Making market sense

Filter the noise, focus on the important
Scroll down for daily comments or click on more

Biography




Andrew Sullivan

Andrew Sullivan
Has been in Hong Kong for over 20 years and is a versatile, results driven professional Asian sales trader. With a loyal client base built on good knowledge of markets, stocks and trading strategies. Good at providing trading ideas (long & short) to achieve client objectives as well as macro and micro insights into the markets.

His career started in the Royal Navy Fleet Air Arm before a time flying jets for the RAF. He then spent time in commercial sales before going to university to study Urban Estate Management. He left with a first class honours degree and went on to quality as a Chartered Survey with Hillier Parker in London. He left London for Hong Kong in 1996, originally as a Chartered Surveyor and then moved to become the Regional Property Analyst at WI Carr. From there he was invited to join ING Barings as a sales trader and has been sales trading ever since.

His aim is to cut through the daily news noise and provide clients with useful and timely information, comments and ideas.

A good team member with experience in building & developing as well as mentoring individuals and teams. Business minded with imagination and the ability and adaptability to execute new ideas and concepts.

Passionate about markets and a trusted voice on Asian trading; he has successful raising the company profiles of firms he has worked for by being a regular contributor to Bloomberg, CNBC, CNN, BBC, RTHK, FT and other media venues.

For more about Andrew's background just click the link
www.linkedin.com/in/andrew-sullivan-bb523a15

Open for job offers 
Available for regular briefings, consultancy and one off projects; please call  or WhatsApp (+852 9106 4632) or email andsullivan@gmail.com

Donations
Your support helps running this site that’s open for everyone. Every contribution, however big or small, is so valuable for our future. Please contact us for how to make a donation.

Mailing list
If you would like the notes sent to you please contact me.

Apr 16 Asian Marco Initial Thoughts Expect a higher open but China data key


Asia
Australia
Market to open higher following the US, Petro names +VE as Oil prices worked higher along with Gold miners.Bank of Queensland Limited good results +VE
Japan
Nikkei futures opened +30pts, eased but then rallied so expect a higher open but the China data could have an impact. Coca-Cola Amatil Ltd in focus as Shareholders will now vote on the proposed takeover by Coca-Cola European Partners. at a special meeting this morning in Sydney.
S Korea
Expect markets to open higher following the strong US data but the China data could limit the upside.
Taiwan
Market to open higher following the US and TSMC’s strong earnings and forecast
China
Market to open slightly higher following the US but with caution ahead of key data. Concerns over Huarong -VE for sentiment.
HK
ADR’s +52pts at 28,845 with weakness in Baba, CKhutch, HSBC,CCB & ICBC but key will be the China data. Also watch the T/O which has been dropping this week.
US Futures
Opened Dow +10pts, S&P flat NDX -0.2%


DOW +0.9% new high above 34,000, NDX +1.31%, S&P +1.1%, Russel 2K +0.4%
Strong Retail sales and Initial claims data saw the markets open higher and then work slightly higher through the day.
Bank of America and Citi posted strong earnings.
Taiwan and Thailand risk joining Vietnam and Switzerland in running afoul of U.S. currency manipulation triggers in Treasury Secretary Janet Yellen's first foreign exchange report, expected this week, but whether she applies that label is unclear.
President Biden has imposed sweeping new sanctions against Russia including long-feared measures targeting its government debt in a sharp escalation of Washington’s confrontation with Moscow.
Banks JPMorgan Chase +0.63%, Citigroup +0.5% Wells Fargo +0.5%, AMEX +0.8%
Work from home names: Facebook +1.7%, Apple +1.9%, Amazon +1.4%, Netflix +1.7%, Disney -0.8%, Zoom Video +1%, Alphabet +1.9% and Microsoft +1.5%,
Tech NXP Semi +0.9%, Nvidia +5.6%, Micron -0.4%, AMD +5.7%, Skyworks +1.5%
Re-opening stocks Boeing -0.5%, Caterpillar flat, Simon Property +0.7%, Kohl’s +0.8%, Nordstrom +3.3%, Gap +2.2%, United Airlines +1.4%, Carnival +2.2%, Wynn Resorts +0.9%, Chevron -0.8%, Exxon Mobil -0.6%,
Lock down names Campbell Soup +0.9% General Mills -0.1%, JM Smucker +1.3%
DATA
Retail Sales Mar +9.8% MoM vs -2.7% Feb revised (F/Cast was +4.5%)
Retail Sales Mar +27.7% YoY vs +6.7% Feb revised (F/Cast was +7.9%)
Retail Sales Ex Auto Mar +8.4% MoM vs -2.5% Feb revised (F/Cast was +5.2%)
NY Empire State Manufacturing Index Apr 26.3 vs 17.4 Mar (F/cast was17)
Philiadelphia Fed Manufacturing Index Apr 50.2 vs 44.5 Mar revised (F/cast was 45)
Initial Claims 576k vs 769k prior revised (F/cast was 715k)
4 week average Initial Claims 683k vs 730.25k prior (F/cast was.711.25k)
Continuing Claims 3.731m vs. 3.727m prior (F/cast was 3.6m
Industrial Production Mar +1% vs -4.8% Feb (F/cast was -1.4%)
Capacity Utilisation Mar 74.4% vs 73.4 Feb revised (Consensus was 75.7%)
Manufacturing Production Mar +3.1% YoY vs -4.7% Feb revised (F/cast was -1.2%)
Manufacturing Production Mar +2.7% MoM vs -3.7% Feb revised (F/cast was +4.2%)
NAHB Housing Market Index Apr 83 vs 83 Mar (F/cast was 82)
Business Inventories Feb +0.5% vs +0.4% Jan revised (F/cast was +0.3%)
EIA Natural Gas Report 61 Bcf vs 20 Bcf Prior (Consensus was 67 Bcf
Foreign Bond Investment Feb $-65.5b vs -49.1b Jan
Net Long Term TIC Flow Feb $4.2b vs 91b Jan
Overall Net Capital Flows Feb $71.6b vs 105.8b Jan
USD was slightly stronger vs Yen & Euro. Bitcoin +2.6% @ 63,418.59, VIX -2.5% @ 16.6, US T10 @ 1.574%
OIL Brent +0.54%, WTI +0.5%
Gold +1.8%, Silver +1.8%, Copper +0.3% Platinum +2.3%, Palladium +2.1%.
AHEAD Housing Starts, Building Permits, Michigan Consumer Prelim data (Inflation Expectations, Consumer Sentiment, 5yr Inflation Expectations, Consumer Expectations, Current Conditions), Baker Hughes Rig Count
Earnings: Morgan Stanley, PNC Financial, Kansas City Southern, Bank of NY Mellon, Citizens Financial, Ally Financial, State Street

