Asian Market Update: Twitter prices IPO at $26/shr with valuation above $18B; Australia employment disappoints; Markets look to ECB, BOE, and US GDP
***Observations/Insights*** - Twitter prices its IPO at $26/shr - above the $23-25 projected range but shy of $27 whisper figure - giving it a valuation just above $18B; Trading commences on Thursday. - Soft Australia employment data underscores the challenging transition from a mining-driven boom economy; full-time jobs particularly telling, declining nearly 28K but offset in part by 29K part-time jobs; participation rate also hits multi-year lows; Separately, Construction sector hit its first expansion in over 3 years and employment component in building increased after 40 months of decline. - PBoC abstains from injecting more liquidity into money markets after 3 consecutive injections; Drains funds overall for the week; Overnight, Q3 Monetary Policy Implementation Report reiterates China to continue prudent monetary policy, with foundation for stable prices is not solid. - Lenovo rises over 2% in afternoon session after reporting better than expected Q2 results; Market share hitting record high 17.7%; Upbeat on PC sector, anticipating corporate refreshment demand and gradual recovery in the China market. - Investors await policy decisions from ECB and BOE as well as the release of the initial estimate of US Q3 GDP that had been postponed due to govt shutdown in Oct.
***Economic Data*** - (AU) AUSTRALIA OCT EMPLOYMENT CHANGE: 1.1K V 10.0KE; UNEMPLOYMENT RATE: 5.7% V 5.7%E; PARTICIPATION RATE: 64.8% V 64.9%E (multi-year low) - (AU) AUSTRALIA OCT AIG PERFORMANCE OF CONSTRUCTION INDEX: 54.4 V 47.6 PRIOR (first expansion since May 2010) - (NZ) NEW ZEALAND OCT QV HOUSE PRICES Y/Y: 8.9% V 8.4% RIOR - (JP) JAPAN OCT TOKYO AVERAGE OFFICE VACANCIES: 7.6% V 7.9% PRIOR (multi-year low) - (TH) THAILAND OCT CONSUMER CONFIDENCE: 77.6 V 77.9 PRIOR; CONSUMER CONFIDENCE ECONOMIC: 66.6 V 67.9 PRIOR
***Fixed Income/Commodities/Currencies*** - (CN) PBoC has not conducted open market operations (OMO) in today's session; Drains CNY5B this week v Injected CNY29.1B prior - (JP) BOJ offers to buy ¥250B in 1-3yr JGB, ¥350B in 3-5yr JGB and ¥400B in 5-10yr JGB - GLD: SPDR Gold Trust ETF daily holdings rise 2.1 tonnes to 868.4 tonnes (1st rise since Oct 22nd)
- EUR/USD and USD/JPY trading in 20pip ranges as markets appear reluctant to take big bets ahead of what appears to be a very close ECB decision and the much-politicized US GDP release. AUD/USD was the biggest movers among the dollar majors, falling about 60pips below 0.9470 after the soft Australia employment numbers. AUD/JPY was also down over 60pips to trade below 93.40, while AUD/NZD hit 3-week lows.
