Wolf Money(world market review 27 June - 02 July 2022)

 

Po Po Myanmar 1957

Incomplete Mirror circa 1991

Collection of National Gallery Singapore 

Market Summary 27 Jun – 02 Jul 2022

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- S&P posted worst first half since 1970, benchmark down by 21% 

- US manufacturing activity slows to 2-year low in June

- US consumer confidence index fell to 98.7, down from 103.2 in May 

- US core PCE deflator slowed from 4.9% to 4.7% YoY vs consensus forecast of 4.8%

- US new vehicles sales tumbled >21% in Q2 YoY as global chip shortage continued to cause production problems

- US mortgage lenders, refinancing firms, real-estate brokers may lay off thousands of employees in coming mths

+ US mortgage rates fall for the first time in 4 weeks on economy uncertainty, 30-year fixed rates fell by 11 basis pts

- US construction spending fell in May as single-family home building stalled, construction spending slipped 0.1%

- US prohibits Russian gold imports, UK, Canada and Japan reportedly joined in ban 

- Boeing said “disappointing that geopolitical differences continue to constrain US aircraft export” after China top 3 airlines buy nearly 300 Airbus planes 

+ US offers to boost pilot pay 17% by end 2024 

- US hundreds of flights axed as it kicks off long holiday weekend 

+ Shell, Exxon join study to build China’s first major carbon storage project 

- Tesla laid off about 200 of workers on its Autopilot team, shuttered a California facility  

- Tesla’s delivered 17.9% fewer EVs in Q2 from previous qtr, disrupted by China’s Covid-19 shutdown 

+ GM surpassed Toyota in Q2 US car sales 

- US quality of vehicles sold fell to 36-year low as supply, labour shortages continued: consultant J.D Power 

- US continued to see newspapers die at the rate of 2 per week; country had 6377 newspapers end of May 

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+ China’s June manufacturing PMI at 50.2, back to expansion range, up from 49.6 in May: NBS

+ China’s private Caixin/Markit Manufacturing PMI rebounded to 51.7 in June, highest since last June 

+ China’s manufacturing activity expanded at its fastest in 13 mths in June, supported by strong rebound in output 

+ China’s non-manufacturing PMI rebounded to 54.7 in June from 47.8 in May supported by more construction activity  

+ Xi arrived in HK by train to inspect and attend HK’s 25th anniversary return to China 

+ People’s Bank of China announced new funding measures to boost infrastructure, support regional projects 

+ China shortens Covid quarantine time for int’l travellers to 7 days from 14, reducing at-home health monitoring to 3 days 

+ China to extend yuan trading hours as part of internationalisation push 

+ China to give subsidies to domestic oil refining firms to safeguard stable supplies of processed oil and reduce operating costs

+ Shanghai province raises annual coal output by 107m tons to 1.3bn to ensure domestic energy supply 

+ China to further extend tariff exemptions for some goods imported from US until mid-Feb 2023

+ China’s firms shifting to new overseas markets such as Switzerland to expand capital-funding channels 

+ China to raise US$45bn through financial bond issuance to replenish capital for major projects, boost employment 

+ China had issued US$180.4bn in local govt bonds in May 

+ China’s first root-community of desktop operating system, Openkylin, makes debut, to boost development of open source ecosystem, help realise independent and innovative development of software industry 

+ Beijing’s economic output will exceed 5 trillion yuan (US$745bn) in next 5 years: Beijing’s Party Secretary    

+ China Rare Earth Gp announced established an int’l trade firm to deepen integration 

+ China 3 state-owned airlines to purchase 292 Airbus aircraft valued at around US$37bn in total 

+ China’s air ticket booking rise 300% past week amid surging demand, relaxed travel restrictions

- Great Wall Motor shelved plans to invest US$1bn in India, laid off all workers after failing to obtain regulatory approvals   

+ China Railway built a track change station at China-Laos railway, to attract >300,000 tons of goods from Thailand per year 

- China property developer Shimao has missed the interest and principal payment of US$1bn offshore bond 

+ China new home price rises at slightly faster pace in June: private survey 

- Evergrande faces creditor petition in HK for liquidation 

- ByteDance, Tencent about to implement fresh job cuts 

+ BYD on the cusp of entering the trillion-yuan-market-cap club 

+ JDcom founder cashes nearly US$1bn from the e-commerce company 

+ China several large firms lining up list in HKEX in H2

- HK high-end housing rental becomes the only market in 10 major cities to suffer drops as expats leave due to Covid curbs   

+ HK could cut hotel quarantine to 5 days, with another 2 in home isolation 

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- Japan’s May industrial output at 88.3, steepest fall in 2 years 

- Japanese firms expect inflation to stay around 2% target for years to come, disagrees with BOJ’s view: survey 

