Wolf Money(world market review 20-26 Sept 2021)

Lim Cheng Ho Singapore 1912-1979

Scene at a Chinese Wayang circa 1959

Collection of National Gallery Singapore 

Market Summary 20-26 Sept 2021

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+ Fed held interest rates steady, indicated expect to begin reducing monthly asset purchases “soon”

- Costco, Nike and FedEx warning more inflation set to hit consumers as holidays approach 

- US existing home sales declined 2% in Aug from July, 1.5% lower than Aug 2020, first annual decline in 14 mths 

+ US new home sales beat expectations; supply near 13-year high  

- Jamie Dimon warned investors that Fed could still be forced into sharp policy move next year

+ SEC said would delay enforcement of certain assets from new disclosures rule for off-exchange securities until Jan 2022

- Yellen cites need for compromise on withdrawal for digital services taxes in call with French counterpart 

- US agriculture gp hit by ransomware attack, demanding US$5.9m in ransom  

- US commerce secretary said will take further action against Hwawei if necessary 

+ Merck on final phase 3 clinical trials on an oral antiviral Covid treatment pill called molnupiravir 

+ US nearly 70% companies expect revenue growth in China to outpace their worldwide growth: Am Chamber 

+ US firms direct investment in Russia 9 times higher than official figures indicate: survey AmChan n E&Y 

- US arrested Russia’s Novatek’s deputy head on tax charges, Moscow in no position to interfere due to his dual Russian-US citizenship  

- JPMorgan facing oil bribery and money laundering probes in Brazil, dating back to 2011  

+ Intel breaks ground on US$20bn Arizona chip plants in bid to lure customers from Taiwanese rival 

+ Tesla Shanghai factory expected to produce 300,000 cars in first 9-mth of the year despite chip shortage: sources 

+ Musk: new semiconductor plants will end global auto chip shortage next year 

+ Boeing forecasts airlines in China will require 8700 new airplanes by 2040, valued at US$1.47 trillion 

+ GM to invest US$300m in Chinese autonomous driving startup Momenta, to access next-generation self-driving technologies  

+ Carnival said bookings for H2 of 2022 ahead of pre-pandemic levels

- Nike cuts sales forecast, citing worsening supply chain woes 

+ McDonald said would restart share buybacks and increased quarterly dividend by 7% 

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+ China drafts new rules on overseas yuan lending, to ease curbs on loan types

+ China added 460bn yuan in liquidity in past week to soothe nerves 

- China central bank said all cryptocurrency-related transactions are illegal and must be banned, urged exit of crypto mining 

- China 2021 growth cuts to 7.7% from 8.2% by Nomura 

+ China issues 15-year plan for Intellectual Property Rights (IPRs) protection, with legislation to cover big data, AI 

- China home purchases declined 16%, auto shipments down 22% in Aug amid Covid-19 outbreaks and regulatory tightening 

- China’s services activity index drops below 50 first time in 16 mths: Caixin PMI

+ China portion of int’l trade in GDP to drop to 25%+- in next decade as its output relies less on global market: economist 

+ China’s R&D spending accounted for 2.4% of GDP in 2020, ranking 2nd in world, narrows gap with US: NBS

+ China to speed up Public-Private Partnership legislation  

+ China issues 8bn yuan (US$1.24bn) worth of yuan-denominated bonds in HK ahead of major bond connect program 

+ China’s rare-earth giants forming ‘super group’ in merger for high-quality development, to improve competitive edge 

+ China plans to accelerate building of intelligent and unmanned ports listed as priority in next 5 years  

+ China expands Qianhai reform zone eightfold to further integrate Guangdong province with HK 

+ Beijing Universal resort set to expand to include a 2nd and 3rd phase just 3 days after opening 

+ Hainan plans int’l carbon market as part of free trade port strategy

- China power supply squeeze leads several provinces to impose restrictions 

- China dozens of soybean crushing plants ordered to shut down n halt production amid increasing demand, rising coal prices and goal to meet carbon nutrition 

+ Cocso struck deal with Container Terminal Tollerot in Port of Hamburg, Germany by acquiring 35% stake  

- China’s lender hold back on new credit for property developers, fears of contagion default by Evergrande Gp 

- China ministry tightens oversight Evergrande accounts to ensure funds are used to complete housing projects 

- Evergrande’s EV arm warms of cash crisis as property group misses’ payment deadline 

- Alibaba seeking to sell entire stake in local television network after govt scrutiny 

+ Huawei laid out blueprint plans range from AI, cloud businesses and networks as 3 critical digital technologies 

+ Huawei’s CFO Meng returns to China after striking deal with US, prosecutors agree to drop charges by Dec1, 2022

- Huawei withdraws from Canada and refuses to authorize 5G patent, more than 4500 jobs cuts and dissolve Canadian branch 

+ Huaweil launched OS openEuler, aims to construct ecological base of national digital infrastructure to prepare more US bans 

- China’s antitrust regulator unlikely to approve Baidu’s US$3.6bn acquisition of JOYY video-based domestic live streaming biz  

+ Xiaomi became Indonesia’s no. 1 smartphone brand in Q2 

+ Geely to set up 5000 battery swapping stations for EVs globally by 2025

+ China tightens tax evasion crackdown on showbiz

- HNA chairman, CEO taken in by police on suspicion of crimes 

+ Mid-Autumn holiday travel recovers to 87% of pre-pandemic level 

- HK denied work visas to dozens of overseas Cathay Pacific pilots seeking to relocate to the city 

+ Taiwan raises 2021 growth forecast support by strong exports lift economy

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+ Japan CPI halted 12-mth decline in Aug, still well below BOJ target 

