Asian Marco Initial Thoughts: China re-opens; Caixin PMI's just after the open. Xi in France. Japan and S Korea closed.

NZX opened lower; currently -108pts -0.9% at 11,839 and trading sideways. I'm on RTHK's Money Talk this morning; just after 8am HK time do listen in.

Asia

China plays catch up as it re-opens along with stock connect so HK turnover should improve but Japan, S Korea and Thailand are closed along with the UK; all re-open on Tuesday

Friday’s much weaker than expected US job report (175,000 new jobs vs 240,000 forecast) and unemployment ticked up to 3.9%; will increase speculation about when a rate cut will happen, although we have to keep in mind that this is just one data point, albeit a big one.  But expect the interest rate sensitive names to do well.  Lots of Fed speakers this week but I don’t see any change to the data dependant stance.

President Xi arrived in Europe Sunday and praised France so investors will be looking for sound bites that could be positive to the EV and battery sectors.   Brandy and Cosmetics are also likely to be on the agenda.

At Saturday’s Berkshire Hathaway annual meeting Buffett said that Greg Abel, his successor, would be making the call on investing decisions.  He explained why Berkshire sold off some of its Apple stock and he revealed a losing bet on Paramount. He also reflected on developments in AI and praised Federal Reserve Chair Jerome Powell’s work steering the economy.  He closed by saying “I not only hope you come next year. I hope I come next year,”  laughing.

He noted during questions 'that Apple is an “even better business” than American Express and Coca Cola.’   Also ‘he finds his bet in Japanese trading houses “compelling,” but said he finds investments in other countries unlikely.’  They have cash just short of US$200b and said  “We’d love to spend it, but we won’t spend it unless we think they’re doing something that has very little risk and can make us a lot of money,”

The rate of businesses in the US using artificial intelligence (AI) is still relatively small, but it is growing rapidly, with firms in information technology, and in places such as Colorado and Washington, leading the way, a new paper from US Census Bureau researchers said. The use of AI by firms is still rather small because many businesses have not yet seen a need for it, census bureau researchers said in an accompanying paper.

That will be a topic at the Milken conference this week (5-8 May) on the theme ’Shaping a Shared Future’; from geopolitical hotspots and the ongoing climate crisis to the complexities of artificial intelligence, examining both its potential and impact on global workers, firms, and markets.

Hong Kong’s Secretary for Culture, Sports and Tourism Kevin Yeung Yun-hung said during a radio program on Sunday that the Labour Day Golden Week holiday has brought about HK$2 billion in spending value to Hong Kong, with various popular attractions seeing a 20 to 30 percent increase in revenue. The five-day Golden Week draws to a close today. Yeung said more than 670,000 mainland tourists visited Hong Kong in the first four days. He believed the number of visitors would eventually be close to the government's estimated 800,000, bringing more than HK$2 billion in total spending value to Hong Kong.

That comes after some very weak Retail sales numbers for March -8% YoY and interestingly he didn’t mention about the large number of Hong Kong citizens that left Hong Kong. 

Housekeeping 
I’ll be on RTHK's money talk this morning; just after 8am HK time; if you have a topic you would like covered you can let them know on email at moneytalk@rthk.hk

If you are a paid subscriber thank you.  If not, please upgrade to paid or make a donation it will be much appreciated. Also remember to recommend it to colleagues and friends.

For leading independent research, check out http://ERI-C.com a platform for vendors of interesting research and trading analysis.  ERI-C is free to access, you can browse different independent research providers, most offer free trials so take a look.

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.

On a personal note I am looking for a job; if you have something or know of something please;  email andsullivan@gmail.com,  WhatsApp me +852 9129 1016 or call +855 10 435 7116.  Thank you.

Friday’s European and US Market summary at bottom of the page

Market Opening Indicators 

NEW ZEALAND
NZX opened lower; currently -108pts -0.9% at 11,839 and trading sideways. 
No Data Due

AUSTRALIA
ASX to open up 22 pts 0.3% at 7,666 with energy news flat and some weakness in gold and iron ore miners.  News of Westpack results inline but announces increasing buyback by A$1B and a special dividend; could push the market higher initially.
Data out after the open
Inflation Gauge Apr MoM vs 0.1% Mar (F/cast is 0.3%)
Job Ads Apr MoM vs -1% Mar (F/cast is 1.1%)

JAPAN 
Markets will be closed for Children’s Day, re-opens on Tuesday.
Chicago futures indiactedup 30pts 0.08% at 38,415
Yen Closed 152.98 in US Friday.  Opened at 153.00 in Asia currently around 153.25 in early trading.
No Data due

S KOREA
Market closed for Children’s Day re-opens Tuesday 
No Data Due

TAIWAN
Taiex to open higher Foxconn reported strong sales +VE for sentiment and the Apple supply chain.
Data after market
Foreign Exchange Reserves  Apr vs $568.1B Mar (F/cast is $565B)

