold yesterday for a sum of HK$82.5 million, or HK$47,332 per sq ft, along with two parking spaces.
The Second Standing Committee of the Macau Legislative Assembly continued the detailed discussion on the draft law of the "Casino Gaming Credit Legal System", according to Radio Macau.  The committee has completed its discussion on the bill, and will sign the submission as soon as possible, in order to submit it to the meeting of the Macau Legislative Assembly in April for detailed scrutiny.

CHINA VANKE (02202.HK) is still in preliminary talks with banks led by ICBC (01398.HK) for a syndicated loan of up to RMB80 billion, Reuters reported, citing people familiar with the matter.  CHINA VANKE is said to have shared with potential lenders a list of major commercial projects, such as shopping malls, and information on their revenue sources, to secure new credit lines, since contracted sales and falling bond prices eclipsed the company's outlook.  Lenders are also said to be scrutinizing high-value assets as much as possible, while insurance company creditors have asked CHINA VANKE to provide more collateral before agreeing to extend its debt.  Analysts estimated the value of CHINA VANKE's unsecured commercial real estate to be between RMB77 billion and RMB90 billion, implying that the company may have access to as much as RMB45 billion if banks are to lend at a 50% loan-to-value ratio.

BABA-SW (09988.HK)'s Hema recorded a significant growth in its global shopping business, with its GMV rising by over 1x YoY over the past year.  Hema plans to add experience stores to its 66 stores, launch its first healthy life private brand, and improve its purchasing traceability system this year to continue to promote the development of its global shopping business.

Taobao Tmall Group's Alimama technology team recently launched AtomoVideo, a high fidelity image generating video framework that automatically converts images into high quality video animations, according to Chinese media.  Users can reportedly upload a picture and enter action text commands to turn static images into creative short videos in one-click, with scene reconstruction and characters' facial expression and action close to the level of professional animators.

A spokesman for XIAOMI-W (01810.HK)  accused some WeChat accounts of maliciously misinterpreting a post by Tianjin Expressway Group and claiming that XIAOMI's test vehicles have evaded highway toll, made illegal U-turns, and did other unlawful behaviours.  Tianjin Expressway published the relevant post on its official account, which mentioned that XIAOMI's test vehicles were found to have issues with their toll mileage data when driving on the Beijing-Shanghai Expressway.  XIAOMI spokesperson said that its testers drove the vehicles up and down the Expressway without leaving the paid area during a closed-loop test. However, as the highway toll calculation system defaulted to the shortest distance between the entry and exit points, the testers paid a toll less than the mileage they had actually driven. The spokesperson stressed that the amount paid originally was following the prompt given by the toll calculation system. The issue was discovered by Tianjin Expressway, which complained to XIAOMI. Both sides confirmed the event through communication and negotiation, and XIAOMI has now made up all the tolls.
The spokesperson affirmed that during the test, XIAOMI's test cars have not engaged in any irregularities such as illegal U-turns on the highway, driving over the speed limit, and intentionally evading the toll fees on the highway. Furthermore, XIAOMI believed the relevant post made by Tianjin Expressway Group on its official account contained inaccurate information, and the company is still in communication with the highway operator about it, the spokesperson noted

EUROPE & US RECAP
DAX 0.31%, CAC 0.65%, FTSE 0.2%
Markets opened around flat and initially dipped into the red and whilst the FTSE continued to drift lower the DAX and CAC worked slightly better but upside limited and occasional pull backs.  Autos lead and F&B was the laggards but sectors were generally mixed.

German ZEW monthly survey saw an unexpectedly sharp upswing in investor optimism.  Economic expectations Mar 31.7 vs 19.9 Feb (F/cast was 20.5)

Eurozone wages Q4 3.1% YoY vs 5.2% Q3 revised lower, the least since the third quarter of 2022.

Increasing confidence that the European Central Bank will deliver interest rate cuts in the next six months. 

Unilever popped on Tuesday after the company announced plans to separate its ice cream unit, which includes Ben & Jerry’s and Magnum, as part of a restructuring that will affect 7,500 jobs.

Reckitt Benckiser fell 3.9%, paring gains from the previous session following a damaging U.S. lawsuit over its Enfamil baby formula.

Atos shares plunged more than 18% and were halted from trading on Tuesday morning after the French IT company announced that Airbus had ended talks to buy its cybersecurity business.

DOW 0.83%, NDX 0.39%, S&P 0.56%, Russel 2K 0.54%
Dow opened flat, but S&P and NDX opened lower but all markets worked better through the morning and then traded sideways in the PM session, with an uptick into the close.  FOMC in focus with no change expected.  Housing starts and building permits accelerated at a faster-than-expected pace in February.

Nvidia up 1.1% having opened lower as investors react to the news from its first-ever GTC Conference. CEO Jensen Huang unveiled Nvidia’s latest artificial intelligence chip, labeled Blackwell, which he touted as a significantly more powerful successor to its chips that power a multitude of AI operations. 

Super Micro Computer, -9% a primary vendor for building out Nvidia’s AI servers on news of a share offering. Shares are  220% higher this year on AI enthusiasm, leading the stock to be added to the S&P 500 on Monday. In another sign that the recent bull run could be slowing down, bitcoin proxy MicroStrategy -5.7% having more than doubled in 2024 as bitcoin surged to record highs.

Nordstrom shares soared 12% but closed up 9.4% on news that the company’s founding family is looking to take the retailer private, Reuters reported, citing people familiar with the matter.

Macy’s up 1.4% on news that two potential purchasers had signed NDAs and been given access to confidential information about a possible buyout. 

Banks JPMorgan Chase 0.59%, Citigroup 0.39% Wells Fargo -1.32%, Amex 0.33%
Ecommerce Meta -0.15%, Apple 1.36%, Amazon 0.81%, Netflix 0.38%,  Disney 0.58%, Zoom Video 0.45%, Alphabet -0.38% and Microsoft 0.98%,
Tech NXP Semi -0.1%, Nvidia 1.07%, Micron 0.23%, AMD -4.84%, Skyworks 0.43%
Industrial/Discretionary  Boeing 0.72%, Caterpillar 0.57%, Simon Property 1.41%, Kohl’s 3.91%, Nordstrom 9.38%, Gap 2.88%, United Airlines 0.83%, Carnival -0.68%, Wynn Resorts 0.92%
Energy Chevron 0.78%, Exxon Mobil 0.7%,  
Consumer Staples Campbell Soup 0.58% General Mills 1.31%, JM Smucker 1.85%

DAILY DATA
USD stronger as FOMC meeting starts, Bitcoin -4.78% at 63,950.01,  
VIX -3.56% at 13.82,  
US T10 down 4 bpts at 4.295% and T2 down 5 bpts at 4.687% 
OIL Brent 0.36%, WTI 0.58% on concerns over Russian supplies..
Gold -0.16%, Silver -0.63%, Copper -1.48% Platinum -2.49%, Palladium -3.77%.