Market Close Aug 21

Vaccine 'breakthrough' drives markets

Gold retreats as risk rally ensues on vaccine hopes; Japan data stokes recovery hopes; China says talks to go ahead with US

Vaccine breakthrough drives markets
Many pharmaceutical companies around the world are working on the hunt for a Covid-19 vaccine. More interesting news is expected in the months ahead. File photo by AFP.  

(ATF) Hong Kong: Asian markets rose after vaccine makers said they were on track for regulatory reviews in October and following a tech rally which boosted the Nasdaq to another record high.

Hopes of trade talks between the world’s two biggest economies were lifted after China’s ministry of commerce spokesman said both parties have agreed to hold a call in the near future in response to a question at a press conference in Beijing on Thursday.

Safe havens were shunned in a risk-on environment, with gold prices easing 0.85% to $1,931 per ounce but the 10-year US Treasuries recovered from the day’s lows and were trading flat at 0.64%. The US dollar also rebounded, jumping to 93.22 versus a basket of currencies.

Pfizer Inc and BioNTech said in a joint statement their coronavirus vaccine work is on track for regulatory review as early as October. They also announced a plan to supply up to 100 million doses worldwide by the end of 2020 and approximately 1.3 billion doses by the end of 2021.

“The pandemic – given the proliferation of vaccines under phase 3 trials, and the apparently good progress being made by some of these, it does not seem unreasonable to look forward to 2021 with a sense of, if not business as usual, at least, 'normal-lite' resumption, and that could also be a cause for more medium-term optimism,” said Robert Carnell, ING Bank’s regional head of research for the Asia-Pacific.

Japan’s manufacturing PMI edged up from 45.2 in July to a six-month high of 46.6.

“There was a stronger rebound in 'output', which now points to industrial production falling by around 5% y/y compared to the 25% y/y plunge in June,” said Marcel Thieliant, senior Japan economist at Capital Economics.

“There was also a rise in new orders, from 40.6 to 43.4. And the pick-up in 'quantity of purchases' to 42.2 suggests that the recent weakness in imports won’t last much longer.”

Japan’s Nikkei 225 rose 0.17%, mainland China’s CSI 300 added 0.85% and Hong Kong’s Hang Seng benchmark rose 1.3%. But Australia’s S&P ASX 200 underperformed, slipping 0.14% as banks and miners retreated.

Credit markets were firm with the Asia IG index moving in 2 basis points to 63/64. Investors await the next wave of primary market offerings after a host of bonds priced overnight. China Golden Wheel Tiandi partly repurchased bonds due in 2021 as asset liability management exercises gain traction.

Huangshan Tourism has hired banks for 5-year euro-denominated deal, and Suncorp Group has appointed banks for long-dated AUD bond offering.

Overnight, Nanjing Jiangbei priced short-dated dollar bondsChina Jianyin sold a two-tranche deal in a $900-million raisingHK Electric priced a 10-year $500-million bond issue and Nan Fung got orders of $2 billion at a 10-year dollar bond offering.

ATF China Bond 50 Index: Bonds hold steady as LPR unchanged

Also on Asia Times Financial

China focus on home market amid tectonic offshoring shift 

Huawei, ZTE removing US elements from their products 

China issues bonds in a rush to meet October deadline 

Spotlight on China's role in UK nuclear power 

Foreign Exchange:

Asia Stocks

# Japan’s Nikkei 225 index edged up 0.17%

# Australia’s S&P ASX 200 dipped 0.14% 

# Hong Kong’s Hang Seng index advanced 1.30%

# China’s CSI300 rose 0.85%

# The MSCI Asia Pacific index added 0.63%.

Stock of the day

Gaming company Sands China rose as much as 7.1% after it unveiled an upbeat assessment for the road ahead as Macau, the world’s biggest gaming centre by revenue, starts opening up to visitors.