DAX +0.3%, CAC +0.41%, FTSE +0.63%
Market opened slightly higher hitting new highs and traded sideways with caution ahead of earnings and US initial claims. Markets worked slightly higher after the good US data German and French inflation numbers in line with estimates. Most sectors in the green with basic resources leading.
L’Oreal to announced after the close
Deliveroo -3.8% but off lows despite saying its orders more than doubled in the first quarter from the same period last year
ABB +3.1% after the Swedish-Swiss tech manufacturer beat first-quarter profit expectations,
AB InBev +3.8% after Barclays upgraded the stock to “overweight” and raised its price target.
GSK +4.6% as the FT reported that activist hedge fund Elliott Management had taken a multi-billion dollar
The Hut Group -5.8% after posting annual operating loss, citing costs that were largely related to a share-based payments charge.
Shares of real estate companies with assets in Berlin rose across the board on Thursday after Germany’s Constitutional Court struck down a law putting a rent cap on apartments in the capital.
Daimler AG flat despite on Thursday unveiled a battery-powered counterpart to its top Mercedes-Benz luxury sedan as German carmakers ramp up their challenge to electric upstart Tesla. The EQS is the first Mercedes-Benz vehicle to be built on a framework designed from the start as an electric car,
Data
Germany
Inflation Rate Final Mar +1.7% YoY vs +1.3% Feb (F/Cast was +1.7%)
Inflation Rate Final Mar +0.5% MoM vs +0.7% Feb (F/Cast was +0.5%)
France
Inflation Rate Final Mar +1.1% vs +0.6% Feb (F/Cast was +1.1%)
Inflation Rate Final Mar +0.6% vs 0% Feb (F/Cast was +0.6%)
UK
BoE Credit Conditions Survey
AHEAD
EUROZONE Balance of Trade, Core Inflation, Inflation
GERMANY No data due
FRANCE No data due
UK No data due

JAPAN 
Nikkei futures opened +30pts, eased but then rallied so expect a higher open but the China data could have an impact.
Yen currently 108.71
Data out
Tankan Index Apr 13 vs 6 Mar (F/cast was 8)
Tokyo reported 729 new covid cases and Osaka 1,208 new cases, a new high.
Government decided to put four more prefectures including Kanagawa, next to Tokyo, under a quasi-state of emergency, bringing the number of prefectures targetted for COVID-19 prevention to 10, public broadcaster NHK said on Thursday. PM Suga said Thursday the government would do "everything possible" to prevent the spread of coronavirus ahead of the Olympics, after a ruling party official said cancelling the event remained an option.
Japan’s economy is picking up steam but any recovery is likely to be modest due to lingering caution over the coronavirus pandemic, Bank of Japan Governor Haruhiko Kuroda warned on Thursday. -VE
Thursday saw Japanese firms with strong Chinese ties were weak ahead of a meeting of PM Suga and U.S. President Biden, as investors fear pressure to align Japan more closely with Washington's tough stance on Beijing. -VE
Nissan Motor Co will slash production at several factories in Japan next month, three sources with direct knowledge of the plan told Reuters on Thursday, in the latest hit to an automaker from a global shortage of semiconductors. Japan's third-largest automaker will idle its factory inKyushu, southern Japan, for eight days between May 10 and 19, the sources said, -VE
Toyota is recalling about 373,000 Venza SUVs worldwide because a wiring problem can stop the side air bags from inflating in a crash. The recall covers Venzas from the 2009 through 2015 model years, including nearly 280,000 in the U.S. -VE