- Japan factory output likely fell again in Aug on supply chain disruption by global chip shortage: Reuters poll 

- Japan average land prices fell 0.4% from previous year for 2nd consecutive year as of July 1

+ Japan expected to see record number of M&A deals in 2021 

- Panasonic to cut >1000 domestic jobs, group sales fell below 7 trillion yen 1st time in 25 years 

+ Russia economy completely resorted to pre-pandemic level: Putin 

+ Russia economic growth upgraded to 4.3% from 3.7% by Fitch, citing impressive cash cushion from oil revenue 

- Russian oil reserves to last 30 years at current production level, natural gas could run low in 70 years: Rosgeo 

+ Russian pipeline gas exports to China nearly triple in Jan-Aug 

+ Russia to commission 15 new nuclear power units by 2035

+ Russia is fully compliant with its gas supply obligations to Europe: Germany’s energy ministry 

- IEA urged Russia to ramp up gas supply to Europe

- Global equity funds saw first outflows in 2021 as rising pessimism on US spending plans triggered large outflows: BofA

+ Oil prices rose for 3rd week in row to near 3-year high as supply tightens 

- Semiconductor chip shortage to cost global automakers US$210bn this year: AlixPartners 

- Crypto Exchange stops taking China users as Beijing widens ban

- BItcoin, Ether tumble as China intensifies crypto crackdown 

- Aluminum process hit 13-year high amid power shortage in China 

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- European gas prices surpassed US$900 per 1,000 cubic meters after reports Gazprom’s no extra transit through Ukraine 

- Europe is battling record-breaking surge in energy prices that threatens to derail post-pandemic economic recovery 

- German business morale fell for 3rd mth running in Sept, hit by bottleneck recession for manufacturers 

+ Germans head to the polls in historic election marking end of Merkel’s era 

- Allianz in process offloading large chunk of US life insurance policies: Bloomberg 

- UK facing impending food crisis due to rising CO2 prices, could skyrocket by 500%: govt warns 

+ Rolls Royce won US Air Force contract worth up to US$2.6bn 

- HSBS, StanChart could face spillover damage to their profits and balance sheets from Evergrande crisis 

- France electricity prices to spike 10% this winter, an unprecedented rise: consumer group 

- Turkey’s central bank slashed key interest rate a full percentage point, with lira plunging to record low levels

- Poland’s energy firm PGNiG has not power to veto certification of Nord Stream 2 gas pipeline: German energy regulator 

- Ukraine accuses Russia of using its natural gas as a geopolitical weapon 

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- Australia must act to curb runaway home prices which have surged >20% in major cities over past year: IMF

- Australian PM refused to commit to phasing out fossil fuels as major climate conference approaches 

+ India’s central bank likely to retain surplus of liquidity in banking system, may announce another round of bond purchases 

+ India stock market on course to become world’s 5th largest by 2024: Goldman Sachs 

+ Indian startsups raising US$10bn through IPO so far in 2021, with 150 private firms queuing up to list, could soon increase US$400bn in market value   

+ India sealed US$3bn deal with Airbus for 56 military transports 

+ Indian to resume Covid vaccine exports to developing nations 

- India’s antitrust fines US$102m on Heineken-controlled United Breweries, and US$16m on local unit of Carlsberg in price fixing

- South Korea central bank warned worsening financial stability woes, debt repayment burden to rise 

- South Korea moved to regulate cryptocurrency trading platforms

- South Korea daily Covid-19 cases top 3000 for the first time 

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- SEA’s economies are on much slower recovery path from Covid-19 crisis than previously thought: ADB 

+ Indonesia final shipment of 6,600 tons of high-quality steel rails from Jakarta-Bandung HSR arrived at the port

- Indosat being placed on negative watch by Fitch amid planned merger

+ Bali to press on with trial reopening for foreign visitors 

+ Tokepedia passes Shopee as most visited e-commerce website in Indonesia 

- Thailand’s exports rose less than expected in Aug as Covid restrictions affected manufacturing and logistics 

+ Thai-Sino high-speed rail project from BKK to Nakhon Ratchasima tipped to go ahead as planned 

- Myanmar’s currency falls to all-time low against US dollar 

- Manny Pacquiao declared to run for president of Philippine in 2022 

+ Malaysia fully vaccinated 19.48m ppl or 59.7% of its population as of Sat, 82.5% of adult population fully vaccinated 

+ Malaysia’s central bank to launch alternative reference rate to offer market participants more flexibility and hedging options 

+ Malaysia to allow inter-state travel once 90% adults are vaccinated 

+ Malaysia to review its framework for SPACs, amid surge in demand for such fundraising vehicles globally 

+ Johor Sultan raised issue during meeting with PM, hopes immediately reviews strict MM2H conditions 

+Sg rolling out S$650m in support for firms hit by tightened Cvid-19 restrictions amid exponential surge in cases 

+ Sg employers to receive >S$900m in jobs support scheme payouts from Sept 30 

+ Sg factory sector rose YoY for 10th straight mth in Aug, with support from linchpin electronics cluster 

+ Sg extending Jobs Growth Incentive to March 2022 to support employers expanding local workforce 

- Sg reported 1939 Covid-19 cases as of noon on Sunday

- Sg dine-in, social gathering sizes cut to 2 for a mth amid exponential case surge 

+ Sg Health Science Authority and Pfizer is discussions regarding obtaining full license application for its Covid-19 vaccine 

+ Sg biotech startup Mirxes in talks for US$1.2bn SPAC listing in US 

+ Sg Ninja Van raises US$578m in funding round, adds Alibaba as investor 

Contribution by Derek@valueinvestments chat group. Thank you.

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