Things to know before trading Asia on Monday

A summary of the FT Weekend and The Weekly Economist along with other weekend press reports

Overview
TikTok stopped working in the United States late on Saturday and disappeared from Apple and Google app stores ahead of a law that takes effect on Sunday requiring the shutdown of the platform used by 170 million Americans. President-elect Donald Trump has said he would "most likely" give TikTok a 90-day reprieve from the ban after he takes office on Monday, a promise TikTok cited in a notice posted to users on the app. “ A law banning TikTok has been enacted in the U.S. Unfortunately, that means you can't use TikTok for now. We are fortunate that President Trump has indicated that he will work with us on a solution to reinstate TikTok once he takes office. Please stay tuned," the message notified users trying to use the app late on Saturday night. "The 90-day extension is something that will be most likely done, because it's appropriate," Trump told NBC. "If I decide to do that, I'll probably announce it on Monday."

Wider trading on Monday is likely to be cautious and with US markets closed volumes are likely to be light. We get the opening remarks from Davos; the theme being ‘a call for collaboration in the intelligence age’. US markets closed Friday higher and indicators are that Asia will open higher too; I think with caution as investors watch to see what Trump actually does as he takes over the presidency. Not least because many are expecting Trump to be seeking retribution on those that he thinks have crossed him..

It will be interesting to see whether other Asian countries benefit from the fact that many Chinese tourists there were intending to go to Thailand for the Lunar New Year holiday after are likely to cancel after Chinese actor Wang Xing went missing.

FT highlights from Friday and the Weekend Edition

Top US court upholds Tik­Tok ban
▸ Video app facing black­out ▸ China’s Byte­Dance told to sell ▸ Rul­ing cites secur­ity fears

Trump says he’s spoken to President Xi about this in their first call in four years. Interesting that we are told the call mentioned Tik Tok but not wider geopolitics or trade relations. But the ban is likely to impact Apple, Google, Oracle and many others who currently provide it with services; if they do then 'they will face fines of $5,000 per user.’

We wait to see what Trump says on the matter on Monday or Tuesday.

Gilan Tett writes in the Opinion section Trump must avoid spook­ing bond mar­kets. Everyone is in the same boat … waiting to see what will actually happen. She concludes ‘

'But whether he (Scott Bes­sent) has the polit­ical power — or savvy — to do this is any­one’s guess. He is cer­tainly in a race against time. So investors had bet­ter keep watch­ing those Treas­ury yields.

After all, one thing that Trump does not want on his watch is a full-blown mar­ket melt­down, let alone a Maga revolt over sur­ging mort­gage rates. If any­thing is going to impose dis­cip­line on his admin­is­tra­tion, it might just be those bond rates; indeed, it is prob­ably the only factor that will.’

I cannot remember a new administration coming in and the markets having so little real insight into what policy would actually be.

Read also Tech chief wel­com­ing ‘Tik­Tok refugees’A surge of US users on his Red­Note app could threaten China’s Great Fire­wall. 'Xiao­hongshu, a popular social media app in China, was not well known out­side the coun­try until an impend­ing ban on Tik­Tok in the US led to an unex­pec­ted surge in Amer­ican users. They are call­ing Xiao­hongshu, which does not have an offi­cial Eng­lish name, Red­Note.’

'But for Mao, no rela­tion to Chair­man Mao, it is no laugh­ing mat­ter. He works in a sens­it­ive reg­u­lat­ory envir­on­ment where reg­u­lat­ors do not look kindly on any breach of the Great Fire­wall — a digital divide that sep­ar­ates China’s online pop­u­la­tion from the out­side world. Xiao­hongshu has respon­ded to its new­found US pop­ular­ity by racing to update con­tent mod­er­a­tion con­trols. Its co-founder and chief exec­ut­ive, thrust into a media spot­light that he act­ively avoids, has remained silent.'

Brus­sels orders X algorithm dis­clos­ure
Com­mis­sion sharpens focus on social media site after Musk inter­ven­tions

I think interesting as Musk has increasingly used X to push his own agenda and because of his closeness to Trump. This action seems from Musk’s support for the Alternative for Germany party and other political interference in European politics.

Also see UK premier touts ties with Trump in push for trade deal
Sir Keir Starmer, Bri­tain’s prime min­is­ter, said he could strike a trade deal with Don­ald Trump and avoid pun­it­ive tar­iffs on the UK as he dis­missed as “noises off” Elon Musk’s strident cri­ti­cism of his lead­er­ship.

Bank of Eng­land delays new cap­ital rules ahead of Trump’s pres­id­ency
The Bank of Eng­land has delayed the start of new cap­ital rules for banks by a year while it waits to see how the incom­ing Trump admin­is­tra­tion will imple­ment the global Basel agree­ment in the US. Even the BoE is unsure of what the implications of Trump taking over at the White House.

‘Bide­nom­ics’ boos­ted growth but left work­ing Amer­ic­ans feel­ing worse off
Out­go­ing pres­id­ent over­came eco­nomic upheaval but his policies failed to res­on­ate with voters.

'The US unem­ploy­ment rate is near his­tor­ical lows, and infla­tion is fall­ing, albeit slowly. The S&P 500 has also risen more than 50 per cent since Biden’s term began.

US eco­nomic policy has moved fur­ther from free-mar­ket ortho­doxy towards a big­ger role for the state. “Bide­nom­ics”, in the pres­id­ent’s own words, was about “grow­ing the eco­nomy from the middle out and the bot­tom up.”’

