[Eng] 2024/08/02 - CSOP Regional Market Report
【SEA+】
Singapore’s employment growth strengthens in Q2 despite seasonal dip in resident employment. Total employment – excluding migrant domestic workers – grew by 11,300 in Q2 2024, more than double the increase of 4,700 charted in Q1.
【China】
The profits of China's industrial enterprises above designated size rose to 3.6% year-on-year in June, and the profits of non-ferrous smelting increased by 78.2% year-on-year in the first half of the year, and the profits of automobiles increased by 10.7% year-on-year
On last Saturday, July 27, the National Bureau of Statistics released data showing that the profits of China's industrial enterprises above designated size in June were 3.6% year-on-year, 2.9 percentage points faster than the previous value of 0.7%. From January to June, the total profit of industrial enterprises above designated size reached 3.51 trillion yuan, a year-on-year increase of 3.5%, and the growth rate was 0.1 percentage points faster than that from January to May.
In the first half of the year, the equipment manufacturing industry contributed more than 60% to the growth of industrial profits above the designated size, the profits of the consumer goods manufacturing industry still grew at a relatively fast rate, the profits of the mining industry and the raw material manufacturing industry narrowed significantly, and the steel industry turned losses into profits
【Japan】
Most BOJ Watchers Rethink Pace of Hikes After Ueda’s Hawkishness
Most Bank of Japan watchers are reassessing the trajectory of interest rates and bringing forward their forecasts after Governor Kazuo Ueda’s hawkish messaging Wednesday and his earlier-than-expected rate hike.
Some 68% of 41 economists see the policy rate rising to 0.5% from 0.25% by the end of this year, according to a Bloomberg survey conducted Thursday. Just under a quarter predicts the hike to come in October, while 44% opt for December. Another fifth expects the move to take place in January.
Japan’s Topix Heads for Correction as Stock Selloff Deepens
Japanese shares tumbled the most since 2020, with the benchmark Topix index sinking more than 10% from its July peak as the fallout from tighter monetary policy roiled one of the world’s best-performing markets.
Exporters took a hit from the yen’s recent rally while financials retreated on concerns that their recent gains may have been excessive.
The benchmark sank as much as 5.7%, heading for a two-day drop of about 8% in the wake of Bank of Japan’s earlier-than-expected rate hike Wednesday and Governor Kazuo Ueda’s hawkish messaging. If the Topix closes at current levels, it will join the Nikkei 225 Stock Average in entering a technical correction.
【United States】
Temasek’s head of North America, said in an interview Monday: Temasek plans to invest up to US$30 billion in US over next five years
Singapore state investor Temasek plans to invest up to $30 billion over the next five years in the U.S. in sectors such as healthcare, financial services and technology.
About 22% of Temasek's investments are in the Americas, or $63 billion, and 19% in China. Its exposure to the Americas surpassed China in the last financial year for the first time in a decade.
FOMC maintains interest rates, Rate cut signals
The Federal Open Market Committee held the federal funds rate in a range of 5.25% to 5.5% on Wednesday. Powell said a rate cut could happen as early as the next meeting, in September, and the committee's overall view is that the economy is approaching a level where rate cuts are appropriate. The benchmark U.S. 10-year note yield fell 9.8 basis points to 4.043%.
The ISM employment report showed the worst non-COVID-19 data since 2009, and new orders were also lower than expected. This is added to the softness of the data and will increase the market's bets on interest rate cuts, which was seen in the initial reaction of the market. a little.
On Thursday, August 1, data released by ISM showed that the ISM manufacturing industry in the United States in July was significantly worse than expected, with the largest contraction in eight months. New orders and output fell, causing the largest decline in employment in four years.
【SEA+】
Samsung (005930.KP) operating profit surged more than 14 times last quarter, beating expectations
Samsung Electronics announced that its second-quarter profit increased more than five times year-on-year to 9.64 trillion won, the fastest growth rate since 2010. Revenue increased 23.42% to KRW 74.07 trillion (approximately US$53.45 billion), beating expectations, and operating profit increased 14.58 times to KRW 10.44 trillion, also better than expected, as demand for advanced chips used in AI remains strong.
Last quarter, Samsung's chip division's operating profit was 6.45 trillion won, beating expectations. This was also the second consecutive quarter of profit after four consecutive losses. It benefited from rising memory chip prices and the demand for high-bandwidth memory chips (HBM). strong demand.
【APAC】
Media ijiwei report that TSMC(2330.TT) receives 'super rush orders' from China Mainland customers willing to pay 40% premium on chips
TSMC's mainland customers have been stocking up on chips over the on-going rising tensions between the US and China escalate, companies from mainland China buying chips made at TSMC are expecting a big impact from the 2024 US presidential election to have (more) negative effects on China's access to the latest chips, according to CNyes. TSMC's main mainland customers include the likes of Bitmain, Alibaba, and ZTE.
SK Hynix(000660.KP) said on last Friday it plans to invest 9.4 trillion Korean won ($6.8 billion) to build a new semiconductor manufacturing plant in an emerging chip hub in South Korea.
SK Hynix's plant will be in the Yongin Semiconductor Cluster where the South Korean government is looking to build a massive complex of chip operations.
SK Hynix has been riding the AI wave and its partnership with Nvidia. The company reported last week that second quarter profit came in at its highest level in six years.
【China】
July report card of new car-making forces released, ideals reach new heights, Huawei ranks second in the industry
Li Auto $LI AUTO-W (02015.HK)$ delivered 51,000 new cars in July, setting a record monthly delivery volume and an annual increase of 49.4%. From January to July 2024, a total of 239,981 vehicles were delivered. As of July 31, 2024, Li Auto has delivered a total of 873,345 vehicles, ranking first among China's new power brands in terms of total delivery volume.
Xpeng $XPENG-W (09868.HK)$ delivered a total of 11,145 new cars in July, an annual increase of 1% and a monthly increase of 4%. From January to July 2024, Xpeng Motors delivered a total of 63,173 new vehicles, an annual increase of 20%.
NIO $NIO-SW (09866.HK)$ delivered 20,498 new cars in July, delivering more than 20,000 units for three consecutive months. From January to July this year, NIO delivered a total of 107,924 new cars, an annual increase of 43.85%. So far, NIO has delivered a total of 557,518 new cars.
Xiaomi $XIAOMI-W (01810.HK)$ SU7 delivery volume exceeded 10,000 units in July. The company estimates that the delivery volume in August will continue to exceed 10,000 units. It is expected to reach the annual delivery target of 100,000 units in November ahead of schedule.
【Japan】
Operating profit was ¥1.31 trillion for the April-June period, up 17% from a year earlier. That was mostly in line with the ¥1.32 trillion projected, on average, by analysts.
Hybrids are selling well in North America, making up for sluggish demand for Toyota’s vehicles in Japan and China. At the same time, a weaker yen is helping to boost income in the carmaker’s home currency.
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