Asia-pacific Stock Markets Mixed After Evergrande Deal Called Off

21/10/2021 Evergrande, Chinese property developer, plan to sell its property management division to a smaller rival had fallen through. In a notice to the Hong Kong exchange Evergrande said it was having difficulties selling off assets to resolve its cash crunch. Markets were mixed after this, with shares slipping in Hong Kong and Tokyo but rose in most other regional markets. MSCI’s broadest index of Asia-Pacific ex. Japan edged 0.3% higher, touching a one-month top. Currencies and commodities were broadly steady, while Brent crude futures inched up to a new five-year peak of $86.10 a barrel. U.S. and European contracts slipped following a mixed Wall Street session in which the S&P 500 neared a record high and the tech-heavy Nasdaq 100 slipped. U.S Treasury yields, 10-year, touched the highest since 2013 after the 20-year auction. The 10-year break even rate is the proxy for annual inflation rates over the next decade. Bitcoin was around $65,000 after setting an all-time peak, after the debut of bitcoin-linked futures-based EFT. Chinese coal futures plunged amid efforts by officials to contain power costs. Tencent major games post double-digit slide, sales falling 18% in September.

Events to watch this week:
• U.S. Conference Board leading index, U.S. existing home sales, jobless claims, Thursday
• Fed Chair Jerome Powell takes part in policy panel discussion, Friday
Locally:
The JSE closed 0.18% higher on Wednesday at 66, 895 points, taking cue from global counterparts. Top-40 index added 0.26% on the day, with both Naspers and Prosus advancing 1.52% and 2.56%. SA consumer inflation, CPI, edged up for the second successive month in September; increasing by 5% year on year from 4.9% a month earlier. CPI was said to be mainly driven by fuel prices, rents and food prices. Rand steadied around R14.43/$, having gained 0.60% against the greenback yesterday – gaining 2.61% in 5 days. Yield on 10-year govt rand bonds fell 4.70 bps to 9.69%. Top-40 futures off -221 points.

Sasol is scheduled to announce first-quarter earnings.

NEWS:
• MultiChoice Nigeria Cleared to Appeal $4.4 Billion Tax Claim
• Employers Recommend 5% Increase in South African Steel Industry
EQUITY PREVIEW:
• Clicks to Report Results; Shares Up 11.4% YTD: Preview
• S. Africa Pick n Pay Rises After Results; Citi Lauds Cost Saving
MEDIA SUMMARIES:
• News24: The Jacob Zuma Foundation has announced that the former president will lay criminal charges against State advocate
• Daily Maverick: 264,809 deaths later: Covid-19’s terrifying toll on South Africa, almost three times the official figure
• Business Day.za: Woolworths joins Netcare in raising green debt
• Business Day.za: JSE to publish further data on bond flows to clear mystery of resilient currency
• Fin24: New Sanlam business to provide options for those who can’t afford medical aid
EARNINGS:
• Clicks Group Ltd. (CLS SJ)
CORPORATE EVENTS:
• Sales Results: AAL LN, AMS SJ, KIO SJ, SOL SJ

EU/UK/US
European markets finished higher on Wednesday as investors digested a mixed bag of corporate earnings news. Swiss food giant Nestle gained 2.7% on an upbeat sales outlook after strong coffee sales and price hikes pushed organic sales 6.5% higher in the third quarter. Europe’s food and beverage index rose 1.7%. Unilever is due to give a trading update on Thursday. The pan-European Stoxx 600 index was up 0.32% to 470.07, alongside CAC-40 advancing 0.54%. FTSE100 ended the day flat 0.08%, and so is the DAX marginally gaining 0.05% at the close. Miner Rio Tinto slipped 3.3% as investors worried about spending after it announced a $7.5 billion plan to reduce carbon emissions. FTSE contract down -31points, the DAX futures on the backfoot -72.5points.

Wall Street closed mixed on Wednesday, with the S&P 500 recording its sixth winning session on the trot. At the close, the Dow was up 0.43% and the S&P 500 added 0.37%, while the Nasdaq slipped 0.05% to settle at 15,121.68. Netflix fell after analysts said its subscriber outlook underwhelmed investors. Tesla reported results that beat on EPS but missed on revenue. IBM‘s shares sunk post-market as its revenue missed. Microsoft Corp. -0.27%. Crypto miner Stronghold Digital Mining Inc. rose 52% from its initial public offering price in Wednesday’s debut session, which came as Bitcoin topped $66,000 for the first time. U.S futures in the red: Doe futures -0.20%, S&P500 -0.22%, Nasdaq – 0.28%

ASIA
China stocks rose as property and coal shares rebounded, after assurances from officials eased worries over the real estate sector. The CSI300 index rose 0.20%, Shanghai pulled back 0.15%, having risen 0.50% earlier. Property firms surged 3.4%, snapping six straight sessions of decline – investors bought the dip. Hang Seng slipped 0.95% as Tencent mobile games fell 18%. Tencent on the backfoot 1.28%. Australia’s ASX200 marginally up 0.28%, with real estate and IT sectors leading the gains.

China’s thermal coal futures fell the maximum permitted 11% at the start of trade on Thursday, extending losses run up since Tuesday when Beijing signalled it might intervene to cool prices.

Gold steadied after a two-day advance as investors weighed the latest comments from Federal Reserve officials, which indicated that interest-rate hikes aren’t imminent. The yellow metal is currently hovering around $1,786/ounce.