Tag Archives: south korea

From China to Japan, deadly cold is gripping East Asia. Experts say it’s the ‘new norm’


Hong Kong
CNN
 — 

A deadly cold snap that is gripping East Asia has killed at least four people in Japan after subzero temperatures and heavy snow brought travel chaos during the Lunar New Year holiday, with climate experts warning that such extreme weather events had become the “new norm.”

Japanese officials said all four of those who died on Wednesday and Thursday had been working to clear snow amid what Chief Cabinet Secretary Hirokazu Matsuno has called a “once-in-a-decade cold snap.”

Two of the deaths were reported in the western Niigata prefecture, with one in southwestern Oita prefecture and one in southern Okayama prefecture – where the victim had a heart attack.

In neighboring South Korea, heavy snow warnings were issued this week as temperatures in the capital Seoul fell as low as minus 15 degrees Celsius (5 degrees Fahrenheit) and plummeted to record lows in other cities, officials said. Residents said it began snowing heavily overnight late Wednesday into Thursday.

On the popular tourist island of Jeju, harsh weather this week led to the cancellation of hundreds of flights while passenger ships were forced to stay in port due to huge waves, according to the Central Disaster and Safety Countermeasure Headquarters.

“Cold air from the North Pole has reached South Korea directly,” after traveling through Russia and China, Korea Meteorological Administration spokesperson Woo Jin-kyu told CNN.

– Source:
CNN
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See what life is like inside one of the world’s coldest places

Woo said that while scientists took a long-term view of climate change, “we can consider this extreme weather – extremely hot weather in summer and extremely cold weather in winter – as one of the signals of climate change.”

Across the border in Pyongyang, North Korean authorities warned of extreme weather conditions as the cold wave swept through the Korean Peninsula. Temperatures in parts of North Korea were expected to dip below minus 30 degrees Celsius (minus 22 degrees Fahrenheit), state media reported.

In Japan, hundreds of domestic flights were canceled on Tuesday and Wednesday due to heavy snow and strong winds that hampered visibility. Major carriers Japan Airlines and All Nippon Airways canceled a combined total of 229 flights.

Meanwhile, high-speed trains were suspended between the northern Fukushima and Shinjo stations, Japan Railway Group said.

China’s meteorological authority has also forecast big temperature drops in parts of the country and on Monday issued a blue alert for a cold wave – the lowest level in a four-tier warning system.

Mohe, China’s northernmost city, on Sunday saw temperatures drop to minus 53 degrees Celsius (minus 63.4 degrees Fahrenheit) – its coldest ever recorded, meteorologists said. Ice fog – a weather phenomenon that occurs only in extreme cold when water droplets in air remain in liquid form – is also expected in the city this week, local authorities said.

Other parts of Asia also felt the impacts of harsh cold weather.

Earlier this month in Russian Siberia, temperatures in the city of Yakutsk stood at minus 62.7 degrees Celsius (minus 80.9 degrees Fahrenheit) – a record for a place widely known as the world’s coldest city.

The cold was also felt in Afghanistan, where Taliban officials reported the deaths of at least 157 people as the country experiences one of its coldest ever winters with minimal humanitarian aid. Officials said temperatures in early January had plummeted to as low as minus 28 degrees Celsius (minus 18 Fahrenheit).

Yeh Sang-wook, a climate professor at Hanyang University in Seoul, attributed the extreme cold wave on the Korean Peninsula to Arctic winds from Siberia, adding that the cold wave in South Korea this year was partly due to the melting of Arctic ice caps from a warming climate.

“There has been a record melting last year and this year,” he said. “When sea ice is melted, the sea opens up, sending up more vapor into air, leading to more snow in the north.”

As climate change worsens, the region would face more severe cold weather in the future, he said.

“There is no other (explanation),” he said. “Climate change is indeed deepening and there is a consensus among global scientists that this kind of cold phenomenon will worsen going forward.”

Kevin Trenberth, from the US National Center for Atmospheric Research (NCAR), agreed that “extreme weather events are the new norm,” adding, “we certainly can expect that weather extremes are going to be worse than they were before.”

He also pointed to the El Niño and La Niña climate pattern cycles in the Pacific Ocean that affect weather worldwide.

La Niña, which typically has a cooling effect on global temperatures, is one of the reasons for the current cold snap, he said.

“There’s certainly a large natural variability that occurs in the weather but … we often hear about the El Nino phenomenon and at the moment we’re in the La Niña phase. And that certainly influences the kinds of patterns that tend to occur. And so that’s a player as well,” he said.

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Australia PMI, Japan Jibun Flash PMI, Lunar New Year holidays

New Zealand’s Auckland airport passenger volumes hit 74% of pre-pandemic levels in November

New Zealand’s Auckland Airport saw its total passenger volumes for November reach 74% of levels seen in the financial year to June 2019, or the last full-year not impacted by the pandemic, according to the airport’s monthly traffic update.

International passengers were at 67% of pre-pandemic levels, the release said, adding that a majority of the recovered overseas travel was short-haul flights from Australia and the Pacific Islands.

The demand for routes between New Zealand and North American regions has recovered to 86% of pre-pandemic levels, including two added destinations in Texas (Dallas/Fort Worth) and New York.

— Jihye Lee

CNBC Pro: These 6 low-debt global stocks are set to outperform, Bernstein says

Rising interest rates have major implications for companies with large amounts of debt, as they will likely experience higher costs from increased borrowing.

As interest rates continue to rise, analysts at Bernstein think that stocks with low debt exposure and a higher quality of debt should outperform.

The investment bank named a handful of global low-debt stocks with an investment-grade credit rating there likely to outperform.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Shares of Zip reverses after initial rally

Australian “buy now, pay later” company Zip fell by more than 10% after a short-lived rally following its quarterly results.

Zip traded 15% lower, a sharp turnaround from its earlier gains of more than 10% after posting 12% revenue growth.

The company said underlying “monthly cash burn has continued to decrease and expected to further improve.” It said currently available cash and liquidity position is “sufficient to see the company through to generating positive cash flow” and expects to deliver positive cash EBITDA by the first half of fiscal 2024.

