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Reports Asia

Asian stock market, economy and companies update (March 18, 2014)

March 18, 2014, Tuesday, 06:10 GMT | 02:10 EST | 10:40 IST | 13:10 SGT
Contributed by Trade The News


***Highlights/Observations/Insights***
- A wide gap among analysts related to expectations for the next RBA policy move is likely to be narrowed after the most recent set of the central bank's meeting minutes that showed even greater commitment to keeping rates steady. Whereas the more dovish contingent - expecting as many as 2 more rate cuts this year - was quick to dismiss the most recent uptick in employment data as an result of a sampling adjustment, today's minutes will make it more difficult to keep that forecast. RBA specifically noted "further signs that low interest rates were providing support to activity", pointing to "improved economic conditions evident across a range of household and business indicators." RBA also said the subdued labor market is consistent with the usual lag in economic activity. Moreover, RBA was increasingly more focused on the property sector, with the minutes showing the discussion of macroprudential tools used by other countries (i.e. LVR in New Zealand) and their applicability in Australia. AUD/USD briefly rose above the $0.91 handle (1-week high) after the release of the minutes before retreating to $0.9080's.

- China property names were softer despite the bid in the broader indices, weighed down by fresh evidence of a slowdown in housing prices. In February, M/M prices rose in 57 cities out of 70, down from 62 prior. New home prices across the 70 cities were up 8.7%, down from 9.6% in January and at its slowest rate of growth in 6 months. New home price slowdown was not isolated to 3rd and 4th tier cities, as both Beijing and Shanghai experienced notable declines (12.2% from 14.7% and 15.7% from 17.5% respectively).
- Separately in China, the Yuan continued to fall in onshore trade despite the PBoC setting the midpoint firmer for the currency. Yuan fell to CNY6.19 in onshore trade and was also within an earshot of the key 6.20 level offshore. China Ministry of Commerce (MOFCOM) spokesperson said investors should not overreact to yuan volatility as two-way movement becomes the norm, promising to maintain reasonable and stable Yuan.

- There was little of note in the Ukraine-Russia standoff after today's announcement of sanctions. Japan's Foreign Ministry joined EU in suspending talks regarding Russian investment, while separate press sources suggested Putin may be preparing his own list of sanctions on certain US lawmakers (thought to potentially include Sens. Robert Menendez (D-NJ) and Bob Corker (R-TN), the leaders of the Senate Foreign Relations Committee) as early as Tuesday.

***Fixed Income/Commodities/Currencies***
- (CN) PBoC to drain CNY100B in 28-day repos (9th consecutive drain)
- (JP) Japan's MoF sells ¥1.10T in 1.5% (1.6% prior) 20-year JGBs; Avg yield: 1.527% v 1.459% prior; bid-to-cover: 3.69x v 3.67x prior
- GLD: SPDR Gold Trust ETF daily holdings fall 3.8 tonnes to 812.8 tonnes
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1341 v 6.1321 prior setting

***Equities***
US markets:
- FF: Reports Q4 $0.61 v $0.15 y/y, R$125.6M v $74.6M y/y; +21.2% afterhours
- IVAN: Suspends Activity on Tamarack Project Pending Regulatory Clarity; +2.1% afterhours
- AMZN: Said to be shipping new video-streaming device in early April - financial press; -0.1% afterhours
- GGS: Reports prelim Q4 op loss $69.4M; Rev $81M v $78Me; Delays 10K filing; Hires advisors to review financial and strategic alternatives to address liquidity needs

Notable movers by sector:
- Consumer Discretionary: Kose Corp 4922.JP +2.3% (acquisition); Formosa International Hotels Corp 2707.TW +3.7% (FY13 results)
- Financials: China Merchants Property Dev 000024.CN -2.9% (FY13 results)
- Industrials: Mitsui Chemical 4183.JP +2.0% (speculation on FY14/15 results); Nufarm Ltd NUF.AU +2.6% (reorganization plan); Nissan Motor 7201.JP +1.9% (analyst action); Hsin Chong Construction Group 404.HK -4.2% (FY13 results); CSR Corp 1766.HK +8.8% (awarded contract)
- Technology: Yonyou Software 600588.CN +5.3% (FY13 results); Beijing Ultrapower Software 300002.CN -7.0% (FY13 results); Shanghai East China Computer 600850.CN +6.5% (FY13 results)
- Healthcare: Guangzhou Baiyunshan Pharmaceutical Holdings 874.HK +6.9% (FY13 results)
- Utilities: Panva Gas 1083.HK +1.6% (FY13 results)


***Economic Data***
- (CN) China Feb Net Forex Purchases: CNY128.3B v CNY437.4B m/m
- (CN) CHINA FEB NEW HOME PRICES M/M: PRICES RISE IN 57 OF 70 CITIES V 62 PRIOR; Y/Y: PRICES RISE IN 69 OF 70 CITIES V 69 PRIOR
- (CN) CHINA FEB ACTUAL FOREIGN DIRECT INVESTMENT (FDI) YTD: 10.4% V 16.1% PRIOR
- (AU) RESERVE BANK OF AUSTRALIA (RBA) MAR MEETING MINUTES: RATES LIKELY STABLE IF ECONOMY EVOLVES BROADLY AS EXPECTED

Market Snapshot (as of 03:30 GMT):
- Nikkei225 +1.1%, S&P/ASX +0.5%, Kospi +0.4%, Shanghai Composite +0.1%, Hang Seng +0.4%, Jun S&P500 +0.1% at 1,853, Apr gold -0.9% at $1,360, Apr crude oil -0.1% at $97.99/brl