Things to know before Trading Asia on Monday: Japan on holiday, China trade data and possible loans data. (2025)

Overview
Trump’s inauguration in 7 days time, means that investors are increasingly focused what might happen when he takes office.

Insurers weak as the LA wildfires spread as the wind direction changed. AllState, Chubb and Travelers are the most exposed carriers to insured losses in the wildfires; Chubb could have a particularly high exposure given its high net worth focus in the region.

Asia on Friday was mainly lower with caution on reports the PBoC would suspend treasury bond purchases and ahead of the expected China loans data which didn’t come; not usually a good sign when China delays releasing data and then trade data which was due Sunday now expected Monday after the open.

But we did get the US jobs data Friday night which was another reason for markets caution on Friday. Also the Michigan Consumer Confidence data showed inflation concerns. Key is that market sold down because the US economy continues to do well. Company earnings in the next few weeks should reveal whether that is actually the case. Monday therefore is likely to see that caution extended whilst we await the China data. Volumes are likely to be lighter with Japan closed for Coming of Age Day.

The US jobs at 256k was much stronger than expected; 160k-200k was the range. Putting in doubt Fed rate cuts in 2025, now many are talking about October being the first cut. But the Michigan Consumer Sentiment data was weaker than expected. Inflation remains a puzzle for the Fed; although some are saying that one key factor is that within the Fed’s data measure many of the persistent high elements are inputted prices; estimates rather than actual real numbers. Fed speakers this week will be watched closely.

Expect Asian interest rate sensitive stocks; Property Companies and Banks to react on Monday.

Key US data this week producer price index comes out on Tuesday, with consumer price index on Wednesday. Again key for the Fed and the numbers will need to be much cooler than recently seen for them to consider rate cuts ahead.

US earnings in focus this week too with Bank earnings; which start Wednesday with; JPMorgan, Goldman Sachs, Wells Fargo and Citigroup. On Thursday we get Bank of America, US Bancorp, Morgan Stanley and PNC Financial. A key element could be regulatory changes or at least no new regulations that may come in under the Trump administration. Additionally the environment for mergers and acquisitions has improved.

On Monday KB Home, which does substantial business in California. Whilst the recent wildfires have devastated the state many of those were very expensive homes, which isn’t the company’s niche. Never-the-less their outlook will be watched closely. Other key earnings; on Thursday; UnitedHealth Group with investors looking for clarity of how they are dealing with the highly-publicized murder of its CEO.

Trucker J.B. Hunt will also report after the close, their results are a barometer of business in general.

On Friday in the oil sector; SLB; the past few weeks of rising oil prices aren’t enough to give the company a real boost. But they may be able to provide a positive forecast because of increased optimism about drilling.

The Ukraine war takes a new twist as South Korea's National Intelligence Service said on Sunday it confirmed Ukraine captured two wounded North Korean soldiers this week in Russia, after Ukrainian President Volodymyr Zelensky said they were being questioned.

Housekeeping
On Monday morning I will be on RTHK’s Money Talk; If you have a question or want to listen to the show; you can find the it here. https://www.rthk.hk/radio/radio3/programme/money_talk

Last Thursday afternoon I was on RTHK’s 'The close’ with host Jeff Cheung; looking at how Trump is a dilemma for Central Banks, and whether he is getting good information from his inner circle of courtiers. Jeff also asked how I’d get the Chinese economy back on it feet; if you want listen to the programme you can find it here: https://www.rthk.hk/radio/radio3/programme/the_close

For leading independent research, click on http://ERI-C.com it is a great platform where independent research vendors list their research and trading analysis. ERI-C is free to access, you can browse different independent research providers, most offer free trials; so worth a look.

Mark Tinker posted Wednesday the Latest thoughts from Market Thinker - ’P(review) The return of Domestic Politics matters as much if not more than GeoPolitics for 2025. Reviews last years calls and looks forward at the issues likely to face investors in 2025.

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FT Weekend
Malaysia expects surge of Chinese investment, economy minister says
Rafizi Ramli suggests semiconductor and tech sectors are seeking to avoid exposure to possible Trump tariffs. The moves by Chinese companies, which are expected to result in billions of dollars of investment in Malaysia in the coming years, would rival the US companies that have dominated the country’s market, he said. It would extend Malysia’s status as a major China plus one beneficiary but worth noting that a couple of weeks ago the country was warning Chinese firms against locating there just to avoid US tariffs.

A big factor is that Chinese firms bring their own ecosystems and that could broaden the economic base of Malaysia. The question is whether it would also make Malaysia the focus of Trump’s tariffs.

Tesla debuts major model update in China for first time
Analysts say Model Y facelift is ‘bare minimum’ for US EV maker to compete in cut-throat Chinese market

‘The refreshed version of the model that outsells its S, 3 and X siblings will start at Rmb263,500 ($35,900), 5.4 per cent more than the previous version, according to prices on Tesla’s China website on Friday.’

This comes as BYD is now being seen as a real threat to the company. Key being that BYD has a huge range of models. It will be interesting to see if this ‘facelift’ model

China’s Zijin in takeover talks for lithium miner
Chinese businesses continue to establish dominant foothold in fast-growing sector for battery supply chain.

It’s looking to take a controlling stake in lithium producer Zangge Mining. Zijin is one of China’s most globally expansive miners seeks to expand its push into the critical metal. Zijin already bought a stake in a mine in the Democratic Republic of Congo which it hopes will start production next year. But the price of lithium has dropped back from its peak levels in 2021/2022 as the price rise attracted new entrants. But it remains a key part of current battery production.

