Monday, July 19, 2010

China State Information Center anticipates slowdown in trade activity


Forex Special Asian Market Update: China State Information Center anticipates slowdown in trade activity; Poll date set for Australia national elections
As of 1:00amET: 
- Nikkei225 - Closed 
- S&P/ASX -1.3% 
- Kospi -0.4% 
- Taiex -0.3% 
- Shanghai Composite +0.9% 
- Sept S&P Futures +0.2% 
- Aug Gold $1,193/oz 
- Aug Crude oil at $75.95/brl

Economic Data

- (NZ) NEW ZEALAND JUNE PERFORMANCE SERVICES INDEX: 55.7 V 53.5 PRIOR (3-month high); Prior revised higher from 53.3 
- (UK) UK JUL RIGHTMOVE HOUSE PRICE INDEX M/M: -0.6% V 0.3% PRIOR (first decline since December 2009); Y/Y: 3.7% V 5.0% PRIOR

Overview/Top Headlines

- Heavy selling in US equity indices on Friday has hardly been echoed in the Asian markets on Monday as traders once again contemplate the extent of decline as a buy-on-dip opportunity.
Volatility is somewhat muted by Nikkei225 index being closed for market holiday - a much needed reprieve after Friday's near-3% plunge. Most pronounced decline among the regional indices is seen in Australia, the only market down by over 1%, on worries over a slowdown in trade activity with China following State Information Center report that H2 export growth may slow to 16.3% from 35% in H1. Political uncertainty in Australia is not helping risk matters, with Labor cabinet calling for Aug 21st national elections. Elsewhere, perception of softening recovery in China portending lower level of vigilance from the PBoC is helping Shanghai Composite to a 1% bounce - a similar reaction to risk appetite following weak Q2 GDP/June economic data last week.


Macro/FX 

China 
- (CH) China H2 export growth may slow to 16.3% (35% in H1), import growth to 19.3% 
- China Securities Journal citing State Information Center report 
- (CH) China's Finance Ministry Research Director Jia Kang: China should implement "direct taxes" on people's personal income and real estate to allocate more funds to lower-income families - China Daily 
- (CH) PBOC Vice Gov Du Jinfu: Inflation pressure in China has eased, still confident of reaching 3% 2010 target; Lending to small and medium sized enterprises (SMEs) rose about 23% in Q1
- (CH) China Premier Wen: Reassures executives of international companies that China's investment climate is stable and China would not block exports or rare metals needed to make computers and mobile phones - Shanghai Daily 
- (CH) China's Q2 index for small and medium-sized enterprises fell to 106.7 from 107.1 in Q1 - People's Daily 
- USD/CNY: (CH) PBoC sets yuan mid point at 6.7800 v 6.7750 prior close
Australia/New Zealand 
- (AU) Smaller mining companies may continue their campaign against the govt's resource tax leading up to the federal election on Aug 21st: Due to the tax only being negotiated with the larger mining companies - The Australian 
- (AU) Australia PM Gillard's Labor party holds a 52% to 48% lead in two-party preferred election poll - Sydney Morning Herald - New Zealand 
- (NZ) New Zealand Labor Dept: Jobless rate may remain elevated; Rate of unemployment could rise from 6% if the participation rate increases 
- (NZ) New Zealand PM Key announced extension of 90-day trial for new workers at all companies - New Zealand Herald 
- AUD/USD: AUD falls to session lows against USD, EUR and JPY on report from China Securities Journal indicating slowing H2 China trade activity 
- NZD/USD: Falls to 1-week low below 0.7040 after NZ Labor Dept comments on unemployment rate
Japan 
- (JP) Japanese press comments on nation's declining trade deficit with China; deficit may have fallen to about ¥480B in FY09/10 amid greater demand for Japanese cars and other products from historical average of about ¥2-3T 
- (JP) Japan June department store sales likely fell 6% y/y to ¥492B - Japanese press
Korea 
- (KS) South Korea's auto insurance premiums may rise by about 6.1-6.8% in September - Korea Economic Daily 
- (KS) Korean Senior Party Member: Will unveil steps to boost real estate market - Korean press
Other 
- (SI) S&P: Credit risks on Singapore home loans are limited; Higher mortgage rates would reduce possibility of a bubble 
- (SI) Singapore Fin Min Shanmugaratnam: Growth forecasted at 13%-15% this year reflects a short term rebound - Singapore Business Times 
- (VN) Vietnam Central Bank may request that local banks raise their registered capital to VND5T by 2012, VND10T by 2015 - Vietnam press 
- IMF Strauss Kahn: IMF is looking to increase its lending resources to $1T from $750B