But ordinary people just don’t feel it. The article points out covid support payments raised the prices of everyday necessities and fuelled inflation. Much of the spending in hindsight was poorly targeted but then no one had ‘covid’ experience.

'Low-income house­holds spend more of their income on essen­tials, which jumped the most in price, accord­ing to research by Oxford Eco­nom­ics. “The irony of Biden’s pres­id­ency was that lower- and middle-income house­holds suffered the most,” said Moore. With sav­ings built up dur­ing the pan­demic now largely spent, the share of loan bal­ances in ser­i­ous debt delin­quency — defined as late pay­ments of 90 days or more — on credit cards and auto loans are near their highest since the after­math of the 2008 fin­an­cial crisis. Des­pite the Biden admin­is­tra­tion’s focus on “middle-class Amer­ic­ans”, it has been cor­por­ate Amer­ica that has really boomed, par­tic­u­larly as enthu­si­asm over arti­fi­cial intel­li­gence pushed equity prices higher.'

Many think in time history will remember Biden for the longer term good that the 'indus­trial strategy — pur­sued not only through the IRA but also the Chips Act and pro­tec­tion­ist policies placed on Chinese com­pet­it­ors’ will be the key points remembered; only time will tell.

The question now is whether Trump can maintain the trajectory of the economy… he inherited a strong economy last time and left it poorer. What will he do this time and what will the ‘ordinary’ people feel about that.

See also Trump’s plans for tar­iffs and tax cuts risk high infla­tion, IMF warns

US sales help Cartier-owner Richemont beat fore­casts in boost for lux­ury sec­tor
A big turn around from years of Chinese sales supporting luxury sales. It will be interesting to see if that continues under Trump.

Poland warns cyber attacks from Moscow are ‘con­stant’ ahead of polls. Underlines the impact that Russia is exerting on free countries. Like China, both are keen to spread disinformation in other countries but claim ‘foul’ when information about themselves is revealed; as is being seen in Hong Kong in the trial of Jimmy Lai and others under the ’National Security Law’.

Investors fear Trump policy agenda will put strain on M&A deals. Top deal­makers and investors have warned that the incom­ing Trump admin­is­tra­tion could use the approval of cross-bor­der deals to pres­sure for­eign gov­ern­ments into align­ing with US policy pri­or­it­ies, such as increased defence spending.

Interesting speculation and after Monday we may get more insight into what will actually happen but like so many issues we just don’t really know what will happen.

In a similar vein European auto industry seeks ‘grand bar­gain’ with Trump
▸Brus­sels urged to avoid US trade war ▸ Body also wants détente with China

Chinese cit­izens’ doubts increase over offi­cial eco­nomic growth claims and also read
Late surge ensures China’s growth hits 5% tar­get Offi­cial fig­ures lif­ted by front-load­ing of exports and stim­u­lus meas­ures.

Many say con­di­tions feel more like a reces­sion, des­pite rosy offi­cial fig­ures on expan­sion. Printing what was first published in the on-line version. But the fact that an increasing number of people are prepared to speak out is significant. It is unlikely to lead to revolt because the party apparatus remains firmly in control but it does add pressure on the credibility of the party. With 5% growth people should at least feel an improvement the fact that that are seeing the reverse is significant.

Last week the Economist carried an article about how pay rises to government workers was causing resentment; especially after a local government cadre suggest government workers should go out and spend to help revive the economy…. Which was resented because President Xi refuses to back payments to the wider population to stimulate domestic consumption. It also explains why there is an increase in people applying for government jobs which is likely to mean that wider China is deprived of entrepreneurs as the young elect for the economic safety of government jobs.

'In Septem­ber, the cent­ral bank announced mon­et­ary eas­ing and sup­port for the stock mar­ket. Beijing has also launched a pro­gramme to refin­ance local gov­ern­ment debt and speed up stim­u­lus spend­ing tar­get­ing infra­struc­ture and other areas.’ Whether this will be effective remains in question as PPI continued to indicate deflation.

One of the biggest issue I think is the opaqueness of Chinese data and the restrictions on third party verification. The fact that ordinary people are not feeling the 5% growth is the most telling I think.

China benefits from ‘dragon year’ birth boost but population falls again
Policymakers respond with tax breaks and other measures as figures reveal third consecutive year of decline; 9.54mn births in 2024, compared with 10.93mn deaths. The births were up from 2023 because 2024 was the year of the dragon a more auspicious birth character. Still the birth rate is below replacement level and with a lack of consumer confidence and concerns over the economy it is unlikely to pick up any time soon adding to the pressure on Beijing. It will impact pension contributions in years to come and the wider finances of China. Whilst China is a leader in automation which helps in labour productivity that still depends of demand for the products being made; something that Trump is likely to have an influence on.

Now, some 20% of the population is over 60 years old; leading to a rise in demand in the ’silver economy’ - products and services for the aged.

It is also worth noting that several studies over the past few years have shown that no government has been successful in instigating policies that have had a significant impact on increasing child brith rates. China is less likely than most to be an exception, the policies of restricting family size were so well, instigated from 1979, that reversing the mind set is very difficult. Partially because part of the social contract is that the party doesn’t make mistakes so reversing policies is that much harder if Beijing is going to remain credible.

TSMC cuts profit tar­get as cost of chip plants rises
Taiwan Semi­con­ductor Man­u­fac­tur­ing Com­pany has cut its prof­it­ab­il­ity tar­get des­pite roar­ing demand for arti­fi­cial intel­li­gence chips, as the cost bur­den of diver­si­fy­ing global chip sup­ply chains starts to bite.

