A mix across the region with no clear direction as a whole. Japan ended the day higher as the land-sale document scandal continues to make headlines and the ¥ weakened. Reforms in China post the National People’s Congress disappointed. S. Korea benefited from continued positive headlines regarding talks with N. Korea. Most sectors ended the day lower weighed down by Chinese names. Energy gave ground more than 0.5% following yesterday’s decline in the price of “Texas Tea.” IT advanced more than 0.5%.
- The reforms in China centered upon combining the banking and insurance commissions. This was generally taken to be a positive. However, the Communist Party appears to be strengthening ties within the economy and corporations. The market had been looking for less government interference and more moves to permit state owned enterprises greater autonomy.
- Japanese Finance Minister Aso signaled he may not attend the G-20 meeting later this month. This is raising concerns regarding the fallout from the land-sale document scandal. Stay tuned…..
- Agricultural Bank of China +5.4% surged post results and a share sale plan. The company plans to issue A shares worth up to CNY 100b to boost capital.
- CIMC +0.15% is also planning to replenish its capital via a 343m H-share placement.
- Investors were less pleased with a placing of Tata Consulting Services -5.3% announced after yesterday’s local close. Tata Sons sold c. 31.3m shares at INR 2,872 raising $1.38b.
- Samsung Elec. +3.6% is already shipping pre-orders for the Galaxy S9 and S9+ ahead of Friday’s official launch date.
- Daewoo Shipbuilding -1.8% suffered a Q4 OP loss of KRW 351b and forecasts $7.3b in orders for this year.
- Macro data saw Japan’s PPI matching estimates while Australian home loan approvals dipped a touch more than expected.
Europe has been trading to the upside for most of the session, thus far. However, the markets pared some gains when EC Pres. Juncker called for further clarity from the U.K. regarding Brexit. The FTSE lags the rest of the markets. Sectors are now fairly mixed. Energy has been leading all morning but is off highs and currently up shy of 1%. Utilities have spent most of the session higher by c. 0.5%. Leading to the downside has been telcos with consumer staples and health care also creating some drag.
- The EON +5.5% deal to acquire Innogy -0.6% from RWE +0.3% continues to dominate headlines. The official bid has been launched at €40/share and RWE published results.
- GKN +3.2% has officially rejected the improved and final offer from Melrose Ind. +2.8%.
- Antofagasta +2.1% posted a consensus beating increase in EBITDA of 59.0% and positively surprised investors with a strong boost to its dividend.
- Iliad -7.2% is one of the day’s worst performers. Revenues lagged consensus and fixed line performance was a major disappointment.
On our side of the pond, President Trump has order Broadcom and Qualcomm to “cease all merger activities” citing national security concerns.
We can now await the U.S. CPI data.
Market Levels and Macro Data
|AU||Home Loans MoM||Jan||-1.00%||-1.10%||-2.30%||—|
|AU||Owner-Occupier Loan Value MoM||Jan||—||0.50%||-1.00%||-1.10%|
|AU||NAB Business Conditions||Feb||—||21||19||18|
|AU||NAB Business Confidence||Feb||—||9||12||11|
|JN||Tertiary Industry Index MoM||Jan||-0.30%||-0.60%||-0.20%||0.00%|
|FR||Private Sector Payrolls QoQ||4Q F||0.30%||0.40%||0.30%||—|
|SP||CPI MoM||Feb F||0.10%||0.10%||0.10%||—|
|SP||CPI YoY||Feb F||1.10%||1.10%||1.10%||—|
|SP||CPI EU Harmonised MoM||Feb F||0.10%||0.10%||0.10%||—|
|SP||CPI EU Harmonised YoY||Feb F||1.20%||1.20%||1.20%||—|
|SP||CPI Core MoM||Feb||0.10%||0.30%||-1.40%||—|
|SP||CPI Core YoY||Feb||0.80%||1.10%||0.80%||—|
|HK||Industrial Production YoY||4Q||—||0.60%||0.30%||—|
|IT||Unemployment Rate Quarterly||4Q||11.00%||11.00%||11.20%||—|
|US||NFIB Small Business Optimism||Feb||107.1||107.6||106.9||—|
|US||CPI Ex Food and Energy MoM||Feb||0.20%||—||0.30%||—|
|US||CPI Ex Food and Energy YoY||Feb||1.80%||—||1.80%||—|
|US||CPI Index NSA||Feb||248.933||—||247.867||—|
|US||CPI Core Index SA||Feb||255.8||—||255.287||—|
|US||Real Avg Weekly Earnings YoY||Feb||—||—||0.40%||0.60%|
|US||Real Avg Hourly Earning YoY||Feb||—||—||0.80%||0.70%|