All major APAC and most European equity indices closed higher,
while US markets were mixed. US government bonds closed higher and
benchmark European bonds closed mixed. CDX-NA closed almost flat on
the day across IG and high yield. Copper and oil closed higher, the
US dollar was flat, and gold silver and natural gas closed lower on
the day.
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Americas
- Major US equity indices closed mixed; Nasdaq +0.9%, S&P 500
+0.4%, DJIA -0.2%, and Russell 2000 -0.5%.
- 10yr US govt bonds closed -3bps/1.28% yield and 30yr bonds
-2bps.
- CDX-NAIG closed -1bp/46bps and CDX-NAHY -1bp/275bps.
- DXY US dollar index closed flat/92.65.
- Gold closed -0.4%/$1,812 per troy oz, silver -0.4%/$23.96 per
troy oz, and copper +1.0%/$4.38 per pound.
- Crude oil closed +0.7%/$69.21 per barrel and natural gas closed
-1.9%/$4.31 per mmbtu.
- Hurricane Ida has had a significant impact on US Gulf Coast
refinery runs with many New Orleans refiners shutting down prior to
the storm. In preparation for the hurricane, Phillips 66 took the
precautionary measure of halting operations at its Alliance
refinery on August 27th and Shell shut down its Norco facility on
the same day. Multiple reports have confirmed that Valero shut down
both its St Charles and Meraux refineries as the hurricane made
landfall. Marathon's Garyville refinery has also reportedly shut
down operations. In addition, PBF Energy's Chalmette and
ExxonMobil's Baton Rouge refineries were running at reduced
operating rates. (IHS Markit Energy Advisory's Roger
Diwan and Debnil
Chowdhury)
- Total capacity in Hurricane Ida's path that may have been
impacted amounts to 2.7 MMb/d, or 14% of total US refining
capacity. The refineries split between the general New Orleans and
Baton Rouge regions are facing operational complications from the
storm, with multiple closures already confirmed.
- Colonial shut its two main lines that pump gasoline and
distillate from Gulf Coast refineries to Greensboro, NC as a
precautionary move. Lines 1 and 2, from Houston to Greensboro, are
down currently but deliveries are continuing along numerous
terminals along the Colonial system.
- Hurricane impacts are expected to disrupt trade flows. Besides
the curtailment of supply to the local PADD 3 market, exports to
Latin America, Europe, and inter-PADD transfers to PADD 1 are also
at risk.

- Hurricane Ida, which struck southeastern Louisiana at noon
Sunday, could have a significant impact on multiple petrochemical
products, notably polyethylene (PE), polypropylene (PP),
polystyrene (PS), and polyvinyl chloride (PVC). After making
landfall near New Orleans with winds up to 150 mph, Ida crept
north-northeast across the state, its eye just east of the
petrochemical corridor that tracks the Mississippi River. By Monday
morning, Ida had weakened to a tropical storm centered over
southwestern Mississippi and heading northeast. Regions further
west such as Lake Charles, Louisiana, and Port Arthur, Texas,
appear to have escaped any significant impact. (IHS Markit Chemical
Advisory)
- As of Monday morning, the extent of shutdowns was unclear.
Roughly 16% of US ethylene capacity is in the path of Ida,
according to IHS Markit estimates. Shell had shut down its steam
crackers in Norco and Nova Chemicals had shut down its cracker in
Geismar, according to market sources. ExxonMobil on Sunday reported
that its Baton Rouge facilities were "adjusting operations and
shutting down some units and equipment." Dow on Sunday said it had
"safely shut down its manufacturing operations in Louisiana."
- The vinyls chain has a particularly heavy presence in the parts
of Louisiana affected by Ida, with about 4.0 MMt/y of vinyl
chloride monomer (VCM) capacity in the area, or 40% of the US
total, and 3.7 MMt/y of PVC capacity, or 43% of the US total,
according to IHS Markit. Formosa Plastics produces VCM and PVC at
Baton Rouge; Shintech produces VCM and PVC at Plaquemine, and PVC
at Addis; and Westlake Chemical produces PVC and VCM at both
Geismar and Plaquemine. Upstream chlor-alkali production in the
region represents about 32% of the US total.
- The area's styrene producers—Americas Styrenics at St.
James and Cos-Mar at Carville—together have 2.2 MMt/y of
capacity, or 44% of the US total. Total Petrochemicals' 0.6 MMt/y
of PS capacity at Carville represents 26% of US capacity.