Week ahead: PMIs, Australia and Singapore inflation reports, South Korea GDP

Here are some of the major economic events in the Asia-Pacific that investors will be closely watching this week.

Stock markets in mainland China and Taiwan will remain closed until they resume trade on Jan. 30.

On Tuesday, regional purchasing managers’ index readings for Japan and Australia will be in focus while most markets remain closed to observe the Lunar New Year with the exception of Australia, Japan and Indonesia.

Inflation reports will be in focus on Wednesday as Australia and New Zealand release their consumer price index readings for the final quarter of 2022. Singapore will publish its inflation print for December.

Hong Kong’s market is scheduled to resume trade on Thursday.

Fourth-quarter gross domestic product for South Korea and Philippines will be published Thursday, while the Bank of Japan will release its summary of opinions from its latest monetary policy meeting in January. Japan also reports its services producer price index on Thursday.

Japan’s core CPI readings for capital Tokyo will be a barometer for where monetary policy is headed.

Australia’s producer price index and trade data will also be closely monitored indicators ahead of the Reserve Bank of Australia’s meeting in the first week of February.

— Jihye Lee

Australia’s business conditions worsened last month: NAB survey

National Australia Bank’s monthly business survey showed worsened business conditions for December with a reading of 12 points, a decline from November’s print of 20 points.

The survey reflects deteriorated trading conditions, profitability, and employment, NAB said.

“The main message from the December monthly survey is that the growth momentum has slowed significantly in late 2022 while price and purchase cost pressures have probably peaked,” NAB chief economist Alan Oster said.

Meanwhile, business confidence in December rose by 3 points to -1, an improved reading from -4 points seen in November.

— Jihye Lee

Japan’s headline factory data shows second month of contraction

The au Jibun Bank Flash Japan manufacturing purchasing managers’ index in January was unchanged for a second-straight month at 48.9, below the 50-mark that separates contraction and growth from the previous month.

The reading “signaled the joint-strongest deterioration in the health [of] the Japanese manufacturing sector since October 2020,” S&P Global said.

The au Jibun Bank flash composite output index rose to 50.8 in January, slightly higher than the reading of 49.7 seen in December.

Flash services business activity rose further with a print of 52.4, higher than December’s reading of 51.1.

— Jihye Lee

CNBC Pro: Wall Street is excited about Chinese tech — and loves one mega-cap stock

After more than 2 years of regulatory crackdowns and a pandemic-induced slump, Chinese tech names are back on Wall Street’s radar, with one stock in particular standing out as a top pick for many.

Pro subscribers can read more here.

— Zavier Ong

Fed likely to discuss next week when to halt hikes, Journal report says

Federal Reserve officials next week are almost certain to approve another deceleration in interest rate hikes while also discussing when to stop the increases altogether, according to a Wall Street Journal report.

The rate-setting Federal Open Market Committee is set to convene Jan. 31-Feb. 1, with markets pricing in almost a 100% chance of a quarter-point increase in the central bank’s benchmark rate. Most prominently, Fed Governor Christopher Waller said Friday he sees a 0.25 percentage point increase as the preferred move for the upcoming meeting.

However, Waller said he doesn’t think the Fed is done tightening yet, and several other central bankers in recent days have backed up that notion.

The Journal report, citing public statements from policymakers, said slowing the pace of hikes could provide the chance to assess what impact the increases so far are having on the economy. A series of rate hikes begun in March 2022 has resulted in increases of 4.25 percentage points.

Market pricing is currently indicating quarter-point hikes at the next two meetings, a period of no action, and then up to a half-point reduction by the end of 2023, according to CME Group data.

However, several officials, including Governor Lael Brainard and New York Fed President John Williams, have used the expression “stay the course” to describe the future policy path.

— Jeff Cox

Nasdaq on pace for back-to-back gains as tech shares rise

The Nasdaq Composite rallied more than 2.2% during midday trading Monday, lifted by shares of beaten-up technology stocks.

The move put the tech-heavy index on pace for a consecutive day of gains exceeding 2%. The index finished 2.66% higher on Friday.

Rising semiconductor stocks helped pushed the index higher. Tesla and Apple, meanwhile, surged 7.7% and 3.2%, respectively, as China reopening lifted hopes of a boost to their businesses. Western Digital and Advanced Micro Devices rose about 8% each, while Qualcomm and Nvidia jumped about 7%.

Information technology was the best-performing S&P 500 sector, gaining 2.7%. That was in part due to gains within chip sector. Communication services added 1.9%, boosted by the likes of Netflix, Meta Platforms, Alphabet and Match Group.

— Samantha Subin

El-Erian says Fed should hike by 50 basis points, calls smaller increase a ‘mistake’

Surging inflation may appear largely in the past, but a shift to a 25 basis point hike at the next Federal Reserve policy meeting is a “mistake,” according to Allianz Chief Economic Adviser Mohamed El-Erian.

“‘I’m in a very, very small camp who thinks that they should not downshift to 25 basis points, they should do 50,” he told CNBC’s “Squawk Box” on Monday. “They should take advantage of this growth window we’re in, they should take advantage of where the market is, and they should try to tighten financial conditions because I do think that we still have an inflation issue.”

Inflation, he said, has shifted from the goods to the services sector, but could very well resurge if energy prices rise as China reopens.

El-Erian expects inflation to plateau around 4%. This, he said, will put the Fed in a difficult position as to whether they should continue crushing the economy to reach 2%, or promise that level in the future and hope investors can tolerate a steady 3% to 4% nearer term.

“That’s probably the best outcome,” he said of the latter.

— Samantha Subin

An earnings recession is imminent, according to Morgan Stanley

An earnings recession is imminent this year, according to Morgan Stanley equity strategist Michael Wilson. 

“Our view has not changed as we expect the path of earnings in the US to disappoint both consensus expectations and current valuations,” he said in a note to clients Sunday.

Some positive developments have unfolded recent weeks — such as China’s ongoing reopening and falling natural gas prices in Europe — and contributed to some investors viewing market prospects more optimistically. 

