Asian Marco Initial Thoughts: Caution to continue. Japan wage data weak. China Trade data due. US Tech weak after ARM
NZX 50 opened lower and trended down to test 11,730 in the 90 minutes before a bounce.
Asia
Chinese trade data in focus today but even good numbers are unlikely to drive the market higher ahead of Saturday’s data dump: Inflation Rate, PPI, New Yuan Loans, M2 Money Supply, Outstanding Loan Growth, Total Social Financing.
Yen levels continue to pre occupy the market and today we get the Bank of England rate decision.
US markets were subdued and that sentiment is likely to roll over into Asia. Weakness in Tech and poor guidance from ARM likely to mean the sector is under pressure today.
News that the EU has agreed to arm Ukraine using profits from Russian state assets could be a game changer for Ukraine. It will be interesting to see how Russia responds.
Cambodia plans to cut shipping through Vietnamese ports by 70% as a result of a $1.7 billion China-funded upgrade of a canal connecting the Mekong River basin to the Cambodian coast, the country's deputy prime minister said. Sun Chanthol downplayed environmental concerns about the Funan Techo canal slated to break ground later this year and dismissed speculation that it could be used to allow upriver access for Chinese warships as "baseless.” The project, to be completed by 2028, has the potential to reignite tensions between Cambodia and Vietnam, which are close partners but have often clashed.
Housekeeping
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Russell Napier just released his latest Solid Ground Newsletter ‘Alliance of Authoritarian Powers’ Publicly Declares Its Aim To Overthrow ‘The Hegemon’- Why Your Lawyer Needs To Be Consulted On Asset Allocation'
There is a lot more on the platform and you can try before you buy; so take a look or drop me a line and I’ll go through it with you.
If you are interested in AI, I recommend Sean Maher of ENTEXT Economics & Research; He has a lot of excellent insights into how to invest in the AI sector; well beyond the chip names. He recently gave a webinar which I wrote up last week; let me know if you would;d like more details
There are lots more contributors on the ERIC platform; many with free trails so let know if you have interest.
For macro assets allocation checkout Mark Tinker’s Market Thinking
https://www.market-thinking.com/ His latest blog is out Trade and Trading Ranges
Outlines the background to ’Sell in May….’ Goes on to outline the implications for trading; short, medium and long term.
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Overnight European and US Market summary at bottom of the page
Market Opening Indicators
NEW ZEALAND
NZX 50 opened lower and trended down to test 11,730 in the 90 minutes before a bounce.
No Data Due
AUSTRALIA
ASX to open lower futures -19pts -0.2% at 7,806 with Energy names slightly better but miners weak as Gold and Iron Ore futures closed lower.
Westpac Banking goes ex-dividend on Thursday It increased its fully franked interim dividend by 7.1% to 75 cents per share and declaring a special fully franked 15 cents per share dividend. These dividends will be paid to eligible shareholders on 25 June.
Commonwealth Bank of Australia in focus as it releases its Q3 update
Data Due mid morning
Building Permits Final Mar MoM vs -0.9% Feb (F/cast is 1.9%)
Private House Approvals Final Mar MoM vs 12.4% Feb (F/cast is 3.8%)
JAPAN
Nikkei to open higher futures up 168pts 0.4% at 38,370. Chicago Futures down 25 pts -0.07% at 38,420. Weak wages data likely to hurt sentiment. Autos in focus Toyota numbers a slight disappointment and Nissan up today. Nippon Steel numbers key considering its bid for US Steel could show what a good company it is.
Yen Closed 155.62 in US. Opened 155.59 in Asia
Key Earnings today Nissan Motors, Nippon Steel, Panasonic Holdings
Data out
Average Cash Earnings Mar 0.6% YoY vs 1.8% Feb (F/cast was 1.7%)
Overtime Pay Mar -1.5% YoY vs -1% Feb (F/cast was -0.6%)
BoJ Summary of Options
Due Pre market
Foreign Investment Bonds & Stocks
At lunchtime
6 mth Bill Auction vs 0.0418% prior
After lunch
Co-incident index Prelim Mar vs 111.6 Feb (F/cast is 111)
Leading Economic Index Prelim Mar vs 111.8 Feb (F/cast is 111.9)
S KOREA
Kospi to open lower following the weakness in tech overnight in the US
Data Released
Current Account Mar $6.93B vs $6.86B Feb (F/cast was 5.4B)
TAIWAN
Taiex to open lower after the weak Balance of Trade data and weakness in Tech overnight.
No Data Due
Data after market Wednesday
Balance of Trade Apr $6.46B vs $8.68B Mar (F/cast is $8.9B )
Exports Apr 4.3% vs 18.9% Mar (Concensus is 10.15%)
Imports Apr 6.6% vs 7.1% Mar (Concensus is 7.6%)
CHINA
CSI 300 to open lower after Golden Dragon Index closed -47pts -0.71% at 6,486 (off initial lows). FTSE A50 Futures flat at 12,675
Data Due 90 minutes after the open
Balance of Trade Apr vs $58.55B Mar (F/cast is 81.2B)
Exports Apr YoY vs -7.5% Mar (F/cast is 2%)
Imports Apr YoY vs -1.9% Mar (F/cast is 5%)
HONG KONG
HSI to open higher as ADR’s up 74pts 0.45% at 16,325 In the green HSBC, CLP, HKEX, AIA, Bank of China HK, Tencent, Baba and Meituan. Expect caution ahead of the China trade data and also the big China data dump on Saturday.
