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Reports Asia

Asian stock market, economy and companies update (May 23, 2013)

May 23, 2013, Thursday, 10:32 GMT | 06:32 EST | 15:02 IST | 17:32 SGT
Contributed by Trade The News


***Markets Snapshot (as of 04:00 GMT)***
- Nikkei225 -2.5%
- S&P/ASX -1.5%
- Kospi -0.7%
- Shanghai Composite +0.1%
- Hang Seng -1.7%
- Jun S&P500 -0.4% at 1,649
- Jun gold flat at $1,361/oz
- Jul crude oil -0.6% at $93.70/brl

***Observations/Insights***
- Asian equity markets are down across the board, tracking the major reversal in the US indices after Fed Chairman struck a less dovish tone during his address of congressional committee. Specifically in the Q/A portion, Bernanke noted some tapering of the QE could begin over the next few meetings if labor market improvement supports such retreat. Later in the day, FOMC meeting minutes from the May 1st meeting also underscored a growing rift within the Fed - some committee members hinted they would be open to a reduction in bond purchases at June meeting if there was evidence of strong and sustained growth, and one member called for an immediate decrease in the rate of QE3 asset purchase program. USD hit multi-month highs against the high-beta easy-Fed-leveraged AUD, NZD, and CAD commodity currencies as well as fresh highs against JPY above ¥103.70. Note the USD/JPY pair has reversed sharply in the Asia session, as BOJ moved to contain volatility in the JGB market, announcing a ¥2T fund supplying operation after the 10-year yield moved to a multi-month high level above the 1%.
- Regionally, HSBC flash manufacturing PMI for the month of May also inflicted major damage on the bullish sentiment, unexpectedly registering its first contraction in 7 months while the new export order component fell to an 8-month low of 49.5. Subsequently, July crude moved below $94/brl, July copper fell nearly 2% below $3.31, and AUD/USD extended its losses below $0.9630 for an 11-month low.

***Fixed Income/Commodities***
- (JP) BOJ to supply ¥2T to the financial system through fund supplying operations; also offers to buy ¥110B in up to 1-yr govt debt and ¥700B in 1-5 year govt debt - financial press
- AUD/USD: Credit Suisse: Decline in AUD this time may be "structural"; Sees AUD/USD falling to $0.85 in the next 12 months - Australian press
- AUD/USD: UBS lowers 2014-end target for AUD/USD to $0.90 from $0.95 - financial press
- SLV: iShares Silver Trust ETF daily holdings fall to 10,023 tons from 10,198 tons (lowest since 9,895 tons in Dec, 2012)
- GLD: SPDR Gold Trust ETF daily holdings fall by 3.0 tons to 1,020.1 ton (lowest since 1,008.8 tons in Feb of 2009)

***Speakers/Political/In the Papers***
- (CN) Shanghai Apr FDI rose 14.9% y/y to $1.6B - Shanghai Daily
- (CN) According to Nielsen, China consumer spending intentions have risen to their highest level since Q3 of 2010 - Chinese press
- (CN) China real estate industry meeting evaluating the impact of property curbs - Chinese press

- (SG) Singapore Central Bank (MAS) Ong: Singapore dollar has traded within its band; Monetary policy remains appropriate

- (JP) Japan Chief Cabinet Sec Suga: BOJ will respond as needed to long-term bond rates; Natural for long-term rates to raise temporarily as shares prices gain

- (KR) South Korea KDI (Top think tank): Cuts 2013 GDP to 2.6% from 3.0% in Nov; Sees 2013 inflation at 1.8%
- (KR) South Korea Fin Min Hyun: global economy is yet to be in full speed recovery; Monetary policy increasingly requires international cooperation; Impact of Yen drop is much stronger than KRW drop.

- (AU) Former Reserve Bank of Australia (RBA) board member McKibbin: More rate cuts by the RBA would be a mistake; Appetite for A$ assets is waning - financial press
- (AU) Australia's Opposition Resources Minister MacFarlane: If victorious in the September elections, opposition would end the mining tax (MRRT) by Jul 2014 - AFR
- (AU) Australia Treasurer Swan: Domestic economy is going through transition; High AUD is challenging for economy, not only the auto industry are impacted by high AUD.


***Equities***
- Komatsu 6301.JP: To raise its capital ratio to 60% by FY15/16 - Nikkei News
- Kawasaki Heavy 7012.JP: To shift some of its production of motorcycles from Thailand back to Japan due to weaker JPY and improved export margins - Nikkei News
- Mitsubishi Motors 7211.JP: To use capital base and reserves to cover its ¥925B parent-only losses for FY12/13; May resume dividend payouts in FY13/14 - Nikkei News
- Fuji Heavy 7270.JP: CEO: Subaru may reach medium-term target for US vehicle sales two years ahead of schedue due to high demand of its SUV model - Nikkei News
- 9101.JP: Containership operations of Japan's top 3 shippers to turn a profit for the first time in 3 years - Nikkei News

- Lenovo 992.HK: Reports FY12/13 Net $635.1M v $475.4M y/y, Rev $33.9B v $29.6B y/y
- Samsung Electronics 005930.KR: Sales of Galaxy S4 smartphones have topped 10M units 20 days faster than for the S3 device - Korean press

- NCM.AU: UBS: May take a A$2B hit against its Telfer mine in W Australia - AFR
- JHX.AU: Reports FY13 Net $45.5M v $604.3M y/y, Rev $1.32B v $1.24B y/y
- TLS.AU: To undergo restructure of business units from July, which may include layoffs - Australian press

- F: To close its Broadmeadows vehicle facility and Geelong engine plant in Australia in 2016; End local car production; To cut 1200 jobs - Australian press
- TM: Australia unit exec: To maintain local operations; Environment in Australia is very difficult - financial press

- HPQ: Reports Q2 $0.87 v $0.81e, R$27.6B v $28.0Be; +13.9% afterhours
- TRP: US House of Reps passes the Keystone pipeline project by a vote of 241-175 - financial press
- LTD: Reports Q1 $0.48 v $0.46e, R$2.27B v $2.25Be


***Economic Data***
- (CN) CHINA MAY HSBC FLASH MANUFACTURING PMI: 49.6 V 50.4E (first contraction in 7 months)
- (AU) AUSTRALIA MAY CONSUMER INFLATION EXPECTATION: 2.3% V 2.2% PRIOR
- (SG) SINGAPORE Q1 FINAL GDP Q/Q: +1.8% V -1.2%E; Y/Y: +0.2% V -0.6%E
- (JP) Japan investors sold net ¥804.4B in Foreign Bonds last week (**first sale in 4 weeks) vs bought net ¥186.6B prior week; Foreign Investors bought net ¥716B in Japan stocks last week vs bought net ¥878.8B in prior week
- (KR) SOUTH KOREA APR DISCOUNT STORE SALES Y/Y: -9.8% V -4.4% PRIOR; DEPT STORE SALES Y/Y: -1.9% V 7.5% PRIOR

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