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Reports Asia

Asian stock market, economy and companies update (December 04, 2013)

December 4, 2013, Wednesday, 06:30 GMT | 01:30 EST | 11:00 IST | 13:30 SGT
Contributed by Trade The News


***Observations/Insights***
- Shanghai Composite was the lone index to trade higher, with other markets tracking softer US sentiment. MOFCOM spokesperson said to have announced plans for as many as 18 new free-trade zones, while finalizing 12 free-trade agreements with ASEAN, Singapore, Pakistan, New Zealand, Chile, Peru, Costa Rica, Iceland and Switzerland, Hong Kong, Macau and Taiwan. Commerce Min still in negotiations on 6 agreements: South Korea, Gulf Cooperation Council, Australia and Norway FTA.
- BOJ board member Sato noting that while further policy easing cannot be ruled out, the magnitude of April 2013 launch of QE would be hard to replicate; Does not see need for a preemptive easing if the impact of sales tax hike is temporary. Nikkei225 is the laggard, having fallen by over 2% in the morning session on sudden reversal in recent yen weakness.
- Australia Q3 GDP misses estimates on q/q and y/y; 2.3% annual print marks lowest level since Q4 of 2011; Terms of trade component particularly weak at -3.3% vs +0.1% prior as China demand for raw materials slow. Despite the selloff in AUD, some of the analysts were quick to dismiss the data, pointing to more recent evidence of improvement in Q4.


***Fixed Income/Commodities/Currencies***
- (JP) BOJ offers to buy ¥200B in 1-3yr JGBs, ¥300B in 3-5yr JGBs, and ¥200B in JGBs with maturity over 10-yr
- (AU) Australia MoF (AOFM) sells A$800M in 2.75% 2022 Bonds; avg yield: 4.1615%; bid-to-cover: 2.25x

- (US) API PETROLEUM INVENTORIES: CRUDE: -12.4M (first draw in 10 weeks) v 0Me
- GLD: SPDR Gold Trust ETF daily holdings fall 1.8 tonnes to 841.4 tonnes (lowest since Jan 2009)
- SLV: iShares Silver Trust ETF daily holdings fall to 10,304 tonnes (lowest level since 10,284 on Jul 23rd) from 10,309 tonnes
- (CN) China Statistics Bureau: China pork price +0.7% in late Nov

- USD/CNY: (CN) PBoC sets yuan mid point at 6.1300 v 6.1352 prior setting (record high setting for Yuan)

- AUD is down sharply across the board following weaker than expected Australia Q3 GDP, which is also weighing on NZD against USD and other currencies. AUD/USD fell over 1% below $0.9050 at its worst level - a 3-month low - while AUD/JPY tumbled as low as ¥92.50, down about 120pips from opening highs. NZD/USD reversed 4 consecutive rising sessions to fall over 60pips below $0.8180 and NZD/JPY was down 70pip at ¥83.70. USD/JPY pair largely traded sideways around ¥102.50, backing away from overnight highs amid a massively one-sided yen-short positioning in the markets. EUR/USD traded in a narrow 15-pip range around $1.3590, with traders eyeing Thursday's ECB policy decision.


***Speakers/Political/In the Papers***
- (CN) China Ministry of Commerce (MOFCOM) spokesman Yao: China targets to set up as many as 18 free-trade zones - financial press
- (CN) China politburo holds conference on economic work for 2014, reiterates key areas of reform; To issue urbanization plan in 2014 - Xinhua
- (CN) Moody's: China banking system outlook stable but with some challenges
- (CN) Citigroup: Shanghai Composite may rise 26% in 2014 above 2,800
- (CN) China Ministry of Commerce (MOFCOM) spokesperson Shen Danyang: US has exaggerated the scale of dumping of Chinese products

- (JP) Japan govt, companies said to be planning total stimulus of ¥18.6T - Japanese press
- (JP) BOJ Board member Sato: The domestic economy is recovering moderately; there is no need to ease preemptively if economic impact of sales tax hike temporary

