HomeContributorsFundamental AnalysisChina Energy Shortage Looks Like The Next Big Obstacle

China Energy Shortage Looks Like The Next Big Obstacle

General trend

  • Hang Seng has pared rise [Financials trade generally higher; COVID restrictions weigh on Casino names ].
  • Property index has weighed on the Shanghai Composite.
  • Nikkei 225 has pared gain [Automakers gain after recent rise in USD/JPY; Banks gain; Travel-related cos. also rise; Marine Transportation firms decline after prior rise].
  • S&P ASX 200 has been supported by Energy, Resources, Financial and Travel-related cos.
  • Fitch updated cash adjustments for China property developers, cited new disclosures.
  • PBOC continues to only conduct 14-day OMOs ahead of upcoming holiday [Reminder: Shanghai markets will be closed for holiday from Oct 1-7 (Fri-Thurs); HK will be closed on Oct 1st].
  • German elections see SPD with a very slim majority, now the bartering for a coalition starts, Merkel to remain until it is resolved. some speculation that it could last to New Year.

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened 0.0%.
  • (AU) Australia PM Morrison has not committed to phasing out the use of fossil fuels – press.
  • API.AU Received unsolicited offer from Sigma Healthcare, A$0.35//shr cash and 2.05 shares per API share; value of A$1.57/shr.
  • (AU) Reserve Bank of Australia (RBA) Offers to buy A$1.60B in Govt bonds v A$1.60B prior.

Japan

  • Nikkei 225 opened +0.1%.
  • (JP) Election of the next PM of Japan likely go to a run-off as neither of the two main candidates (Kono and Kishida) look able to secure an outright majority in the first round of voting (taking place on Wed) – press.
  • (JP) Japan said to be planning to lift emergency measures in all areas at the end of the month – press.
  • (JP) Japan said to begin trial of easing coronavirus restrictions related to sporting events – Press.

Korea

  • Kospi opened -0.1%.
  • (KR) South Korea and US hold regular defense talks amid North Korea sending conciliatory signs – press.
  • (KR) South Korea FSC Chairman Koh: Prolonged low interest rates and asset bubble cannot last much longer, To take strong preemptive measures against household debt.

China/Hong Kong

  • Hang Seng opened -0.3%; Shanghai Composite opened +0.4%.
  • 1918.HK Said to be seeking policy support from government of Shaoxing, Zhejiang; due to property sales being week in the region.
  • (CN) China PBOC sets Yuan reference rate: 6.4695 v 6.4599 prior.
  • (CN) China PBOC Open Market Operation (OMO): injects CNY100B in 14-day reverse repos v CNY120B prior; Net inject CNY100B v Net inject CNY60B prior.
  • China Evergrande Electric Vehicle Unit. 0708.HK Cancels plans to issue A-shares.
  • 2378.HK Prices offering at HK$143.80/shr v HK$172/shr indicated for HK$18.5B (prior HK$22.5B).
  • 3333.HK Reportedly Chinese cities seize Evergrande presales to block potential funds misuse – FT.
  • (CN) Macau tightens Covid restrictions ahead of Golden Week celebration in early Oct, cancelling ferry service and will hold 3 days of mass COVID testing.
  • Guangdong, China has asked people to turn off lights they don’t need and use their air conditioning less as energy crisis spreads from the factories to homes – press.
  • (CN) China PBOC auctioned CNY70B in Ministry of Finance Deposits on Sun (Sept 26th) [as expected], interest rate 3.55%.
  • (CN) China State Planner NDRC: Declares all crypto related activities and transactions illegal; To strictly prohibit financial support for new cryptocurrency mining projects (Friday after the close).

Other

  • (SG) Singapore Fin Min Wong: 6-7% GDP Growth is still achievable for 2021, if economy grows on track, should live within our means, but won’t hesitate to use past reserve if needed.
  • (PH) Philippines Central Bank (BSP) Gov Diokno: Stimulative fiscal policy crucial to reviving demand.

North America

  • TSLA Shanghai factory expected to produce 300K vehicles from Jan-Sept even with chip shortage – press.
  • EDU Said to be planning to layoff 40,000 employees by the end of 2021, will gradually close its teaching sites – press citing founder.
  • (US) Speaker Pelosi sets Thursday (Sept 30th) to vote on $1.0T infrastructure bill (Prior vote was scheduled for Monday).
  • XLRN Said to be in advanced talks to be acquired for ~$180/shr in $11B deal – press.

Europe

  • (DE) Germany Election Final Update: Social Democrats (SPD) Scholz 25.7%; CDU/CSU Laschet 24.1%; Greens Baerbock 14.8% – Federal Returning Officer.
  • BP.UK Updates on shortage of deliver drivers in UK: 30% of UK fuel stations have nearly no gas to supply, 1.2K locations are running out of the 2 main fuel types.
  • ZO1.DE EQT launches voluntary public takeover offer at €470/shr (update Sept 25).

Levels as of 01:15ET

  • Hang Seng +0.2%; Shanghai Composite -1.3%; Kospi +0.1%; Nikkei225 -0.0%; ASX 200 +0.6%.
  • Equity Futures: S&P500 +0.4%; Nasdaq100 +0.3%, Dax +0.3%; FTSE100 +0.5%.
  • EUR 1.1727-1.1716; JPY 110.81-110.54; AUD 0.7316-0.7236; NZD 0.7034-0.7005.
  • Commodity Futures: Gold +0.4% at $1,759/oz; Crude Oil +1.4% at $74.97/brl; Copper -0.3% at $4.29/lb.

 

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