Reports » Asia

Asian stock market, economy and companies update (January 18, 2013)

Contributed by Trade The News

***Markets Snapshot (as of 05:30 GMT)***
- Nikkei225 +2.2%
- S&P/ASX +0.3%
- Kospi +0.3%
- Shanghai Composite +1.4%
- Hang Seng +0.9%
- Mar S&P500 flat at 1,476
- Feb gold flat at $1,690/oz
- Feb Crude Oil -0.4% at $95.64/brl

***Notes/Observations***
- Asian equity markets are in the green across the board, with the drastic bearish reversal in Japanese yen sending Nikkei225 to its highest weekly close since early 2011 above 10,900 and Shanghai Composite testing 7-month highs above 2,300 after a heavy dose of sound economic data. Risk-on sentiment is also on display in commodities, as WTI crude rose $0.50 above $95.50 and front-month copper broke above $3.67 for a healthy spike in a span of 24 hours.

- Renewed selling in JPY started overnight as Econ Min Amari backtracked from earlier statements suggesting the excessive currency weakness could be a negative for certain domestic industries. Subsequently in US hours, local press suggested BOJ is considering an open ended asset buying until 2% inflation target is being approached replacing a conventional "fixed" program. A separate report noted BOJ will likely target 2% inflation and expand asset buying program by ¥10T in its policy decision early next week. BOJ Gov Shirakawa held talks with Fin Min Aso and and Econ Min Amari, pledging to work closer to defeat deflation, even though the cabinet officials conceded there is still no "final agreement" on a joint statement to come after the central bank's meeting. JPY hit its lows after influential PM Abe economic adviser Hamada said USD/JPY at ¥95 or ¥100 would not a problem or cause an inflation fear, sending USD/JPY to fresh 30-month highs of ¥90.20.

- China economic data was all largely as expected, as Q4 annualized GDP and 2012 GDP as well as Dec output and retail sales all beat estimates by a decimal. Most notably, China Stats Bureau said annual growth of 7-8% would be a good balance to end the period of "super rapid growth." NBS estimated 2012 property sales rising 10% and investment up 16%, but also warned over projected decline in working age population requiring improvements in productivity. NBS also pointed to higher food prices as the reason behind strong Dec CPI data (released earlier), suggesting inflation may not be an issue in the short-term, but also remaining mindful of continued expectation for higher wage costs and land prices. China govt also announced it will shift to daily liquidity operations from twice-weekly, solidifying the current PBoC policy stance on both interest rates and RRR. Earlier in the day, China Dec property price gains did showcase continued rebound in the real estate sector, as prices rose in 54 out of 70 cities vs 53 in prior month - a 3rd consecutive increase in the total.

***Currencies/Fixed Income/Commodities***
- EUR/CHF: Extending gains above CHF1.2520; Highest level since May 2011
- EUR/GBP: Extending gains above £0.8365; 9-month highs
- NZD/USD: Falls over 60pips below $0.8350 following much weaker than expected New Zealand CPI data
- (US) Weekly Fed Balance Sheet Assets Week ending Jan 16th: $2.946T v $2.911T prior; M1: -$17.3B v -$20.0B prior; M2: +$8.8B v +$74.9B prior

***Speakers/Political/In the Papers***
- (JP) Japan Vice Econ Min Nishimura: Govt, BoJ largely agreed on joint statement to be issued on Tuesday, likely to mention inflation target of 2%; There is no mention yet regarding timeframe of inflation target. - financial press
- (JP) IMF head Lagarde: Japan needs to step up its efforts toward fiscal consolidation; BOJ's 2% inflation target would be an "interesting project" - Japanese press
- (JP) Fitch: Japan's stimulus package not large enough to change sovereign rating; Credible debt stabilization strategy continues to be the main key for Japan - financial press
- (JP) BOJ considering open ended asset buying until 2% inflation target is being approached, rather than more conventional increase in total asset purchases; other less alternative ideas also being mulled - press
- (JP) BoJ is said to have reached a deal with the Abe government to undertake another round of policy easing at its next meeting, will target 2% inflation and expand asset buying program by ¥10T (raising total to ¥111T) - Nikkei News

