CAPIS Capital Institutional Services : Global Recap – 1/4/18

Asian Headlines

Apart from S. Korea, Asia finished up again led by Japan. After being closed the last couple of sessions, the Nikkei played catch up, rallying over 3% with all sectors solidly in the green. Oil continues to rally as did natural gas with the continued cold in North America. WTI has moved to levels not seen since 2015 where the 60-62 range in May and June provided resistance. On that, the Energy sector was generally at the top of the heap in performance today.

Caixin PMI readings for Services and the composite were released for China with both showing a tick up in December. The Services reading of 53.9 was well ahead of the 51.9 report from November, hitting a 3 year high and the quickest rise since August of 2014. As noted above, Energy names led with Sinopec up 4.1%, PetroChina +5.1%, and CNOOC better by 3.8%. Also to the upside were retail names after Retail Sales volumes YoY rose 7.5% in November ahead of the 4.2% growth expected. With holdings in shopping malls, Wharf Holdings rose 8.7%.

The Nikkei hit levels not seen since 1991, closing up 3.26% to 23,506.33. As noted, gains were broad with many seeing big moves on the day. Both Honda and Toyota closed up over 2% as did many of the big banks. Ahead of same store sales, Fast Retailing rose 3.4% with overseas growth expected to boost sales. Nintendo rallied 4.9% after a FT interview noting Pokemon Go will be released in China soon. On the economic front Manufacturing PMI rose 54.0 in December, just a hair light of the previous 54.2 reading. Venture capital fund SBI Holdings leapt +20% as the firm holds a 10.5% stake in Ripple, a rising cryptocurrency. Fin Min Aso noted GDP has grown in the last 5 years with the economy, labor, and wage environment improving. The BoJ's Kuroda spoke to their Banking association noting their easing policy should continue.

Several large names saw weakness overnight in South Korea leading to a lower finish on the day. LG Chemical fell 3.4% on the aforementioned exclusion by the Chinese government to give subsidies for EV's with SK batteries on the continued spat over the THAAD missile system. Hyundai Motors -2.7% slipped with workers resuming a partial strike over wages. Kia -3.2%. Parts-makers Hyundai Mobis -3.9% and Mando -3.7% were also weaker.

European Headlines

Europe is trading to the upside with Food and Media names lagging. Construction and Autos lead with Service and Comp PMI readings generally coming inline with views showing further expansion in the region. After moving lower late yesterday, the Euro and Pound are rebounding somewhat. While most names trade to the upside, we will note a few stories behind moves today.

Debenham's -16% is getting crushed but is well off of earlier lows after reporting 17 week comparative sales fell 1.3% over the Christmas holiday. UK LfL's were off 2.6%. On that, 1H gross margins are expected 150bps lower with further job cuts ahead. Marks & Spencer -2.4%.

Post yesterday's somewhat better vehicle sales reports from Ward's, auto names are providing a boost with Fiat up 10%, besting gains from the States. While the firm met estimates of a slowing of 11% in December, the firm's high margin Dodge trucks are doing well. Also in the space, Daimler +1.3%, BMW +1.1%, and Michelin +1.3% announced a joint venture with Sumitomo to create the 2nd largest dealer for North American tire distribution and service.

On a strong 4Q, Petroleum Geo-Services +17% is ticking higher after the underperforming oil-services sector is seeing a rebound over the last week or two.

Software provider Sopheon is up over 21% on a trading update. The firm sees FY17 results well ahead of estimates noting the board sees improved recurring revs and visibility for 2018.

Micro-electronic component-maker SUESS MicroTec +7% said FY order intake was up over 24% with the start of 2018 called 'Excellent'.

		Event		Survey	Actual	Prior	Revised
SK	17)	Foreign Reserves	Dec	-	$389.27b	$387.25b	-
AU	18)	CBA Australia PMI Services	Dec	-	55.1	54	-
AU	19)	CBA Australia PMI Composite	Dec	-	55.5	54.3	-
AU	20)	AiG Perf of Services Index	Dec	-	52	51.7	-
JN	21)	Nikkei Japan PMI Mfg	Dec F	-	54	54.2	-
HK	22)	Nikkei Hong Kong PMI	Dec	-	51.5	50.7	-
CH	23)	Caixin China PMI Composite	Dec	-	53	51.6	-
CH	24)	Caixin China PMI Services	Dec	51.8	53.9	51.9	-
IN	25)	Nikkei India PMI Services	Dec	-	50.9	48.5	-
IN	26)	Nikkei India PMI Composite	Dec	-	53	50.3	-
IR	27)	Investec Services PMI Ireland	Dec	-	60.4	56	-
IR	28)	Investec Composite PMI Ireland	Dec	-	60.2	57.7	-
UK	29)	Nationwide House PX MoM	Dec	0.10%	0.60%	0.10%	-
UK	30)	Nationwide House Px NSA YoY	Dec	2.00%	2.60%	2.50%	-
SW	31)	Swedbank/Silf PMI Services	Dec	-	64.6	61.8	61.9
SP	32)	Markit Spain Services PMI	Dec	54.6	54.6	54.4	-
SP	33)	Markit Spain Composite PMI	Dec	55.4	55.4	55.2	-
IT	34)	Markit/ADACI Italy Services PMI	Dec	54.7	55.4	54.7	-
IT	35)	Markit/ADACI Italy Composite PMI	Dec	56	56.5	56	-
FR	36)	Markit France Services PMI	Dec F	59.4	59.1	59.4	-
FR	37)	Markit France Composite PMI	Dec F	60	59.6	60	-
GE	38)	Markit Germany Services PMI	Dec F	55.8	55.8	55.8	-
GE	39)	Markit/BME Germany Composite PMI	Dec F	58.7	58.9	58.7	-
EC	40)	Markit Eurozone Services PMI	Dec F	56.5	56.6	56.5	-
EC	41)	Markit Eurozone Composite PMI	Dec F	58	58.1	58	-
UK	42)	Official Reserves Changes	Dec	-	-$44m	$865m	-
UK	43)	Net Consumer Credit	Nov	1.5b	1.4b	1.5b	1.4b
UK	44)	Net Lending Sec. on Dwellings	Nov	3.4b	3.5b	3.4b	3.3b
UK	45)	Mortgage Approvals	Nov	64.0k	65.1k	64.6k	64.9k
UK	46)	Money Supply M4 MoM	Nov	-	0.10%	0.60%	-
UK	47)	M4 Money Supply YoY	Nov	-	3.70%	4.10%	-
UK	48)	M4 Ex IOFCs 3M Annualised	Nov	-	3.40%	5.40%	-
UK	49)	Markit/CIPS UK Services PMI	Dec	54	54.2	53.8	-
UK	50)	Markit/CIPS UK Composite PMI	Dec	55	54.9	54.9	54.8
CC	51)	CPI MoM	Dec	-	-0.41%	0.10%	-
CC	52)	CPI YoY	Dec	-	-0.58%	0.28%	-