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Asian stock market, economy and companies update (May 13, 2010)

Contributed by Trade The News

By Trade The News

- Asian equity markets are in the green across the board as Wednesday's risk appetite in the US indices following a day of respite on Tuesday is helping erase last week's collapse. Tech export heavy Nikkei225 and Taiwan's Taiex are seeing the biggest gains of just over 2.2%, Korea's Kospi and Sydney's ASX200 are close behind at +1.5%, and even the Shanghai market is seeing a modest bounce of 0.8%. Ahead of the Thursday session, front-month S&Ps are up a marginal 0.1% just above 1,170. Overnight, Cisco exceeded estimates on top and bottom line, reporting Q3 $0.42 v $0.39e, Rev $10.4B v $10.2Be and also guiding Q4 Rev +25-28% y/y (implies R$10.6-10.9B v $10.6Be). Despite the record level revenue, a drop in y/y GM weighed on the stock afterhours to the tune of a 2% drop.

SPEAKERS/PRESS
- AUSTRALIA: April employment data marked the primary economic event of the session, with job growth coming in at a 3-month high of 33.7K v 22.5K expected. Despite the job growth however, unemployment rate also unexpectedly rose to 5.4%, with some analysts pointing to an accelerated population growth in Australia requiring an even faster job growth. Aussie fixed income markets were nonetheless impressed, as 2-yr and 10-yr govt bond yields rose 4bps while AUD rose above 0.90 and EUR/AUD fell to a 20-yr low. Earlier in the session, RBA Assistant Gov Lowe said the turmoil in Europe may impact Asia, but was overall hawkish on inflation and economy. Lowe said the most recent CPI data suggests that disinflation pressure is not as strong as anticipated, while overall conditions outlook was still seen as a "positive".

- CHINA: In notable Chinese press reports, the State Council was said to have approved a fund raising plan for some of the country's biggest banks estimated around CNY287B in total. Specifically, ICBC was said to target a CNY70B capital raise and Bank of China a CNY100B sum in shares and convertible bonds. Separately, Shanghai Securities News reported that a unit of China's sovereign wealth fund - Central Huijin Investment - may have purchased shares of large financials amid the most recent selloff on the Composite.

EQUITIES
- In individual names reporting earning in Tokyo, Shimizu posted FY09/10 Net loss ?6.9B v loss ?0.7Be, Op Profit ?22.1B v ?21Be, Rev ?1.6T v ?1.6Te, guiding FY10/11 Net ?10.0B v ?13Be, Op Profit ?23.0B v ?28Be, Rev ?1.34T v ?1.4Te. Shared traded down to unchanged levels from over 1% gain after those results. Chiyoda also sold off after reporting FY09/10 Net ?3.0B v ?2.6Be, Op Profit ?1.7B v ?1.5Be, Rev ?313B v ?318Be and guiding FY10/11 Net ?4B v ?5.2Be, Op Profit ?6B v ?6.7Be, Rev ?240B v ?275Be. Among notable gainers, Elpida rallied after overnight report of a FY net profit against estimates of a loss. In the press, Nikon was under investigation in China related to a possible gas poisoning. In the auto space, Toyota was said to delay reopening Takaoka assembly plant until 2013 from 2011, and Isuzu reported to begin selling plug-in hybrid autos in lithium-ion battery partnership with Sanyo Electric. Outside Tokyo, HTC was sharply higher after filing a counter suit against Apple for alleged patent infringement. Separately, a WSJ report said the company would begin selling 4G phones early next month.

CURRENCIES/FIXED INCOME/COMMODITIES
- In currencies, risk appetite in equities finally translated into some relief for European majors, with both EUR and GBP up about 50 pips against USD to 1.2660 and 1.4860 respectively. In commodity FX, AUD was the outperformer across the board, gaining 80 pips vs USD to 0.9010. The Aussie also briefly tested a 20-yr high against EUR, with EUR/AUD falling below 1.4055. Japanese Yen consolidated US session weakness, trading sideways just above 93.10 against USD.

- In commodities, gold hit a fresh record high of $1,248/oz in the US before declining to $1,238 in Asian hours. Gold Trust ETF daily holdings continued to see gains, rising 17 metric tons to a record 1,209.5 metric tons. Front-month crude traded in a narrow sideways range just below $75.50 following mixed inventory reports from API/DOE over the last 2 sessions. Earlier today, OPEC's El-Badri said volatility in oil markets could still continue for some time.

ECONOMIC DATA
- (NZ) New Zealand APR Business PMI: 58.9 v 56.3 prior (5-yr high)
- (NZ) New Zealand APR Food Prices m/m: -0.5% v 0.2% prior
- (JP) JAPAN MAR CURRENT ACCOUNT TOTAL: ?2.5T V ?2.2TE (2-yr high); ADJUSTED: ?1.7T V ?1.5TE (9-month high); TRADE BALANCE: ?1.1T V ?1.1TE (2-yr high)
- (JP) JAPAN APR JAPAN MONEY STOCK M2 Y/Y: 2.9% V 2.5%E; M3 Y/Y: 2.2% V 1.9%E (3-month high for both measures)
- (JP) JAPAN APR BANK LENDING Y/Y: -1.8% V -1.8% PRIOR; BANK LENDING BANKS Y/Y: -1.8% V -1.7%E; BANK LENDING BANKS ADJUSTED Y/Y: -1.7% V -1.7% PRIOR
- (AU) AUSTRALIA APR EMPLOYMENT CHANGE: 33.7K V 22.5KE (3-month high); UNEMPLOYMENT RATE: 5.4% V 5.3%E (4-month high)
- (TH) Thailand APR Consumer Confidence Economic: 67.2 V 69.8 prior
- (JP) JAPAN APR BANKRUPTCIES Y/Y: -13.2% V -14.5% PRIOR (5-month high)