Wolf Money(world market review 29 Aug-4Sept)

Fatimah Chik Malaysia 1947

Reflections circa 1989

Collection of National Gallery Singapore 

Market Summary 29 Aug – 4 Sept 2022

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+ USD index hit 20-year high as data support aggressive Fed 

+ US added 315,000 jobs in Aug as labour market remains solid 

+ US ISM manufacturing index at 52.8 in Aug, unchanged from July 

- US factory orders drop in July on defence aircraft bookings

- US construction spending declined further in July, raising mortgage rates weighed on single-family homebuilding 

- US to keep tariffs on hundreds of billions of dollars’ worth of Chinese imports while review continues 

+ Americans filing new claims for unemployment benefits fell to 2-mth low las week 

+ US expected to announce 3 years biofuel blending mandates in Nov: sources 

- NASA again called off mission to send a ricket around moon due to mechanical problem

- US announced US$1.1bn arms sales to Taiwan 

+ Micron investing US$15bn to build new memory fab in Idaho 

- US blocked Nvidia AI chip exports to China 

+ US firms looking to trade secretly with Moscow via Turkey: media 

- US seeks to seize Russian corporate jet 

- Berkshire Hathaway trims its stake in Chinese EV maker BYD 

+ Boeing expects more orders from India as airlines boost capacity 

+ Ford’s sales of EVs in US skyrocket 307% to 5897 units in August 

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- China’s factory activity contracted after 2 mths of expansion in Aug, Caixin PMI contracts to 49.5 from 50.4 in July 

+ China’s manufacturing PMI rebounded from 49 in July to 49.4 in August 

- China’s logistics activities eased in Aug partly due to hot and rainy summer weather, Covid-19 outbreaks in some regions 

+ China to issue US$29bn of special loans to finish housing projects 

+ China to step up measures to boost demand, stabilise employment and prices in H2: Ministry 

+ China NDRC proposes to require firms to obtain certificate ahead of any issuance offshore debt with maturity >1 year 

+ China securities regulators says will implement Sino-US audit deal 

+ China to push forward new legislation for firms’ overseas listing, include foreign firms listed in HK tradable in stock connect 

- China’s banking regulator mulls replenishing small, medium-sized banks amid rising NPL ration 

- China Construction Bank and Bank of China, reported 68% and 20% increase in bad real estate debt in H1

- ICBC posted 15% rise in real estate sector sourced debt in H1

+ China to take further steps to improve business environment, lower govt imposed transaction costs 

+ Chinese firms reveal new GPUs, tech at World AI 2022 in Shanghai 

+ China airlines are expanding more intercontinental cargo flights, routes to Europe and US the busiest 

- China’s top 3 airlines posted total US$4.12bn Q2 loss, total 8 listed airlines recorded combined losses of US$10.16bn in H1  

+ China plans to spend billions on new water infrastructure after long drought affecting agriculture and hydropower 

- China registered 7.64m new marriages in 2021, lowest since records began in 1986

+ China’s state railway handled 1.95bn tons of goods, YoY increase of 5.5%, builds 2043km new lines in H1

+ China’s box office from June to August reached US$1.32bn, highest since Covid outbreak 

+ Alibaba and Yum China first in line for audit checks by US regulator

+ Tencent buys back 1.08m shares for US$325m 

- China’s carbon emission fall 8% as economic growth slows 

+ HK Airport conducted trial run of major surge in passenger arrivals, sign of city could ease Covid curbs 

+ China MOF to issue 3bn yuan (US434.7m) treasury bonds in Macao  

- Taiwan shoots down suspected Chinese drone for first time 

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- Japanese currency slumped to fresh 24-year low against USD 

+ Toyota to invest up to US$5.3bn in battery production 

- Russian economy shrinks 0.4% in H1, however capital investment rises: Rosstat 

+ Russia jobless rate at 3.9% over last 3 mths at lowest level since early 1990s

- Nord Stream gas supply to EU stopped indefinitely

+ Russia has enough gas for at least 100 years: Gazprom 

+ Russia mulls buying friendly foreign currencies 

- Russia can afford complete halt in gas supplies to EU, boosting fuel exports to Asia: Bloomberg