CHINA
Golden Dragon Index closed up 114pts 1.7% at 6,683 but could see more upside as markets play catch up having been closed since last Tuesday.
FTSE A50 Futures indicating -2pts -0.2% at 12,761
FT reports 'Xi ready to play hard­ball behind the scenes of EU charm offens­ive'
Data due 15 minutes after the open
Caixin PMI 
Services Apr vs 52.7 Mar (F/cast is 52.6)
Composite Apr vs 52.7 Mar (F/cast is 52.5)

HONG KONG
HSI ADR’s closed up 101pts 0.62% at 16,352 most higher but in the red; ICBC, Bank of China and Cheung Kong Hutchison.  Futures up 0.66%

Data pre market
PMI  Apr vs 50.9 Mar (F/cast is 51)
After Market
Foreign Exchange Reserves Apr vs $423.6B Mar 
After market Friday
Retail Sales Mar -8.6% YoY vs 0.5% Feb (F/cast is 0.8%)
The value of total retail sales in March 2024, provisionally estimated at $31.2 billion, decreased 7% YoY, as compared with the market's original expectation of an increase of 0.9%, according to the Census and Statistics Department (C&SD)'s announcement. The revised estimate of the combined value of total retail sales in January and February 2024 increased by 1.4% compared with the same period a year earlier. For 1Q24, it was provisionally estimated that the value of total retail sales decreased by 1.3% compared with the same period in 2023.

SINGAPORE
Data due out pre market
PMI  Apr vs 55.7 Mar (F/cast is 55.8)

INDIA
Out after market. Friday
Bank Loan Growth Apr 19% YoY vs 19.9% Mar 
Deposit Growth Apr 13.3% YoY vs 13.8% Mar 
Foreign Exchange Reserves  Apr $637.92B vs $640.33B Mar 
Data due after the open
PMI Final 
Services Apr vs 61.8 Mar (F/cast is 62.2)
Composite Apr vs 61.2 Mar (F/cast is 61.7)

EUROPE 
DATA 
EUROZONE PMI (Services & Composite), PPI
GERMANY PMI (Services & Composite), Bundesbank President Nagel Speaks
FRANCE  PMI (Services & Composite), 3, 6 & 12 Month BTF Auction
UNITED KINGDOM  No Data Due  Market closed 

UNITED STATES
Futures Indicate   Dow 66pts  0.2%,  S&P  0.16% and NDX 0.17%
Data due 3 & 6 Month Bill Auction, Feds Williams speaks, Loan Officers Survey 
Earnings include from Simon Property and Tyson Foods

HEADLINES and NEWS

AUSTRALIA 
The nation’s new privacy commissioner is frustrated big tech companies are pushing for the urgent rollout of artificial intelligence without appropriate safeguards in place to protect citizens.

Australia’s software sector has posted one of the largest exits in its history, with husband-and-wife team Collis and Cyan Ta’eed selling their company Envato to global giant Shutterstock in a deal worth $373 million.

Over the Weekend 
‘Not for the faint-hearted’: Jetstar boss on the high-stakes battle for Australia’s skies. There’s a cruel irony to Australia’s newest low-cost airline scrambling to get out of voluntary administration while the country’s oldest celebrates its 20th birthday.

All Bonza flights cancelled until Wednesday with no refunds imminent. Administrators confirmed the company will be grounded until at least next Wednesday morning and have asked thousands of customers with bookings scheduled before then not to turn up to their respective airports

Macquarie’s top executives have had their pay packets shrink this financial year. Chief executive Shemara Wikramanayake’s pay fell from $32.8 million to $25.2 million, as the commodities-fuelled bonanza cooled for the investment behemoth.

Get a room: Why hotels are so hot right now. Investors, developers and management groups are lining up to join boom-time conditions in the hospitality industry.

JAPAN 
PM Kishida outlined his vision for Japan's ties with Latin America in a speech Saturday that capped off visits to Brazil and Paraguay as Tokyo looks to deepen relations with emerging and developing nations while trying to counter China’s growing clout in the resource-rich region.  Nearly 10 years since former Prime Minister Shinzo Abe visited the region, the last Japanese leader to do so, Kishida vowed to work together with these countries — part of what is commonly referred to as the “Global South” — to tackle challenges such as economic disparity and climate change.

Nearly 50% of investments made through the new Nippon Individual Savings Account, or NISA, program went to Japanese stocks from January through March, a survey has shown.  During the quarter, the Nikkei 225 stock average rewrote its record high for the first time in 34 years and rose further to top 40,000. The new NISA tax exemption program for small-lot investors allowing bigger tax-free investments began in January, replacing the previous NISA program.

A record-breaking heatwave is broiling parts of Asia, helping drive surging demand for cooling options, including air-conditioning. AC exhaust units are a common feature of urban landscapes in many parts of Asia, clinging like limpets to towering apartment blocks in Hong Kong or tucked in a cross formation between the windows of a building in Cambodia. They offer relief from temperatures that have toppled records in recent weeks, with many countries in the region hitting 40 degrees Celsius (104 Fahrenheit) or higher.  +VE for Daikin and Power Companies although in Asia hydro units are having difficulty due to the lack of rain.

