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Reports Asia

Asian stock market, economy and companies update (December 12, 2013)

December 12, 2013, Thursday, 06:09 GMT | 01:09 EST | 10:39 IST | 13:09 SGT
Contributed by Trade The News


***Observations/Insights***
- Asian equities continued to lose ground amid speculation that the Fed could begin to scale back its stimulus measures sooner than later. Despite the declines in the US markets, the S&P announced that Facebook was set to replace Teradyne in the S&P 500 index at the close of trading on Dec 20th. Shares of Facebook closed at $49.38 -1.7%, but rose to a high of 52 +5.3% in after-hours trading on the news.
- The NZD strengthened on hawkish tones out of the RBNZ after it left the official cash rate at 2.50% (as expected). The central bank said that it would increase the cash rate as needed to maintain average inflation near 2% target midpoint. It had previously stated that a rate hike will likely to be needed next year.
- The Australian jobless rate increased to a three-month high of 5.8% for November despite a rise in job numbers with the participation rate steady at 64.8%, the lowest level since October 2006. AUD was briefly higher following a November employment change reading of 21.0k beating expectations, but it quickly reversed gains on risk-aversion and expectations of Fed tapering.
- South Korean market fell after the Bank of Korea left its 7-day repo rate steady at 2.50%, as widely expected. Increased volatility in the yen continued to pose considerable risk to the domestic economy.


***Fixed Income/Commodities/Currencies***
- JGB: (JP) Japan's MoF sells ¥2.50T in 0.2% (0.2% prior) 5-yr notes; Avg yield: 0.197% v 0.193% prior; Bid to cover: 4.43x v 5.03x prior
- (CN) China National Petroleum Corporation (CNPC) researcher: China natural gas price may rise 77% by 2015; Sees China oil demand to rise 2.5%/yr in 2013-2020 - Chinese press
- (CN) China Qinhuangdao coal price rises to CNY605-615/t (9th consecutive rise; highest since mid-June)
- (CN) China Iron and Steel Association (CISA) plans to introduce daily price index for imported iron ore in early 2014 - Chinese press
- GLD: SPDR Gold Trust ETF daily holdings fall 2.1 tonnes to 833.6 tonnes (lowest since Jan 2009)
- SLV: iShares Silver Trust ETF daily holdings fall to 10,208 tonnes (lowest since July 15) from 10,304 tonnes

***Speakers/Political/In the Papers***
- (JP) Japan Pension Fund (GPIF) panel head Ito: Govt should decide on independence of GPIF
- (JP) Japan PM Abe cabinet set to approve ¥5.5T extra budget for stimulus measures - Japanese press
- (JP) Japan to increase total defense spending to ¥24.4T over the next 5-yr mid-term Defense Program - Kyodo News
- (JP) Japan megabanks to allow overseas credit card users to access cash at ATMs - Japanese press

- (CN) China to sell second tranche CNY15B of negotiable certificates of deposits (NCD) for 5 banks on Friday Dec 13th, 2014 - financial press
- (CN) PBoC won't conduct open market operations (OMO) in today's session (3rd consecutive session of halted operations); Drains CNY37B this week v drained CNY47B prior (2nd week of net drain)
- (CN) China Finance Ministry announces import, export duty adjustments, effective Jan 1st; Over 760 imported goods to be affected

- (NZ) RBNZ Gov Wheeler: Rate must rise by 225bps over the next 2 1/4 year; RBNZ serious about containing inflation - press conf
- (NZ) RBNZ Gov Wheeler: RBNZ concerned about house prices; Auckland house price gain is unhealthy - address at Finance and Expenditure Committee
- (AU) New South Wales (NSW) announces deficit wider than prior forecast

- (ID) Fitch: Indonesia residential property faces near-term headwinds
- (VN) Moody's: Firmer macroeconomic stability supports Vietnam sovereign rating
- (TH) Moody's: Thailand political crisis is credit Negative

- (UK) British Chambers of Commerce (BCC): Raises 2013 GDP forecast to 1.4% from 1.3% prior forecast, Raises 2014 GDP to 2.7% from 2.2% prior forecast
- (EU) ECB may put in place stricter regulations on sovereign bonds - FT citing ECB's Praet
- (EU) EU negotiators said to have reached provisional agreement to impose possible losses on shareholders, bondholders, savers on failing banks form Jan 2016 - financial press
- (IT) Italy Govt of PM Letta wins confidence vote in the Senate; as expected

- (US) House panel has cleared bipartisan budget deal for full house vote this week; vote may occur Thursday - financial press