The reason firms outsourced chip making and the wider globalisation of supply chains, was that costs at home were too high. Now for national security reasons, supply chains are being revised and costs are going up. Much of this is because China, under President Xi, decided to try and change the world order. Until there is global agreement on the world order that is not going to change. It will be interesting seeing what direction Trump’s agenda will push the world order. Make America great again doesn’t sound like its in favour of globalisation.

Still for TSMC the outlook remains bullish; it remains the world leader and importantly remains committed to investing in its continued dominance of its sector.

Rio pos­it­ive on Chinese iron demand. It says is sees signs of stabilisation in the property market, although overall there continue to be mixed signals due to headwinds. Elsewhere is sees US as stable and Europe as uneven.

The miners themselves are re-orientating towards those metals needed for energy transition like copper and lithium. But China remains a ‘wild card’.

Also see LEX Miners’ M&A dreams are an endur­ing resource

AstraZeneca over­hauls scan­dal-hit China divi­sion
New man­age­ment seen as vital to drug­maker get­ting growth back on track.

The firm has taken action despite not receiving any formal explanation of why Wang or other senior managers were detained. That is a big problem for international firms looking to navigate the Chinese administration and legal tightropes. It could also mean that despite being a huge potential market it will increasingly be marginalise as firms put it again into the ’too difficult’ to deal in category. Especially drug companies where increasingly China wants to negotiate national price lists.

A big problem is that the health service is under funded which makes it susceptible to corrupt practices. The fact that the global drugs industry has long had a problem with the relationship between doctors and drug reps, that is amplified in China because of the under funding, both western drug companies and Chinese medicine providers seem to ‘work the system’ to their advantage.

Apple loses its smart­phone crown in China
'Local smart­phone makers Vivo and Hua­wei leapfrogged Apple to become the top two sellers in the Chinese mar­ket last year, deal­ing a blow to the iPhone maker as it struggles to intro­duce AI fea­tures on the main­land and fight com­pet­i­tion from domestic rivals.’

An example of how Beijing looks to stimulate ‘patriotic’ buying. It is happy to open its markets once it knows that it has domestic brands that can compete and Beijing and its netizens are not against playing the patriotic card. Something I think Trump is likely to adopt too. The question is will US citizens be so willing to heed the call?

US defence sec­tor fears Trump will muster the tech dis­rupters
Northrop and peers risk los­ing budget share to Anduril and other makers of unmanned sys­tems.
It notes Trump 'will poten­tially be more dis­rupt­ive than his first term, when he showed a will­ing­ness to shake up the status quo and inter­vened in pro­cure­ment decisions.’

Seems to outlook for defence stocks could see a shake up. Spending patterns could change, especially if the lessons from the Ukraine war are taken to heart.

It notes 'Cuts in some of the large weapons pro­grammes are pos­sible — espe­cially if the Pentagon looks to release spend­ing for new types of tech­no­logy focused on arti­fi­cial intel­li­gence or soft­ware.

Lock­heed Mar­tin’s F-35 — the world’s largest defence pro­gramme — is seen as the biggest tar­get fol­low­ing Elon Musk’s cri­ti­cism of the stealth air­craft last year in social media posts. It accounts for more than 25 per cent of Lock­heed’s sales alone.’

It concludes “Unlike in tech or whatever, the mil­it­ary can­not take unac­cept­ably high levels of risk,” he said, adding: “Elon can blow up a rocket or two but if the US mil­it­ary loses a war, it is ter­minal.”

Aus­tralia’s Applied EV devel­ops robotic util­ity vehicles designed for ‘crappy jobs’.
'Applied EV, an elec­tric-vehicle tech­no­logy com­pany that emerged from the ashes of a once proud auto­mot­ive sec­tor, is plan­ning a list­ing after deep­en­ing a part­ner­ship with Japan’s Suzuki to make autonomous vehicles designed for “dull and dan­ger­ous” jobs.'

Underlines that whilst autonomous taxi’s and driving in cities required huge investment; there are some ‘crappy’ (dull or dangerous) jobs that can be done by autonomous vehicles for less.

Pen­sion funds dabble in tokens after bit­coin’s surge
Con­ser­vat­ive trust­ees in staid corner of fin­ance find it hard to ignore out­sized returns.
After year’s of dismissing crypto as worthless they are having to re-asses their stance and even a small adoption is likely to have a huge impact and was such reinforce crypto’s legitimacy - that is somewhat ironic from those that sort to see it fail.

UK busi­nesses out­pace cor­por­ate Amer­ica for share buy­backs
FTSE 100 busi­nesses adopt prac­tice that has attrac­ted cri­ti­cism from poli­cy­makers.
'The trend marks a shift in think­ing among UK com­pan­ies, which have his­tor­ic­ally favoured dividends as a way of return­ing money to share­hold­ers, mak­ing the Brit­ish mar­ket attract­ive to income investors.’ It notes that buybacks are more tax efficient than dividends; obviously something the authorities should review. An interesting read; it concludes '“It also reflects the fact that UK com­pan­ies, by his­toric stand­ards, are very good value,” Hall said. “Given where valu­ations are [in the UK] at the moment, share buy­backs look pretty sens­ible.”’