No Data Due
SINGAPORE
Data Due
6 month T Bill Auction
INDIA
Watch Tata Motors this week ahead of earnings on Friday
No Data Due
EUROPE
DATA
EUROZONE No Data Due
GERMANY No Data Due
FRANCE No Data Due
UNITED KINGDOM RICS House Price Balance already out Apr -5% vs -5% Mar revised (F/cast was 2%), BoE (Rate Decision, Monetary Report, Vote Tally), MPC Meeting Minutes, BoE Gov Baily and Pill speak.
UNITED STATES
Futures opened in Asia Dow 6pts 0.02%, S&P -0.03% and NDX -0.11%
After Market
Arm -6% posted full-year revenue guidance of $3.8 billion to $4.1 billion, while Wall Street called for $3.99 billion in revenue.
Airbnb -8% issued disappointing forward guidance, Q2 revenue would range between $2.68 billion and $2.74 billion, vs F/cast $2.74 billion, per LSEG. Q1 beat on the top and bottom lines.
Robinhood up 6% after Q1 beat estimates. Earnings of 18 cents per share on revenue of $618 million, while analysts polled by LSEG expected 6 cents in earnings per share and $549 million in revenue
SolarEdge -7% posted a wider-than-expected loss for the first quarter, coming in at $1.90 a share, vs f/cast a loss of $1.57 per share. Q2 revenue guidance was also weak, ranging between $250 million and $280 million, versus analysts’ estimates for $306 million.
Data due Initial Claims, 4 week Average Claims, Continuing Claims, EIA Natural Gas Report, 4 & 8 week Bill Auction, 15 & 30 year Mortgage Rates, 30 year Bond Auction.
Earnings include Roblox, Warner Brothers Discovery, Akamai Technologies, Tapestry
AUSTRALIA
Govt to spend $370m to map mineral deposits in order to boost the transition to green energy. The long term investment will be $566.1m will deliver data, maps and tools to help the resources industry make new discoveries.
Power giant Origin Energy’s stake in Britain’s Octopus Energy has gained hundreds of millions of dollars in value after the fast-growing UK electricity sector disruptor secured new backing from superannuation funds, including Australia’s Aware Super.
Multinationals push back, blaming supermarkets for rising prices. Global companies like Nestle, Unilever, Coca-Cola and Mars face the possibility of a further inquiry into their role in rising grocery prices.
JAPAN
BoJ Governor Kazuo Ueda said on Wednesday the central bank will raise interest rates if trend inflation accelerates in line with the bank's current projections. "If inflation overshoots our forecasts or if upside risks become high, it will be appropriate for us to adjust interest rates earlier," Ueda said in a speech. "On the other hand, if inflation undershoots or downside risks heighten, we must maintain current accommodative financial conditions for a longer period," he said.
A bipartisan group of senior U.S. senators introduced legislation on Wednesday to require officials involved in the AUKUS defense project with Britain and Australia to engage with them and Japan on how Japan could be included in the project. A bill, introduced by Republicans Mitt Romney, Bill Hagerty and Jim Risch, and Democrat Tim Kaine, would require the U.S. to coordinate a path forward for Japan's cooperation on advanced technology projects under the so-called Pillar 2 of AUKUS. Its first pillar involves cooperation between the three partners to provide Australia with nuclear powered submarines, but they have raised the possibility of other countries joining a second pillar to develop other high-tech weaponry.
SoftBank Group (9984.T) is in talks to buy artificial intelligence (AI) chipmaker Graphcore, Bloomberg News reported on Wednesday, citing people familiar with the matter. The months-long negotiations between the two companies recently reached a more advanced stage but financial terms of the deal haven't yet been decided, the report said, adding that talks could still collapse. SoftBank and Graphcore declined to comment. Last year, UK-based Graphcore said in a forecast made through 2027 that it needed to raise cash to break even as Nvidia's dominance in AI chilled funding for startups looking to compete directly.
Toyota Motor (7203.T) forecast a 20% profit decline in the current financial year on Wednesday, citing looming investment in both its suppliers and strategy after it delivered blockbuster fourth-quarter earnings. Despite the leaner forecast, the results from the world's top-selling automaker smashed market expectations. Operating profit surged 78% in the January-March quarter. For the full year, it totalled 5.35 trillion yen ($34.5 billion) - the first time for a Japanese company to top 5 trillion yen, local media reported. While Toyota has been boosted by a weaker yen, it has also been a big beneficiary of cooling demand for electric vehicles in some markets, such as the United States, where more customers are embracing petrol-electric hybrids, Toyota's traditional strength. The Japanese automaker was long criticised for pursuing its "multi-pathway" strategy championing hybrids and plug-in hybrids as well as EVs, a stance that is increasingly looking prescient given consumer concerns about EV driving ranges and the availability of charging stations. China remains a challenge in the face of strong software loaded EV’s; which has prompted it to team with Tencent.
