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Reports Asia

Asian stock market, economy and companies update (February 14, 2014)

February 14, 2014, Friday, 07:18 GMT | 02:18 EST | 11:48 IST | 14:18 SGT
Contributed by Trade The News


***Highlights/Observations/Insights***
- China y/y CPI tops estimates, remaining at 2.5% in Jan and matching an 8-month low. Incidentally, m/m rate predictably accelerated in the month leading to Lunar New Year holiday, rising by an 11-month high rate of 1.0%. Food inflation once again outpaced non-food inflation, rising 2.4% m/m and 3.7% y/y vs 0.3% and 1.9% non-food. Separately, shadow banking worries simmered a little hotter after China press reported as many as 6 trust firms may have up to a CNY5B exposure to the troubled Shanxi Liansheng Energy. Analysts have previously expressed some concern that the turmoil related to ICBC's China Credit Trust products was the "canary in the coal mine", as coal prices fall and investment dries us.
- Gold has regained a firmer footing, extending to 3-month highs above $1,305 overnight. Note the SPDR Gold trust fund is rising again as well, with a near 2-month high in holdings. Australia's largest gold miner - Newcrest Mining - posted mixed H1 results. Newcrest reported H1 net profit of A$207M, down from A$320M y/y, but saw H1 production up over 25% y/y and also forecasted FY output at the top end of prior guidance range.
- RBA Asst Gov Kent drove AUD slightly lower, noting there is potential for a correction in AUD, but also indicated inflation will be higher than in the Nov forecast (as confirmed by the latest RBA quarterly policy statement) and provided no indication how far that correction would run. He also acknowledged weakness in the labor market, but said investors should not be overly pessimistic from one month of data.

***Fixed Income/Commodities/Currencies***
- (US) Weekly Fed Balance Sheet Total Assets Week ending Feb 12th: $4.12T v $4.11T prior; Reserve Bank Credit: $4.08T v $4.07T prior; M1: +$109.2B (**multi-year high) v +$8.6B prior; M2: +$14.9B v +$25.5B prior
- (CN) Daily Shibor fixings: O/N: 3.2780% v 3.6690% prior (4th consecutive decline, lowest since Jan 16th); 1-week: 4.4360% v 5.0210% prior (5th consecutive decline, lowest since Jan 14th)
- JGB: (JP) Japan's MoF sells ¥T in 0.2% (0.2% prior) 5-yr notes; Avg yield: 0.185% v 0.206% prior; Bid to cover: 4.07x v 3.73x prior
- (JP) BOJ offers to buy ¥2.0T in T-bills outright
- (JP) Japan investors sold net ¥617.2B in foreign bonds last week (4th consecutive week of net sales) vs sold net ¥1.82T in prior week; Foreign Investors sold net ¥76.4B in Japan stocks v sold net ¥751.9B in prior week
- (AU) Australia MoF (AOFM) sells A$800M in 5.5% 2018 Bonds; avg yield: 3.2157%; bid-to-cover: 4.56x
- GLD: SPDR Gold Trust ETF daily holdings rise 7.5 tonnes to 806.4 tonnes (highest since Dec 20th)

***Speakers/Political/In the Papers***
- (CN) Follow-up: China Development Bank (CDB) said to provide CNY2B credit to Shanxi Liansheng Energy for restructuring - financial press
- (CN) China State Council researcher Chen Daofu: China can endure 1-2 local govt defaults - Chinese press
- (JP) Japan Econ Min Amari: US, Japan agreement on contentious trade issues is the key for Tran-Pacific Partnership (TPP)
- (AU) Australia Central Bank (RBA) Asst Gov Kent: Sees potential for a correction in AUD after it has been on the high side of fundamentals for the past few years; Lower AUD would balance growth and return it to trend
- (KR) Bank of Korea (BOK) Gov Kim: Policy needs long-term view in tackling short-term issues; Will take several years to normalize from financial crisis
- (KR) South Korea Fin Min Hyun: Sees recovery in South Korea economy; To focus policy on job creation and domestic demand
- (TH) Thailand riot police has started to clear protest sites in Bangkok without resistance - financial press
- World Bank looks to increase lending by $100B (+50% increase) over the next 10 years through International Bank for Reconstruction and Development (IBRD) - financial press
- NPD: Jan total US video game sales $664M, -21% y/y