The Economist
A number of interesting articles

The Trump doctrine: America’s new foreign policy; will he upend 80 years of American foreign policy. A superpower’s approach to the world is about to be turned on its head. As mentioned about Pete Hegseth could not name a single member of the regional bloc during his confirmation hearing; which potential is not a good sign for Asia.

Also worth reading Banyan Can Donald Trump maintain Joe Biden’s network of Asian alliances? Discipline and creativity will help, but so will China’s actions.

Other interesting articles

Old friends, new plans India’s Faustian pact with Russia is strengthening
The gamble behind $17bn of fresh deals with the Kremlin on oil and arms

Terms of trade What North Korea gains by sending troops to fight for Russia
Resources, technology, experience and a blood-soaked IOU.

The Nikkei also has an article 'North Korean troops told to choose suicide over capture in Ukraine’ : Over 300 North Korean soldiers killed in battle, South Korea's spy agency says. South Korea's National Intelligence Service told lawmakers Monday that over 300 North Korean troops have died along with more than 2,700 wounded while supporting Russia's war efforts. A lawmaker later provided a summary of the briefing to reporters. Among the dead soldiers, notes were discovered indicating that the regime pressured the troops to kill themselves rather than be taken prisoner, the NIS alleged. Some notes contained hopes of joining the ruling Workers' Party of Korea or being pardoned.

K-drama After the president’s arrest, what next for South Korea?
Some 3,000 police breached his compound. The country is dangerously divided

The Voldemort of economic plans An initiative so feared that China has stopped saying its name. “Made in China 2025” has been a success, but at what cost? A good take at the policy that first indicated that a change in the world order was what China wanted! But it hasn’t had the desired effect.

Closing time at the bar Why foreign law firms are leaving China
A number of them are in motion to vacate

Black jails and angry wails An outrage that even China’s supine media has called out
Anger is growing over a form of detention linked to torture and deaths

The Telegram Marco Rubio will find China is hard to beat in Latin America
China buys lithium, copper and bull semen, and doesn’t export its ideology

School’s out Why elite MBA graduates are struggling to find jobs
Is a degree still worth it?

Housekeeping

On Monday morning I will be on RTHK’s Money Talk with host Andrew Work and Hao Zhou, Chief Economist at GTJAI. If you want to raise a question or just listen to the show please click here https://www.rthk.hk/radio/radio3/programme/money_talk

On Thursday afternoon I was on RTHK’s 'The close’ with host Jeff Cheung and Priyanka Kishore of Asia Decoded; if you want listen to the programme you can find it here: https://www.rthk.hk/radio/radio3/programme/the_close

For leading independent research, click on http://ERI-C.com it is a great platform where independent research vendors list their research and trading analysis. ERI-C is free to access, you can browse different independent research providers, most offer free trials; so worth a look.

Mark Tinker recently posted the Latest thoughts from Market Thinker - ’P(review) The return of Domestic Politics matters as much if not more than GeoPolitics for 2025. Reviews last years calls and looks forward at the issues likely to face investors in 2025.

MARKET INDICATIONS

Australia
Market to open higher following the US market close and the speculation over a deal between Rio and Glencore
No Data due

Japan
Likely to open higher following the US.
Yen closed 156.3 in US.
Data due 10 minutes before market opens
Machinery Orders Nov MoM vs 2.1% Oct (F/cast is 0.3%)
Machinery Orders Nov YoY vs 5.6% Oct (F/cast is 5%)
Later
Capacity Utilisation Nov MoM vs 2.6% Oct (F/cast is 0.2%)
Industrial Production Nov MoM vs 2.8% Oct (F/cast is -2.3%)
Tertiary Industry Index Nov MoM vs 1.4% Oct (F/cast is 0.1%)

S Korea
To open higher following the US markets on Friday with tech in focus. On Friday shares ended slightly lower on foreign selling and retail investors were buying; with China's better-than-expected economic growth falling short of boosting investor sentiment. The Korean won fell against the US dollar. Volumes remain moderate. Auto’s & Shipbuilder’s led the declines.
Data due
10 year KTB Auction vs 2.665% prior

Taiwan
Expect market to open higher following the US close on Friday.
No Data Due

China
Market to open higher; Golden Dragon China Index closed up 209pts 3.18% at 6,776 but upside may be limited as Trump takes over the US administration.
Yuan weakness remains adding to the pressure on Beijing.
Data Due 15 minutes before the open
Loan Prime Rate 1 year Jan vs 3.1% Dec (F/cast is 3.1%)
Loan Prime Rate 5 year Jan vs 3.6% Dec (F/cast is 3.6%)

Hong Kong
HSI to open higher after ADRs closed up 246pts 1.24% at 19,829 with only SHKP and CK Hutch in the red. Recent increased short selling could prompt a short squeeze on the open.
Data Due after market
Unemployment Rate Dec vs 3.1% Nov (F/cast is 3.1%)

Macau - No Events scheduled this week

Singapore - Data Due

Malaysia - Data Due
Balance of Trade Dec vs MYR 15.29B Nov (F/cast is 16.5B)
Exports Dec YoY vs 4.1% Nov (Consensus is 9%)
Imports Dec YoY vs 1.6% Nov (Consensus is 3.3%)

Indonesia - No Data Due
Philippines - No Data Due
Thailand - No Data Due
Cambodia - No Data Due
Vietnam - No Data Due
India - Data Due

Europe Data Due
Eurozone Construction Output, Eurogroup Meeting
Germany PPI 3 & 9 month Bubill Auction
France 12, 3 & 6 month BFT Auction
United Kingdom No data due
United States - Markets closed

HEADLINES & NEWS

AUSTRALIA

McDonald’s has cut breakfast service timings by 90 minutes, the company said, after a shortage of eggs caused by bird flu outbreaks that have led to the slaughter of about 1.5 million chickens. “Like many retailers, we are carefully managing supply of eggs due to current industry challenges,” McDonald’s said on Facebook, adding that from Tuesday it would stop serving breakfast at 10:30 a.m. instead of the usual time of midday. “We are working hard with our Aussie farmers and suppliers to return this back to normal as soon as possible,” the fast food company said.