- (AU) Australia Treasurer Hockey: Govt GDP forecasts will not be achieved
- (AU) RBS strategist: Q3 GDP is "ancient history"; RBA knows that Q4 has improved and rates are likely to remain on hold for some time
- (AU) Moody's analyst: Latest GDP data shows Australian economy is underperforming; Seen some positive developments since end of Sept - SMH


***Equities***
Market Snapshot (as of 04:30 GMT):
- Nikkei225 -1.7%, S&P/ASX +0.4%, Kospi -0.7%, Shanghai Composite +1.3%, Hang Seng -0.4%, Dec S&P500 +0.1% at 1,793, Feb gold -0.1% at $1,220, Jan crude oil +1.2% at $97.2/brl

US markets:
- CCXI: Announces Positive Top-Line CCX168 Phase II Data in ANCA-Associated Renal Vasculitis; +9.6% afterhours
- SAEX: Announces $40M of New Project Awards (NOTE: Q4 Rev est $76M), Including First Contract in Brazil, along with Achievement of Key Milestone; +9.2% afterhours
- JCP: Reports Thanksgiving weekend SSS +10.1% y/y; +3.4% afterhours
- LEN: Prevails in Defamation and Extortion Case Against Marsch; Jury Awards $1B in Damages; +0.5% afterhours

- OVTI: Reports Q2 $0.60 v $0.43e, R$397.2M v $392Me; -12.7% afterhours
- AMBI: Plans not to submit NDA for accelerated approval of quizartinib based on the Phase 2 and 2b clinical trial data; -22.7% afterhours

Notable movers by sector:
- Consumer discretionary: Dentsu Inc 4324.JP -2.2% (Jiji cuts stake); Cochlear Ltd COH.AU +1.0% (receives FDA clearance); Sydney Airport SYD.AU -5.3% (traffic results)
- Industrials: Token Corp 1766.JP -4.2% (H1 results); Kia Motors 000270.KR +1.1% (Nov US sales); First Tractor 38.HK +2.5%, Stanley Fertilizer 002588.CN +5.6%, Shandong Kingenta Ecological Engineering 002470.CN +6.4% (China politburo issues plan on modern agriculture development); CPI Yuanda Environmental-Protection Group Co Ltd 600292.CN +2.4%, Beijing SPC Environment Protection Tech 002573.CN +1.4%, Fujian Longking Co Ltd 600388.CN +2.8% (Eastern China reports smog; China politburo issues plan on green, low-carbon development); China COSCO 601919.CN +5.0%, China Shipping Development 600026.CN +10.0%, China Shipping Container 601866.CN +9.9% (China politburo issues plan to promote marine economy related constructions); Shanghai Port 600018.CN +10.0%, Shanghai Waigaoqiao FTZ 600648.CN +10.0%, Shanghai Lujiazui Finance & Trade Zone Development 600663.CN +10.0%, Shanghai Material Trading 600822.CN +10.0% (China comments on free trade zone trials)
- Materials: Ningxia Qinglong Pipes Industry Co Ltd 002457.CN +10.0% (private banking plans)
- Financials: Emperor Capital Group Ltd 717.HK +7.6% (FY13 results)


***Economic Data***
- (AU) AUSTRALIA Q3 GDP Q/Q: 0.6% V 0.7%E; Y/Y: 2.3% V 2.6%E (lowest reading since Q4 2011)
- (AU) AUSTRALIA NOV AIG PERFORMANCE OF SERVICES INDEX: 48.9 V 47.9 PRIOR (8-month high)
- (CN) CHINA NOV HSBC/MARKIT SERVICES PMI: 52.5 V 52.6 PRIOR (22nd month of expansions)
- (HK) HONG KONG NOV HSBC/MARKIT PMI: 52.1 V 50.1 PRIOR (highest since Jan)
- (IN) INDIA NOV HSBC/MARKIT SERVICES PMI: 47.2 V 47.1 PRIOR (5th consecutive contraction)
- (NZ) NEW ZEALAND Q3 VALUE OF ALL BUILDINGS Q/Q: 1.4% V 4.8%E
- (KR) SOUTH KOREA NOV FOREIGN RESERVES: $345B V $343B PRIOR
- (UK) UK NOV BRC SHOP PRICES INDEX Y/Y: -0.3% V -0.5% PRIOR (7th month of decline)