Evergrande debt deadline, chip supply outlook, Uniqlo results
Welcome to your week in Asia.
This week will start with a bite to the nail: Chinese real estate developer Evergrande will face another debt payment deadline on Monday. Investors will be closely monitoring a series of Chinese economic indicators later in the week for further clues about the country’s financial condition.
Uniqlo Fast Retailing owner and Muji operator Ryohin Keikaku, both of whom have large businesses in China, will report their results on Thursday.
Thursday could also be a big day for supply chain watchers. Taiwan Semiconductor Manufacturing Company, the world’s largest contract chip maker, presents its industry outlook for the 2021 holiday season and a look at 2022 in its earnings conference.
Make the most of our coverage on these events and more by following us on Twitter @NikkeiAsia.
Evergrande payment deadline
China Evergrande Group, which missed two offshore bond interest payments last month, faces further deadlines this week. It provides for coupon redemptions of three dollars with a combined value of $ 148.1 million, according to data from Refinitiv. The rapidly cash-strapped company has a 30-day grace period to make payments before it is labeled in default. Evergrande, which has over $ 300 billion in liabilities, missed an interest payment of $ 83 million on September 23 and another of $ 46 million on September 29.
Evergrande’s missed deadlines to pay banks, suppliers and retail creditors have resulted in the suspension of more than half of its 800 projects across China. The company is trying to sell assets and attract investors. The Evergrande crisis, along with missed bond repayments by competitors including Fantasia Holdings, has pissed off investors and skyrocketed the cost of high-yield borrowing in China. Evergrande’s problems, if not contained quickly, would upset a Chinese real estate industry already in crisis, and could have greater fallout for the world’s second-largest economy.
Follow our latest coverage on the Evergrande saga.
New South Wales partially lifts lockdown
The Australian state of New South Wales – home to Sydney – is ending a multi-month COVID-19 lockdown, at least for those who can prove a full vaccination. Businesses ranging from gyms to hair salons and restaurants will be allowed to open with customer density limits, among other easing measures. The state has vaccinated more than 70% of residents aged 16 and over, according to local media.
Bank of Korea rate hike?
The Bank of Korea is expected to raise its policy rate by 25 basis points to 1%, following an increase at its previous meeting in August. The central bank has signaled that it is time to stabilize financial and real estate markets, as easy money drastically inflated asset prices during the pandemic.
However, some economists predict that the BOK could wait until next month to raise the benchmark rate to avoid burdening household debt service too quickly, which could have a negative impact on consumption.
G20 meeting on Afghanistan
The G20 summit will not take place until the end of the month, but Italy will call leaders for an extraordinary summit on Tuesday to define strategies for Afghanistan. Italian Prime Minister Mario Draghi said the richest countries in the world had a “duty” to act to prevent a humanitarian crisis. The leaders will also discuss ways to welcome refugees, provide humanitarian and financial assistance, ensure political stability, protect the rights of women and girls and prevent Afghanistan from becoming a hotbed of terrorism.
China Monthly Trade Statistics
Economists expect China’s trade growth in September to slow as major economies recover from the pandemic. The inflation rate, which is due to be announced on Thursday, could rise due to power outages and supply disruptions.
Wipro results, Infosys
Indian IT majors Infosys and Wipro are expected to post robust growth as they report second quarter results amid strong demand for their services. “Covid-19 has driven industries around the world to make changes to adapt to the home work environment with minimal disruption to their business models. It has also led companies to change their model from captivity to outsourcing, which should benefit Indian IT companies. “Brokerage and research firm ICICI Direct said in a recent memo.
Another national brokerage, Motilal Oswal, expects India’s leading IT companies to report second-quarter revenue growth of 3.9% to 6.9% quarter-on-quarter in constant currency terms.
Global Energy Outlook 2021
The International Energy Agency will release its flagship World Energy Outlook report on Wednesday, ahead of the 26th United Nations Climate Change Conference in November. The report will examine the clean energy transitions needed to keep global warming below 1.5 ° C above pre-industrial levels. As energy consumption accounts for a significant share of global greenhouse gas emissions, countries will be urged to make bold plans to reduce carbon emissions, while ensuring energy security and economic development.
