In today’s briefing:
- Ohayo Japan | Bracing for Jobs Data
- Japan Morning Connection: 7&I, PPIH, Baycurrent
- Market take: Patience needed in the AI buildout
- Developed Market Exchanges – Integrated Flow Monsters and Big Data Monetisers
- Australia Banks – Loan Growth Flat Line, Negative Building Approvals, WBC Credit Metrics Concerning
- # 56 India Insight: HDB Targets IPO $9 Billion, Reliance PLI for 10GWh Battery Storage, Nazara AI
- [Blue Lotus Daily-TMT Update]:BABA US/700 HK/WB US/PDD US/JD US/VIPS US/3690HK/1810 HK
- [Blue Lotus Daily]:1211 HK/LI US/XPEV US/NIO US/LKNCY US
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Ohayo Japan | Bracing for Jobs Data
- Wall Street is bracing for Friday’s crucial jobs report, expected to influence Federal Reserve policy. Nonfarm payrolls are forecast to grow by 161,000 in August
- Seven & i Holdings will reject Alimentation Couche-Tard’s $40 billion takeover offer, deeming the price too low
- Effissimo Capital Management, an activist investment fund, has increased its stake in Teijin from 6.03% to 7.67%
Japan Morning Connection: 7&I, PPIH, Baycurrent
- Not much lead from the US, although Broadcom numbers missing after hours set a slightly negative tone for tech, despite NVDA and TSLA posting gains.
- The market should like the news that 3382 7&I is engaging with ACT and asking for a higher bid, which may also indicate their failure to attain ‘core’ status from the JP Govt.
- PPIH looks oversold after missing out on NKY225 inclusion yesterday, especially in comparison to Baycurrent who also missed, yet finished the day +4.5%.
Market take: Patience needed in the AI buildout
- Tech and cloud firms are heavily investing in artificial intelligence, but there are questions about whether the revenues from AI will catch up with the capital spending
- It will take time for big tech companies to see a return on their AI investments, with the AI build-out expected to take years
- There are opportunities for investment in firms supplying key inputs for the AI sector, such as energy, utilities, materials, and real estate
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Developed Market Exchanges – Integrated Flow Monsters and Big Data Monetisers
- Our core pick is flow monster CME Group for its dominant franchise through its trading and post-trading (including clearing) operations in interest rates, equity indices, foreign exchange and commodity derivatives
- We also like Deutsche Borse as the European flow monster and for its attractive valuations and gearing into greater European securities activity
- We downgrade Japan Exchange to a neutral from buy for its fair valuations, as we see more compelling opportunities with CME group and Deutsche Borse; CBOE is one to watch
Australia Banks – Loan Growth Flat Line, Negative Building Approvals, WBC Credit Metrics Concerning
- Credit growth is persistently weak in Australia, and this is as good of a sign as any, of weak demand or / and worsening credit metrics.
- Many other figures at the macro level point to weakness ahead (and now) for Australia’s banks even if credit costs appear low.
- WBC data on stressed corporate exposures shows all too well how migration can impact bad loans. BEN shows this too, with mortgage loans.
# 56 India Insight: HDB Targets IPO $9 Billion, Reliance PLI for 10GWh Battery Storage, Nazara AI
- Adani plans to raise Rs 40,000 crore via NCDs from retail investors, diversifying funding sources.
- Reliance secures 10 GWh battery storage under India’s PLI scheme, advancing clean energy goals.
- Nazara partners with Telangana to launch an AI Centre, driving innovation in gaming and emerging tech.
[Blue Lotus Daily-TMT Update]:BABA US/700 HK/WB US/PDD US/JD US/VIPS US/3690HK/1810 HK
- BABA US/700 HK/WB US/PDD US/JD US/VIPS US:Taobao to launch WeChat Pay support this month (+/+/-/-/-/-)
- 3690HK: Meituan Plans to Increase Marketing Investment to Support Small and Medium-sized Restaurant Businesses(+)
- 3690HK: Meituan food delivery and Meituan hotel services launch on Alipay Mini Program(+)
[Blue Lotus Daily]:1211 HK/LI US/XPEV US/NIO US/LKNCY US
- 1211 HK/LI US/XPEV US/NIO US: In the 35th week of 2024, BYD’s EV delivery hits a new high, while Xpeng’s sales increase by 700 units(///////)
- LI US/NIO US/XPEV US: Xiaomi SUV spy photos exposed, similar to Model Y, good news for Li Auto, NIO and Xpeng.(+/+/+)
- XPEV US: XPEV MONA M03 pre-order exceeded only 30K in 48 hours.(/)