Asia Market Update: Asian indices trade mixed; Property shares rise in HK and Shanghai after PBOC announced plan to revise the pricing mechanism for floating-rate loans, banks decline in Shanghai
General Trend:
- Chinese brokerage firms trade generally higher after China’s top legislature approved the revisions to the securities law
- Hong Kong brokerage firms track the gains in Shanghai
- Guangzhou Auto rises over 3%, expects 2020 vehicle sales to reverse the decline seen in 2019
- Tesla confirmed the first deliveries of the China-made Model 3, plans to ‘scale up’ deliveries of the vehicle in Jan
- Japanese equity markets decline in final trading session of 2019 as yen strengthens, decliners include marine/transportation companies and banks
- Australian equities weighed down by declines in resource, energy and financial companies
- The government of Victoria (Australia) urged residents and tourists to evacuate amid danger related to fires, NAB also announced certain branch closures due to fire risk
- Australian and Hong Kong markets are due to close early on Tuesday (Dec 31st), Japanese and South Korean markets will be closed
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened 0.0%
- AVH.AU FDA approves IDE plan to evaluate Recell for Vitiligo
- MET.NZ Board unanimously recommends deal with EQT infrastructure IV at NZ$7.00/shr
Japan
- Nikkei 225 opened -0.3%
- 8848.JP Outside board director Murakami said to call for the company’s entire board to resign – Japanese media (Friday)
- 6752.JP Says its plant labor shortage in Nevada (gigafactory with Tesla) has been resolved
Korea
- Kospi opened -0.1%
- (KR) South Korea Nov Industrial Production M/M: -0.5% v 0.0%e; Y/Y: -0.3% v -0.4%e
- (KR) South Korea Finance Ministry selects 11 banks (5 foreign) as lenders responsible for setting prices for direct won/yuan transactions in 2020 – Yonhap
- (KR) North Korea Plenary Session started Saturday: Leader Kim Kim emphasized the need to take positive and offensive measures for fully ensuring the sovereignty and security of the country as required by the present situation, he indicated the duties of the fields of foreign affairs, munitions industry and armed forces of the DPRK
- 005380.KR Hyundai Kia recall >640K vehicles for faulty parts
- (KR) Bank of Korea (BOK) see China 2020 GDP at 5.9% v analysts’ estimates of 5.7-6.0%, due mainly to still weak domestic demand and investment
- (KR) US reiterates will take action against any North Korea missile test, monitoring situation closely, find situation concerning – White House
- (KR) South Korea Fin Min: Dec exports will decline significantly less than recent; Nov industrial activity data shows positive aspects for economic recovery
China/Hong Kong
- Hang Seng opened +0.1%; Shanghai Composite opened -0.2%
- (CN) China Commerce Ministry: We have proactively dealt with trade frictions with the United States this year; Remain in close touch with the United States on signing the trade deal – speaking after annual work conference
- (CN) China PBOC told banks to start using the loan prime rate (LPR) as new benchmark to price loans issued before Jan 1, 2020, instead of using the old benchmark lending rates – financial press (update)
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repos for the 5th consecutive session; Net drain CNY0B v drain CNY0B prior
- (CN) China PBOC sets Yuan Reference Rate: 6.9805 v 6.9879 prior
- (HK) Hong Kong Financial Sec Chan: Sees Q4 GDP contraction
- (CN) Dep Dir of China PBOC Payment and Settlement Dept Mu Changchun: PBOC’s digital currency electronic payment project involves digital yuan intended only for the payment of goods and service – SCMP
- North America
- (US) Def Sec Esper: US airstrikes hit 5 facilities associated with Iranian supported militia responsible for attacks on US military forces in Iraq
- TSLA China Exec: Allows first China built cars to go to employees; Planning to scale up deliveries of China made Model 3 starting in January – press
Europe
- (AT) Austria conservative leader Sebastian Kurz close to reaching a deal with Greens, which will see him becoming chancellor again; coalition expected to be formalized by mid-this week – press
- (UK) PM Johnson reportedly to set up new negotiating team for post Brexit trade deal with the EU – UK press
Levels as of 12:15ET
- Hang Seng +0.7%; Shanghai Composite +1.1%; Kospi -0.3%; Nikkei225 -0.7%; ASX 200 -0.3%
- Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.1%; FTSE100 -0.1%
- EUR 1.1211-1.1171; JPY 109.50-109.06; AUD 0.6999-0.6975; NZD 0.6720-0.6696
- Commodity Futures: Gold -0.0% at $1,517/oz; Crude Oil +0.1% at $61.78/brl; Copper +0.1% at $2.83/lb
