Wolf Money(world market review 23-29 Aug 2021

Lai Foong Moi Singapore 1931-1995

Trishaw Rider circa 1961

Collection of the National Gallery Singapore

Market Summary 23-29 Aug 2021

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+ US corporate profits surged to fresh record high in Q2, boosted by robust demand and higher prices 

+ US economy on track for strong jobs market despite Delta variant, no signal given on start of bond-buying taper; Powell 

+ US is reviewing its trade policy with China: Katherine Tai 

+ S&P 500 passed historic mark of 4500 pts after Powell’s speech regarding monetary policy 

+ US personal spending growth moderated in July, climbed by 0.4% from a mth earlier

- US consumer sentiment little changed in 2nd half Aug, remaining at pandemic lows as concerns over Delta variant 

- US Supreme Court has allowed evictions to resume, ends protection for around 3.5m ppl next 2 mths 

- US jobless claims rise by 4000 to 353,000 from pandemic low 349,000 a week earlier 

- US introduced import duties >200% on several types of steel pipes from Russia 

- US oil workers flee as storm near Gulf of Mexico; oil firms slash output by 91% ahead of powerful Hurricane Ida 

+ Biden advisers considering recommending Powell for 2nd term as Fed chair, Lael Brainard as vice chair 

+ US to restart federal oil and gas leasing program next week, plans to hold Gulf of Mexico auction after Biden paused it in Jan 

+ US approved license applications worth hundreds of millions for Huawei to buy chips for its auto component business 

+ BofA: Fixed income funds enjoyed biggest inflows in 7 weeks pilling into investment grade debt and US Treasuries 

+ SEC issued new disclosures requirements to Chinese firms seeking to list in NY 

+ US finance firms and senior Chinese regulatory officials are preparing for new talks, an effort to secure access Chinese market  

+ FAA will open review of operations at Boeing after feedback from inspectors 

- US top retail importer Dollar Tree said full-year profits to take bigger hit due to surging shipping costs, could hurt store inventories  

- Microsoft revealed thousands of cloud database customers were vulnerable to data breach  

+ Walt Disney’s ESPN looking to license its brand to major sports-betting companies for at least US$3bn 

+ Amazon moves Into Buy Now Pay Later space with Affirm Partnership

+ Nvidia likely to seek EU antitrust approval for its US$54bn takeover of UK chip designer Arm early Sept 

+ Western Digital in advanced talks for possible US$20bn stock merger with Japanese chipmaker Kloxia

- US auto retail sales expected to fall 14% YoY to 987,100 in August as global chip shortage continues 

+ Pfizer to buy cancer drug developer Trillium in US$2.3bn deal 

+ Universal Studio’s US$7.7bn Beijing theme park set to open to select guests in China after delayed due to pandemic 

- US judge declined to stop J&J from splitting talc Baby Powder product liabilities from main business 

+ Google swaps Qualcomm for Samsung to use its 5G modem for its Pixel 6 and Pixel 6 Pro

- American Airlines warns on August revenue as rising Covid-19 cases hit bookings 

+ Delta Air orders 30 A321neo jets narrowbody  from Airbus to upgrade its fleet and prepares for rebound in travel 

- Carnival’s Diamond Princess cruise ship delays its return to sailing to spring of 2022 

+ Forbes magazine to go public via US$630m SPAC merger with HK-based Magnum Opuns to expand consumer business 

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+ China’s US$1.2 trillion sovereign wealth fund trims overseas equities, bonds, seeking ‘new ways to deploy capital overseas’, citing uncertainties in post-pandemic int’l landscape

+ China’s central bank vowed to stablise supply of credit and boost amount of money supporting SMEs and real economy after both credit and economic slowed in July 

- China’s economy decelerated more than expected in July as Delta variant hits retail sales, pollution curbs 

+ China’s industrial profit grew 16.4% YoY in July to US$108.4bn, slowest rate this year 

+ China to press ahead with restructuring and integration its SOEs across industries in H2, aims for competitiveness  