The boss of Qantas Airways has acknowledged the “anger” of thousands of customers who were sold tickets for already-canceled flights. “Everyone feels pain at the anger,” Qantas CEO Vanessa Hudson told CNN’s Richard Quest in an exclusive interview at an airline industry conference in Dubai Monday. “It’s not just me; (it’s) 25,000 people that work for us as well. Because not only (did) we let our customers down, we let our people down.” Last August, Australian regulators accused Qantas in a lawsuit of selling tickets for more than 8,000 flights that the airline had already canceled — affecting more than 86,000 customers. Qantas agreed last month to pay 120 million Australian dollars ($79 million) to settle the lawsuit. Of that, about 20 million Australian dollars ($13.3 million) will go to the affected customers. The remaining 100 million Australian dollars ($66.5 million) is a fine — the biggest ever for an Australian airline, according to Reuters.

Minister reveals green transition ‘truth’ Resources Minister Madeleine King warns support for Labor’s renewable transition will evaporate if voters lose their lifestyles, as Anthony Albanese prepares to reveal a plan to get aluminium smelters switched to renewables by 2036.

Tens of thousands of people in Australia's New South Wales state were without power on Saturday after a low pressure system brought damaging winds and heavy rains, sparking flood warnings. Around 28,000 people were without power in Sydney, the state capital and Australia's largest city, and 15,000 had no power in nearby Newcastle city and Hunter region, power company Ausgrid said on its website on Saturday morning. The state's emergency services agency fielded 2,825 callouts for assistance since Friday, mostly for fallen trees and properties with wind damage, it said on its website.

"It is still a dynamic situation, and I urge people in affected areas to stay up to date with the latest emergency warnings and follow the advice of emergency services," federal emergency management minister Jenny McAllister said in a statement announcing disaster support funding.

JAPAN

Foreign tourists to Japan hit record 37m in 2024, up 47% on weak yen As visitors from China fuel boom, consumption reaches all-time high of $52bn. +VE for Tourist plays

Honda's (7267.T) U.S. financing arm was ordered on Friday by the U.S. Consumer Financial Protection Bureau to pay $12.8 million for reporting inaccurate information that affected the credit reports of 300,000 drivers of Honda and Acura vehicles. The CFPB said American Honda Finance deferred some drivers' loan payments during the COVID-19 pandemic, only to then tell credit reporting agencies that the drivers were delinquent when they should have been reported as current.

The Bank of Japan is expected to hike interest rates twice in 2025 and twice more in 2026, International Monetary Fund chief economist Pierre-Olivier Gourinchas said on Friday. In its latest World Economic Outlook, the IMF forecast that Japan's economy would grow by 1.1% in 2025, moderating slightly to growth of 0.8% in 2026, leaving its October forecast unchanged. "We're ... expecting that there will be something like two more rate hikes by the Bank of Japan in 2025 and two additional rate hikes in 2026," Gourinchas said, adding that the gradual pace of tightening was warranted and would ensure that the economy was able to meet its inflation target.

Most Japanese companies with operations in the United States are preparing for possible additional tariffs under the incoming Trump administration, according to a survey released on Friday by the Japan External Trade Organization. Those efforts include strengthening manufacturing and procurement in the U.S. and considering product price hikes, the survey showed. It was conducted earlier this month and targeted 694 companies, the Japanese government-related trade body said. Of the 123 respondents that expected to be affected by tariff policies, nearly three-fourths said those effects would be negative for their business, while 17% said they would be mixed and 10% said they would be positive. Japanese companies also expressed concerns about the effect of U.S. excise taxes targeting other countries, while a proposed 60% tariff on Chinese goods was seen as likely to have the biggest impact on supply chains.

Foreign minister said on Friday he would highlight the economic and national security value that the United States' key Asian ally offers during his visit to Washington for President-elect Donald Trump's inauguration on Monday. During his four-day stay beginning Sunday, Foreign Minister Takeshi Iwaya will be the first senior Japanese official to meet members of the incoming president's governing team. Iwaya said he was likely to meet with Trump's pick for secretary of state, Senator Marco Rubio, who is expected to be confirmed on Monday. Iwaya said Japan's commitment to allocating 2% of gross domestic product to defence by 2027, in line with its national security strategy, was steadily progressing. "Japan's status as the leading U.S. investor over the past five years also demonstrates our contributions," Iwaya said at a regular press briefing. "I will thoroughly explain and ensure understanding of these efforts," he added.

SOUTH KOREA

Hundreds of supporters of South Korea's arrested president, Yoon Suk Yeol, stormed a court building early on Sunday after his detention was extended, smashing windows and breaking inside, an attack the country's acting leader called "unimaginable”. Yoon on Wednesday became the first sitting South Korean president to be arrested as he faces allegations of insurrection related to his stunning, short-lived Dec. 3 declaration of martial law that has plunged the country into political turmoil.

