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