***Equities***
Market Snapshot (as of 04:30 GMT):
- Nikkei225 -1.7%, S&P/ASX +0.7%, Kospi +0.7%, Shanghai Composite +0.5%, Hang Seng +0.4%, Mar S&P500 -0.3% at 1,819, Apr gold +0.5% at $1,306, Mar crude oil -0.1% at $100.23/brl

US markets:
- LCAV: To be acquired by PhotoMedex for $5.37/share in cash, or $106M; to be accretive to PhotoMedex's cash EPS in 2014; +26.1% afterhours
- JCOM: Reports Q4 $0.80 v $0.77e, R$138M v $139Me; Increases dividend; +19.6% afterhours
- CLF: Reports Q4 $1.22 adj v $0.77e, R$1.52B v $1.45Be; +7.3% afterhours
- IM: Reports Q4 $0.88 adj v $0.80e, R$11.8B v $11.6Be; +3.1% afterhours
- BRCD: Reports Q1 $0.24 v $0.20e, R$565M v $550Me; Guides Q2 $0.17-0.19 v $0.19e, R$520-540M v $540Me - slides; +1.8% afterhours
- KRFT: Reports Q4 $0.43(adj) v $0.61e, R$4.60B v $4.65Be; +1.1% afterhours
- OXY: Announces Sale of Hugoton Field Assets for $1.4B As Part of Company's Strategic Review; +0.4% afterhours
- TSLA: Confirms press report of an incident of fire in Toronto; 4-month old vehicle was unplugged in a garage; -1.3% afterhours
- EFX: Reports Q4 $0.91 v $0.91e, R$578.5M v $581Me; increases dividend 14% from $0.22 to $0.25; -5.4% afterhours
- A: Reports Q1 $0.67 v $0.66e, R$1.68B v $1.69Be; Exec: clinical business crimped by slow release of research budgets in US and China - conf call; -5.8% afterhours
- TRLA: Reports Q4 $0.03 adj v $0.10e, R$49.7M v $49.2Me; -14.7% afterhours
- GNC: Reports Q4 $0.63 v $0.65e, R$613.7M v $634Me; -16.0% afterhours
- WTW: Reports Q4 $0.54 v $0.60e, R$366M v $360Me; -20.2% afterhours

Notable movers by sector:
- Consumer Discretionary: Luk Fook Holdings 590.HK +1.3% (sales results during Lunar New Years); Kirin Holdings 2503.JP -8.6% (FY13 results); Meiji Holdings 2269.JP +3.8% (9M results)
- Financials: DBS Group Holdings DBS.SG -0.6% (Q4 results); Oversea-Chinese Banking Corp OCBC.SG +0.1% (Q4 results); Everbright Securities 601788.CN -0.6% (Jan results)
- Materials: Newcrest Mining NCM.AU -1.3% (H1 results); Toyo Tire & Rubber 5105.JP +8.0% (FY13 results)
- Industrials: Sumitomo Rubber Industries 5110.JP -1.8% (FY13 results)
- Technology: Lenovo Group 992.HK -0.5%, China Wireless 2369.HK -1.3% (IDT releases Q4 China smartphone shipment)
- Utilities: Tepco 9501.JP -2.4% (detected record level of radioactive cesium near Pacific)
- Telecom: SmarTone Telecommunications 315.HK +0.4% (H1 results)


***Economic Data***
- (CN) CHINA JAN CONSUMER PRICE INDEX (CPI) M/M: 1.0% (11-month high) V 0.3% PRIOR; Y/Y: 2.5% (matches 8-month low) V 2.4%E
- (CN) CHINA JAN PRODUCER PRICE INDEX (PPI) Y/Y: -1.6% V -1.6%E (23rd month of decline)
- (NZ) NEW ZEALAND JAN NON-RESIDENT BOND HOLDINGS: 65.1% V 65.1% PRIOR
- (NZ) NEW ZEALAND JAN FOOD PRICES M/M: +1.2% V -0.1% PRIOR (first rise in 4 months and 7-month high)
- (NZ) NEW ZEALAND REINZ JAN HOUSE PRICE INDEX: 3,756 V 3,847 PRIOR; M/M: -2.4% (2nd consecutive decline) V -1.0% PRIOR; HOUSE SALES Y/Y: -4.3% V -1.1% PRIOR
- (PE) PERU CENTRAL BANK LEAVES REFERENCE RATE UNCHANGED AT 4.00%, AS EXPECTED