***Equities***
Market Snapshot (as of 04:30 GMT):
- Nikkei225 -1.4%, S&P/ASX -1.3%, Kospi -0.7%, Shanghai Composite -0.1%, Hang Seng -0.5%, Dec S&P500 -0.2% at 1,777, Feb gold -0.2% at $1,255, Jan crude oil -0.1% at $97.36/brl

US markets:
- HLT: Prices 117M share IPO at $20/shr (as expected)
- PRTA: Prothena Enter Into Worldwide Collaboration with Roche to Co-Develop and Co-Promote Antibodies for Treatment of Parkinson's Disease; +7.7% afterhours
- FB: *TO BE ADDED TO S&P500 AND S&P100; effective after the close of trading on Friday, December 20; +4.0% afterhours
- MW: Reports Q3 $0.90 v $0.87e, R$649M v $627Me; +1.4% afterhours

- AET: Reaffirms FY13 $5.80-5.90 v $5.87e, R$47B v $47.1Be; Guides initial FY14 at least $6.25 v $6.21e, R$53B v $54.9Be - filing; -0.5% afterhours
- IAG: Suspends dividend payout (prior was 6.5% yield) to preserve balance sheet; -3.4% afterhours
- VRA: Reports Q3 $0.37 v $0.34e, R$130.1M v $129Me; guides lower; -7.7% afterhours
- SUNE: Guides Q4 semiconductor materials Rev $209-234M v $234-264M prior; -11.3% afterhours
- ATHN: Guides initial FY14 $0.98-$1.10 v $1.37e, R$725-755M v $765Me; Affirms FY13 $1.05-1.15 v $1.03e, R$580-615M v $592Me (prior "at or near the low end" $1.05-1.15); -15.8% afterhours

Notable movers by sector:
- Consumer discretionary: Sunvim Group 002083.CN +2.2% (receives govt subsidy); Huayi Brothers 300027.CN +4.9%, Zhejiang Huace Film 300133.CN +9.6%, China Television Media 600088.CN +3.6% (China annual movie box office reaches CNY20B); Shanghai Lansheng 600826.CN +10.0% (approves for SOE restructure)
- Industrials: Kanamoto Co Ltd 9678.JP +2.3% (FY12/13 results); Doosan Heavy 034020.KR -4.6% (to sell treasury shares); Chengdu Road & Bridge Engineering 002628.CN +0.9% (awarded contract); Jiangsu WELLE Environmental 300190.CN +1.7% (awarded contract)
- Materials: Nitto Denko Corp 6988.JP -18.3% (FY13/14 guidance)
- Financials: Cinda Asset Management 1359.HK +29.9% (IPO)
- Technology: Pegatron Corp 4938.TW -1.1% (working safety concerned)
- Energy: Kingdream 000852.CN +3.1%, Shandong Molong Petroleum Machinery 002490.CN +4.3% (China Qinhai province finds shale gas)
- Utilities: Envestra Ltd ENV.AU +1.0% (FY14 guidance)


***Economic Data***
- (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE UNCHANGED AT 2.50%, AS EXPECTED
- (AU) AUSTRALIA NOV EMPLOYMENT CHANGE: +21.0K V +10.0KE (7-month high); UNEMPLOYMENT RATE: 5.8% V 5.8%E
- (AU) AUSTRALIA DEC CONSUMER INFLATION EXPECTATION: 2.1% V 1.9% PRIOR (4-month high)
- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 2.50% (AS EXPECTED); (7th straight pause)
- (JP) JAPAN NOV TOKYO AVERAGE OFFICE VACANCIES: 7.5 V 7.6 PRIOR
- (AU) AUSTRALIA OCT CREDIT CARD BALANCES (A$): 48.9B V 48.8B PRIOR; CREDIT CARD PURCHASES: 23.0B V 22.0B PRIOR
- (NZ) NEW ZEALAND NOV FOOD PRICES M/M: -0.2% V -1.0% PRIOR
- (NZ) NEW ZEALAND REINZ NOV HOUSE PRICE INDEX: 3,885 V 3,839 PRIOR; M/M: 1.2% V 1.6% PRIOR; HOUSE SALES Y/Y: -6.6% V +2.1% PRIOR
- (JP) Japan investors bought net ¥413.2B in foreign bonds last week vs bought net ¥65.5B in prior week (9th straight week of net purchases); Foreign Investors bought net ¥113.8B in Japan stocks v bought net ¥368.7B in prior week