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Asian stock market, economy and companies update (April 30, 2010)

Contributed by Trade The News

- Asian equity markets are near-unanimous to end the week with an upmove, tracking a rebound of over 1% in S&P500 and the Dow Jones Industrial Avg. Entering the final hour of Tokyo trading - Nikkei225 returned from holiday with a 1.1% move. The Kospi and S&P/ASX are up by just over 0.5%, while Shanghai Composite and the Taiex are dragged down by fresh speculation of govt curbs on housing, losing 1.0% and 0.1% respectively. Ahead of the US Friday session and the release of Advance GDP, front-month S&Ps are down about 0.2%. Note, the US equity futures fell precipitously following WSJ speculation the US federal prosecutors are conducting a preliminary stage criminal probe into whether Goldman Sachs management or employees committed securities fraud in relation to mortgage trading.

SPEAKERS/PRESS
JAPAN:
- A broad spectrum of economic data and a rate decision from Japan were in the spotlight throughout the session, with improving fundamentals and commitment to loose policy supporting equity gains. Japan manufacturing PMI saw its first increase in 4 months, household spending rose at the quickest pace in since 2004, and headline CPI contraction stayed at its narrowest rate in 11 months. In housing, construction orders saw the biggest increase since October of 2008, while housing starts fell at slowest pace since Nov 2008. In a widely anticipated move, the Bank of Japan voted unanimously to leave rates unchanged and keep monthly JGB purchases at ?1.8T. Most notably, BOJ Gov Shirakawa suggested that a review may be needed on whether financial firms need additional funds. Earlier, Japan Fin Min Kan echoed press speculated that the central bank may forecast a flat to positive CPI in FY11/12 as part of its semiannual policy outlook report. Fin Min Kan also said the fiscal crisis in Europe will not impact Japan, but serves as a reminder of needed direction regarding fiscal reform.

GREECE:
- On a related note, FT reported Greece may have agreed to a ?24B austerity package, targeting deficit reduction of 10-11% of GDP in the next 3 years with measures including higher VAT and a 3-yr pay freeze for the public sector.

CHINA:
- In China, local press cited former PBOC advisor Fan Gang reiterating that March trade deficit demonstrates the economy is not primarily export-driven, but rather supported by higher domestic consumption and investment. In latest China housing developments, city of Shenzhen was said to limit purchases of 2nd homes by residents as well as formulate official definition of second home ownership. Also in Chinese press, a survey of nation's 4 largest banks saw their lending below CNY200, far below recent lending levels. In addition, vague rumors of a potential Yuan revaluation as early as this weekend were weighing on bullish sentiment in Chinese equities.

EQUITIES
- In notable individual names, Samsung Electronics reported Q1 Net profit KRW4T v KRW3.7Te, Op profit KRW4.4T v KRW4.3Te, Rev KRW34.6T v KRW36Te. Despite the shortfall relative to estimates, shares rose about 3%, with the company forecasting a substantial increase in FY10 CAPEX. Flat panel TVs also rose 47% y/y to 8.4M units, while PC shipments were up 30%. In terms of guidance, company saw Q2 DRAM market demand as being positive due to PC demand, DRAM shipment growth in the mid-teen pct, DRAM ASP as flat q/q, and NAND chip demand higher. Samsung also said it would outperform growth in the flat-panel TV industry. In other Korea earnings, KT Corp reported Q1 Net KRW372.5B v KRW348Be, Op profit KRW553B v KRW528Be, Rev KRW4.8T v KRW4.8Te. In notable Tokyo names, Sumitomo Corp reported FY09/10 Net ?155B v ?145Be, Op Profit ?120.5B v ?145Be, Rev ?7.77T v ?8.3Te; In materials, JS Group posted FY09/10 Net loss ?5.3B v loss ?3Be, Op Profit ?26B v ?25Be, Rev ?983B v ?990Be, and Shin-Etsu Chemical reported FY09/10 Net ?83.9B v ?80Be, Op Profit ?117.2B v ?116Be, Rev ?917B v ?911Be.

