SK Hynix IPO oversubscribed; Tencent reduces stake in Kuaishou
SK hynix's U.S. IPO is reportedly oversubscribed. Hedge funds' bearishness on the yen has reached its highest level since 2007. Trump expects Xi Jinping to visit the U.S. around September 24. Tencent reduced its stake in Kuaishou's Hong Kong shares and is no longer a major shareholder.
Overnight Highlights
– Boosted by strong Q2 profit expectations, the three major U.S. stock indices collectively closed higher, with the Nasdaq up over 1%. Last week's weak non-farm payroll data continued to dampen rate hike expectations, leading to a significant decline in U.S. Treasury yields across all maturities. Despite cooling rate hike bets, the U.S. dollar index temporarily stabilized during the day, supported by a sharp weakening of the yen. Although Saudi Aramco's significant price cut initially exacerbated concerns about oversupply, international oil prices resisted the downward trend and both closed slightly higher. Under the dual pressure of a stable dollar and some profit-taking, both spot and futures gold came under pressure, falling from recent highs.
International News
– Data from the Institute for Supply Management (ISM) shows that the U.S. services sector's expansion slowed in June, but as cost pressures eased, corporate hiring activity accelerated.
– Federal Reserve Governor Waller defended forward guidance, stating that if used properly, it can still play a positive role and should not be applied rigidly.
– South Korean memory chip giant SK hynix launched its U.S. listing roadshow on Monday, potentially becoming one of the top three largest IPOs in global history. The offering is reportedly oversubscribed and is expected to start trading on July 10.
– Data from the U.S. Commodity Futures Trading Commission shows that as of June 30, hedge funds' bearish sentiment on the yen reached its most severe level since 2007, while traders' bullish bets on the dollar hit a more than decade-high.
– Saudi Aramco cut the price of its main crude oil for Asia by the largest margin since at least 2000.
– News that NVIDIA's (NVDA.US) next-generation AI server architecture might be delayed dragged down Asian printed circuit board supply chain stocks on Monday. NVIDIA responded that its roadmap has not changed.
– Broadcom (AVGO.US) will provide Apple (AAPL.US) with new custom chips, extending their partnership to 2031. This extension further solidifies Apple's strategy of signing long-term supply agreements with major chipmakers to enhance supply chain resilience.
– Microsoft's (MSFT.US) Xbox gaming business will lay off 3,200 people over the next year and divest four game development studios. Microsoft hinted that other business units will undergo similar restructuring in the future.
– Convenience store giant 7-Eleven has formally sued Nike (NKE.US) for trademark infringement, alleging that Nike's upcoming new sneaker copies its iconic three-stripe design and misleads consumers, demanding a sales ban and compensation.
Greater China News
– Trump expects Chinese President Xi Jinping to visit the U.S. around September 24.
– Hong Kong Chief Executive John Lee met with People's Bank of China Governor Pan Gongsheng. Lee stated that Hong Kong will promote more efficient circulation of RMB funds in the offshore market and actively promote the establishment of a Hong Kong Gold Central Clearing System.
– Last week, inflows into U.S.-listed emerging market stock and bond ETFs plummeted, ending a six-week streak of outflows from the China/Hong Kong market.
– Tencent (00700.HK) $TENCENT(00700.HK) sold Kuaishou shares via an off-exchange block trade, reducing its stake in the company from about 15.68% to 9.37%, and is no longer a major shareholder. The terms show Tencent sold at HK$43.25 per share, raising about $1.5 billion.
– Apple supplier Luxshare Precision reportedly plans to set its Hong Kong IPO price at the top of the guidance range, HK$63.28, aiming to raise HK$24.3 billion.
Commodities & Forex Markets
– The Bloomberg Dollar Index was largely flat, giving up early gains. The yen weakened for a second consecutive day.
– Despite Saudi Aramco's significant price cut for its main crude oil for Asia, crude oil futures still closed slightly higher against the trend. Both spot and futures gold fell, weighed down by a stable dollar and profit-taking.
Earnings & Economic Data Focus
– U.S. ADP Employment Change for week ending June 20 (in 10,000) (Previous: 3.075, Forecast: --)
– U.S. Trade Balance for May (in $100 million) (Previous: -559, Forecast: -780)
Source: Golden Horse Capital Management (Hong Kong) Limited
Author: Emily Zheng
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