Worth noting that the stock saw significant short selling in Hong Kong

Chinese toymaker taps ‘kidult’ craze as shares soar on Hong Kong debut
As birth rates fall in Asia, companies focus on nostalgic toys for young adults

An interesting read The relationship recession is going global
A rise in the number of single people is becoming a key driver of falling birth rates.

Actually its looking at the fact that notably are birth rates are falling as couples elect to have smaller families but also that fewer people are getting married and relationships are becoming more ‘fragile’.

Greenland wants to be independent, not American or Danish, says premier
Múte Egede open to continuing co-operation with US, but rejects Donald Trump’s attempt to buy Arctic island.

An interesting take on the current situation. The Economist also has an article on the topic as well. Key is that it should be up to the people of Greenland. Not Trump or anyone else.

From the Economist Free exchange
An American purchase of Greenland could be the deal of the century
The economics of buying new territory

The big read. The art of dealing with Donald Trump
The president-elect’s aggressive claims about potential territorial expansion are a crash course for allies in his negotiating tactics.

Great quote “We’re all the cats — and Trump is holding the laser pointer,” says Trevor Traina, Trump’s former US ambassador to Austria. “So, do we behave like cats? Or do we stand back and kind of assess?”

We worried about Biden’s mental state when took over a president and it looks like we should be worrying again but this time because Trump doesn’t seem to think through the possible implications of his thoughts before expressing them.

AI-powered devices dominate Consumer Electronics Show
Tech companies showcase new devices with artificial intelligence embedded in cars, TVs and washing machines - a look at the Consumer Electronics Show in Las Vegas.

Trump dis­charged in ‘hush money’ case
Judge declines to sen­tence pres­id­ent-elect to a jail term or impose any fine. The judge said 'in brief remarks before announ­cing his decision that it was “the only law­ful sen­tence . . . without encroach­ing on the highest office in the land”.’ He also said 'that, des­pite the “far-reach­ing pro­tec­tions” afforded to hold­ers of the office, “they do not reduce the ser­i­ous­ness of the crime” nor do they bestow the “power to erase a jury ver­dict”.’

Trump’s lawyers have done well in frustrating the legal cases against the former president and I think in doing so have exposed the weakness of the US legal system and the fact that with money and influence it is possible for some people to be treated differential under the law.

Yoon’s defi­ance deep­ens divi­sions
Pres­id­ent’s refusal to engage with invest­ig­a­tions polar­ises debate over future of coun­try.
Political turmoil continued and that is likely to cause wider problems.

Fall­ing Chinese bond yields sig­nal warn­ing to poli­cy­makers over defla­tion
China’s gov­ern­ment bond mar­ket has opened 2025 with a clear warn­ing for poli­cy­makers — without more determ­ined stim­u­lus, investors expect defla­tion­ary pres­sures to become even more entrenched in the world’s second­largest eco­nomy. 'Cru­cially, the whole yield curve has shif­ted down­wards rather than steep­en­ing, sug­gest­ing that investors are alarmed about the long-term out­look and not just anti­cip­at­ing short-term cuts to interest rates.’

In the Book section The dom­in­a­tion of Hua­wei
Eva Dou takes a look behind the scenes of the secret­ive tech­no­logy com­pany that has become a flash­point in US-China rela­tions.

The Economist Weekly

Leads with Donald the Deporter - Could a man who makes ugly promises of mass expulsion actually fix America’s immigration system?

Asia related
From nickel to pickle Just because Indonesia has nickel doesn’t mean it should make EVs
Economic nationalists are making a reckless bet

Banyan
By resisting arrest, South Korea’s president challenges democracy
His attempt to impose martial law failed. But Yoon Suk Yeol is still causing trouble

What are friends for?
Joe Biden’s mixed legacy on Japan
Security co-operation flourished, but a scuppered steel deal leaves a sour taste

Debt, deficits and depressed consumers
Does China have the fiscal firepower to rescue its economy?
There is a fierce debate over whether it can afford to keep spending

Key 'In November the finance minister, Lan Fo’an, insisted China can afford such generosity, claiming it has plenty of fiscal “room”. Is he right? One reason to worry is that the official deficit covers only a fraction of public borrowing. If you add the government’s three other accounts—covering social insurance, land-financed infrastructure spending and transactions with state-owned enterprises—the deficit was probably 7.1% of GDP in 2024, according to Fitch, a ratings agency. Even broader measures are possible. The IMF calculates an “augmented” deficit, which includes a lot of red ink that does not appear in the budget. One example is borrowing by local-government “financing vehicles”, which invest in infrastructure and other ventures. By this measure, the IMF thinks China’s deficit this year could exceed 13% of GDP and its debt could reach almost 129%.’

The article was written before the rumours on Friday about the PBoC suspending bond purchases but underlines the pressure that Beijing is currently under.

Grains for the iron rice bowl
A pay rise for government workers sparks anger and envy in China
The effort to improve morale has not had the intended effect

'In China’s private sector, many complain that jobs and wages are being cut as the country’s economy flounders. So as news spread online in late December that people on the government payroll were being given a salary increase, some netizens were outraged. “Reminds me of a famous Soviet joke,” wrote one. “Brezhnev on stage says, ‘Our lives will get better and better.’ A worker in the audience asks, ‘What about ours?’” Life can be tough as a state employee, but envy of them is growing.’