However, Wilson advises investors to remain bearish on equities, citing price action as the main influence for this year’s rally. 

“The rally this year has been led by low-quality and heavily shorted stocks,” he said. “It’s also witnessed a strong move in cyclical stocks relative to defensives.”

Wilson has based his forecasts on margin disappointment, and he believes the case for this is growing. Many industries are already facing revenue slowdowns, as well as inventory bloating, less productive headcount. 

“It’s simply a matter of timing and magnitude,” said Wilson. “We advise investors to stay focused on fundamentals and ignore the false signals and misleading reflections in this bear market hall of mirrors.”

— Hakyung Kim

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South Korea’s moon probe captures stunning Earth, moon images

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CNN
 — 

South Korea’s first lunar probe has returned some striking images of Earth and the moon.

The Korean Pathfinder Lunar Orbiter began orbiting the moon in December after the Korea Aerospace Research Institute’s spacecraft had launched aboard a SpaceX Falcon 9 rocket from Cape Canaveral, Florida, in August.

The probe, also known as “Danuri” thanks to a public naming contest in the country that combined the Korean words for moon and enjoy, will orbit the moon for 11 months.

The stunning images captured by the probe showcasing Earth and the moon in black and white look like something photographer Ansel Adams might have taken had he ever enjoyed such an opportunity. The orbiter is flying at an altitude of 62 miles (100 kilometers) above the lunar surface.

Data collected by the orbiter will be used to inform future lunar exploration, including the Artemis program, which eventually aims to land humans at the lunar south pole in late 2024.

The probe’s imagery could help with selecting landing sites for future Artemis missions, as well as mapping resources like water.

South Korea signed the Artemis Accords in 2021 and collaborates with NASA on lunar exploration.

The probe carries six instruments, including the NASA-funded ShadowCam, developed by Arizona State University.

Universities and research institutes in South Korea developed the probe’s high-resolution camera to scout future landing sites, a polarized camera to analyze surface particles, an instrument to measure the lunar magnetic field and a gamma-ray spectrometer to identify elements in the lunar surface.

ShadowCam’s main objective is to take images of the permanently shadowed regions near the lunar poles that will help researchers searching for ice, mapping terrain and watching for seasonal changes.

ShadowCam is several hundred times more sensitive than the cameras on NASA’s Lunar Reconnaissance Orbiter, enabling it to take detailed images in incredibly low-light conditions.

The probe recently used ShadowCam to peer inside Shackleton crater, one of the permanently shadowed regions on the lunar surface.

Previous images taken of this crater by the Lunar Reconnaissance Orbiter were able to spot its illuminated rim, but ShadowCam could actually see the interior, including the crater floor and boulder tracks that rocks left behind after tumbling inside.

Officials at the Korea Aerospace Research Institute, or KARI, sees the Danuri orbiter as a “first step for ensuring and verifying its capability of space exploration,” according to the organization.

The US, Russia, Japan, China, European Union and India have all sent missions to the moon, and South Korea wants to dive into space exploration and develop its own missions.

“Korea is planning to successfully land onto the surface of the Moon or asteroids and make safe return,” according to the institute. “Korea is expecting to achieve strategic space technologies.”

In addition to the orbiter, KARI aims to make an initial lunar landing on the moon by 2030.

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Guryong Village, South Korea: 500 evacuated as massive fire breaks out in one of Seoul’s last slums


Seoul
CNN
 — 

Around 500 people were evacuated from their homes on Friday after a fire broke out in Guryong Village, one of the last remaining slums in South Korea’s capital Seoul, according to fire officials.

The fire broke out around 6:28 a.m. in the fourth district of the village, said Shin Yong-ho, an official with the Gangnam Fire Station, in a televised briefing. First responders arrived around five minutes later, he said.

No deaths or injuries have been reported so far.

Around 60 homes are believed to have burned down, Shin said, adding most structures are made from vinyl plywood panels.

Videos on social media show the fire engulfing what looks like rows of homes, with huge plumes of thick black smoke hanging above the slum as sirens wail nearby.

More than 800 response personnel have been mobilized, including firefighters, police and governmental workers, while 10 helicopters have been deployed to assist with the response, Shin said.

South Korean President Yoon Suk Yeol, who is in Switzerland attending the World Economic Forum, has been notified of the fire and has ordered authorities to mobilize “all available personnel and equipment,” according to the presidential office.

Yoon also requested local governments to evacuate residents and ensure the safety of rescue workers, his office said.

Authorities have long warned that Guryong residents are at particular risk of disasters, with the Gangnam government saying on its website that the slum was “vulnerable to fires” in 2019.

It was also hit hard by flooding last August, when record rainfall killed at least 13 people in Seoul – including some residents trapped in the dingy “banjiha” basement homes depicted in the movie “Parasite.”

The Guryong slum has long been seen as a symbol of the gap between rich and poor in South Korea, Asia’s fourth-largest economy. It’s part of the wealthy, glittering Gangnam district, made famous by Psy’s 2012 song “Gangnam Style” and sometimes called the Beverly Hills of Seoul.

Gangnam’s high-rise apartment buildings lie less than a kilometer from the shacks of Guryong, where many residents live in cramped makeshift housing built from materials like wood and corrugated iron.

Though plans to redevelop the area stretch back at least a decade, numerous proposals have faltered due to disagreements between local governing bodies and negotiations over land compensation.

These efforts are ongoing, with 406 households – more than a third of the slum’s population – relocated as of 2019, according to the Gangnam government website. More than 1,000 residents are still living there, Gangnam officials confirmed on Friday.

The district shared more redevelopment plans last May, with a local official saying the land would be turned into “an eco-friendly luxury residential complex.”

Authorities are working to help relocate about 1,500 households living in shacks across three major slums, including Guryong, into public housing instead, the Seoul government said in a news release last November.

It added that the city aims to eventually “eliminate abnormal residences such as shacks and vinyl houses.”

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Asia-Pacific markets mostly fall as investors digest Chinese economic data

Goldman Sachs: China’s ‘exit wave’ on reopening is taking a toll on economy

China’s “exit wave” during its reopening process has dragged down the economy significantly, Goldman Sachs economists said in a report.