More than 400 residents in northern Japan were urged to evacuate on Sunday over fears a forest fire that has been blazing for two days could spread to residential areas. Helicopters poured water for hours on the mountains around Nanyo city in Yamagata prefecture to douse the flames, but the operation was called off after dark with the fire still burning. "We're urging over 400 residents in the three districts" of the city to evacuate, an official in charge of the disaster response told AFP. "There is a risk the fire will spread" to the residential area, she said, adding firefighting efforts will resume on Monday morning.

Despite Japan’s well-deserved reputation a wonderland of delicious pleasures for the palate, the country isn’t immune to food/beverage crises.   Now Japan looks to be facing another shortage of something ordinarily available just about anywhere: orange juice.
In early April, Megmilk Snow Brand, the Japanese distributor for Dole juices, suspended sales of its Dole Orange 100% juice in 450-mililiter and one-liter cartons, leaving the less-then-half-pint 200-militer pack as the only remaining option. Then, on April 25, Morinaga Milk, Sunkist’s Japanese distributor, announced that it will be suspending sales of 200-mililter cartons of Sunkist 100% Orange once its current ingredient supply runs out.  So what’s causing this OJ shortage? Japan imports about 90 percent of its orange juice, with much of it made from fruit grown in Brazil, which suffered significant rain damage and a citrus disease outbreak in 2023. At the same time that supply is taking a hit, though, demand is rising in the post-pandemic world economy, leading to higher prices. Unfortunately, this is coinciding with the yen cratering in value versus foreign currencies. According to statistics released by the Japanese government’s Ministry of Finance in March, the in-yen price for importing orange juice has jumped 69 percent from a year ago, and has doubled since 2019, making it difficult for Japanese companies to import it in the current business climate.

Over the Weekend 
Japan appears to have bought some time and respite for a tumbling yen through its latest bursts of suspected interventions yet it has also set itself up for a protracted war with a market that views the currency as a compelling sell, analysts say.  Traders estimate the Bank of Japan (BOJ) spent nearly $59 billion defending the currency this week, helping to put the yen on track for its best weekly performance in over a year.  The Japanese currency is up 5% from the 34-year low of 160.245 it plumbed on Monday. Tokyo is yet to confirm it had intervened.   But this week's rally has been anything but linear in a market decidedly bearish on the currency, given the massive gap between its ultra-low yields and those in other major economies.

An assembly plant to produce Toyota Motor Corp vehicles has opened in the Phnom Penh Special Economic Zone. At an opening ceremony on Thursday for the factory, Cambodian Prime Minister Hun Manet said, "Toyota is a giant company...When the giant comes to Cambodia with trust, many other companies will follow suit.”  "Cambodia needs this kind of investment," he added. The factory, operated by a Cambodian arm of Toyota Tsusho Corp, a group company under the Japanese automaker, will produce Toyota's Hilux pickup trucks and Fortuner SUVs.

Nippon Steel Corp said Friday it has postponed the expected closing of its $14.1 billion takeover of U.S. Steel by three months after the U.S. Department of Justice requested more documentation related to the deal.  Nippon Steel said the deal, already approved by U.S. Steel's shareholders, is still expected to go through. “Nippon Steel will continue to fully cooperate with the examination of the relevant authorities,” it said in a statement. The sale has drawn opposition from President Joe Biden’s administration on economic and national security grounds, and from former President Donald Trump, the likely Republican presidential candidate in November's election. The new timing could push the closing beyond the election, but Nippon Steel denied the delay was related to that.

SOUTH KOREA 
First Vice Finance Minister Kim Byoung-hwan attended a ministerial meeting of the Organization for Economic Cooperation and Development (OECD) last week, Seoul's finance ministry said Sunday. During the meeting in Paris on Thursday and Friday (local time), Kim discussed global supply chains, inclusive growth and other issues, the Ministry of Finance and Economy said in a statement. On the sidelines of the meeting, Kim held separate talks with his counterparts, including Charlotte Vere of Britain. Kim and Vere agreed to forge close cooperation as the two nations are set to hold high-level talks involving financial authorities in July, according to the statement. 

Hankook Tire and Technology Co. on Friday reached a deal to buy a controlling stake in Hanon Systems Corp., the world's second-largest heat pump systems maker for automobiles, for 1.73 trillion won ($1.27 billion). Under the deal with private equity firm Hahn & Co., Hankook Tire will buy a 25 percent stake in Hanon Systems and an additional interest via rights offerings. Hankook Tire already owns 19.49 percent in Hanon Systems after spending 1.08 trillion won in 2014. With the additional stake purchases, Hankook Tire will own a 50.53 percent stake in Hanon Systems, the company said. The deal will be completed by the end of the year.

