Asian Mid-session Update: Shanghai Composite erases 5% drop on reports of IPO suspension and further liquidity operation
***Economic Data***
- (JP) JAPAN MAY LABOR CASH EARNINGS Y/Y: 0.6% V 0.7%E; REAL (EX-INFLATION) EARNINGS Y/Y: -0.1 V 0.2% PRIOR
- (AU) AUSTRALIA MAY PRIVATE SECTOR CREDIT M/M: 0.5% V 0.5%E; Y/Y: 6.2% V 6.1%E
- (AU) AUSTRALIA MAY HIA NEW HOME SALES M/M: -2.3% V 0.6% PRIOR; first decline in 5 months
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 116.3 v 114.0 prior; highest level in 18 months
- (NZ) NEW ZEALAND JUN ANZ ACTIVITY OUTLOOK: 23.6 V 32.6 PRIOR; BUSINESS CONFIDENCE: -2.3 V +15.7 PRIOR, first decline since Feb 2011
- (NZ) NEW ZEALAND MAY BUILDING PERMITS M/M: 0.0% V -1.7% PRIOR
- (SG) Singapore May M1 Money Supply Y/Y: 0.8% v 1.2% prior; M2 Money Supply Y/Y: 4.9% v 4.5% prior
- (KR) South Korea Jul Business Manufacturing Survey: 67 v 77 prior (lowest level since December 2012); Non-Manufacturing Survey: 66 v 76 prior
- (KR) SOUTH KOREA MAY INDUSTRIAL PRODUCTION M/M: -1.3% (3rd straight decline) V -0.7%E; Y/Y: -2.8% V -1.9%E
- (UK) JUN GFK CONSUMER CONFIDENCE: 7 V 2E; multi-year high
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 -0.1%, S&P/ASX -0.2%, Kospi +0.3%, Shanghai Composite -0.3%, Hang Seng +0.6%, Sept S&P500 +0.1% at 2,053
***Commodities/Fixed Income***
- Aug gold -0.2% at $1,176/oz, Aug crude oil -0.6% at $57.97/brl, Sept copper flat at $2.63/lb
- SLV: iShares Silver Trust ETF daily holdings fall to 10,068 tonnes from 10,088 tonnes
- (CN) PBoC to inject CNY50B in 7-day reverse repos (2nd consecutive injection) at lower yield of 2.5% v 2.7% prior
***Market Focal Points/FX***
- Shanghai Composite resumed its steep decline in the early going, falling by as much as 5% below 3,850, but heading into its midday break the index has impressively returned all the way back to its unchanged levels above 4,050. PBoC has injected another CNY50B in liquidity through 7-day reverse repos and also lowered the offering yield by 20bps to 2.5%. Earlier, local press also reported regulators are considering allowing the country's pension fund to invest in A-share market. However, the upward inflection coincided with reports that CSRC would postpone the China Nuclear Engineering Corp (CNEC) IPO that was expected to raise CNY2.7B in July. Despite Securities Finance Corporation (CSF) determination earlier that risks of margin trading is within control, Shanghai Exchange also announced a halt in margin trading for select stocks. Note that the out-of-control margin investing in the retail space along with the rich IPO pipeline have been widely cited as the key culprits in this extreme China selloff.
- Australia's latest HIA new home sales should give greater comfort to RBA if it were to lean in favor of more easing. M/M sales fell for the first time in 5 months, and resident economist said decline was "driven by a 5.1% dip in detached house sales - reflecting weaker monthly demand in four out of the five states surveyed." In New Zealand, ANZ Business Confidence also contracted for the first time since early 2011, with ANZ citing low sentiment in construction along with particularly downbeat conditions in agriculture. NZD/USD was the biggest loser against the generally bid USD, falling about 50pips below $0.68 level in the wake of ANZ data.
- There were no updates out of Greece as the formal deadline for IMF payment is now 24 hours away. Few expect Athens to come up with the funds, and markets hope for the optimal scenario of a YES referendum vote followed by a pro-creditor govt transition. EUR was bid in the US hours after investors saw the peripheral yields were up by a fraction of the Greek debt, but pared some of that rebound in Asian hours, sliding some 50pips to 1.1180.
***Equities***
US equities / ADRs:
- JUNO: Celgene announces ten year collaboration with JUNO; Juno will receive $150M upfront payment and Celgene will buy 9.1M shares at $93/shr (100% premium over closing price); +37.2% afterhours
- FGEN: Announces receipt of $120M License Payment from AstraZeneca; +2.0% afterhours
- APOL: Reports Q3 $0.53 v $0.47e, R$681M v $699Me; -6.8% afterhours
Notable movers by sector:
- Consumer discretionary: Wuxi Taiji Industry Co 600667.CN +10.0% (restructuring plan); Chengdu B-Ray Media Co Ltd 600880.CN -3.5% (halts margin trading); Beijing Enlight Media 300251.CN +5.5% (investment in Longvision Media); Kathmandu Holdings Ltd KMD.AU +23.2% (Briscoes to acquire stake); Qantas Airways QAN.AU +3.6% (May result)
- Consumer staples: Woolworths Limited WOW.AU -0.6% (considers selling Thomas Dux chain)
- Financials: CITIC Securities 6030.HK +0.4%, GF Securities 1776.HK -1.6%, Guotai Junan 1788.HK-4.6% (CSRC comment)
- Industrials: Brilliance China Automotive Holdings 1114.HK +2.1% (considers group listing); CRRC Corp 1766.HK -0.7% (clarification on Bombardier); Colorpak Ltd CKL.AU +1.2% (reaffirms FY15 guidance); Takata Corp 7312.JP -0.8% (said to request to ease demands)
- Technology: Coolpad Group 2369.HK -11.0% (LeTV investment); BOE Technology Group Co 000725.CN +2.9% (agreement with IBM); Beijing Bewinner Communications Co Ltd 002148.CN -6.4% (halts margin trading); Eservglobal Ltd ESV.AU -1.5% (H1 result)
- Materials: China Minmetals Rare Earth Co Ltd 000831.CN -6.4% (halts margin trading); Nippon Paper Industries Co 3863.JP +2.2% (Q1 result speculation); Kuraray Co Ltd 3405.JP +0.7% (H1 result speculation)