The fact is that Beijing has many problems in trying to restore consumer confidence it hasn’t had much success yet but it keeps trying. Paying civil servants could help but it could also lead to public discord which is something that President Xi and his team could well do without.

Hot TIP
Militant Uyghurs in Syria threaten the Chinese government
How much does China have to fear?

Caught in the middle
Does made in Mexico mean made by China?
Donald Trump believes Mexico is a trojan horse for Chinese mercantilism

It’s electrifying!
A new electricity supercycle is under way
Why spending on power infrastructure is surging around the world. I and many others have been saying that investment in the power infrastructure is a great way to play AI; with demand for everything from transformers and switchgears to high-voltage transmission cables is being turbocharged.

It concludes 'Expanding manufacturing capacity will leave these firms exposed if the electricity supercycle turns out to be no such thing. Growth in EV sales has already slowed in many rich countries. The AI boom could yet turn to bust. To reassure shareholders, Andreas Schierenbeck, boss of Hitachi’s energy business, says that his company has been getting big customers to reserve capacity with upfront payments, and is shifting from customised orders to framework contracts with standardised product designs. All this makes future revenue more dependable and expanding production capacity less risky.

For now, spending on electricity infrastructure shows no sign of easing, as grid operators grapple with rising power consumption, a changing generation mix and ageing infrastructure. Those pressures will only increase, predicts Mr Bruch. “That is why we are bullish.”’

I doubt the boom will end quickly and it remains a sector that I remain optimistic about and not just on AI demand but because renewable energy needs a way to get to the users.

I can do it with a distributed heart
Training AI models might not need enormous data centres
Eventually, models could be trained without any dedicated hardware at all

High and dry
Alcohol-free drinks are becoming big business
But will they ever be as good as the real thing?

Beyond the iPhone
Foxconn and other gadget-makers are expanding their empires
The world’s contract manufacturers are moving into new products and places

Alloys and allies
What next for US Steel?
The faded industrial icon has few good options without a Nippon deal

Dark humour
China’s markets take a fresh beating
Authorities have responded by bossing around investors

MARKET INDICATIONS

New Zealand
Expect market on the open lower
Data due after the open
Building Permits Nov MoM vs -5.2% Oct

Australia
Market to opened lower following the US sell-off with interest rate sentitives under pressure. But downside limited as energy stocks closed higher.
Data due after the open
Job Ads Dec MoM vs -1.3% Nov (F/cast is 0.3%)
Inflation Guage Dec MoM vs 0.2% Nov (F/cast is 0.2%)

Japan - Market Closed (Coming of Age Day)

S Korea
Expect Kospi to open lower following the US with Tech under pressure. On Friday markets closed lower as investors moved to lock in profits from recent gains mainly in tech shares. The local currency fell against the US dollar. Trade volume was moderate at 365.58 million shares worth 9.43 trillion won ($6.43 billion), with winners outnumbering losers 462 to 406. Foreigners and institutions net sold while retail investors net bought.
Data due
3 year KTB Auction vs 2.53% prior

Taiwan
Expect market to open lower with Tech weak following the sell off in the US. But news that the Ministry had lifted the overseas limits on TSMC investing in next-generation 2-nanometer chip production in the US a slight +VE
No Data Due

China
Market to lower after Golden Dragon China Index closed -207pts -3.14% at 6,380 round the day lows.
Yuan weakness remains adding to the pressure on Beijing.
Due after the open
Balance of Trade Dec vs $97.44B Nov (F/cast is $85B)
Exports Dec YoY vs 6.7% Nov
Imports Dec YoY vs -3.9% Nov
Could get
Vehicle sales Dec YoY vs 11.7% Nov (F/cast is 6.4%)
New Yuan Loans Dec vs CNY 580B Nov (F/cast is CNY690B)
M2 Money Supply Dec YoY vs 7.1% (Consensus is 7.3%)
Outstanding Loan Growth Dec YoY vs 7.7% (F/cast is 7.5%)
Total Social Financing Dec vs CNY 2340B Nov (F/cast is CNY1850B)

Hong Kong
HSI to open lower after ADRs closed -161pts -0.84% at 19,118; with only HSBC, BoC and BoC HK in the green
No Data Due

Macau - No Events scheduled this week

Singapore - No Data Due

Malaysia - Data Due
Retail Sales Nov YoY vs 7.1% Oct

Indonesia - No Data Due
Philippines - No Data Due

Thailand - Data Due
Consumer Confidence Dec vs 56.9% Nov (F/cast is 58)

Cambodia - No Data Due
Vietnam - No Data Due

India - Data Due
Inflation Rate Dec YoY vs 5.48% Nov (F/cast is 5.2%)
Inflation Rate Dec MoM vs -0.15% Nov (F/cast is 0.2%)

Europe Data Due
Eurozone
No data due
Germany 12 month Bund/g Auction
France 12, 3 & 6 month BFT Auction
United Kingdom No data due

United States
Futures
S&P -0.01%, NDX 0.02%
Data due Consumer Inflation Expectations, 3 & 6 month Bill Auction,

HEADLINES & NEWS

JAPAN

The Biden administration delayed until June an order for Nippon Steel (5401.T) to abandon its $14.9 billion bid for U.S. Steel the companies said on Saturday, giving them some time to revive the politically contentious deal. President Joe Biden blocked the acquisition on national security grounds on Jan. 3, and Treasury Secretary Janet Yellen said this week the proposed deal had received a "thorough analysis" by the interagency review body, the Committee on Foreign Investment in the United States. The delay will give the courts time to review a legal challenge the steelmakers brought against Biden's order. The parties previously had 30 days to unwind their transaction. "We are pleased that CFIUS has granted an extension to June 18, 2025 of the requirement in President Biden's Executive Order that the parties permanently abandon the transaction," the companies said in a statement. "We look forward to completing the transaction, which secures the best future for the American steel industry and all our stakeholders," they said.