Woori Financial Group said Friday that it will launch a new brokerage arm in the third quarter by acquiring digital brokerage firm Korea Foss Securities and merging it into its existing investment banking subsidiary. The tie-up plan between Woori Investment Bank and Korea Foss Securities marks the financial giant's return to the stock trading business after a decade. Woori Financial Group's long-term goal is to become one of the country's top 10 brokerage firms within the next decade, said Deputy President of Woori Financial Group's Strategy Planning

Over the Weekend 
The US government announced a decision Friday to extend tax credits for electric vehicles containing Chinese graphite until the end of 2026 -- an extension that followed a demand from EV manufacturers. On the Federal Register, the Treasury Department posted the final rules on the clean energy vehicle provisions of the Inflation Reduction Act that included the temporary exemption of graphite from rules on the use of minerals from "foreign entities of concern," including from China, Russia, North Korea and Iran.  The IRA provides up to US$7,500 in tax credits to buyers of EVs that met sourcing requirements and were assembled in North America. Automakers without tax benefits would find it difficult to compete against the beneficiaries of the credits. The strict FEOC rules appear aimed at reshaping EV supply chains away from China amid an intensifying Sino-US rivalry, observers said. The rules have been expected to affect the South Korean EV industry that relies on China's supply chains.

While the Japanese government is pressuring Naver to shed ownership in Line, the dominating messaging app in Japan, the Korean internet giant said it will make a decision based on the benefit of the company's business, the chief executive officer said Friday.  During an earnings call, Naver CEO Choi Soo-yeon said the administrative guidance issued by Japan's Ministry of Internal Affairs and Communications last month, demanding Tokyo-based LY Corp., the operator of Line, to lower its dependency on Naver following a data breach incident was unusual. “The administrative guidance on calling for a sell down of the equity holdings is considered something quite extraordinary, basically,” Choi said. The Japanese government's move came after about 510,000 pieces of personal information involving Line users, business partners and employees were leaked through Line's subcontractor Naver Cloud last year. The messaging app is used by about 70 percent of the Japanese population.  LY Corp. is owned by A Holdings, a 50-50 joint venture between Naver and SoftBank. A Holdings has a 64.5 percent stake in Yahoo Japan. Following the administrative guidance, SoftBank is reportedly making moves to acquire Naver's stake in LY Corp.

Samsung Electronics Chairman Lee Jae-yong returned to Seoul on Friday after his trip to Europe, where he made a surprise visit to Vatican City to meet with Pope Francis, and met with business counterparts for cooperation. During the 10-day trip, Lee traveled to Germany, France and Italy, and checked on the company's business operations there. “The spring has come,” he told reporters without further explanation, upon his arrival at the Seoul Gimpo Business Aviation Center. He did not answer other questions asking details about his trip.

B-Robotics, a subsidiary of the delivery app Baemin's operator Woowa Brothers, said Friday it has signed a memorandum of agreement with Hanwha Robotics to strengthen its focus on the restaurant automation market. The signing ceremony was held at B-Robotics' headquarters in Seoul on Thursday with B-Robotics CEO Kim Min-soo and Hanwha Robotics CEO Seo Jong-hwi in attendance. Under the agreement, B-Robotics and Hanwha Robotics will establish a joint strategy for further developing restaurant automation solutions by leveraging their respective expertise in robot-based automation, including serving robots, collaborative robots and cooking robots, which are emerging as viable options to replace simple, repetitive tasks in the restaurant industry.  The agreement also includes various collaborative efforts such as enhancing service quality, showcasing jointly developed products and supporting each other's field demonstrations.

Hyundai Motor Group will invest 1.29 trillion won ($946 million) in Motional, a US-based autonomous driving startup, to boost technological development and secure stable control of the startup, the Korean auto conglomerate said Friday.  Hyundai Motor will spend 663 billion won in capital increase and another 620 billion won for acquiring Aptiv’s 11 percent share in Motional, bringing the auto giant’s total share to 66.8 percent.  The auto giant’s three affiliates -- Hyundai Motor, Kia and Hyundai Mobis -- will take part in the capital increase. They will spend 665 billion won, 361 billion won and 257 billion won, respectively.

Samsung Life Science Fund, an investment fund created by Samsung affiliates, will invest in Latus Bio, a US gene therapy development company, according to Samsung Bioepis on Friday. It is the sixth investment made by the fund between Samsung Biologics, Samsung C&T and Samsung Bioepis, to explore new business opportunities in the biotechnology sector. The exact amount of investment has not been disclosed. Latus Bio is a US biotech that develops novel gene therapy candidates for disorders of the central nervous system (CNS) using proprietary technologies. Such technologies are used to identify and engineer novel adeno-associated virus (AAV) capsid variants, which allow more efficient delivery of therapeutic genes to target tissues.  AAV-mediated gene therapy has held promise for the treatment of genetically-defined CNS disorders. However, it has been limited by its inability to transduce specific CNS substructures and cell types with specificity.