“The ongoing ‘exit wave’ on the back of China’s faster-than-expected reopening has taken a heavy toll on economic activity in recent months, due to surging infections, a temporary labor shortage and supply chain disruptions,” it said in a report.

“It is very surprising in our view that the reported numbers for December were not worse,” the economists said.

– Jihye Lee

Credit Suisse says iron ore prices to peak at around $130 to $140 this year

Iron ore prices are forecast to be around $130 to $140 as traders keep China’s reopening in focus, said Credit Suisse’s Head of Energy and Resources Research, Saul Kavonic.

“We are expecting that $130 to $140 mark to be where prices kind of end up and top out this year,” he said.

While the last few weeks of iron ore demand strength is buoyed by speculative buying and holiday period purchases, he said the markets are currently watching how China’s reopening plays out and the rolling out of any infrastructure stimulus.

He said these measures will “sustain that demand for iron ore throughout the course of this year well into next year.”

Australia’s mining giant Rio Tinto posted their fourth quarter production results which slightly beat estimates.

“The real focus [of] Rio has been on iron ore, which is supportive the whole sector over the last few months which has been a call that’s finally come good at the end of last year and early this year,” he said.

Rio Tinto‘s shares last traded down 1.11%.

—Lee Ying Shan

China’s retail sales beat estimates, economy expands more than expected

China’s December retail sales beat estimates, falling only 1.8% on an annualized basis, significantly better than the decline of 8.6% projected in a Reuters poll.

Industrial output also grew 1.3% in December, higher than expectations for an increase of 0.2%.

In the fourth quarter, China’s economy expanded by 2.9% on an annualized basis, better than the expected 1.8% growth. While quarterly growth was flat, it still beat expectations for a 0.8% contraction.

Despite better-than-expected data, the Chinese offshore yuan weakened sharply from 6.7403 to 6.7563 against the U.S. dollar shortly after the release.

Alibaba stock inches up after Ryan Cohen reportedly takes stake in company

Shares of Alibaba rose after the Wall Street Journal reported that Ryan Cohen built a stake in the company “worth hundreds of millions of dollars.”

Cohen, who founded online pet retailer Chewy and is also chairman of GameStop, is privately pushing Alibaba to accelerate and further boost its share-repurchase program, the Journal report said.

Hong Kong-listed shares of Alibaba rose 2% in the first hour of trade. The stock has since pared its gains to trade roughly flat.

– Jihye Lee

China’s Liu He to meet with U.S. Treasury Secretary Janet Yellen

U.S. Treasury Secretary Janet Yellen is scheduled to hold a meeting with Chinese Vice Premier Liu He on the sidelines of the World Economic Forum, China’s commerce ministry said in a statement.

The two will hold a meeting to “strengthen macroeconomic and financial policy coordination,” the ministry said.

The meeting will take place in Zurich on Jan. 18, according to the statement, adding that the two will discuss the implementation of the agreements reached between U.S. President Joe Biden and Chinese President Xi Jinping late last year in Bali, Indonesia.

The sit-down will mark the first face-to-face meeting between Yellen and Liu.

Separately, Politico reported U.S. Secretary of State Antony Blinken will meet newly appointed Chinese foreign minister Qin Gang in Beijing on Feb. 5-6, citing Washington-based diplomats familiar with the matter.

– Jihye Lee

Singapore’s non-oil domestic exports fall by more than 20% in December

Singapore’s non-oil domestic exports fell 20.6% in December on an annualized basis, a further drop from a decline of 14.7% seen in November.

The steep decline was driven mainly by exports to China, Indonesia and Hong Kong, according to the government release. Exports to South Korea and Japan rose, it said.

The nation’s total trade declined 7.7% in the month of December compared with a year ago – with exports dropping 7.1% and imports also dropping 8.2%.

Jihye Lee

CNBC Pro: This under-the-radar global carbon capture stock could soar by 65%, investment banks say

Shares of an under-the-radar carbon capture company are expected to rise by 65% due to increasing global demand for emissions reduction technology, according to investment banks analyzing the stock.

The company’s latest innovation, revealed last week, could cut the energy needed to capture carbon and improve the company’s profitability in the future, according to analysts at a German investment bank.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Where the major indexes stand coming off the first two weeks of 2023 trading

With the first two weeks of 2023 trading done, the three major indexes are up so far for the year.

The Nasdaq Composite is leading the way, adding 5.9% as investors bought beaten-down technology stocks on rising hopes of an improving landscape for growth holdings. The S&P 500 and Dow followed, gaining 4.2% and 3.5%, respectively.

— Alex Harring

Stock futures open lower

Stock futures were lower despite the market coming off a winning week.

Futures tied to the Dow dipped 0.1%. S&P 500 and Nasdaq-100 futures fell 0.2% and 0.4%, respectively.

— Alex Harring

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Asia-Pacific shares higher as U.S. inflation data remains in spotlight

SHANGHAI, CHINA – MARCH 01: Skyscrapers stand at the Pudong Lujiazui Financial District on March 1, 2022 in Shanghai, China.

Xiao Yang | Visual China Group | Getty Images

Asia-Pacific shares were mostly higher as investors look ahead to the U.S. consumer price index report Thursday. Economists expect inflation to have cooled in December, which could signal to the Federal Reserve that previous interest rates hikes have had their intended effects.

Australia’s S&P/ASX 200 closed 1.18% up at 7,280.4 after the release of the country’s November trade balance.

The Nikkei 225 closed flat to stand at 26,449.82 while the Topix climbed 0.36% to 1,908.18. South Korea’s Kospi edged up 0.24% to 2,365.1 while the Kosdaq dipped 0.15% to 710.82.

Hong Kong’s Hang Seng index declined fractionally, reversing earlier gains. Mainland China’s Shanghai Composite added 0.051% to close at 3,163.45 and the Shenzhen Component was up 0.23% to 11,465.73. China’s consumer price index rose 1.8% in December from a year ago, in line with Reuters’ expectations.

India’s inflation data for December is also slated for release.

