New York: 00:31 || London: 05:31 || Mumbai: 09:01 || Singapore: 11:31

Reports Asia

Asian stock market, economy and companies update (May 27, 2014)

May 27, 2014, Tuesday, 06:56 GMT | 01:56 EST | 10:26 IST | 12:56 SGT
Contributed by Trade The News


***Highlights/Observations/Insights***
- The Asia markets were broadly mixed with the Nikkei225 in positive territory tracking overnight gains in European markets. Overall the markets were generally quiet with US closed on Monday for Memorial Day holiday and UK closed for a bank holiday. Foreign exchange volumes were below half their daily averages, with the major currency pairs near their recent ranges.
- In terms of economic data the BOJ released the Corporate Service Price Index for April, which was up by 3.4% from the prior month beating expectations and the March reading of 0.7%. Not including the consumption tax increase, the corporate service prices were rose an annual 0.8%.
- There were renewed tensions between China and Vietnam after a Chinese ship rammed and sunk a Vietnamese fishing vessel. The spokesperson for the Vietnamese Foreign Ministry said that the fishing boat was initially surrounded by 40 Chinese ships approximately 17 nautical miles from the China Haiyang Shiyou-981 oil rig. The oil rig was the cause of violent anti-China protests this month.

***Speakers/Political/In the Papers***
- (CN) PBoC Gov Zhou: reiterates China to well implement prudent monetary policy - financial press
- (CN) China National Development and Reform Commission (NDRC) head Xu Shaoshi: China's progress on over-capacity cut is slow; China to strictly control over-capacity industries - CCTV
- (CN) China big four banks new loans CNY130B in May 1st-25th - Chinese press
- (CN) Industrial Bank Chief Economist Lu Zhengwei: Necessary for China to cut RRR; probability for RRR cut during H2 increasing given current economic condition - Chinese press
- (JP) Japan LDP tax panel to allow cutting corporate tax rate under certain conditions - Japanese press
- (JP) Japan Tax Panel chief Saito: too hasty to conduct corporate tax cut from 2015; PM Abe may make decision on whether sales tax rise 10% by Nov
- (NZ) New Zealand Institute of Economic Research (NZIER): Sees 2014 GDP at 3.5%; RBNZ may pause rate hikes after June if growth slows

***Fixed Income/Commodities/Currencies***
- (JP) Japan MoF sells ¥400B in 1.70% 40-year bonds, bid to cover: 3.73x v 3.69x
- (CN) PBoC to drain CNY20B on 28-day repos (28th consecutive drain)
- (CN) PBoC sets yuan mid-point at 6.1687 v 6.1699 prior (1st firmer Yuan setting in 5 sessions)
- (AU) Australia Newcastle weekly coal exports for week ended May 26th -19% w/w
- LME Copper inventory under 200Kt, lowest level since Oct 2008 - Chinese press

***Equities***
US markets:
- AZN: Pfizer says it does not intend to make a bid for company; bound by restrictions in rule 2.8 of code
- IBM: (AU) Transport for NSW expected to sign 10-yr contract value up to $1B - financial press
- INTU: Said to have agreed to acquire bill-payment service Check Inc for over $350M - financial press

Notable movers by sector:
- Financials: OzForex Group OZF.AU -0.1% (FY results)
- Energy: Shunfeng Photovoltaic International 1165.HK +1.5% (private placement)
- Industrials: Fuji Heavy Industries 7270.JP +2.4% (confident to beat guidance)
- Technology: Zhejiang Crystal-Optech 002273.CN +2.1%, Zhejiang East Crystal Electronic 002199.CN +3.9% (China sapphire materials trading higher on LG & Samsung's possible use); LG Electronics Inc 066570.KR +1.7% (Q1 mobile sales rank); Renesas Electronics Corp 6723.JP -1.0% (speculation on LCD unit sale)
- Telecom: Daum Communications Corp 035720.KR +15.0% (to merge with Kakao)


***Economic Data***
- (JP) JAPAN APR CORPORATE SERVICE PRICE INDEX Y/Y: 3.4% V 3.2%E
- (KR) SOUTH KOREA MAY CONSUMER CONFIDENCE: 105 (8-month low) V 108 PRIOR
- (PH) PHILIPPINES MAR TRADE BALANCE: -$146M V -$200ME
- (PE) Peru Q1 GDP Y/Y: 4.8% v 4.8%e

Market Snapshot (as of 03:30 GMT):
- Nikkei225 +0.9%, S&P/ASX flat, Kospi -0.9%, Shanghai Composite -0.3%, Hang Seng -0.2%, Jun S&P500 +0.3% at 1,903, Jun gold flat at $1,291, Jul crude oil flat at $104.38/brl