[Eng] 16/8/2024 - CSOP Regional Market Report

U.S. retail sales in July increased by 1% month-on-month, the highest growth rate in a year and a half. Data showed that U.S. retail sales growth in July exceeded expectations, indicating that consumers are still resilient even in the face of high prices and borrowing costs, and U.S. recession concerns have eased. At the same time, the number of first-time Jobless claims in the United States fell to 227,000 in the week ended August 10, lower than expected, hitting the lowest level since July.

The three major U.S. stock indexes rose across the board, with the Nasdaq closing 2.34%, the S&P 500 closing up 1.61%, and the Dow Jones closing up 1.39%. Technology stocks, chip stocks, and AI concept stocks all rose.

According to an announcement from the Ministry of Finance of China, the interest rates for two tranches of certificate-based savings bonds to be issued on August 10th, with maturities of three and five years, will be reduced by 20 basis points (bps) to 2.18% and 2.30%, respectively. This marks the second interest rate cut for savings bonds by the Ministry of Finance this year.

The announcement indicates that the fifth and sixth tranches of certificate-based savings bonds for this year, with maturities of three and five years, will be issued from August 10th to 19th. The maximum total issuance amount is 24 billion RMB, equally divided between the three-year and five-year bonds.

Sales of so-called new energy vehicles (NEVs) jumped 37% last month from the same period a year earlier, accounting for a record 50.7% of car sales, data from the China Passenger Car Association showed.

The National Bureau of Statistics said that overall, the economy in July was generally stable and making progress, and high-quality development was solidly advanced. However, the current adverse effects of changes in the external environment are increasing, domestic demand is still insufficient, there are pains in the conversion of old and new driving forces, and the economy still faces many difficulties and challenges as it continues to rebound.

According to a survey released by the Development Bank of Japan, large enterprises (across all industries) plan to increase their domestic investment by 22% compared to the actual investment amount in fiscal year 2023, reaching 21.9596 trillion yen in fiscal year 2024. Investments are expected to rise in sectors with strong demand, such as semiconductors and pure electric vehicles (EVs).

The survey was conducted in June 2024, targeting 2,872 large enterprises with capital of over 1 billion yen, with about 60% of the companies responding.

According to quarterly economic data released by Indonesia's Central Statistics Agency, Indonesia's GDP grew by 5.05% year-on-year in the second quarter of this year, which is slightly lower than the 5.11% growth in the first quarter. However, quarter-on-quarter, the GDP for the second quarter still achieved a 3.79% increase, which is higher than expected.

Indonesia and Japan have reached an agreement on a revised economic pact aimed at reducing or eliminating trade barriers, with expectations that the new agreement will boost bilateral trade. According to a statement from Indonesia's Ministry of Trade, Japan will further reduce import tariffs on 112 Indonesian products. Under the new Indonesia-Japan Economic Partnership Agreement (IJEPA), Indonesia will improve market access for 25 Japanese products, including stainless steel and automobiles.

On the 8th, the Philippine Statistics Authority announced that the country's Gross Domestic Product (GDP) grew by 6.3% year-on-year in the second quarter of this year. The industrial and service sectors, which grew by 7.7% and 6.8% year-on-year respectively, were the main drivers of economic growth.

Singapore firms’ optimism about business prospects reach two-year high in Q2: BT-SUSS poll. The survey’s other indicators also show an improvement in business conditions

Growth in the second quarter was primarily driven by the wholesale trade, finance and insurance, and information and communications sectors, MTI said. But consumer-facing sectors such as the retail trade and food and beverage services sectors shrank, partly due to an increase in outbound travel by locals.

In the second quarter, Southeast Asia's smartphone shipments grew 14% year-on-year, higher than the global growth rate

SINGAPORE’S non-oil domestic exports (NODX) far exceeded economist estimates to climb 15.7 per cent in July, as both electronics and non-electronics exports grew, data from Enterprise Singapore showed on Friday (Aug 16).

