Things to know before trading Asia on Monday. Complete with Marco Data impacting Asia Aug 26 -31,
Also The Weekly Economist summary and other news items
Asia
Little data to influence Asia on Monday. On Tuesday we get Chinese Industrial Production data which should give more insight into the state of the Chinese Economy. The only other data out of China this week will be the PMI’s due out on Saturday.
A Data light week for Asia but there will be a dump for Japan on Friday Unemployment data, Tokyo CPI data, Industrial Production Prelim, Retail Sales, Consumer Confidence, Housing Starts, Construction Orders.
This week US Q2 GDP second estimate out Thursday along with PCE data will be watched closely. US earnings is winding down but Invidia will report on Wednesday and expected to be good again, although investors will be wanting clarity on the impact of the delays in its new Blackwell chip. Ahead of that we get US Durable Goods
US China relationship in focus this week at US National security adviser Jake Sullivan travels to China to meet Chinese Foreign Minister Wang Yi. That comes as a number of Western airlines are slashing flights to China. In reaction to low demand and the high cost of flying around Russian airspace due to the war in Ukraine. All of which undermines their ability to compete with local carriers. BUT it also reflects a lack of interest and probably less business interest in China which will be negative for the economy.
Housekeeping
I will be on RTHK’s Money Talk on Monday; let them or me know if you have a topic you’d like discussed. https://www.rthk.hk/radio/radio3/programme/money_talk
For leading independent research, check out 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 take a look.
For macro assets allocation checkout Mark Tinker’s Market Thinking
https://www.market-thinking.com His latest blog 'August Analogues’. 'August certainly doesn’t have great seasonality, (apart from 2020) but we suspect that what we are seeing here is an unwind of the three big anomalies we have been highlighting for a while; the concentration risk in US Equities, the very low level of the VIX and the extreme undervaluation of the Japanese Yen. And the possible appearance of a new anomaly - the flight to quality in US Bonds is being explained as a recession signal, along with calls for the long awaited Fed Pivot. We doubt it will result in either.’
DATA impacting ASIA August 26 -31
Monday No Data Due
Tuesday 1 year Bill and 3 & 6 month Bill Auction
Wednesday No Data Due
Thursday No Data Due
Friday Consumer Confidence, Building Permits
Australia
Monday No Data Due
Tuesday No Data Due
Wednesday Monthly CPI Indicator, Construction Work Done
Thursday Business Confidence, Building Capital & Plant & Machinery Expenditure, Private Capital Expenditure.
Friday Housing Credit, Retail Sales, Private Sector Credit,
Japan
Monday No Data Due
Tuesday No Data Due
Wednesday Coincident and Leading Economic Indexes Final.
Thursday Foreign Bond and Stock Investment, 2 year JGB Auction
Friday Unemployment Rate, Jobs/Applications Ratio, Tokyo Core CPI (and Ex food & Energy), Industrial Production Prelim, Retail Sales, 3 month Bill Auction, Consumer Confidence, Housing Starts, Construction Orders
S Korea
Monday 5 year KTB Auction
Tuesday 20 year KTB Auction
Wednesday No Data Due
Thursday No Data Due
Friday Industrial Production, Retail Sales
Sunday Balance of Trade, Exports & Imports.
Taiwan
Monday No Data Due
Tuesday Consumer Confidence
Wednesday No Data Due
Thursday No Data Due
Friday No Data Due
China
Monday No Data Due
Tuesday Industrial Profits
Wednesday No Data Due
Thursday No Data Due
Friday No Data Due
Saturday PMI’s (Manufacturing, Non Manufacturing and General)
Hong Kong
Monday No Data Due
Tuesday Balance of Trade, Exports & Imports
Wednesday No Data Due
Thursday No Data Due
Friday Retail Sales
Macau
Monday Unemployment Rate
Tuesday No Data Due
Wednesday No Data Due
Thursday No Data Due
Friday Could get Balance of Trade
Singapore
Monday Industral Production
Tuesday 12 week & 4 Week Bill Auction
Wednesday 5 year Bond Auction
Thursday Export & Import Prices, PPI, 6 mth T-Bill Auction.
Friday Bank Lending
Indonesia
Monday No Data Due
Tuesday No Data Due
Wednesday No Data Due
Thursday No Data Due
Friday No Data Due
Philippines
Monday No Data Due
Tuesday No Data Due
Wednesday Budget Balance
Thursday No Data Due
Friday PPI
Thailand
Monday Balance of Trade, Exports & Imports, New Car Sales.