- About 2.8 MMt/y of methanol capacity, or 32% of the US total,
is located in the region. Methanex has 2.2 MMt/y of capacity at
Geismar, while Koch has about 0.6 MMt/y at St. James.
- About 14% of US benzene capacity is in the region, with Dow
producing at Plaquemine; ExxonMobil at Baton Rouge; PBF at
Chalmette; and Phillips 66 at Belle Chasse.
- Municipal bond primary activity remains stable as participants
step away for summer vacations after last week's calendar supplied
$9.8 billion of muni paper after several large issuers stepped up
to the plate and priced new issue bonds. The Pennsylvania Turnpike
Commission led last week's primary calendar with a successful
pricing of $530 million oil franchise revenue bonds with tighter
spreads noted in the intermediate range of the scale, after 2031
maturity spreads landed +19 off the interpolated MAC. The South
Carolina Public Service Authority also took advantage of
opportunistic pricing levels, selling $430 million tax-exempt
revenue bonds with bumps of 2-9 basis points registered across the
scale. This week's calendar is slated to taper down to $6 billion
ahead of the Labor Day Holiday weekend, with 167 new issues on the
roster and noteworthy presence of New York offerings, representing
~25% of total issuance over the week. The New York Transitional
Finance Authority (Aa1/AAA/AAA) is set to lead this week's
negotiated calendar, offering $950 million future tax secured
subordinate bonds spanning 08/2023-08/2048 with the greatest par
size presented in the longer-dated maturities. New Hope Cultural
Educational Facilities of Texas will also make a debut, selling
$500 million senior living revenue bonds on Wednesday across three
series, senior managed by Hilltop Securities. This week's
competitive calendar will span 86 issues for a total of $1.64Bn,
led by the New York Transitional Finance Authority, auctioning $250
million of future tax secured taxable subordinate bonds selling on
Wednesday. (IHS Markit Global Market Group's Matthew
Gerstenfeld)
- Averaged over the last week, the count of seated diners on the
OpenTable platform was 10.4% below the comparable period in 2019,
somewhat softer than comparisons from a month or so ago. The recent
surge in new COVID-19 cases has introduced some renewed caution on
the part of diners. Meanwhile, box-office revenues last week were
43.6% below the comparable week in 2019. This is an improvement
over most prior weeks, an indication of gradual recovery in
movie-theater activity. (IHS Markit Economists Ben
Herzon and Joel
Prakken)

- The US Pending Home Sales Index (PHSI) fell 1.8% in July. The
index is down 12% this year and back to pre-pandemic levels. (IHS
Markit Economist Patrick
Newport)
- The index for the West was up from a month earlier; the indexes
for the other three regions were down.
- According to Lawrence Yun, the National Association of
Realtors' chief economist, "Homes listed for sale are still
garnering great interest, but the multiple, frenzied offers -
sometimes double-digit bids on one property - have dissipated in
most regions. Even in a somewhat calmer market, a number of
potential buyers are still choosing to waive appraisals and
inspections."
- A second forward-looking housing indicator suggests that sales
will continue to sag. The Mortgage Bankers Association (MBA)'s
Purchase Index (four-week moving average), down 22% from the start
of the year, is back to its pre-pandemic levels.
- Pivotal for sales in the upcoming months are inventories, which
remain at historic lows but have edged up in the past five months.
Strong demand for houses this year has mostly led to higher home
prices—not higher sales—because listings have not picked
up.
- The PHSI leads existing home sales by a month or two. The
latest two PHSI readings point to flat to declining sales in August
and September.
- The index of pending home sales declined in July by more than
we expected, implying fewer existing home sales and brokers'
commissions in the third quarter relative to our previous forecast.
As a result, we lowered our tracking forecast of third-quarter GDP
growth by 0.1 percentage point to 4.7%.
- An IHS Markit review of first-half 2021 light-vehicle
registrations in the United States indicates that brand loyalty has
dropped to a six-year low. Analysis of new vehicle registration
data through June indicates that the overall brand loyalty rate of
51% in the US market is the lowest since August 2015. Year on year
(y/y), IHS Markit new vehicle registration data indicate that brand
loyalty in the US fell by 1.7 percentage points (PP) to 51% in June
(versus June 2020). This follows a 2.5 PP drop y/y in May and a 2.8
PP decline in April. The aggregated three-month brand loyalty in
2021 was 51.6%, down from 54% a year ago and 54.1% two years ago.