1 in 5 people aged 65 or older in Japan predicted to have dementia by 2060. Around 20 percent of people aged 65 years and over in Japan will suffer from dementia by 2060, the government predicted Wednesday, highlighting the need to expand nursing care and strengthen preventative measures amid the graying of the country's population. This is a growing global issue and one that will hit China even harder due to its one child policy. The Economist Drum Tower podcast out Tuesday How Alzheimer's will test China looks at the issue. https://www.economist.com/audio/podcasts/drum-tower
SOUTH KOREA
South Korea's battery industry has secured a two-year reprieve from the US Inflation Reduction Act restrictions on electric vehicle batteries containing Chinese graphite, giving it time to diversify its supply chain while the Korean government has committed 9.7 trillion won ($7.1 billion) in policy financing to support this transition. Following negotiations and advocacy by the Korean government and related industries, the US government on Friday agreed to suspend specific provisions of the IRA that would have penalized electric vehicles using Chinese graphite in their batteries. This decision effectively delays these sanctions until the end of 2026.
SK Hynix has agreed to sell its nearly 50% stake in its foundry unit based in China to a Chinese state-owned enterprise, according to regulatory filings and media reports. SK Hynix System IC said in a regulatory filing that it plans to sell a 21.3% stake in its foundry unit in Wuxi to China's state-owned Wuxi Industry Development Group Company for 205.4 billion won ($150.81 million). In a separate filing, SK Hynix System IC said it will also sell its intangible assets, including process technology to its Wuxi unit for 123.8 billion won. In both filings, SK Hynix said they are pursuing such sales to its improve business structure and seek mid-to-long-term growth opportunities. Wuxi Industry Development Group Company will also acquire a further 28.6% through a new share issuance, Korea Economic Daily newspaper reported on Wednesday, citing an unnamed source.
Countries have been rolling out competitive subsidy programs to boost their edge in the critical semiconductor industry. For South Korea, it is difficult to come up with such direct support programs, but the government is working to create an environment to benefit long-term investment in the sector, Industry Minister Ahn Duk-geun said in a press briefing Tuesday. Ahn also explained that the ministry, along with other government entities will set up a public fund to support strategic industries, including semiconductors. "Instead of offering loans, we seek to create an environment favorable for long-term investment. We are currently in discussions with related government entities including the Finance Ministry to set up a fund to foster advanced technologies including chips, secondary batteries, biopharmaceuticals and displays.
Mirae Asset Securities, Korea’s largest stock brokerage company, has yielded solid results and created a strong impetus for growth in overseas markets after two decades of global expansion. Park Hyeon-joo, chairman of the Mirae Asset Financial Group, which covers comprehensive financial services including asset management, wealth management, investment banking and life insurance, has been spearheading the group's ambition to expand businesses beyond familiar horizons. Mirae Asset Securities established a Hong Kong subsidiary in 2004 with an equity capital of $5 million. Since then, its capital has grown by nearly 600-fold, exceeding about $3.4 billion in 20 years. The brokerage firm operated 12 overseas subsidiaries and three offices, holding the largest overseas network among the 14 Korean brokerage houses that entered foreign markets as of the end of 2023.
Coupang reported Wednesday that its sales soared to a record high of $7.1 billion in the first quarter of this year, but operating profits were almost cut in half largely due to the losses from Farfetch, the luxury shopping platform it acquired last year. According to its earnings report earlier in the day, its revenue reached $7.1 billion in the January-March period, up 23 percent from a year ago. Its operating profits were $40 million, which compared to $167.7 million during the same period last year. This is the first time the company’s operating profits have decreased since it turned a profit in the third quarter of 2022.
TAIWAN
Exports disappoint with 4.3% growth with uneven recovery: Outbound shipments of ICT products (AI) spiked 114.6% last month, but exports of electronic components, led by semiconductors, fell 17.7% The figure suggested an uneven recovery and was disappointing compared with the ministry’s forecast of an increase of 8 to 11 percent, Department of Statistics Director-General Beatrice Tsai said. “It is hard to capture the world’s business pulse as uncertainties linked to inflation, monetary policies and geopolitical tensions escalate,” Tsai said. It is safe to say that the previous impressive rebounds were technical in nature and mainly due to lower comparison bases last year, she said. Tsai said that shipments this month might expand 7 to 10 percent. The poor performance; Tsai attributed it to US technology giants aggressively building up AI infrastructure and capacities, while Chinese firms increasingly depend on domestic suppliers amid the technology rivalry with the US.