Tuesday No Data Due
Wednesday No Data Due
Thursday No Data Due
Friday Industrial Production, Current Account, Private Consumption & Investment, Retail Sales
Malaysia
Monday No Data Due
Tuesday No Data Due
Wednesday PPI
Thursday No Data Due
Friday M3 Money Supply
Cambodia
Monday No Data Due
Tuesday No Data Due
Wednesday No Data Due
Thursday No Data Due
Friday No Data Due
Vietnam
Monday No Data Due
Tuesday Foreign Direct Investment
Wednesday No Data Due
Thursday Balance of Trade, Industrial Production, Inflation Rate, Tourist Arrivals
Friday No Data Due
India
Monday No Data Due
Tuesday No Data Due
Wednesday No Data Due
Thursday No Data Due
Friday Government Budget Value, Foreign Exchange Reserves, Infrastructure Output, GDP Growth Rate
Europe
Data Due
Eurozone
Monday EU Bond Auction
Tuesday No Data Due
Wednesday Loans to Companies & Households, M3 Money Supply
Thursday New Car Registrations, Economic, Industrial and Services Sentiment, Consumer (Confidence Final, Inflation Expectations and Selling Price Expectations)
Friday Flash Inflation Rate, Core & CPI, Unemployment Rate
Germany
Monday Ifo Business Climate, Current Conditions and Expectations
Tuesday GDP Growth Rate, 5 year Bobl Auction
Wednesday GfK Consumer Confidence
Thursday CPI, Inflation Rate
Friday Unemployed Persons, Unemployment Change & Rate and could get Retail Sales.
France
Monday 12, 3 & 6 month BTF Auction
Tuesday No Data Due
Wednesday Consumer Confidence, Unemployment Benefit Claims, Jobseekers Total.
Thursday No Data Due
Friday Inflation Rate Prelim, GDP Growth Rate Final, Household Consumption, PPI
United Kingdom
Monday No Data Due
Tuesday CBI Distributive Trades
Wednesday 10 yr Index Linked Treasury Gilt Auction,
Thursday Overnight Car Production
Friday BoE Consumer Credit, Mortgage Approvals & Lending, M4 Money Supply, Net Lending to Individuals
United States
Monday Durable Goods Orders (ExTransport, Ex Defense, Non Defense Ex Air), Dallas Fed Manufacturing Index, 3 & 6 Month Bill Auction.
Tuesday Redbook, Case/Schiller Home Price, House Price Index, CB Consumer Confidence, Richmond Fed Indexes (Manufacturing Shipments, Services Revenues), Dallas Fed Services and Services Revenues Indexes. 2 year Note Auction, US Money Supply, API Crude Oil Stock Change.
Wednesday MBA (Mortgage Applications, 30 yr Mortgage Rate, Market Index, Reference Index, Purchase Index), EIA Oil Report,17 week Bill Auction, 2 year FRN Auction, 5 year Note Auction
Thursday GDP data 2nd Est. (Growth Rate, Price Index, Sales) Corporate Profits, Goods Trade Balance, Initial Jobless Claims, Continuing Jobless Claims and Four Week Average, Retail Inventories (Ex Auto) advanced, Wholesale Inventories advanced, Core CPE Prices 2nd Est., PCE Prices 2nd Est. Real Consumer Spending 2nd Est., Pending Home Sales, EIA Natural Gas Report, 4 & 8 week Bill Auction,15 & 30 year Mortgage Rate, 7 year Note Auction, Fed Balance Sheet.
Friday PCE & Core Price Index, Personal Income & Spending, Chicago PMI, Michigan Consumer Data Final (Sentiment, 5 year Inflation Expectations, Consumer Expectations, Inflation Expectations), Baker Hughes Rig Count.
Weekly Economist Articles
Headline is How would she govern?
Personality and policy
Kamala Harris can beat Donald Trump. But how would she govern?
Being a politician is about more than campaigning. More policy detail is needed
Leader Countries should act faster to curb the spread of mpox The slower the response, the more people will die
Asia
A succession battle in Hanoi. Vietnam’s new ruler: hardman, capitalist, hedonist
To Lam, the Communist Party’s new leader, has just met Xi Jinping. America is next
Asia | Banyan If a China and America war went nuclear, who would win?
After 45 days of conventional fighting nukes would be tempting, wargamers suggest
India’s women problem The rape and murder of a doctor in India is fuelling outrage
But public protests about violence against women have not achieved much
The really big issue is the attitude of men in India and that is crucial because the way that China got ahead was in allowing women to work. If India’s men cannot act properly then the country is likely to stagnate and the industries it wants to cultivate will locate elsewhere. Modi’s government is responsible for the law but so much of it has been undermined.
Asia | New city, new start? Indonesia’s new capital is built on vanity
President Jokowi doesn’t seem to be in any mood to leave politics behind
China
Sizing up the ticket. China’s rulers are surprised by Kamala Harris and Tim Walz
One has never been to China, the other has visited 30 times.
'For China’s rulers the ascent of the Harris-Walz ticket creates two difficulties. It challenges China’s nihilistic interpretation of American politics as racist and decrepit. And it has triggered a scramble to assess how a Harris administration might approach China relations, not least because Ms Harris’s credentials on dealing with China are limited, while Mr Walz has more experience of China than any vice-presidential candidate in decades.’ It also makes President Xi age an issue along with the fact that he has dropped women for the leadership.
Tossing eggs at a national pastime. Millions of Chinese people play guandan. Is that good or bad? The Communist Party is torn on the merits of the popular card game
The other gas problem Time for China to get serious about its methane emissions
Officials mull a future of less coal and fewer cows—and don’t like it
Access delayed Why are VPNs getting slower in China?