SOUTH KOREA 
Expect markets to open higher following the strong US data but the China data could limit the upside.
No data due
South Korea’s central bank chief said Thursday that the nation’s economy is likely to expand in the mid-3 percent mark this year, rosier than its previous forecast in February. The bank also decided to keep its policy rate frozen at a record low of 0.5 percent on concerns of a looming fourth wave of the COVID-19 virus. +VE
South Korean vendors at a fish market in the capital Seoul and opposition party members called on the government to take actions to have Japan drop plans to release contaminated water from its wrecked Fukushima nuclear plant into the sea.
President Biden will meet with South Korean President Moon Jae-in in Washington next month, Moon's office and the White House said, in talks that will include how to push forward efforts to stem North Korea's nuclear programme.
Citibank Korea, the South Korean unit of Citigroup, said Thursday that it would withdraw its retail business as part of its parent company’s reorganization plans for Asia. The decision was made to streamline operations and enhance global competitiveness by focusing investments and resources on its consumer banking franchise, it said in a statement. Slight -VE
Namyang Dairy Products, a major dairy producer here, has come under fire for claiming its yogurt drink prevents COVID-19. -VE
SsangYong Motor, the cash-strapped South Korean affiliate of Indian carmaker Mahindra & Mahindra, was put under court receivership Thursday, marking the second such case in 12 years.-VE
Samsung Electro-Mechanics has developed an ultrasmall, high-capacity multilayer ceramic capacitor, the company said Thursday. A multilayer ceramic capacitor regulates a current’s flow in a circuit, making it a core component within electric devices, such as smartphones, home appliances, and electronic vehicles. +VE
Hanwha Solutions will issue its first overseas green bonds worth 1 billion yuan ($152.9 million) starting from Monday, the company said. +VE
LG Energy Solution and General Motors will build a new electric vehicle battery plant in Tennessee, their second in the US, the US automaker’s South Korean unit confirmed Thursday. +VE
LG Electronics Inc. said Thursday it will invest $20.5 million to expand its washing machine factory in the United States in a move to meet growing demand in the country. The home appliance maker said the investment will create 334 new jobs at the plant in Clarksville, Tennessee, bringing its total workers to 1,000. +VE
Coupang hands cash to bereaved families at workers’ funerals. Relatives battle with ecommerce group over claims that employees died of overwork. Slight -VE

TAIWAN 
Expect market to open higher following the US and TSMC’s strong earnings and forecast
No data due
Taiwan Semiconductor Manufacturing Co (TSMC) yesterday raised this year’s capital expenditure to a record US$30 billion, as demand for advanced chips used in high-performance-computing (HPC) applications is stronger than last quarter. The figure surpasses the chipmaker’s allocation in January of US$25 billion to US$28 billion. The investment is part of a three-year US$100 billion capital expansion plan that TSMC unveiled earlier this month.
The company expects revenue this quarter to reach US$12.9 billion to US$13.2 billion, up from US$12.75 billion last quarter. It expects gross margin this quarter to fall to between 49.5 percent and 51.5 percent, compared with 52.4 percent last quarter, due to a higher revenue contribution from 5-nanometer technology, which delivers a lower gross margin than the corporate average. The chipmaker’s net profit last quarter increased 19.4 percent to NT$139.69 billion (US$5.03 billion), from NT$116.99 billion a year earlier. That represented a quarterly decline of 2.2 percent from NT$142.77 billion. Earnings per share last quarter increased to NT$5.39 from NT$4.51 a year earlier. That was a decline from earnings per share of NT$5.51 a quarter earlier.
China Steel Corp yesterday said that it is planning another price hike for next month — the 11th consecutive month of increases — with the price of steel products for domestic delivery rising 8.1 percent on average. +VE

CHINA 
Expect market to open slightly higher following the US but with caution ahead of key data. Concerns over Huarong -VE for sentiment.
Data due House Price Index, Fixed Asset Investment, GDP, Industrial Production & Capacity Utilisation, Retail Sales and Unemployment. NBS Press Conference.
The Chinese foreign ministry said on Thursday that China and South Korea share a common stance opposing Japan's decision to release contaminated water from the Fukushima nuclear plant into the sea.
Congressional China hawks are urging the Biden administration to restrict sales of chip-making tools to Chinese companies, similar to an action taken against teleo equipment maker Huawei Technologies Co (HWT.UL). In a letter to U.S. Commerce Secretary Gina Raimondo, Representative Michael McCaul and Senator Tom Cotton said the rule that requires U.S. licenses to sell semiconductors made abroad with U.S. technology to Huawei should apply to any Chinese company designing more advanced chips at 14-nanometers or below. -VE
China tried to wage ‘undeclared war’ against India through cyberattacks, New Delhi’s military chief General Bipin Rawat said, speaking at the Raisina Dialogue, says China’s creation of ‘disruptive technologies’ has emboldened Beijing and made it assertive. He joined his counterparts from Australia and Japan in asserting the importance of the Quad and its focus on the Indo-Pacific region -VE
Beijing skies turned yellow and air pollution soared to severe levels as a giant cloud of sand and dust particles rolled into the city, propelled by strong winds from the north of China. Slight -VE
China approved the construction of five nuclear power units, with total installed capacity of 4.9 GW, roughly 10% of the country's total, two sources said, as Beijing strives for alternatives to fossil fuel to meet its climate goals. Slight +VE
Ansteel Group is planning a “strategic restructuring” of regional rival Ben Gang Group, a filing showed on Thursday, in a sign that the government is seeking to step up consolidation of its mammoth steel sector. +VE