Kishida dissolves Diet for October 31 elections
Japanese Prime Minister Fumio Kishida will dissolve the lower house on October 14 and call a general election, 10 days after his election as head of the country. Kishida and the ruling Liberal Democratic Party seek to capitalize on the increased public support prompted by the change in leadership of the LDP.
Fast retail, Muji profits
Fast Retailing, owner of Uniqlo, and Ryohin Keikaku, operator of Muji, will report their annual results for the fiscal year ended in August. Fast Retailing expects annual net profit to increase 83% to 165 billion yen, while Muji estimates its annual net profit will be 34.8 billion yen. As the world recovers from the pandemic, attention will focus on how the resurgence of infections in some regions has affected retailer incomes.
Taiwan Semiconductor Manufacturing Co. – the world’s largest contract chip maker and a key barometer of electronics demand thanks to its large customer base – is expected to provide industry outlook for the 2021 holiday season and a preview 2022. The chip giant will also give its take on the unprecedented global supply crisis at this earnings conference.
The event also comes as the U.S. government requires all major chip and electronics makers to disclose confidential information, including customer sales and inventory data. Washington wants to alleviate the chip shortage that has lasted for nearly a year and has affected so many industries, from PCs to automobiles. TSMC said it would not provide confidential data, especially that associated with customers. Chipmaker Still Evaluating How To Answer List Of Questions By Nov 8
Singapore GDP in Q3
Singapore will release preliminary GDP data for the July-September quarter on Thursday as the country battles a significant resurgence in COVID-19 infections. A September survey of economists compiled by the Japan Center for Economic Research and the Nikkei showed a 6.8% increase for the quarter from a year earlier. As the city-state leads the region in vaccination progress, the recent coronavirus spike and China’s slowdown are among the downside risks to its economy going forward.
Taiwan-EU Investment Forum
The European Union Investment Forum 2021 in Taiwan will take place online on Thursday. The forum, first launched in 2020, is designed to increase bilateral investment activity between the European bloc and Taiwan. The head of the European Commission’s Directorate-General for Trade, Sabine Weyand, will deliver a keynote address at the forum. The EU has launched efforts to bring more semiconductor manufacturing to land amid an unprecedented global chip shortage. TSMC said it sees Germany as a possible location for its first chip factory in Europe.
Partial reopening of Bali to international visitors
Indonesia will partially reopen the popular holiday island of Bali to some international tourists. Arrivals from countries like China, Japan and South Korea have been mentioned to be part of the program, while those arriving will need to be quarantined for eight days. Bali depends on tourism and has seen its economy decimated by the pandemic. The government hopes that a partial reopening will restore some economic activity in the so-called “Island of the Gods”.
Opening of the Canton Fair in person
The biannual Canton Fair, China’s largest and oldest trade fair, will once again welcome visitors to Guangzhou for the first time in two years. But since China’s tight restrictions on COVID will largely prevent foreigners from attending, the show will continue to offer exhibits online, keeping the format of the last three exhibits. With the country still on coronavirus alert, the fair will only last five days, a third of the normal duration.
CEATEC opening night
The annual Ceatec electronics exhibition in Japan will have an opening event on Friday. The main event will take place October 19-22. Under the slogan “Towards Society 5.0 with the New Normal”, the exhibition will showcase technologies in the fields of decarbonization, mobility, 5G and smart cities. Toshiba CEO Satoshi Tsunakawa will deliver an opening speech on Friday on the company’s efforts towards carbon neutrality and infrastructure resilience. The CEO of Norwegian software company Cognite will also deliver a speech on profitability, sustainability and digital transformation.
Philippines starts vaccinating minors
The Philippines begins immunizing children with co-morbidities aged 12 to 17, as the Southeast Asian nation expands its vaccination campaign. The country, which ranked last in the Nikkei COVID-19 recovery index in September, had fully vaccinated 22.7 million people, or 21% of the total population as of October 6.
Victoria gets her hands on Crown Resorts
A Royal Australian Commission of Inquiry is due to issue a recommendation on whether Crown Resorts is “appropriate” to continue to operate its flagship casino complex in Melbourne.
The eight-month investigation by the state of Victoria follows a similar investigation in neighboring New South Wales. This investigation concluded that the company was not fit to offer gambling at its new luxury hotel in Sydney, due to its inability to prevent money laundering in Crown Melbourne and other issues – well that it also offered the company the possibility of reforming itself.