The government seems increasingly uneasy about people leaping over the great firewall
Chaguan In China’s “median city” people are surprisingly risk-averse
Our columnist travels there to ask ordinary people two mega-questions
Other
From Bangkok to Dubai Indian tourists are conquering the world
A booming middle class, budget flights and Bollywood
Tech on wheels Apple can’t do cars. Meet the Chinese tech giants that can
Baidu, Huawei and Xiaomi have built thriving auto businesses
Konbini combination. What a takeover offer for 7-Eleven says about business in Japan
Its merger with a Canadian firm would create a convenience-store goliath
A 7-Eleven convenience store
Blue-sky thinking India’s largest airline is flying high
IndiGo has conquered its home market. Its ambitions are rising
Danger signs Is America already in recession?
Some rules of thumb suggest so
WEEKEND FT
Headlines
Powell says he is ready to cut rates
▸ Hint of September move ▸ Dollar falls back ▸ Eye on labour market ▸ Inflation ‘sustainable’
Struggling Nigerians fly into storm as plush Airbus swells presidential fleet
Nigerian officials have defended the purchase of a multimillion-dollar jet that has swelled the presidential air fleet to almost a dozen craft as the country endures its worst economic downturn in decades.
Inside
US targets nations hosting Russia banks
Treasury signals it will ‘go after’ branches used by Moscow to evade controls. Still trying to curb Russia’s access finance which is supporting his war against Ukraine.
US national security adviser Sullivan set for first China trip
Jake Sullivan will make his first visit to China as US national security adviser next week for talks with foreign minister Wang Yi as part of the “strategic channel” created by the superpowers to stabilise relations.
Harris rebrands Democrats to take on ‘unserious’ Trump
Vice-president and allies home in on theme that personal freedoms are at stake
Opinion A new gold rush reflects the world’s deep worries
Biggest uranium supplier slashes production target
Kazatomprom, the largest uranium producer, has slashed its production target for 2025 due to project delays and sulphuric acid shortages, threatening to squeeze supplies of the radioactive fuel vital for nuclear power.
Microsoft to revamp Windows after CrowdStrike IT debacle
▸ Focus on system resilience ▸ Security summit ▸ Third parties fear exclusion
Chipmaker Kioxia files for biggest Tokyo IPO of year
The Japanese chipmaker taken private by Bain Capital in 2018 in an $18bn buyout, has applied to list on the Tokyo Stock Exchange in what brokers said was likely to be Japan’s biggest initial public offering this year.
MARKET opening indicators
New Zealand
NZX likely to open flat with little news to drive the market
No Data due
Australia
Market to open higher with energy names and miners +VE
No Data due
Japan
To opening higher following the higher close in the US. The strengthening Yen a slight concern.
Yen closed 144.37
No Data due
S Korea
Market to open higher with support from Tech
Data due
5 year KTB Auction
Taiwan
Expect market to open higher with Tech seeing interest.
No Data due
China
Market to open flat after the Golden Dragon China Index closed down up 16pts 0.3% at 5,620 having traded in a tight range all day. Sentiment remains weak.
No Data due
Hong Kong
Expect HSI to open highe; ADR’s closed up 96pts 0.55% at 17,487 with only CCB, ICBC, BoC and CK Hutch in red. Worth noting that the turnover dropped to HK$78.773B a six month low. Increased shorting on Friday make an initial short squeeze likely
No Data Due
Macau
Data due after market
Unemployment Rate Jul vs 1.75 Jun (F/cast is 1.7%)
Singapore
Data Due
Industrial Production Jul MoM vs -3.8% Jun (F/cast is 1.6%)
Industrial Production Jul YoY vs -3.9% Jun (F/cast is -0.7%)
Indonesia
No Data Due
Philippines
No Data Due
Thailand
Data Due
Balance of Trade Jul vs $0.22B Jun (F/cast is -1.5B)
Exports Jul YoY vs -0.3% Jun (F/cast is 0.0%)
Imports Jul YoY vs 0.3% Jun (F/cast is 0.4%)
Malaysia
No Data Due
Cambodia
No Data Due
Vietnam
No Data Due
India
No Data Due
Europe
Data Due
Eurozone 10 year & 5 Year Bond Auction
Germany Ifo Business Climate, Current Conditions and Expectations
France 12, 3 & 6 month BTF Auction
United Kingdom Pre market Consumer Confidence, CBI Distributive Trades
United States
Data due Durable Goods Orders (ExTransport, Ex Defense, Non Defense Ex Air), Dallas Fed Manufacturing Index, 3 & 6 Month Bill Auction.
HEADLINES and NEWS
JAPAN
Shigeru Ishiba, a former defence minister, said on Saturday he would run in the ruling Liberal Democratic Party leadership election on Sept 27 that will pick a successor to Prime Minister Fumio Kishida. Kishida will step down in September, ending a three-year term as leader of the world's fourth-largest economy. In a recent interview with Reuters, Ishiba endorsed the Bank of Japan's policy of gradually raising interest rates, saying the normalisation of ultra-loose monetary policy could push down prices and boost industrial competitiveness.
