[Eng] 2024/7/26 - CSOP Regional Market Morning Report
Market News
【United States】
US Economy Regains Speed In Second Quarter; Price Pressures Easing
The U.S. economy grew faster than expected in the second quarter, driven by robust consumer spending and business investment, but inflationary pressures eased, keeping expectations for a Federal Reserve rate cut in September unchanged.
The preliminary annualized quarter-over-quarter growth rate of the real GDP in the second quarter was 2.8%, higher than the market expectation of 2% and up from the previous value of 1.4%. The core PCE price index, a key inflation indicator watched by the Federal Reserve, rose by 2.9% in the second quarter, slowing from the previous value of 3.7% but still higher than the expected 2.7%.
【APAC】
Taiwan's export orders in June amounted to $45.56 billion, down 6.8% month-on-month and 5.5% after seasonal adjustment. On a yearly basis, the increase was 3.1%, which is significantly below the market expectation of a 12.5% rise.
South Korea's preliminary GDP for the second quarter decreased by 0.2% quarter-on-quarter, compared to the expected growth of 0.1%. On an annual basis, the preliminary GDP for the second quarter grew by 2.3%, against the expected growth of 2.5%.
The South Korean government announced a series of tax reduction measures aimed at stimulating the economy and boosting the stock market. These measures include lowering the inheritance tax cap from 50% to 40% and significantly raising the exemption threshold from 50 million KRW per person to 500 million KRW. The government also plans to extend semiconductor tax incentives for three more years, delay the implementation of the cryptocurrency holding tax by another two years, and seek to abolish plans to impose capital gains tax on financial investment income.
【SEA+】
India's Modi Government Unveils First Budget
The fiscal deficit target for this financial year has been revised down to 4.9% of GDP. The corporate income tax for foreign companies has been reduced from 40% to 35%, and the standard deduction for personal income tax has been increased from 500,000 to 750,000 rupees.
The Indian government will provide a 2 trillion rupee package to increase employment and stimulate the economy. Additionally, India plans to raise the short-term capital gains tax rate on stocks from 15% to 20%, the long-term rate from 10% to 12.5%, and also increase the tax on derivative transactions.
In July, India's Manufacturing PMI preliminary reading was 58.5, with expectations at 58.0 and the final value for June at 58.3. The Services PMI preliminary reading was 61.1, with expectations at 60.7 and the final value for June at 60.5. The Composite PMI preliminary reading was 61.4, with expectations at 60.0 and the final value for June at 60.9.
The Monetary Authority of Singapore (MAS) kept its monetary policy unchanged on Friday, in line with widespread market expectations. This decision comes as economic growth accelerates and inflation is expected to ease by the end of the year.
Corporate News
【China】
According to information from the Hong Kong Stock Exchange, Berkshire Hathaway, the investment company led by renowned investor Warren Buffett, reduced its holdings in Chinese electric vehicle giant BYD $BYD COMPANY(01211.HK$ last Tuesday (16th), cashing out approximately HK$340 million. As the holding percentage has fallen below 5%, the company no longer holds a notifiable interest. This means that any future sales of shares for cash will not require disclosure.
【Japan】
Toyota Motor (7203 JT) Plans to Buy Back Over $5 Billion Worth of Shares Held by Japanese Banks and Insurance Companies. Japanese financial regulators have pressured companies to reduce their holdings in other domestic listed companies to improve corporate governance.
Nissan Motor (7201 JT) reported a net profit of 28.56 billion yen for the first fiscal quarter, representing a 73% year-on-year decline and falling significantly short of the market estimate of 97.08 billion yen. The company's global vehicle sales forecast has been slightly revised downwards from 3.7 million units to 3.65 million units.
【APAC】
SK Hynix’s Revenue More Than Doubles as AI Demand Powers On
SK Hynix (000660.KP) announced that its second-quarter revenue more than doubled, and this year's capital expenditures might exceed previous plans, suggesting that the global surge in artificial intelligence (AI) hardware spending could continue throughout the year.
SK Hynix is a key partner of NVIDIA for AI computing power chips. The company reported quarterly revenue of 16.4 trillion Korean won (11.9 billion USD), surpassing expectations, with high-bandwidth memory chip revenue growing by over 250%. Driven by rising DRAM and NAND prices, operating profit for the three months ending in June also exceeded expectations, reaching 5.47 trillion Korean won, with an operating profit margin of 33%.
According to informed sources, Samsung Electronics Co.' (005930.KP) fourth-generation high-bandwidth memory (HBM3) chips have been approved by NVIDIA and will be used for the first time in its processors for AI chips specifically designed for the Chinese market.
According to informed sources, TSMC's (2330.TT) German plant is scheduled to break ground in the fourth quarter of 2024, with mass production expected to begin as early as the fourth quarter of 2027. The plant aims to gradually achieve a monthly production capacity of 40,000 wafers by 2028.
【SEA+】
Singapore's online restaurant reservation platform Chope has been acquired by ride-hailing company $Grab Holdings(GRAB.US$. According to an internal company email, the specific amount of the acquisition has not been disclosed to the public. Upon completion of the acquisition, Grab will take over Chope's operations in Singapore, Indonesia, and Thailand.
$Grab Holdings(GRAB.US$ and taxi operator Trans- Cab have agreed to terminate their proposed merger, according to a statement by the Singapore competition watchdog on Thursday. Both parties have withdrawn their application to the Competition and Consumer Commission of Singapore. The CCCS has accordingly ended its assessment of the proposed acquisition.
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