Asia Summary
Asian equity markets have opened generally lower, following the mixed trading session in the US.
In the tech sector, chip giant, Samsung Electronics has gained over 1%. The company confirmed its Q3 results, announced a plan to increase capital returns to shareholders and said it plans to raise its FY17 Capex by over 80% y/y. Softbank has declined by over 5%, following the speculation that the merger between Sprint and T-Mobile could be canceled. Shares of Nintendo have risen by over 6%, as the company raised its FY forecast on demand for its Switch device.
South Korean advertising firm Cheil Worldwide has gained over 9%, as the company reported better than expected Q3 results. Shares of Lotte Shopping and Lotte Tour have outperformed. Earlier today, South Korea and China agreed to work toward improving bilateral relations.
Fast Retailing has declined by over 0.4% amid the earlier weakness seen in the S&P 500’s Consumer Discretionary sector. Australian Retailer Woolworth’s has gained over 1.5%, as Q3 revenues rose by over 3%.
Steel makers are currently trading mixed. Kobe Steel has gained over 1%, after reporting its financial results. At the same time, Nippon Steel and South Korea’s Posco have declined by over 1%. In Oct, China’s Steel PMI declined, according to an industry association.
The auto sector in Japan has traded generally lower. On Wednesday (Nov 1st), Honda is expected to release its financial results.
Japanese mega banks have added on to the losses seen in the prior session. In the brokerage space, Nomura has declined by over 2% after the company reported a decline in its quarterly profits. There has also been some weakness in the banking sector in China/Hong Kong. Shares of the Bank of China have declined by over 3%, after the company reported flat Q3 profits. China Communications Construction has dropped over 2% following its 9-month results. In the mining sector, Glencore said it would move to have its Hong Kong listing withdrawn in 2018.
Meanwhile, China’s Oct official manufacturing and non-manufacturing PMIs each declined from the prior month. The country’s sovereign 10-year bond yield has declined for the first time in 5 sessions, after yields moved to the highest level since late 2014 during the prior session.
In terms of the Chinese shorter-term rates, there has been speculation that the PBoC could announce a medium-term lending facility (MLF) by as soon as Friday. Liquidity conditions in China may tighten in the near term with around CNY1T in funds expected to mature this week, says the China Securities Journal.
In Japan, as speculated the BoJ left policy unchanged and lowered its inflation forecasts. Once again at today’s policy meeting, official Kataoka was the dovish dissenter on the belief that the central bank’s policy should target the 15-year JGB yield as opposed to the 10-year yield, which is currently the focus.
There has been little initial impact on the Yen following the policy decision. In New Zealand, the Kiwi has declined by over 0.4%, as PM Ardern confirmed plans to crack down on foreign purchases of residential properties. On tomorrow’s session, New Zealand’s Q3 employment figures are expected to be released. Ardern has previously said the incoming government plans to review the RBNZ’s mandate to see whether it should cover employment
Japanese companies expected to report results later today include, Asahi Glass, Daiichi Sankyo, FUJIFILM, Japan Airlines, JTEKT, JVC Kenwood, Mitsubishi Heavy, NEC Corp, NGK Insulators, Nippon Express, Nitto Denko, Oki Electric Industry, Omron, Panasonic, Sony, Sumitomo Heavy and TEPCO.
Key economic data
(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED
(NZ) NEW ZEALAND SEPT BUILDING PERMITS M/M: -2.3% V +5.9% PRIOR (1st decline in 5-months)
(CN) CHINA OCT OFFICIAL GOVT MANUFACTURING PMI: 51.6 V 52.0E
(KR) South Korea Sept Cyclical Leading Index Change: -0.2 v 0.1 prior
(KR) SOUTH KOREA SEPT INDUSTRIAL PRODUCTION M/M: 0.1% V 2.2%E; Y/Y: 8.8% V 4.8%E
(JP) JAPAN SEPT OVERALL HOUSEHOLD SPENDING: -0.3% V 0.6%E
(JP) JAPAN SEPT PRELIM INDUSTRIAL PRODUCTION M/M: -1.1% V -1.6%E; Y/Y: 2.5% V 2.0%E
(NZ) New Zealand Oct ANZ Business Confidence: -10.1 v 0.0 prior; Activity Outlook: 22.2 v 29.6 prior
(AU) Australia Sept HIA New Home Sales m/m: -6.1% v 9.1% prior
(AU) AUSTRALIA SEPT PRIVATE SECTOR CREDIT M/M: 0.3% V 0.5%E; Y/Y: 5.4% V 5.6%E
Speakers and Press
Japan
(JP) Japan said to set FY18 budget at ~¥98T v ¥97.5T set in FY17 – Nikkei
Korea
(KR) South Korea Ministry of Foreign Affairs: South Korea and China agreed to restore their bilateral relations to a "normal development path swiftly" as stronger ties meet their mutual interests
China/Hong Kong
(CN) Former China SAFE (FX regulator) official sees stronger US dollar putting pressure on the yuan – China Securities Times
(CN) PBoC said to check bank demand for medium-term lending facility (MLF) loans, with possible operations on Friday – financial press
(CN) China liquidity conditions expected to tighten with ~CNY1T in funds are due to mature this week – China Securities Journal
Australia/New Zealand
(NZ) New Zealand PM Ardern: To amend law to classify residential homes as sensitive which means non-residents can’t buy existing homes; expects law to be introduced before Christmas
Asian Equity Indices/Futures (00:00ET)
Nikkei -0.2%, Hang Seng -0.2%; Shanghai Composite -0.3%; ASX200 +0.0%, Kospi +0.6%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax closed for holiday; FTSE100 +0.1%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1653-1.1632; JPY 113.28-112.98; AUD 0.7699-0.7672;NZD 0.6882-0.6838
Dec Gold -0.1% at $1,276/oz; Nov Crude Oil -0.2% at $54.05/brl; Dec Copper -0.1% at $3.11/lb
USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT 6.6397 V 6.6487 PRIOR
(CN) PBoC OMO: Injects CNY300B combined CNY150B in 7-day, 14-day and 63-day reverse repos v CNY140B prior; Net injection CNY80B v CNY40B prior
Equities notable movers
Australia/New Zealand
SGH.AU Updates on recapitalization; -20.6%
AHZ.AU Reports Q1 (A$) Rev 1.9M, +23% y/y; -13%
Japan
7974.JP Reports H1 Net profit ¥51.5B v ¥38.3B y/y, Op profit ¥40.0B v loss ¥5.95B y/y, Rev ¥374B v ¥137B y/y; Raises FY18 outlook’ +4%
3092.JP Reports H1 Net ¥9.6B v ¥8.1B y/y; Op ¥13.8B v ¥10.6B y/y; Rev ¥42.7B v ¥31.6B y/y; -9%
China/Hong Kong
000338.CN Reports Q3 (CNY) Net profit 1.95B, +316.1% y/y; +7.3%
Korea
005930.KR Reports Q3 (KRW) Net 11.2T v 10.8Te; Op 14.5T v 14.5T prelim; Rev 62.1T v 62.0T prelim; +1.6%