Although consumers are changing brands, body-style loyalty remains
strong, increasing slightly - national overall body-style loyalty
rose by 1.1 percentage points in June (y/y) to 55.5%. The three
dominant body styles, including sedan, pickup, and sport utility
vehicle (SUV), all experienced loyalty improvements, with sedan up
by 2.4 percentage points, pickup up by half a percentage point, and
SUVs up by 0.3 percentage point. These three body styles accounted
for 90% of all new vehicle retail transactions in the first six
months of the year. "Households with a pickup in the garage like
the concept of a pickup, and therefore will acquire another one.
But their likelihood of staying loyal to the brand of their pickup
has diminished," said Thomas Libby, associate director of loyalty
and industry analysis at IHS Markit. The likelihood of a household
with a pickup in the garage acquiring another pickup has risen
slightly to 50.8%, but the household's loyalty to brand has dropped
by 3 PP to 53.3% in the past year. This decline in loyalty is
inevitably due, at least in part, to the major declines in dealer
inventory stemming from the global microchip shortage. (IHS Markit
AutoIntelligence's Stephanie
Brinley)
- Rivian has issued a statement announcing that the company has
confidentially submitted a draft registration proposing public
trading of its common stock with the US Securities and Exchange
Commission (SEC). Rivian says that the size and price range for the
proposed offering have not yet been determined. Timing for an
initial public offering (IPO) is not clear, only that the "offering
is expected to take place after the SEC completes its review
process, subject to market and other conditions". Rivian's press
statement was issued in accordance with SEC rules, which are based
on ensuring transparency in the operations and finances of publicly
traded companies. According to media company Bloomberg, Rivian is
seeking a valuation of around USD80 billion. Bloomberg cites people
familiar with the matter as sources; this information is not
included in Rivian's press statement. Also citing the same sources,
Bloomberg reports that Rivian would like the IPO to take place
around 25 November, coinciding with the US Thanksgiving holiday,
but also notes that the actual timing is dependent on SEC review
and approval. (IHS Markit AutoIntelligence's Stephanie
Brinley)
- The body's ability to fight off foodborne illness increases
during the day and subsides at night when exposure is less likely,
according to a study conducted by a team of scientists at the
University of Texas Southwestern Medical Center. (IHS Markit Food
and Agricultural Policy's Margarita Raycheva)
- Findings of the study, which were published late last month in
the science journal Cell , indicate that the body's natural
defenses against foodborne infections peak at certain times,
suggesting researchers in the future might be able to develop timed
therapies or vaccination regimens to maximize this immune
response.
- "This study shows that our immune systems are not turned on all
the time, which is an unexpected result," says study leader John
Brooks, a postdoctoral fellow at UTSW, who worked on the study with
Lora Hooper, a professor of immunology and microbiology.
- As part of their research, the UTSW team was able to show that
in mice the resistance to Salmonella Typhimurium varied according
to the mice's circadian cycle and that mice were more successful in
fighting off the pathogen at night when they were more active.
- The study results confirm past research suggesting that
circadian cycles in animals are linked to health consequences. For
instance, research has linked chronic sleep disruption to increased
intestinal infection in humans. Circadian cycles play a key role in
helping the body anticipate and prepare for changes in the
environment, but it has been unclear how and why this occurs.
- The award for the first domestically produced offshore wind
farm substation has gone to Kietwit Offshore Services. Wind farm
developer Orsted expects the design and fabrication of the South
Fork project substation to kick off in November 2021, with
completion by the spring of 2023. The substation is estimated to
weigh 1,500 metric tons, and measure 18 meters tall. The substation
will be built in Kiewit's Ingleside facility in Texas, and loaded
out for installation in the summer of 2023. This is contingent on
the project receiving its Bureau of Ocean Energy Management (BOEM)
record of decision, which is expected in October 2021. Orsted
expects the project to be fully permitted in early 2022 and
construction activities to commence immediately thereafter. (IHS
Markit Upstream Costs and Technology's Melvin Leong)
- Canada registered a current-account surplus of $3.6 billion in
the second quarter of 2021. The current-account surplus in the
first quarter was revised up from $1.2 billion to $1.8 billion.