Law enforcement agencies on Sunday condemned the violent protests at the Seoul Western District Court, the first-ever riot targeting the judiciary in South Korea, vowing to restore order and hold those responsible accountable. Sparked by the formal arrest of President Yoon Suk Yeol earlier in the day, the attacks have sent shockwaves through the country.

The National Pension Service is set to give the upper hand to the current management of Korea Zinc, supporting management proposals such as cumulative voting in the shareholders’ meeting slated to take place Thursday. Holding a 4.51 percent stake in the zinc smelter, the decision by the NPS could swing the outcome of the proxy fight. On Friday, the NPS trustee commission decided to vote for the proposals made by the current management of Korea Zinc, including the adoption of a cumulative voting system and setting a 19-person cap on the number of directors on the board. Cumulative voting refers to a system that grants shareholders multiple votes, proportional to the number of shares they hold. The votes are multiplied by the number of directors up for election to the board of directors. With NPS support, the current management of Korea Zinc, headed by Chairman Choi Yoon-beom, could gain the upper hand in the ongoing power struggle with the MBK-Young Poong alliance, though the coalition recently took the lead with a stake of over 40 percent in the company. Choi and his side own a 34 percent stake. If the voting system is implemented, Choi and minority shareholders can pool their votes to certain director candidates, making it harder for the Young Poong-MBK alliance to take control of the board. The NPS further decided to vote for three director candidates proposed by each side.

Three major South Korean shipbuilders are expected to have posted an operating profit for last year, data showed Sunday. HD Korea Shipbuilding & Offshore Engineering Co. is forecast to have logged an operating profit of 1.43 trillion won ($980 million) in 2024, according to data compiled by Yonhap Infomax. Hanwha Ocean Co. likely swung to an operating profit of 169.1 billion won last year. Samsung Heavy Industries Co. suggested its operating profit surged 102.37 percent to 472.1 billion won in 2024. Industry watchers say the strong performance of the shipbuilders can be attributed to increased contracts amid the "super cycle" of the industry.

For Korean investors and companies looking to engage with California’s dynamic life science sector, Biocom California Honorary President Joe Panetta assured that the association offers a wealth of resources to create abundant opportunities for cross-country collaboration and innovation. "We want to find partners and work in hubs that bring opportunity to our members to expand their business and access to capital," Panetta said during a press briefing held Wednesday in San Francisco on the sidelines of the JP Morgan Healthcare Conference.

TAIWAN

The head of Taiwan's delegation to next week's inauguration of Donald Trump as U.S. president said on Saturday he was going there to extend the island's "highest blessings" to the United States. Taiwan, which China views as its own territory, enjoyed strong support from the first Trump administration, including regularising arms sales which have continued under President Joe Biden. But Trump unnerved Taiwan on the campaign trail by calling for it to have to pay to be defended. Taiwan parliament speaker Han Kuo-yu, a senior member of the opposition Kuomintang party and who unsuccessfully ran for president in 2020, said at Taoyuan airport before leaving for Washington that many foreign leaders were also on their way even with the threatened heavy snow. "All of our delegation members likewise are taking this enthusiasm to the United States to represent (our) 23 million people, and we extend our highest blessings to the U.S. presidential team and to the people of the United States.”

Shares in the local tourism sector yesterday jumped 3.98 percent, much faster than the TAIEX’s 0.53 percent increase, after China voiced more interest in resuming cross-strait tourist exchanges in Shanghai and Fujian Province. The Chinese Ministry of Culture and Tourism yesterday morning wrote on its Web site that the two sides of the Taiwan Strait should step up communication, and provide high-quality travel services and products for people. China is making preparations and would in the near future allow residents of Fujian and Shanghai to go on group tours to Taiwan, in line with the bid to normalize cross-strait tourism and facilitate exchanges in other fields, it said.

CHINA

President-elect Donald Trump has told advisers he wants to travel to China after he takes office, the Wall Street Journal reported on Saturday, quoting people familiar with the discussions. Trump has expressed interest in traveling to China in his first 100 days in office, the report said, citing one of the people. Trump's inauguration is Monday, and Chinese state news agencies said on Friday that Chinese Vice President Han Zheng will attend as Beijing stands ready to strengthen cooperation. Trump and Chinese President Xi Jinping, through their representatives, have discussed meeting in person, with one option involving the incoming American president inviting the Chinese leader to the U.S., the WSJ added. The Chinese embassy in Washington did not immediately respond to a request for comment.

President Xi Jinping said Beijing is ready to work with Hanoi to build a community with a shared future of strategic significance, China's official Xinhua news agency reported on Saturday. The remark came in a congratulatory message by Xi to Vietnam's ruling Communist Party chief To Lam and President Luong Cuong to mark the 75th anniversary of diplomatic ties between the two countries.

China's concept of building a "community with a shared future" is extended to countries with which it desires to build a long term relationship based on strong alignment of goals, interests and even ideology. Describing this relationship to be "of strategic significance" is an emphasis on the value that China ascribes to its ties with Vietnam. Xi said that in the 75 years since the establishment of diplomatic relations, the countries had struggled side by side and supported each other during the years of striving for national independence and people's liberation, describing the nations as "comrades and brothers", according to Xinhua.

The China Geological Survey announced that a massive ion-adsorption rare earth mine with potential resources reaching 1.15 million tons had been discovered in the Honghe area of Yunnan Province with support from the Ministry of Finance. Of which, key rare earth elements such as praseodymium, neodymium, dysprosium, and terbium exceed 470,000 tons, marking a significant breakthrough since the first discovery of an ion-adsorption rare earth mine in Jiangxi in 1969. This mine is expected to become China's largest medium-to-heavy rare earth deposit.