The People’s Republic of China (PRC) might consider initiating a hack on Taiwanese networks on May 20, the day of the inauguration ceremony of president-elect William Lai sources familiar with cross-strait issues said. While US Secretary of State Anthony Blinken’s statement of the US expectation “that all sides will conduct themselves with restraint and prudence in the period ahead” would prevent military actions by China, Beijing could still try to sabotage Taiwan’s inauguration ceremony, the source said.
Taiwan on Tuesday opened a Chip-based Industrial Innovation Program office with NT$300 billion (US$9.25 billion) in funding earmarked over 10 years, during a ceremony witnessed by representatives from IC design and foundry companies such as Powerchip Semiconductor Manufacturing Corp, Mediatek Inc and Taiwan Semiconductor Manufacturing Co. The program, which was approved last year, starts this year and aims to boost the innovation of Taiwan’s generative artificial intelligence (AI) in all industries and continue IC technological development on the basis of the nation’s edge in chipmaking, National Science and Technology Council Minister Wu Tsung-tsong (吳政忠) said at the launch event. Wu said Taiwan is now “treading a path where it no longer has anyone to follow” and has to “advance with the support of everyone in the country.”
Taiwan should extend the retirement age to keep talent in the tech industry to help train younger people as well as offer more incentives to attract foreign workers, AI on Chip Taiwan Alliance chairman Nicky Lu said in Taipei on Tuesday. Speaking at the launch of the office of the Chip-based Industrial Innovation Program, Lu said that artificial intelligence (AI) is both a blessing and a challenge for Taiwan. “We are facing an era where major corporations such as Microsoft Corp are trying to change the horizontal division of labor back to vertical integration,” he said, referring to brand companies’ plans to manufacture chips themselves. However, Taiwan is ever-ready to take on the challenges, said Lu, who is also the chairman of memorychip supplier Etron Technology Inc.
Novatek Microelectronics Corp which specializes in driver ICs for displays, forecast that revenue would either be flat or increase by up to 4.4 percent sequentially to between NT$24.4 billion and NT$25.5 billion (US$752 million and US$786 million) this quarter, mainly due to restocking demand for TV chips in preparation for the shopping festival in China and global sports events, including the Paris Olympics. “The [semiconductor] industry’s inventory has returned to healthy levels following more than one year of adjustments. Now all eyes are on how fast consumer electronics demand would pick up,” Novatek president Steve Wang (王守仁) told an online investors’ conference on Tuesday.
CHINA
China and Serbia on Wednesday agreed to follow a "shared future" as President Xi Jinping visited the Balkan country as part of his bid to forge stronger relations with allies at the edge of the European Union. Xi is on his first European tour in five years, and the trip was seen as an effort to strengthen ties with eastern European countries that are pro-Russia and large recipients of Chinese investment.
The Ministry of Industry and Information Technology (MIIT) of China publicly sought for solicit public opinion on the normative conditions and administrative measure of the lithium battery industry (draft for comments). It is mentioned that lithium battery enterprises and projects should meet the requirements of laws and regulations on national resource development and utilization, ecological environment protection, energy saving management, production safety and others, national industrial policies and relevant industrial planning & layout, local spatial planning & special planning for ecological and environmental protection, and the requirements of the "three lines and one list" ecological environment zoning management and control. The enterprises will be guided to reduce the number of manufacturing projects that simply expand output, strengthen technological innovation, improve product quality and reduce production costs. Interestingly this is not the first time CATL’s expansion plans were curtailed by Beijing a few months ago.
Preliminary data from the China Passenger Car Association (CPCA) showed that retail sales of passenger vehicles in the mainland during April totalled 1.585 million units, down 2% YoY and 6% MoM. In the first four months of 2024, the cumulative retail sales were 6.417 million vehicles, elevating 9% YoY. In April, retail sales of new energy vehicles (NEVs) hiked by 34% YoY to 706,000 units, but remained flat MoM. In the first four months of this year, the cumulative retail sales of NEVs reached 2.478 million, lifting 35% YoY.
In April, Tesla EV wholesales volume. amounted to 62,167 in China, down 18% YoY, according to data released by the China Passenger Car Association (CPCA). BYD COMPANY (01211.HK) (002594.SZ) reported sales volume of over 312,000 units, up 48.97%/ 3.5% YoY/ MoM. Based on the sales data for March, it is expected that China's sales volume for new energy passenger car will remain at around 800,000 units in April.
According to data released by the China Academy of Information and Communications Technology (CAICT), in March 2024, mobile phone shipments to the mainland market were 21.38 million units, representing a 5.5% YoY decrease.
Among them, 17.736 million 5G mobile phones were shipped, growing 2.3% YoY and accounting for 83% of the total mobile phone shipments in the same period. Domestic branded mobile phone shipments amounted to 17.633 million units, dropping 8.5% YoY, accounting for 82.5% of the total. Smartphone shipments amounted to 20.218 million units, falling 6.2% YoY, accounting for 94.6% of the total. In 1Q24, mobile phone shipments to the mainland market were 67.415 million units, a 7.4% YoY increase. Among them, 56.433 million 5G mobile phones were shipped, rising 9.6% YoY and accounting for 83.7% of the total mobile phone shipments in the same period. Domestic branded mobile phone shipments amounted to 55.711 million units, hiking 19.3% YoY and accounting for 82.6% of the total. The shipment of smartphones amounted to 63.773 million units, elevating 5.8% YoY and accounting for 94.6% of the total.