(IHS Markit Economist Evan Andrade)
- After a huge swing to surplus in the first quarter, the goods
account surplus widened $484 million to $1.7 billion. The services
account surplus narrowed to $136 million, with small contributions
from all service sub-accounts.
- The primary income account surplus widened to $3.0 billion. In
addition, the initial $53 million deficit in the first quarter was
revised to a $1.3 billion surplus. The secondary income account
deficit changed little, registering $1.2 billion.
- We expect Canada's current account to remain close to
balance—relative to recent history—through the second half
of the year, as both domestic and US demand should remain strong.
Export competitiveness concerns have abated, with the Canadian
dollar depreciating through June and July.
- Total goods exports advanced 0.6% quarter on quarter (q/q),
resulting in a full year of growth. Higher prices helped export
gains of 15.1% q/q in forestry products and building materials and
5.6% q/q in energy products. Goods imports also saw a fourth
consecutive rise, edging up 0.3% q/q. This was aided by a 14.3% q/q
jump in chemical, plastic, and rubber product imports and an 11.0%
increase in metal ores and non-metallic mineral product
imports.

- IHS Markit has analyzed the main banking-sector indicators for
June 2021 of Argentina, Bolivia, Chile, Colombia, Ecuador,
Paraguay, and Uruguay. Our key findings indicate that credit is
still growing in most countries and that profitability has
continued to decline. Meanwhile, non-performing loans (NPLs) are
increasing slowly. All averaged figures presented here are
calculated by simple (non-weighted) averages. (IHS Markit Banking
Risk's
Alejandro Duran-Carrete)
- Credit has grown at a low pace for most of the region. Except
for countries with high inflationary environment, such as
Argentina, Paraguay, and Uruguay, credit grew at very limited
levels. The average growth stayed at 6.3% year over year (y/y),
well below the 11.6% y/y displayed at the end of 2019, primarily
caused by depressed credit demand following the economic decline in
2020.
- NPLs are slowly rising in most of the countries where
forbearance measures are ending. The average NPL ratio of the
region moved from 3.1% in the end of 2019 to 3.3% in June 2021. A
significant part of this stems from Argentina, which is beginning
to return to the pre-pandemic levels of impairment, particularly in
the household segment. Countries such as Chile are benefitting from
the release of pension funds, which are used to pay outstanding
debts.
- All the sectors remain very well-capitalized. With an average
capital adequacy ratio (CAR) of 19.1% and an average tier-1 capital
ratio of 16.5%, the sectors' capitalization in June 2021 remains
robust.
- Liquidity has improved and is likely to return to normal in
2022. Thanks to contained levels of credit growth and a large
increase in deposits, the sectors' liquidity metrics have grown
sharply. Revealing this, the region's average loan-to-deposit ratio
(LDR) went from 89.0% to 78.4%.

Europe/Middle East/Africa
- Most major European equity indices closed higher except for
Spain -0.6%; Germany +0.2%, France +0.1%, and Italy +0.1%.
- 10yr European govt bonds closed mixed; France/Spain -1bp and
Italy/Germany flat.
- Brent crude closed +0.7%/$72.23 per barrel.
- Reports of EU food imports containing unauthorized pesticide
residues soared last year after the bloc introduced stricter rules
around the use of agrochemicals. According to the European
Commission's latest Rapid Alert System for Food and Feed (RASFF)
report, these pesticide residues became the second most hazardous
products flagged by national authorities. The report explains that
this was because EU authorizations for "several much-used
pesticides were not renewed following a precautionary approach" -
stemming from plans to prevent any "adverse effects" to public
health, the environment and biodiversity. The Commission added that
the most reported active substance in 2020 was ethylene oxide (347
notifications), followed by chlorpyrifos (48 notifications),
pyridaben (43 notifications) and chlorpyrifos-methyl (41
notifications). In total, there were 667 related notifications made
to the RASFF system, which represented a 164% increase compared to
2019. A key factor to this was a major food contamination incident
in September when Belgium reported high levels of ethylene oxide in
sesame seeds from India that surpassed the 'Maximum Residue Limit'
(MRL) of 0.05 ppm - a situation that then went on to affect other
EU member states. (IHS Markit Food and Agricultural Policy's Steve
Gillman)
- Germany's Federal Statistical Office (FSO) has reported, based
on data from various regional states, that the country's national
consumer price index (CPI) was flat month on month (m/m) in August.