China's population fell for a third consecutive year in 2024, with the number of deaths outpacing a slight increase in births, and experts cautioning that the trend will accelerate in the coming years. The National Bureau of Statistics said the total number of people in China dropped by 1.39 million to 1.408 billion in 2024, compared to 1.409 billion in 2023. Friday's data reinforces concerns that the world's second largest economy will struggle as the number of workers and consumers declines. Rising costs from elderly care and retirement benefits are also likely to create additional strains for already indebted local governments.

The Philippines and the United States carried out joint maritime exercises for a fifth time in the South China Sea, Manila's armed forces said on Sunday, in a move that would likely irk China.

The Philippine military said in a statement it held a "maritime cooperative activity" with the U.S. on Friday and Saturday, its first for the year and fifth overall since launching the joint activities in 2023.

HONG KONG

Suspended
Trading in the shares of both CSMALL (01815.HK) +41% and CHI SILVER GP (00815.HK) was halted with effect from 3:21 pm Friday (17th), pending the release of an announcement which contains inside information of the companies.

Earnings

SF Holding (6936) reported a 12.34 percent growth in revenue from its express logistics business, supply chain, and international business in December, totalling 26.44 billion yuan (HK$28.09 billion), driven by promotional activities from e-commerce platforms. The express logistics business generated 19.63 billion yuan, an 8.64 percent increase from the previous year and parcel volume grew by 19.47 percent year-on-year. The stable freight rates and cargo volume for international sea freight lifted its supply chain and international revenue by 24.63 percent year-on-year, reaching 6.8 billion yuan.

Buybacks

AIA (01299.HK) repurchased 1.281 million shares of the company on the Stock Exchange of Hong Kong Friday (17th) at $54-55 per share, involving approximately $69.927 million. Since the ordinary resolution was passed on May 24, the company has repurchased nearly 486 million shares, accounting for 4.32% of its share capital.

HSI Short Selling Friday 21.4% vs 20.6% Thursday
Top shorts Longfor (960) 40%, Sands China (1928) 39%, Citic (267) 39%, Hang Seng Bank (11) 38%, CK Asset (1113) 37%, Henderson Land (12) 36%, JD Health (6618) 35%, China Res Power (836) 35%, Zhong Sheng (881) 35%, Sinopec (386) 33%, SinoPharm (1099) 33%, BoC Hong Kong (2388) 33%, Kuaishou (1024) 33%, Bidu (9888) 31%, Nongfu Spring (9633) 31%, Xinyi Solar (968) 31%, Geely Auto (175) 30%, Geely (175) 30%, Wharf REIC (1997) 30%, Hengan (1044) 30%, Ali Health (241) 30%, BYD Electronic (285) 29%, China Overseas (688) 29%, Bank of China (3988) 29%, Trip Com (9961) 29%, Lenovo (992) 29%, Xinyi Glass (868) 28%, China Res Land (1109) 27%, ENN Energy (2688) 26%, Li Ning (2331) 26%, CM Bank (3968) 26%, BYD (1211) 26%, CKH (1) 26%, Haier Smarthome (6690) 25%, China Res Mixc (1209) 25%, China Res Beer (291) 25%, JD (9618) 25%.

WATCH
Dried seafood shops had dim hopes for sales this Lunar New Year, anticipating a 20 percent drop compared to last year. Despite efforts to lower retail prices and adopt a “pile it high and sell it cheap” strategy to attract customers, some businesses remained cautiously optimistic about a slight increase in sales, driven by business clientele. Richard Poon Kuen-fai, managing director of On Kee Dry Seafood, said the festive atmosphere returning to the city this Lunar New Year. He believes citizens may be willing to spend on dried seafood after several months of low spending sentiment.

PICC P&C (02328.HK) announced that, under Chinese accounting standards, the original insurance premium income totaled RMB538.055 billion last year, up 4.3% YoY. Among them, motor vehicle insurance premium income rose by 4.1% YoY, accidental injury and health insurance premium income surged by 9.7% YoY, and agriculture insurance premium income dropped by 5.7% YoY.

The original premiums income of PICC GROUP (01339.HK) as derived from its operating subsidiaries PICC Property and Casualty (PICC P&C), PICC Life and PICC Health for 2024 were RMB538.055 billion, RMB106.003 billion and RMB48.695 billion, up 4.3%, 5.3% and 7.7% YoY, respectively, according to PICC GROUP's announcement.

CHINA VANKE (02202.HK) told some of its creditors that it has enough cash set aside to repay its 2.95% RMB bonds due on January 27, Bloomberg reported, citing sources. The bonds, which have RMB3 billion outstanding, last traded RMB98.4 Wednesday (15th), implying investors are confident the bonds will be repaid. It is not yet clear when or whether the Chinese developer will remit funds to repay the January 27 note, sources divulged. Separately, a batch of 3.45% RMB bonds due in May of CHINA VANKE was priced RMB73 today (17th). The company has US$4.9 billion of bonds maturing or facing redemption options this year, which is the highest annual amount in the company's record and the most among Chinese developers this year, report revealed.