Japanese Foreign Minister Takeshi Iwaya will attend Donald Trump's inauguration as U.S. president on Jan. 20, ensuring that a high-ranking official from a key Asian ally is on hand for the event, two people familiar with the matter said. Iwaya was invited by Trump's camp to the launch of his second term and has accepted, the two people said, confirming Japanese media reports. He will be the first Japanese cabinet member to attend the swearing-in of a U.S. president, the Nikkei newspaper said.

Prospects of sustained wage gains in Japan and the boost to import costs from a weak yen have heightened attention within the central bank to rising inflationary pressures that may lead to an upgrade in its price forecast this month, sources said. Even if the Bank of Japan were to raise its inflation forecast, the upgrade alone won't lead to an interest rate hike if it is driven by temporary factors such as the rising price of rice and higher import costs, said three sources familiar with the bank's thinking. The BOJ could hike rates this month if the board is convinced that sustained, broad-based wage hikes will take hold, and keep inflation durably at its 2% target, they said. "Risks to inflation are skewed to the upside due partly to renewed yen falls," said one of the sources, a view echoed by another source. "Wage momentum also appears to be strong," a third source said, adding the board may discuss revising up its inflation forecast for the fiscal year beginning in April.

SOUTH KOREA

The preparatory hearing for the trial of former Defense Minister Kim Yong-hyun will be held Thursday, headlining legal proceedings against military commanders implicated in President Yoon Suk Yeol's alleged insurrection. Kim, currently under detention, faces insurrection and power abuse charges related to his role in Yoon's botched martial law plan Dec. 3-4. He is believed to have acted under Yoon's orders to deploy armed forces to the National Assembly, in an apparent bid to block the parliamentary vote to nullify Yoon's decree. Kim is also suspected of ordering Army Counterintelligence Commander Yeo In-hyeong to arrest a list of around 10 prominent figures, including the National Assembly Speaker Rep. Woo Won-sik, main opposition Democratic Party of Korea Chair Rep. Lee Jae-myung and then-leader of Yoon's own People Power Party, Han Dong-hoon, while also deploying troops to occupy the National Election Commission and seize servers.

The recent weakness of the Korean won is expected to put more inflationary pressure on South Korea's economy, driving up consumer prices, a central bank report showed Sunday. The Bank of Korea assessed the sharp fall in the local currency likely pushed up the consumer price index for last month by 0.05 to 0.1 percentage point, according to its report submitted to Rep. Lim Kwang-hyun of the main opposition Democratic Party. In December, consumer prices grew 1.9 percent from the same month last year, accelerating from the 1.5 percent on-year growth recorded in November. The BOK anticipated consumer prices could further go up this month as the weakness of the Korean won will continue to put inflationary pressure on the economy, but will hover below the 2 percent level considering the low pressure from demand and the base effect in oil and agriculture prices.

South Korea's exports of kimchi increased 6.9 percent from a year earlier to hit a record high in 2024, driven by growing global popularity of Korean cuisine, government data showed Sunday. Outbound shipments of kimchi, a traditional Korean side dish typically made from fermented cabbage, reached a fresh high of 47,100 tons, according to data compiled by the Ministry of Agriculture, Food and Rural Affairs. The country had exported 44,000 tons of kimchi in 2023 and 41,100 tons in 2022. The value of kimchi exports also climbed to a new record high of $163.6 million in 2024, up 5.2 percent from the previous year.

Hyundai Motor (005380.KS) said on Friday it would introduce the cheapest compact electric car in Japan, to penetrate a market dominated by local giants with established petrol and hybrid vehicle technologies. The Japan launch of the Hyundai Inster follows attempts by Tesla (TSLA.O) and other foreign brands to enter a country seeing a slow take-up of EVs. With the Inster, Hyundai will take a low-price strategy akin to China's leading EV maker, BYD (002594.SZ). The 2.85 million yen ($18,000) entry-model price tag will be the lowest for a compact electric car in Japan, below the 3.63 million yen BYD set in 2023 with its Dolphin. Inster, which made its debut in Europe last year after launching in South Korea as Casper Electric, will be delivered to Japanese customers starting around May, Hyundai Mobility Japan CEO Toshiyuki Shimegi said at a news conference during the Tokyo Auto Salon motor show.

A slew of Korean companies are set to showcase their latest developments from contract manufacturing to antibody drug conjugates pipelines at the 2025 JP Morgan Healthcare Conference, the world’s largest event in the pharmaceuticals and biotech industry, kicking off Monday in San Francisco. Now in its 43rd edition, the annual January gathering serves as a key platform for networking and collaboration, drawing industry experts and investors while offering insights into the latest trends and innovations while fostering business partnerships. The four-day conference is expected to attract up to 10,000 attendees. Particular attention is on Samsung Biologics and Celltrion, two of Korea's leading biotech companies, both of which are slated to deliver presentations at the main conference venue Tuesday.

