European equity markets closed higher across the region, while
US and APAC markets closed mixed. Benchmark European government
bonds were higher across the region, while US bonds were slightly
lower. iTraxx indices closed tighter across IG and high yield,
while a late-day sell-off in the US resulted in CDX-NAIG closing
flat and CDX-NAHY slightly wider after being tighter for most of
the day. The US dollar, Brent crude, and gold closed lower on the
day, while silver and WTI closed higher.
Americas
- US equity markets closed mixed; DJIA +0.4%, S&P 500 flat,
Russell 2000 -0.3%, and Nasdaq -0.4%. The S&P 500 closed +0.2%
on the week and 1.8% below Monday's intraday high for the
week.
- 10yr US govt bonds closed +1bp/0.75% yield and 30yr bonds
+1bp/1.53% yield.
- The U.S. budget shortfall ballooned to more than $3.1 trillion
in the government's fiscal year ended in September, Treasury
Department data showed Friday. The deficit as a share of the
economy surged to 16%, the largest since 1945, based on
second-quarter gross domestic product. At the end of the financial
crisis in 2009, the ratio was close to 10% before slowly narrowing
through 2015. (Bloomberg)
- CDX-NAIG closed flat/57bps and CDX-NAHY closed +2bps/374bps,
which is +3bps and +5bps week-over-week, respectively.

- DXY US dollar index closed -0.1%/93.72.
- Gold closed -0.1%/$1,906 per ounce and silver +0.8%/$24.41 per
ounce.
- Crude oil closed +0.4%/$41.12 per barrel.
- US total retail trade and food services sales increased 1.9% in
September; core retail sales were stronger than expected, resulting
in a 0.9 percentage point upward revision to our third- and
fourth-quarter estimates of real personal consumption expenditures
(PCE) growth. (IHS Markit Economists James Bohnaker and David
Deull)
- Motor vehicle and parts dealers enjoyed another solid month as
sales increased 3.6% in September to 10.9% growth on a 12-month
basis. Strong demand for home improvement and socially distanced
recreation has not wavered—sales at building materials and
sporting goods retailers were 19.1% and 14.4% higher on a 12-month
basis, respectively.
- Clothing and clothing accessory stores (up 11.0%) and
department stores (up 9.7%) had a positive month, likely due to
last-minute back-to-school shopping. Electronics and appliance
stores (down 1.6%) sales backtracked in September despite increased
remote learning this school season.
- Restaurant and bar sales continued to see gradual improvement
with a 2.1% increase in September, yet remained down 14.4% from 12
months earlier. Food services sales may stall as outdoor dining
becomes unmanageable in parts of the country with colder
temperatures moving in.
- Nonstore retail sales continued to improve as sales increased
0.5% in September and were up 23.8% on a 12-month basis. Online
sales growth could accelerate further during the holiday shopping
season.
- Retail sales again beat expectations as consumers divert more
of their spending money to retail goods while much of the service
sector is shuttered. We expect that spending on goods will begin to
unwind in the next couple quarters, acting as a drag on overall PCE
growth.
- US total industrial production (IP) declined 0.6% in September,
in contrast to expectations for a moderate increase. This report is
consistent with our view that the broad economic recovery has
essentially stalled, setting up fourth-quarter GDP for a sharp
deceleration. (IHS Markit Economists Ben Herzon and Lawrence
Nelson)
- The details from this report that feed directly into our GDP
tracking—vehicle assemblies, utilities IP, mining IP, and
computer IP—were, on balance, above our assumptions, implying a
small (0.1 percentage point) upward revision to our estimate of
third-quarter GDP growth. A subsequent report out this morning on
retail inventories more than reversed this. We currently look for
33.0% annualized GDP growth in the third quarter followed by 4.6%
growth in the fourth quarter.
- Manufacturing IP declined 0.3% in September. The industrial
detail within manufacturing IP was mixed. Of note was a 4.0%
decline in IP of motor vehicles and parts. Excluding this industry,
manufacturing IP was flat.