+ China central bank makes biggest weekly cash injection into banking system since Feb  

+ China 3 top banks posted robust H1 profits, bad loans fall 

+ China signaling keen to add stimulus even if US Federal starts tapering bond purchases 

- China plans to ban US IPOs for tech firms with sensitive data 

- China halts over 40 IPOs as it investigates law firm and broker

+ China says maintaining ‘normal communication’ with US on trade 

+ China’s cross-border yuan settlements accounted for record 47.4% of all domestic and foreign transactions in 2020, surged by 44.3% YoY to US$4.37 trillion 

+ China will study targeted measures to help exporters cope with rising logistics costs: Ministry 

+ China’s common prosperity push does not mean ‘killing the rich’: official

- China’s Supreme Ppl’s Court said overtime practice of “996”, working 9am to 9pm, 6 days a week is illegal 

+ China administered over 2bn Covid-19 vaccine doses 

+ China plans to develop hydrogen energy industry by >10,000 fuel cell vehicles on road and 37 hydrogen filling stations by 2025 

+ China planning huge green hydrogen project using solar and wind power to produce approximately 66,000 tonnes per year 

- China’s growth in home prices set to slow in 2021 on policy curbs: Reuters poll 

+ Air China, China Southern narrowed quarterly losses as travel rebounds 

- China orders state firms to migrate to govt cloud services

- China considers making US-listed companies hand over data control to 3rd party firms, preferably state-backed firms 

+ Guangdong and Shenzhen eye foreign capital via bond sales in HK, Macau

- PBOC urged citizens to stay away from cryptocurrencies 

+ China reopened Ningbo-Zhoushan port after 2-week shutdown

+ China set to study targeted measures to help exporters amid record high shipping rates and insufficient transport capacity 

+ China imports US$107m worth of frozen beef from US in July, compared to just US$35m from traditional destination Australia

+ PetroChina announced discovery significant reserves of shale oil at its largest oil field 

- Guandong govt seeking feedback from major banks of China Evergrande about forming a creditor committee, as company warned of further plunge in profits  

- Evergrande has more than 240bn yuan of bills and trade payables from contractors to settle over next 12 mths: S&P Global 

+ China’s CRRC approved to pilot integrated system R&D for maglev trains with speed 200lm/h, high-speed maglev 600km/h

+ Xiaomi posts record 64% surged in revenue in Q2, prepares autonomous driving expansion 

+ HKEX, Guangzhou exchange explore products to support China’s climate goal 

+ HK ex-monetary chief: let investors trade Hang Seng Index stocks in RMB

+ HK home prices rise for 7th mth at near record high 

- TSMC to raise prices by as much as 20% to keep up with demand 

- Faxconn facing labour shortage up to 200,000 workers just weeks before new iPhone 13 launch in Sept 

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- Japan’s food self-sufficiency rate in fiscal 2020 fell to lowest level since the statistics began in 1965

- Japan’s July factory output to fall as export demand for capital goods stagnated and supply chains further disrupted 

- Japan estimated >US$15bn preparing for Olympics over past decade, double initial estimates 

+ Russia expanding its infrastructure of Krasnaya Ployana resor Sochi gambling zone to be adapted into Russian Las Vegas 

+ Russian’s biggest automaker AvtoVaz plans to launch its new EVs Lada in 2027 

+ Russia’s gold and foreign currency holdings grew by another US$1.8bn in one wk to totaled US$595.6bn 

+ Honduras opened the first cryptocurrency ATM 

+ Cuba govt will officially recognize cryptocurrencies for payments 

- World Bank suspended disbursements in Afghanistan as Taliban sizes power 

+ Global bond markets saw 5th consecutive week of inflows on investor caution: Lipper 

- Global corporate profits in Q3 likely to fall for the first time in 18 mths after record earnings in Q2: Reuters

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- Eurozone lending to companies continued to slow in July: central bank data   