South Korea's air passenger traffic jumped sharply from a year earlier in 2024, nearly reaching the pre-pandemic level on increased overseas travel, data showed Sunday. The number of airline passengers at South Korean airports came to more than 120 million, up 19.5 percent from about 100.5 million tallied in 2023, according to the data from the Ministry of Land, Infrastructure and Transport. The number represents 97.3 percent of the record 123.36 million posted in 2019. The number had dipped to 29.5 percent of the record figure in 2020 amid the COVID-19 pandemic, before recovering to 81.5 percent of the 2019 tally in 2023. The sharp increase last year was largely attributed to a rise in the number of international passengers to and from South Korea, which jumped 30.2 percent on-year to some 88.9 million, while domestic passengers gained 3.3 percent to 31.13 million over the cited period, the data showed. By destination, passengers to and from Japan spiked 29.7 percent on-year to over 25 million, apparently helped by the weak Japanese currency.

TAIWAN

TSMC (TSM.US) conducted a client review triggered by the discovery of its chip in Huawei's AI processor, the South China Morning Post reported, citing informed sources. The review led to the immediate termination of its business tie with PowerAIR, a Singaporean company, due to potential violations of US export controls. Registered as a private company in Singapore in September 2023, PowerAIR focuses on engineering design and consulting, according the report. TSMC also halted shipments to Chinese chip design company "Sophgo" last year. It also unveiled its operating income report for December 2024. Revenue for December 2024 was approximately NT$278.16 billion, up 57.8% YoY or up faintly by 0.8% MoM.

Also the Ministry of Economic Affairs said yesterday announced TSMC would no longer be restricted from investing in next-generation 2-nanometer chip production in the US. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically those that were at least two generations less advanced than those being used domestically, it said. “Those were old-time rules. Times have changed,” Minister of Economic Affairs J.W. Kuo said on the sidelines of a ministry media briefing yesterday. “Private businesses should make their own business decisions based on their own technological progress,” Kuo said.

E.SUN FHC has announced the publication of its “2023 Climate and Nature Report”, the first report of its kind in Taiwan to receive third-party verification under the Taskforce on Nature-related Financial Disclosures (TNFD) framework. This report successfully passed the British Standards Institute’s (BSI) first-ever conformity check on the TNFD framework, achieving the highest grade of “Level 5: Excellence”. Additionally, it has also earned the highest grade of “Level 5+: Excellence” for climate-related financial disclosures (TCFD).

Formosa Plastics Group, Taiwan’s largest industrial conglomerate, yesterday posted a small profit for its major four units of NT$715 million (US$21.69 million) for the fourth quarter and NT$8.37 billion for last year, it said, blaming languid demand and China’s overproduction. The fourth-quarter results represented a comeback from losses of NT$8.03 billion in the preceding quarter, but suggested an 81 percent plunge, or earnings of NT$0.29 per share, compared with a year earlier, company data showed.

The poor earnings came even though combined revenues last year slipped only 2.1 percent to NT$1.47 trillion amid lingering excessive supply induced by Chinese peers, the group said. Consequently, the group said it would issue moderate year-end bonuses equivalent to three months of wages for its employees later this month. The conglomerate said it is looking at business improvement this year for petrochemical products, but voiced concern that US president-elect Donald Trump’s planned tariff hikes would slow the pace of recovery.

CHINA

Liao Min, China's Vice Minister of Finance, said at a press conference of the State Council Information Office that, a more proactive fiscal policy can be expected, mainly reflected in 3 aspects, namely strength, efficiency and timing three aspects. In terms of strength, it is necessary to make good use of the policy space, strengthen the counter-cyclical adjustment, increase the fiscal deficit rate and the intensity of expenditure to further add the transfer payments to the localities, strengthen the financial strength of the localities, secure the solid base of "three protections", and arrange for a larger scale of government bonds, including the ultra-long-term special national bonds and the local government special bonds, etc..

Rumor has it that China will lower the predetermined interest rates for life insurance products next season, heaping pressure on Chinese insurers Friday (10th). CHINA LIFE (02628.HK) -4.82%, PING AN (02318.HK) -3.97%, CPIC (02601.HK) -4.4%, NCI (01336.HK) -4.73%. PICC GROUP (01339.HK) -1.91%. The market today was abuzz with news that documents related to the pricing mechanism for China's life insurance product interest rates may be released soon. The industry expected a reduction in predetermined interest rates for life insurance products next season. The upper limit is expected to decrease from 2.5% to 2% for the predetermined interest rate of newly filed ordinary insurance products and from 2% to 1.5% for the predetermined interest rate of newly filed participating insurance products, while the minimum guaranteed interest rate upper limit for newly filed universal insurance products is expected to drop from 1.5% to 1%.

China on Thursday said that an investigation had found the EU imposed unfair “trade and investment barriers” on Beijing, marking the latest salvo in long-running commercial tensions between the two economic powers. Officials announced the probe in July last year after Brussels began looking into whether Chinese government subsidies were undermining European competition. Beijing has consistently denied its industrial policies are unfair and has threatened to take action against the EU to protect Chinese companies’ legal rights and interests.