- Mining IP rose 1.7% in September, but remained well below the
pre-pandemic trend.
- Utilities IP dropped 5.6% in September, as unseasonably mild
temperatures led to a larger-than-normal decline in the demand for
air conditioning.
- As of September, total IP had reversed 57% of the spring
contraction, but IP has made no progress since July. The momentum
for IP heading into the fourth quarter is weak.
- The US University of Michigan Consumer Sentiment Index rose 0.8
point (1.0%) to 81.2 in the preliminary October reading, a marginal
improvement from September and the highest since March. The reading
is consistent with our expectation for slowing growth in consumer
spending in the fourth quarter. (IHS Markit Economists David Deull
and James Bohnaker)
- The Consumer Sentiment Index was 9.4 points above the April
trough, but, at 19.8 points beneath its February level, it
continued to signal a much more pessimistic outlook in the COVID-19
era. It is comparable to levels seen in 2014, partway through the
recovery from the Great Recession.
- The October increase was driven by improving expectations; the
index measuring consumer expectations increased 3.2 points to 78.8.
In contrast, the index of views on current conditions fell 2.9
points to 84.9.
- Consumer sentiment rose 1.8 point to 79.0 among households
earning less than $75,000 a year but slipped 0.8 point to 82.8
among households with earnings above that threshold.
- Buying conditions were mixed in October. The index of buying
conditions for large household durable goods fell by 7 points to
107, and the index for vehicles fell 12 points to 115, a notable
downswing to the lowest level since 2011. In contrast, the index of
buying conditions for homes increased 10 points to 142, an
eight-month high.
- The expected one-year inflation rate edged up 0.1 percentage
point to 2.7%, while expected five-year inflation swung down 0.3
percentage point to 2.4%, the lowest since March.
- Movement in the Consumer Sentiment index since its plunge in
March and April has been minimal relative to that drop, indicating
that in spite of lapsing fiscal support to businesses and
households on the one hand, and improvement in equity markets on
the other, consumers' views on the economy are not easily
changed—a condition likely to persist until the pandemic is
overcome.
- PQ Group announced plans to sell microspheres unit to private
equity, explore options for sodium silicates. The performance
materials business generated $363.0 million in revenue and $76.7
million in adjusted EBITDA during 2019. The company has also
announced plans to explore a possible sale of its sodium silicate
and silicate derivatives unit, called performance chemicals. That
unit, PQ's largest reporting segment, generated $685.1 million in
revenue and $154.3 million in adjusted EBITDA in 2019. It operates
in diversified end markets, including food and beverage, coatings,
and personal care. The plans are both part of a strategy to focus
PQ on its catalysts and refining services businesses, which are
"well positioned to use its technology and service offerings to
help customers drive sustainability by more efficiently producing
the lightweight polymers and clean fuels that are expected be in
high demand going forward," says PQ Group CEO Belgacem Chariag. The
performance chemicals and performance materials segments account
for over 60% of PQ Group's annual revenues. The performance
materials sale is expected to close by the end of this year.