According to Ing, ASEAN exports to the US had risen from $185 billion in 2018 to $270 billion in 2023. The increase was mainly driven by machinery, electronics, and semiconductors which are substitutes for Chinese products.

South Korea's Consumer Price Index (CPI) rose by 2.6% year-on-year in July, accelerating from 2.4% the previous month and exceeding the expected value of 2.5%. Core CPI increased by 2.2% year-on-year. The Bank of Korea stated that inflation is expected to ease continuously starting from August.

Data released by the Bank of Korea shows that, thanks to strong exports, the current account surplus expanded to $12.26 billion in June, marking the largest monthly surplus in nearly seven years.

Chairman and CEO Ma Huateng said: "The results for the second quarter of 2024 demonstrate the advantages of our platform and content combination strategy. Our domestic market game revenue has resumed growth, and international market game revenue has accelerated growth, thanks to the increase in user engagement of several evergreen games and the successful launch of several new games. Tencent Video has achieved significant growth in viewers and paying members through self-produced TV series adapted from Yuewen IP. Looking ahead, we will continue to invest in platforms and technologies including AI to create new business value and better serve user needs."

JD.com announced its results after the Hong Kong stock market closed yesterday. Non-GAAP net profit for the second quarter rose 69% year-on-year to RMB 14.5 billion, far exceeding expectations. CEO Ran Xu said JD.com’s low-price strategy has not changed. In the second quarter, the number of users maintained double-digit growth, and the frequency of shopping maintained double-digit growth, emphasizing that JD.com still attaches great importance to the performance of gross merchandise volume (GMV), profit and cash flow indicators, and strives to achieve a balance.

Alibaba's shares rose 3.21% to HK$78.85 in early trading. Alibaba announced last night its first quarter results for fiscal year 2025, which showed: revenue of 243.236 billion yuan, a year-on-year increase of 4%, and an expected 249.85 billion yuan; adjusted net profit of 40.69 billion yuan, a year-on-year decrease of 9.4%.

It is worth noting that Alibaba executives stated during the conference call that Alibaba is currently actively seeking to use Hong Kong as the company’s main listing location. The company will hold a shareholders' meeting on August 22, at which time relevant proposals will be submitted to shareholders. If approved by the general meeting of shareholders, the dual primary listing in New York and Hong Kong is expected to be completed by the end of August.

Jefferies has previously issued a report stating that it is expected that after Alibaba completes its dual primary listing on August 24, there will be potential opportunities to be included in the "Hong Kong Stock Connect" on September 24, which is expected to reflect positively on the stock price.

Vietnamese retail conglomerate Masan Group (MSN VM) aims to triple membership in its loyalty program to 30 million people as soon as next year, seeking to strengthen consumer relations amid an expansion push. Solidifying its footing in a market with a population of roughly 100 million, Masan plans to triple the number of convenience stores by the end of the decade.

According to reports, TSMC (2330.TT) plans to increase its foundry prices for 5nm and 3nm process chips in 2025, with expected price hikes ranging from 3% to 8%.

Samsung Electronics (005930.KP) has officially begun mass production of the industry's thinnest LPDDR5X memory, with a package thickness of only 0.65 millimeters, supporting capacities of 12GB and 16GB.

South Korean battery giant SK Hynix's (000660.KP) advanced chip packaging plant construction project in Indiana, USA, will receive government subsidies, with the maximum amount reaching 620 billion Korean won (approximately 3.2 billion RMB).

On August 14, Foxconn parent company Hon Hai Precision released its second quarter 2024 financial report, with revenue of NT$1.55 trillion, an increase of 19% over the same period last year: net profit of 35 billion yuan, an annual increase of 6%, a record high for the same period last year. Hon Hai Group's AI server revenue dropped by more than 60% in the second quarter. As iPhone 16 enters the peak production season, Hon Hai's operations will gradually heat up next quarter.

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