Former environment minister Shinjiro Koizumi will announce his candidacy for the ruling party leadership race at a press conference on Aug. 30, broadcaster TBS reported on Friday. Koizumi, the 43-year-old son of former Prime Minister Junichiro Koizumi, will become the latest contender for the Liberal Democratic Party (LDP) leadership election next month to replace Prime Minister Fumio Kishida.
Expect more candidates to come forward in the coming days.
The Bank of Japan can raise interest rates gradually as heightening inflation expectations leave further scope to normalise its ultra-loose monetary policy, the International Monetary Fund said on Friday. The speed of further rate increases will be "very data-dependent," as the BOJ will look at the pace at which inflation, wage growth and inflation expectations heighten in normalising policy, said IMF chief economist Pierre-Olivier Gourinchas. Gourinchas said Japan's inflation is higher than 2% and inflation expectations have started to move towards, or "maybe even a little bit above" the BOJ's 2% target. As a result, the BOJ is normalising the extremely loose monetary policy it has had for decades, which is "certainly something that we think is a good development for Japan," he told Reuters in an interview on the sidelines of the annual economic symposium in Jackson Hole, Wyoming.
Bank of Japan Governor Kazuo Ueda on Friday reaffirmed his resolve to raise interest rates if inflation stayed on course to sustainably hit the 2% target, suggesting recent market volatility would not derail its long-term rate hike plan. But Ueda warned that markets remained jittery and may affect the BOJ's inflation forecasts, a sign that yen and stock price moves will be key to determining the next rate hike timing.
Japan's major steelmakers Nippon Steel Corp and JFE Steel Corp will invest a combined 160 billion yen in a coal mine owned by an Australian mining firm to secure a stable supply of high-quality coal. In a bid to achieve eco-friendly steelmaking, Nippon Steel will pay about 108 billion yen to acquire a 20 percent interest in the Blackwater coal mine in the state of Queensland, while JFE Steel will obtain another 10 percent, valued at around 54 billion yen. The mine, which has an annual output of 10.1 million tons and is held by Whitehaven Coal Ltd, has ample resources and is expected to be mineable for over 30 years. The coal is of higher quality, meaning it emits less emissions when burned, according to the two Japanese companies.
Mitsubishi Electric Corp is struggling to meet sustained global demand for optical components used in data centers powering artificial intelligence (AI). The Tokyo-based maker of factory automation is a key supplier of optic fiber communication devices that link servers to one another. AI’s appetite for high speed and high volume calculations is propelling sales of Mitsubishi Electric’s devices, which boast low power consumption and heat emission, said Masayoshi Takemi, an executive officer in charge of the company’s semiconductor and devices business. The company next month plans to ramp up production capacity for optical devices to a level 50 percent above last year’s.
SOUTH KOREA
Hanwha Aerospace announced Friday that it has completed the construction of the Hanwha Armored Vehicle Centre of Excellence, or H-ACE in Geelong, Australia, signifying the first overseas production foothold for a Korean defense company. “This facility represents Hanwha's commitment to Geelong, Victoria and Australia, demonstrating that the company is focused on the future of programs in this region, including howitzers, vehicles and other technological advancements beyond our current initiatives,” said Son Jae-il, CEO of Hanwha Aerospace. “H-ACE is a significant part of our global defense supply chain, further strengthening the relationship between Australia and Korea. We will continue to collaborate with Australian companies and work towards integrating more of them into our global supply networks.” High-ranking government and military officials including Australia’s Deputy Prime Minister and Defense Minister Richard Marles, Korea’s Minister of Defense Acquisition Program Administration Seok Jong-gun took part in the opening ceremony of H-ACE.
Kim Dong-sun, the youngest heir of Hanwha Group and vice president of Hanwha Galleria, has initiated a public tender offer to increase his control over the retail subsidiary. According to a regulatory filing released Friday, Kim has offered to purchase 34 million shares, representing 17.54 percent of Hanwha Galleria, from Aug. 25 to Sept. 11. The offer price is set at 1,600 won ($1.19) per share, a 23 percent premium over the previous day's closing price of 1,303 won. The filing noted that Kim's tender offer aims to "strengthen responsible management in collaboration with Hanwha Galleria’s major shareholders and special affiliates while establishing an efficient decision-making system to enhance the target company's business competitiveness and ultimately improve shareholder value.” Kim's move is seen by industry watchers as a strategic effort to solidify his control over Hanwha Galleria and establish a foundation for its independence.
TAIWAN
Taiwan wants to continue its free way of life and rejects being ruled by China's Communist Party, Taiwan President Lai Ching-te said on Friday, visiting a frontline island between the two sides to mark a key battle with Chinese forces. China's military carried out another round of manoeuvres around Taiwan as Lai was making the comments, underscoring what Taiwan's government views as Beijing's ongoing efforts to undermine regional peace and stability.
Industrial production last month expanded 12.3 percent year-on-year, driven by strong demand for electronic components used in high-performance computing and artificial intelligence (AI), the Ministry of Economic Affairs said Friday. The industrial production index printed 95.5 last month and is likely to tick higher this month, even though a number of companies are forecasting a decline in output, Department of Statistics Deputy Director-General Huang Wei-jie said. “Local firms would benefit further from the upcoming releases of next-generation technology gadgets and aggressive spending by US technology giants on AI development and applications,” Huang said. Taiwan is home to the world’s major suppliers of advanced chips, AI servers, storage, memory and other equipment used in cloud data centers, smartphones, notebook computers, wearable gadgets and vehicles. Apple Inc is to launch a new iPhone series next month, ramping up business for local firms in its supply chain. However, the uptrend could take a hit from uncertainties such as US monetary policy, the US-China technology dispute and geopolitical tensions, Huang said.
