Morning Report APAC: Risk rally pushes equities and USDJPY higher

- Mario Draghi says growth in the euro area could fall 0.5% over next three years
- With a pause in risk-off USDJPY rallies 0.7%
- After two days of heavy losses, European equity markets bounce overnight
- Stoxx600 is up 2.5% and UK's FTSE100 up 2.6%
- Sentiment carries over to US and S&P500 closes up 1.8%
By Saxo APAC Sales Trading
Economic data of the day (Singapore Time; GMT+8)
2000: EUR – Germany CPI MoM (Exp. 0.2%, Prev. 0.3%), YoY (Exp. 0.3%, Prev. 0.1%)
2030: USD – PCE Deflator MoM (Exp. 0.2%, Prev. 0.3%), YoY (Exp. 1.0%, Prev. 1.1%)
2030: USD – PCE Core MoM (Exp. 0.2%, Prev. 0.2%), YoY (Exp. 1.6%, Prev. 1.6%)
2200: USD – Pending Home Sales MoM (Exp. -1.1%, Prev. 5.1%), YoY (Exp. 4.6%, Prev. 2.9%)
Speeches
2130: EUR – ECB President Mario Draghi Participates at ECB Conference
Overnight news
Brexit: German Chancellor Angela Merkel said it’s not possible to pull out of the EU referendum outcome. There’s a number of suggestions on the further development of the European Union.
US: GDP was slightly better than expected at 1.1% QoQ (Exp. 1.0%) and Core PCE came in at 2.0% (Exp. 2.1%)
The improved performance in trade and business investment more than made up for weaker consumer spending. Corporate profits at the start of the year were also revised up, giving a brighter picture to gross domestic income.
RBNZ reiterates its June 9 policy statement that “further policy easing may be required to ensure that future average inflation settles near the middle of the target range”.
RBNZ will monitor whether inflation expectations fall further and become embedded in price and wage setting behaviour, developments in the Chinese and emerging Asian economies, global dairy prices, high net immigration, the housing market, and weak world demand and how this affects oil and other import prices.

Foreign exchange

Commodities


Equities
Asia Pacific Stocks
Hong Kong:
Analyst Ratings
China South City (1668 HK): Cut to fully valued at DBS Vickers
Cosmo Lady (2298 HK): Cut to neutral at Merchants Securities
Link REIT (823 HK): Raised to neutral at Credit Suisse
NARI Tech (600406 CH): Rated new buy at Haitong Intl
New China Life (1336 HK): Raised to hold at HSBC
PICC Group (1339 HK): Cut to hold at HSBC
Preview
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Yue Yuen(551): NIKE(NKE) shares fell as much as 7% (last seen down 3.6%) after the bell as its sales and orders missed forecasts.
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PSBC received approval from CSRC for its H-share IPO with no more than 13.923bn shares.
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StanChart (2888) to merge SH and HK lending team, adding three bankers on board. Shares in London closed at 0.2% discount.
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PICC (1339): National Audit Office identified audit problem, which the company said has no material impact.
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HKEx (388) said it will increase SH-HK connect quota in appropriate time.
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West Cement (2233) said the company plans to issue a statement on Jun 30. The deal with Anhui Conch (914) is still in progress.
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CH Gas (384) FY NI HK$2.27bn, down 32.6% YoY, final dividend 14.46 HK cents. Apr-Jun sales higher than nation’s average 2017 LNG sales target at 800k tons.
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Zijin (2899) says shareholder New Huadu Industrial Grp sold 375.6m of the company’s A-shares on Jun 27, cutting its stake to 4.92% from 6.66%.
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CRTG (269) may sell 86.9% of Zhunxing Heavy Haul Expressway.
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Tsui Wah (1314) plans to open 80 shops in CH and HK within a year, 1/3 of which are in HK. The company will also open eight shops in Guangzhou, SZ and Macau by end of 2016.
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Fosun (656) is said to have stronger interest in investing in UK and Europe (Reuters).
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Shougang (697) may sell 100% of Qinhuangdao Shougang Plate mill.
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Golden Meditech (801) FY net loss HK$407m.
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Sunac(1918) suspends applications to buy land nationwide temporarily due to high prices.
Japan:
Analyst Ratings
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Tokyo Electron (8035 JP) Raised to Outperform vs Neutral at Credit Suisse
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Hitachi Kokusai (6756 JP) Raised to Outperform at Credit Suisse
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Disco Corp (6146 JP) Cut to Neutral from Outperform at Credit Suisse
Preview
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Adways (2489 JP), Imagineer (4644 JP), Netyear (3622 JP) and other Line-related stocks: Line sets IPO price range at ¥2,700-3,200 per share: filing with Finance Ministry; WSJ had reported price range earlier.
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DCM Holdings (3050 JP): First-quarter operating profit rose 17.2% y/y to ¥6.9bn; company to make Kuroganeya (9855 JP) a wholly-owned unit via stock swap; to pay 0.6 share for each share of Kuroganeya, which is to be delisted on Nov. 28.
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Heiwado (8276 JP): First-quarter operating profit fell 2.2% y/y to ¥2.9bn, and first-quarter net income dropped 6.6% y/y to ¥1.9bn.
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J Front Retailing (3086 JP): First-quarter operating profit fell 12.7% y/y to ¥9.3bn, and first-quarter net income tumbled 50.3% y/y to ¥8.5bn.
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Oracle Corp Japan (4716 JP): full-year parent operating profit rose 6.7% y/y to ¥50.2bn, full-year parent net income climbed 11% y/y to ¥33.6bn.
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Right On (7445 JP): Nine-month cumulative quarterly parent operating profit jumped 62.3% y/y to ¥4.5bn.
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V Technology (7717 JP): Renaissance Technologies cuts stake in company to 5% from 6.76%.
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Zojirushi (7965 JP): Half-year operating profit climbed 28% y/y to ¥8.5bn; full-year operating profit forecast raised 11.1% to ¥12bn.
- IPOs: Solasto (6197 JP): Begins trading on TSE after IPO priced at ¥1,300; Komeda (3543 JP): Begins trading on TSE after IPO priced at ¥1,960.
Australia:
Preview
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Perpetual raised to buy vs hold at Morningstar
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Qube raised to buy vs hold at Morningstar
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Sigma Pharmaceuticals cut to sell vs neutral at Goldman Sachs
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Australian Pharma raised to neutral vs sell at Goldman
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APN News & Media cut to neutral vs buy at UBS
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Evolution Mining cut to underperform vs neutral at Credit Suisse
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Caltex raised to overweight vs neutral at JPMorgan
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Mayne Pharma (MYX@AU) in trading halt as it undertakes A$888m capital raising after acquisition
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National Storage REIT (NSR@AU)) in trading halt as it undertakes A$260m raising after acquisition
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Rio Tinto (RIO@AU) says tax payments fell 32% in 2015
- Hellaby (HBY@NZ) announces sales of equipment group to private equity fund
– Edited by Susan McDonald
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