Apple's iPhone shipments in China increased by 12% in March after the company and its retailers reduced prices, according to data from a research firm affiliated the Chinese government. Shipments of foreign-branded phones in China increased by 12% in March to 3.75 million units from 3.35 million a year earlier，data from the China Academy of Information and Communications Technology (CAICT) published on Wednesday showed.
The Biden administration is poised to open up a new front in its effort to safeguard U.S. AI from China and Russia with preliminary plans to place guardrails around the most advanced AI Models, the core software of artificial intelligence systems like ChatGPT, sources said. The Commerce Department is considering a new regulatory push to restrict the export of proprietary or closed source AI models, whose software and the data it is trained on are kept under wraps, three people familiar with the matter said. Any action would complement a series of measures put in place over the last two years to block the export of sophisticated AI chips to China in an effort to slow Beijing's development of the cutting edge technology for military purposes. Even so, it will be hard for regulators to keep pace with the industry's fast-moving developments.
China Vanke (000002.SZ) is selling a large Shenzhen land plot at a reserve price of 2.24 billion yuan ($310 million) via auction, the developer's latest move to raise funds to ease its liquidity stress. Key is that it has a loss making reserve price. The auction of the 19,000 square-metre block, which the state-backed property developer bought in late 2017 for 3.1 billion yuan, will start on May 18, according to a notice in the Shenzhen Public Resources Trading Center on Wednesday. Vanke said last month it is facing short-term liquidity pressure and operational difficulties, adding that it had prepared "a basket of plans" to stabilise its business and cut debt. It has also said it aims to boost cashflow this year with bank financing and more asset disposals worth more than 30 billion yuan.
After three decades selling homemade buns on the streets of the Chinese city of Xian, 67-year-old Hu Dexi would have liked to slow down. Instead, Hu and his older wife have moved to the edge of Beijing, where they wake at 4 a.m. every day to cook their packed lunch, then commute for more than an hour to a downtown shopping mall, where they each earn 4,000 yuan ($552) monthly, working 13-hour shifts as cleaners. The alternative for them and many of the 100 million rural migrants reaching retirement age in China over the next 10 years is to return to their village and live off a small farm and monthly pensions of 123 yuan ($17). "No one can look after us," said Hu, still mopping the floor. "I don't want to be a burden on my two children and our country isn't giving us a penny.” The generation that flocked to China's cities at the end of last century, building the infrastructure and manning the factories that made the country the world's biggest exporter, now risks a sharp late-life drop in living standards. If these migrants were to rely solely on China's basic rural pension, they would live on less than the World Bank's poverty threshold of $3.65 a day, though many supplement their earnings by labouring in the cities or by selling some of their crop. This plus the Alzheimer’s problem, falling birth rates and the result of the one child policy means that China is facing a huge problem. The main reason China has not built a stronger safety net for them is that policymakers, fearing the economy might fall into the middle-income trap, prioritise growing the pie rather than sharing it, the government adviser told Reuters.
U.S. officials confronted the Chinese government in Beijing last month about a sweeping cyber espionage campaign through which Chinese hackers have broken in to dozens of American critical infrastructure organizations, a senior U.S. cyber official said. Under the campaign named Volt Typhoon, American officials say China aims to leverage the access it has gained into U.S. organizations in the event of a war or conflict - a nod to escalating U.S.-China tensions over Taiwan. The Chinese have previously dismissed such allegations as groundless. Asked how the Chinese responded, Fick said: "Same way they have to previous attributions ... They have said before that it's a ploy by various U.S. agencies to get more budget dollars."
China has approved the safety of gene-edited wheat for the first time as Beijing cautiously moves forward with commercial growing of genetically modified food crops. China has in the past year ramped up approvals of genetically modified (GM) corn and soybean seeds that are higher-yielding and resistant to insects and herbicide to secure its food security, but the uptake remains slow and cautious due to concerns about the impact to health and ecology. Unlike genetic modification, which introduces foreign genes into a plant, gene editing alters existing genes to change or improve its performance and is viewed by some scientists as less risky than genetically modifying them.
China mostly imports GM crops such as corn and soybeans for animal feed and grows non-GM varieties for food consumption. Many Chinese consumers remain concerned about the safety of GM food crops.
HONG KONG
Hong Kong's Court of Appeal on Wednesday granted an application by the government to ban a protest anthem called "Glory to Hong Kong", overturning a lower court judgment that had rejected such a ban because of its possible "chilling effects" on free speech. The ruling comes amid what critics say is an erosion in Hong Kong's rule of law and individual rights amid a security crackdown by Beijing that has seen scores of opposition democrats jailed and shut down liberal media outlets. The case has implications for internet freedoms and the operations of firms including internet platform operators (IPOs) and technology firms such as Google. Court of Appeal judges Jeremy Poon, Carlye Chu and Anthea Pang wrote that the composer of the protest song had intended it to be used as a weapon. "In the hands of those with the intention to incite secession and sedition, the song can be deployed to arouse anti-establishment sentiments," the judges wrote.
