• Asian stock market, economy and companies update (May 27, 2015)

    ***Index Snapshot (as of 02:30 GMT)***
    - Nikkei225 -0.1%, S&P/ASX -0.8%, Kospi -1.8%, Shanghai Composite +0.2%, Hang Seng -0.7%, Jun S&P500 -0.1% at 2,103

    ***Commodities/Fixed Income***
    - Jun gold +0.1% at $1,187/oz, Jul crude oil +0.5% at $58.34/brl, Jul copper +0.1% at $2.78/lb
    - GLD: SPDR Gold Trust ETF daily holdings rise to 715.9 tonnes; first rise since apr 22
    - USD/CNY: PBoC sets yuan mid point at 6.1198 v 6.1172 prior setting; weakest Yuan setting since Apr 28th
    - (CN) China MOF sells 5-yr bond, avg yield 3.10% v 3.14%e
    - (JP) BOJ offers to buy ¥400B in 5-10yr JGBs, ¥240B in 10-25yr JGBs, and ¥140B in JGBs with maturity over 25-yr
    - (AU) Australia MoF (AOFM) sells A$700M in 3.25% 2025 Bonds; avg yield: 2.8450%; bid-to-cover: 3.48x

    ***Market Focal Points/FX***
    Shanghai Composite swung in a 100 point range around 4,900 in the morning session but settled up 0.2% going into the break. Some traders had reportedly expressed concerns over the sustainability of the sharp rally on the mainland fuelled by margin debt after a couple of key local brokers raised their margin requirements. The case for expectation of further aggressive PBoC easing were also dented by Stats Bureau reporting April industrial profits returning to annualized growth for the first time since Sept of last year. Despite the better number, NBS said companies remain constrained by weak market demand. Separately, HSBC cut China 2015 GDP target to 7.1% from 7.3% and raised the expected interest rate easing forecast from 25bps to 50 bps.

    Japan cabinet officials were unenthused by the latest selloff in JPY amid the rampant buying of the US currency. Chief cabinet Sec Suga reiterated excessive volatility in FX is not desirable, but the pace of Yen weakness does not yet justify much concern. BOJ Dep Gov Iwata also offered some upbeat remarks on the economy, noting virtuous cycle is working and inflation will accelerate gradually. Iwata added that the downward pressure from oil prices will start to dissipate in H2 of this year. Recall the recent Nikkei feature speculated that BOJ Gov Kuroda raised overall economic assessment to forestall concern once inflation turns negative in the summer months. BOJ minutes from Apr 30th meeting unveiled today saw many members express confidence that easing will persist until 2% inflation is target. Note that meeting featured the formal revision of achieving 2% inflation target at a later date of H1 of 2016.

    Down under, Australian construction work contracted for the 6th straight quarter and at a faster pace. Engineering component that includes mines saw the most pronounced decline of 20% after a 1% drop in Q4. In New Zealand, NZIER speculated the sharp rise in Auckland property markets would make it too difficult for the RBNZ to announce more easing despite the macroprudential measures taken by the central bank at its last decision.

    Stateside, Fed chair Yellen announced she would skip the Jackson Hole summit in August without providing a reason, but may attend the high profile meeting in future years. Note that her predecessor Bernanke had attended the summit every year until the year of his announced retirement. Fed hawk Lacker said it was clear that inflation is heading to 2%, with the weakness in consumer spending counterbalanced by strength in employment.

    In FX, USD majors consolidated greenback gains. EUR/USD traded just above 1.0880, USD/JPY remained just above 123, and AUD/USD traded in a 30pip range below 0.7760.

    ***Equities***
    US equities / ADRs:
    - RAI: FTC requires Reynolds and Lorillard to divest 4 brands as merger condition
    - WDAY: WDAY: Reports Q1 -$0.02 v -$0.08e, R$251M v $244Me ; Exec: Guides FY16 Rev $1.125-1.14B v $1.14Be; Subscription rev to increase as percent of total over time; GM to fluctuate - conf call; -7.3% afterhours
    - HRL: To acquire Applegate for $775M, sees acquisition accretive in 2016; +3.3% afterhours
    - FPRX: Enter into License Agreement with bluebird bio for Novel Antibodies to Develop Chimeric Antigen Receptor T Cell Therapy; will receive milestone and upfront payments; +20.1% afterhours

    Notable movers by sector:
    - Consumer discretionary: Thorn Group Ltd TGA.AU -1.0% (FY14 results); Belle International Holdings 1880.HK +3.6% (FY14 results); Cofco Biochemical Co 000930.CN -2.5% (stock exchange warning)
    - Financials: Programmed Maintenance PRG.AU +3.4% (FY15 results); Cheung Kong Holdings 1.HK -25.6% (ex-spin off)
    - Industrials: China Shipbuilding Industry Company 601989.CN +5.2%, China First Heavy Industries 601106.CN +7.2%, CITIC Heavy Industries 601608.CN +10.0% (China unveils military whitepaper); Shanghai Construction 600170.CN +10.0% (to jointly set up railway transport PPP fund)
    - Technology: Bright Oceans Inter-Telecom Corp 600289.CN +10.0% (private placement)
    - Materials: Adelaide Brighton ABC.AU +3.1% (update outlook); Marubeni Corp 8002.JP -0.5% (to construct plant in Myanmar); Zijin Mining 601899.CN +9.9% (private placement, jv with Barrick); Citic Resources 1205.HK -4.6% (profit warning)
    - Energy: Strike Energy STX.AU +8.3% (Orica to make payment)
    - Healthcare: Minsheng Investment Management Co 000416.CN +10.0% (to acquire wealth management business)


    ***Economic Data***
    - (CN) CHINA APR INDUSTRIAL PROFITS Y/Y: +2.6% v -0.4% prior (first annual rise since Sept 2014)
    - (AU) AUSTRALIA Q1 CONSTRUCTION WORK DONE Q/Q: -2.4% V -1.4%E; 6th quarter of decline
    - (AU) AUSTRALIA APR WESTPAC LEADING INDEX M/M: +0.1% V -0.3% PRIOR
    - (KR) South Korea Q1 household credit y/y: +7.3% v +6.5% prior; Household loans +7.5% v +6.7% prior

    Contributed by Trade The News
About us
StockMarketsReview.com provides news coverage, analysis and researches for world stock markets, commodities and currencies. We publish articles provided by experts of leading brokerage and investment companies. At our website investors can find daily, weekly and monthly reports, news, recommendations on the IPOs and fundamental analysis for stocks which are currently traded at the stock exchange.