Asian Equities Track US Declines

May 23 19, 06:18 GMT

General Trend:

Chinese video surveillance firm Hikvision extends declines on US blacklisting concerns
China-listed Iflytek also declines on concerns regarding possible US restrictions
Chinese rare earth companies rise; President Xi said rare earths are important ‘strategic resources’
Japanese companies start to address concerns related to Huawei and China.
Panasonic confirmed it halted certain component supplies to Huawei due to US ban
Japan Display denied that the China Harvest Fund is considering delaying its investment decision
Softbank Group declines over 5% amid concerns related to the regulatory approval of the Sprint/T-Mobile merger
Japan’s Manufacturing PMI moves back into contractionary territory in May
Aussie bond yields hit record lows amid focus on June 4th RBA policy meeting
Market initially ignores improvement in Australia’s May PMI data
New Zealand milk producer Fonterra cuts FY18/19 milk price forecast, noted slightly weaker than expected pricing for whole milk powder and skim milk powder

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.1%
(AU) Australia May Preliminary PMI Manufacturing 51.1 v 50.9 prior
FCG.NZ Reports 9M (NZ$) EBIT 522M, -9% y/y; Rev 15.0B v 14.8B y/y; Reviewing some operations for possible disposal
KDR.AU Agrees to be acquired by Wesfarmers for A$1.90/shr cash (premium of 47.3% to May 1st closing price) for A$776M
TRS.AU CEO Ross Sudano resigns, names Dani Aquilina acting CEO; Cuts FY19 guidance
(NZ) New Zealand Fin Min Robertson: Govt plans to shift to a net debt target range, for 2021-2022 debt targeting 15-25% of GDP

Japan

Nikkei 225 opened -0.5%
(JP) Japan Fin Min Aso: Short sale of JGBs will not necessarily cause volatility, will continue to closely watch JGB market
6752.JP Confirms halting supplying certain components to with Huawei subject to US ban
(JP) Bank of Japan (BOJ) Dep Gov Amamiya: Need to continue easing persistently, takes time to hit 2% inflation target, BOJ will communicate exit appropriately at the right time
(JP) Trade talks between US and Japan said to have stalled related to auto tariffs – Nikkei
(JP) Japan May Prelim PMI Manufacturing: 49.6 v 50.2 prior
(JP) White House official notes that Trump’s visit to Japan will not focus on trade – Nikkei
(JP) Japan Fin Min Aso: Reiterates on schedule to raise sales tax in Oct, needed to secure stable funds
(JP) Bank of Japan (BOJ) Dep Gov Wakatabe: Agree FRB’s interest rate earnings are stable; Japan long and short term rate differential is limited
(JP) Japan Cabinet Secretary Suga: It up up to PM Abe to decide whether to dissolve parliament

Korea

Kospi opened -0.1%
(KR) US State Dept spokesperson: US talks with North Korea are ongoing
(KR) Bank of Korea (BOK) emergency meeting on KRW decline: Won’s recent decline is excessive, officials to hold a meeting soon to discuss trading that has distorted the currency market
(KR) Bank of Korea (BOK) Official: No reason Won to track yuan movement

China/Hong Kong

Hang Seng opened -0.7%; Shanghai Composite opened -0.4%
(CN) China Daily: ‘Large’ foreign fund outflow ‘not possible’
(CN) China Finance Ministry (MOF) announced it would offer preferential income tax treatment for integrated circuit design and software companies – financial press
002415.CN Exec: Take cyber security seriously, follows applicable laws where it operates, have retained human rights expert and former US ambassador Pierre-Richard Prosper to advise regarding rights compliance
(CN) China PBoC Open Market Operation (OMO): Skips v injects CNY20B in 7-day reverse repos prior: Net: CNY0B v CNY20B prior
(CN) China PBoC sets yuan reference rate: 6.8994 v 6.8992 prior
(CN) Think Tank sees China 2019 Avg home price +7.6% y/y – Chinese Press
Lenovo [992.HK] Reports Q4 Net $118M v $33M y/y, Rev $11.7B v $10.6B y/y; FY18 PCSD Rev +14% y/y a record high

Other Asia

2330.TW CEO: Affirms 2019 CAPEX $10-11B, Q2 Rev $7.55-7.65B; shipments to Huawei not impacted by US ban
(PH) Philippines President Duterte ordered govt to hire a private shipping company to send 69 containers of garbage back to Canada and leave them within its territorial waters if Canada refuses to accept the rubbish which was sent from 2013-2014 – local press
(IN) India Election results: Early count shows PM Modi’s Bharatiya Janata Party (BJP) is in the lead
(SG) Singapore Apr CPI M/M: -0.3% v -0.1% prior; Y/Y: 0.8% v 0.8%e

North America

CTRP Reports Q1 $0.44 adj v $0.23e, Rev $1.20B v $1.18Be
NTAP Reports Q4 $1.22 v $1.25e, Rev $1.59B v $1.65Be; Raises Quarterly dividend 20% to $0.48 from $0.40 (indicated yield 2.86%)
(IR) Pentagon officials to brief the White House national security team tomorrow on plan that could send thousands of additional US troops to Middle East amid Iran tensions – CNN
(US) Fed’s Kaplan (dove, non-voter): US is flirting with yield curve inversion, which points to expectations for sluggish growth in the future

Europe

(UK) 1922 Exec calling on PM May to announce she will step down June 10th at upcoming Friday meeting – Telegraph

Levels as of 1:20 ET

Nikkei 225, -0.7%, ASX 200 -0.2%, Hang Seng -1.4%; Shanghai Composite -0.9%; Kospi -0.1%
Equity Futures: S&P500 -0.4%; Nasdaq100 -0.6%, Dax -0.3%; FTSE100 -0.5%
EUR 1.1159-1.1147; JPY 110.36-110.12 ; AUD 0.6884-0.6865 ;NZD 0.6499-0.6483
Gold -0.1% at $1,272/oz; Crude Oil -0.6% at $61.08/brl; Copper -0.5% at $2.664 /lb