Macro

• Happy New Year, friends, and welcome back to the Steno Signals editorials! My apologies for the silence over the past few days—I celebrated New Year’s Eve (and my 35th birthday) battling a nasty pneumonia, which has taken some time to recover from.
• Thankfully, I am finally better and wanted to share my 2025 thoughts on liquidity with you, as I find myself disagreeing quite a bit with the current semi-bearish consensus.
• We experienced an almost equally “tight” year-end as the tight quarter-end back in September.

• For the week ending 27/Dec, U.S. crude inventories fell by 1.2m barrels, missing expectations of a 2.4m barrel decrease. Gasoline and distillate stockpiles rose more than expected.
• U.S. natural gas inventories fell by 116 Bcf for the week ending 27/Dec, missing analyst expectations of a 127 Bcf drawdown. Inventories are 4.7% above the 5-year seasonal average.
• JP Morgan lowered its 12-month PT for Halliburton and Schlumberger but maintained its “Overweight” ratings. Saudi Aramco revised fuel and natural gas prices for cement production starting from 01/Jan.

• Funds / In Depth: Venture Capital in China flounders as state takes over
• Flights /Chinese airlines skirt southern Russia after Azerbaijan plane crash
• PMI /China manufacturing slows as exports decline, Caixin PMI shows

• During the period under review, i.e. October 22nd, 2024, to November 25th, 2024, the EUR/CNY pair experienced a slight but steady downward trajectory amid fluctuations.
• Initially, the pair followed an upward movement, reaching its peak at the price of 7.7654.
• However, after November 6th, 2024, the currency faced a general depreciation which persisted until the end of the period, signaling a bearish momentum. 

• ADD on NBR imports from Japan, South Korea extended to five years
• Chinese companies beef up domestic carbon black production
• ZC Rubber unveils US$259 million and Longxing US$405 million projects

• Hong Kong Alpha Portfolio returned 5.23% in December and outperformed the benchmark by 5.92%.  The portfolio has outperformed Hong Kong indexes by 10.36% to 14.38% since its inception on 10/01/24.
• About 80% of the portfolio’s excess returns have been from alpha generation.  The portfolio has no exposure to Real Estate, Healthcare, Materials, or Energy at this time.
• At month end, we sold ZhongAn Online P&C Insurance C (6060 HK) , China Longyuan Power (916 HK) , CRRC Corp Ltd H (1766 HK), and Weibo (9898 HK) .

• Trump’s pro-oil stance is expected to weigh on prices by boosting U.S. output in an oversupplied market. Like in his first term, he aims to expand drilling in federal lands.
• During Trump’s first term, federal land leases averaged 1.62 million acres annually, a stark contrast to Biden’s 138,000 acres, implying a dramatic 91% decline.
• Rising U.S. oil production has reduced OPEC+ share to 48% from 55% in 2016. OPEC+ fears further U.S. output growth under Trump could weaken its ability to sustain prices.

• Private credit is transforming the world of debt, creating concerns for investors and the broader economy
• Chicken wing prices are volatile due to the poultry industry focusing on breast meat demand, making wings a fall-off product
• Companies like Elf Bar evade FDA regulation by flooding the market with products and rebranding under different names

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Nickel market focusing on developments in Indonesia, China, and US policies
• Impact of policy changes on nickel demand in the battery sector
• Potential diversification in ownership of Indonesian nickel projects due to concerns over Chinese stakeholding.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• US natural gas prices fell by 9.7% for the week ending 27/Dec, as volatile weather forecasts and a smaller-than-expected drawdown in natural gas inventories offset rising LNG exports.
• Henry Hub Put/Call volume ratio jumped to 1.05 from 0.60 (20/Dec) the previous week as call volumes dropped by 73.1% WoW, while put volumes fell by 52.4%. 
• Henry Hub OI PCR inched up to 0.85 from 0.84 compared to last week. Call OI fell by 17.1% WoW, while put OI decreased by 16.5%.

• We discuss the end of the mandatory lock-up periods for 57 stocks in Korea in January 2025, among which four are in KOSPI and 53 are in KOSDAQ. 
• The ban on short selling of Korean stocks which is still in place is likely to be lifted on 31 March 2025.
• Some of the companies mentioned in this insight which highlights the end of the major lockup periods could help to narrow down the list of candidates for potential shorting. 

• WTI futures rose 1.6% for the week ending 27/Dec, led by China’s planned stimulus initiative and declining U.S. crude oil stockpiles.  
• WTI options Put/Call volume ratio rose to 0.97 from 0.95 (20/Dec) last week, as call volume grew by 22.3% WoW while put volume increased by 25.2%.  
• WTI OI PCR rose to 0.89 from 0.87 last week. Call OI inched up by 1.8% WoW, while put OI rose by 3.6%.