Overnight on Wall Street, major stock indexes closed higher. Economists surveyed by Dow Jones expect the inflation print to show that prices cooled by a modest 0.1% in December from November.

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Chinese are angry at South Korea and Japan

Travel restrictions launched in the wake of China’s border reopening may be affecting where people there are booking trips.

But it’s not out of spite, said several Chinese travelers who spoke to CNBC.

It’s because some countries aren’t letting them in easily, they said.

‘I think it’s unfair’

Reactions from Chinese travelers who spoke to CNBC were varied, ranging from indifference to confusion to anger.

“Of course, I think it’s unfair,” said one citizen, who asked to be called Bonnie. “But at the same time, we understand what’s going on.”

So far, more than a dozen countries have announced new rules for travelers departing from China. Last week, the European Union recommended that its members require Chinese travelers to take Covid tests before entering.

But Covid tests aren’t the problem, Shaun Rein, managing director of China Market Research Group, told “Squawk Box Asia” on Monday. It’s that “these policies are directed only towards mainland Chinese,” he said.

South African Mansoor Mohamed, who lives in China, agreed. “It is relatively easy and cheap to do a Covid test in China, so it will not affect my travel planning,” he said.

However, I know that many patriotic Chinese colleagues and friends will avoid those countries for now because the practice of only testing passengers arriving from China is discriminatory,” he said.

Of course, China requires travelers to test negative before entering China, and has for three years.

The difference, Mohamed said, is that “every arrival [to China], including Chinese nationals … [is] subjected to the same rules.”

Where the Chinese are going

Gao Dan told CNBC she is planning to travel out of the province of Qinghai for the first time in more than two years. But she said she’s staying in China, adding that she “hasn’t looked into what other countries’ travel policies are,” according to a CNBC translation.

Others are booking trips abroad, but some not to their first-choice destinations — namely Japan and South Korea.

One traveler, named Bonnie, told CNBC her friends in China are going to Thailand rather than South Korea, even though “they wouldn’t have considered Thailand” before.

Tuul & Bruno Morandi | The Image Bank | Getty Images

“When China said they were opening the borders in January, all my friends said they’re going to Japan and Korea,” said Bonnie.

But they couldn’t get visas, she said. “So they are now going to Thailand.”   

Rein said Chinese travelers are now headed to Singapore and Thailand because “both countries are welcoming us.”

Of the top destinations Chinese nationals searched after the border reopening announcement, those are the only two that haven’t imposed new restrictions on incoming Chinese travelers.

Data shows search interest for outbound flights from mainland China rose by 83% in the 11 days after the announcement, compared with the 14 days before it, according to data from Trip.com Group.

During this period, search interest for Thailand and Singapore grew by 176% and 93%, respectively, according to the company.

Angrier at some more than others

Chinese officials called the rules from South Korea and others “excessive” and “discriminatory.”

But South Korea refutes claims of discrimination. Seung-ho Choi, a deputy director at the Korea Disease Control and Prevention Agency, pointed out to CNBC that the country’s rules apply to “Korean nationals and non-Korean nationals coming from China. … There is no discrimination for nationality in this measure.”

“China’s Covid situation is still worsening,” he said. The number of people traveling from China to Korea who tested positive for Covid-19 went up 14 times from November to December, he said.

The Prime Minister’s Office of Japan did not respond to CNBC’s request for comment. A representative at Japan’s Embassy in Singapore told CNBC that Japan is processing Chinese travel visa requests as usual.

Citing a discrepancy in infection information from China, Japan Prime Minister Fumio Kishida told reporters on Dec. 27: “In order to avoid a sharp increase in the influx of new cases into the country, we are focusing efforts on entry inspections and airports,” according to an article published by Nikkei Asia.

Both Japan and South Korea have taken conservative stances toward the Covid pandemic.

Japan, in particular, has been sluggish to bounce back to pre-pandemic life, with residents showing little enthusiasm when its own border fully reopened in October 2022.  

‘A political issue’

Rein told “Squawk Box Asia” that the rules are not just about tourism.

“This is a political issue,” he said, adding that he expects Japanese stocks to be affected, singling out two cosmetics names.

Read more about China’s reopening

“I would be cautious on Shiseido. I’d be cautious on Kose, because there are going to be some boycotts,” he said. Shares of Kose were lower on the Tokyo stock exchange on Tuesday, but Shiseido was higher.

Rein said animosity toward South Korea and Japan will be short-lived.

“It’ll take about three months for the anger to dissipate,” he said. “There’s going to be massive revenge travel outside to Korea to Japan — if those two countries treat Chinese properly.”

New Zealander Darren Straker, who lives and works in Shanghai, said he, too, believes the policies are politically motivated, calling them a “last sad gasp [as] the Covid geopolitical door closes.”



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Samsung earnings guidance, Japan services PMI, U.S. jobs data

Tesla cuts some model prices in China, suppliers rise

Tesla slashed prices for some models in China for the second time in three months, the firm announced in a Weibo post.

The firm said its Model 3 and Model Y vehicles in China are now priced at 229,900 yuan and 259,900 yuan, respectively.

That’s a drop of 6% to 13.5%, a separate calculation by Reuters showed.

Shenzhen-listed shares of Tesla’s Chinese suppliers rallied amid optimism the price cut could boost demand for the electric vehicle maker.

Shares of Anhui Shiny Electronic Technology rose as much as 10% in Asia’s trade and Hengdian Group DMEGC Magnetics gained nearly 9%. Zhejiang Chint Electrics climbed about 10% and Shandong Jinjing Science & Tech rose more than 7%.

— Jihye Lee

More Chinese electronics firms set to take away market share from Taiwanese companies like Foxconn: Investment fund

More Chinese electronic component manufacturing companies are set to take away market share from Taiwanese counterparts such as Foxconn, Kirk Yang, chairman and CEO of Kirkland Capital, told CNBC’s “Squawk Box Asia” Friday.

Apple supplier Foxconn is facing rivalry from Luxshare, which was awarded a contract for iPhone production in China, even as Foxconn posted record revenue and its Zhengzhou plant returned to normalcy following Covid restrictions and labor unrest.