Equities

Australia 
- HSP.AU: Accepts A$6.26/shr cash offer (A$2.7B) from TPG/Carlyle 
- AXA.AU: Extending takeover agreement with National Australia Bank to August 31st for Regulators and January 31st for shareholders; NAB is continuing to pursue options to satisfy regulators 
- TOL.AU: Managing Director Little: Expects an increase to A$3B next year in the company's freight forwarding business with the additional from the recent acquisition of WT Sea Air Group and Genesis Forwarding Group - The Australian 
- SIP.AU: Received 3 bids each for Hesson and Orphan Australia - The Age 
- FMG.AU: CEO Forrest: Investing A$3M in biotechnology company Coridon to develop DNA based vaccines for the prevention and treatment of viral infections - Sydney Morning Herald 
- TLS.AU: In talks to acquire 25% of racing broadcaster TVN; Analysts speculate that the partnership would bring increase content to the new T-Box product Telstra is launching - The Australian
Japan 
- TM: To resume exports of Fortuna SUV to Middle East and Philippines by August on sharp recovery in regional demand - Japanese press 
- Mitsubishi Motors: To partner with Nissan on Electric-Car-Sharing Project - Japanese press 
- Mitsubishi Estate: to open an outlet mall close to Narita Airport to attract more of the growing number of tourists from China - Japanese press 
- Daiwa Securities Group: May post second consecutive quarterly Net loss in Q1 of about ¥10B - Japanese press
China 
- PTR: Tries to contain the damage from earlier blasts on an oil pipeline in Dalian; Expects the 50 sq. km area affected to take about 2 weeks to clean up weather permitting - WSJ 
- Zijin Mining Fujian province plans legal action against Zijin; 2 executives have been arrested, several others suspended after the company waited 9 days to report the spill 
- HSBC Closing its wholesale note business in the Asia-Pacific; The 50 employees in Hong Kong will be moved to other positions - Oriental Daily 
- AIG: Confirms appointment of Mark Tucker as the CEO of the AIA unit; Will list its Asian life insurance businesses in Hong Kong
Korea 
- LG Electronics Says it will begin sales of 3-D computers 
- LG Chem Aims for KRW1T in sales of car batteries by 2013, KRW2T by 2015 - Korean press 
- Doosan Heavy Signs a memorandum of agreement with GE to jointly develop next generation power turbines 
- Hana Financial Group May pay interim dividend of about KRW300 v KRW100 prior 
- Daewoo Shipbuilding & Marine Won a contract for a ship that builds submarine pipelines; No value disclosed 
- Hyundai Heavy Industries Building a $90M transformer plant in the US by 2011
US 
- BP: US Coast Guard's Allen's letter to BP's Dudley: A seep some distance from the well has been detected; undetermined anomalies seen around well head 
- XOM: Ghana's government is looking for a way out of being pushed by Exxon and Kosmos in a $4B deal to transfer 23.5% stake of Jubilee offshore oilfield to Exxon - FT 
- MS: Sells apartment project located in Pudong, China for CNY1.2B - South China Morning Post - BP: US Coast Guard's Allen's letter to BP's Dudley: A seep some distance from the well has been detected; undetermined anomalies seen around well head 
- BP: Talks with Apache on sale of Prudhoe Bay stake reportedly stall 
- JPM: Bank is re-considering £1.5B expansion in London because of lack of support from the gov't for the financial services sector; Bank has made it clear it sees its future in Asia - Telegraph 
- INTC: Considering a stake in Taiwan's Cheng Uei - Economic Daily News

Commodities 

- STO.AU: Received A$2B bank facility 
- ORI.AU: To complete $550M ammonium nitrate plant in Indonesia in H2 2010; New plant in New South Wales was under way; Continuing to look for additional acquisitions in South America - The Australian 
- WPL.AU: CEO Voelte: Downplays the company's interest in acquiring BP assets - The Australian

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