President Joe Biden is calling for tighter cybersecurity standards for federal agencies and contractors in a new executive order due to be published in the coming days, pushing reforms designed to address repeated Chinese-linked cyber operations and cybercriminal operations, according to a draft of the order seen by Reuters. The order is set to land in the waning days of Biden’s presidency, during which several high-profile, Chinese-linked hacks occurred, according to the U.S. government and cybersecurity research groups. The alleged activity targeted critical infrastructure, government emails, major telecom firms and, most recently, the U.S. Treasury Department. Beijing has rejected the allegations. Biden's proposal calls for tougher standards for secure software development, the ability to verify that those standards have been met, and a process for the Cybersecurity and Infrastructure Security Agency (CISA) to evaluate the process, according to the draft. Vendors will have to provide secure software development documentation to be evaluated and validated by CISA through the agency's software attestation program. Attestations that "fail validation" could be referred to the attorney general for “action as appropriate,” according to the draft.

People's Bank of China Governor Pan Gongsheng met his Bank of England counterpart, Andrew Bailey, on Saturday in Beijing and discussed topics including financial stability and cooperation, China's central bank said on Sunday. Pan met top executives at HSBC, Standard Chartered Bank and London Stock Exchange on Friday, the PBOC said. The meetings happened during British finance minister Rachel Reeves' two-day visit to China, where she is seeking to revive high-level economic and financial talks that have been frozen for nearly six years.

Zambia's Securities and Exchange Commission (SEC) has sanctioned Standard Chartered for mis-selling a Chinese property company's bonds to one of the bank's local wealth clients at the height of the Asian country's real-estate crisis, according to a source. The source familiar with the matter told Reuters that the UK-headquartered bank, which is currently looking to sell its wealth and retail banking businesses in Zambia, was facing "enforcement action" for two breaches of SEC rules following a months-long investigation.

HONG KONG

Economy
President Xi Jinping's expectations for Macau to seek reform and boost its economy also apply to Hong Kong, Beijing's top man on Hong Kong affairs says.
Speaking at a seminar in Beijing yesterday, Hong Kong and Macao Affairs Office director Xia Baolong said that Hong Kong authorities should seek reform while leveraging advantages under the one country, two systems principle.

IPO
Yibin Bank(02596.HK), which will be listed Monday, opened down 2.7% to $2.52 on gray market .
Peaking/ bottoming at $2.55/2.48, it closed at $2.55, down 1.5% or $0.04 from the listing price, on volume of 1.89 million shares and turnover of $4.78 million, according to Futu data. Excluding handling fee, the book loss was $40 per board lot size of 1,000 shares. On the PhillipMart platform it opened flat at $2.59 on gray market, on volume of 400,000 shares and turnover of $1.01 million. Excluding handling fee, the book loss was $50 per board lot size of 1,000 shares.

New Gonow RV(00805.HK), which will be listed Monday, opened down 0.8% to $1.26 on gray market. Peaking/ bottoming at $1.26/0.92, it closed at $0.99, down 22% or $0.28 from the listing price, on volume of 1.21 million shares and turnover of $1.23 million, according to PhillipMart data. Excluding handling fee, the book loss was $560 per board lot size of 2,000 shares. On the Futu platform it opened down 17.3% to $1.05 on gray market. Peaking/ bottoming at $1.26/1, it closed at $1.16, down 8.7% or $0.11 from the listing price, on volume of 942,000 shares and turnover of $1 million. Excluding handling fee, the book loss was $220 per board lot size of 2,000 shares.

Numans Health Food(02530.HK), which was listed Friday, opened at $0.79, down 1.3% from the listing price of $0.8. Peaking/ bottoming at $0.79/0.58, the stock closed at $0.69, down 13.8% from the listing price of $0.8, on volume of 123.02 million shares and turnover of $89.62 million. Excluding handling fee, the book loss was $880 per board lot size of 8,000 shares.

Bloks Group(00325.HK), which listed Friday, opened at $109.6, up 81.6% from the listing price of $60.35. Peaking/ bottoming at $109.9/84.9, the stock closed at $85, up 40.8% from the listing price of $60.35, on volume of 26.8 million shares and turnover of $2.67 billion. Excluding handling fee, the book gain was $7,395 per board lot size of 300 shares.

Earnings

OOIL (00316.HK) announced that its total revenue for 4Q as of December 31, 2024, increased by 55% to US$2.514 billion compared to the same period last year. The total liftings grew by 6.1%, and the loadable capacity inclined by 4.2%. The overall load factor rose by 1.5% compared to the same period in 2023. Overall average revenue per TEU climbed by 46.2% compared to 4Q24.

Buybacks

AIA (01299.HK) repurchased 6.898 million shares on the Hong Kong Stock Exchange Friday (10th) at prices ranging from $52.25 to $53 per share, involving approximately $362 million. Since the ordinary resolution was passed on May 24, the company has repurchased a total of 458 million shares, accounting for 4.079% of the share capital.

TENCENT (00700.HK) repurchased 4.01 million shares on the Stock Exchange Friday (10th) at a price per share ranging from $370.2 to $379.2, involving $1.5 billion. Since the approval of the resolution, the Company has repurchased about 251 million shares in total, accounting for about 2.67% of its issued share capital.