+ Russia’s top gold producer PJSC issued 4.6bn yuan (US$666m) of bounds in Yuan 

- Gazprom cuts off supplies to France Engie after failure to pay for gas deliveries in July

+ Russia and Iran to integrate payment systems

- Argentina could hike interest rate to 75% this mth: source 

- G20 meeting fails to agree communique on adopting cleaner energy: Indonesia 

- G7 unveils plan to enforce Russian oil price cap

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- Eurozone inflation spiked to record high of 9.1% in Aug: Eurostat 

- EU gas markets brace for price surge after latest Russia gas cut 

- ECB sets stage for another big hike with jumbo move possible: Bloomberg 

+ Eurozone unemployment fell from 6.7% to 6.6% in July

- EU to recommend electricity demand cut and price cap for non-gas generated power 

- EU has no alternative to Russian energy: Aramco ex VP

- EU countries increasingly boosting storages with surplus Chinese LNG purchased in spot market: FT  

- Germany’s exports dropped for first time in 4 mths in July, imports logged unexpected decline  

- Lufthansa to cancel 800 flights on Sept 2 due to pilot’s strike 

- UK stores prices soar to 17-year high: media 

- UK inflation may top 22% next year, expects recession later in the year: Goldman Sachs 

- UK house price surge to end next year due to cost of living crisis and rising borrowing costs: Reuters poll

+ France state-backed utility firm EDF to restart unclear reactors before winter 

+ Norway to extend life of its last Arctic coal mine to meet demand

- Switzerland’s CPI accelerated in Aug to its highest level in 29 years 

+ Credit Suisse aims to launch China wealth business in 2023 

- Credit Suisse weighing plans to eliminate around 5000 jobs across the group, around one job in 10: source 

- Turkey raised electricity, natural gas prices by 20% for homes, 50% for industry, annual inflation expected to >81% in Aug

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+ Rio Tinto agrees US$3.3bn takeover of Canada’s Turquoise Hill, to gain direct ownership of giant copper mine in Mongolia 

+ India’s GDP advanced 13.5% in quarter ended June, forecast economy to expand at 7.2% in 2022-2023: Reserved Ban India

- South Korea chipmakers recorded first fall in factory shipments in almost 3 years in July with shipment down 22.7% YoY 

- South Korea inspecting stock short-selling, starting with Morgan Stanley 

+ Qatar central bank issues first license for digital payments 

- Iran allows crypto payments for imports to circumvent US sanctions 

+ Sri Lanka-IMF reached preliminary deal on US$2.9bn bailout over 4 years 

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- Indonesia hikes fuel prices to rein in ballooning subsidies 

+ Indonesia plans to establish crypto stock exchange by end 2022 

+ Indonesia received first batch of China-made high-speed trains for Jakarta-Bandung HSR 

- GoTo posted half-year net loss of US$955m, more than double YoY 

+ Thailand to lure top professionals, high net-worth individuals, retirees with 10-year visa, tax breaks 

+ Thai Airways creditors have accepted revised rehabilitation plan 

- Myanmar’s currency kyat reached record low against USD and other major currencies 

- Malaysia CPI rose 4.4% YoY in July vs 3.4% in June

- Malaysia 2 largest carriers declined stakes in state-owned 5G agency 

+ Malaysia introduces premium visa programme to attract wealthy foreigners 

+ Sg Producer Price Inflation eased for 1st time in 3 mths in July to lowest level in 10 mths at 16.2% in July YoY vs 20.2% in June

+ Sg to launch new work pass to attract global top talent with S$30,000 monthly pay 

- Sg retail investors ‘irrationally oblivious’ to crypto risks, plans tougher rules: MAS 

+ Sg rents for high-end non-landed private residential units rise at fastest pace since 2014

+ Sg 1st digital bank Trust Bank, launched with savings accounts and credit card offerings for retail customers 

- SEA cuts jobs in gaming arm Garena in 2nd downsizing wave 

Contribution by Derek@valueinvestments chat group. Thank you.

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