“Chinese companies are getting pretty competitive for iPhone assemblers. China is doing quite well in pretty much everything, aside from semiconductors,” said Yang.

Yang further added that with China-Taiwan geopolitical tensions, Taiwanese companies in China, in the last five years, have seen a lot of pressure. “A lot of them are moving out of China,” said Yang.

This is why Apple has to diversify, he said, adding that the US-China tech war is also causing companies to move even faster out of China to diversify.

– Sheila Chiang

Samsung Electronics could cut production in coming months, says CLSA

Samsung Electronics may follow its competitors Micron Technology and SK Hynix in cutting production in the later part of 2023, Sanjeev Rana, senior analyst at CLSA said.

The company has “no other option but to cut their production because inventories are quickly building up,” Rana said on CNBC’s Squawk Box Asia on Friday.

“If they don’t cut production, inventories could go up even higher,” he said, adding the demand for IT products have plunged in recent months, causing the sale of memory chips to also fall.

Rana said on the demand side, China’s reopening could lead to a double-digit growth in smartphone shipments to China on an annualized basis.

Oil prices to stay around $85 per barrel for the next five years, analyst says

Oil prices are expected to hover around $85 per barrel for the next five years as a result of “underinvestment on the supply side” and likely growing demand, said Pickering Energy Partners’ Dan Pickering.

Once China gets through its Covid wave, “a million to two million barrels a day of incremental demand,” can be expected, Pickering said, adding this will be supportive of the commodity’s prices.

He added further support will also be priced in once the world steps out of the global economic downturn.

Brent crude futures added 1.12% to stand at $79.57 per barrel. Similarly, the U.S. West Texas Intermediate rose 1.15% to $74.74 per barrel.

Overnight in the U.S. also reported lower fuel inventories in the wake of a winter storm, adding on to pressures on supply.

—Lee Ying Shan

China relaxes floor rates on mortgage loans for first home buyers

The People’s Bank of China and the China Banking and Insurance Regulatory Commission announced approval for lower mortgage rates for first-time home buyers if newly constructed house prices drop for three consecutive months, a notice said.

The latest measures show further support from the government for the property sector.

Housing sales in China fell more than 20% on an annualized basis each month last year through November, Factset data showed. Home prices fell for the fourth-straight month in November on a monthly basis, Reuters reported.

Property stocks listed in Hong Kong were mostly up, with Logan group rising 5.48% and Cifi Holdings gaining 0.79%. Country Garden and Longfor Group were flat in Friday’s morning session.

— Jihye Lee

CNBC Pro: Veteran investor sees energy as the biggest winner in 2023 — and names the stocks to play it

After a standout performance in 2022, energy stocks are having a slow start to the year.

But veteran investor Louis Navellier is unfazed. He believes the sector is set for another bumper year in 2023, and has a number of stock picks to play it.

Pro subscribers can read more here.

— Zavier Ong

Japan’s service sector grows for fourth straight month

Japan’s services sector activity showed a fourth-consecutive month of growth in December as the nation’s central bank maintains its ultra-dovish policy, in contrast with its hawkish global peers.

The final au Jibun Bank Japan Services Purchasing Managers’ Index rose to 51.1, compared with the sharp fall in November’s reading of 50.3 from 53.2 in October.

The 50-point mark in PMI readings separates contraction from expansion.

The Japanese yen traded marginally stronger after the report and last stood at 133.38 against the greenback.

— Jihye Lee

Samsung Electronics’ earnings guidance flags nearly 70% plunge in quarterly profits

Samsung Electronics flagged the worst quarterly profit in nearly 8 years with a roughly 70% decline in its final quarter’s operating profit, according to the company’s latest earnings guidance.

The tech giant estimated its profit slumping to 4.3 trillion won ($3.37 billion) in the period from October to December on weakened global demand, after posting a profit of 13.87 trillion won ($10.92 billion) in its previous quarter.

Shares of the tech giant inched up 0.17% shortly after the guidance release.

— Jihye Lee

CNBC Pro: Citi’s Chronert says a recession is near; shares his ‘top conviction calls’ to tough it out

Citi’s Scott Chronert expects a mild recession in the first half of this year and revealed three strategy calls that could help investors trade the downturn.

He shared three “top conviction calls” with CNBC that could help investors navigate the macro environment.

CNBC Pro subscribers can read more here.

— Weizhen Tan

St. Louis Fed President James Bullard says 2023 is poised to be a disinflationary year

There are a number of factors that could make 2023 a disinflationary year, according to St. Louis Federal Reserve Bank President James Bullard in a Thursday speech.

He noted that GDP growth likely improved in the second half of 2022 and inflation has declined recently, even though it remains too high overall.

He added that while current policy is not yet “sufficiently restrictive” but is moving closer and will reach that level this year. This signaled to markets that he may be backing off the more than 5% terminal rate he sees the central bank reaching before pausing or pivoting rate hikes, bringing stocks off lows of the day.

The labor market strength that has been seen in the midst of a hiking cycle is unprecedented, he said.

—Carmen Reinicke

CNBC Pro: Goldman Sachs reveals 7 under-the-radar global stocks to buy this year

Many under-the-radar stocks are key to a green energy transition, according to Goldman Sachs — and it expects them to take off in 2023.

The Wall Street bank said the decade-long trend of investing in large clean energy stocks would shift this year, with the focus moving to smaller supply chain firms.

The investment bank identified seven stocks in the Europe, Middle East, and Asia regions that will benefit from the new trend.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Big declines for Silvergate, Bed Bath & Beyond highlight midday movers

Here are some of the biggest stock moves during Thursday’s trading session:

Silvergate — Shares of the crypto-focused bank tumbled more than 42% after Silvergate disclosed massive customer withdrawals during the fourth quarter. The bank said it $3.8 billion in assets from digital asset customers at the end of December, down more than 60% from three months earlier. The company also sold off more the $5 billion of debt securities to cover the withdrawals, resulting in a loss on those sales of $718 million.

