Asia Market Update: Equity volume remains light; China press explores 2018 outlooks
General Themes: Asia indices trade mixed, in line with the NY session
-Energy companies outperform
-Chipmakers in South Korea rebound
-World's Largest Shipbuilder Hyundai Heavy share price declines by record on capital raise
-PBoC skips OMO for 4th straight session amid signs of ‘high bank liquidity’ into year-end
-China Nov Industrial Profits grow at slowest pace since April
Australia
-ASX 200 opened flat: closed flat
-ASX 200 Resources Index +0.7%, Energy +0.7%; Financials -0.1%
-ORL.AU Enters binding deed with Mr J Will Vicars for proposed whole business outcome and continuation of operations
-RFG.AU Extended 3-year debt facility which was due to mature in Dec 2018 to 2020; reduces 5-year credit facility amount by A$25M; +9%
China/Hong Kong
-Shanghai Composite opened -0.1%, Hang Seng +0.2%
-Hang Seng Information Energy Index +1.8%, Property/Construction +1.8%; Technology -1%
-Herbal products firm Bawang International -30% (bankruptcy concerns)
-(CN) China Nov Industrial Profits Y/Y: 14.9% v 25.1% prior (slowest rise since April); China Stats Bureau cited prices for the slowdown in the data
-(CN) China Beige Book: industrial firms continued to ramp up output in Q4, wages and hiring dipped with the retail sector lagging other industries an acute hit on weak rev; see slower growth in 2018
-(CN) China State Researcher: China's economy hasn't bottomed out - China Daily
-(CN) China PBoC sets yuan reference rate at 6.5421 v 6.5416 prior
-(CN) PBoC OMO: Skips OMO v skips prior; Net drain CNY40B v CNY50B drain prior (4th consecutive skip)
-(CN) China Party Central Committee Meeting to hold plenary in January - Xinhua
-(CN) China 2018 registered unemployment rate may be 4%; surveyed unemployment 5% - China Securities Journal
-(CN) China NDRC on alert over surge in chip prices - China Daily
-(CN) China Tangshan City issues pollution alert for Tuesday – financial press (**note: Tangshan, home to dozens of steelmakers, is located in heavily-polluted Hebei province, China's biggest steelmaking region. Hebei produced 192.6 million tonnes of steel last year, nearly a quarter of the national total)
-(CN) China Information Daily: China will fight against online finance violations
-HNA Group: Bohai Capital unit received China CSRC approval to sell up to CNY4.0B in bonds
- (CN) China risk reduction efforts to focus on three main areas: state-owned enterprise leverage, local debt risk, and the asset management industry - Economic Information Daily
- (CN) Some China interbank deposit rates hit record high in December - China Securities Journal
- In China 734 bond issues have either failed or been canceled during the first 11 months of 2017, amounting to CNY586.6B v last year’s total canceled or failed issues worth CNY577.5B
- China Securities Journal discusses recent appreciation in yuan, driven largely by sharp drop in the US dollar index
-(CN) PBoC Adviser: forecasts yuan consolidation after recent gains - China press
Japan
-Nikkei 225 opened -0.2%; closed +0.1%
-TOPIX Securities Index +1.3%, Iron/Steel +0.7%
-J Front Retailing +7% (9-month profits +24%); Fast Retailing +1%
-Kawasaki Heavy Industries +7% (broker commentary)
- Japan govt reportedly could boost penalties for manufacturers who falsify product quality data - Nikkei
- Japan Center for Economic Research Survey shows expect avg CPI of 0.9% in FY18, higher than actual 0.6% rate achieved in the April-November period and the highest since FY08
- The number of IPOs in Japan in 2017 made it the second busiest year on record – Nikkei
-(JP) JAPAN NOV HOUSING STARTS Y/Y: -4.2% V -2.5%E; ANNUALIZED HOUSING STARTS: 951K V 934KE; Construction Orders y/y: 20.5% v +6.7% prior
Looking Ahead: Japan prelim Nov Industrial Production data due on Thursday
Korea
-Kospi opened -0.3%
-Hyundai Heavy -28% (announced KRW1.29T capital raise)
-Broad weakness in financial sector: Woori -3%, KB Financial -2.4%
-Chipmakers rebound from Tuesday’s declines: Samsung Electronics +1.2%, Hynix +1.9%
-LG Electronics +6.5%; Announces autonomous car partnership with Here Technologies
-Korean (KRW) trades at 2 ½ year high
-South Korea Dec Consumer Confidence: 110.9 v 112.3 prior
-China delays 3-way summit with Japan and South Korea – Yomiuri
- (KR) US Treasury announces sanctions targeting two North Korea officials
-(KR) According to Korea Economic Research Institute South Korean economy will likely take a hit from a reversal of top corporate tax rates in Asia's fourth-largest economy and the United States
-010620.KR Guides FY18 orders $3.0B, affirms FY17 orders $2.31B; -21%
Looking Ahead: South Korea Nov Industrial Production, Retail Sales and Service Sector Output data due on Thursday
Other Asia
- USD/TWD (TW) Taiwan Central Bank Deputy Gov Yang Chin-long: Taiwan Dollar (TWD) appreciation reflects US dollar weakness and the appreciation this year is not big
(TW) Taiwan Premier: Affirms sees 2018 GDP growth of 2.3%; to implement policy loosening and increase investment in 2018; Calls for higher salaries at listed companies.
North America
-US equities ended mixed: Dow flat, S&P500 -0.1%, Nasdaq -0.3%, Russell 2000 +0.1%
S&P500 Energy sector +0.9%; Technology -0.7%
-(RU) Russia said to limit US open skies access, starting Jan 1st; in response to planned US curbs
-(US) Pres Trump tweets: "All signs are that business is looking really good for next year, only to be helped further by our Tax Cut Bill. Will be a great year for Companies and JOBS! Stock Market is poised for another year of SUCCESS!"
-(LY) Explosion reported at Waha Oil pipeline feeding Es Sider terminal inLibya (production approx 260K bpd); Waha output reportedly down about 70K bpd after the incident - financial press
***Levels as of 01:00ET***
- Nikkei225 +0.1%, Hang Seng +0.1%; Shanghai Composite -0.3%; ASX200 flat, Kospi +0.3%
- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.2%; FTSE100 +0.3%
- EUR 1.1880-1.1855; JPY 113.36-113.17; AUD 0.7747-0.7724;NZD 0.7053-0.7029
- Feb Gold -0.0% at $1,287/oz; Feb Crude Oil -0.4% at $59.76/brl; Mar Copper -0.5% at $3.26/lb