New York: 10:08 || London: 15:08 || Mumbai: 18:38 || Singapore: 21:08

Reports Asia

Asian stock market, economy and companies update (May 28, 2014)

May 28, 2014, Wednesday, 06:21 GMT | 01:21 EST | 09:51 IST | 12:21 SGT
Contributed by Trade The News

- Fonterra finalizes its milk price for FY13/14 at NZ$8.40/kg, down from NZ$8.65/kg prior estimate, and also initiates FY14/15 forecast at NZ$7.00/kg. Co-op continues to see China demand remaining strong, anticipating about 2% growth in overall milk production for the coming season. ANZ economists noted the price cut was not as steep as markets had feared, briefly sending NZD slightly higher.

- China April industrial profit growth slowed to single digits y/y and also incrementally softer on YTD basis. Research notes from mainland analysts and the CICC varied on the viability of a more aggressive policy easing in the shape of a RRR cut - the former leaning in favor and the latter arguing in support of a more low-profile and targeted monetary easing.

- Commentary accompanying Australia's Westpac leading index from resident economist warned that the data show a "slowdown corroborated across all components (which) is a strong indication that a genuine slowdown is underway." Note Australia will put out its critical private CAPEX survey from the ABS, widely regarded as a powerful gauge of business appetite for risk as well as the health of the mining industry.

***Speakers/Political/In the Papers***
- (CN) China National Development and Reform Commission (NDRC): China's high level of iron ore inventory to continue - financial press
- (CN) Slowdown in China housing market adds the chance to a RRR cut; Chance for a loose monetary policy still low - Chinese press
- (CN) China Pres Xi Jinping: Both the "invisible hand" and the "visible hand" should be well used - Xinhua
- (JP) BOJ Gov Kuroda: critical to balance policy flexibility and commitment in forward guidance - BOJ conf (Tokyo)
- (US) Fed's Lockhart (moderate, FOMC alternate): Expects first raise in main rate in H2 2015; Expects Fed to halt QE in Q4 2014; Sees 3% GDP growth over next several quarters

***Fixed Income/Commodities/Currencies***
- (JP) BOJ offers to buy ¥250B in 1-3yr JGB, ¥250B in 3-5yr JGB and ¥170B in JGB with maturity over 10-yr
- (AU) Australia sells A$700M in bonds due 2027; Avg yield: 3.9479%; Bid-to-cover: 3.02x
- GLD: SPDR Gold Trust ETF daily holdings rise 8.4 tonnes to 785.3 tonnes (first rise since May 15th)

- USD majors were largely confined to thin post-holiday ranges with the exception of the kiwi dollar. NZD/USD initially rose some 30pips above $0.8570 as New Zealand's Fonterra payout cut for the current year and next year were not as steep as feared, but retreated back below $0.8550 later in the day. USD/JPY backed away from the ¥102 handle, sliding some 10pips to ¥101.90, while EUR/USD consolidated the moderate selling in the US session to trade within the $1.3620-40 band. AUD/USD traded about 10pips on either side of $0.9260 amid mixed economic data from Australia and China.

US markets:
- WDAY: Reports Q1 $0.13 v -$0.15e, R$159.7M v $153Me; +8.7% afterhours
- QIHU: Reports Q1 $0.54 v $0.34e, R$265.1M v $222Me; +6.0% afterhours
- URBN: Announces Authorization to Repurchase 10M (7.3% of outstanding) Shares; +0.3% afterhours

Notable movers by sector:
- Consumer Discretionary: Sands China 1928.HK -2.2% (shareholder offers shares); Ajinomoto 2802.JP +2.0% (to use marine or rail shipping in long distance)
- Consumer staples: Fonterra FCG.NZ +0.3% (announces payout prices)
- Financials: Goodpack GPACK.SG +4.3% (KKR makes offer); China Vanke 000002.CN +1.1% (cuts price in Guangzhou)
- Industrials: Shanghai Prime Machinery 2345.HK -3.6% (announces acquisition)
- Technology: GRG Banking Equipment 002152.CN +10.0%, Guangzhou KingTeller Technology 002177.CN +10.0%, Inspur Electronic Information Industry 000977.CN +10.0% (China bans IBM servers in banks); Tencent Holdings 700.HK +1.4% (JD traded higher by over 14% today in US)

***Economic Data***
- (AU) AUSTRALIA APR WESTPAC LEADING INDEX M/M: -0.5% (biggest decline in 5 years) V 0.0% PRIOR
- (AU) AUSTRALIA Q1 CBA/HIA HOUSE AFFORDABILITY: 77.2 V 75.6 PRIOR (best affordability in 12 years)
- (NZ) NEW ZEALAND MAY ANZ ACTIVITY OUTLOOK: 51.0 V 52.5 PRIOR; ANZ BUSINESS CONFIDENCE: 53.5 (3rd consecutive decline; 6-month low) V 64.8 PRIOR

Market Snapshot (as of 03:30 GMT):
- Nikkei225 flat, S&P/ASX +0.4%, Kospi +0.5%, Shanghai Composite flat, Hang Seng +0.5%, Jun S&P500 flat at 1,909, Jun gold -0.1% at $1,264, Jul crude oil +0.1% at $104.19/brl