In today’s briefing:
- Ohayo Japan| Fed Watch: Now for Hawkish Hold; Advantest Miss; NUGGET: JP Executives Not Incentivized
- Interpretation of China’s Politburo – The A-Share Bull Market Is Coming?
- China A-Share Consumer Staples: The Most Challenging Time Is Behind
- China TMT Update-ATAT/XPEV-The VW Brand Cooperate with Xpeng;G6 Capacity;Legacy-Huazhu 2Q23 RevPAR
- SPAC TALK – SPACs and Publicly Traded Targets
Ohayo Japan| Fed Watch: Now for Hawkish Hold; Advantest Miss; NUGGET: JP Executives Not Incentivized
- OVERSEAS. Fed Lifts rates +25bps as expected; No longer sees recession emerging; Equities – Mixed as Industrials Rally, Tech Sells off; Meta Beats on Rev/EPS; Boeing Surges on Outloook
- JAPAN. Nikkei Futures -0.4% vs Cash; USDJPY 140.4; Fed Move Done, but for BOJ – Potential for a Surprise Move ? Advantest Miss-back to reality ? Earnings in Full Swing.
- NUGGET. Japanese Executives Not Properly Incentivized; Shareholders need to take a different tact in addressing corporate performance.
Interpretation of China’s Politburo – The A-Share Bull Market Is Coming?
- On China’s Politburo, we did see some rare expressions and highlights worthy of attention. Perhaps, avoiding short-term risks is so important that China needs to temporarily put aside long-term transformation.
- Attitude change doesn’t mean returning to old model.Since “expanding domestic demand” is placed in a prominent position, we have reason to be optimistic about the prospects of private economy/A-share market.
- The real A-share bull market may not come immediately, but we are optimistic about the performance of A-shares in 23Q4 and 2024. We recommend investors to get prepared in advance.
China A-Share Consumer Staples: The Most Challenging Time Is Behind
- Performance of China A-share consumer staples stayed lacklustre in the last three months, underperforming benchmark indexes. Negative consumer sentiments have weighted on them.
- The pullback in valuations, however, has made them look more appealing now. Excluding Foshan Haitian Flavouring & Food (603288 CH), there has been no earnings downgrades.
- Both Shanxi Xinghuacun Fen Wine Factory Co (600809 CH) and Fu Jian Anjoy Foods Group (603345 CH) have pre-announced 1H23 results which showed good 2Q23 earnings.
China TMT Update-ATAT/XPEV-The VW Brand Cooperate with Xpeng;G6 Capacity;Legacy-Huazhu 2Q23 RevPAR
- ATAT: Legacy-Huazhu 2Q23 RevPAR increased 21% vs. same period in 2019（+）
- XPEV: weekly data indicates G6 capacity still needs time to ramp up (-)
- XPEV : The VW brand concludes technological framework agreement for long-term cooperation with Xpeng (+)
SPAC TALK – SPACs and Publicly Traded Targets
Dog days of summer. Just as the unbearable heatwave afflicting the US and other parts of the globe may have a slowing effect on activity, there has been a slowdown in SPAC merger deal activity.
Having just entered the last week of July, while the SPAC IPO market continues to trundle along (four priced in July), there has been a noticeable tamp down in merger deal flow.
Only five new SPAC IBC deals have been announced so far this month, with the average value per deal at $364M.
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