+ Euro Zone expects 2.7% for August inflation, above July 2.2% 

- Europe’s banks are proving slow to act on sustainability: BlackRock report  

- German Ifo index, leading indicator signals economy’s loss of momentum 

+ Germany’s GDP grew adjusted 1.6% in Q2, up from previous estimate of 1.5%, driven by consumers, state spending

- German exports to China declined for first time in nearly a year in July, easing by 3.9% YoY to €8.4bn 

+ German publisher Axle Springer will acquire US news website Politico for over US$1bn 

+ UK car production drops to lowest in July, worst monthly performance in 65 years 

+ Richard Branson’s Virgin Orbit to go public in Boeing-backed SPAC deal 

+ French consumer only marginally less confident about economic prospects in August despite surge in Covid-19 cases  

- France 160,000 across the country protest against Cvoid-19 rules 

- South Africa’s unemployment rate is now highest in the world at 44.4% in Q2 

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- Australia GDP expected to show one of biggest contraction on record in Q3: CBA

- Qantas reported A$1.83bn in underlying pre-tax losses for 12 mths to June 30, rising to A$2.35bn when includes one-off costs  

+ Virgin Australia to add 9 planes to fleet ahead of expected travel rebound 

+ India to sell US$81bn state assets over next 4 years to boost growth and infrastructure spending 

+ India GDP projected to increase by 18.5% in Apr-Jun: State Bank India 

+ India won’t surprise markets with sudden rate hike: Central Bank 

+ India attracts US$22.5bn in FDI in Apr-Jun, 90% higher YoY, automobile industry accounted 27% of total FDI

+ India’s SpiceJet expects to restart Boeing MAX service end Sept 

- South Korea’s total fertility rate fell to 0.84 in 2020, lowest since records began in 1970  

+ South Korea raised its benchmark rate first time in almost 3 years by 25 basis pt to 0.75%, aimed at curbing debt growth  

- South Korea parliament committee votes to curb Google, Apple commission dominance 

+ Samsung to invest US$206bn in next 3 years for post-pandemic growth 

+ Iran’s mega gas find could become major supply source for EU: Tehran Times 

+ Iran set to join Shanghai Cooperation Organization (SCO) 

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+ SEA firms public equity capital raising has surged to 4-year high of US$8.4bn so far this year: Refinitiv  

+ Indonesia IT spending expected 13% compound annual growth rate to US$6bn by 2024, to be APAC fastest growing: Report 

+ Thailand domestic airlines soon resume commercial flights out of Bangkok in Sept 

+ Thailand expects to have 140m doses of Covid-19 vaccines this year 

+ Philippines granted 5th new digital bank license to neobank  

+ Philippines lifts casino ban in top tourist island Boracay 

+ Malaysia’s total trade increasing by 13% YoY to RM180.96bn in July, marking 6th consecutive mth of double-digit growth 

+Malaysia almost 62% of adult population fully inoculated as Aug 28

+ Malaysia capable of producing nation’s first Covid-19 vaccine: Adham

+ Sg growth forecast raised to 6-7% as global economy picks up: PM

+ Sg can live with Covid-19, no longer possible to bring cases down to zero: PM 

+ Sg manufacturing output slow to 16.3% in July, 2nd mth in the row at slower pace but 9th straight mth of increases 

- Sg factory output growth slowed in July, manufacturing expansion set to moderate on cooling global chip supply crunch 

+ Sg recorded 2.5% YoY increase in consumer prices, transport sector saw the highest increase of 9.6% 

+ Sg fully vaccinates 80% of population of its 5.8m population 

+ Sg firms that hire foreigners must pay minimum S$1400 for local staff

+ Sg tourism sector is showing “promising signs” of recovery: Manpower Minister 

+ Sg services industries grow 16.7% YoY in Q2 to pre-pandemic levels 

+ Changi Airport to reopen Terminals 1 and 3 to the public on Sept 1 

- Sg plan to let migrant workers into community still on hold after new Covid-19 clusters in dorms 

+ Sg average package for mid-level expatriate costs US$225,171, the 17th most expensive location to send expat workers 

Contribution by Derek@valueinvestments chat group. Thank you.

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