Asian Market Update: April 5, 2012

(HK) HONG KONG MAR PURCHASING MANAGERS INDEX (PMI): 52.0 V 52.8 PRIOR

(CN) CHINA MAR HSBC SERVICES PMI: 53.3 V 53.9 PRIOR

(KR) SOUTH KOREA Q1 FDI Y/Y: 17.0% V 4.9% PRIOR

(JP) JAPAN MAR TOKYO AVERAGE OFFICE VACANCIES Y/Y: 9.0% V 9.2% PRIOR

(CO) COLOMBIA MAR CPI M/M: 0.1% V 0.3%E; Y/Y: 3.4% V 3.6%E

(JP) Japan investors bought ¥762B in foreign bonds last week v ¥348B bought in prior week

Markets Snapshot (as of 04:30GMT)

Nikkei225 -1.0%

S&P/ASX -0.4%

Kospi -0.2%

Taiwan Taiex -1.7%

Singapore Straits Times +0.1%

Shanghai Composite +1.4%

Hang Seng -1.1%

S&P Futures +0.1% at 1,394

April gold +0.6% at $1,624/oz

May Crude +0.8% at $102.29

Overview/Top Headlines

Asian markets saw more action today with all markets open for trade after a holiday heavy first half of the week (Hong Kong, Australia, India and New Zealand will be closed tomorrow). Shanghai Composite was one of the few markets to strongly stay in positive territory in its first day of trade all week. Chatter continues that there could be some sort of easing in the near term, though most expect it will come after next week's release of Q1 GDP data.

For reference the PBoC last cut the RRR in February for large banks by 25bps to 20.5%. Hong Kong fell over 1.1% after China Premier Wen voiced concerns over the monopoly of the big banks saying that they needed to be broken up. Taiwan's Taiex continued to remain under downward pressure as plans to impose a capital gains tax seem to be moving forward. A weaker bond auction in Spain (selling just over the minimum planned) and comments from PM Rajoy saying the country was facing extreme difficulties weighed on Asia as well.

Currencies were relatively subdued, AUD and NZD both had a day of gains after declining for the last two days. EUR/USD was up slightly to $1.3159 heading into the European open. USD/JPY declined to ¥82.12 and EUR/JPY tested ¥108.03. Some additional text continues to come out of China Premier Wen's speech yesterday saying, China's domestic demand is insufficient to maintain the nation's current growth rate. Small and medium-sized firms need more help to tackle rising costs of fuel and other inputs.

Speakers/Geopolitical/In the press

(JP) Japan Diet expected to approve initial FY12 budget of ¥90.3T. - Japanese Press

(AU) Business Council of Australia President Shepherd: Gillard government should not pursue a budget surplus "at any cost." - The Australian

(JP) Japan Fin Min Azumi: There are probably differences between Japan and US over forex policy; US views will not affect Japan policy.

Equities

Hon Hai, 2317.TW: Will raise Taiwan wages "significantly" from July.

TM: Reports March China sales +2.2% y/y to 211.5K vehicles; YTD +1.8% y/y.

BHP: Unions to stage new stoppages at BHP-Mitsubishi mines on April 12th. - Financial Press

China Unicom, 762.HK: May buyback 10% of shares outstanding before its next annual general meeting in 2012.

Showa Denko, 4004.JP: To supply hard disks to HDD maker Seagate starting this summer. - Nikkei News

ASX.AU: Reports March Total Capital Raised A$4.36B v A$3.75B y/y.

Industrial and Commercial Bank of China, 1398.HK: In talks about acquiring a stake in Korea Savings Bank. - Korean Press

US Equities

BBBY: Reports Q4 $1.48 v $1.33e, R$2.73B v $2.7Be; Guides Q1 Rev +4-6% y/y (implies R$2.2-2.24B v $2.2Be) - conf call; +5.5% after hours.

JPM: CEO Dimon letter to shareholders: There is still hostility towards the banking industry; we have stepped up not retrenched; -0.1% after hours.

APP: Reports Prelim March Rev $49M, +15% y/y; SSS +21% y/y; Prelim Q1 Rev $132.7M, +14% y/y; SSS +15% y/y; +26.3% after hours.

RT: Reports Q3 $0.18 (ex-items) v $0.16e, R$325M v $339Me; -12.1% after hours.