Buybacks
YUM CHINA (09987.HK) (YUMC.US) announced that it repurchased 64,300 shares on the New York Stock Exchange Tuesday (7 May). The repurchase price per share ranged from US$37.07 to US$37.66, involving a capital of US$2.3999 million. In addition, the company repurchased 16,000 shares on the Stock Exchange of Hong Kong on the same day, with the repurchase price per share ranging from HK$291 to HK$296.6, and the total consideration was HK$4.6876 million. Since the ordinary resolution was passed, the company has repurchased a total of 2.9525 million shares, accounting for 0.71% of the company's issued share capital.
AIA (01299.HK) disclosed in a statement that Wednesday (8 May), it repurchased 255,000 shares on the Stock Exchange at a price of $60.75-$61.55 per share, involving a total amount of about $15.616 million. Since the ordinary resolution was passed, a total of 366 million shares have been repurchased, representing 3.1521% of the company's share capital.
IPO.
HOLLWIN URBAN (02529.HK), a state-owned urban service and operation provider in China, will start its. IPO in Hong Kong from today (8th) to next Monday (13th), with about 30% of the proceeds raised from its IPO planned to be used to acquire suitable downstream service providers in property management sector and urban service providers.
In response to a question on why the Group chose to list in Hong Kong, Wang Guofu, secretary of the Board and an executive director of HOLLWIN URBAN, emphasized that the decision to list in Hong Kong is not accidental, but is based on the Group's long-term strategic plan. Although there is a certain degree of volatility in the market now, Wang believed that it has no conflict with the Group's overall development strategy. Wang remained optimistic about the prospects of Hong Kong's stock market, and expected to be able to converge with the capital market.
HSI Short Selling Wednesday 12.6% vs 14.2% Tuesday
Top shorts Bud APAC (1876) 51%, Ali Health (241) 41%, New World Development (17) 39%, Bank of China (3988) 37%, Hang Seng Bank (11) 34%, MTRC (66) 31%, Mengniu Dairy (2319) 30%, Hengan (1044) 29%, Tingyi (322) 29%, Shenzhou (2313) 26%, ENN Energy (2688) 25%, BYD (1211) 25%, Hansoh Pharma (3692) 25%.
WATCH
HANG SENG BANK (00011.HK) held a general meeting today (8th). As of December 2023, home mortgage loans accounted for 40% of HANG SENG BANK's total loans, with very low delinquency ratio, emphasizing that business performance was solid, CEO Diana Cesar said. Hong Kong's property market is affected by various factors, Cesar added. If interest rates remain high in the short term, it may affect the desire to enter the market. However, with the Hong Kong government's relaxation of measures in the property market, it is believed that if the overall economy continues to grow, the property market sentiment will improve. When asked whether HANG SENG BANK would imitate its parent company, HSBC HOLDINGS (00005.HK) in declaring special dividend, Cesar said that HANG SENG BANK's dividend policy would be consistent, and that it would continue to reward its shareholders while maintaining its growth momentum.
COUNTRY GARDEN (02007.HK) is seeking help from China Bond Insurance to pay interest due Thursday, according to Bloomberg, citing people familiar with the matter. According to the report, a dialogue is underway between the two parties, with China Bond Insurance likely guaranteeing two of CG's notes, the interest on which is due soon. The two interest payments, totalling RMB65.95 million, are due on 9 May.
2024 JD 618 big promotion will be fully launched on 31 May at 8:00 pm, with the simultaneous launch of the RMB10 billion subsidy day event, according to JD-SW (09618.HK)'s announcement.
JD-SW (09618.HK) announced that it has recently made a series of revamps to address the experience pain points in the order cancellation and post-sale chain. The updates will be online in phases. The new features include cancelling orders for just some products in the order, and allowing the merchant to refund in post-sale scenarios before confirmation of good receiving. Jingmai's (JD's merchant dashboard) order cancellation and merchant-initiated post-sale refund functions will be integrated into the "integrated post-sale workbench" function. Customers can now change the amount of refund money demanded in the order cancellation scenarios. Post-sale refunds can be made with the unsettled purchase money of the goods without freezing the temporary security deposit of merchants.
In April 2024, CIFI HOLD GP (00884.HK) recorded contracted sales amounted to approx. RMB3.98 billion, down 52.05% YoY, with contracted GFA of approx. 300,100 sq.m., contracted average selling price of approx. $14,200 per sq.m., and contracted sales attributable to the equity owners of approx. RMB2 billion, according to CIFI HOLD GP's announcement.
POWERLONG (01238.HK) announced that its contracted sales value and contracted sales area in April amounted to about RMB1.134 billion -63.69% YoY and 94,042 square metres, down 52.55% YoY The total contracted sales value and total contracted sales area of the Group for the four months ended 30 April 2024 were around RMB4.981 billion and 494,938 square metres, plummeting 58.35% and 35.82% YoY respectively.