Bed Bath & Beyond — The home goods retailer plummeted 24% after reporting it’s running out of cash and is considering bankruptcy, citing weaker-than-expected sales. The company said it is exploring financial options including restructuring, seeking additional capital or selling assets, in addition to a potential bankruptcy.

Lamb Weston Holdings — The food processing company jumped 9% after it smashed quarterly earnings and revenue estimates. Lamb Weston also raised its financial guidance for the full year.

Check out more movers here.

— Jesse Pound

Continuing jobless claims dip, signaling labor market strength

Initial jobless claims ticked up slightly to 225,000 in the week ending Dec. 24, according to the Labor Department. But continuing claims – which count those who have been on unemployment for more than one week – dropped.

Continuing claims fell more than 24,000 to 1,569,764 in the previous week. This signals that people are finding new jobs amid a strong labor market.

—Carmen Reinicke

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N Korea drone entered S Korea’s presidential no-fly zone: Army | Conflict News

The drone was among five North Korean unmanned aerial vehicles that crossed into South Korea’s airspace on December 26.

A North Korean drone entered the northern end of a 3.7km (2.2 miles) radius no-fly zone around South Korea’s presidential office in Seoul when it intruded into the country’s airspace last month, South Korean military officials say.

“It [the drone] briefly flew into the northern edge of the zone, but it did not come close to key security facilities,” a military official told South Korea’s Yonhap News Agency on Thursday.

The drone was among five North Korean unmanned aerial vehicles that crossed the border and entered South Korean airspace on December 26, prompting South Korea’s military to scramble fighter jets and attack helicopters. The military could not bring down the drones, which flew over South Korean territory for hours.

South Korea’s Joint Chiefs of Staff had denied that one of the drones intruded into the presidential office no-fly zone, however, on Thursday confirmed that a drone had violated the northern end of the secure area but did not fly directly over the Yongsan area, where the office of President Yoon Suk-yeol is located.

The drone incursion has sparked criticism of South Korea’s air defences at a time when North Korea poses a growing threat as it develops its ballistic missile technologies, including test-launching an unprecedented number of missiles last year.

“Drone incursions have laid bare the South’s insufficient readiness to detect, track and shoot down such small drones,” Yonhap said.

South Korea’s president warned on Wednesday that he would consider suspending a 2018 inter-Korean military pact with Pyongyang if drones violate his country’s airspace again.

“He instructed the national security office to consider suspending the validity of the military agreement if North Korea stages another provocation invading our territory,” presidential press secretary Kim Eun-hye told a briefing.

The 2018 deal, sealed on the sidelines of a summit between North Korean leader Kim Jong Un and former South Korean President Moon Jae-in, called for ceasing “all hostile acts”, creating a no-fly zone around the border, and removing landmines and guard posts within the heavily fortified Demilitarized Zone (DMZ).

Yoon’s threat to abandon the 2018 pact could mean the return of live-fire drills in the former no-fly zone and propaganda broadcasts across the border – all of which drew angry responses from Pyongyang before the pact. Yoon has criticised the military’s handling of the drone incident, and has urged the country’s forces to stand ready to retaliate, even if that means “risking escalation”.

He has also ordered the defence minister to launch a comprehensive drone unit that performs multipurpose missions, including surveillance, reconnaissance and electronic warfare, and also called for a system to mass-produce stealth drones.

South Korea’s army has operated two drone squadrons within its Ground Operations Command since 2018, but they were primarily designed to prepare for future warfare.

Read original article here

Asia-Pacific markets trade mixed as region kicks off 2023

India’s cement stocks to perform well on government infrastructure spending, says IIFL Securities

India’s domestic cement stocks are set to rise on increased government spending on infrastructure, said Sanjiv Bhasin, director at investment management firm IIFL Securities.

“The government spending on both commercial and real estate, and [developments on] the infrastructure, is going to see cement companies do well,” Bhasin said on CNBC’s “Street Signs Asia” on Tuesday.

He said his firm is positive on companies such as Larsen & Toubro, Ultratech India, and Kotak Mahindra Bank, adding that cement prices in India is expected to rise as the country enters a period of high levels in construction activity.

Australian miners, metal prices fall as China Covid cases rise

Shares of mining companies listed in Australia fell in Tuesday’s afternoon trade as prices of metals fell in Shanghai as Covid infections soared in mainland China.

The February copper contract trading on the Shanghai Futures Exchange fell 0.7% to 65,670 yuan per ton while aluminum fell 2.7% to 18,175 yuan per ton.

Sandfire Resources inched 0.18% lower while Oz Minerals traded 0.25% higher – Rio Tinto fell more than 1% while Yancoal Australia shed more than 4.6% and Whitehaven fell 5.89%. Fortescue Metals lost 0.73% and South32 traded 0.5% lower.

— Jihye Lee

Consumer growth in Asia remains a ‘massive challenge’ for region, says Singapore Exchange

Consumer growth in Asia remains a “massive challenge” for the region, as its economic growth is significantly dependent on trade, Geoff Howie, markets strategist at the Singapore Exchange said.

Howie pointed to South Korea and Taiwan’s declines in exports since May 2021 as well as Singapore’s non-oil exports contracting by 14.6% in November.

There have been “much hinges on trade and tech, and we are expecting moderation in global trade,” he said on CNBC’s “Street Signs Asia” on Tuesday. “Consumer growth is an area that we have to really watch,” Howie said.

– Charmaine Jacob

‘Rough front half, better second half for tech stocks’: Jefferies shares 2023 outlook

The first half of 2023 is going to be a “tough setup” for tech stocks, Brent Thill, managing director and senior analyst of investment firm Jefferies, told CNBC’s “Street Signs Asia” Tuesday.

“You still have the economic overhang that is going to be impacting earnings as we go into the beginning of this year. Companies have to lower numbers and expectations are still coming down,” said Thill.

He projected things to turn around in the second half of 2023, as it “takes time” for effects from macro economic conditions such as rising interest rates to unravel and “investors start to look at 2024 numbers being reset.”

“I think the worst-case scenario is that 2023 could be a total wash,” said Thill, adding that Jefferies is expecting a recession to hit the third quarter, which is later than most expect.