Proceeds from the sale will go toward reducing debt and funding a
special dividend of up to $1.84/share. Goldman Sachs and Harris
Williams are acting as financial advisors to PQ, while Ropes &
Gray is acting as legal advisor. Kirkland & Ellis is acting as
legal advisor to The Jordan Company. No timetable has been given
for the potential sale of the performance chemicals segment. (IHS
Markit Chemical Advisory's Vincent Valk)
- Distributor Barentz announced intentions to acquire Maroon
Group. Terms of the transaction, including purchase price, were not
disclosed. Barentz is backed by private equity firm Cinven (London,
UK), while Maroon Group has been owned by CI Capital Partners (New
York, New York), another private equity firm. The deal is expected
to close later this year. Maroon Group, which is active in the
personal care, cleaning, pharma, food ingredient, and CASE
(coatings, adhesives, sealants, and elastomers) markets,
significantly increases Barentz's presence in North America. The
company has about $500 million/year in revenue and around 300
employees. "Our product portfolios are very complementary," says
Hidde van der Wal, CEO of Barentz. "We have no conflicts of
interest and we can learn a lot from each other. Maroon Group has
significant scale in North America—the biggest economy of the
world, where we were small, until today." Barentz's global presence
was "the deciding factor" in the deal, according to Maroon Group
CEO Terry Hill. "This creates tremendous opportunities to
strengthen our business in North America and internationally," he
adds. Hill and Maroon Group's existing management team will
continue to run the business under Barentz. CI Capital Partners
acquired Maroon Group in 2014. The company has completed 11
acquisitions under CI's ownership, increasing revenues by 450% and
adding new end markets, according to CI. Maroon Group has around
5,700 customers in the US and Canada. (IHS Markit Chemical
Advisory's Vincent Valk)
- In a Medium.com blog post, CEO of Cruise Automation, Dan Ammann
announced that Cruise, which is owned by General Motors (GM), will
put its autonomous vehicles (AVs) on the streets of San Francisco
without a backup driver by the end of 2020. Ammann wrote, "Before
the end of the year, we'll be sending cars out onto the streets of
SF [San Francisco] — without gasoline and without anyone at the
wheel. Because safely removing the driver is the true benchmark of
a self-driving car, and because burning fossil fuels is no way to
build the future of transportation. It will be a low key, quiet
moment. But the echo could be loud." The announcement comes as
Cruise received a permit on 15 October from the California DMV to
remove the human backup driver from the company's autonomous test
cars. "We're not the first company to receive this permit, but
we're going to be the first to put it to use on the streets of a
major US city," Ammann wrote. A spokesperson for Cruise Automation
confirmed to IHS Markit that the permit allows Cruise to test five
vehicles in the city center for ongoing testing, which is the
number that Cruise requested in its permit application, although
Cruise has not yet asked for the necessary permit to have public
passengers in the vehicle. The test vehicles are the Cruise AVs,
based on the Chevrolet Bolt electric vehicle (EV), not the concept
Cruise Origin due to start production in 2021. Although putting the
Cruise AVs on the streets of San Francisco is an important step, it
is also the next step in the company testing and proving out the
ability of the vehicles to operate safely and integrated with usual
traffic. (IHS Markit AutoIntelligence's Stephanie Brinley)
- Fisker has announced an agreement with Magna for the production
of its Ocean SUV at Magna's European assembly facility, starting in
the fourth quarter of 2022. The move is in line with Fisker's
strategy and plans to work with another company on production, and
both the backing of Magna and the selection of a production
location could increase confidence in Fisker's plans to go public.
Fisker also says that, while initial production of the Ocean will
be at Magna's facility in Europe, the company is also considering
production in the US in 2023. Fisker's market sales launch is due
in the US and Europe simultaneously. Fisker has also confirmed that
its production target at Magna's facility is 50,000 units in 2023,
with the scale of production in 2022 depending on when during the
fourth quarter it starts and how well its ramping up goes. (IHS
Markit AutoIntelligence's Stephanie Brinley)
- According to data from the Colombian National Department of
Statistics (Departamento Administrativo Nacional de Estadística:
DANE), industrial production contracted 12.2% year on year (y/y) in
August, while retail sales fell 17.1%. (IHS Markit Economist
Lindsay Jagla)
- In yearly terms, industrial production remains well below 2019
levels, with all four industrial sectors contracting y/y.
Manufacturing drove this decline in August, falling 10.3% y/y, due
primarily to contractions in food and beverages production (-5.4%
and -16.8% y/y, respectively).
- Contractions in mining and quarrying also played a role. This
sector declined 23.1% y/y in August as crude oil and natural gas
extraction fell 15.4% y/y and coal mining dropped 39.6% y/y.
