Reports » Asia

Asian stock market, economy and companies update (August 31, 2012)

Contributed by Trade The News

***Markets Snapshot (as of 04:30GMT)***
- Nikkei225 -1.1%
- S&P/ASX +0.6%
- Kospi +0.2%
- Shanghai Composite -0.1%
- Hang Seng -0.3%
- Taiwan Taiex +0.2%
- Straits Times Index +0.1%
- Sept S&P500 unchanged at 1,397
- Dec gold +0.1% at $1,656/oz
- Oct Crude oil +0.1% at $94.66/brl

***Overview/Top Headlines***
- Markets continue to be mixed ahead of the long awaited comments from Fed Chairman Bernanke. NBER President Emeritus Feldstein does not expect that Bernanke will unveil new QE with the economy improved somewhat. Went on to say there is not much Fed can do even if wanted to. German Chancellor Merkel has requested that Italian PM Monti delays any request for a bailout also said she will make a similar request of Spain PM Rajoy next week. EUR/USD was steady in a 20 pip range, up 0.8% to $1.2515 heading into the European open.

- Japan and South Korea data showed weaker than expected activity in the manufacturing sector. Markets didn't seem to concerned and both currencies were stronger against the USD. Soybeans fell nearly 0.8%, while corn tested $8.10 and wheat rose to $8.85. Copper was slightly stronger and silver remained mostly unchanged.

- Amid record levels in reverse repo action from the PBoC, a local press source reported that China may make reverse repo a "target rate", citing an un-named PBoC official. Yesterday S&P commented that the deterioration in real estate credit has just begun and today it was reported that China state-owned investment entity Huijin buys more shares in ICBC, China Construction Bank, Bank of China and AgriBank.

- Looking ahead to the weekend China will release Aug Manufacturing PMI: No est v 50.1 prior.

***Speakers/Geopolitical/In the press***
- (CN) China Vice Fin Min Wang Jun: China has room for policy adjustment, Confident in China's growth
- (JP) Japan Econ Min Furukawa: May have to shift some burden on the public to achieve FY20 primary balance surplus
- (JP) Japan Govt: Will be difficult to reach primary balance surplus target by FY20; Expect can reach mid-term fiscal improvement goal for FY15
- (KR) South Korea govt expected to announce new fiscal policy steps to support the economy - Korean press
- (CN) Goldman Sachs chief China equity strategist Zhu: Slowdown in China stocks likely to be short term; Cyclical recovery likely in H2 - CNBC
- (HK) Hong Kong chief executive Leung Chun-ying: Announced increase in home supply as part of measures to slow housing prices - Shanghai Daily
- (US) Fed's Plosser (non-voter, hawkish): Current assessment of QE is that it doesnt meet cost benefit test right now - CNBC

***Europe News***
- (UK) BoE's Posen: BOE should consider buying assets other than Gilts; Fed has room to ease further given low inflation; ECB should cap yields on Italian and Spanish bonds
- (UK) British Chambers of Commerce (BCC): Lowers UK 2012 GDP target to -0.4%; 2013 GDP to +1.2%
- (ES) Moody's: Review of Spain sovereign Baa3 rating likely to continue through end of September

***Equities***
- LLC.AU: To create a fund that invests in property development in China's largest cities in the next 3 years - China Daily
- HVN.AU: Reports FY12 Net A$172.5M v A$175Me; Total Rev A$6.24B v A$6.2B y/y
- Nippon Steel, 5401.JP: Expects ¥120B impairment charge in Q2 for steel plant writeoffs; Guides H1 net loss lower to -¥155B from -¥85B prev

***US Equities***
- VALE: CEO Martins: Expects iron ore prices to recover within the next 45-days, surprised at the extent of price decline
- ZUMZ: Reports Q2 $0.17 (ex $0.10 costs) v $0.13e, R$135.1M v $135Me; -14% afterhours
- OVTI: Reports Q1 $0.21 v $0.22e, R$258.1M v $243Me; +8.9% afterhours

***Fixed Income/Commodities/Forex***
- (AU) Australia MoF (AOFM) sells A$500M in 4.25% 5-yr bonds, avg yield 2.5805%; bid-to-cover 5.74x
- SLV: iShares Silver Trust ETF daily holdings fall to 9,721 tons from 9,763 tons (lowest since Aug 14th)
- (JP) Japan Fin Min Azumi: Finance cannot be managed without the deficit-bond bill; Will not be able to issue short term debt to fund spending under fiscal law
- USD/HKD: (HK) HK analyst: The HK$ could loose some of its prominence and use similar to the pataca, as market continues to respond positively to use of the yuan in trade - HK press
- USD/BRL: (BZ) Brazil Fin Min Mantega: Forex policy will remain "very active" in 2012 and 2013
- (IR) Iran Oil Minister: Sees $130/bbl as a reasonable price for brent crude oil; current prices are not bad but should be higher

***Economic Data***
- (JP) JAPAN JUL PRELIMINARY INDUSTRIAL PRODUCTION M/M: -1.2% V 1.7%E; Y/Y: -1.0% V 1.8%E
- (JP) JAPAN AUG TOKYO CPI Y/Y: -0.7% V -0.7%E; CORE CPI Y/Y: -0.5% V -0.6%E (4-month high)
- (JP) JAPAN JUL NATIONAL CPI Y/Y: -0.4% V -0.3%E; CORE CPI Y/Y: -0.3% V -0.3%E (matches 17-month low)
- (JP) JAPAN JUL JOBLESS RATE: 4.3% V 4.3%E; JOB-TO-APPLICANT RATIO: 0.83% V 0.83%E
- (JP) JAPAN AUG MARKIT/JMMA MANUFACTURING PMI: 47.7 V 47.9 PRIOR (lowest level since April 2011)
- (KR) SOUTH KOREA JUL CYCLICAL LEADING INDEX CHANGE M/M: 0.2% V 0.6% PRIOR
- (KR) SOUTH KOREA JUL INDUSTRIAL PRODUCTION M/M: -1.6% V -0.9%E (2nd consecutive decline); Y/Y: 0.3% V 0.7%E
- (JP) JAPAN JUL VEHICLE PRODUCTION Y/Y: 16.7% V 20.3% PRIOR
- (NZ) NEW ZEALAND JUL MONEY SUPPLY M3 Y/Y: 7.2% V 5.7% PRIOR
- (SG) SINGAPORE JUL CREDIT CARD BAD DEBTS (S$): 19.9M V 18.0M PRIOR; CREDIT CARD BILLINGS (S$): 3.14T V 3.18T PRIOR; BANK LOANS & ADVANCES Y/Y: 20.0% V 20.9% PRIOR
- (SG) SINGAPORE JUL M1 Y/Y: 7.0% V 6.6% PRIOR; M2 MONEY SUPPLY Y/Y: 5.9% V 6.5% PRIOR
- (AU) AUSTRALIA JUL PRIVATE SECTOR CREDIT M/M: 0.2% V 0.4%E; Y/Y: 4.2% V 4.4%E
- (JP) JAPAN JUL OVERALL HOUSEHOLD SPENDING Y/Y: +1.7% V 1.2%E
- (UK) UK AUG GFK CONSUMER CONFIDENCE INDEX: -29 V -27E
- (JP) JAPAN JUL CONSTRUCTION ORDERS Y/Y: 8.0% V 4.6% PRIOR; HOUSING STARTS Y/Y: -9.6% V -9.7%E