Chinese Equities Decline Amid Focus On Corporate Profits

Oct 29 18, 06:44 GMT

General Trend:

US equity futures pare opening gains
Chinese liquor maker Kweichow Moutai declines, Q3 results miss ests
HSBC reports better than expected Q3 results
Japan’s Ricoh declines over 11%, reported H1 results/guidance post close on Friday
Australia listed Kogan.com drops over 30%, received pricing-related notice from regulator
LG Chemicals rises over 6% post earnings
M&A in focus: IBM to acquire Redhat in cash transaction ($34B enterprise value)
Penn Virginia Corp to be acquired by Denbury Resources
Australian construction services firm Watpac rises over 40% after receiving takeover bid
China Industrial Profits slow for the 5 straight month in Sept
Brazil equity ETF rises in Japan, Bolsonaro wins the presidential elections
Japan companies expected to report earnings today include Komatsu, Fanuc and Daiwa Securities
Bank of China and BYD are among the earnings expected out of Hong Kong
The BoJ is due to hold is next monetary policy meeting on Oct 30-31 (Tuesday-Wed)

Headlines/Economic Data

Japan

Nikkei 225 opened +0.7%
(JP) Japan Sept Retail Sales m/m: -0.2% v -0.2%e; Retail Trade y/y: 2.1% v 2.1%e
(JP) Japan Sept Department Store, Supermarket Sales y/y: 0.4% v 0.1%e
4502.JP Said to be considering selling European over the counter assets, worth €1B – press
3938.JP LINE Financial Asia to acquire 20% stake in PT Bank KEB Hana Indonesia; no terms disclosed
(JP) Moody’s: Japan planned sales tax hike for October 2019, will aid in further fiscal consolidation over the medium term
(JP) Bank of Japan (BOJ) said to be looking at slightly adjusting bond buying program but wont rush – press

Korea

Kospi opened flat
(KR) South Korea FSC: To take measures to stabilize capital markets, KOSDAQ scale-up fund to begin investment in early Nov
(KR) According to analysts, South Korean economy is expected to post a weak annual growth for this year due to high unemployment and falling corporate investment – Korean press
(KR) Bank of Korea (BOK) sells KRW900B in 3-month bonds; avg yield 1.7%
(KR) South Korea sells KRW400B v KRW400B indicated in 3-year bonds: avg yield 1.975%
(KR) Bank of Korea (BoK) Gov Lee: Various downward pressures on economy exist

China/Hong Kong

Hang Seng opened +1%, Shanghai Composite -0.2%
(CN) China Sept Industrial Profits Y/Y: 4.1% v 9.2% prior (slowest pace since March)
(CN) According to China Securities Depository and Clearing Corporation all but 13 of the 3,491 companies listed on China’s two stock exchanges have pledged their equity as collateral against bank loans
(CN) China Banking and Insurance Regulatory Commission (CBIRC) urged banks in Beijing against forcing liquidation of pledged shares – financial press
(CN) China PBoC Open Market Operation (OMO): skips v skips prior in 7-day reverse repos prior: Net: CNY120B drain v CNY30B injection prior
(CN) China PBOC sets Yuan midpoint rate at 6.9377 v 6.9510 prior
(CN) China President Xi stresses the importance of independent innovation and called for all researchers and workers to strive toward that on inspection of Guangdong
(CN) China Sept bond issuance totaled CNY4.3T v CNY4.4T prior; Outstanding bond value CNY83T v CNY81.9T prior
(CN) China legislator approves revisions to Company Law that relax restrictions on buybacks for public companies – Xinhua
(CN) China companies have announced CNY16.8B in buyback plans – CST
(CN) China will not ease property control measures even with slowing market – Xinhua
HSBA.UK Reports Q3 Net $3.9B v $2.9B y/y; adj Pretax $6.19B v $5.3B y/y ($5.73Be); Rev $13.8B v $12.7B y/y ($13.7Be)
(CN) China expected to announce additional tax cuts – CSJ

Australia/New Zealand

ASX 200 opened +0.1%
KGN.AU [-22%] Reports Q1 Active Customers 1.45M v 1.02M y/y; Kogan Mobile Active Customers +102.9% y/y; Global Brands rev -27.4% y/y (impacted by GST law, at this stage, the company is unable to determine whether the recent widespread avoidance of GST will be temporary)
WTP.AU [+40%], Entered into bid implementation agreement with BESIX Group regarding unconditional off-market takeover to acquire all issued shares for A$0.92/shr cash

North America

RHT To be acquired by IBM for $190.00/shr cash for enterprise value of $34B; IBM intends to suspend its share repurchase program in 2020 and 2021
TLSA Second largest shareholder Baillie Gifford said to note the firm is willing to invest more cash into the company – UK Press
(MX) Mexico public consultation on Mexico City Airport prefers cancellation of the $13.3B project – US financial press

Europe

CBK.DE Deutsche Bank says merger with the firm ‘not on table’ – FT
(DE) In Germany Hesse regional elections, Chancellor Merkel CDU party’s support declined to 28%, down 10 pct points vs 2013 – German Press
(DE) Following regional elections in Hesse, Germany SPD leader said to give Chancellor Merkel an ultimatum – German Press
(UK) UK Chancellor of the Exchequer Hammond (Fin Min) said has money buffer in case of ‘Brexit shock’ – financial press

Levels as of 01:20ET

Hang Seng +0.3%; Shanghai Composite -1.6%; Kospi -0.2%; Nikkei225 +0.3%; ASX 200 +1.1%
Equity Futures: S&P500 +0.0%; Nasdaq100 +0.4%, Dax +0.0%; FTSE100 -0.1%
EUR 1.1386-1.1404; JPY 111.78-112.05 ; AUD 0.7085-0.7102;NZD 0.6514-0.6542
Dec Gold -0.1% at $1,235/oz; Dec Crude Oil +0.1% at $67.62/brl; Dec Copper -0.2% at $2.74/lb