- Japan’s Kirin plans to sell its stake in Myanmar Brewery to JV partner 

- Nissan to suspend production in Russia for 6 mths 

- Russia’s inflation in 2022 seen at 14.5%, to expect more rate cuts 

- Russia seized control of Sakhalin gas project partly owned by Shell and 2 Japanese firms 

- Gazprom cancelled 2021 dividends, first such move since 1998, shares tumbled 30% 

+ Canada’s economy to top G7 on high oil, crop prices 

+ Brazil’s trade surplus reached US$8.8bn in June

- Global factory growth stalled in June due to higher prices and weaker economic outlook 

- G7 reached an agreement to set a price cap on Russian oil exports: Politico 

+ G7 states say do not intend to apply sanctions on Russian food and agricultural products  

- Crypto lender Voyager Digital suspends withdrawals, deposits 

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- Eurozone annual inflation accelerated to another record at 8.6% in June 

+ EU prepares emergency plan to do without Russian energy 

- Eurozone manufacturing production fell in June, first since initial wave of pandemic 2 years ago: PMI

- Eurozone is headed toward “stagflation”: UBS

+ Eurozone unemployment reached new all-time low at 6.6% despite economic slowdown

- EU needs at least 3 years to replace Russian gas: Fitch

+ ECB to buy bonds from Italy, Spain, Portugal, Greece with proceeds from maturing German, French, Dutch to cap spreads  

- Germany manufacturing PMI, account for 1/5 of economy, fell to 52 in June from 54.8 in May 

- German 1 in 4 fears losing job due to Ukraine crisis 

- Germany to impose levy on all gas consumers to help suppliers grappling with soaring gas import prices 

- Germany’s chemical giant BASF may shut down its biggest facility due to reduced Russian energy supply

- Commerzbank had reduced workforce by 7000, plans to reach agreements with rest of staff intends to lay off by end year 

+ Audi to start build first NEV manufacturing base in China, annual output of >150,000 NEVs expected 

+ Mercedes-Benz to invest €2bn in luxury EVs in Europe 

+ Volkswagen to narrow EV gap between Tesla in terms of production and sales by end 2022

- UK’s Q1 current account deficit ballooned to 51.7bn pounds or 8.35 of GDP, biggest shortfall in records back to 1955  

- French inflation in June hit record of 6.5%: preliminary figures 

- France wants sanctioned Iranian and Venezuelan crude to return to global market 

+ Turkey reaches NATO deal with Finland and Sweden 

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- Australia’s first online-only bank to shut down, returning deposits, selling mortgage book after failing to raise sufficient funds  

- India’s factory output at 9-mth low in June as inflation dampen demand and output 

- India to tax windfall gains accruing to oil companies from soaring energy prices 

- South Korea’s trade deficit may continue, harming the economy as it relies heavily on imports of raw materials 

- Hyundai Motor’s union votes to strike first time in 4 yrs after stalled negotiations for higher wages 

+ Saudi Arabis Public Investment Fund holding talks for Aston Martin stake

+ Iran applies to join BRICS group of emerging countries 

- Sri Lanka has stopped gasoline sales amid an energy crisis 

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- Indonesia inflation rose 4.35% YoY in June, driven by food prices 

+ Indonesia likely to book 2022 fiscal of US$68.2bn, or 3.92% of GDP, lower than previous outlook 4.5% due to strong revenue 

+ Indonesia’s 6-mth long tax amnesty has uncovered nearly US$40bn of unreported assets, earned govt US$4bn extra tax revenue  

+ Indonesia govt to start construction of new capital Nusantara in August 

+ Indonesia-China state-owned CAMC signed dam building contract worth US$290m 

+ Indonesia looks to raise palm oil export quota 

+ Thailand’s May exports rose faster than expected 10.5% YoY, weak baht a boost  

- Thai Airways Int’l submitted new debt rehabilitation plan following a better-than-expected recovery 

+ Thailand plans to extend property support measures to help boost recovery of the industry 

+ Laos plans to issue regulations for offshore online gambling businesses

+ Malaysia govt looking into ways to address rising prices of goods: PM 

+ Malaysia surpassed target of 2m tourist arrivals, with new target of 4.5m set 

- Sg home loan rates hit new high of 3.08% with latest move by UOB 

+ Sg expects more IPO activity in H2 in firms manage to find realistic valuations acceptable at right price to investors: Deloitte 

+ Sg to launch >6.36 hectares of industrial land supply for H2

+ Sg private home prices up by 3.2% in Q2: URA, HDB resale price index rises 2.6% QoQ: OrangeTee

+ Sg is the most sustainable place for real estate in APAC: Knight frank 

- Sg electricity tariffs up by 8.1% from previous qtr or 2.21 cents per kilowatt-hr 

+ Sg cruise industry set to return to pre-pandemic levels between 2023-2024: STB 

+ Sg and Malaysia to deepen cooperation in digital and green economy 

- Sg based crypto fund Three Arrows Capital files for bankruptcy in US 

Contribution by Derek@valueinvestments chat group. Thank you.

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