- Retail sales fell 17.1% y/y, driven mainly by declines in fuel
purchases for motor vehicles as well as a decrease in purchases of
motor vehicles themselves. Four out of 19 merchandise lines grew in
yearly terms: household furniture and appliances, sound and video
equipment, cleaning supplies, and personal computer and telecoms
equipment.
- Due to the global outbreak of the COVID-19 virus and the
subsequent social isolation measures that shuttered the Colombian
economy, industrial production and retail sales hit rock bottom in
April, falling 29.4% and 42.3% y/y, respectively. Since then, both
indicators have shown signs of recovery, expanding month on month
(m/m) in May, June, and July.
Europe/Middle East/Africa
- European equity markets closed higher across the region; France
+2.0%, Italy +1.7%, Germany +1.6%, UK +1.5%, and Spain +0.5%.
- Most 10yr European govt bonds closed higher, except for UK
flat; Italy -5bps, Spain -4bps, France -2bps, and Germany
-1bp.
- The UK's credit rating was downgraded by Moody's late on Friday
evening as analysts at the agency warned of scarring to the
country's economy from the coronavirus pandemic. The rating agency
cut its grade one notch to Aa3, equivalent to a double-A minus
rating from rival S&P Global, while adding that its outlook was
"stable". Moody's said it believed growth would be "meaningfully
weaker" than it had previously believed and that the country's
economy had been struggling even before the pandemic reached
Britain. (FT)
- Italy achieved its first negative-yield term bond sale on 13
October. (IHS Markit Economist Brian Lawson)
- On 13 October it placed EUR3.75 billion of January 2024 BTPs at
-0.14%, with demand of EUR5.244 billion. It had offered
EUR3.25-3.75 billion at the maturity.
- On the same day, it also sold EUR2.25 billion of seven-year
debt, the maximum of a range of EUR1.75-2.25 billion, at 0.34%,
with EUR3.95 billion of interest, alongside EUR1.5 billion of
September 2050 debt at 1.48%.
- At the same time, Italy's 10-year bond traded to a new low of
0.63%, while Greece's 10-year yield reached 0.77%, also an all-time
low.
- Underlying this improvement is the growing cumulative stimulus
under the ECB's PEPP facility, which purchased EUR126.77 billion of
public-sector securities during August and September.
- The programs held EUR95.2 billion of Italian government debt at
end-September, with net purchases in the latest two-month period of
EUR21.8 billion.
- iTraxx-Europe closed -3bps/54bps and iTraxx-Xover
-12bps/326bps, which is +1bp and +9bps week-over-week,
respectively.

- Brent crude closed -0.5%/$42.93 per barrel.
- The European Commission has adopted an EU sustainable chemicals
strategy. The strategy includes actions that prohibit the use of
the most harmful chemicals in consumer products such as toys,
childcare articles, cosmetics, detergents, food contact materials,
and textiles, unless proven essential for society, and ensures that
all chemicals are used more safely and sustainably, the Commission
says. The strategy sets out concrete actions to make chemicals safe
and sustainable by design, and to ensure that chemicals can deliver
their benefits without harming the planet, and both current and
future generations, according to the Commission. Several innovation
and investment actions "will be foreseen to accompany the chemicals
industry through this transition," it says, although no further
details were provided. The strategy also draws the attention of EU
member states to the possibilities of the Recovery and Resilience
Facility to invest in the green and digital transition of EU
industries, including in the chemical sector, according to the
Commission. European chemical industry association Cefic has
cautiously welcomed the proposals adopted in the new strategy, but
says a sectoral Green Deal for chemicals is still needed and has
warned that an uncoordinated policy risks undermining the role the
EU's homegrown industry can play. The European Chemicals Agency
(ECHA) also welcomed the strategy, saying it looked forward to
supporting its implementation.
