Market Wrap by Decoder – 14 Feb 14

• HK/CN (Morgan):

1. China Macro:China targeting 7.5% YoY export growth in 2014, lower than the 7.9% target in 2013.

2. Citic Bank (998.HK, 601998.SH) A share price hit upper limit again on Thursday and increased 36% within one week. Local media said the POS Online Commercial Loan product has granted Rmb1.5bn loan since launched at the end of 2013. They denied that Alibaba would buy their stocks.

3. Lenovo (992): CEO said they are confident to help Motorola turnaround in next few quarters and will bring Motorola handset to mainland China market. 3QFY14 net profit grows 29.5% YoY. PC market share increased to 18.5%.

4. SJM (880) started to build the new resort in Cotai yesterday and the cost of it increased HK$5bn due to higher labor cost, and the total investment is 30bn.

5. Melco Crown (6883) said the unaudited 2013 EBITDA and net income are US$1.288bn and US$5.1bn, +40% and +24% YoY respectively. The EBITDA growth rate in 4Q13 was 49% YoY and the company will distribute US$191mn dividend.

6. GCL Poly (3800) announced to buy 369mn shares of Same Time Holdings (451) for HK$1.44bn. The price is HK$4 per share, 70% discount to yesterday market close. After the deal, GCL’s stake would increase to 67.99%.

7. BYD (1211): Local media said BYD will cooperate with ABB and Daimler to build the largest EV charging network in the world.

8. China FTZ: China Securities Journal said Guangzhou Baiyun Airport is about to be included in the Guangdong, HK and Macau FTZ.

9. China Banks: S&P said China banks’ profit margin and loan quality will deteriorate in 2014 due to tight credit and deregulation.

• TH: Market is closed for Makha Bucha Day (Full Moon Day).

• Stock markets traded steadily higher throughout the session after a weak opening due to a WTE retail sales in Jan (-0.4% Vs flat est) and jobless claims that just exceeded expectation (339K Vs 335K). US futures also pointed to a lower open which coincides with the strength in Yen once again created fear in the market. Subsequently, the rally is broad based, with utilities/tech/telco topping the chart while industrial/consumer/financial lagged behind. Treasuries kept going higher, pushing the 10 yrs yield down 6bps to 2.73%.

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