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Your Week in Asia

PetroChina results, Bank of Japan meeting and Golden Week begins

Your weekly lineup of Asia's biggest business and political events

State-owned PetroChina will be among the rush of mainland China companies reporting earnings this week.    © Reuters

Welcome to Nikkei Asian Preview.

Amid concerns of a second wave of infections, the Golden Week holiday begins in Japan and China. Japan's state 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 listed 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 rolled 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 the timing of the company's 5G handset release 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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