- The French economy declined by substantially more than the
eurozone average during the first half of 2020. French GDP fell by
12.3% year on year (y/y), well above the decline of 9.0% y/y in the
eurozone. (IHS Markit Economist Diego Iscaro)
- There are many reasons for this underperformance. In relation
to Germany, for example, the second-quarter lockdown was stricter
and, for example, tourism plays a more important role in the
economy.
- However, one of the main reasons is actually methodological,
and relates to the way the French statistical office decided to
measure the output produced by the non-healthcare public sector
during the lockdown.
- In France, there was a strict lockdown between March and May,
most schools were closed and many other public services were not
provided. Therefore, the statistical office took the view that
output in the non-healthcare public sector had collapsed during the
second quarter.
- Real public consumption was therefore estimated to have
declined by 7.2% during the first half of the year, being a
substantial drag on the economy. This contrasts with Germany, where
real government spending rose by 3.2% during the first six months
of 2020, or even Italy where it declined by just 1.0% during the
same period.
- While this helps to explain part of the underperformance of
France (and countries such as Belgium and Slovakia) during the
first half of the year, as the economy started to reopen in May we
estimate that government consumption rebounded strongly in during
the third quarter. As a result, France's GDP is likely to have
increased by substantially more than the eurozone average during
the period.
- We currently estimate French real GDP to have rebounded by
13.2% quarter on quarter (q/q) during the third quarter. The
third-quarter first estimate will be published on 30 October.
- Statistik Austria data show that consumer prices increased by
0.6% month on month (m/m) in September, about 0.1 percentage point
lower than the long-term average for the month. Headline inflation
according to the national measure thus rebounded from 1.4% year on
year (y/y) to 1.5% y/y, compared with May's interim four-year low
of 0.7%. (IHS Markit Economist Timo Klein)
- The EU-harmonised measure, which displays a different seasonal
pattern (relatively higher weights for fuel and restaurants and
hotels, and lower weights for insurance services and housing
maintenance), increased more strongly at 1.0% m/m, but this is a
seasonal phenomenon. Its annual rate actually softened from 1.4%
y/y to 1.3% y/y. Nevertheless, at 1.6 percentage points, this
represents the largest positive gap with the eurozone average
(-0.3%) ever recorded, almost three times the 0.6% average
differential during 2011-19.
- There was not any single major factor causing Austria's
inflation to remain as high, relatively speaking. That said,
clothing and footwear, food, household goods, and hotels and
restaurants were the main boosting forces for the annual rate.
Healthcare and recreation and culture exerted the most downward
pressure.
- Energy prices remained essentially flat (-0.1% m/m), which also
applies to mineral-oil products and household energy individually.
Owing to base effects, the annual decline of energy prices deepened
from -6.6% to -7.2%.
- Only 4 of the 12 main Classification of Individual Consumption
According to Purpose (COICOP) groups of goods and services posted a
softening rate, while upward pressure came from six categories
(housing and utilities and alcohol and tobacco retained the
inflation rates seen in August).
- The prices of seasonal goods increased by 1.0% m/m in
September, leading to a rise in their y/y rate from 5.1% to 6.2%.
This means that the index excluding seasonal goods, while also
posting a 0.6% m/m like the headline measure, showed a slightly
softer picture (from 1.3% y/y in August to 1.4% y/y in
September).

- ZITY, a car-sharing service by Renault and Ferrovial, has
deployed 100 vehicles with telemetry and driving assistance
solutions in Spain. This deployment is a result of ZITY's
partnership with Telefónica, Geotab, and Mobileye, reports Europa
Press. The collaboration is part of a nine-month pilot project,
called Safe Driving, the aim of which is to offer greater safety
and a better experience to users. Telefónica will analyze the areas
of opportunity for ZITY's Renault ZOE vehicles and will also
contribute in designing the final solution. Meanwhile, the trial
will involve vehicles integrated with the Geotab Go device, a fleet
management platform, and Geotab's Go Talk, a voice message
platform. The pilot will also feature Mobileye's driving assistance
system, which uses a single camera and helps in reducing accidents.
