Wolf Money(world market review 16-22 Aug 2021)

Xu Beihong China 1895-1953

Portrait of Lim Loh circa 1927

Gift of the Lim Family in Memory of Lim Loh

Collection of The National Gallery Singapore 

Market Summary 16-22 Aug 2021

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+ Fed preparing for taper likely before end year if economic recovery continues

+ US jobless at lowest level since Covid-19 began March 2020; claims fell to 348,000, down by 29,000

- US retail sales drop 1.1% in July, motor vehicles and parts dealers led the decline, shift to spending on services 

+ US Conference Board said its index of leading economic indicators (LEI) rose 0.9% to 116.0 in July

+ US dollar marked fresh 9.5 mths high against major peers on Friday 

+ Powell to speak on ‘economic outlook’ next week

+ Yellen backs reappointing Powell as US Fed Chair, whose term expires Feb 

- Goldman Sachs lowered Q3 growth forecast for US to 5.5% from 9% due to impact of Delta variant 

+ US 97% of small business owners won’t pay more income taxes under Biden plan: Treasury 

- US Environmental Protection Agency expected to recommend biofuel blending mandates below 2020 levels

- VP Kamala Harris said issues’ stemming from a global chip shortage is “very real”

+ US set to begin offering Covid booster shots next mth 

- US to probe whether Russia is operating as non-market economy over claims it subsidies goods entering US 

- US solar manufacturers requests Federal to investigate Chinese firms circumventing tariffs by manufacturing in other countries 

- US looks to block Taliban from accessing its US$360m in reserve assets which IMF planned to send next week 

- Mastercard faces US$14bn class action lawsuit in UK for overcharging fees to millions British consumers  

- US opened formal safety probe into Tesla’s partially automated driving system after 11 crashes  

- Apple suppliers in China are facing labour shortages, may drive up prices

+ Amazon plans to open department stores in US

+ Tesla likely to launch humanoid robot prototype next year: Musk 

- GM recalls all bot EVs on fire risk, sees US$1bn cost 

+ Coinbase has built US$4bn cash stockpile to weather tighter regulation, crypto risks 

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+ Xi stresses promoting common prosperity amid high-quality development, forestalling major financial risks 

+ China postpones vote on extending anti-sanctions law to Hong Kong 

+ China likely to achieve herd immunity by year-end with 80% population vaccinated: Zhong Nanshan 

+ China’s Jan-July fiscal revenues up 20% YoY, fiscal expenditures rose 3.3% the same time 

+ China’s Jan-July non-financial outbound direct investment (ODI) up 4.2% YoY to US$62.81bn 

+ China several commercial banks posted double-digit growth in net profit in H1

+ China mulls law revision to advance innovation in science, technology 

- China regulators considering pressing data-rich US IPO-bound firms to hand over data control: sources 

+ China to set up state conglomerates focusing on new strategic sectors 

- China’s State Administration issued draft rules aimed at preventing unfair competition on the internet

+ China’s Nasdaq-like STAR board to host world’s 2 largest IPOs with forecast potential raising >US$17bn 

+ China’s mRNA vaccine firm Abogen raises US$700m from investors, including Temasek 

- China’s tech stocks slumped to new low, HK’s benchmark Index hit 10-mth trough, wiped off >US$560bn in market value  

- Chinese firms listed in US on pace for longest losing streak >10 years as Beijing continues its clampdown

+ China’s new draft rules ban using algorithms or fake reviews to promote goods and services

+ China passed new online privacy law preventing businesses from collecting sensitive personal data 

+ China Telecom surged as much as 44% as it made its stock market debut in Shanghai as world’s largest IPO of 2021  

+ China 3rd-child policy written into Chinese law and stipulates supportive policies for childbearing 

- Chinese authorities called for indebted Evergrande to resolve its debt risks in meeting with executives 

