New York: 00:15 || London: 05:15 || Mumbai: 08:45 || Singapore: 11:15

Reports Asia

Asian stock market, economy and companies update (May 12, 2014)

May 12, 2014, Monday, 05:33 GMT | 00:33 EST | 09:03 IST | 11:33 SGT
Contributed by Trade The News


***Highlights/Observations/Insights***
- Japan's rising energy bill due to weak Yen and complete nuclear power shutdown continued to be felt in the current account data, which came in well below estimates for March. For the year FY13/14, the current account surplus of ¥789.9B was the smallest surplus on record. Analysts expect the situation to continue to deteriorate - BNP expects Japan to post its first annual current account deficit next year, while Credit Suisse thinks it will happen after 2017. JPY was a bit softer after the data, as USD/JPY briefly rose above the ¥102 handle - a near 1-week high.

- Closely watched geopolitical standoff in east Ukraine is entering a new phase, as local pro-Russian separatists have beaten the Kiev govt to the polls by holding referendum votes in the cities of Donetsk and Luhansk on Sunday. Although results were not expected until Monday, Donetsk electoral commission head Lyagin announced that 89.7% voted in favor of independence with a high turnout that was estimated 74.9%. Neither Kiev govt nor Western leaders had any response to the results which they have previously denounced as illegal and "farcical". Russia was also reserved in response, even as the head of NATO announced there were no signs of troops returning to their bases from the Ukrainian border as promised by Putin. Ahead of the poll, Donetsk officials announced they will look to begin a period of negotiation with the authorities in Kiev, but also branded any Ukraine government soldiers as "occupiers" in the event of the vote for independence.

- China Pres Xi announced the nation will need to adapt to a new normal in the pace of economic growth, also noting Beijing must take "timely countermeasures to reduce potential negative effects." In other notable Chinese press reports, Premier Li cautioned that large FX reserves may stoke inflation in the long term, justifying potentially lower levels of trade surpluses going forward. PBoC Gov Zhou also reiterated some policy fine-tuning is still possible, but no major policy changes should be expected. Comments were despite the soft CPI prints reported last week that prompted some speculation over the need for more easing by the Chinese central bank. Instead, PBoC turned to currency levers, setting CNY midpoint at its softest level in 8 months.

***Fixed Income/Commodities/Currencies***
- (JP) BOJ offers to buy ¥2.0T in T-bills
- (KR) South Korea sells KRW1.91T in 5-yr govt bond, avg yield 3.115%, bid-to-cover 4.56x
- OPEC Sec Gen El-Badri: output to stay around 29-30M bbl/d in near term
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1625 v 6.1581 prior setting (weakest Yuan setting since Sep 9th, 2013)

***Equities***
US markets:
- TSLA: Said to stop supplying battery packs and electric motors for Toyota - press
- JPM: Analysts believe CEO Dimon may seek to step down amid large layoffs and deleveraging by consumers and the govt - NY Post

Notable movers by sector:
- Consumer Discretionary: Beijing Xiangeqing 002306.CN -5.8% (private placement plan); Hakuhodo DY Holdings 2433.JP +8.3% (FY13/14 results); Olympus 7733.JP +4.0% (FY13/14 results); Super Retail Group SUL.AU -3.5% (analyst action)
- Financials: Yuexiu Property 123.HK +2.1% (Apr sales results)
- Energy: West Holdings 1407.JP -3.2% (FY13/14 results)
- Industrials: Furukawa Electric 5801.JP -7.7% (FY13/14 results); Suzuki Motor 7269.JP +1.4% (FY13/14 results); NSK Ltd 6471.JP +10.3% (FY13/14 results); Incitec Pivot IPL.AU +0.9% (H1 results)
- Technology: Sumitomo Electric Industries 5802.JP -5.9% (FY13/14 results); Toshiba 6502.JP -1.3% (to invest in semiconductor plant)


***Economic Data***
- (JP) JAPAN MAR CURRENT ACCOUNT BALANCE: ¥116B V ¥348BE; ADJ CURRENT ACCOUNT: -¥780B V -¥546BE; TRADE BALANCE BOP BASIS: -¥1.1T V -¥1.1TE; FY13/14 Current Account Surplus ¥789.9B (smallest surplus on record) v Surplus ¥3.4T in FY12/13
- (AU) AUSTRALIA APR NAB BUSINESS CONFIDENCE: 6 V 4 PRIOR; BUSINESS CONDITIONS: 0 V 1 PRIOR
- (AU) AUSTRALIA MAR CREDIT CARD PURCHASES: A$23.0B V A$21.4B PRIOR; CREDIT CARD BALANCES: A$49.8B V A$50.2B PRIOR
- (NZ) NEW ZEALAND APR HOUSE PRICE INDEX: 3,971 V 3,965 PRIOR; M/M: 0.1% V 3.4% PRIOR; HOUSE SALES Y/Y: -20.2% V -10.0% PRIOR

Market Snapshot (as of 03:30 GMT):
- Nikkei225 -0.2%, S&P/ASX -0.3%, Kospi +0.2%, Shanghai Composite +1.7%, Hang Seng +1.5%, Jun S&P500 +0.2% at 1,876, Jun gold flat at $1,287, Jun crude oil +0.1% at $100.07/brl