CTBC Financial Holding Co Friday offered to acquire Shin Kong Financial Co via a cash and share swap deal totaling NT$14.55 per share, saying it would prove a better choice for the life insurance-focused conglomerate, its employees and shareholders. The offer would suggest a 28.5 percent premium over NT$11.32 per share the other contender, Taishin Financial Holding Co unveiled a day earlier. CTBC president and spokeswoman Rachael Kao said the group aims to buy 51 percent of Shin Kong for NT$131.4 billion (US$4.11 billion) so that it would dominate the boardroom and ensure the smooth running of the firm.
H1 pretax profits of listed companies soar 31.2 percent. The aggregate pretax profit posted by companies on the Taiwan Stock Exchange and over-the-counter (OTC) market in the first half of this year soared more than 30 percent year-on-year, the Financial Supervisory Commission (FSC) said. Data compiled by the FSC showed that companies listed on the local main board and the OTC market posted NT$1.93 trillion (US$60.36 billion) in profit before tax for the first half of this year, up 31.2 percent from a year earlier and the third-highest total in a decade. First-half aggregate pretax profit only trailed NT$2.48 trillion recorded in the same period of 2022 and about NT$2 trillion seen in the first half of 2021, the data showed.
CHINA
On Friday afternoon (August 23), Chinese President Xi Jinping had a telephone conversation with British Prime Minister Keir Starmer upon invitation, according to the website of the Ministry of National Defense.
According to the website of the China Securities Regulatory Commission (CSRC), the CSRC has recently agreed to the registration of lead, nickel, tin and aluminium oxide options offered by the Shanghai Futures Exchange (SFE). The CSRC will supervise the SFE to well prepare for the launch of the above options to ensure their smooth launch and stable operation.
China's financial regulators approach bond market oversight based on market principles and from macro-prudential and compliance perspectives, state media on Saturday, rejecting claims of market intervention. Chinese authorities in recent weeks halted a long, frenzied rally in the world's second-largest bond market and squelched trading volume with repeated warnings about the risks of reckless buying.
Early this month a financial market association under the People's Bank of China, the central bank, said it would investigate four rural commercial banks over suspected manipulation in the treasuries market. The PBOC-backed Financial News pushed back on Saturday against claims by some market participants that the central bank was intervening in the market through administrative measures. "As long as institutions trade in accordance with market principles and rule of law, the regulators will not directly intervene," the newspaper cited an industry source as saying.
The United States on Friday added 105 Russian and Chinese firms to a trade restriction list over their alleged support of the Russian military as Washington seeks to keep up pressure on Moscow's war effort in Ukraine. The companies -- 63 Russian and 42 Chinese as well as 18 from other countries -- were targeted for a host reasons, from sending U.S. electronics to Russian military-related parties to producing thousands of Shahed-136 drones for Russia to use in Ukraine. Being added to the entity list forces U.S. suppliers to get a difficult-to-obtain license before shipping to the targeted companies. Many of the firms added to the list on Friday were given a special designation that also forces overseas suppliers to get the same U.S. licenses before shipping to the targeted companies. The moves show the Biden administration is trying to keep up pressure on the companies sustaining Moscow's war in Ukraine despite a raft of Western sanctions aimed at hobbling that effort and amid reports that restricted American technology is still reaching Russia's defense industry.
Western China's development must build a "strong sense of community" and safeguard national unity and border stability, according to a readout from a key Politburo meeting, official news agency Xinhua reported on Friday. Western China comprises a number of provinces and regions including Xinjiang, Tibet and Yunnan "It is necessary to persist in forging a strong sense of community for the Chinese nation and earnestly safeguard ethnic unity and stability in the border areas," the readout said. Some Western governments have accused Beijing of violating human rights in Xinjiang and Tibet in the name of safeguarding national security. Beijing has vigorously denied any wrongdoing, saying lies were fabricated to smear China's image.
To construct the "new urbanisation" of Western China, revitalise rural areas and expand poverty alleviation efforts, strengthening the guarantee of energy resources and promoting the construction of clean energy bases was necessary, according to the readout.
The Philippines called on Beijing on Saturday to "immediately cease all provocative and dangerous actions" after accusing it of "unjustifiably" deploying flares from China-occupied Subi Reef on Aug. 22 while a Manila aircraft was conducting patrols. The same aircraft also "faced harassment" from a Chinese jet fighter while it was conducting a surveillance flight near Scarborough Shoal on Aug. 19, the Philippines' South China Sea Task Force said in a statement. "Such actions undermine regional peace and security, and further erode the image of the PRC (People's Republic of China) with the international community," the task force said.
There was no immediate comment from the Chinese Embassy in Manila about the incidents, which happened the same week Manila and Beijing accused each of ramming vessels and performing dangerous manoeuvres in the South China Sea.