HONG KONG 
ADR’s +52pts at 28,845 with weakness in Baba, CKhutch, HSBC,CCB & ICBC but key will be the China data. Also watch the T/O which has been dropping this week.
No data due
Short Selling Thursday 17.7% vs 15% Wednesday

Top Shorts Ali Health (241) 59%, Country Garden (2007) 48%, Hang Lung Property (101) 46%, Bud Apac (1876) 40%, Sino BioPharm (1177) 35%, ICBC (1398) 33%, Bank Of China (3988) 32%, Sands China (1928) 30%, Baba (9988) 30%, BankComm (3328) 30%, HSBC (5) 30%, Ping An (2318) 30%, Mengniu Dairy (2319) 28%, Henderson Land (12) 28%, CCB (939) 27%, Wuxi Bio (2269) 27%.

POLITICS
The Legislative Council should not end up as a place with one voice only because Hong Kong is a society of diverse voices
, says Henry Tang Ying-yen, a member of the standing committee of the Chinese People's Political Consultative Conference. His comment came after the new electoral amendment bill went through its first and second readings in Legco on Wednesday. Tang said Legco would not be healthy if it lacks voices from the pro-democracy camp, since Hong Kong is a society of diverse voices.

WATCH
UK FOOK HOLD (00590.HK) announced that due to the low base effect and the declined gold price in the last two months
, the overall SSSG of the Group’s retail business in 4Q FY2021 recorded a turnaround from last quarter’s -29% to +30% YoY. +VE
Fitch Ratings affirmed Hong Kong's Long-Term Foreign-Currency Issuer Default Rating (IDR) at AA- with a Stable Outlook, underpinned by robust track record of public financial management, strong external cushions and high per capita income. The rating agency expected a 4.5% rebound for Hong Kong economy this year after two-year setback. +VE
The Lands Department (LandsD) announced today (April 15) that it registered 15 lease modifications and four land exchanges in the Land Registry during the quarter ending March 2021, of which one was a modification of a technical nature involving nil premium. The above land transactions realized a total land premium of about $9.93 billion.
FUYAO GLASS (03606.HK) announced first quarter results ended March 2021. Net profit amounted to RMB855 million, up 85.9% yearly. EPS equaled RMB0.34. +VE
ByteDance is working to prepare for the listing of some underlying businesses, including Douyin, TouTiao, iXigua and other flagship domestic assets, in Hong Kong or the U.S., tech.qq learnt from insider sources. TikTok and such other overseas businesses will be part of ByteDance' other planned IPO , said insiders.
SA SA INT'L (00178.HK) announced that for the fourth quarter from 1 January to 31 March 2021, the Group’s retail and wholesale turnover. decreased by 3.4% year on year to HK$819 million, indicating a narrowing decline. This was mainly due to the extremely low comparison base caused by the outbreak of COVID-19 pandemic in early 2020. -VE
CHINA SOUTH AIR (01055.HK) announced that the passenger load factor was 74.96% in March, representing an increase of 16.71 percentage points. The cargo and mail load factor was 50.09%, representing a decrease of 19.47 percentage points. Slight +VE
HSBC HOLDINGS (00005.HK) announced that a meeting of a committee of the Board of Directors will be held on 27 April 2021 to consider the announcement of the Earnings Release for the First Quarter 2021.
XIAOMI-W (01810.HK)'s Xiaomi Technology Co., Ltd. applied for registration of multiple "Mi Car" trademarks in categories of transportation, machinery and equipment etc., as disclosed by open.tianyancha.com. At the end of last month, XIAOMI-W had announced a foray into the smart EV sector.
Centa Valuation Index (Major Banks) (CVI) last stood at 82.03 this week, up 0.78 pts weekly.  The index stood firmly aloft 80 for four consecutive weeks, indicating bankers' active and rational stance on mortgage business. Home prices will likely struggle to edge up given the lack of excessive market excitement.

Apr 15 HK/CHINA WRAP Markets weak ahead of key China data Friday and T/O fell again


HSI -108pts (-0.4%) 28,793 HSCEI -93pts (-0.9%) 10,906  T/O HK$124.5bn (-9.8% DoD) 

EUROPE 
Market opened slightly higher hitting new highs and traded sideways with caution ahead of earnings and US initial claims. German and French inflation numbers in line with estimates. Most sectors in the green with basic resources leading.
L’Oreal to announced after the close
Deliveroo very weak despite saying its orders more than doubled in the first quarter from the same period last year
ABB +VE after the Swedish-Swiss tech manufacturer beat first-quarter profit expectations,
AB InBev +VE after Barclays upgraded the stock to “overweight” and raised its price target.
Legal & General weak.
Shares of real estate companies with assets in Berlin rose across the board on Thursday after Germany’s Constitutional Court struck down a law putting a rent cap on apartments in the capital.
Data
Germany
Inflation Rate Final Mar +1.7% YoY vs +1.3% Feb (F/Cast was +1.7%)
Inflation Rate Final Mar +0.5% MoM vs +0.7% Feb (F/Cast was +0.5%)
France
Inflation Rate Final Mar +1.1% vs +0.6% Feb (F/Cast was +1.1%)
Inflation Rate Final Mar +0.6% vs 0% Feb (F/Cast was +0.6%)
Due later
UK BoE Credit Conditions