– Sheila Chiang

Oil prices to fall to $70-levels by end of 2023, says analyst

The price of Brent oil will fall to the lower end of $70 a barrel by year’s end, according to Citi’s global head of commodities research, Ed Morse, adding volatility surrounding the oil markets will remain.

“We’re expecting volatility to be about what it was last year,” said Morse. “We’re looking at Brent prices going down by the end of the year to the low 70s,” he estimated.

A number of oil producing countries are facing extreme difficulties, Morse said. He also expects demand for oil to be kept low due to a prolonged recession in China.

Developments on Russia’s war on Ukraine will also add onto volatility in prices, Morse added.

Brent crude dipped 0.43% to $85.57 a barrel. The U.S. West Texas Intermediate crude traded down 0.39% to $79.95. 

—Lee Ying Shan

Japanese yen at strongest levels in seven months

The Japanese yen hovered around its strongest levels since early June, Refinitiv data showed.

The currency last traded at 129.7 against the U.S. dollar after strengthening past the key technical level of 130.4 that it last saw in August. Late last year, the yen depreciated significantly and hit its weakest levels in 32 years.

The currency weakened past 151 against the greenback in mid-October as the Bank of Japan maintained its ultra-dovish monetary policy and yield curve control strategy. But the yen has since strengthened after the central bank widened its YCC band last month.

– Jihye Lee

China’s Caixin PMI shows further factory activity decline

China’s factory activity slid further into contraction territory in December, a private sector survey showed.

The Caixin/Markit manufacturing purchasing managers’ index fell further to 49 in December after recording 49.4 in November – remaining below the 50-point mark that separates growth and contraction.

The survey saw improved optimism among businesses, the release said, adding that firms expressed confidence in China’s economic recovery following the relaxation of most of its stringent Covid measures.

Separately, China’s National Bureau of Statistics said the official manufacturing PMI fell to 47 for the month, marking the biggest drop since the start of the Covid outbreak in January 2020.

– Jihye Lee

Singapore economy grew 3.8% in 2022

Singapore’s economy saw full-year growth of 3.8% for 2022, according to data released by the Ministry of Trade and Industry on Tuesday.

The economy grew 2.2% in the fourth quarter compared with a year ago, the slowest pace since mid-2021 but beating expectations of 2.1% from a Reuters poll.

The latest figures reflected continued recovery in the service sector that followed lifting of domestic and border restrictions since April, the ministry said in a statement, adding that the accommodation sector expanded for the first time since mid-2021.

— Jihye Lee

Bank of Japan is reportedly considering hiking its inflation forecasts in January, according to Nikkei

Japan’s central bank is reportedly considering boosting its inflation forecasts in January to reflect price growth that’s closer to its 2% target in the 2024 fiscal year, according to a Dec. 30 report from Nikkei, citing sources familiar.

The move could be laying the groundwork for a shift toward tighter fiscal policy, according to the report.

The report arrives more than a week after the Bank of Japan changed its bond yield controls, allowing long-term interest rates to rise more. The rate on the 10-year bond will be allowed to fluctuate by half a percentage point above and below the nation’s target of 0% – up from a quarter-percentage point range.

Retail sales have also ticked higher in Japan, rising for a ninth consecutive month in November.

Darla Mercado

Week ahead: PMIs in Asia-Pacific, trade data, inflation readings

Key economic events in the Asia-Pacific next week will be dominated by Purchasing Managers’ Index readings in the region.

China’s National Bureau of Statistics is scheduled to release the official manufacturing and non-manufacturing PMI prints on Saturday. Reuters expects China’s factory activity to show a contraction with a reading of 48.

South Korea is also slated to report its December trade data over the weekend, in which economists polled by Reuters predict will show a drop of 10.1% compared with a year ago.

Singapore is scheduled to release manufacturing PMI readings next week, while S&P Global is scheduled to release its PMI readings for South Korea, Indonesia and India on Monday.

Inflation prints for the Philippines and Indonesia will also be closely watched, with the releases scheduled for Tuesday and Monday, respectively.

Japan’s PMI reading and China’s private survey for services PMI will be released on Wednesday. Singapore will release November’s retail sales on Thursday as well as South Korea’s unemployment rate for December.

– Jihye Lee

CNBC Pro: Wall Street veteran names the stocks that could go to $0 — and his favorites in tech

2022 has marked the end of an era of cheap money, and that’s bad news for companies with a “growth at all costs” approach, said David Trainer, CEO of investment research firm New Constructs.

In the year ahead, investors will need to exercise due diligence in distinguishing between good and bad firms, he told CNBC Pro.

That’s because the U.S. Federal Reserve’s interest rate hikes in 2022 have “ended the era of super easy money,” and exposed many companies with bad business models. He calls those companies “zombie stocks” with heavy cash burn.

He highlights a list of such names to avoid and what to buy instead.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Final market stats for 2022

Friday was the final trading day of the 2022, but also for the quarter, month and year. Here’s how the major market averages fared over those time frames.

The Dow finished:

  • down 8.78% for the year
  • up 15.39% for the quarter
  • down 4.17% for the month
  • down 0.17% for the week

The S&P 500 finished:

  • down 19.44% for the year
  • up 7.08% for the quarter
  • down 5.90% for the month
  • down 0.14% for the week

The Nasdaq Composite finished:

  • down 33.10% for the year
  • down 1.03% for the quarter
  • down 8.73% for the month
  • down 0.30% for the week

The Russell 2000 small caps finished:

  • down 21.56% for the year
  • up 5.8% for the quarter
  • down 6.64% for the month
  • up 0.02% for the week

— Jesse Pound, Christopher Hayes

CNBC Pro: 2023 looks good for the market — especially for one ‘extremely attractive’ asset class: Fund manager

Markets have bottomed and things are looking up for stocks and bonds, which could rally more than 10% in 2023, according to one portfolio manager.

Jay Hatfield, CEO and portfolio manager at Infrastructure Capital Advisors, also highlighted the “conviction investment themes” he expects will be very attractive in 2023.

That includes one asset he said could beat its peers.

CNBC Pro subscribers can read more here.

— Weizhen Tan

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