Wolf Money(world market review 28 Aug- 3 Sept 2023)

 

Lim Tze Peng Singapore 1921

Singapore River 1965

Gift of Lim Chun Ching

Collection of National Gallery Singapore 

Market Summary 28 Aug – 3 Sept 2023

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- US manufacturing PMI contracted 10th straight mth in Aug, below 50 threshold, longest stretch since GFC 

- US jobless rate rose to 3.8% in Aug vs 3.5% in Jul, highest since Feb 2022

+ Nonfarm payrolls up by 187,000 vs DJ estimate for 170,000, data for Jul revised lower to 157,000 in Jul vs previously reported 187,000

- US private employers added 177,000 jobs in Aug vs revised total 371,000 added in Jul, DJ expecting 200,000 jobs added in Aug

+ Fed likely done raising rates after govt reports show unemployment rate rose in Aug and wage growth cooled 

+ Moody’s raised 2023 US economic growth forecast to 1.9% from 1.1% in May  

- US equity funds see outflows for 5th successive week in 7 days to Aug 30, investors pulled net US$4.54bn from US equity funds 

- US crude oil stocks fallen to lowest level this year and likely will shrink further; record demand, producer supply cuts, weaker futures, rising storage costs 

+ US govt names 10 prescription drugs subject to price negotiations, but faces lawsuits from drugmakers 

+ US construction spending rose 5.5% YoY in Jul as shortage of houses on single-family housing 

- Goldman Sachs set up a fund with Chinese state money to acquire number of US and UK firms: FT 

- US expanded microchip blacklist nations ban on supplies of AI chips produced by Nvidia n AMD, adding several ME states 

- US 6 private equity and hedge fund trade gps sued securities regulator over new rules 

+ Dell shares rose >22% hit record high after report, forecasts impress with AI in mix 

+ US FTC allowed Amgen to continue its US$27.8bn acquisition of Horizon Therapeutics 

- Fed warned Goldman’s fintech unit on risk, compliance oversight: FT 

+ Musk secretly funded the development of Dogecoin and mulled creating new blockchain-based social media platform: WSJ 

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+ China’s banks set to cut interest rates on deposits again, 3rd reduction in a year 

- China’s manufacturing PMI stood at 49.7 in Aug vs 49.3 in Jul, an increase of 3 consecutive mths: NBS 

+ China’s Caixin/S&P Global PMI rose to 51 in Aug from 49.2 in Jul, at 6 mths high, back into expansion: private survey 

+ China rolled out forceful policy to support economy across all fronts including private economy, real estate and employment

+ China, US trade ministers to meet at least once a year, talk directly on key matters: MOFCOM 

+ China, US agreed to set up new communication channels to address various trade issues 

+ China to cut forex deposit reserve requirement ratio by 2% pts to support yuan exchange rate, prop up economy 

- China multiple commercial banks to lower yuan deposits rates by 10-25 bps starting from Sept 1 

+ China to lower downpayment for both 1st and 2nd time homebuyers, further cutting interest rates on existing mortgages 

+ China’s first-tier cities Beijing and Shanghai announced implementation of relaxed rules for first-home mortgages 

+ GZ and SZ acted first among major cities to ease home purchase policies

+ China’s regulator released new round of comprehensive reforms for Beijing Stock Exchange, market liquidity highlighted 

+ China, Netherlands maintain communications on chip equipment export controls

+ BYD car sales ranked among top 10 auto firms globally for the first time in first 6 mths, exceeding Mercedes-Benz and BMW   

+ China planning major expansion of copper mining in Serbia: Bloomberg 

+ China hoped to further increase direct flights to US: ministry when meeting Raimondo  

+ China EV maker Hozon Auto appointed banks to work on HK IPO that could raise up to US$1bn 

- Country Garden reports US$6.7bn loss for H1, gets approval to extend Yuan bond repayment from creditors 

+ Country Garden some onshore creditors of private bond receive interest payments: Reuters 

+ Huawei launched presales of latest Mate 60 Pro handset on its online mall, world’s first smartphone to support satellite calls  

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+ Japan stands a better chance of finally breaking with deflation shackled the nation for quarter century: govt white paper 