US Futures 
Opened in Asian time slightly higher Dow +50pts, S&P and NDX +0.2% but have risen to Dow +200pts S&P +0.7% and NDX +1%. On good retail sales numbers pre market and initial claims dropping to new lows.
Data due:
Retail Sales, NY Empire State Manufacturing Index, Philiadelphia Fed Manufacturing Index, Initial Claims, 4 week average Initial Claims, Continuing Claims, Industrial Production, Capacity Utilisation, Manufacturing Production, NAHB Housing Market Index, Business Inventories, EIA Natural Gas Report, Foreign Bond Investment, Net Long Term TIC Flows, Overall Net Capital Flows.
Earnings: Bank of America, Citigroup, UnitedHealth, PepsiCo, BlackRock, Alcoa, PPG Industries, U.S. Bancorp, Charles Schwab, Delta Air Lines, Rite Aid, Wipro, Taiwan Semiconductor, Truist Financial, SunTrust

CHINA 
CSI 300 closed -32pts (-0.6%) @ 4,949
CSI300 opened lower with concerns on further tightening by the PBOC and worries over bond defaults. The weakness saw the markets sell down to 4,900 through the morning. PM saw a rebound but still closed -32pts (-0.6%) @ 4,949 ahead of key data tomorrow on the open (GDP data, House Price Index, Industrial Production & Capacity Utilisation, Retail Sales and Unemployment)
Leaders Baby-concept and non-ferrous, medical beauty, shipbuilding, digital currency, and medical equipment.
Laggards Financials, large cap liquor, environmental protection, power, tourism and hotel.
Shanghai Comp -18pts (-0.5%) @ 3,399
Shenzhen Comp -58pts (-0.4%) @ 13,680
ChiNext Comp -15pts (-0.5%) @ 2,868
CHINA DATA No data

HSI 
Pre market opened @ 28,873 -28pts vs -31pts ADR’s
ECommerce and financials were weak following the US. HSI sold down to 28,530 in the morning before a small bounce into lunch. PM worked back slowly and popped +35pts in the closing auction. T/O dropped ahead of important China data tomorrow on the open.
HONG KONG DATA 
The Centre for Health Protection reported 6 new covid cases (vs 5 cases Wednesday) 2 of unknown origin
Short Selling Thursday 17.7 vs 15% Wednesday
Top Shorts  Ali Health (241) 59%, Country Garden (2007) 48%, Hang Lung Property (101) 46%, Bud Apac (1876) 40%, Sino BioPharm (1177) 35%, ICBC (1398) 33%, Bank Of China (3988) 32%, Sands China (1928) 30%, Baba (9988) 30%, BankComm (3328) 30%, HSBC (5) 30%, Ping An (2318) 30%, Mengniu Dairy (2319) 28%, Henderson Land (12) 28%, CCB (939) 27%, Wuxi Bio (2269) 27%.
AFTER MARKET NEWS 
LUK FOOK HOLD (00590.HK) announced that due to the low base effect and the declined gold price in the last two months, the overall SSSG of the Group’s retail business in 4Q FY2021 recorded a turnaround from last quarter’s -29% to +30% YoY.
Fitch Ratings affirmed Hong Kong's Long-Term Foreign-Currency Issuer Default Rating (IDR) at AA- with a Stable Outlook, underpinned by robust track record of public financial management, strong external cushions and high per capita income.  The rating agency expected a 4.5% rebound for Hong Kong economy this year after two-year setback.
The Lands Department (LandsD) announced today (April 15) that it registered 15 lease modifications and four land exchanges in the Land Registry during the quarter ending March 2021, of which one was a modification of a technical nature involving nil premium. The above land transactions realized a total land premium of about $9.93 billion.
FUYAO GLASS (03606.HK) announced first quarter results ended March 2021. Net profit amounted to RMB855 million, up 85.9% yearly. EPS  equaled RMB0.34.
ByteDance is working to prepare for the listing of some underlying businesses, including Douyin, TouTiao, iXigua and other flagship domestic assets, in Hong Kong or the U.S., tech.qq learnt from insider sources. TikTok and such other overseas businesses will be part of ByteDance' other planned IPO , said insiders.
SA SA INT'L (00178.HK) announced that for the fourth quarter from 1 January to 31 March 2021, the Group’s retail and wholesale turnover. decreased by 3.4% year on year to HK$819 million, indicating a narrowing decline.   This was mainly due to the extremely low comparison base caused by the outbreak of COVID-19 pandemic in early 2020.
CHINA SOUTH AIR (01055.HK) announced that the passenger load factor was 74.96% in March, representing an increase of 16.71 percentage points. The cargo and mail load factor was 50.09%, representing a decrease of 19.47 percentage points.
HSBC HOLDINGS (00005.HK) announced that a meeting of a committee of the Board of Directors will be held on 27 April 2021 to consider the announcement of the Earnings Release for the First Quarter 2021.
XIAOMI-W (01810.HK)'s Xiaomi Technology Co., Ltd. applied for registration of multiple "Mi Car" trademarks in categories of transportation, machinery and equipment etc., as disclosed by open.tianyancha.com.  At the end of last month, XIAOMI-W had announced a foray into the smart EV sector.
Centa Valuation Index (Major Banks) (CVI) last stood at 82.03 this week, up 0.78 pts weekly.  The index stood firmly aloft 80 for four consecutive weeks, indicating bankers' active and rational stance on mortgage business. Home prices will likely struggle to edge up given the lack of excessive market excitement.