***Speakers/Political/In the Papers*** - (CN) China Bank of Communications (BoCom) chief economist Lian: PBoC monetary policy adjustment is due to GDP and CPI concerns - financial press - (CN) China big four banks Oct new loans said to be CNY182B (lowest amount in 2013) - financial press - (CN) China Civil Aviation Administration (CAAC): Widens the range for airlines to set air ticket prices
- (JP) BOJ Gov Kuroda: too early to debate detailed exit strategy by the BOJ - addressing parliament - (JP) Japan Fin Min Aso: Japan may reach 2% inflation target in 2 years time per BOJ forecast - addressing parliament
- (KR) South Korea releases Oct Monthly Economic Report: Domestic economic recovery is accelerating - (KR) According to South Korea's Financial Supervisory Service (FSS), loan delinquency ratio for Korea's 18 local banks in Q3 rose 0.07pts to 1.80% - Korean press
- (NZ) ANZ rural economist: Recent dairy auction data suggest prices may have reached the tipping point in the current cycle - NZ press
***Equities*** Market Snapshot (as of 03:30 GMT): - Nikkei225 -0.6%, S&P/ASX -0.5%, Kospi -0.4%, Shanghai Composite -0.3%, Hang Seng -0.7%, Dec S&P500 -0.1% at 1,762, Dec gold -0.2% at $1,315, Dec crude oil +0.1% at $94.88/brl
US markets: - OME: Reports Q3 $0.66 v $0.35e, R$87.6M v $78.9Me; +22.6% afterhours - TPX: Reports Q3 $0.73 v $0.69e, R$735.5M v $708Me; +14.9% afterhours - FLTX: Reports Q3 $0.25 v $0.22e, R$46.3M v $44.5Me; +14.1% afterhours - AEO: Guides Q3 $0.19 v $0.15e, R$857M v $834Me ($0.14-0.16 prior), SSS -5%; +12.3% afterhours - RIG: Reports Q3 $1.37 v $1.06e, R$2.56B v $2.47Be; +2.8% afterhours - VALE: Reports Q3 EBITDA $5.9B v $4.3B y/y; Rev $12.7B v $11.4B y/y; +0.8% afterhours - PRU: Reports Q3 $2.07 (cont ops) v $2.10e, R$10.82B v $12.1Be; +0.6% afterhours
- CBS: Reports Q3 $0.76 v $0.76e, R$3.63B v $3.53Be; -0.5% afterhours - TSO: Reports Q3 $0.72 v $0.49e, R$11.2B v $9.45Be; -1.1% afterhours - CTL: Reports Q3 $0.63 adj v $0.63e, R$4.52B v $4.51Be; -2.0% afterhours - ATVI: Reports Q3 $0.08 v $0.04e, R$657M v $593Me; -2.4% afterhours - QCOM: Reports Q4 $1.05 v $1.08e, R$6.84B v $6.35Be; -4.0% afterhours - CKP: Reports Q3 $0.22 v $0.27e (1 est), R$174.5M v $168.8M y/y; -8.0% afterhours - WFM: Reports Q4 $0.32 v $0.31e, R$2.98B v $3.04Be; boosts dividend 20%, authorizes $500M buyback; -9.2% afterhours - INWK: Reports Q3 $0.05 (adj) v $0.15e, R$232.6M v $237Me; cuts guidance; -22.1% afterhours - NVTL: Reports Q3 -$0.04 v -$0.10e, R$92.7M v $94.7Me; -26.1% afterhours
Notable movers by sector: - Consumer discretionary: Starbucks Coffee Japan 2712.JP -2.7% (H1 results); Sankyo Co Ltd 6417.JP -1.9% (H1 results); Casio Computer Co Ltd 6952.JP -2.7% (H1 results); Edion Corp 2730.JP +8.3% (H1 results); United Arrows Ltd 7606.JP -3.8% (H1 results); Namco Bandai Holdings 7832.JP +8.1% (H1 results) - Industrials: Toyota Motor Corp 7203.JP -1.1% (H1 results); Mitsuba Corp 7280.JP +15.1% (H1 results); Calsonic Kansei Corp 7248.JP +13.1% (H1 results); Unipres Corp 5949.JP -6.4% (H1 results) - Materials: Nippon Paper Industries Co 3863.JP +5.8% (H1 results); DeHua TB New Decoration Materials Co Ltd 002043.CN +5.7% (US ITC vetoes anti-trust duties) - Financials: Commonwealth Bank of Australia CBA.AU +1.2% (analyst action) - Technology: Lenovo 992.HK +2.4% (Q2 results); Juki Corp 6440.JP +4.4% (H1 results); COLOPL Inc 3668.JP +8.9% (H1 results); JVC Kenwood Holdings Inc 6632.JP -10.0% (H1 results); Acer Inc 2353 -1.2 (Oct shipments); Nanya Technology Corp 2408.TW +4.2% (Oct results); Inotera Memories Inc 3474.TW +3.7% (Oct results); Konami 9766.JP -2.8% (H1 results); - Healthcare: Santen Pharmaceutical Co Ltd 7248.JP +13.5% (H1 results) - Telecom: MTI Ltd 9438.JP % (H1 results)