Asian equity markets trade mixed amid recent US gains and holiday

Asia Market Update: Asian equity markets trade mixed amid recent US gains and holiday; Headlines related to China shift from trade to recent viral outbreak; PBOC left LPRs unchanged

 

General Trend:

- Various sectors in China and Hong Kong impacted by reported disease outbreak; Airlines and gaming companies decline, while healthcare firms rise

- China travel/airlines as well as Macau gaming names under pressure as the coronavirus continues to spread ahead of the largest travel holiday in China

- Hong Kong gaming companies trade generally lower amid cautious analyst comments, viral outbreak in China and upcoming Lunar New Year Holiday; Angang Steel drops over 2% on profit warning

- Telecom-related names rise in China and Hong Kong amid focus on 5G rollout, China said it would encourage local governments to roll out 5G support policies

- China Life rises over 1.5% on FY19 guidance

- Shanghai Property index drops as PBOC left loan prime rates unchanged

- Lens Technology (makes protective panels for electronic devices) rises 10% in China on guidance

- Marine/Transportation and financial firms are among the gainers in Japan

- Toshiba drops over 4%, speculation that subsidiary may have misreported certain revenues (press)

- Gainers in Australia include Resources and Energy companies

- Australia's NIB Holdings [health insurance company] drops over 12%, guided its results lower y/y

- South Korean cosmetics and travel-related companies trade lower amid focus on Wuhan (China) pneumonia outbreak

- LG Chemical rises over 5%, to consider joint battery plant with Hyundai

- China official said government is studying postponing the reduction of subsidies for new energy vehicles (NEVs) [Note: China has previously said there will be no significant reduction in NEV subsidies in 2020, 2020 NEV subsidy policy to remain relatively stable]

- PBOC continues to inject liquidity ahead of upcoming Chinese Lunar New Year Holiday [due to start on Jan 25th]

- US markets are closed on Monday for holiday

- Huawei's CFO faces extradition hearing later on Monday

- BOJ is expected to release rate decision on Tuesday

 

Headlines/Economic Data

Australia/New Zealand

-ASX 200 opened +0.2%

-(AU) Australia negotiators with China to look to have the trade concessions similar to those made to the US, which include relaxed inspection, licensing and technical regulations on dairy products, also applied to Australian companies – SMH

-SUL.AU Reports H1 LFL Sales +1.7% y/y; Total sales +2.9% y/y; Guides H1 EBIT A$113-115M v 124.5M y/y; updates on bushfire impact

- ORE.AU Signs 2 multi year supply contracts with China manufacturing companies for battery grade lithium carbonate; no terms disclosed

 

Japan

-Nikkei 225 opened +0.2%

- 6502.JP Toshiba subsidiary may have misreported up to ¥20B in revenues

- press -9202.JP Expected to announce a tie up with Singapore Airlines as soon as this month – Nikkei

-6104.JP Received notice that shareholders with ties to activist investor Yoshiaki Murakami will launch a bid to increase current 11.5% stake – Nikkei

- (JP) Japan Fin Min Aso: Cabinet agreed to submit budget plans to Diet today

- (JP) Japan Nov Final Industrial Production M/M: -1.0% v -0.9% prelim; Y/Y: -8.2% v -8.1% prelim

 

Korea

-Kospi opened +0.5%

- 005930.KR Confirms executive reshuffle: appoints Roh Tae-Moon head of smartphones

-(KR) North Korea appoints Ri Son-gwon as new foreign minister, replacing Ri Yong-ho; seen as a possible policy shift to relations with South Korea and the US; Also replaced nearly 50% of its vice chairman- Korean press

-(KR) South Korea Govt to invest KRW1.0T over the next 10-years to nurture the next generation semiconductor sector- Yonhap

-004990.KR Lotte Group founder Shin Kyuk-ho passed away - Korean press

 

China/Hong Kong

-Hang Seng opened +0.4%; Shanghai Composite opened +0.2%

- (CN) Sources close to the China government said China may include some bilateral investment treaty (BIT) terms into the phase 2 trade talks, but official BIT talks and phase 2 trade talks may not start ahead of the 2020 US presidential election – Global Times

- (HK) Thousands of protesters showed up in Hong Kong business district called for international sanctions to be placed on the Chinese Communist Party; police fired tear-gas after protesters started fires and dug up paving stones

-(CN) CHINA PBOC SETS 1-YEAR LOAN PRIME RATE (LPR) AT 4.15% V 4.15% PRIOR (4.10%E); SETS 5-YEAR LPR AT 4.80% V 4.80% PRIOR (4.80%E)

- (CN) China PBOC to conduct CNY6.0B v CNY6.0B prior in 3-month Central Bank bill swaps (CBS); coupon 2.35% v 2.35% prior (8th ever CBS operation)

- (CN) China PBoC Open Market Operation (OMO): Injects CNY250B via 14-day reverse repos v injects CNY200B in 14-day prior; Net injection CNY250B v injects CNY200B prior

- (CN) China PBOC sets Yuan Reference Rate: 6.8664 v 6.8878 prior (strongest fix since July 19th, 2019)

-(CN) China publishes new 'very strict' standards for copper and aluminium scrap;effective July 1 2020

- (CN) China Industry Min: Targets stable and high-quality development in industry and communications sectors in 2020

- (CN) China Ministry of Industry and Information Technology (MIIT) Official Miao Wei: China faces big pressure in stabilizing industrial production this year, confident to ensure stable industrial production in 2020

Other

- (LY) Libya National Oil Corporation warns that eastern forces have seized several large export terminals, a move that will cut off oil exports for most of eastern and southern oil fields - press

-(IQ) Dozens injured in Iraq anti-government protests over the weekend; more rallies planned by organizers over the coming week specifically calling for removal of US troops from Iraq

- OLAM.SG Announces reorganization of business into food ingredients and agri-business

 

North America

US markets closed Monday for holiday

- (US) US President Trump said to have plan to replace water rule from the Obama era, Trump wants rights to be with the states and not the federal government- US press citing comments from a rally

 

Europe

- (UK) Jan Rightmove House Prices m/m: +2.3% v -0.9% prior; y/y: +2.7% v +0.8% prior

 

Levels as of 12:15ET

- Hang Seng -0.4%; Shanghai Composite +0.5%; Kospi +1.0%; Nikkei225 +0.3%; ASX 200 +0.2%

- Equity Futures: S&P500 0.0%; Nasdaq100 +0.1%, Dax +0.1%; FTSE100 0.0%

- EUR 1.1099-1.1088; JPY 110.22-110.08; AUD 0.6885-0.6873; NZD 0.6623-0.6609

- Commodity Futures: Gold -0.1% at $1,559/oz; Crude Oil +1.1% at $59.25/brl; Copper +0.3% at $2.85/lb