Zhong Shanshan, China's richest man and the founder and chairman of NONGFU SPRING (09633.HK), posted on his WeChat Moments, blasting the four major e-commerce platforms for causing a large number of small and medium merchants to lose or have lost the ability to compete fairly, and a large number of job opportunities have been occupied by platforms, according to Chinese media. Zhong described the four major platforms as meat grinders of China's economy, which "makes us lose the opportunity to outperform in economy" and leads to an increase in internet hostility and violence. However, Zhong did not name the four major e-commerce platforms.

The Insurance Authority of Hong Kong (IA) released the provisional business statistics for the first three quarters of 2024, with total gross premiums reaching $480.8 billion. Of which, new office premiums (excluding Retirement Scheme business) of long term business were $169.6 billion, up by 15.7%, mainly composed of an increase of 18% to $162 billion derived from Non-Linked individual business which can be further broken down into participating business of $141.4 billion and other businesses of $20.7 billion, as well as a fall of 19.7% to $7.2 billion derived from Linked individual business. Some 58,000 Qualifying Deferred Annuity Policies were issued that brought in $3.7 billion or 2.2% of the total premiums for individual business. During the period, new business premiums derived from Mainland visitors dipped by 0.4% YoY to $46.6 billion, representing 27.6% of total new new office premiums for individual business. A majority of these policies were settled at regular intervals. Whole life, critical illness and medical policies accounted for about 59%, 28% and 5% of them respectively. Having regard to the seasonal travelling pattern of Mainland visitors, the related business statistics will be released at semi-annually rather than quarterly intervals from 1Q25.

The Macau Gaming Inspection and Coordination Bureau announced that last year's total gross revenue from different gaming activities amounted to MOP226.782 billion, with VIP baccarat gross revenue surging by 21% YoY to MOP54.764 billion, accounting for 24.1% of the total gross revenue. Last year's VIP baccarat gross revenue was equivalent to 40.5% of the MOP135.228 billion in 2019. After deducting VIP baccarat GGR from last year's total GGR, Macau's mass market revenue last year was MOP172.018 billion, accounting for 75.8% of the total GGR.

The Macau Financial Intelligence Office announced that the total number of suspicious transaction reports (STRs) received last year was 5,245, an increase of 13.67% YoY. Among them, the number of STRs received from games of fortune operators last year was 3,837, up 11.83% YoY, accounting for 73.2% of the total number of STRs.

On the ride of the policies of "one trip per week" and "multiple-entry permits" for travelers to Macau from Zhuhai and Guangdong-Macao In-Depth Cooperation Zone in Hengqin, Macau Government Tourism Office (MGTO) expected that Macau's visitor arrivals this year will reach 38-39 million, which is close to the level of 2019, according to a reassessment by the government, MGTO Director Maria Helena de Senna Fernandes was quoted by Radio Macau as saying. The Director also predicted that the average daily number of visitors during the Spring Festival Golden Week this year will be 185,000, with international visitors accounting for about 8,000 of the total.

Friday's closings in EUROPE & US.
DAX 1.2%, CAC 0.98%, FTSE 1.35%
European markets opened higher and worked higher through the day; Mining stocks led on rumours of a Rio Glencore merger but Novo Nordisk -4.3% on news the U.S. government announced it intends to negotiate pricing over the company’s blockbuster weight loss and diabetes drugs.

UK retail sales -0.3% MoM vs F/cast 0.4% rise; which combined with other weak data led to increased expectations that the BoE will cut rates this year; which weakened sterling. That could put pressure on UK listed stocks because of the high proportion of them rely on foreign earnings.

DOW 0.78%, NDX 1.51%, S&P 1%, Russel 2K 0.4%
US markets opened higher through the morning before drifting lower through the afternoon. Big Tech rallied after CPI and PPI showed inflation pressures easing and good banks earnings could suggest a goldilocks scenario for the economy …. But that will very much depend on what Trump does. But the expectation is that there will be deregulation and lower taxes. Crypto rallied.

Intel rallied as the beaten-up chipmaker continues to be a part of takeover speculation following the departure of its CEO in December. The stock, which was booted from the Dow in November, is still down more than 50% in the last 12 months.

Qorvo rallied on news that activist investor Starboard Value had amassed a 7.7% stake in the company. Sources told the paper that the investor is also seeking changes to improve Qorvo’s share price.

Banks JPMorgan Chase 1.92%, Citigroup 1.89% Wells Fargo 1.49%, Amex 0.35%
Ecommerce Meta 0.24%, Apple 0.75%, Amazon 2.39%, Netflix 1.87%, Disney 0.53%, Zoom Video -1.72%, Alphabet 1.62% and Microsoft 1.05%,
Tech NXP Semi 2.18%, Nvidia 3.1%, Micron 3.07%, AMD 2.55%, Skyworks 2.41%
Industrial/Discretionary Boeing 1.28%, Caterpillar 1.44%, Simon Property 0.83%, Kohl’s 1.17%, Nordstrom -0.12%, Gap 3.17%, United Airlines 1.2%, Carnival 3.19%, Wynn Resorts 2.63%
Energy Chevron 1.31%, Exxon Mobil 0.9%,
Consumer Staples Campbell Soup -0.71% General Mills 0.79%, JM Smucker -0.39%

DAILY DATA
USD steady, Bitcoin -0.85% (Sunday morning Asia), VIX -3.8% at 15.97
US T10 up 1 bpts to 4.617% and T2 up 4 bpts at 4.278%
OIL Brent -0.62%, WTI -1%
Gold -0.4%, Silver -2.14%, Copper -2.03% Platinum 1.75%, Palladium 0.95%.