• Law enforcement / Cover Story: How profit-driven law enforcement can kill businesses
• Asia Central Banking /Interview: Thailand’s central bank chief on its rate cut, household debt and fintech
• Low-altitude /: China sets up new division to advance its low-altitude economy

• CEAT buys Off-Highway Tires (OHT) business and Camso brand for US$225 million
• CEAT to access 40 global OEMs and a vast network of OHT distributors
• Michelin expands Chennai TBR tire plant, spending US$66 million

• Hello everyone—we hope you enjoyed the holiday season and had a wonderful Christmas.
• The festive season has been relatively quiet macro-wise, with only a few comments from the PBoC and BoJ.
• However, markets seem unwilling to move until there is news on the USD front, which has been driving almost all assets since December.

• Capitalizing on the lower share prices combined with the government’s pressure for Corporate Value up improvements, the share buybacks surged in Korea in 2024.
• As of 27 December 2024, the total treasury shares planned acquisition amount by Korean companies increased by 215% YoY to 11.83 trillion won in 2024.
• There have been some mixed share price performances among the companies announcing meaningful share buyback/cancellation announcements this year.

• Top holdings remain unchanged: TSMC, Samsung Electronics, and Tencent are almost universally owned. TSMC hits record weights but active funds sell into strength as benchmark weights surpass 10%
• Hon Hai, Hyundai Motor, and Singtel lead recoveries from prolonged declines. Baidu Inc. and Kweichow Moutai see sharp ownership drops.
• Momentum leaders include Accton Technology, CATL, and KE Holdings. By contrast, Axis Bank, PDD, and Reliance face stalling ownership.

• The past week saw insights on Erajaya Swasembada (ERAA IJ), Grab Holdings (GRAB US), GoTo Gojek Tokopedia (GOTO IJ), Sumber Alfaria Trijaya (AMRT IJ), and Cisarua Mountain Dairy (CMRY IJ). 
• There were also insights on Malaysia Airports Holdings (MAHB MK), Vale Indonesia Tbk (INCO IJ) and Malaysian Rubber Production.
• The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated substantive, and actionable insights, macro and equity bottom, from across Southeast Asia.

• The US oil and gas rig count remained unchanged for the third straight week at 589 for the week ending on 27/Dec.
• For the week ending 20/Dec, US oil production moderately fell to 13.59m bpd from 13.6m bpd the week prior.
• The number of active US oil and gas rigs remained steady at 483 and 102, respectively. US producers added one rig in North Dakota and cut one in Texas.

• The 2024 real GDP forecasts for Greece, indicate a growth rate of 2.24%, bringing Real GDP above the €200 billion, which continues the positive trends after the pandemic.
• The OECD, IMF and European Commission also project a 2.14% growth rate in 2025.
• The Public debt is expected to fall from €369.099 billion in 2023 to €362.182 billion in 2024, and the Debt to GDP will reach 156.1%, while the downward trend is expected to continue in 2025. 

• According to Graph 1, during the period October 28th, 2024 – November 25th, 2024, a bearish trend was reflected in the price of silver futures.
• During this timeframe, there was a significant decrease in the price of the commodity from above $34 to below $31.
• The MA-10 line was recorded to perform remarkably higher than MA-20 line in the beginning of the period under consideration, until November 8th when it crossed below it, indicating a downward momentum.

• The stock market is likely to advance during the Santa Claus rally window, which began on December 24 and ends January 3.
• But the rally is attributed to an oversold bounce and marked by narrow leadership. Either the rebound fizzles in January or broadens into lagging issues.
• We identified selected contrarian value opportunities for bulls among Santa’s discards for potential outperformance into January and beyond.

• For the week ending 20/Dec, U.S. crude inventories fell by 4.2m barrels, beating expectations of a 0.7m barrel decrease. Distillate stocks fell more than expected, while gasoline inventories unexpectedly rose.
• U.S. natural gas inventories fell by 93 Bcf for the week ending 20/Dec, missing analyst expectations of a 98 Bcf drawdown. Inventories are 4.9% above the 5-year seasonal average.
• Chevron signed a 20-year deal with Energy Transfer for 2 million tonnes of LNG annually. Stifel lowered Schlumberger’s 12-month price target while maintaining a Buy rating.

• The U.S. equity is highly vulnerable because of overvaluation and excessive growth expectations, but valuation is not very predictive of returns over a one-year time horizon.
• We estimate downside risk on the S&P 500 in the 20–30% range in the event of a major bear market.
• Despite our concerns, we see no immediate bearish triggers for investors to adopt defensive positioning in their portfolios.

