Welcome to Nikkei Asian Preview.
The dog days of summer are upon us, but this week will still be a busy one for corporate news. Directors and creditors at Luckin Coffee and Virgin Australia will meet to decide the direction of their troubled companies. Results will come from Chinese oil major Sinopec and Intel will launch new chip technology in a bid to catch up with Taiwan’s TSMC.
PMI figures are expected from China on Monday, as is India’s quarterly gross domestic product.
Keep up with our reporting by following us on Twitter @NAR.
Interim results from Sinopec
China Petroleum & Chemical, better known as Sinopec, will be part of the final rush of Hong Kong and mainland-listed companies required by Monday to submit interim results through June.
The outlook: Sinopec is expected to record a substantial drop in revenue and a net loss, if results from local peer PetroChina are anything to go by. Global energy majors have been hit by the coronavirus oil market crash.
Why it matters: Sinopec has been tightening its belt, including its capital spending budget, which has wider implications for China’s economy, given the company’s size.
What to watch for: Sinopec’s investment plan and management’s outlook for the full year and beyond. Although demand for oil has picked up from its trough in the first quarter, hopes for a recovery remain modest at best.
Quarterly GDP from India
Economists expect to see a sharp contraction of 15% to 25% when India releases its April-June GDP figures on Monday. India spent the quarter under one of the world’s strictest coronavirus lockdowns, severely disrupting economic activity.
Background: India’s economy was already slowing before the pandemic struck, growing only 4.2% in the last fiscal year, its slowest pace in 11 years.
The upside: India appears to be one of the few G-20 economies, along with China and Indonesia, that may log GDP numbers above pre-pandemic levels by the end of next year, according to Moody’s analysts.
Citywide testing begins in Hong Kong
Hong Kong will begin a citywide coronavirus testing scheme on Tuesday to identify asymptomatic cases, in an attempt to contain a third wave of COVID-19 infections. But the voluntary scheme backed by Beijing has been met with skepticism by Hong Kongers, who fear their DNA data will not be properly protected by the mainland Chinese companies conducting the tests. Chief Executive Carrie Lam has accused critics of smearing the Hong Kong and Beijing governments over the program.
Kazakhstan’s state of the nation address
Economic and social issues will top the agenda when Kazakh President Kassym-Jomart Tokayev delivers his annual state of the nation address on Tuesday.
State of play: Kazakhstan’s economy has been hit hard by the pandemic and this year’s drop in oil prices, along with falling demand for its commodity exports. The World Bank forecasts its GDP will contract 3% this year, the first fall in over two decades.
Why it matters: While the World Bank predicts the economy will rebound to 2.5% growth in 2021, the government will be watching developments closely as the drawn-out crisis pushes thousands of Kazakhs into poverty. This risks stoking public protests ahead of parliamentary elections scheduled for early next year.
Luckin board votes on Sean Shao
Luckin Coffee, the troubled Chinese challenger to Starbucks, will hold an extraordinary shareholders meeting on Wednesday to vote on the reinstatement of Sean Shao as a board director. Luckin said the vote was requested by shareholders who believe Shao’s reappointment will help get the coffee chain back on track following its sales scandal.
Who is Sean Shao? Shao was chairman of a special committee tasked with looking into the fraud but was ousted at a previous extraordinary shareholders meeting in July, along with Luckin’s ex-chairman Charles Lu.
Taiwan ban on iQiyi begins
The Taiwanese government is closing a regulatory loophole to ban Tencent Holdings and Baidu from offering video streaming services in Taiwan, starting Friday.
Background: In the past few weeks, Taipei has stepped up scrutiny of mainland companies’ investments and operations on the island. Online mall Taobao’s Taiwanese arm was recently ordered by the government to re-register as a Chinese company or withdraw within six months. Taiwanese authorities said Alibaba Group Holding hid its participation in Taobao by routing its investment through the U.K. and Singapore.
Intel launches Tiger Lake CPU
The long-awaited launch of Intel’s new Tiger Lake central processing unit, featuring its most advanced 10-nanometer semiconductor technology, will come on Thursday. Intel says the product line will deliver improved graphics and artificial intelligence capabilities.
Why it matters: In July, Intel confirmed that its 7-nanometer chips would face production delays until as late as 2023. Competitor TSMC has been producing such chips for years and will begin manufacturing 5-nanometer chips this summer.
Japan hosts environment ministers meeting
Environment Minister Shinjiro Koizumi will host counterparts and representatives from the United Nations, civil society and corporate partners at an online forum to discuss plans for a sustainable recovery from the coronavirus crisis. Speakers include Selwin Hart, special adviser to the UN secretary-general on climate action, and Patricia Espinosa, executive secretary of UN Framework Convention on Climate Change. The meeting, which will start on Thursday at 8 p.m. Japan time, is open for public viewing.
Virgin Australia creditors vote on Bain bailout
Creditors of collapsed Australian carrier Virgin Australia will vote on a buyout offer from U.S. private equity firm Bain Capital, after a potential rival bid collapsed. Bain’s plan would see the airline shed a third of its staff. Bondholders would get back only around 10% of their investments while shareholders, including China’s HNA Group and Singapore Airlines, would get nothing.