TAIWAN 
Taiwan should create a military aviation law to give legal protection to its air defense identification zone (ADIZ) in counteracting Chinese People’s Liberation Army (PLA) drones, National Defense University associate professor of law and military officer Lee Yen-chang  said on Saturday. The PLA has increased its efforts to compress Taiwan’s defensive area by crossing into the latter’s ADIZ with ships and aircraft including uncrewed aerial vehicles, major Yen wrote in an article published in this month’s issue of Air Force Bimonthly.  The Chicago Convention on International Civilian Aviation, which governs transnational civilian flights, neither allows nor forbids governments from staking out its ADIZs, he said.  This means ADIZs have an unclear legal status in international law, and the right to self-defense inside an ADIZ is conditional, he said.  The legitimate exercise of the right to self-defense by a nation state must be an appropriate, necessary, incremental and proportional response to actions causing actual harm, instead of merely posing a military threat, Yen said.

The Chinese Nationalist Party (KMT) would “appropriately handle” the fallout from an invitation it had extended to Russia’s representative to Taipei to attend its international banquet last month, KMT Chairman Eric Chu said yesterday.  US and EU representatives in Taiwan boycotted the event, and only later agreed to attend after the KMT rescinded its invitation to the Russian representative. The KMT has maintained long-term close contact with all representative offices and embassies in Taiwan, and had extended the invitation as a practice of good diplomacy, Chu said.  

Hon Hai Precision Industry Sunday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance.  Hon Hai, known also as Foxconn Technology Group, assembles most iPhones, but the company is diversifying its business to put greater focus on building data center server racks and other equipment for AI clusters. That has helped its stock reach a record high this year. With Apple’s business making up more than half of its revenue, its investors are watching the Taiwanese company for clues on iPhone sales. Hon Hai posted about a 10 percent plunge in first-quarter revenue, in part because Apple’s flagship device underperformed.  The second quarter remains a traditional off-peak season and a transition period for major products, Hon Hai said.  Visibility for the second quarter is approximately in line with market expectations, with operations outlook for the period expected to show quarter-on-quarter and year-on-year growth, Hon Hai said.

Gasoline and diesel prices are to drop NT$0.1 per liter this week after prices were left unchanged the previous week, CPC Corp, Taiwan (CPC) and Formosa Petrochemical Corp said in separate statements Sunday. CPC said global crude oil prices fell last week, causing the cost of crude oil to drop 2.09 percent from the previous week, based on its floating oil price formula. Formosa attributed the decline in global oil prices to market expectations of a ceasefire agreement between Israel and Hamas and a significant increase in US crude oil inventories during the week

A judge in Hsinchu handed down prison sentences ranging from four to six months to three Taiwanese, which were commuted to fines, for their involvement in the poaching of engineers for China’s Xiaomi Corp. Beijing Tianmi Technology Co’s Taiwan office technical director Pan Chi-kuei  was sentenced to four months in prison, former Xiaomi Communications chief financial officer Yu Ming-to was given five months and Altek Semiconductor acting general manager Hsia Tzu-yu was handed a six-month sentence. The sentences can be commuted to fines, with the three paying a combined NT$600,000. Beijing Tianmi Technology, a subsidiary of Xiaomi Corp, established a number of companies in Taiwan to poach engineers, under the guise of engaging in research and development in Taiwan, court documents said.

Taiwan moved up eight positions to 27th in the latest World Press Freedom Index released Friday by the Reporters Without Borders (RSF), an international non-profit organization that focuses on safeguarding the right to freedom of information.  Meanwhile, the Asia-Pacific region is the world’s second most difficult region to practice journalism, the RSF said, indicating that Myanmar, China, North Korea, Vietnam and Afghanistan are among the world’s 10 most dangerous countries for media personnel.  Hong Kong is ranked 135th with China 172nd among 180 countries and regions. China has the largest known number of imprisoned journalists in the world at 119, including 10 Hong Kong journalists. The RSF described China as the “world’s largest prison for journalists,” as its regime conducts a campaign of repression against journalism and the right to information worldwide.

Over the Weekend 
A former U.S. ambassador appointed by Donald Trump said on Saturday he believed the former president would again support Taiwan if he wins back the White House.

Taiwan, claimed by China as its own territory despite Taipei's objections, received strong backing from Trump's 2017-2021 administration, including arms sales, which have continued under the government of President Joe Biden.  Trump spoke to Taiwan President Tsai Ing-wen in 2016 shortly after he won the election, prompting anger in Beijing - as the United States does not officially recognise Taiwan's government - and glee in Taipei.

Artificial intelligence (AI) chip designer Alchip Technologies Ltd  Friday said that revenue would grow significantly again in 2026 after adding a major AI chip customer, reversing moderation amid a product transition next year.  The Taipei-based application-specific IC (ASIC) designer reiterated its strong revenue growth forecast for this year and 2026 after its stock plummeted about 23 percent to NT$3,145 from a peak of NT$4,085 on March 6 amid growing competition. Alchip said it has built strong partnerships with cloud service providers (CSP), denying that it had lost orders to smaller competitors such as Faraday Technology who said it has secured its first order to design AI chips for customers.

