Equities Move Generally Higher, Particularly Tech

Jan 25 21, 06:19 GMT

General Trend

Hang Seng TECH index rises over 3%, trades at record high
Early gainers in Shanghai included Consumer and Industrial names; IT and financial firms underperformed
Topix Pharma index rises over 1%, Marine/Transportation lags; Toshiba rises over 15%, to move back to the first section of the TSE
Japanese companies expected to report earnings include Nidec and JSR Corp
Australian Consumer firms rose, while Energy lagged
PBOC confirmed that it would allow TMLF funds to mature
PBOC Gov Yi Gang is expected to speak later today at the Hungary Central Bank’s Online Annual Conference
Local governments in China have started to issue 2021 GDP growth targets
Various press outlets have focused on the impacts of the ongoing auto-related chip shortage

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.3%
(AU) Australia Treasurer Frydenberg: COVID situation in Australia is under control, vaccine roll out is on track to begin in mid to late February – press
Australia Therapeutic Goods Administration (TGA) provisionally approves Pfizer COVID vaccine (as expected)
(AU) Australia Stats Office (ABS) Dec Preliminary Trade Balance (A$): 9.0B v 5.0B prior final; Exports M/M: +16% v +3% prior final; Imports M/M: -9% v +10% prior final

Japan

Nikkei 225 opened +0.2%
(JP) According to survey by Nikkei, companies in Japan are cutting FY20/21 Capex plans by 2.9% from original amounts (largest drop since survey started), mostly attributed to COVID
(JP) Japan Cabinet approval rating -6ppt to 33% – Asahi poll
(JP) Japan officials to look at effectiveness of current second state of emergency measures this week before considering an extension (currently half way through SOE) – Japan press
9984.JP Vision Fund managing partner Colin Fan is leaving (2nd departure of a managing partner in January) – press
6502.JP Confirms report to move to 1st section of Japan Exchange (Friday)

Korea

Kospi opened +0.1%
(KR) South Korea ruling party seeking to provide cash handouts to all citizens and compensating small business for shutdowns related to COVID rules; Discussion on cash handout will begin after Lunar New Year holiday if virus spread contained – Korean press
003490.KR South Korea antitrust regulator reviewing proposed merger with Asiana – Yonhap
005930.KR Heir and vice chairman Jay Lee will not appeal court ruling – Yonhap

China/Hong Kong

Hang Seng opened +0.8%; Shanghai Composite opened 0.0%
700.HK Said to be in talks to secure 5-year $6.0B loan – SCMP
(CN) Shanghai is targeting 2021 GDP growth of 6.0% – Chinese press
(CN) CNY614B in reverse repos are due to mature this week, CNY240.5B in targeted medium-term lending facility (MLF) funds are expected to mature on Monday (Jan 25th)- Xinhua
(CN) China to regulate non-bank payment customer reserve funds management, will need to deposit customer reserve funds to PBOC or a compliant commercial bank by March 1st – press
(CN) Front Page China Sec Journal article: PBoC said to potentially use contingency reserve arrangement (CRA) to stabilize liquidity before Lunar New year; reiterates analysts see little possibility for a RRR cut
(HK) Hong Kong Stock Exchange to include eligible A-shares on Sci-Tech Innovation Board in Shanghai into Stock Connect, starting Feb 1st
(CN) China PBOC Open Market Operation (OMO): Injects CNY2B in 7-day reverse repos v CNY2B in 7-day reverse repos prior; Net Inject CNY0B v Net inject CNY0B prior
(CN) China PBOC sets Yuan reference rate: 6.4819 v 6.4617 prior
(HK) Hong Kong to end partial lockdown related to district: Hong Kong Home Affairs Sec said people declared COVID-19 negative would be allowed to move freely in and out of the restricted area in Jordan [located in the Kowloon Peninsula], effective from 6 pm on Sunday [Jan 24th] – Press (update)

Other

(IQ) State Organization for Marketing of Oil (SOMO) Deputy chief Nizar: Iraq to pump ~3.6M bpd for Jan and Feb to compensate for last year’s beach of OPEC+ quota – press
(TW) US, UK, Germany and Japan have all asked Taiwan to increase chip supply – Nikkei
2330.TW Taiwan Economy Min Wang Mei-hua spoke with senior executives about global shortage of auto chips, TSMC said they would optimize production of chips and prioritize auto chips
2303.TW UMC and Vanguard International said to be planning to raises chip prices by ~15% after Lunar New Year – press
CAPL.SG Guides FY20 (S$) Net -900M to -800M v 31.6M y/y; cautious about Q1 but looking to a recovery in H2 (Friday after the close)

North America

NXPI NXP and STMicroelectronics said to have informed customers they will increase prices by 10-20% due to higher demand for chips used in cars and telecommunications equipment – Nikkei

Europe

(UK) PM Johnson: Some evidence that new COVID variant may be more deadly
(UK) UK Parliament Environmental Audit Committee note that Bank of England (BOE) Gov Bailey could help fight climate change buy buying low carbon bonds and attaching Green requirements to stimulus program – press
(FR) France Top Medical Adviser Jean-Francois Delfraissy: Country probably needs to move into a third lockdown, suggests the new lockdown could begin by as soon as Feb – financial press

Levels as of 12:15ET

Hang Seng +2.0%; Shanghai Composite +0.8%; Kospi +2.0%; Nikkei225 +0.4%; ASX 200 +0.4%
Equity Futures: S&P500 +0.4%; Nasdaq100 +0.8%, Dax +0.3%; FTSE100 +0.3%
EUR 1.2181-1.2160; JPY 103.89-103.72; AUD 0.7742-0.7707; NZD 0.7211-0.7172
Commodity Futures: Gold -0.1% at $1,854/oz; Crude Oil -0.0% at $52.26/brl; Copper +0.4% at $3.63/lb