Reports » Asia

Asian stock market, economy and companies update (January 08, 2013)

Contributed by Trade The News

***Markets Snapshot (as of 05:00 GMT)***
- Nikkei225 -1.1%
- S&P/ASX -0.6%
- Kospi -0.6%
- Shanghai Composite -0.1%
- Hang Seng -0.5%
- Mar S&P500 -0.1% at 1,455
- Feb gold +0.1% at $1,648/oz
- Feb Crude Oil -0.1% at $93.15/brl

***Notes/Observations***
- Asian equity markets traded largely in the red, tracking a somewhat cautious sentiment on Wall Street going into the unofficial start of the Q4 earnings season on Tuesday with an update out of Alcoa. Both S&P/ASX and Shanghai Composite were initially higher before paring those gains in the final hour of trading. Nikkei225 was the biggest decliner however, losing over 1% while tracking the second day of short-covering in JPY pairs. USD/JPY fell as low as ¥87.25 after local press reported that the BOJ-govt accord would set shared goals of job stability, 2% inflation target but would not set any hard deadlines on inflation. Yen weakness did reemerge after Fin Min Aso said Japan will be using its FX reserves to purchase ESM bonds starting today, as USD/JPY pair rose back to ¥87.70 level. Aso also called for a joint policy statement with BoJ to enhance policy coordination. Separately, PM Abe called for MoF to compile a stimulus package by this Friday. Japan's economic stimulus policy draft indicated the cabinet will continue to monitor FX markets, look to speed up reconstruction efforts related to earthquake, facilitate growth by encouraging R&D investment in renewable energy, and provide support for SMEs.

- Australian dollar was the weakest performer among the majors, falling some 40 pips below $1.0480 from session highs in the wake of disappointing November trade data that showed the biggest deficit since early 2008. The silver lining in the report were strong exports to China (up about 5%) as well as a 15% rise in iron ore shipments. Economists also downplayed the report, noting this was an outdated datapoint for November that would be reversed in December when higher prices of iron ore are taken into account.

- On the corporate earnings front, Samsung Electronics reported a record high Q4 op procit of KRW8.8T, rising 89% y/y and beating estimates. Despite the strong results, shares slumped about 1% late in the day.

***Currencies/Fixed Income/Commodities***
- USD/JPY: (JP) Some top execs in Japan are concerned the weakness in JPY is too fast - US financial press (Update)
- USD/JPY: (JP) Japan business lobby (Keidanren) head Yonekura: Sees USD/JPY in ¥75-90 range this year; Current level of ¥88 is acceptable - Nikkei News
- USD/JPY: Rises about 30pips above ¥87.70 on ESM bond purchase comments from Fin Min Aso
- EUR/USD: Rises about 30pips above $1.3130 after comments from Japan Fin Min Aso on ESM bonds
- AUD/USD: HSBC economists expect AUD to face more headwinds in 2013 than in 2012 - The Australian
- AUD/USD: Falls over 10 pips toward $1.05 handle after wider than expected Australia trade deficit
- (JP) Fitch: Will not change Japan sovereign rating based on LDP campaign pledges - financial press
- JGB: (JP) Japan MoF sells ¥2.10T in 0.8% 10-yr notes; Avg yield: 0.822% v 0.730% prior; Bid to cover: 3.52x v 3.85x prior
- (IN) Fitch: India may be Downgraded in the next 12-24 months
- GLD: SPDR Gold Trust ETF daily holdings fall by 1.4 tons to 1,340.7 tons
- (CN) China National Bureau of Stats (NBS): China iron ore inventory in the first week of Jan was 74.74M MT, first w/w increase in 10 weeks - financial press

***Speakers/Political/In the Papers***
- (CN) China Finance Ministry researcher Jia Kang: 2013 fiscal deficit could be around 2.2% of GDP v 1.5% in 2012 - Chinese press
- (CN) China top four banks saw Dec lending at approx CNY164B - Chinese press
- (CN) China Ministry of Commerce: Aims to grow of outsourcing industry by 30% per year through 2015 - Shanghai Daily
- (CN) According to PricewaterhouseCoopers, China's IPO market in 2013 may see an increase of up to 40% in funds thanks to govt stimulus measures - Shanghai Daily
- (KR) South Korea Fin Min Bahk: Exports likely to improve in 2013 - Korean press
- (NZ) RBNZ may do more to calm housing markets - New Zealand press
- (JP) Japan PM Abe: To compile stimulus package on Friday, 11th Jan - financial press
- JGB: (JP) Japan FY12/13 Govt bond issuances expected to reach ¥50T - Japanese press
- (JP) Japan think tank forecasts Japan FY13/14 GDP likely to rise about 2%; Proposed govt stimulus to lift Q1 GDP by 0.3-0.7% - Yomiuri News
- (UK) UK British Chambers of Commerce (BCC): UK economy showing broad improvement in business sentiment in Q4

***Equities***
- Samsung Electronics 005930.KR: Reports prelim Q4 Op profit KRW8.8T (+88.8% y/y) v KRW8.5Te; Rev KRW56.0T (+18.4% y/y) v KRW56.4Te
- Sharp 6753.JP: US unit CEO: Expect 3rd year in a row of double digit sales growth in the US; Expecting Q4 Rev to top estimates - CES presentation comments
- IHI 7013.JP: President: Exports and industrial production to start recovering moderately; Outlook for ASEAN particularly bright - Nikkei News
- SNE: Exec: Emerging markets are the key to growth - CES press conference
- FMG.AU: To delay loading of certain long-term contractual iron ore cargoes due to machinery issues - financial press

- AET: Guides FY13 EPS at least $5.40 v $5.52e; Rev growth seen at about +9% (implies $38.7B based on 2012 forecast v $39.0Be); -0.4% afterhours
- HLS: Raises FY12 guidance to $1.53-1.55 v $1.54e (guided $1.49-1.53 prior) - filing; -0.4% afterhours
- YUM: Guides FY12 EPS $3.24 v $3.26e (prior guidance was "at least $3.24"); Cuts Q4 China SSS guidance - filing; -5.1% afterhours

***Economic Data***
- (AU) AUSTRALIA NOV TRADE BALANCE (A$): -2.64B V -2.30BE (biggest deficit since Mar 2008)
- (AU) AUSTRALIA DEC AIG PERFORMANCE OF CONSTRUCTION INDEX: 38.8 V 37.0 PRIOR (10-month high)
- (UK) UK DEC BRC SALES LFL Y/Y: 0.3% V 0.5%E