- (CN) China Stats Bureau chief Ma: China growth of 7-8% is a good balance; cannot return to period of super rapid growth - financial press
- (CN) China PBoC to gauge repos, reverse repos from 12 major banks on daily basis - financial press
- (CN) China State Electricity Regulatory Commission of China (SERC): China power consumption growth in 2013 may rise to 9% from 5.5% - Chinese press
- (CN) Some China banks said to have tightened management of overdue loans as 2012 commercial loans said to have reached CNY500B - Chinese press

- (KR) Bank of Korea (BOK) Gov Kim: Must be prepared for sooner than expected possible unwinding of QE policies by the Fed - financial press

***Equities***
- WIT: Reports Q3 $0.13 v $0.13e, R$2.01B v $2.01Be; raises quarterly dividends from $0.035 to $0.04
- CBA.AU: Aims to achieve A$1B annual increase in AUM - AFR
- SNE: Confirms to sell 550 Madison Avenue Building for $1.1B (implies about $1,571/square foot)
- Mazda 7261.JP: May report FY12/13 op profit around ¥40B, up from ¥25B prior estimate, due to weaker than projected JPY - Nikkei News
- Canon CAJ: May report FY12 op profit around ¥390B, up from ¥356B prior estimate, due to weaker than projected JPY - Nikkei News

- INTC: Reports Q4 $0.51 (adj) v $0.45e, R$13.5B v $13.5Be; Guides Q1 Rev $12.2-13.2B v $12.9Be
- XLNX: Reports Q3 $0.38 v $0.37e, R$510M v $528Me
- COF: Reports Q4 $1.41 v $1.62e, R$5.62B v $5.77Be
- AXP: Reports Q4 $1.09 v $1.08e, R$8.14B v $8.10Be

- T: Expect a near-term pressure on operating income, margins, and EPS in Q4 due to high subsidies on smartphones - filing
- DELL: Silver Lake may announce leveraged buyout as soon as 22nd Jan - financial press
- BA: Follow up: Engineers Union (SPEEA) negotiators to seek authorization for strike; Rejecting Boeing's "final" offer
- BA: (JP) Japan Transport Min: Fuel leak on JAL-operated 787 Dreamliner in Tokyo due to malfunction - financial press
- LIFE: Said to have hired Deutsche Bank Securities and Moelis & Co to drum up takeover interest; Acquisition price seen in $65-75/shr - financial press

***Economic Data***
- (CN) CHINA Q4 REAL GDP Q/Q: 2.0% V 2.2%E; Y/Y: 7.9% V 7.8%E; 2012 GDP YTD: 7.8% (lowest since 1999) V 7.7%E V 9.3% PRIOR IN 2011
- (CN) CHINA DEC NEW HOME PRICES M/M: FELL 8 OF 70 CITIES V 10 PRIOR; Y/Y: FELL 26 OF 70 CITIES V 41 PRIOR
- (CN) CHINA DEC INDUSTRIAL PRODUCTION Y/Y: 10.3% V 10.2%E (fourth straight increase; nine-month high); YTD: 10.0% V 10.0%E
- (CN) CHINA DEC RETAIL SALES Y/Y: 15.2% V 15.1%E (9-month high)
- (CN) CHINA DEC URBAN FIXED ASSETS YTD Y/Y: 20.6% V 20.7%E (first decline in 4 months)
- (NZ) NEW ZEALAND Q4 CONSUMER PRICES (CPI) Q/Q: -0.2% V +0.1%E (1-year low); Y/Y: 0.9% V 1.2%E (below RBNZ's 1-3% target range for 2nd consecutive quarter)
- (JP) JAPAN NOV FINAL INDUSTRIAL PRODUCTION Y/Y: -1.4 % V -1.7% PRELIM; CAPACITY UTILIZATION M/M: -0.2% V 1.6% PRIOR