This matches the average for this month in recent years. As base
effects linked to the temporary VAT cut in mid-2020 are still
having a boosting influence, annual inflation increased from July's
3.8% to 3.9% year on year (y/y). (IHS Markit Economist Timo
Klein)
- The EU-harmonized CPI measure increased by 0.1% m/m, its y/y
rate thus rising from 3.1% to 3.4% y/y. The current differential
between the national and the harmonized measure in y/y terms is
linked to the latter using weights derived from the
consumer-spending pattern of 2020 rather than 2015. This heavily
underweights package tour prices, which regularly spike to much
higher levels in July-August than during the rest of the year
because of summer holiday travel.
- The detailed breakdown of the German national data will only be
published with the final numbers on 10 September, but components
are available, for instance, from the largest and most populous
state of North Rhine-Westphalia (NRW). CPI in this state posted
0.1% m/m and 4.2% y/y, the latter rising from 4.1% in July.
- In NRW, energy prices were broadly flat at 0.2% m/m in August,
which also leaves their annual rate roughly steady at 12.6%. Food
prices hardly moved either (-0.1% m/m), keeping their y/y rate at
an elevated level of 4.4%. In contrast, the ongoing loosening of
restrictions with respect to holiday travel and
recreation/entertainment meant that prices fell by less during the
month than they usually do, raising the annual rate for package
tours from -0.5% to 1.5% and for the overall category of
recreation/entertainment/culture from 2.4% to 3.4%.
- Renault Group's Mobilize business has unveiled the Limo, a new
battery electric vehicle (BEV) sedan designed to be used by ride
hailing services as a taxi and private hire vehicle. According to a
statement, the four-door vehicle has been developed in conjunction
with Renault Group's Chinese partner Jiangling Motors Group (JMCG).
It is said to measure 4.67m long with a 2.75m wheelbase; 1.83m
wide; and 1.47m tall, with a design that has a short bonnet and
plunging roofline. Other exterior features include flush door
handles that unfold when unlocked, and 17-inch wheels. The interior
has an easy to clean satin finish, leather-effect upholstery, while
the dashboard benefits from a 10.25-inch instrument panel and
12.3-inch central infotainment touchscreen. It also offers
passengers in the rear seats 288mm of legroom, with enough space
for three people, two USB ports and volume control knobs,
adjustable air vents and booklights. The car has a 411-litre boot.
The electric motor develops 110kW and 220Nm of torque giving it the
ability to accelerate to 100km/h in 9.6 seconds and a top speed of
140km/h. This is combined with 60kWh lithium-ion battery that is
said to offer around 450km of range under WLTP. It is also said to
be capable of being charged to offer 250km of range within 40
minutes using a fast charger. (IHS Markit AutoIntelligence's Ian
Fletcher)
- The latest, preliminary national accounts data from Statistics
Sweden (SCB) show that the Nordic economy in the second quarter of
2021 expanded by 0.9% quarter on quarter (q/q), adjusted for
seasonal variation, growth thus marginally accelerating from the
first quarter. Meanwhile, annual growth improved significantly,
with a calendar-adjusted gain of 9.7% year on year (y/y), following
modest contraction in the first quarter. (IHS Markit Economist Venla
Sipilä)
- Household final consumption rose by 1.0% q/q in April to June,
contributing 0.4 percentage point to growth from the first quarter.
Household final consumption increased by 9.0% y/y, in what was the
first annual expansion since the fourth quarter of 2019. Tourism
incomes and recreation and culture services contributed
particularly to the strong growth.
- Growth of 0.8% q/q in government spending, driven by increased
consumption by local and regional governments, contributed 0.2
percentage point to overall GDP.
- Gross fixed investment recovered to show growth of 3.8% q/q,
which marked a GDP contribution of 0.9 percentage point, and more
than 10% y/y. Machinery investment provided the greatest positive
contribution. Meanwhile, inventories, which had been the leading
GDP driver in the first quarter, now only contributed 0.1
percentage point to GDP.
- Meanwhile, exports returned to q/q contraction for the first
time since the second quarter of 2020, falling by 1.1% q/q in
seasonally adjusted terms, while import growth moderated to 0.7%
q/q. These developments left the negative GDP growth contribution
from net exports at 0.8 percentage point.
