Welcome to Nikkei Asian
Preview.
Amid concerns of a second wave of infections, the
Golden Week
holiday
begins in Japan and China.
Japan's
tate of emergency
-- expanded from seven prefectures to all 47
-- is supposed
to end at the holiday's close on May 6.
But prefectural
governments
are trying to take that further, asking companies
to let
employees
take 12 straight days off from
April 25 through May 6.
The coronavirus is expected to rear its head when
East Japan Railway,
one
of the world's largest railway companies,
announces
full-year results on
Tuesday. An accelerated
shift to
remote work
may have long-term
implications for railway
services.
This week in China, the standing committee
of the National People's
Congress will meet,
while mainland l
isted companies rush to disclose
full-year and first-quarter
results to meet the deadline on
April 30.
Keep up with our reporting by following us on
Twitter @NAR.
MONDAY
Bank of Japan weighs
unlimited bond
purchases To reduce the risk of infection, the monthly
meeting of Japan's
central
bank board will be cut down from two days to one.
What's on the agenda? The Bank of Japan is expected
to announce a
plan to
aid corporations facing funding problems,
mirroring similar
efforts made
by central banks in the U.S. and Europe.
The BOJ
may promise to buy
unlimited amounts of
government debt, as reported by Nikkei.
Monday's meeting
will also produce
the bank's economic forecast through 2022.
Labor stats: The BOJ meeting will be followed
by the release of the March
unemployment
rate on Tuesday. The jobless rate could
tick up from 2.4% in
February amid sharp
increases in redundancies
caused by the plunge in inbound
tourism and the state of emergency.
TUESDAY
HSBC announces Q1
results
HSBC Holdings is expected to announce that first-quarter
pre-tax profit
fell by 31%, as the bank trebled provisions for
loan losses amid the
coronavirus pandemic, according to a
consensus of analyst estimates. Last
month, HSBC said
it would have to book higher virus-related credit losses
to
comply with accounting standards.
Dividend freeze:
The London-headquartered bank
has suspended dividend payments to comply
with a
demand from the U.K. regulator, a step that earned the
wrath of
shareholders in Asia -- the region that generates
most of its profits.
Chief executive Noel Quinn has also
suspended job cuts as the bank deals
with the fallout
from the pandemic.
Background: HSBC shareholders in Hong
Kong revolt
over canceled dividend
Results from China's
largest banks
Industrial & Commercial Bank of China,
China Construction Bank,
Agricultural Bank of China
and Bank of China could claw back some of the
excess
provisions for bad loans to stabilize earnings when they report
first quarter results this week, analysts said.
After posting record earnings in 2019, the banks could still
manage to
expand earnings by 3%, according to the mean
estimate of four analysts
surveyed by Nikkei Asian Review.
But the analysts warned exhausting
provisions would
not be prudent, as the banks will need to prepare for a
long
global economic slowdown.
WEDNESDAY
NPC standing committee
meeting ends
In China, the central decision-makers within the National
People's
Congress will end a four-day meeting on Wednesday
to review legislative
bills. Besides a resolution to laws on
biosecurity and animal epidemic
prevention, the committee
may set a date for the NPC's annual legislative
meeting.
Originally slated for March 5, the meeting was postponed due to
the coronavirus.
Singapore's Q1
unemployment rate
Singapore will announce its unemployment rate from
January to March, as
COVID-19 caused job cuts and hiring
freezes around the world. The
Singapore government has r
olled out multi-billion dollar relief packages
for businesses,
but the central bank in March said "the resident
unemployment
rate is expected to rise" in the coming months.
Last year's average unemployment rate was as low as 2.3%.
United Overseas
Bank projected Singapore's unemployment
rate to rise to 3.5% in 2020,
similar to the impact seen during
SARS and the global financial crisis.
Background: In January, we took a look at how Singapore's
low
unemployment belies a quarter of a million
Singaporeans
living in functional poverty.
Results from Chinese
air and oil companies
Expect to be underwhelmed when three state-owned airlines --
China
Eastern Airlines, China Southern Airlines and Air China --
release first
quarter results on Wednesday. China Eastern and
China Southern have
already
warned of
"significant" or "substantial" net losses.
Other major state-owned enterprises from various sectors
will announce
results on the same day, including PetroChina,
Baoshan Iron & Steel
and shipping companies Cosco
Shipping Holdings and Sinotrans.
Tesla announces Q1
earnings
Tesla is expected to report January-March earnings after
the market
closes in New York on Wednesday. Earlier this month,
the U.S. electric
carmaker released better than expected
production numbers for the
quarter, thanks to its
Shanghai Gigafactory ramping up manufacturing
capacity.
The positive news has driven Tesla shares up more
than 50% since early
April, despite the March closure
of the company's main manufacturing
facilities in
California due to the state's shelter-in-place order.
Samsung announces Q1
results
Samsung Electronics is expected to have been resilient in
the
January-March period despite the pandemic,
thanks to rising demand for server chips.
Smartphone sales,
however, may have dropped as people reduce their
consumption.
THURSDAY
Results from Japan's
manufacturing bellwether
Nidec Corp. will report full-year results on Thursday.
Late last year,
the manufacturer's operating profit was buoyed by
strong sales of motors
in China. But Nidec still downgraded its
expectations for the fiscal year
ended March, with a 23% decrease
in profit and operating profit
increasing by only 8%, or
10 billion yen ($93 million) less than the
previous forecast.
In an exclusive interview with Nikkei, Nidec CEO
Shigenobu Nagamori argued against government efforts to
reshore
factories,
saying the move would only add to risk for supply
chains.
Taiwan reports Q1 GDP
data
The Taiwanese government is scheduled to release its gross domestic
product for the first quarter, as well as an update to
its 2020 GDP
forecast.
Before the pandemic, Taiwan forecast that its economy would rise
by 2.72%
this year, but the government has cut its expectation to
somewhere above
1%.
The International Monetary Fund is gloomier, projecting that
Taiwan's
economy could shrink by 4% in 2020.
China announces April
PMI
China's first economic indicator for the second quarter will come
on
Thursday with the purchasing managers' index for April. As more
factories
resumed work, the PMI rebounded to 52.0 in March after
a plunge to 35.7
the month before. A private PMI survey by Caixin
will also be out on the
same day.
Japan approves 2020
supplementary budget
Japan is expected to pass a supplementary budget worth
25.7 trillion yen
($240 billion), featuring 100,000 yen ($930)
in cash handouts to
every citizen as an emergency relief measure.
Rapid passage of the bill,
just four days after its submission
to parliament, is aimed at delivering
the cash to households
within next month.
Results from Japan's
airlines
Japan Airlines on Thursday will report its performance for
the fiscal
year that ended in March, after ANA Holdings on
Tuesday. Both companies
have already revised their earnings,
with ANA saying its net profit may
plunge by 71%, and JAL by 43%.
Cloudy skies: Japanese airline group seeks
$18 billion in
government aid
FRIDAY
Apple announces Q1
results
Apple will report March quarter earnings on
Friday morning Japan time.
The company
withdrew guidance for the quarter
after COVID-19 paralyzed
its supply chain in Asia. Questions around
are expected during the earnings call,
though
Apple is unlikely to reveal
any details.
Expectations of a first 5G iPhone
launch this year have been
tempered by concerns about
demand.
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