Updated throughout the day
August 18
Good evening everyone. Chinese shares closed much lower today on news that the State Council approved a new plan to overhaul the nation’s SOEs by granted them more independence from Beijing. If you could believe that. The SHCOMP fell 6.15% today while the SZCOMP tanked 6.58%. The selloff seemed to have spread throughout Asia as well, with Hong Kong’s Hang Seng Index finishing the day down 1.2% while over in Japan, the Nikkei Average fell 0.3%. Copper – which usually goes where China goes – also sank 1.6% in the London Metal Exchange. Here’s what else you need to know:
Bank Indonesia keeps rates steady. The Indonesian central bank decided to keep its discount rate unchanged at 7.5%, just as analysts have expected. Capital Economics however, is still betting on a rate cut this year from the oil-rich Asian nation: “Inflation is set to drop sharply once the anniversary of last November’s cuts to fuel subsidies is reached, which could create room for BI to cut rates before the end of the year.” Barron’s
Thai markets feel the aftershock of Bangkok blast. Share prices plummeted in Bangkok as investors reacted badly to yesterday’s bomb blast in the city center. The benchmark SET index fell sharply before recovering slightly, but in late trade it was down 2.9%. The tourism sector was hardest hit, with hoteliers such as Erawan Group, Minor International and Central Plaza down more than 10%. The blast, which happened at a Hindu shrine, has killed at least 21 people. BBC
At least 19 killed in Bangkok blast. A bomb planted in a shrine in Bangkok’s main shopping district exploded during the Monday evening rush hour killing at least 19 people and injuring over 120. Ten Thais are among the confirmed dead as well as one Chinese and one Filipino. The incident has sparked fears of a resurgence of political violence in the country. BBC
Shadow banks are begging for Beijing’s support. Here’s something you don’t see every day. 11 shadow banks apparently asked the Chinese government to bailout the Hebei Financing Investment Guarantee Group – a province-owned loan guarantor – in order to stave off a series of massive wealth management product defaults in their region. Financial Times
Chinese home prices climb for the third-straight month. China’s property sector showed signs of a recovery today as nationwide new home prices climbed 0.3% from the month before in July. That’s still slightly below June’s 0.4% gain but it’s better than May’s 0.2% rise. Annually, it fell 3.7%, beating June’s 4.9% year-on-year decline and punching in its lowest drop since December. CNBC
Putin friend ousted from post. One of President Putin’s longtime associates, Bank Rossiya co-founder Vladimir I. Yakunin, was reportedly ousted from his post as director of Russia’s national railway, raising concerns over what the President may be up to this time. “Putin is a man who is fiercely loyal to people who have been loyal to him…if he were starting to go after his insiders, that could well lead to panic and a true threat to the regime.” New York Times
Sri Lanka awaits elections results. Polling officials have begun counting ballots on Monday evening as the country decides whether to bring back its controversial former leader Mahinda Rajapaksa. The former president lost his office in a snap election in January. His return could trigger his party – United People’s Freedom Alliance (UPFA) – to secure a majority. Wall Street Journal (paywall)
Thought Greece was bad? Check out Venezuela. Long duration bonds in the region almost yield a staggering 30%, while inflation reportedly comes in at a harrowing 70%. Coppola Comment
IRS says hacks were much more extensive than originally reported. Hackers tried more than 600,000 times to infiltrate the tax statements of U.S. citizens, succeeding more than 300,000 times. Originally, the IRS reported that attackers had tried to breach the system 225,000 times, succeeding in about 50% of cases. Only a few thousand filed for fake refunds but the IRS believes that the attack was in preparation for the 2016 tax season. The vulnerability has been shut down. Wall Street Journal (paywall)
Manufacturing data in New York weaker than expected. The New York Fed’s Empire State index nosedived from 3.86 in July to -14.92 this month. Economists had expected the index to rise to 5 but new orders and shipments dropped unexpectedly. Reuters
Homebuilder index edges up, as expected. The NAHB/Wells Fargo Housing Market Index hit 61 this month, up from 60 in July — a new 10-year high. Strength in the West and South propelled the index higher. National Association of Home Builders
GE homes in on E.U. deal. The European Union is expected to approve a $13.8 billion bid of GE for the French Alstom’s power business. It would mark GE’s biggest deal ever. Reuters
QVC is buying flash sales startup Zulily for a discount to the IPO price. The e-commerce company agreed to sell for $18.75/share, or $2.4 billion, a discount to the IPO price of $22. On its first day of trading, the stock had closed at $37.70/share. More recently, Zulily has disappointed investors and the stock has been trading between $10 and $15/share. Business Insider, Tech Crunch
Big Read: How three teenaged London girls abandoned their homes to join ISIS in Syria. A terrifying read. New York Times (paywall)
You won’t believe this:
Meet the “Tianjin Blast” puppy. It wasn’t all bad news from Tianjin. “Shenghua,” also known online as the “Tianjin Blast” puppy, has become a symbol of hope for the region following his miraculous rescue by a chemical specialist team. Also, he’s so fluffy you’re gonna die. BBC
Photo credit: JERRYANG