CHINA
China’s provinces trim thousands of government jobs to spend more on Beijing’s science and control priorities.  SCMP reports Facing budget blowouts and new policy directions, local governments are finding ways to shed ‘iron rice bowl’ positions without mass redundancies.  ’The workload on each head will increase and we have heard complaints. But it is still better than retrenchment’: Henan official

China’s steel industry risks ‘falling off a cliff’ as overcapacity concerns point to end of an era.   China’s steel production has increased, but a property market downturn and slowdown in infrastructure spending have seen prices plunge steeply.  Washington has called for higher tariffs on Chinese steel imports, while Chile has made moves to curb shipments, and Vietnam is considering a probe

Over the Weekend 
Damage to Philippine vessels and injuries to their crew in the South China Sea is "irresponsible behaviour" in disregard of international law, U.S. Defense Secretary Lloyd Austin said on Thursday, weighing in on the latest flare-up involving China.
Manila and Beijing have traded barbs almost daily since Tuesday's confrontation at the disputed Scarborough shoal where China's coast guard used water cannon against to two vessels from the Philippines, prompting outrage from its government.

The European Commission has warned three Chinese electric vehicle makers that they have not supplied sufficient information for its anti-subsidy investigation, according to two people familiar with the case.   If the Commission concludes that the provided information from sampled companies BYD (002594.SZ), SAIC (600104.SS) and Geely (0175.HK) is insufficient, it could use evidence available elsewhere to compute tariffs, a move that can inflate them.  Warnings of this kind occur frequently in EU trade defence cases. Indeed, for all 10 past anti-subsidy cases against China for which measures are still in place, the Commission used such "facts available" to fill in certain gaps.   The companies have been given the right to respond to the warning, the people said.  SAIC said it had "fully cooperated" with the Commission and provided all necessary information in accordance with World Trade Organization and EU rules.  "It is worth pointing out that commercially sensitive information - such as battery formulation - should not belong to this category," it said in a WeChat message.   The company declined to comment when asked if Brussels had asked for battery formulation information.  Geely declined to comment. BYD did not respond to a request for comment late on a public holiday.  The China Chamber of Commerce to the EU said the reported allegations of non-cooperation were unfounded and that the companies had participated in multiple rounds of questionnaires and facilitated on-site inspections.   It added the companies viewed some of the EU's demands as excessive, including tight deadlines for detailed paperwork, demands going beyond the companies' capacity to provide evidence and requests for business-sensitive supplier information. The Commission, which oversees trade policy in the 27-nation European Union, launched an investigation in October into whether battery electric vehicles manufactured in China were receiving distortive subsidies and warranted extra tariffs.

France's world-leading cosmetics sector is counting on talks between Xi Jinping and Emmanuel Macron next week to help minimize the impact on French companies of tough new Chinese import rules requiring the sharing of formulas and manufacturing know-how.  From May 2025 cosmetics exporters will be required to share detailed information on their manufacturing processes with Beijing and receive Chinese inspectors in their factories, a measure that raises concerns about losing control of intellectual property.
President Xi's first visit to Europe in five years comes amid a backdrop of tense trade relations, with the European Union threatening China's electric vehicle and green energy industries with tariffs.  But progress towards an agreement between France and China on the regulation of cosmetics, including lipstick and fragrances, could be a bright spot in discussions in Paris next week.  President Macron's office said ahead of the meeting that cosmetics would be a topic of "great attention," and that they sought to "find a solution that also protects the interests of our companies.”  France is the world's leading cosmetics exporter, shipping nearly 2 billion euros ($2.15 billion) worth of makeup and skin care products to China last year, second in importance only to aerospace products.  New Chinese safety rules due to come into effect next year threaten that trade.

Electric vehicle maker Zeekr Intelligent Technology Holding said on Friday it was targeting a valuation of up to $5.13 billion in its U.S. initial public offering (IPO), the first major floatation of a China-based company in more than two years.  Zeekr is looking to raise up to $367.5 million by selling 17.5 million American depositary shares (ADSs) priced between $18 and $21 each. The IPO will test investors' appetite for Chinese companies, given the simmering tensions between the two biggest economies in the world over trade, intellectual property and the future of Taiwan.

Credit Suisse's securities brokerage joint venture in China said its staff numbers sank 46% in 2023, a year the Swiss authorities arranged a takeover to keep the firm from collapsing.  Credit Suisse Securities (China) Ltd said in an annual report dated Tuesday that employee numbers were 126 at the end of December, down from 234 a year earlier.  The Chinese venture made several rounds of layoffs last year in an attempt to stem losses, Reuters has reported.