MARKET COMMENT 
*PETOCHEMS FIRM as Oil rose 4% overnight to its highest in a month as the IEA joined OPEC and the EIA in giving more optimistic forecasts for demand, citing improving outlooks for the U.S. and China. U.S. crude inventories fell by 5.89 million barrels last week to the lowest level since Feb. CNOOC (883 HK +1%) PETCH (857 HK +1%) ANTON (3337 HK +2%).
*CHINESE BANKS WEAK on tightening worries, as the PBOC rolls over the matured CNY 150 bn 1-year MLF, and CNY 10 bn 7-day repo and CNY 10 bn matured today, still with zero injection from the PBOC.  CCB (939 HK -1.2%) ICBC (1398 HK -1.6%) BOC (3988 HK -0.6%).
In HK, HSBC (5 HK -1.1%) is to move four of its top executives to Hong Kong from London, one more than had been previously announce and means almost all of HSBC’s global revenue will be run out of Hong Kong.
*E-COMMERCE WEAK on regulatory concerns after some Chinese Internet platform companies, including BAIDU (9888 HK-0.8%), JD (9618 HK-1.6%), KUAISHOU (1024 HK-7.7%) and BILIBILI (9626 HK -1.9%), pledged to avoid anti-competitive behaviors such as forcing vendors to use their platform exclusively.
News that Bytedance is planning for a HK IPO in 2H also weighted on the sector, especially on Kuaishou, because of their similarities.
TENCENT (700 HK -0.6%) is holding off on marketing a USD bond deal because Asia's credit markets have been disturbed by the plunge in China Huarong's bonds. (Good article in yesterday’s FT on the issue)
*TECH & COMPONENTS WEAK after  yesterday's rally related to APPLE’s upcoming new product launch.  
Chip makers traded mixed after TSMC reported profit +19% YoY; SMIC (981 HK -0.2%) HUA HON (1347 HK -2.4%) ASM (522 HK +1.4%).
XIAOMI (1810 HK +0.6%) continues to buys back shares; another 7.79m for HK$198.8m on April 14. Meanwhile, one of Xiaomi's non-executive director disposed in the market 32.9648m shares in total.
*HK PROPERTY MIXED  following recent rebound on the expansion of the vaccine program in HK. CK ASSET (1113 HK +2.2%) said its repurchase program was increased to 380 million shares, from 333 million, representing about 10% of the total issued shares. The offer price for the revised plan was unchanged at HK$51/shr.
MTRC (66 HK -0.3%) received at least six bids for its latest development offering
SHKP (16 HK -1.2%) NWD (17 HK +0.4%) SINO LAND (83 HK -0.9%) HENDERSON (12 HK -0.3%).
*SPORTWEAR MAKERS STRONG  after ANTA SPORTS (2020 HK +1%) said 1Q sales for Anta brand +40%-50% YoY, Fila brand sales +75%-80% YoY, and sales for other brands more than doubled.
LI NING (2331 HK +3.1%) POU SHENG (3813 HK +1.2%), but 361 DEGREES (1361 HK -4.6%) retreated from recent strong rally.
*MACAU WEAK as Macau moves step closer using the digital currency, as. the gambling hub seeks to better combat money laundering and tax evasion. SJM (880 HK -3%) GALAXY (27 HK -2.4%) MGM (2282 HK -2.8%).
*OTHER MOVERS: 
GOODBABY (1086 HK +2.6%) after PBOC published an article seeking to promote fertility and suggesting a lifting of birth restrictions.
SINOPHARM (1099 HK +6.3%) as demand on its vaccine is expected to increase, as more Astrazenca's vaccine are being paused due to rare blood clot cases.


