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Asian stock market, economy and companies update (June 23, 2014)

June 23, 2014, Monday, 05:59 GMT | 00:59 EST | 10:29 IST | 12:59 SGT
Contributed by Trade The News


***Highlights/Observations/Insights***
- Asian indices traded up nearly across the board in the morning session, cheering a much stronger than expected June flash manufacturing PMI from HSBC. Coming in at a 6-month high and the first instance of expansion in 2014, the data also showed reversal in Input prices (inflationary) and employment decreased at a slower rate, while the growth in new export orders slowed. HSBC chief economist for China indicated the "improvement was broad-based with both domestic orders and external demand sub-indices in expansionary territory", also pointing to evidence of "mini-stimulus filtering through to the real economy" and forecasting that policymakers "continue accommodative policy until the recovery is sustained." AUD/USD hit a 2-month high above $0.9440 in the wake of the data, rising some 50pips, while front month copper rose three-quarters of a percent above $3.14. Sept S&Ps were also up about 5 handles on the release, hitting new highs above 1,959.

- Also out of China, Beijing put out its quarterly Beige Book for Q2 that was slightly more downbeat, indicating fewer companies had access to credit amid weakening investment environment. Beige Book also warned that the economy continues to decelerate q/q, driven by perhaps unprecedented weakness in capex.

- Aug WTI Crude Oil contract opened up nearly a dollar above $107, with turmoil in Iraq unabated. Late on Friday, reports indicated rebel ISIS group had signed a truce with the Kurds in the northern part of the country. Over the weekend, ISIS militants were also reported to have extended their territory in the west of the country after having overrun a border post with Syria. Analysts suggest this risks a more protracted conflict, as it opens up supply routes for the rebels.

***Speakers/Political/In the Papers***
- (CN) China Academy of Social Sciences (CASS) researcher Yi Xianrong: PBoC won't adjust prudent monetary policy in H2 - Chinese press
- (CN) China iron ore port inventory rises to record - Chinese press
- (CN) As of Jun 18th, Beijing city home inventory at 80.8K units, highest level in 18 months - Xinhua
- (CN) According to owner of a small house developer in City of Xiangyang, Hubei Province, extremely difficult for small home developer to get loans now; Difficult even at 5% monthly rate from private loans - Chinese press
- (JP) Japan PM Abe's cabinet support rating is down 6pts to 43% (lowest since Dec 2012) in June - Asahi
- (JP) Japan PM Abe plans to reshuffle cabinet in Sept - Yomiuri
- (JP) According to a Nikkei survey of 144 top executives in Japan, 67% expect return to prior consumption levels in July-Sept quarter
- (KR) South Korea Fin Min Hyun: South Korea production may be affected by ferry sinking accident - financial press
- (IQ) Iran's Supreme Leader Ayatollah Khamenei: US should not intervene in Iraq; Iraqis are able to handle the conflict themselves - financial press
- (IQ) Iraq's ISIS militants said to have expanded and reinforced their territory in the west of the country after having overrun a border post with Syria - financial press
- (UK) BOE's Miles (Dove): Subdued inflation to allow policymakers to raise rates gradually; Increasingly likely he will vote for rate increase before his term expires next May - UK press

***Fixed Income/Commodities/Currencies***
- (JP) BOJ offers to buy ¥400B in 5-10yr JGB, ¥100B in 10-25yr JGB, and ¥30B in JGB with maturity over 25-yr
- (KR) South Korea (MOF) sells KRW900B 20-yr govt Bonds; avg yield 3.38%; bid-to-cover 4.44x
- SLV: iShares Silver Trust ETF daily holdings fall to 10,181 tonnes from 10,262 tonnes prior (lowest since May 1st)

***Equities***
US markets:
- GE: Confirms Alstom board chooses GE offer
- CENT: Harbinger Capital to make $1.1B bid for Central Carden - FT

Notable movers by sector:
- Consumer Discretionary: Takashimaya 8233.JP +0.4% (speculation on Q1 results); eprint Group Ltd 1884.HK -8.7% (FY13 results)
- Financials: Fosun International 656.HK +0.6% (announces acquisition)
- Materials: Rio Tinto RIO.AU +2.9%, FMG.AU +5.6% (comments from Rio Tinto exec calls for softer regulation)
- Industrials: Leighton Holdings LEI.AU +1.2% (said to quick sell John Holland unit); Asciano Limited AIO.AU +2.5% (analyst action)


***Economic Data***
- (CN) CHINA JUNE HSBC/MARKIT FLASH MANUFACTURING PMI: 50.8 V 49.7E (highest since Nov 2013, first expansion in 6 months)
- (JP) JAPAN JUN MARKIT/JMMA MANUFACTURING PMI: 51.1 (highest reading since Mar) V 49.9 PRIOR
- (NZ) NEW ZEALAND MAY CREDIT CARD SPENDING M/M: +3.0% V -3.0% PRIOR; Y/Y: 7.5% V 3.2% PRIOR
- (NZ) NEW ZEALAND MAY NET MIGRATION: 4.0K V 4.1K PRIOR

Market Snapshot (as of 03:30 GMT):
- Nikkei225 +0.4%, S&P/ASX +0.8%, Kospi +0.5%, Shanghai Composite +0.1%, Hang Seng +0.4%, Sept S&P500 +0.2 % at 1,958, Aug gold -0.3% at $1,312, Aug crude oil +0.4% at $107.21/brl