HOPSON DEV HOLD (00754.HK) announced that for the four months ended 30 April 2024, gross contracted sales were about RMB5.404 billion plummeting 53.6% YoY. Amongst which, property contracted sales were approx. RMB5.151 billion; decoration contracted sales were about RMB253 million. Solely for April, the group's gross contracted sales reached about RMB1.51 billion, dropping 4.7% YoY. Amongst which, property contracted sales were around RMB1.422 billion, and decoration contracted sales were approx. RMB88 million. For the four months ended 30 April 2024, the group recorded property contracted sales of approximately 191,035 square metres in gross floor area and an average property selling price of RMB26,964 per square metre.
HSBC hiked its deposit interest rates against the market trend, with its 3-month HKD term deposit rate now at 4.3%, hoping to attract new high-end customers. The lender also provided a flash offer to its existing high-end customers, with 3-month HKD term deposit rate for new funds rising from 0.5% to 4.1%, while that for existing HSBC One customers is elevated to 3.8%. HSBC's 3-month USD term deposit rate has been raised to 5% for premium customers and 4.7% for general customers. The limited-time offers above are effective until next Monday (13 May). CCB Asia and ICBC Asia still offer 6% interest rates. Meanwhile, BANK OF E ASIA (00023.HK), WeLab Bank and Fubon Bank reduced their deposit interest rates.
R&F PROPERTIES (02777.HK) completed the disposal of the entire issued share capital of R&F International Real Estate Investment Co. Limited, and the transactions contemplated thereunder Wednesday (8th), according to R&F PROPERTIES' announcement. The above company ceased to be a subsidiary of R&F PROPERTIES, and its financial results ceased to be consolidated in the financial statements of R&F PROPERTIES, according to the announcement.
China Telecom Global, a subsidiary of CHINA TELECOM (00728.HK), recently obtained a license from the Office of the Telecommunications Authority of Hong Kong for its business for service of smart phones with direct satellites connection. The Group announced that it officially launched the internationalized operation of the Tiantong satellite mobile system with Hong Kong as the first stop. Other than traditional satellite phones, some smartphones from brands such as Huawei, XIAOMI-W (01810.HK), OPPO, HONOR and ZTE (00763.HK) will support the Tiantong satellite communication function in Hong Kong. Tang Ke, Deputy General Manager of CHINA TELECOM, said that the Company will explore cooperation with telecoms such as HKT-SS (06823.HK), HUTCHTEL HK (00215.HK) and SMARTONE TELE (00315.HK) to promote the convergence of satellite communications with the local network, so as to cover Hong Kong's sea areas, outlying islands and other emergency scenarios for the use of the satellite phone and SMS communications of monthly subscribers of local telecoms. Yang Lingcai, General Manager of China Satellite Communications, expected that Hong Kong users will be able to enjoy the communications service with converged network protocols without changing their phone cards or numbers after the implementation of the service of smart phones with direct satellites connection in Hong Kong. In the future, Hong Kong will be used as a starting point to promote the overseas operation of Tiantong in Hong Kong & Macau, Southeast Asia, South Asia and other countries along the Belt and Road Initiative (BRI).
The completions of private domestic properties in Hong Kong amounted to 4,975 in 1Q24 ended March, up approx. 32.2% QoQ, down approx. 26.8% YoY, accounting for 22.3% of the full-year forecast completion target of 22,300 units, according to the information from the Rating and Valuation Department (RVD). Of which, the completions of private domestic properties in the New Territories was the largest, accounting for 4,158 units in 1Q24.
A luxury home at 23-29 Blue Pool Road in Happy Valley, developed by Hang Lung Properties (0101), has been sold by tender for HK$250 million. The house spans 4,599 square feet, giving it an average selling price of HK$54,360 per sq ft, and the sale is the luxury project's second transaction this year. The sale came as developers continued putting new homes on the market.
Star Properties will put 59 flats at After The Rain in Yuen Long up for sale over the weekend. The flats range in size from 268 sq ft to 717 sq ft, and prices range from HK$3.84 million to HK$10.07 million. They include the last three two-bedroom flats which go on sale Saturday, the cheapest of which is a 454-sq-ft flat priced at HK$6.12 million, or HK$13,478 per sq ft. About 75 percent of the project - or 254 flats - has been sold so far for a total of HK$1.54 billion.
Potential buyers submitted over 7,000 checks for 210 flats at the Yoho Hub II in Yuen Long which is being developed by Sun Hung Kai Properties (0016), making the batch 32 times oversubscribed. And in Sham Shui Po, Carrianna (0126) and Choice Holdings raised the prices of three flats at The Vim by up to 3.3 percent.