Popularity of China-made vehicles is increasing in Latin American nations. In 2019, the Asian economic giant sold US$2.2 billion worth of cars in the region. Last year, the figure reached US$8.5 billion, according to the UN’s International Trade Center (ITC). Chinese car sales represented 20 percent of the region’s total in money terms — ahead of the US with 17 percent and Brazil with 11 percent. No other market outside Asia has a larger share of Chinese cars, according to the ITC.
HONG KONG
Earnings from Friday
CHINA COAL (01898.HK) announced the interim results ended June 2024. The turnover. declined 15% year on year to RMB92.984 billion. The net profit amounted to RMB10.695 billion, down 16%. EPS was RMB0.81. An interim dividend of RMB0.221 was declared, against no dividend in the year-ago period.
TUHU-W (09690.HK) has announced its interim results for the period ended 30 June 2024. The turnover spiked 9.3% YoY to RMB7.126 billion, while net profit amounted to RMB286 million with a YoY surge of 373.8%. EPS stood at RMB0.4. No dividend was declared.
SHANGRI-LA ASIA (00069.HK) announced its interim results for the period ended 30 June 2024. The turnover climbed 4.3% YoY to US$1.049 billion, while net profit amounted to US$94.482 million, down 28.1% YoY. EPS. stood at US$2.661 cents. An interim dividend of HK5 cents was declared, against no dividend in the year-ago period. For Hong Kong, occupancy was 75% in 1H24, marking a YoY increase of 10 ppts. During the period, revenue per available room (RevPAR) grew 11% YoY to US$202. The group's hotels in Hong Kong delivered a better performance in 1Q24 on a YoY basis, but faced some pressure in 2Q. Total revenue from Hong Kong hotel properties in 1H24 gained 7.9% to US$151 million.
CMOC (03993.HK) announced its interim results for the six months ended June this year, with operating revenue of RMB102.818 billion, a YoY increase of 18.6%, a record high. Net profit rocketed 670.4% YoY to RMB5.417 billion, also a record high.
EPS was RMB0.25. In 1H24, the completion of production of all major mines of CMOC exceeded the median of the annual production guidance. The production and sales of copper, cobalt, niobium and other major products were also favourable, with growth in the output of all major products. CMOC's copper and cobalt production doubled. Copper production was 313,800 tonnes, a YoY surge of about 101%, while cobalt production soared around 178% to 54,000 tonnes. Niobium production exceeded 5,000 tonnes for the first time, an increase of nearly 8% YoY, while phosphorus production was 583,300 tonnes, an increase of approximately 6%.
HK TECH VENTURE (01137.HK) 1H24 loss amounted to $27.478 million, representing a turnaround from a profit of $48.696 million in the same period of 2023. Adjusted EBITDA was about $37.6 million, down 54.5% YoY. The Company must engage in diversified development and persist in trying new approaches when encountering the complex and dynamic business environment in the future, Ricky Wong, Vice Chairman and Group Chief Executive Officer of HK TECH VENTURE, said. Therefore, in the coming years, with the support from the solid performance of HKTVmall, the Group will keep strengthening investments and explore new businesses.
ENN ENERGY(02688.HK) announced its interim results for the six months ended June 2024, with a revenue of RMB54.587 billion, up 0.9% YoY. Net profit amounted to RMB2.573 billion, down 22.8% YoY. EPS was RMB2.29. An interim dividend of $0.65 was declared, compared to $0.64 declared in the same period of 2023.
TCL ELECTRONICS (01070.HK) has announced its interim results for the period ended 30 June 2024. The turnover surged 30.3% YoY to $45.494 billion, while net profit amounted to $650 million, up 146.5% YoY. EPS stood at HK26.69 cents. No dividend was declared.
Profit Alert
ND PAPER (02689.HK) announced a positive profit alert, expecting a net profit of about RMB700 million to RMB800 million for the financial year ended June, compared with a loss of RMB2.383 billion in the last financial year. The company said the increase in net profit was due to the increase in sales volume and gross profit margin of the group in the current financial year.
Buybacks
AIA (01299.HK) repurchased 1.15 million shares on the Stock Exchange Friday (23rd) at a price per share ranging from $54.1 to $54.95, involving a total of $62.7822 million, according to AIA's announcement. Since the ordinary resolution was approved, the Company has repurchased a total of 267 million shares, representing 2.3767% of its share capital.
TENCENT (00700.HK) announced that it repurchased 2.66 million shares of the company on the Stock Exchange of Hong Kong Friday (23rd) at $373.6-378.4 per share, involving a total of $1 billion. Since the passing of the ordinary resolution, the company has repurchased a total of approximately 118 million shares, accounting for approximately 1.25% of the company's issued shares.
SWIRE PACIFIC A (00019.HK) announced that it repurchased 167,500 shares on the Hong Kong Stock Exchange Friday (22 August) at a price ranging from $64.8 to $65.65 per share, involving a total of $10.895 million. Since the passing of the ordinary resolution, the company has repurchased a total of 12.2085 million shares, accounting for 1.4618% of the share capital.
