EM ASIA CREDIT: Jollibee Worldwide: Q2 earnings out
(JFCPM, NR/NR/NR)
"*JOLLIBEE 1H NET INCOME 5.62B PESOS, -0.8% Y/Y" - BBG
EBITDA margins shrinking, keep an eye on leverage
Jollibee Foods, the unrated Philippine fast‑food restaurant operator, earlier reported Q2 EBITDA of PHP 11.1 bn, up 13.5% YoY, though margins narrowed to 9.7% from 10.2% a year earlier. Growth was driven primarily by the Coffee and Tea segment, with Q2 revenues up 69% YoY, supported by the acquisition of Compose Coffee, which was consolidated only from August 2024. There is no update yet on balance sheet developments. As a reminder, LTM net debt to EBITDA rose to 2.8x in Q1 from 2.1x at end‑FY24.
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CHINA: House Prices Decline Further in June
- For the third successive month, new home prices in China declined further than the month prior.
- June's result saw a decline in -0.27, the worst result since October 2024.
- The year on year result was marginally better than the month prior with declines of -3.69% (vs -4.08% in May.)
- New home prices did rise in 14 cities (vs 13 in May) MoM and 3 cities YoY.
- Beijing declined -0.3% MoM and -4.1% YoY whilst Shanghai rose +0.4% MoM and +6% YoY.
- Used home prices declined -0.61% MoM versus -0.50% in May for the worst result since September 2024.
- Used home prices were lower -6.09% YoY (vs -6.30% in May) and the MoM figure saw rises in just one city with both Beijing and Shanghai recording modest MoM declines.
FOREX: JPY Crosses - Outside Of GBP/JPY Continue To Press Higher
This morning has seen US futures open a little lower after ending in the green and erasing all the losses in relation to the new tariffs, ESU5 -0.15%, NQU5 -0.15%. US Stocks have focused on the fact Trump said he is still open to more trade negotiations. The JPY continues to underperform in the crosses with only GBP/JPY pulling back on UK centric news.
- EUR/JPY - Overnight range 171.73 - 172.47, Asia is trading around 172.35. This pair has had a decent move higher and has led the charge against the JPY longs. Short-term it is starting to look a little stretched but the direction is clear and should expect demand on dips. First support 170.50 area then the more important 168.50 area.
- GBP/JPY - Overnight 198.11 - 198.79, Asia trades around 198.35. The pair has failed initially towards the 199.00/200.00 resistance a break of which could see more JPY longs pared back. First support is around 198.00 then the more important 196.50 area. Governor Andrew Bailey hinted at bigger rate cuts if the job market deteriorates further making this pair trade heavy overnight.
- NZD/JPY - Overnight range 88.02 - 88.32, Asia is currently dealing 88.25. NZD/JPY broke through the resistance around 88.00 but has failed to really follow through. Price is consolidating above 88.00 looking for a reason to extend. The Support towards 87.00/50 needs to hold for the focus to remain on the 90.00/91.00 area.
- CNH/JPY - Overnight range 20.5286 - 20.6045 Asia is currently trading around 20.6000. This pair is now back up towards the 20.60 resistance area, a sustained break back above 2.7000 will see more paring back of JPY longs.
Fig 1 : GBP/JPY Hourly Chart
Source: MNI - Market News/Bloomberg Finance L.P
CHINA PRESS: Yuan Likely To Remain Strong In H2
The yuan is expected to remain strong in the second half, supported by China’s economic resilience and the rising possibility of Federal Reserve cuts amid growing pressure from U.S. President Donald Trump, wrote Xiao Yu, associate researcher at the Chinese Academy of Social Sciences, in a commentary. Xiao noted that U.S. tariff policy could cause great uncertainty in the dollar. Xiao said international capital was optimistic about the yuan, highlighting the offshore yuan had increased about 2.5% in the past six months, higher than the 1.8% rise in the onshore yuan. (Source: 21st Century Business Herald)