In 2017, ZITY was launched in Madrid (Spain) and currently has 800
cars deployed in the service in the city. This year, ZITY
introduced the service in Paris to replace Moov'in, which it
launched with ADA in 2018. Ridecell has been selected as the
platform provider for the service, which will enable ZITY users to
access facilities such as contactless rental, payment,
verification, and on-demand scheduling through the app. Recently,
the European Commission approved the creation of a car-sharing
alliance between Renault Group and Ferrovial to involve the
acquisition of Car Sharing Mobility Services, also known as ZITY
Hub. (IHS Markit Automotive Mobility's Surabhi Rajpal)
- Evonik Industries sales totaled €2.92 billion, down 9.6% YOY,
while adjusted EBITDA was €519 million, €24 million or 4.4% less
than in the prior-year period, but €48 million higher than the
consensus estimate of €471 million, as compiled by Vara Research.
"This result is clearly above market expectations and is therefore
pre-released today," it says. During the third quarter, an
improving month-on-month trend became apparent, which further
accelerated in September and produced the better-than-expected
results, according to Evonik. The main drivers were the specialty
additives and smart materials divisions, it says. Specialty
additive sales fell by 10% YOY to €777 million, while adjusted
EBITDA declined by 8% to €214 million, but beating consensus. Sales
of smart materials declined 5% YOY to €790 million, with adjusted
EBITDA dropping 13% to €137 million, also beating analysts'
consensus expectations. Evonik's nutrition and care business
recorded sales that were 2% lower YOY at €715 million, but with an
18% increase in adjusted EBITDA to €140 million, slightly below
consensus. Sales of its performance materials decreased 27% YOY to
€444 million, with adjusted EBITDA down 43% to €28 million, beating
consensus. The company has also provided an updated outlook for
2020, saying it now expects adjusted EBITDA to be in the range
€1.8-2.0 billion, compared with €2.15 billion in 2019. The sales
outlook remains unchanged at €11.5-13.0 billion, compared with
€13.1 billion in 2019, it says.
Asia-Pacific
- APAC equity markets closed mixed; Hong Kong +0.9%, India +0.6%,
Mainland China +0.1%, Japan -0.4%, Australia -0.5%, and South Korea
-0.8%.
- China's new aggregate financing, the widest measure of net new
financing to the real economy, increased CNY3.48 trillion in
September 2020, up CNY965.8 billion from the amount a year ago,
according to the release of the People's Bank of China (PBOC). The
stock total social financing (TSF) increased 13.5% year on year
(y/y), 0.2 percentage points up from August. (IHS Markit Economist
Yating Xu)
- Rising local government leverage remained a major contributor
to the TSF increase. Local government bond issuance reached CNY1.01
trillion in September, CNY630 billion higher than the year-ago
level, but softening from July and August. Meanwhile, new bank
loans continued to expand as a result of sustained growth
recovery.
- Corporate medium- and long-term loans increased CNY1.1
trillion, nearly doubling y/y, in line with the rise in the export
order index and domestic order index in the central bank's
third-quarter 2020 entrepreneurs survey.
- New household medium- and long-term loans maintained their
strong momentum since June, rising CNY142 billion from a year ago
in September.
- Undiscounted bankers' acceptance rose CNY1.09 trillion from a
year ago, marking the sixth consecutive month of increase. However,
other off-balance sheet loans, including entrusted loans and trust
loans, declined.
- Broad money supply (M2) growth rebounded to 10.9% y/y following
three consecutive months of decline. Acceleration in credit
expansion and increase in government spending were the two major
contributors to M2 growth. M1 maintained its upward trend as strong
housing sales and government spending supported corporates' current
deposits.
- TSF increased by CNY29.6 trillion in the first three quarters
of 2020, up CNY9 trillion y/y. New bank loans rose to CNY16.26
trillion, falling short of the annual target of CNY20
trillion.
