Morning Report APAC: Risk-off sentiment all pervasive

 

 
















- USD: mostly lower against the G10 complex as the trend of weaker USD driven by both political uncertainty and monetary policy dovishness relative to other central banks.
- AUDNZD: AUD was the weakest of the G10 currencies as RBA deputy governor Guy Debelle attempted to quash rate hike expectations. Coupled with AUDNZD cross unwind of positions, AUD was 0.5% lower while NZD +0.77% higher on the unwind.
- JPY: Performed on safe haven flows as Risk Off mode took hold of the markets in Friday's session.
- Emerging Markets: PLN remains under pressure as protests grow against the government’s plans to remove independence of the judicial system. ZAR rallied hard on hopes that the vote of no confidence against President Zuma may be secret, potentially allowing ANC members to vote against their leader.

Foreign exchange movements

Rates

US yields were lower across the curve, as treasuries were supported on the back of slump in oil.

European bonds rallied amid ECB tapering decision are seen to delay to October meeting, large redemptions due over the next 10 days is supporting European bonds.
 

 

 
















The S&P500 and the Nasdaq extended gains for a third week, while the broader market retreated on Friday as General Electric fell 2.9% on weaker earnings, leading industrial stocks lower. The VIX logged its second-lowest close in history.

Colgate Palmolive rose 1.6% recovering from losses after a sales miss offset profit that was reported in line with expectations for the personal-care products company.

Capital One gained 8.71% after earning $1.94/share for the second quarter, 4cps above estimates. The lender and credit card issuer also saw revenue beat forecasts. Capital One wrote off more delinquent loans than in the year-ago period, and also increased the amount set aside to cover bad loans.

Paysafe Group surged 6.8% after the British electronic-payments company said it received a possible all-cash buyout offer from funds managed by Blackstone and CVC Capital Partners. The bid represented an 8.9% premium to Thursday’s closing price of £5.42 a share.

Valeo slumped 6.9% as the French car parts manufacturer’s first-half sales increased to €9.46 billion, but fell short of market expectations of €9.56 billion.

Asia Pacific Stocks
 
Hong Kong
 
Analyst ratings
-          China Galaxy Sec. (6881 HK): H Shares Raised to Outperform at Daiwa
-          China Res Land (1109 HK): China Resources Land Rating BOCOM From July 14
-          CITIC Securities (600030 CH): H Shares Raised to Buy at Daiwa, PT HK$21
-          CK Infra (1038 HK): CK Infra Upgraded to Buy at Daiwa; PT Raised to HK$80.20
-          Goodbaby Intl (1086 HK): Goodbaby Intl Upgraded to Buy at Daiwa; Price Target HK$4
-          Guangdong Invest (270 HK): Guangdong Invest Initiated at Guangfa Securities with Accumulate
-          Haitong Securities (600837 CH): Haitong Securities H Shares Raised to Outperform at Daiwa
-          Hangzhou Hikvision (002415 CH): Remains Buy at CICC
-          Power Assets (6 HK): Power Assets Cut to Underperform at Daiwa; PT Cut to HK$64.10
-          SF Holding (002352 CH): SF Holding Initiated at China Renaissance with Buy; PT 60 Yuan
-          Wanhua Chem Group (600309 CH): Wanhua Chem Group Cut to Neutral at Nomura
-          Xiangtan Electric Manufacturing (600416 CH): Xiangtan Electric Manufacturing Initiated at GF Secs with Buy
 
