EM ASIA CREDIT: SK Telecom: Q3 earnings out
(SKM, A3/A-/A-)
"Chosun Ilbo: Breaking: SK Telecom's Operating Profit Plummets 91% Amid Hacking Fallout" - BBG
'**SK TELECOM: NO CASH DIVIDEND FOR 3Q" - BBG
Cyber-attack loyalty initiatives drag profits lower, not as bad as expected, still negative read.
SK Telecom reported very weak Q3 results with operating profit down 91% YoY to KRW48bn, though higher than Bloomberg consensus estimates of KRW9bn, as costs related to rebuilding customer trust (KRB500bn in benefits) after the cyber-attack were well flagged. The company swung to a net loss of KRW167bn for the quarter.
The "Customer Appreciation Package" included discounts on bills, more data and partner discounts.
The effectiveness of these initiatives remains unclear, as consumer retention may falter when incentives taper off.
In terms of business operations, the telecom unit—making up 67% of 3Q revenues—saw average revenue per user (ARPU) down 18% YoY to KRW24,125 per month ($17) in Q3. No new update on guidance was provided.
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CHINA SETS YUAN CENTRAL PARITY AT 7.1055 TUES VS 7.1089
- CHINA SETS YUAN CENTRAL PARITY AT 7.1055 TUES VS 7.1089
CNY: USD/CNY Fixing Edges Lower Again
The USD/CNY fix printed at 7.1055, versus a BBG market consensus of 7.1180.
- This fixing edged lower again(Monday's print was 7.1089). The error term adjusted lower to 125 pips (from -176 pips last).
- Spot USD/CNH tracks near 7.1250 in latest dealings, down from the highs seen towards the 7.1500 area at the end of last week.
FOREX: JPY Crosses - NZD/JPY Leads The Move Lower
US equities stalled just ahead of their all-time highs as the market started to ask why a shutdown was good for equities ? This morning US futures have opened slightly lower on our open, E-minis(S&P) -0.05%, NQZ5 -0.05%. The JPY outperformed across the board in the crosses, NZD remains the standout to be long JPY against.
- EUR/JPY - Overnight range 173.99 - 174.65, Asia is trading around 174.25. The pair topped out around 175.00 and has pulled back as upward momentum stalled. First support back toward the 173.00/173.50 area.
- GBP/JPY - Overnight 199.35 - 200.06, Asia trades around 199.60. This pair has failed again to move above the 200.00 area. Buyers need to reassert the momentum higher again soon or the probability of a deeper pullback increases. In the middle of its recent 198.00-201.00 range, first support is seen back towards the 198.00 area.
- NZD/JPY - Overnight range 85.83 - 86.17, Asia is currently dealing 85.90. This pair worked its way through the bid around 86.20 and yesterday extended lower. While below 88.00/88.50 I continue to have a bias lower. Anyone looking for a vehicle to express a long JPY in the crosses should look to this pair, a move back below 85.00/85.50 could see the move begin to grow momentum.
- CNH/JPY - Overnight range 20.82.31 - 20.8856, Asia is currently trading around 20.8600. The pair is topped out toward the upper boundary of its recent 20.40-21.00 range, a sustained break back above the pivotal 21.00 area is needed to signal the start of the next leg higher targeting the 21.50 area.
Fig 1 : NZD/JPY Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