According to reports, SWIREPROPERTIES (01972.HK) has been actively expanding its territory in the Quarry Bay area. 3 of its projects in the area are currently in the redevelopment stage or have already completed redevelopment, with the area posing to become a major commercial centre in Hong Kong Island East. In September 2023, SWIRE PPT, in partnership with HENDERSON LAND (00012.HK), successfully unified the ownership of 16-94 Pan Hoi Street in Quarry Bay, together with 983-987A King's Road, at a reserve price of about $6.31 billion. At that time, both sides were discussing whether to develop smaller or larger units, with construction expected to start in the middle of 2024 and be completed six years later, according to Henderson.
Xiaomi (1810) plans to reveal three new smartphone phone models in the second half of the year. The Chinese smartphone maker, which caught the world's attention with its first electric vehicle model earlier this year, is expected to launch two new foldable phones under the MIX series in the third quarter, competing with Huawei and Samsung. They could be the MIX Fold 4 and the vertically foldable MIX Flip, and will reportedly use Qualcomm's Snapdragon 8 Gen 3 platforms and feature a slim, lightweight body. It is also expected to unveil a new flagship smartphone, the Xiaomi 15 and Xiaomi 15 Pro, in mid-October.
Hong Kong dentists should not engage in a price war with imported dentists, but uphold their quality of service to attract customers, former chief executive Leung Chun-ying said. Leung, also a vice-chairman of the Chinese People's Political Consultative Conference national committee, said Hong Kong is a place with high income and high cost and dentists will only see their income decline if they engage in a price war with non-locals.
EUROPE & US RECAP
DAX 0.37%, CAC 0.69%, FTSE 0.49%
Markets opened higher, FTSE remained subdued and rangebound ahead of tomorrow BoE rate decision. DAX and CAC worked better initially worked better through the morning dipped after lunch and then worked better but dipped slightly into the close.
Sweden’s central bank cut interest rates for the first time in eight years; another sign of monetary policy divergence between the U.S. and Europe.
German industrial production -0.4% MoM March,vs -0.6% consensus F/cast. It’s first drop since last December, coming after a downwardly revised 1.7% growth in the prior month, due to falls in energy output (-4.2%). The less volatile three-month on three-month comparison showed that production was 0.1% higher in the period from January to March 2024 than in the previous three months. Yearly, industrial output fell 3.3% in March, softer than the prior 5.3% slump.
Food and beverage stocks were up 1.8%, while mining stocks dipped 1.3%.
Puma up 11% it reported Q1 earnings in line with expectations and predicted growing demand for its retro Palermo sneakers.
BMW -3% after the company reported a lower first-quarter profit margin amid higher costs and muted demand for its luxury cars.
Siemens Energy up 12.8% after the company raised its 2024 outlook on the back of strength in its power grid business.
AB InBev 4% after posting higher Q1 revenue and profit as it recovered from a boycott of its Bud Light brand.
German fashion retailer Zalando fell 1.4% off the lows after it reported a dip in Q1 sales on Tuesday.
DOW 0.44%, NDX -0.18%, S&P flat, Russel 2K -0.46%
US markets opened lower but worked better; Dow traded in the green and closed on its high. S&P and NDX traded in the red for most of the day.
Uber -5.7% off the early lows after it posted a surprising net loss and weaker-than-expected bookings revenue, while Intel lost 2% after lowering its Q2 revenue guidance.
Tesla -1.7% after Reuters reported that U.S. prosecutors are looking into whether the company committed wire fraud as part of a probe into Tesla’s Autopilot systems.
Shopify -18.6% its worst session having earlier been down more than 19% despite beating expectations in Q1 But the company said its revenue outlook would be impacted by the sales of its logistics businesses, while also warning that the gross margin would decrease in the current quarter.
There were a number of Fed speakers; Collins said Wednesday that it is likely to take longer than expected to get inflation back down to the central bank’s goal, but noted that policymakers should be wary not to wait too long to start normalizing interest rates.
Banks JPMorgan Chase 3.9%, Citigroup 0.75% Wells Fargo 0.97%, Amex 1.58%
Ecommerce Meta 4.36%, Apple 0.34%, Amazon -0.76%, Netflix 3.47%, Disney 0.05%, Zoom Video -0.91%, Alphabet -1.82% and Microsoft 1.2%,
Tech NXP Semi 1.56%, Nvidia -1.42%, Micron 0.11%, AMD 0.81%, Skyworks 0.68%
Industrial/Discretionary Boeing 3.64%, Caterpillar -0.5%, Simon Property -0.07%, Kohl’s -0.11%, Nordstrom 0.08%, Gap 0.3%, United Airlines 0.33%, Carnival 0.18%, Wynn Resorts -1.48%
Energy Chevron -0.13%, Exxon Mobil -0.02%,
Consumer Staples Campbell Soup -0.15% General Mills -0.38%, JM Smucker 0.06%
DAILY DATA
USD stronger, Bitcoin -2.34% at 61,626, VIX -1.74% at 13.00,
US T10 up 3 bpts at 4.492% and T2 up 1 bpt at 4.834%
OIL Brent 0.51%, WTI 078% after a surprise stockpile decline
Gold -0.35%, Silver 0.08%, Copper -1.4% Platinum -0.36%, Palladium -2.06%.