- In Sydney, Macquarie Group reported FY10 Net A$1.05B, +21% y/y and Op profit A$6.6B v A$5.5B y/y, guiding improved operating results in FY11 for all businesses, but also warning regulatory changes could lead to higher capital requirements. Woolworth posted Q3 Rev A$12.9B v A$12.3B y/y, also guiding FY10 Rev growth 3-6% - a revision for prior forecast of growth in the upper single digits.

CURRENCIES/FIXED INCOME/COMMODITIES

- In currencies, FT speculation of additional Greek austerity helped boost EUR/USD from 1.3225 to 1.3265. In other European majors, GBP/USD tested 1.5360, while USD/CHF traded down to 1.0815. In commodity FX, AUD/USD benefited from strong results from Macquarie, rising about 40 pips just above 0.93 following the banking group's earnings. Kiwi dollar also remained firm, rising above 0.7260 - the highest level since late Jan - on growing speculation of RBNZ hike next month. The Yen continued to trade in a narrow range around 94.00 handle, despite central bank pledge to keep loose monetary policy.

ECONOMIC DATA

- (NZ) NEW ZEALAND MAR BUILDING PERMITS M/M: -0.4% V 5.8% PRIOR
- (KS) SOUTH KOREA MAR INDUSTRIAL PRODUCTION M/M: 1.6% V 0.5%E; Y/Y: 23.2% V 19.8%E; INDUSTRIAL PRODUCTION MFG Y/Y: 23.2% V 19.8% PRIOR
- (KS) SOUTH KOREA MAR LEADING INDEX Y/Y: 9.6% V 10.3% PRIOR (6-month low)
- (KS) SOUTH KOREA MAR SERVICE INDUSTRY OUTPUT Y/Y: 5.2% V 7.1% PRIOR
- (JP) JAPAN APR NOMURA/JMMA MANUFACTURING PMI: 53.5 V 52.4 PRIOR (first increase in 4 months)
- (JP) JAPAN MAR OVERALL HOUSEHOLD SPENDING Y/Y: 4.4% V 0.7%E (biggest increase since May 2004)
- (JP) JAPAN MAR JOBLESS RATE: 5.0% V 4.9%E (first increase in 4 months); JOB-TO-APPLICANT RATIO: 0.49 V 0.47 PRIOR
- (JP) JAPAN MAR NATIONAL CPI Y/Y: -1.1% V -1.1%E (remains at 11-month high); CORE Y/Y: -12% V -1.2%E; APR TOKYO CPI CORE Y/Y: -1.9% V -2.1%E (3-month low)
- (JP) JAPAN MAR PRELIM INDUSTRIAL PRODUCTION M/M: 0.3% V 0.8%E; Y/Y: 30.7% V 31.3% (first decrease since Feb 2009)
- (AU) AUSTRALIA MAR HIA NEW HOME SALES M/M: 0.9% V -5.2% PRIOR
- (JP) JAPAN MAR LABOR CASH EARNINGS Y/Y: 0.8% V -0.4%E (first increase since May 2008)
- (AU) AUSTRALIA MAR PRIVATE SECTOR CREDIT M/M: 0.5% V 0.4%E (14-month high); Y/Y: 2.1% V 1.9%E (7-month high)
- (SI) SINGAPORE Q1 UNEMPLOYMENT RATE: 2.2% V 2.1% PRIOR
- (SI) Singapore MAR M1 Money Supply y/y: 13.9% v 17.5% prior; M2 Money Supply y/y: 8.8% v 9.8% prior
- (JP) JAPAN MAR VEHICLE PRODUCTION Y/Y: 71.2% V 74.9% PRIOR
- (JP) BOJ LEAVES RATES UNCHANGED AT 0.10% AS EXPECTED (VOTE UNANIMOUS)
- (JP) JAPAN MAR HOUSING STARTS Y/Y -2.4% V -5.8E (smallest decline since Nov 2008); ANNUALIZED HOUSING STARTS: 0.85M V 0.86ME; CONSTRUCTION ORDERS Y/Y: +42.3% V -20.3% PRIOR (biggest increase since Oct 2008)