rss

Apple supplier Foxconn’s electric vehicle collaboration with Chinese startup Byton has been put on hold

Japan media, Nikkei with the report, saying the Foxconn has pulled back due to Byton’s “worsening financial situation”.

  • Foxconn announced in January it had hooked up with Byton
  • plans were to bring its first EV into mass production by the Q1 2022
Nikkie reports:
  • Multiple people familiar with the matter, however, say that the project was halted after less than six months and that the Taiwanese company has since shifted its focus to other ongoing EV projects, such as a joint venture with Thai oil and gas company PTT.

Suzuki’s factory in Shizuoka, Japan, has shut down in response to a coronavirus outbreak

The motor plant halted production on Tuesday and remains offline.

  • In response to cases amongst workers at the factory
  • Suzuki says it has not decided on when to resume production, Friday likely the earliest but unclear.

Suzuki has a number of factories in Shizuoka prefecture. Details are a little light so I am not sure which one has closed, or perhaps more than one?

suzuki

Fitch on Evergrande – say a credit event could result in headwinds ….

Chinese property firm Evergrande has been all over the financial news in past weeks as its bonds were trashed.

The concern is, of course, contagion.

Fitch has weighed in, saying that Fitch a “credit event” for the firm would have a broader effect:
  • a default would reinforce credit polarisation among homebuilders
  • could result in headwinds for some smaller banks
Let’s see how this pans out … I’d suggest Chinese authorities would be quick to step in and proper up anything that needs propping up. The death of China has been greatly exaggerated many times.
My 2 cents (it was a dollar, but yeah, Evergrande and all that 😉  )

Head of the US SEC wants faster delisting for Chinese firms not compliant with disclosure rules

Gary Gensler is chair of the US Securities and Exchange Commission. He appeared before a Senate Banking, Housing and Urban Affairs Committee hearing on Tuesday.

Said he wants Chinese firms to comply with American auditing rules
  • And that the SEC supports ed legislation that would allow for faster delisting of those that do not.
More:
  • the SEC has “had discussions directly with the Chinese authorities” about the potential speeding up of delisting
  • “the clock is ticking”
Gensler’s testimony is in relation to the Accelerating Holding Foreign Companies Accountable Act. The bill is not yet law (the US Senate passed the bill in June but the House of Representatives has yet to vote on it). If it passes it would reduce the amount of time US-traded Chinese companies have to hand over their audits to US regulators to 2 years from 3 before they can be delisted from American exchanges.
Info via South China Morning Post  (may be gated)
Gary Gensler is chair of the US Securities and Exchange Commission. He appeared before a Senate Banking, Housing and Urban Affairs Committee hearing on Tuesday.

Semiconductor chips – Taiwan’s TSMC announced price rises last month

Taiwan Semiconductor Manufacturing Co announced price hikes last month, post is here ICYMI:

  • TSMC to increase prices of most advanced chips by roughly 10%; less advanced chips will cost about 20% more
Financial media outlets are now reporting prices will rise …. So, yeah, just note this has been around for a few weeks now. Prices have been rising anyway given shortages (lower supply).
Taiwan Semiconductor Manufacturing Co announced price hikes last month, post is here ICYMI:

Chile sees slowing Chinese demand for copper, projects price falling in 2022

Commission Chilena del Cobre (Cochilco) acts as an advisor to the Chilean government through the Ministry of mining, focused on copper and its by-products.

(That’s an ‘in a nutshell’ description.)
Cochilco average copper price forecast
  • for 2021 US$4.20/lb (was US$4.30/lb previously, this projection made 3 months ago)
  • for 2022 unchanged at US$3.95/lb
Cites:
slower growth in the Chinese economy
and therefore copper import falls
China’s policy to sell copper reserves
US Federal reserve to taper stimulus
On the other hand:
  • expectations of economic recovery
  • low inventories
  • limited supply
  • labour disputes
Cochilco predicts a supply deficit for 2021 and a surplus for 2022
  • global copper demand will rise this year and next

US major stock indices close lower. NASDAQ down for the fifth consecutive day

All 11 sectors of the S&P are lower.

The majors stock indices are all closing lower with the Dow industrial average the worst performer.

  • The S&P and Dow have been down for five the last six trading days
  • The NASDAQ index has fallen five straight days
  • All 11 sectors of the S&P index are lower today
  • US yields are sharply lower leading to the decline in the financials.  The tenure yield is down -4.5 basis points. The 30 year yield is down -5.1 basis point.
All 11 sectors of the S&P are lower.

  • The Russell 2000 was the worst performer with a decline of over -1.4%
the final numbers are showing:
  • Dow industrial average fell -291.07 points or -0.83% at 34578.56
  • S&P index fell -25.5 points or -0.57% at 4443.23
  • NASDAQ index fell -67.82 points or -0.45% at 15037.76
  • Russell 2000 felt -30.83 points or -1.38% at 2209.95
Looking at the sectors of the S&P index (all declined), the worst performers included:
  • Energy -1.54%
  • Financials, -1.41%
  • Industrials -1.23%
  • Materials -1.16%
The best performers in a losing effort were:
  • Healthcare -0.11%.
  • Technology, -0.14%.
  • Discretionary, -0.33%.
  • Real estate, -0.34%.