+ Japan’s economic output ran above full capacity in Q2 for the first time in nearly 4 years

- Japan may take China to WTO over Fukushima-driven seafood import ban

+ Russia launched e-visa service to simplify travel for citizens of 55 countries

+ Russia is launching Islamic banking for the first time as part of 2-year pilot programme 

- Canada’s GDP contracted 0.2% on annualised basis in Q2, on declines in housing and smaller inventory accumulations 

+ Brazil’s oil and gas output reached highest level ever for a single mth in July; totalled 4.48m barrels of oil equivalent per day  

+ Oil prices rose to highest in >7 mths on supply worries 

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- Eurozone manufacturing and services slumped to lowest level since Nov 2020 to 47 in Aug from 48.6 in Jul  

- European banking giants reported drop in deposits in past 12 mths: S&P Global 

+ EU countries set to buy record volumes of LNG from Russia this year: Global Witness 

- EU and G7 set to unveil sanction on import of gemstones mined in Russia, include those cut and polished in other countries

+ Western businesses >90% present in Russia before Ukraine conflict are still operating in Russia: Austrian FM 

- Germany considering a 3-year nationwide rent freeze to control housing costs 

- UK home sales on course to fall to lowest level in more than a decade, expected to drop by 21% YoY to abt 1m this year 

- UK home prices in Aug fell by 5.3%, steepest annual drop since Jul 2009

+ UK set to send largest business delegation to China in 4 years at attend China Int’l Fair for Trade in Services  

- France govt to allow use of fossil fuel to avoid power shortages

- Italy’s electricity prices surged 30% in a week 

- Netherlands’ export controls on cutting-edge chipmaking tools officially take effect on Sept 1 

- Switzerland faced huge withdrawal of capital to Middle East: Swissinfo 

+ Danish drugmaker Novo Nordisk overtakes LVMH as Europe’s most valuable company 

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- Australia’s regulator seeks “hundreds of millions” fines for Qantas allegedly selling tickets to thousand of flights after cancelled 

+ India to permit rice exports to Singapore citing special relationship

+ Aramco considering selling stake worth up to US$50bn through secondary share offering on Riyadh bourse 

+ UAE looking to inject more capital into BRICS’ New Development Bank (NDB): Minister 

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+ ASEAN posted triple-digit growth in investment in EV sector in 2022 

- Indonesia annual CPI rose 3.27% in Aug after declining for 5 mths in a row

+ Indonesia number of int’l arrivals soared by 197% to reach 6.31m in first 7 mths YoY 

+ Indonesia to receive Pepsi back to the country after 4-year absence with US$200m investment to build a new snack factory 

- Thailand’s Q2 GDP at 1.8% YoY weaker than expected, leading to lowered growth forecast from 3% to 2.8% 

- Thailand industries sentiment index drops to lowest level in 10 mths at 92.3

- Thailand’s household debt level hits 15 years high with average household now >500,000 baht in debt 

- Thailand’s exports declined for 9th consecutive mths; due to slower recovery in major trade partners China and US 

+ Thai King reduced prison sentence of ex-PM Thaksin from 8 years to 1 year 

+ Malaysia budget 2024 to be tabled in Oct will focus on empowering and strengthening the middle class and SMEs

- Malaysia manufacturing industry operated at lower capacity utilisation of 78.2% in Q2 vs 79% YoY

+ Country Garden has wired a coupon payment due on ringgit-denominated bond to avoid default: Bloomberg 

+ Sg exploring new tools to manage significant investments into critical entities: Minister

+ Sg cut land betterment charge (LBC) rates for non-landed residential use for the first time in 3 years 

+ Sg condo rents rose 1.1% MoM, overall rents up 21.6% YoY, HDB rose 2% MoM, up 24.1% YoY 

- Sg 2nd public offer of sovereign green bonds see S$3.8m of S$50m retail tranche taken up

- DBS and BOS of OCBC are creditors to suspects in a major money laundering scandal involving >S$1bn of assets 

+ Tharman clinched presidency with landslide win 

Contribution by Derek@valueinvestments chat group. Thank you

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