HONG KONG  
Earnings
FIH (02038.HK) announced its results for 1Q24 ended March this year. Revenue was US$998 million, down 21.7% YoY. Loss narrowed to US$20.407 million, compared to a loss of US$52.315 million a year earlier.  The Group currently expected itself to continue recording a consolidated net loss for 1H24, which is likely to be close to or lower than the consolidated net loss of approx. US$49.84 million in 1H23.

Buybacks
SWIRE PACIFIC A (00019.HK) announced that it repurchased 395,000 shares of the company on the Hong Kong Stock Exchange Friday (3rd) at $66.5-68.3 per share, involving a total of $26.6266 million.

HANG SENG BANK (00011.HK) repurchased 400,000 shares on the Stock Exchange Friday at a price per share ranging from $104.6 to $106.2, involving approx. $42.1266 million, according to HANG SENG BANK's announcement.  HANG SENG BANK has repurchased a total of 8.384 million shares until now, accounting for 0.4385% of its share capital.  

HSI Short Selling Friday 15.3% vs 15.5% Thursday 
Top shorts JD Health (6618) 51%, Tingyi (322) 50%, Nongfu Spring (9633) 42%, Hang Seng Bank (11) 41%, China Overseas (688) 40%, Chow Tai Fook (1929) 37%, Ali Health (241) 36%, China Haongqiao (1378) 35%, Anta Sports (2020) 31%, New World Development (17) 31%, Bank of China (3988) 29%, Bud APAC (3988) 29%, Hengan (1044) 28%, Geely Auto (175) 28%, BOC HK (2388) 28%, Techtronics (669) 27%, MTRC (66) 26%, Shenzhou (2313) 26%, Sinopharm (1099) 25%.

WATCH
Hong Kong's primary housing market maintained its momentum over the weekend with brisk sales at Onmantin in Ho Man Tin and The Yoho Hub II in Yuen Long, as second-hand home deals continued to languish.  Phase IIB of Onmantin, developed by Great Eagle (0041) and MTR Corp (0066), sold 202 out of 248 flats on offer in the second round of sales by 6pm yesterday, after group B sales on Saturday was postponed to Sunday.  Together with tendered sales at Phase IIA, Onmantin reported 504 transactions worth over HK$6.2 billion in 11 days.  
In Kau To Shan, El Futuro recorded 10 deals over the mainland's five-day May Day holiday through yesterday, cashing in over HK$194 million, said CK Asset (1113).   CKA also plans to sell six flats at the project this Thursday, with prices ranging from HK$17.25 million to HK$21.83 million after discounts.
Wheelock Properties said 12 homes at the Seasons series in Lohas Park were sold over the five-day break.
In Pok Fu Lam, Chinachem's luxury project Victoria Coast sold a home by tender for HK$30 million, or HK$21,946 per square foot.
Meanwhile, Sun Hung Kai Properties (0016) said it received more than 3,600 checks for 282 flats in the price lists of The Yoho Hub II, making them nearly 12 times oversubscribed. On Saturday, SHKP unveiled a second price list for 94 more flats, with the cheapest priced at HK$6.84 million after discounts.    The latest batch of flats has an average price of HK$15,038 per sq ft after discounts, up by nearly 5 percent from the first batch. But the figure is still 24.4 percent cheaper than the first price list of The Yoho Hub I.
Henderson Land Development (0012) opened the new sales center and show flats for Gateway Square Mile in Mong Kok yesterday.

In contrast, weekend transactions at 10 major housing estates fell 27 percent to eight over the previous week, data from Centaline Property Agency showed.  Louis Chan Wing-kit, Asia Pacific vice chairman of the residential division at Centaline, said attractively priced new homes on the market and adverse weather impacted secondary sales, even though the US Federal Reserve held interest rates steady as expected.  Hong Kong Property Services reported only two deals at blue-chip estates, down by 78 percent and hitting a two-week low.

Over the Weekend 
COUNTRY GARDEN (02007.HK) announced that for the single month of April 2024, the Group achieved contracted sales amounted to approximately RMB3.85 billion, slumping 83.03% yearly, with contracted sales GFA attributable to the shareholders of the Company of approximately 430,000 square meters.

Annie Yau Tse, Chairman of Hong Kong Retail Management Association (HKRMA), said that less than 10% of HKRMA members tracked business hike in April this year, while more than 90% of the members reported declines. Among them, only fast food and telecommunications retailers recorded a faint increase in business.  Retailers with business decreases ranging from single-digit to low-double-digit were involved in local supermarkets, food stores, electrical appliance stores and furniture stores. On the other hand, retailers in the 20%-40% business decline range were in categories of watch and clock, jewelry and health food sectors.  Tse added that Hong Kong's retailers remained jeopardized by factors such as Hong Kong people's continued northbound spending, tighter bank lending, high interest rates, and global uncertainties, which stifled the business environment persistently.  She also opined that the current duty free allowance of $5,000 for each Mainland visitor was relatively low, and hoped that the Hong Kong Government would reach a consensus with the Central Government to gradually raise the allowance in the future

The Centa-City Leading Index (CCL) last printed at 146.48, down 0.28% WoW.  The data reflects the market situation in the week when the first price list for PARK SEASONS, Phase 12B of Tseung Kwan O's LOHAS Park, was released on 11 April, according to Yeung Ming Yee, senior associate director at Centaline Property Research.  The CCL softened after the incline in 2 consecutive weeks, and remained at the 146-level in the past 3 weeks. The market continued to focus on new first-hand properties, while the second-hand market was pressured, with stagnated property prices. It is believed that the CCL will remain in a narrow range between 145 and 150 in the short term. 