• China dominates allocations, India and Taiwan are equal 2nd, while South Korea lags a further 7% behind after seeing a big drop in exposure.
• Indonesia leads the ASEAN region, emerging as the top overweight country as a record 79.8% of funds are ahead of the benchmark.
• India sees 62% underweight the benchmark. Vietnam hits new highs in average fund weight (0.97%) and fund participation (34%).

• Possibility of short peak can result in short-lived shortage  
• Declining Chinese TSR inventory can lend demand support  
• Uncertainty around policies weighs upon the market confidence

• The acting South Korean President Han Duck-Soo was impeached by the South Korea’s Parliament on 27 December. Choi Sang-Mok (finance minister) is now the new, acting President of South Korea.
• There could be multiple impeachments of acting Presidents in the next several weeks which would be unprecedented and raise further concerns about the lack of political stability in South Korea. 
• Amid all this political uncertainty, Yoon Suk-Yeol’s approval rating has been improving sharply to more than 30%.

• November PCE prices at 0.1% overall and core has sharply underperformed gains of 0.3% in both overall and core CP
• It eases some of the inflationary concerns generated by two straight gains of 0.3% in September and October core PCE prices.
• Gains of 0.3% in personal income and 0.4% in spending are also on the low side of consensus, though still respectable in real terms.

• Tuberculosis / In Depth: China launches new plan to tackle tuberculosis
• China-Mexico /: Trump tariff hike on Mexico would hurt Chinese investments, experts say
• The World Bank nudged up its China GDP growth forecast for this year to 4.9%, up from its June projection of 4.8%

• Canals / In Depth: Canal fever grips China amid slowing growth
• Hong Kong /In Depth: Hong Kong IPO market stages comeback after dismal 2023
• BYD /: Brazil halts work on BYD factory over workers’ living conditions

• The recovery in Asian economies in 2024 may provide only a brief respite from the pandemic-induced convulsions as the world economy enters a new era of turbulence. 
• A harsher outlook for global trade and continued tightness in monetary policy are key downsides for the region, although emerging Asia can mitigate their worst effects. 
• But domestic demand will remain resilient due to continued real wage growth.  Investment-induced demand may also outperform due to supportive policy.

• Gloves main exports of rubber-based products at RM1.5 billion
• A total of 7,652 paid employees recorded in Oct, down 23.6% YoY
• Malaysian Sustainable Natural Rubber (MSNR) initiative launched

• In 2025, the NPS could purchase significant amounts of Korean stocks (at least 25 trillion won) which could act as support in the domestic stock market. 
• At the end of September 2024, NPS’s domestic stock portfolio was 12.7% of its total assets, a 2.2% lower than NPS’s domestic stocks target at the end of 2025 (14.9%).
• The top five net purchases by the NPS and local pension funds of Korean stocks in the past one month include Samsung Electronics, Kakao, SK Innovation, Hyundai Motor, and SEMCO.

• The Federal Reserve recently cut interest rates by 25 basis points, unveiling new year expectations for inflation and economic growth.
• San Francisco Fed President Mary Daly discusses the current state of the labor market, the impact of AI on productivity, and the importance of data and evidence in making policy decisions.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• WTI futures fell 2.6% for the week ending 20/Dec, pressured by weak economic data, a robust dollar, and the Fed’s hawkish outlook on rate cuts in 2025.  
• WTI options Put/Call volume ratio fell to 0.95 from 1.15 (13/Dec) last week, as call volume dropped by 52.5% WoW while put volume decreased by 60.8%.   
• WTI OI PCR rose to 0.87 from 0.85 last week. Call OI fell by 18.5% WoW, while put OI declined by 16.3%. 

• EVs / Cover Story: Baidu-Geely joint EV failure reflects treacherousness of Chinese market
• Central bank /Exclusive: Singapore’s central bank chief on crypto, AI and battling inflation
• Outlook /: Four things to know about China’s 2025 economic outlook

• 40-45% of production forest areas in Vietnam certified for sustainable  management 
• VRG sold over 800 tons EUDR rubber netting an additional US$250/ton
• Member firms abroad readying to sign contracts on EUDR rubber

• US natural gas prices surged by 14.3% for the week ending 20/Dec, driven by rising LNG exports, favourable long-term weather forecasts, and stronger-than-expected declines in natural gas stockpiles.
• Henry Hub Put/Call volume ratio fell sharply to 0.60 from 1.10 (13/Dec) the previous week as call volumes surged by 228.8% WoW, while put volumes increased by 77.6%. 
• Henry Hub OI PCR inched up to 0.84 from 0.83 compared to last week. Call OI rose by 5.3% WoW, while put OI increased by 6.0%.