Preview
-          AAC Technologies (2018 HK): Drops Most in 7 Years as Jefferies Cites Revenue Warning
-          BOC Hong Kong (2388 HK): Lowers Offshore Yuan Deposit Rate in City: HKET
-          BYD (1211 HK): Plans to Sell Up to 10b Yuan of Bonds
-          China Unicom HK (762 HK): Baidu, JD.com Are Said to Join China Unicom Cash Injection: Rtrs
-          Great Wall Motor (2333 HK): First Half Preliminary Net 2.49 Bln Yuan
-          Guangzhou Rural Commercial (000524 CH): Reports CFO Resignation
-          Guotai Junan Sec (601211 CH): First Half Preliminary Net 4.75 Bln Yuan
-          HNA Holding (521 HK): HNA Says Acquired Units’ Work With BoAML Proceeding Normally
-          Hangzhou Hikvision (002415 CH): First Half Net Income 3.29 Bln Yuan
-          Huishan Dairy (6863 HK): Signs Deloitte as Forensic Accountant
-          Jiangsu Yinhe Electronics (002519 CH): Climbs After Announcing Stock Repurchase Plan
-          Yanzhou Coal (1171 HK): 2Q Coal Sales Volume Rises 31% From Year Ago

Japan
 
Analyst ratings
-          Aoyama Trading (8219): Cut to neutral from buy at Mizuho
-          OSG (6136): Raised to outperform from neutral at Tokai Tokyo
-          Sharp (6753): Upgraded to B+ from B- at S&P, with stable outlook
-          Welcia Holdings (3141): Cut to neutral plus from outperform at Mito Securities

Preview
-          Agratio Urban Design (3467): To move listing to TSE2 frok Jasdaq on July 28
-          Daiichi Sankyo (4568): European Medicines Agency panel gives negative recommendation to for breast cancer drug Onzeald
-          Drecom (3793): Preliminary 1Q operating profit at 34m yen, beating company forecast for loss of 100m yen
-          Hitachi Koki (6581): To be delisted on July 24
-          Jafco (8595): 1Q operating profit more than doubles to 6.3b yen from 2.4b yen a year ago
-          Kagome (2811): Lifts annual operating profit forecast 8.7% to 12.5b yen
-          Seven & i Holdings (3382): Unit receives warning from Japan FTC for underpaying subcontractor
-          Shimamura (8227): July same-store sales +6.4%
-          Shiseido (4911): Recalls body soap citing "uncharacteristic odor"
-          Shoei Foods (8079): To move listing to TSE1 from TSE2 on July 28
-          Sobal (2186): To conduct 2-for-1 stock split on Sept. 1
-          Tokyo Steel Manufacturing (5423): 1Q parent operating profit +79% y/y to 4.6b yen; keeps full-year forecast unchanged

Australia
 
Analyst ratings
-          Aurelia Metals (AMI): Raised to buy at Hartleys Ltd, PT A$0.43
-          Myer (MYR): Cut to hold at Morningstar
-          Perpetual (PPT): Cut to underweight at JPMorgan, PT A$46.50

Preview
-          BHP Billiton (BHP): Don’t count on iron ore collapse in 2018, AMP Capital says
-          CSL (CSL): Gets orphan-drug exclusivity for Haegarda
-          Iluka (ILU): 2Q production report
-          National Australian Bank (NAB): New corporate head bets on infrastructure, debt for growth
-          Newcrest (NCM): 4Q production report expected; NOTE: Co. in May forecast FY17 gold output 2.35m-2.6m ozs; copper output 80kt-90kt
-          Pepper Group (PEP): Is said to be mulling PrimeCredit IPO pitches: AFR
-          Westpac Banking (WBC): Enters talks with Charter Hall over sale of Hastings
-          Whitehaven (WHC): European 2018 coal posts biggest weekly gain since February
-          Woodside (WPL), WorleyParsons (WOR), Oil Search (OSH), Beach Energy (BPT), Karoon (KAR), Origin Energy (ORG), Santos (STO): Oil slides most in two weeks as OPEC production is seen rising
-          Bank of New York Australia ADR Index -1.2%
-          BHP Billiton ADR -1.1% to A$24.53 equivalent, 0.2% premium to last Sydney close
-          Rio Tinto ADR -0.9% to A$55.83 equivalent, ~11% discount to last Sydney close
-          Companies trading above 20/50/200 DMAs, Bollinger upper band with RSI above 70: None among screened stocks
-          Companies trading below 20/50/200 DMAs, Bollinger lower band with RSI below 30: TLS, MYR