IMOTIONAUTOTECH (01274.HK) marked a three-day free fall after setting an all-time high. It last printed at $58.8, collapsing 40.46%, on volume of 391,300 shares and

turnover of $32.0779 million.   According to hearsay, Tesla had started cooperation with BIDU-SW (09888.HK) on map and navigation functions this Monday (29 April), removing major obstacles for Tesla's Full Self-Driving (FSD)'s foray into Mainland China market.  In response, HK-listed stocks with self-driving concept were in demand on that day. IMOTIONAUTOTECH were amongst them, hitting a new high and concluding at $112.3.

Hong Kong is most likely to postpone the waste charging scheme again, South China Morning Post quoted sources as saying. Some government advisors warned that if the Hong Kong government insists on implementing the controversial initiative in August, it may undermine the government's prestige because of its impact on Hong Kong as a whole, and on low-income earners in particular.  It is said that senior officials have begun preparations for another postponement of the scheme, with many advisors believing that there is a 99% chance that the waste charging scheme will not be fully implemented in August.

The Chief Executive has approved the appointment of Carlson Tong Ka-shing as Chairman of HKEX (00388.HK) with immediate effect. The approval was made under the Securities and Futures Ordinance (SFO) (Cap. 571). Tong's chairmanship will coincide with his term of appointment as a member of the Board of Directors of the HKEX, which will conclude at the end of the 2025 Annual General Meeting of the HKEX.

EUROPE & US RECAP
DAX 0.59%, CAC 0.54%, FTSE 0.51%
Markets opened higher and worked slightly better through the morning, they spiked higher on the weak US jobs report but then sold down into the close.

Société Générale reported a smaller-than-forecast decline in first-quarter profit, and Crédit Agricole which saw a leap in net profit. Both stocks were among the top performers.

Novo Nordisk weak through Friday morning, extending a 2.7% loss on Thursday after Q1 results.

UK retail footfall recorded a weak April amid wet weather, while Turkey’s inflation rate climbed to nearly 70%.

DOW 1.18%, NDX 1.99%, S&P 1.26%, Russel 2K 0.97%
US markets opened higher after a much weaker than expected jobs report.  The ISM services index saw contraction for the first time in a year.  While Corn futures rose about 1% on Friday to trade at a nearly four-month high of 464.75 per bushel.

Markets eased back initially before working better but eased back slightly in the last hours of trading.

Strong quarterly reports from major Dow components also contributed to Friday’s rally. Apple 6% after it announced a $110 billion share repurchase and a top -and bottom-line beat. Biotech stock Amgen surged nearly 12% after posting better-than-expected earnings and offering a positive update on an experimental obesity drug. Shares notched their best day since 2009.

The auditing firm for Trump Media and the auditor’s owner were charged Friday with “massive fraud” by the US Securities and Exchange Commission for work that affected more than 1,500 SEC filings, the federal regulator announced.

Banks JPMorgan Chase -0.6%, Citigroup 0.84% Wells Fargo 0.18%, Amex -0.74%
Ecommerce Meta 2.33%, Apple 5.98%, Amazon 0.81%, Netflix 2.51%,  Disney 0.92%, Zoom Video -1.61%, Alphabet 0.31% and Microsoft 2.22%,
Tech NXP Semi 1.41%, Nvidia 3.46%, Micron 2.11%, AMD 3.04%, Skyworks 3.11%
Industrial/Discretionary  Boeing 0.53%, Caterpillar 0.39%, Simon Property 1.11%, Kohl’s -1.91%, Nordstrom 0.6%, Gap 3.85%, United Airlines -0.06%, Carnival -0.14%, Wynn Resorts 1.51%, 
Energy Chevron -0.3%, Exxon Mobil -0.21%,  
Consumer Staples Campbell Soup -2.2% General Mills -1.05%, JM Smucker 0.23%

DAILY DATA
USD weaker, Bitcoinup 0.22% at 63.900.55 ,  VIX -8.11% @ 13.49,  US T10 down 7 bpts at 4.5% and T2  down 6 bpts at 4.814%  after the weak jobs report.
OIL Brent -0.85%, WTI -1.06% 
Gold 0.02% (dipped on the weak jobs report as some investors locked in recent gains), Silver -0.16%, Copper 1.86% Platinum 0.37%, Palladium 1.27%.