- In a related data release, the SCB reported that the
unemployment rate in July was 8.0%, or 9.0% adjusted for seasonal
variation. In July, there were a total of 5,257,000 employed
people, which brought the employment rate (the share of the
employed of those aged 15-74 years) to 70.1%. Seasonally adjusted
figures produced an employment rate of 67.6%. The seasonally
adjusted and smoothed data suggest an increase in employment and in
the employment rate compared with preceding months, although annual
comparisons are not feasible because Sweden introduced the Labour
Force Survey methodology, compliant with the new EU regulations,
only from the beginning of the year.
- The Kyrgyz government's expropriation in May of the operating
contract of the Kumtor gold mine has prompted IHS Markit to revise
its outlook for short-term and medium-term sovereign risks to
Negative. As the country engages in contentious arbitration with
the mine's Canadian operating company, risks of further
expropriation will rise, jeopardizing future capital inflows. A
loss of capital inflow could trigger a deterioration in the
country's external repayment risks, potentially lowering the
overall risk scores in the second half of 2021. (IHS Markit
Economist Andrew
Birch)
- IHS Markit is revising the short- and medium-term outlooks on
its Kyrgyzstan sovereign risk ratings from Stable to Negative. The
expropriation of the operating contract for the Kumtor gold mine in
May by the government was the primary trigger for the move.
- In May, the government approved a law that allowed for the
nationalization of any company operating under a concession
agreement if the company violates certain standards. Canada's
Centerra Gold, which operates the Kumtor gold mine through a
subsidiary, is the only company operating in the country under such
an agreement. The government then seized operations of the gold
mine in May.
- At the beginning of July, Kyrgyzstan's government announced
that it was in the process of voiding all contracts related to the
Kumtor mine. Centerra has filed for arbitration hearings for unjust
contract termination.
- Upon the election of the government at the beginning of the
year, the potential for nationalization of the gold mine was high
given the nationalistic background of the new Kyrgyz government.
The May-July actions have fulfilled these fears.
- The interim results of South Africa's three largest banks -
Standard Bank, Absa, and Nedbank - show an improvement in the
pre-tax return on assets (ROA) in June 2021 (Standard Bank 0.9%,
Absa 1.6%, and Nedbank 1.0%) compared with June 2020 (Standard Bank
0.1%, Absa 0.2%, and Nedbank 0.3%). However, only Absa had
surpassed the pre-pandemic 2019 levels. (IHS Markit Banking Risk's
Ronel Oberholzer)
- Nedbank mentioned in its report that it expects to exceed these
levels only by 2023. All three banks' capital adequacy ratios (CAR)
improved significantly between June 2020 and June 2021, albeit
slightly below the sector's average of 16.9% in March 2021.
- Only Absa surpassed the level at 17.7%. The banks attribute the
better CARs to improved organic earnings growth and lower
provisioning.
- In 2020, in preparation for the possible losses attributed to
the impact of the coronavirus disease 2019 (COVID-19) virus
pandemic, Absa provisioned ZAR14.7 billion (USD1 billion), Standard
Bank ZAR11 billion, and Nedbank ZAR7.7 billion. The amounts have
declined to ZAR4.7 million, ZARR5.8 billion, and ZAR4.5 billion,
respectively.
- All three banks have expressed concern about the significant
drop in loan growth. Standard Bank and Absa recorded loan growth of
only 1.9% and 2.5%, respectively, in June 2021 compared with 10.4%
and 5.7%, respectively, in the previous year. Nedbank recorded a
contraction in loans of 7.9% compared with 3.5% growth over the
same period. Nedbank attributes this drop to clients opting to
repay existing commitments rather than acquiring new credit.
- All three banks have reported a lack of demand for corporate
loans.
- Asset quality also deteriorated or stayed unchanged during this
period. Standard bank's non-performing loans (NPL) ratio worsened
from 3.6% in June 2020 to 4.2% in June 2021. Absa's NPL stayed
almost unchanged at 5.6% from 5.7% previously. Nedbank's data are
not available for this period. However, given the marginal increase
in provisioning from December 2020 to June 2021, it is likely that
Nedbank's NPL ratio also deteriorated in the first half of
2021.