- TSF and M2 are expected to remain strong in the fourth quarter
as relatively low financing costs and low inventory levels may
continue to help corporations and households increase their
leverage.
- Local government financing will keep growing in the fourth
quarter, albeit at a slower pace compared with in the third
quarter. The remaining CNY1.78 trillion in local government bonds
has yet to be issued in the fourth quarter, compared with the
CNY2.93 trillion worth of government bonds issued in the third
quarter.

- In the week ending 16 October 2020, China saw corn starch
purchasing price for processing surge to CNY3,000 per ton
(USD441/ton), five-year high, according to Chinese media outlet
Wenhua Caijing. The market sentiment in the consuming regions has
been influenced by the news, in which the pace of harvesting is
slower than usual as some crops had fallen due to the weather in
the northeast. Some processors are actively stocking up on corn as
the supply of high-quality grains is expected to be tight.
Meanwhile, the stock in the processing industry is relatively low,
indicating a need for replenishment. As of 14 October, total stock
of corn starch processors was 579,000 tons, a reduction of 4.3%
compared with the same period of last year. The price fluctuation
before and after the 1 October national public holiday has
triggered some panic ordering. Overall sales are dynamic. This
week, the average price of corn starch in the domestic spot market
in producing regions was CNY2,829.52/ton, an increase of
CNY72.85/ton compared with the average price before the National
Day. On the husbandry side, the number of livestocks has recovered
and pigs are growing in weight and size, so demand for feed is
growing accordingly. Additionally, demand for corn starch for
packaging material has risen. China's ecommerce big discount day is
11 November (Single's Day), equivalent to the US Black Friday. The
sales season consume substantial packaging material. (IHS Markit
Food and Agricultural Commodities' Hope Lee)
- Shares in China's leading animal health business recently
climbed to their highest ever valuation on the Shanghai Stock
Exchange. China Animal Husbandry Industry Company (CAHIC) saw it
shares peak at around CNY20.50 ($3) each last month. The firm has
been publicly listed since 1999. According to Bloomberg data,
China's stock market value has hit a record high of more than $10
trillion on the back of the country's strong economic recovery
during the COVID-19 pandemic. The data shows China's stock market
is the second largest in the world, behind that of the US ($39tn).
This current peak takes the total value of China's stock market
past its previous high in 2015 - a time when the country witnessed
an equities bubble. 2015 also marked the last time CAHIC's shares
were valued higher than CNY15 each. CAHIC has shown resilience in
the face of COVID-19 and African swine fever (ASF). In 2019, the
firm's revenues dropped 10%. This was a much smaller dip than Jinyu
Group - China's second-largest animal health company - and other
major domestic players. Other leading Chinese animal health firms
on the Shanghai Stock Exchange such as Jinyu Group and Pulike
Biological Engineering have also witnessed strong share prices
recently. Jinyu's stock valuation reached an all-time high of
around CNY31 each in August. The firm's share price has been
climbing steadily this year, despite it reporting a major impact
from ASF on it 2019 financials. In September, Pulike's valuation
eclipsed CNY30 per share for the first time since 2015. In
addition, Tianjin Ringpu Bio-Technology's shares climbed over CNY27
for the first time in the firm's 10 years as a listed entity on the
Shenzhen Stock Exchange. (IHS Markit Animal Health's Joseph
Harvey)
- CWind Taiwan announced that it has been awarded Taiwan's first
balance of plant (BOP) contract for the Formosa 1 Offshore Wind
Farm, as it moves into its operational phase. The contract will see
the continued involvement of CWind's crew transfer vessel (CTV)
Ocean Surveyor 3, that had been involved in previous crew transfer
charters and marine survey work during the construction and
maintenance phases of the wind farm. Under the contract, CWind will
also provide its in-house technicians, which include its first
batch of Taiwanese technicians to graduate from its Global Wind