- Evergrande in talks with Xiaomi consortium to sell EV unit stake

+ China property demand remains high despite measures to cool sector

- China port congestion worsens as ships divert away from Ningbo after shutting for 7 days, amid Covid-19 outbreak continues 

+ China will plant 36,000 square km of new forest a year until 2025 to combat climate change 

+ China-US maintains normal communications in economy and trade sector: MOFCOM 

+ Huarong Asset Management gets state-led bailout after record US$16bn net loss for 2020

- China’s biggest vaping company RLX Tech reported dramatic drop in growth of both revenue and profit in Q2 

+ Chinese investments still flowing into India in an indirect and low-profile fashion: Insider

+ Shanghai unveiled measures to support chips, AI and trade in FTZ

- Shanghai quarantined hundreds of ppl, suspended cargo handling after infections detected in cargo workers at Pudong Airport 

- Chinese experts suggesting companies should move certain production lines to China from Malaysia after surging Covid cases 

- China’s number in Top 500 companies falls from 51 to 47: Hurun Global 

+ Tencent to invest US$7.7bn to help promote common prosperity initiative 

- HK reclassifies 15 countries in a high-risk category for Covid-19 

- HK quarantine-free travel bubble with Singapore has been cancelled permanently after Sg adopted a “Cvoid-19 resilient” strategy 

+ HKEX announced launched of futures contract based on MSCI China A50 connect Index 

+ Taiwan govt said global supply and demand for auto chips should reach a “balance” by Q4 this year

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- Japan’s core consumer prices dropped 0.2% YoY, unlikely to hit its 2% goal 

- Japan’s state of emergency restrictions is not curbing movement as effectively as in the past, risks recovery delay

+ Japan’s exports rose 37% in July to US$67bn YoY, rising for the 5thn mth in a row 

- Japan’s June machinery orders fell 1.5%, first decline in 4 mths 

- Toyota eyes 40% cut in global output in Sept amid global chip shortage, to suspend 27 production lines at 14 plants in Japan

- Russia ready to take tough measures to keep lid on domestic fuel prices, includes stopping exports petrochemicals: DPM

+ Russia to pump 5.6m cubic of natural gas through Nord Stream 2 pipeline in 2021 

+ Nord Stream 2 gas pipeline from Russia to Germany that bypasses Ukraine only left 15km to go: Putin 

+ Russia may reach record-high oil output level by summer 2022 and further raise production to peak by 12.2m bpd in 2023

+ Russian banks net profit in H1 totaled US$19.2bn, nearly double their earnings YoY: central bank 

- Russia pledges retaliatory measures after new US sanctions on Russian ship and 2 companies involved in Nord Stream 2 

+ Brazil central banck purchased >62 tons of gold in 3 mths through July 2021, amounted to 92% of total reserves 

- Oil posted biggest week of losses in >9 mths in anticipation of weakened fuel demand worldwide due to surge in Delta variant

- Copper and Iron Ore prices are collapsing on growth worries and Chinese steel curbs 

+ WTO’s Good Trade Barometer at 110.4, highest since first released July 2016, confirming strength of trade recovery  

- Global auto market decline 6.3% in July YoY due to chip shortage and Covid delta variant 

- Global chip shortage will cut worldwide auto production by up to 7.1m vehicles this year  

+ Crypto market cap returns to US$2 trillion level as bitcoin rallies to 3-mth high 

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+ Euro zone inflation accelerated to 2.2% in July, highest in nearly 3 years, above ECB target 

+ Germany economy is on track for a lasting, probably stronger recovery in 3rd qtr driven by lively domestic demand: ministry 

+ Germany considering using Nord Stream 2 gas pipeline for hydrogen deliveries from Russia 

- Germany to sell a quarter of its stake in Lufthansa before end 2023  

- Volkswagen will slash production at its main plant due to ongoing chip shortage 

- UK lost nearly a hundred highly paid bankers ahead of its departure from EU: EBA 

- UK mounts in-depth probe into Nvidia’s proposed £29bn takeover of Arm, citing ‘serious competition concerns’ 