- Nigeria's real GDP fell by 0.3% quarter on quarter (q/q) during
the second quarter of 2021, from a sharp contraction of 14.1% q/q
in the previous quarter. The low base year of comparison left the
year-on-year (y/y) growth rate up by 5.4% in the second quarter,
from 0.4% y/y in the previous quarter. The Nigerian government had
introduced COVID-19-virus-related restrictions in the second
quarter of 2020 that limited domestic mobility, caused border
closures with close neighbors, and disrupted businesses. (IHS
Markit Economist Thea
Fourie)
- The official GDP produced by Nigeria's National Bureau of
Statistics (NBS) shows that crude petroleum and natural gas
production fell by 20.3% q/q and 12.5% y/y, respectively, during
the second quarter of 2021, while non-oil related GDP rose by 1.7%
q/q and 7.1% y/y, respectively
- Non-oil sectors that showed the biggest year-on-year growth
during the second quarter included the transport sector (up 76.8%
y/y), with both road and rail showing a strong recovery, followed
by electricity and water supply (up 56.9% y/y). Wholesale and
retail trade recovered by 22.4% y/y, followed by other non-oil
related mining activity (up 9.7% y/y). Mining of coal and metals
ores reported strong growth during the second quarter.
Asia-Pacific
- All major APAC equity markets closed higher; India +1.4%, Japan
+0.5%, Hong Kong +0.5%, South Korea +0.3%, Australia +0.2%, and
Mainland China +0.2%.
- Zeekr, the battery electric vehicle (BEV) brand owned by
Zhejiang Geely Holding Group and Geely Automobile Holdings Ltd, has
announced that it has agreed USD500 million of pre-A funding from
several strategic investors. According to a statement, Intel
Capital, Intel's investment arm, will be the lead investor in this
funding round. It will be joined by battery-maker CATL; online
entertainment and content distributor Bilibili; Cathay Fortune
Group, which invests, develops, and operates assets in the "new
energy sector", as well as being a leading producer of copper and
cobalt; and Boyu Capital, a Greater China-focused alternative asset
management firm. The statement added that investors are expected to
receive an aggregate shareholding equivalent to around 5.6% of the
enlarged issued share capital of Zeekr. They are also expected to
contribute their expertise in areas such as connectivity, battery
technology, raw materials, and new customer groups to supporting
the growth of the business. (IHS Markit AutoIntelligence's Ian
Fletcher)
- Baidu Apollo has officially begun the automatic driving
operation route in the Beijing Sub-Administrative Center, located
in Tongzhou District, Pandaily reported. The company has obtained
the first batch of test licenses for autonomous driving roads in
Tongzhou District and can carry out test operations on 26 roads.
The total length of the roads is more than 50 km in the region. The
report added that the first batch of routes will cover the
surrounding areas of the administration area, with a total of 22
stations. The distance between each station is 600 m. (IHS Markit
Automotive Mobility's Isha Sharma)
- Japan's retail sales rose by 1.1% month on month (m/m) and 2.5%
year on year (y/y) in July following a 3.1% m/m rise in the
previous month. Although states of emergency for Tokyo and Okinawa
as well as quasi-states of emergency for six prefectures were
extended, improved consumer confidence, an extra holiday for the
opening of the Tokyo Olympics games, and progress with the vaccine
rollout supported mobility and retail trade. (IHS Markit Economist
Harumi
Taguchi)
- Although sales for the majority of retail store groupings
declined, particularly for fabrics, apparel, and accessories; and
machinery and equipment, sales of fuel and miscellaneous were major
reasons behind the increases. Increased sales of fuel partially
reflected higher petrol prices, while the weakness in sales of
autos was partially due to negative impacts from semiconductor
shortages.
- The July results were better than IHS Markit expected and were
additional evidence of resilient private consumption under states
of emergency for many prefectures. However, containment measures
under Japan's state of emergency are mild and rely on voluntary
responses to government requests, with the containment measures
themselves having only few penalties. It has been difficult to
limit mobility, particularly during the Olympic/Paralympic games
and school breaks.
- SsangYong plans to receive acquisition proposals from potential
buyers until 15 September, reports the Yonhap News Agency. Around
11 investors from home and abroad have so far submitted letters of
intent (LOIs) to take over the struggling South Korean automaker.
Major candidates include SM Group, whose businesses range from
construction to automotive parts manufacturing, and Edison Motors,
which has teamed up with a homegrown equity fund, Korea Corporate
Governance Improvement (KCGI), the report highlights. (IHS Markit
AutoIntelligence's Jamal Amir)

Posted 30 August 2021 by Ana Moreno, Director, Product Development, IHS Markit
and
Chris Fenske, Head of Capital Markets Research, Global Markets Group, S&P Global Market Intelligence
S&P Global provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.
This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.