FTSE Russell Commented On Index Removals

Dec 07 20, 07:06 GMT

General Trend

Financials weigh on the Hang Seng, Tech trades mixed [Alibaba drops]; CNOOC continues to move lower; SMIC rises over 3%
ZhengTong Auto Services drops over 20% in HK; China regulator said the firm improperly obtained the approval for the establishment of Shanghai Dongzheng Automotive Finance Co., Ltd.
Financial and Property shares are the leading decliners in Shanghai; Consumer Staples and IT sectors outperform
FTSE Russell: Will remove shares of 8 China companies (including Hikvision, China Railway Construction, China Spacesat, China Communications Construction, China Nuclear Engineering & Construction, CRRC Corp) from its indexes; effective Dec 21st (Monday); will evaluate CNOOC and SMIC in due course.
Topix Air Transportation and Iron/Steel indices are among the decliners; Insurance and Pharma indices outperform
South Korean chipmakers extend gains
Australian iron-ore, Energy and Consumer Staples firms rise; Consumer Discretionary and Financial sectors lag.
Australia 10-yr yield pares rise amid stepped up bond buying by the RBA
China’s Nov iron ore imports again declined m/m

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.5%
MTS.AU Reports H1 (A$) underling Net 129.6M v 95.7M y/y; underlying EBIT 203.0M v 149.7M y/y; Rev 7.1B v 7.2B y/y
(AU) Reserve Bank of Australia (RBA) Gov Lowe: Skeptical about need for central bank digital currency, maybe with the success of a digital currency elsewhere may change my view – Q& A
(AU) Reserve Bank of Australia (RBA) Gov Lowe: Australia’s Payments System Board has resumed its periodic Review of Retail Payments Regulation; board does not see a strong case for a significant revision of the interchange framework in Australia.
(NZ) RBNZ buys NZ$310M v NZ$310M prior in government bonds as part of QE v NZ$310M sought
(AU) Australia sells A$2.0B v A$2.0B indicated in 1.00% Dec 2030 bonds, avg yield 1.0656% v 0.7482% prior, bid to cover 2.47x v 5.1x prior

Japan

Nikkei 225 opened +0.5%
(JP) Japan PM Suga confirms to announce further economic measures tomorrow, will include loans, more reserve funds
(JP) Japan Nov FX Reserves: $1.38T v $1.38T prior
9201.JP Japan LDP Lawmaker: Public debate on funds for airlines is premature, ANA, JAL are able to stay in business and keep routes
9432.JP To sell ¥1.0T in bonds in record corporate bond sale for Japan (upsized from ¥700B)

Korea

Kospi opened +0.2%
(KR) More than 12 South Korea lawmakers are pushing the Bank of Korea (BOK) to broaden its mandate to cover employment stability (would be the 1st time in ~10-years mandate was adjusted) in order to address economic issues exaggerated by COVID – press
(KR) South Korea tightens restrictions to 2.5 in Seoul, as Saturday recorded 631 cases (highest since early March)
(KR) South Korea said to consider extension of tax cuts related to car purchases – South Korean press

China/Hong Kong

Hang Seng opened +0.1%; Shanghai Composite opened +0.1%
(CN) CHINA NOV TRADE BALANCE (CNY-DENOMINATED): 507.1B V 373.2BE; Exports Y/Y: 14.9% v 5.7%e; Imports Y/Y: -0.8% v 0.6%e
(CN) CHINA NOV TRADE BALANCE: $75.4B V $53.8BE (record high); Exports Y/Y: 21.1% v 12.0%e (fastest pace in 19 months); Imports Y/Y: 4.5% v 7.0%e
(HK) HKMA said it is in talks with the PBOC regarding ‘technical test’ related to digital yuan usage – financial press
(CN) FTSE Russell said it will remove shares of 8 China companies (including Hikvision, China Railway Construction and China Spacesat) from its indexes; cited order from the US government
(CN) China PBoC Open Market Operation (OMO): Injects CNY50B in 7-day reverse repos v Injects CNY10B in 7-day reverse repos prior; Net Drain CNY100B v Net drain CNY100B prior
(CN) China PBOC sets Yuan reference rate: 6.5362 v 6.5507 prior (strongest since June 26, 2018)
JD Has become the first China online mall to test the digital yuan – SCMP
5.HK Former Hong Kong democracy lawmaker Ted Hui said some of his bank accounts had been unfrozen, said he moved funds from HSBC; said he no longer trusted HSBC – financial press
000800.CN FAW-Volkswagen and SAIC Volkswagen said to have halted or reduced production due to auto chip shortages – China press

North America

(CN) Trump Administration is preparing new sanctions on at least 12 China officials, relates to China’s move to disqualify elected lawmakers in Hong Kong – financial press
(US) Pres Trump urges Georgia Gov Kemp to “immediately ask for a Special Session of the Legislature”
ABNB Indicated IPO pricing said to be raised to $56-60/shr (prior $44-50/shr) – US financial press
(US) Attorney General (AG) Barr said to be considering leaving position before end of Trump term – press

Europe

(EU) German Chancellor Merkel and France President Macron to soften level playing field demands in Brexit talks – UK press
(UK) BOE’s Haldane (chief economist): A nationwide spending spree could help the economy recover more quickly than current seen – UK press
(UK) According to an un-named source on the UK side there has been no break through on fishing negotiations with EU – BBC
(UK) PM Johnson and EU’s Von der Leyen: still significant difference on 3 issues: level playing field, governance, and fisheries (Saturday)
LHA.DE Expected to cut additional 10K jobs in Germany in 2021 and possibly another 20K cuts outside of Germany taking total global workforce to 109K – German press

Levels as of 12:15ET

Hang Seng -1.5%; Shanghai Composite -0.5%; Kospi +0.2%; Nikkei225 -0.6%; ASX 200 +0.6%
Equity Futures: S&P500 -0.2%; Nasdaq100 -0.1%, Dax -0.1%; FTSE100 +0.1%
EUR 1.2141-1.2119; JPY 104.23-103.94; AUD 0.7437-0.7425; NZD 0.7050-0.7035
Commodity Futures: Gold +0.2% at $1,843/oz; Crude Oil -0.5% at $46.02/brl; Copper -0.6% at $3.50/lb