HSI Short Selling Friday 22.8% vs 21.2% Thursday
Top shorts Hengan (1044) 49%, Nongfu Spring (9633) 46%, Haidilao (6862) 46%, New World Development (17) 43%, Sands China (1928) 42%, Mengniu Dairy (2319) 39%, Zhong Sheng (881) 37%, Ali Health (241) 36%, HSBC (5) 36%, SHKP (16) 34%, Bidu (9888) 33%, Li Auto (2015) 33%, JD Health (6618) 32%, NTES (9999) 31%, Sinopec (386) 29%, China Shenhua (1088) 29%, CM Bank (3968) 28%, Zijin Mining (2899) 27%, BYD (1211) 27%, Tencent (700) 27%, ICBC (1398) 26%, AIA (1299) 26%, MTRC (66) 25%, Citic (267) 25%, Bank of China (3988) 25%, HK & China Gas (3) 25%
WATCH
Michael Guo, Co-CEO and Deputy General Manager of PING AN (02318.HK) said that PING AN's product structure will focus on participating policy in the future, which is expected to account for more than 50% of overall sales, according to reports by Chinese media. As interest rates will continue to decline in the future, Guo further added, the Chinese life insurance industry is facing the problem of interest rate losses. Timely intervention by the regulator to drop the pre-determined interest rate can effectively prevent the problem of interest rate losses in the industry from worsening.
The Hong Kong General Chamber of Commerce (HKGCC) welcomed the Hong Kong Monetary Authority (HKMA)’s announcement of the establishment of a task force on SME financing to assist SMEs in repayment difficulties. The task force will alleviate the pressure on SMEs' cash flow and ensure that bank policies are implemented at the frontline service level, especially in handling complaints related to mortgage review and borrowers' requests for early repayment of loans, said HKGCC.
Banks also pledged to respond to mortgage applications within two weeks after receiving all the required documents. The authorities expected that there will be some individual cases of loan defaults, but overall, the positive benefits of providing support to the majority of SMEs will outweigh the impact. HKGCC also called on the authorities to reinstate the Pre-approved Principal Payment Holiday Scheme (which ended in July 2023) and increase the credit guarantee amount of the Export Credit Guarantee Program under the Hong Kong Export Credit Insurance Corporation (HKECIC).
Jose Carvalho, head of wealth and personal banking UK at HSBC, said the bank aims to double the assets under management (AUM) of its UK wealth management business to GBP100 billion in the next five years, vying with other banks for fee income from Britain's mass affluent, Reuters reported. Carvalho said that HSBC UK targets to become one of the top five banks in the country, relying on its global network to attract customers from different markets and overseas, and plans to hire more consultants as part of the promotion. Yet, it did not provide specific figures.
Zhang Xuzhong, Executive Director and President of Property Development of LONGFOR GROUP (00960.HK) said that the real estate market in mainland China is still in the process of adjusting prices and quantities, and confidence has yet to be restored. The authorities once again emphasized that the industry as a whole has to actively focus on the digestion of existing housing in 2H24, satisfying rigid demand and diversifying demand for improved housing, cited Zhang. Meanwhile, enterprises should abandon the “three highs” model: high leverage, high turnover and high debt, while achieving self-improvement and quality development. Zhang pictured that the recovery of the property market will still be on a bumpy ride, with both challenges and opportunities. LONGFOR will focus on stabilizing prices and quickening sales of properties. The group plans to launch seven new property development projects this year, two of them were launched in 1H24, and the remaining five are expected to be launched simultaneously in September. Zhang forecast that the market will remain volatile in 2H24, and the group will launch projects flexibly in response to market conditions.
The Centa-City Leading Index (CCL) last printed at 138.61, down 0.41% WoW, representing the market condition in the week when the US kept its interest rates unchanged on 1 August, Yeung Ming Yee, senior associate director at Centaline Property Research, said. The sentiment of the property market was positive stimulated by the favorable news of a visible rate cut in September. However, the secondary property market remained in a tug-of-war situation, while property price adjustments continued. The CCL lost by a total of 1.77% for 3 consecutive weeks, approaching the short-term target of 138, which will be reached with a further drop of 0.61 points or 0.44%. This week's CCL hit a nearly-8-year (412 weeks) low, returning to the level at the end of September 2016, with a cumulative decline of 5.84% in 2024. The index cascaded 27.56% from the all-time high of 191.34 recorded in August 2021, and sagged 3.08% from the low of 143.02 in March 2024 before the withdrawal of harsh measures.
SKYWORTHDT (000810.SZ) revealed on an interactive platform that the Aurora Box 5 Pro, a flagship multi-functional smart box developed in collaboration with TENCENT (00700.HK) is built in TENCENT’s massive amount of genuine content. The smart box is a Tencent START cloud gaming certified device, with Tencent START cloud gaming built in, allowing two-player low-latency operation of 3A cloud games, such as “Black Myth: Wukong”. SKYWORTHDT pointed out that it will continue to actively explore diversified cooperation in the company's products, and looks forward to bringing users more new experiences and services.
Bloomberg reported that Lu Tian, deputy general manager of Goldman Sachs (China) Securities, will leave the company and join HSBC as CEO and general manager at HSBC Qianhai Securities, replacing Irene Ho, who will retire soon. It is learnt that Lu Tian is one of the second executives of Goldman Sachs (China) Securities to leave the company this year.