Organization (GWO) training school. These graduates will work
alongside senior technicians from its European parent company. The
scope of work, to commence in September 2020, will include the
topside inspection and maintenance services to the 22 turbines in
the project, including internal and external inspections and
painting. The wind farm has a capacity of 128 MW, and was delivered
in two phases. Phase 1 consists of two 4 MW turbines, and Phase 2
consists of 20 6 MW turbines delivered by Siemens Gamesa. (IHS
Markit Upstream Costs and Technology's Melvin Leong)
- Japan is seeking to set up a commercial hydrogen fuel supply
chain by around 2030 to support the reduction of carbon emissions,
according to Reuters, citing a statement from the country's
Industry Minister Hiroshi Kajiyama. The country is trying to speed
up technological developments to scale up a transportation system
for hydrogen using ships by around 2030. Kajiyama said that his
ministry has asked for a hydrogen budget of USD800 million for
2021, up by 20% from 2020. Separately, Kawasaki Heavy Industries
plans to ship liquefied hydrogen from Australia to Japan early next
year. Japan's Ministry of Economy, Trade, and Industry (METI)
outlined plans for a "hydrogen society" vision in March 2016
associated with the Olympic Games, which were scheduled to take
place in Tokyo in 2020 but were postponed owing to the COVID-19
virus outbreak. The plan aimed to have 160 hydrogen filling
stations and 40,000 hydrogen fuel-cell vehicles (FCVs) in use by
2020. By 2030, the ministry aims to expand this 20-fold to 800,000
FCV units, with at least 320 filling stations across the country.
Japan has been aggressively pursuing improvements in its hydrogen
infrastructure to support the adoption of FCVs. (IHS Markit
AutoIntelligence's Nitin Budhiraja)
- South Korea's largest mobile carrier SK Telecom plans to spin
off its mobility business unit into a new company called T Map
Mobility, reports Reuters. The new company will receive a direct
investment of USD50 million from Uber. In addition, T Map Mobility
will form a separate ride-hailing joint venture (JV) with Uber,
which will invest USD100 million for a 51% stake. The JV will
combine the expertise of T Map Mobility's mapping technology and
Uber's ride-hailing technology and is expected to begin operations
in the first half of 2021. This gives Uber an opportunity to expand
in South Korea's ride-hailing market, which is dominated by local
player Kakao's mobility unit. Uber which currently offers premium
taxi-hailing and registered taxi-hailing services in South Korea
was earlier subjected to tough competition and opposition from taxi
drivers and regulations. (IHS Markit Automotive Mobility's Surabhi
Rajpal)
- Hyundai has signed a memorandum of understanding (MOU) with
South Korean government entities, energy companies, and other local
companies to establish Korea Hydrogen Energy Network (Kohygen), a
special-purpose company, reports The Korea Herald. The agreement is
part of the government's Green New Deal policy, which involves
joint efforts with corporations to foster hydrogen fuel-cell
mobility. Kohygen, which will officially begin operations in
February 2021, will install 10 gaseous hydrogen refueling stations
starting next year. It will also establish more than 25 liquid
hydrogen refueling stations in 2023. Along with Hyundai, Korea
District Heating Corporation and seven energy companies, including
SK Energy, GS Caltex, and S-Oil are participating in Kohygen. This
latest development is in line with the South Korean government's
wider aims to reduce greenhouse gas emissions, generate new growth
momentum for its automotive industry, and reduce its heavy reliance
on imported oil. Hydrogen fuel has a strong potential to revive
sluggish manufacturing businesses, including small and medium-sized
enterprises, which in turn will create new jobs. Last year, the
government revealed a roadmap to increase the adoption of fuel-cell
electric vehicles (FCEVs) in the country. It aims to produce 6.2
million FCEVs and build 1,200 hydrogen refilling stations across
the country by 2040. (IHS Markit AutoIntelligence's Jamal
Amir)
Posted 16 October 2020 by Chris Fenske, Head of Capital Markets Research, Global Markets Group, S&P Global Market Intelligence
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