HSI Short Selling Friday 19.5% vs 17.4% Thursday
Top shorts Xinyi Glass (868) 58%, Sino Biopharm (1177) 54%, Henderson Land (12) 50%, HK & China Gas (3) 45%, Nongfu Spring (9633) 44%, MTRC (66) 42%, Galaxy Ent (27) 42%, CK Asset (1113) 42%, SHKP (16) 41%, China Res Land (1109) 38%, JD Health (6618) 37%, Chow Tai Fook (1929) 37%, CSPC Pharma (1093) 37%, China Rex Mixc (1209) 36%, Power Assets (6) 35%, Hang Seng Bank (11) 35%, Citic (267) 35%, Shenzhou (2313) 34%, CKI (1038) 34%, Xinyi Solar (968) 34%, BYD (1211) 33%, Whard REIC (1997) 32%, Zijin Mining (2899) 32%, Hengan (1044) 32%, Sinopec (386) 32%, Geely Auto (175) 32%, BOC (3988) 31%, Bud APAC (1876) 31%, Ali Health (241) 30%, ICBC (1398) 30%, Longfor (960) 30%, Tingyi (322) 30%, HKEX (388) 29%, Hang Lung Ppty (101) 29%, CM Bank (3968) 28%, China Overseas (688) 28%, China Shenhua (1088) 27%, Sunny Optical (2382) 27%, Petrochina (857) 26%, Zhong Sheng (881) 26%, CCB (939) 26%, Mengniu Dairy (2319) 26%, NTES (9999) 26%, Haidilao (6862) 26%.

WATCH

CLP HOLDINGS (00002.HK)’s CLP Power Hong Kong Limited (CLP Power) announced that its wholly-owned subsidiary, CLP Power HK Finance Ltd., successfully completed the issuance of US$500 million of 5.45% non-call 5.25-year perpetual capital securities. Proceeds from the securities will be used to redeem CLP Power HK Finance Ltd.'s outstanding US$500 million perpetual subordinated guaranteed capital securities issued on 6 November 2019. The securities are rated A3 and A- by Moody's and Standard & Poor’s (S&P) respectively, and will be listed on the Stock Exchange of Hong Kong.

SUNNY OPTICAL (02382.HK) the shipment volume of handset lens sets amounted to about 105 million units in December, down 5.6% MoM and 1.9% YoY. The shipment volume of handset camera modules increased by 13.4% YoY/ 42.7% MoM to 53.394 million units, mainly due to the low base caused by the weak demand from the overall smartphone market in the same period of last year/ the delivery requests from customers.

SHIMAO GROUP (00813.HK) announced that the group's aggregated contracted sales for the year ended December 31, 2024, amounted to approximately RMB34billion, down 20.6% YoY, while the group's aggregated contracted sold area was 2.675 million square meters. During the period, the average selling price for the year came in at $12,710 per square meter. In December 2024, the group's contracted sales amounted to around RMB2.83 billion, up 0.71% YoY, while the contracted sold area was 224,856 square meters. The average selling price came in at $12,590 per square meter.

Maria Helena de Senna Fernandes, Director of the Macau Government Tourism Office, said that after the implementation of the "One Trip Per Week" and "Multi-Entry Visa" policies for travel to Macau by residents of Zhuhai and the Hengqin Guangdong-Macao In-Depth Cooperation Zone from New Year's Day, there has been a noticeable surge in visitors to Macau, according to Radio Macau (TDM). From last Friday (3rd) to Sunday (5th), there were 100,000 or more inbound visitors, Fernandes revealed. She anticipated that many mainland tourists will come to Macau for New Year shopping during the Spring Festival holiday. The Tourism Office will enhance promotional efforts and direct visitors to various districts for shopping.

R&F PROPERTIES (02777.HK) announced that its total contracted sales for the month of December 2024 decreased by 11.1% YoY to approximately RMB1.04 billion, with about 74,500 square meters of GFA. For the full year of 2024, its total contracted sales were approximately RMB11.23 billion, marking a 43.7% drop compared to the same period the previous year, with about 838,000 square meters sold.

CHINA LIFE (02628.HK) announced that the accumulated premium income of the Company for the period from 1 January 2024 to 31 December 2024 was approximately RMB671.7 billion, an increase of 4.7% year on year.

The key creditor group of COUNTRY GARDEN (02007.HK) has not agreed to the latest terms for the offshore debt restructuring, Bloomberg, citing sources, reported. This creditor group holds over 30% of the developer's outstanding notes of around US$10.4 billion. It is understood that COUNTRY GARDEN began negotiations last November, but progress slowed in the last week of December due to disagreements with the creditor group over restructuring terms, including the conversion prices of mandatory convertible bonds and the debt repayment dates.

NEW WORLD DEV (00017.HK)'s parent company, Chow Tai Fook Enterprises, has hired advisers to study a disposal plan for Australian power company, Alinta Energy, including the sale of parts of its stake, Bloomberg quoted sources as saying. The company is exploring collaboration and co-investment opportunities with potential partners, and has been considering opportunities to support its growth, including investment in renewable energy projects, the report quoted a spokesperson of Alinta Energy as saying.

TENCENT (00700.HK) recently reduced its holdings in WEIMOB INC (02013.HK) and UBTECH ROBOTICS (09880.HK). TENCENT told the Securities Times that it will actively review its investment portfolio and assess potential adjustments to allocate funds for shareholder returns or new investment projects. WEIMOB INC opened 14.78% lower Friday (10th), once bottoming at $1.85 with a slump of 42%. It last printed at $1.94, down 38.99%, on a volume of 1.337 billion shares, involving $2.967 billion. TENCENT slashed its holdings in WEIMOB INC on Monday (6th) from 6.55% to 2.94% by selling nearly 122 million shares at an average price of $3.4 per share, cashing out nearly $4.15 billion.

UBTECH ROBOTICS opened 3.11% lower Friday, bottoming at $46.05. It last printed at $46.35, down 9.91%, on a volume of 10.7949 million shares, involving $521 million. On January 3 and 7, TENCENT cut its holdings in UBTECH ROBOTICS from 8.05% to 2.08% by selling a total of 19.0426 million shares in the market, cashing out nearly $1.035 billion.