The first batch of goods carried by the Chongqing-Shenzhen-Hong Kong fixed-route carrier arrived at the Hongkong International Terminals and were immediately transferred to international liners for shipment to destinations around the world. With the opening of the Chongqing-Shenzhen-Hong Kong regular carrier service, Chongqing foreign trade companies can leverage the stable departure time to shorten the transportation time from Chongqing to Yantian, Shenzhen, from 5 days to 2 days. There are six daily ferry services from Yantian to Kwai Tsing, Hong Kong, which means that goods from Chongqing can reach Hong Kong in three days.
Klaus Chan, Principal Assistant Secretary for Transport and Logistics, said that the new model of Chongqing-Shenzhen-Hong Kong fixed-route carrier will expand the cargo coverage of Hong Kong and Yantian Port, increase the cargo volume of the two ports, and help Chongqing develop into a regional “sea-rail intermodal” logistics hub. In the future, Hongkong International Terminals will continue to work with various parties to create and launch innovative multi-location cooperation models such as the “Kwai Tsing- Yantian Link” and “Chongqing-Shenzhen-Hong Kong Express Line” to consolidate and enhance Hong Kong's status as an international shipping center and international trade center status, and join forces to enhance the overall international competitiveness of the Greater Bay Area, helping to achieve the country's “dual carbon” goals and high-quality development of foreign trade.
EUROPE & US RECAP
DAX 0.76%, CAC 0.7%, FTSE 0.48%
Markets opened higher and traded cautiously ahead of Powell’s speach. FTSE traded sideways initially and then slightly higher from mid morning with a small rally in the last hour after Powell indicated rate cuts ahead. DAX and CAC trended higher in the morning eased back in the afternoon and then rallied in the last hour after Powell’s comments.
Powell said: “The time has come for policy to adjust... The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.” Market is putting a 67.5% probability on a 25 bpt cut in September. Key this week will be the US PCE data due out on Thursday.
The British pound gained 0.8% vs US dollar to trade above $1.319 the highest level since March 2022. The euro strengthened 0.58% to $1.118.
Nestle 0.1% but opened almost -4% after announcing that it was replacing CEO Mark Schneider with company veteran Laurent Freixe following a period of lackluster performance.
Hugo Boss 6% after its second-biggest shareholder, Frasers, filed a request to acquire more shares.
DOW 1.14%, NDX 1.47%, S&P 1.15%, Russel 2K 3.19%
Markets opened higher and saw choppy trading in the morning season and sold down to the day lows around midday and then worked better through the afternoon but failed to regain the morning highs.
Technology stocks as investors grew hopeful that a lower-rate environment would benefit this group. Notably, Tesla and Nvidia (ahead of earnings on Wednesday) jumped more than 4% each. Small-cap stocks also gained on this outlook, with the Russell 2000 advancing more than 3%.
New home sales picked up the pace in July, hitting an adjusted annualized rate of 739,000, which is the highest number since May 2023, the Census Bureau said Friday.
The S&P 500 closed positive for a second week in a row. Keysight Technologies
and Albemarle are the biggest gainers in the index with shares up about 14% each. Homebuilders have also contributed heavily to the index’s rally with Builders FirstSource and PulteGroup both up 10%. Lennar Corporation and D.R. Horton have added at least 7%. Materials also did well and retailers are also among the biggest winners this week, with Target up 10%. TJX Companies is on pace for a 7% week-to-date rally. Only energy had a negative week.
Regional banks rallied after Powells speech. Zinc prices are up more than 4% this week, the industrial metal’s best performance since April as smelters in China cut back on production.
Banks JPMorgan Chase 0.78%, Citigroup 2.85% Wells Fargo 1.32%, Amex 1.43%
Ecommerce Meta -0.74%, Apple 1.03%, Amazon 0.52%, Netflix -0.32%, Disney 0.71%, Zoom Video 3.09%, Alphabet 1.17% and Microsoft 0.3%,
Tech NXP Semi 2.96%, Nvidia 4.55%, Micron -1.35%, AMD 2.16%, Skyworks 3.83%
Industrial/Discretionary Boeing 1.27%, Caterpillar 1.77%, Simon Property 2.64%, Kohl’s 4.11%, Nordstrom 2.74%, Gap 4.38%, United Airlines 4.54%, Carnival 7.51%, Wynn Resorts 0.36%,
Energy Chevron 1.3%, Exxon Mobil 1.39%,
Consumer Staples Campbell Soup 0.4% General Mills 0.23%, JM Smucker 0.82%
DAILY DATA
USD weaker as Powell indicates rate cuts ahead, Bitcoin 0.5% at 63,974.59 (Sunday morning in Asia), VIX -9.63% at 15.86,
US T10 down 6 bpts at 3.801% and T2 down 10 bpts at 3.913%
OIL Brent 2.33%, WTI 2.49% on concerns remain about Chinese demand. Natural Gas 1.27%
Gold 1.27%, Silver 2.8%, Copper 1.37% Platinum 1.73%, Palladium 3.42%.