CAPIS Capital Institutional Services : Global Recap – 1/22/2018

Asian Headlines

Varied returns seen across the region today with mainland China leading while Korea again slipped on weakness in the tech space. IT names fell in Japan as well with Telcos and Health Care buoying the Nikkei to flattish levels on the day. IT though ticked higher in China with Discretionary names leading on the Hang Seng and noted below. A wary eye of course is being kept on DC with the Dollar holding in well overnight.

The PBoC set the Yuan rates at its strongest level since Dec '15 while injecting roughly half as much in open market ops today. Of interest the much-watched power consumption reading was reported today by their Energy Admin as up 6.6% YoY for 2017. On the stock front, gaming names rallied as broker CICC said gross gaming revenue for the 1Q in Macau should rally 25% YoY. MGM China +1.4%, Wynn Macau +3.2%, Sands China +4.1%, and Galaxy Entertainment +3.2%. Tencent rallied 1.7% on headlines they are joining with Citic Bank -.8% to develop AI and Blockchain platforms as well as cloud and Big Data collaborations.

Samsung -2.2% and SK Hynix -3% dragged the Kospi lower today on word Apple instructed suppliers to cut parts supplies. Earlier the country reported trade data that showed both imports and exports slowed in December from prior readings. Also weighing were steel companies with Posco -2.1% set to report Wednesday. No doubt steel production will be a topic discussed with Davos kicking off Tuesday.

Steel names were weaker in Japan as well ahead of Tokyo Steel -.9% reporting tomorrow. The big focus though will be on the BoJ with rates expected to remain as-is. Kawasaki Heavy rose 1.1% with the Nikkei reporting they will win a 1600 car project for NY's subway.

Post the close Taiwan reported export orders YoY up 17.5%, ahead of both the estimate and prior reading. Bellwether Taiwan Semi rallied 2.4% with the Taiwan $ up on demand for stocks. Per the Liberty Times the gov is said to be extending a same-day tax cut.

European Headlines

The BoJ is not the only game in town this week with the ECB to announce rates Thursday with markets eager to hear future plans. Today though we are seeing tepid moves across the board with Spain the outperformer. Telcos lead with news cited below with Energy stronger as well despite flat oil markets. Leisure names lead lower, more specifically gaming plays, with Media also a bit off. Volume is currently up ~12% on the Stoxx Europe 600.

UBS -1.2% is off post 4Q results where they noted the firm has set a CHF2B stock buyback with plans for a single-digit percent growth in their dividend. Additionally, plans are to to combine their wealth management units into one.

Richemont -1.2% is snapping up luxury retailer Yoox Net-a-Porter +24% €2.7B which works out to a 26% premium over Friday's close. The move is intended to help Richemont facilitate its push to sell more of its own product as luxury watches and the like see increased transactions via the Net.

Also in the merger space Sanofi -3.5% will acquire hemophilia treatment firm Bioverative for $11.6B or $105 a share.

Gaming names are weaker in the UK with word the gov may impose a maximum stake cut to £2B for fixed-odds betting terminals. William Hill -11%, Ladbrokes -8.6%.

French newspaper Le Monde is reporting Deutsche Telekom +2.8% and Orange +2.1% spoke for several months concerning a merger of equals but fell apart as DT is considerably larger than Orange. Additionally, the French gov was left in the dark concerning the talks thus upsetting the 23% holder of Orange.

		Event		Survey	Actual	Prior	Revised	Relevance
SK	1)	Imports 20 Days YoY	Jan	-	14.10%	19.50%	-	0
SK	2)	Exports 20 Days YoY	Jan	-	9.20%	16.40%	-	2.85714
SK	3)	PPI YoY	Dec	-	2.30%	3.10%	-	60
JN	4)	Tokyo Condominium Sales YoY	Dec	-	-7.50%	24.60%	-	53.2609
NE	5)	Consumer Spending YoY	Nov	-	2.60%	1.70%	-	57.8947
NE	6)	Consumer Confidence Index	Jan	-	24	25	-	0
NO	7)	Industrial Confidence	4Q	5	6.4	2.3	3.2	14.8148
JN	8)	Convenience Store Sales YoY	Dec	-	-0.30%	-0.30%	-	29.3478
NE	9)	House Price Index MoM	Dec	-	0.40%	0.50%	-	5.26316
NE	10)	House Price Index YoY	Dec	-	8.20%	8.20%	-	10.5263
SZ	11)	Money Supply M3 YoY	Dec	-	3.20%	4.40%	4.30%	40.625
SZ	12)	Total Sight Deposits CHF	19-Jan	-	574.7b	573.8b	-	12.5
SZ	13)	Domestic Sight Deposits CHF	19-Jan	-	468.9b	473.9b	-	9.375
IR	14)	PPI MoM	Dec	-	0.40%	-0.40%	-	57.6923
IR	15)	PPI YoY	Dec	-	-3.60%	-3.60%	-	53.8462