Regional Markets
AUSTRALIA 
ASX200 opened lower and initially tested the support around 6,990 level but worked better from about 10:30am for the rest of the day on good employment data to close just off the day high +36pts (+0.5%) @ 7,058
Data
Consumer Inflation Expectations Apr +3.2% vs +4.1% Mar (F/cast was +4.2%)
Part time employment Mar +91.5k vs -0.4k Feb revised from -0.5k (F/cast was +10k)
Unemployment rate Mar 5.6% vs 5.8% Feb (F/cast was 5.8%)
Employment change Mar +70.7k vs 88.7K Feb (F/cast was +20k)
Full time employment change Mar -20.8k vs 89.1k Feb (F/cast was +10k)
Participation rate Mar 66.3% vs 66.1% Feb (F/cast was 66.3%)
JAPAN
Nikkei opened lower but spiked higher to 29,720 in early trades, consolidated and then tested to. 29,790 before easing back into lunch.  PM opened lower around yesterdays close and traded sideways to close+22pts (+0.1%) @ 29,643  
Topix traded in a similar pattern but above yesterday’s closing level. Closed +7pts (+0.4%) @ 1,959
Toshihiro Nikai, Secretary-General of Liberal Democratic Party of Japan, told TBS that cancelling Tokyo Olympics 2021 is one of the options. The government may have no choice but to cancel this global event if the pandemic goes more rampant, furthered Nikai. Comes as Tokyo reported 729 new cases
Data
Foreign Stock investment ¥640.9B vs ¥977.6B prior Foreign Bond investment ¥1714.4B vs ¥375.1B prior
Tomorrow we get the Tankan Index pre Market
S KOREA  
BoK left interest rate unchanged at 0.5% as expected
Kospi opened flat but rallied to test 3,205 around 10 am, it failed to break above and eased back to 3,185 around midday and then worked higher to retest 3,200 before easing slightly to close +12pts (+0.4%) @ 3,194
Kosdaq sold down initially to 1,008 before rebounding too 1,013 and then traded sideways to until around 2pm when it rallied to test yesterday’s closing level but failed to break above and closed -0.5pt (flat)@ 1,014
TAIWAN 
Opened lower but worked higher through the day and closed at the day high +210pts (+1.3%) @ 17,077
TSMC (TSM.US) reported that 1Q21 net profit +19.4% to TWD139.69 billion, beating TWD134.01 billion in consensus. TSMC forecast a record revenue for the second quarter, which hit US$13.05 billion in median estimate, above US$12.92 billion in the previous quarter.The firm raised its 2021E capex from US$25-28 billion to US$30 billion, up 74% year-on-year.
CONNECT FLOWS
Shanghai 
Northbound RMB 36,198m Sell 17,847m : 18,351m Buy
Southbound HK$ 10,537m Sell 5,867m : 4,670m Buy
Shenzhen 
Northbound RMB 41,362m Sell 21,408m : 19,954m Buy
Southbound HK$ 12,857m Sell 6,107m : 6,750m Buy

Active Heavyweights
BABA (09988.HK) -1.7%
CCB (00939.HK) -1.2%
PING AN (02318.HK) -1%
AIA (01299.HK) +1%
TENCENT (00700.HK) -0.6%
HKEX (00388.HK) +0.4%
MEITUAN (03690.HK) -0.4%
HSI & HSCEI Constituents on Move:
KUAISHOU-W (01024.HK) -7.8%
NTES (09999.HK) -3.1%
HSMI & HSSI Constituents on Move:
SINOPHARM (01099.HK) +6.3%, hitting new high
SHIMAO SERVICES (00873.HK) +2.7%, hitting new high