EVERG SERVICES (06666.HK) 5.97% having opened 1.49% higher Friday (10th), after rumor at noon that EVERGRANDE (03333.HK) 's wholly-owned subsidiary, CEG Holdings, was ordered to wind up by a Hong Kong court. CEG Holdings holds nearly half of EVERG SERVICES' shareholding. In the afternoon, EVERG SERVICES' share price surged, peaking at $0.94, up 40.3%.

He Xiaopeng, Chairman of XPENG-W (09868.HK), said that Lei Jun, Founder, Chairman and CEO of XIAOMI-W (01810.HK), once advised him to leave technical products and work more on social media to reach out to users, according to Chinese media. Lei has done a far better job than him in this area, and regarded Lei as a role model, He added. However, there may be times at a certain stage when XPENG-W is also Lei's motivation and pressure.

Friday closings in EUROPE & US.
DAX -0.5%, CAC -0.79%, FTSE -0.86%

European markets opened flat; FTSE trended lower all day as Govt bonds hit their highest levels since the 2008 financial crisis as concerns about the UK economy mount and the new labour governments policies are being questioned . DAX and CAC opened around flat but sold down when the US jobs data came out as bond yields climbed. All the major exchanges and sectors closed in the red. Utilities and food and beverage stocks led losses, while autos were the sole outlier, adding 0.48%.

French Nov Industrial output +0.2% MoM vs -0.3% in October. But -0.9% YoY.

Ambu’s +13% a day after the firm raised its full-year guidance; it now expects organic revenue growth of 11% to 14% for the 2024/25 financial year. It had previously forecast growth of 10% to 13%.

Mercedes-Benz 3.7%; after its trading update on Friday Q4 sales were +5% QoQ but -2% YoY; it sold 2.4 million cars overall in 2024, -4% YoY.

Ubisoft -1.58% off initial lows (-8%) after the company announced it had appointed strategic advisors to pursue its options, following reports last year that the company’s backers were considering a buyout. It also announced it was delaying the release of its upcoming “Assassins Creed Shadows” title again, pushing the game’s launch back to March 20.

DOW -1.63%, NDX -1.63%, S&P -1.54%, Russel 2K -2.22%
US markets opened lower after the stronger than expected jobs report (256k) put the Fed’s rate cuts in question and saw choppy trading and closed slightly lower than they opened. Treasury yields spiked; traders give 97% odds that the Fed stands pat on rates at its meeting later in January, and they now think the central bank will hold rates where they are in the March meeting as well, based on fed funds futures trading.

Michigan’s consumer sentiment index signaled concern on the inflation front Jan at 73.2 vs 74 F/cast. Part of that was driven by one-year inflation expectations rising to 3.3% from 2.8%. Five-year expectations also scaled to their highest level since June 2008.

Growth stocks weak on the expectation that rates stay higher for longer; Nvidia -3%, AMD -4.8% and Broadcom -2.2%, Palantir -1%. Small-cap stocks, also sensitive to borrowing rates, dropped with the Russell 2000 index losing more than 2% putting it into correction territory.

Walgreens Boots Alliance +28% after its Q1 earnings and revenue beat analysts’ expectations; a net loss of $265 million, or 31 cents per share, significantly higher than the net loss of $67 million, or 8 cents per share, it posted for the year-earlier period. The retail pharmacy chain owes the loss to higher operating losses, which is driving its multiyear plan to cut costs and close stores that are underperforming.

Delta Air Lines +9% on better-than-expected Q4 results and a strong outlook after adjusted earnings of $1.85 per share on $14.44 billion of revenue vs forecast of $1.75 per share and $14.18 billion in revenue.

Constellation Energy 25% after the company announced it would buy geothermal and natural gas company Calpine in a $26.6 billion deal. Constellation also guided its full-year adjusted earnings per share to above where analysts anticipated

Banks JPMorgan Chase -1.34%, Citigroup -2.54% Wells Fargo -2.25%, Amex -3.15%
Ecommerce Meta 0.84%, Apple -2.41%, Amazon -1.44%, Netflix -4.26%, Disney -1.01%, Zoom Video -0.55%, Alphabet -1.14% and Microsoft -1.32%,
Tech NXP Semi -1.42%, Nvidia 3%, Micron -0.07%, AMD -4.76%, Skyworks 2.62%
Industrial/Discretionary Boeing 0.14%, Caterpillar -2.79%, Simon Property -2.14%, Kohl’s 1.41%, Nordstrom -0.33%, Gap 1.43%, United Airlines 3.27%, Carnival 0.37%, Wynn Resorts -0.02%
Energy Chevron 1.89%, Exxon Mobil -0.36%,
Consumer Staples Campbell Soup -3.81% General Mills -3.1%, JM Smucker -4.3%

DAILY DATA
USD remains strong, Bitcoin -0.09% at 94,759.00, VIX 8.14% at 19.54
US T10 up 6 bpts to 4.745% and T2 up 10 bpts at 4.369% after the stronger than expected jobs report.
OIL Brent 3.69%, WTI 3.58% as the US imposes more sweeping sanctions on the Russian oil industry.
Gold 0.99%, Silver 0.92%, Copper -0.45% Platinum 0.82%, Palladium 4.01%.

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Things to know before Trading Asia on Monday: Japan on holiday, China trade data and possible loans data. (2025)
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