- Scotland’s power-sharing deal gives pro-independence majority

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- Australia announced more drastic curbs and longer lockdowns to rein in outbreaks of Delta variant after reported record cases 

- NZ extended lockdown, reported 21 new Covid-19 cases on Saturday, more expected 

- Asian shares finished the week heading for their lowest close since November, worst week since February 

+ India needs to continue monetary policy support for the economy, remaining watchful of inflationary pressures: central bank 

+ India’s economy showing strong signs of recovery as several states begin to ease restrictions and cancel lockdowns 

+ Modi unveiled US$1.35 trillion infrastructure plan on 75th Independence Day 

+ India’s exports rise nearly 40% in 2nd week of August, worth US$7.1bn 

+ India stock market has more than doubled since last year, with record gains in Aug, market capitalization now around US$3 trillion 

+ India gives emergency approval for world’s first Covid-19 DNA vaccine 

+ South Korea Investment banks pocketed record fees from equity underwriting this year, due to booming IPOs 

+ South Korea to see 50% of population fully vaccinated by end Sept 

- Iran’s crude oil production fell to lowest in 40 years: EIA 

- Afghan central bank’s assets of US$9.5bn has been freeze by US, global development aid halted 

- Taliban has blocked Indian-Afghan transit trade through Pakistan and shut down 2 crucial trading terminals on border

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- ASEAN progress in Myanmar has not been as effective as hoped: Sg FM 

+ Indonesia to spend tens of trillions of rupiah on infrastructure amid pandemic pressures 

+ Jokowi reiterated 8.9% or US$63bn in direct investment this year  

 + Indonesia seek to spur economic growth to 5.5% in 2022, budget deficit expected to narrow to 4.85% of GDP: Jokowi 

+ Indonesia July trade surplus hit US$2.59bn as commodity prices rise, 2nd highest surplus recorded this year 

- Indonesia aims to phase out 112m fuel-powered motorcycles 

+ Thai Parliament passes US$93bn budget 

+ Bank of Thailand urging govt to borrow additional 1 trillion baht to address the server economic impact of pandemic 

+ Bank of Thailand plans to test its Retail Central Bank Digital Currency next year’s Q2 as alternative payment option  

+ Thailand cryptocurrency trading value expected to reach 1 trillion baht by end year 

- Thailand residential market unlikely to recover to pre-Covid levels until 2025, market contraction has been revised to 25-32%

+ Vietnam emerging as solar power champion, ranks 7th in the world in terms of installed capacity 

- Vietnam HCM City issues stay-home order as Covid-19 deaths soar 

+ Malaysia has chosen a new PM Ismail Sabri in accordance with nominations of lawmakers as 3rd PM in 3 years 

+ Malaysia fully vaccinated 38% of population as of Aug 20, total jabs given top 30m  

+ Malaysian palm oil exchange eyes night trading to drive growth 

- Sg will remain an open economy; approach has not and will not change: Minister 

+ Sg to recognize approved overseas vaccinations for all travellers, to start vaccinated travel lanes with Germany and Brunei

+ Sg announced 4 new classifications of travelers as response to increased vaccinations from regions 

+ Sg very likely to have a Cvoid-19 booster exercise: Minister  

+ Sg economy could benefit by US$6bn (1% of GDP) if businesses increase their investment in cloud-based technologies: Deloitte

+ MAS is building a bitocin inspired currency using JPMorgan technology: Forbes 

+ Sg shophouse transactions hit S$1bn for year to date, surpassing levels in 2019 and 2020 

+ Sg new private home sales surged 82% in July despite tightened Covid-19 curbs 

- Sg 47% retailers postpone seeking new space due to stricter Covid measures 

+ Sg biotech startups have attracted record amount of US$360m halfway through 2021 

- Wilmar’s India IPO on hold amid Indian probe of JV partner Adani Gp  

Contribution by Derek@valueinvestments chat group. Thank you.

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