MARKET HOURS NEWS.
US-China trade grew rapidly in 1Q21, when China' exports to US rose 62.7% yearly, and imports up 57.9%, said Chinese Ministry of Commerce Spokesperson Gao Feng. Regarding the recent antitrust penalty slammed on Alibaba, Gao stated that Beijing attaches equal emphasis onto development and scrutiny of the e-commerce industry.
Three funds under Cathie Wood's ARK bought a combined 749,000 shares of Coinbase (COIN.US) on its US market debut. Based on Wednesday's closing price, their stake is worth US$246 million.
Malina Ngai, Group COO of A.S. Watson Group & CEO of A.S. Watson (Asia & Europe), said the group will focus on the Offline plus Online (O+O) model, which is the new standard for retail, as its development strategy.  She believed retail is not dead. Physical stores will continue to play a significant role in creating unique O+O experience. With over 16,000 physical stores and 100 eCommerce platforms in 27 markets in Asia and Europe, physical and online stores is the perfect leverage for the A.S. Watson O+O model. The group plans to open 1,000 new stores this year, Ngai added.
Seeing "videolization" as a huge flurry of the internet sector, BILIBILI-SW (09626.HK)  Chairman Chen Rui anticipated China's online video user base to surmount 1.2 billion in the next three to five years.  China recorded 927 million online video users as of end-2020, according to data from China Internet Network Information Center.
Polestar, a Swedish electric car maker controlled by Zhejiang Geely and its Volvo Cars, has raised US$550 million in external funding, led by Chengxing Equity Investment Fund Partnership and Zibo. The company said that the proceeds will be used to speed up product development and production, and it will also launch new car models in the next few years. The automaker is discussing for additional financing with other investors.
HKMA CEO Eddie Yue said the authority firmly defended the linked exchange rate system despite social unrest last two years, global financial market choppiness amid the pandemic, and dismay about sanctions. Total fund inflows into the Hong Kong dollar reached USD50 billion over the past year or so, reflecting a safe and effective operation of Hong Kong's payment system and manifesting the HKD/USD peg's capability.
BABA-SW (09988.HK) founder Jack Ma appeared Wednesday at the Russian Geographical Society board meeting, led by Russian President Vladimir Putin, Sputnik reported. Yet the Chinese billionaire did not join the two-hour conversation.reported.
MTR CORPORATION (00066.HK)'s Wong Chuk Hang Station Phase 6 "the Southside" has received at least six tenders from CK ASSET (01113.HK), HENDERSON LAND (00012.HK), K. WAH INT'L (00173.HK) and Wheelock Properties, before the tender closed at 14:00, according to on-site witness. These companies submitted tenders on a sole basis. SHK PPT (00016.HK), on the other hand, replied that it was also among the suitors. KERRY PPT (00683.HK) and SINO LAND (00083.HK) proposed an alliance.
The Government will enlarge the coronavirus vaccination program to cover residents aged 16-29, local media learnt from market sources. Patrick Nip, Secretary for the Civil Service, and Sophia Chan, Secretary for Food and Health, will brief the press at 15:15.
There were 62 residential transactions involving Buyer's Stamp Duty (BSD) in March 2021, up 4 cases or 6.9% monthly to a 4-month high, Inland Revenue Department's Stamp Office announced. The taxation amounted to $268.3 million, up 2.5 times monthly to a 4-month peak.  There were 291 home deals involving Ad Valorem Stamp Duty (AVD), up 68 cases or 30% monthly to a 4-month peak. The taxation amounted to $707.5 million, up 86.3% monthly to a 4-month high.
TENCENT (00700.HK) plans to raise up to US$4 billion in a bond issue scheduled today, Reuters learnt from sources with direct knowledge of the matter.  The Chinese tech firm intends to use the proceeds for general corporate purposes.
SINOPEC CORP (00386.HK) forged a strategic cooperation agreement with NIO (NIO.US), whereby more battery exchange stations for NIO will be set up at SINOPEC CORP's gas stations in future.   Zhang Yuzhuo, Chairman of Sinopec, said the company plans to build 5,000 battery charging/ changing stations by 2025.
Overnight HIBOR last posted at 0.03467%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.10357%, down for 6 days, marking a 1-month low.
Yango (000671.SZ) announced that the board of directors has given green light to the proposed spin-off of a property management subsidiary  for listing in Hong Kong.
Macau's gaming junkets worry that the digital RMB will squash the industry once it is introduced to the casinos, Bloomberg reported. Prior to this, the Macau government had approached casino operators in regards to the relevant regulations.  The city's Chief Executive Ho Iat Seng said the government is studying the feasibility of digital currency, hoping to improve money-laundering crime effectively.
JD-SW (09618.HK) announced that its JD LUXURY tailor-made a distinctive cooperation module for Louis Vuitton, under which users will be able to connect to the Mini Program of LV through the JD APP, enjoying exclusive consumption experience in shopping authentic products.
Tencent Music Entertainment Group (TME.US) appointed Cussion Pang as executive chairman, and Ross Liang as chief executive officer and a board member.  Ross Liang had served as TENCENT (00700.HK)'s vice president, taking the helm of social media platforms like QQ and Qzone.
TENCENT (00700.HK)'s Platform and Content Group (PCG) announced a fresh round of organizational and employee adjustment, marking the unit's biggest overhaul since its inception in 2018, reported Chinese media.  The group's Tencent Video, Weishi and YingYongBao will be consolidated into an online video business group.
BABA-SW (09988.HK) is renewing its US$5.15-billion revolving credit due 2022, and having negotiation with banks, Bloomberg cited people with the knowledge of the matter.  The company reportedly intends to cut the loan rate from LIBOR + 95 bps to LIBOR + 80 bps, and extend the related loan for five years. The tech giant has not yet made any comment on the report.
The PBoC today started RMB150-billion MLF and RMB10-billion reverse repurchase operations, with respective interest rates at 2.95% and 2.2% unchanged.
PRE MARKET HOURS NEWS 
China's State Administration for Market Regulation (SAMR) disclosed the second batch of Commitment to Operate in Compliance with Laws and Regulations made by the internet companies to the society. Such companies included TENCENT (00700.HK), TRIP.COM-S (09961.HK)(TCOM.US), Didi, KUAISHOU-W (01024.HK), MissFresh, BILIBILI-SW (09626.HK)  -15.500 (-1.898%) (BILI.US), BABA-SW (09988.HK) (BABA.US)'s Fresh Hema, and some other firms.
National Integrated Circuit Industry Investment Fund reduced 45 million shares of SMIC (00981.HK) on 9 April, cashing in $1.177 billion, as revealed by the Stock Exchange.
The US Federal Reserve will possibly scale back its bond purchase before pondering over any interest rate hike, Chairman Jerome Powell told foreign press.  While the central bank will only think about rate hikes after. inflation sustainably reaches 2% and the labor-market recovery is complete, Powell opined the combination is unlikely to happen before 2022.Cryptocurrencies are yet to reach the status of payment mechanisms, as they are "vehicles for speculation,” Fed Chairman Jerome Powell told foreign press.   Comparing crypto to gold, the central bank leader said the market gave gold "a special value that it doesn’t have as an industrial metal."
FAW-Volkswagen Audi will slash production of A4L, A6L, Q5L and other auto models by 30% in April amid chip shortage, likely bringing the output cut up above 20,000 units, Shanghai Securities News citing sources. The carmaker has yet to comment on the rumors.
However, Audi's sales manager has reportedly been notified to rationalize orders and adjust inventory structure against chip shortage.
Macao Government Tourism Office announced that the project titled “Stay, Dine and See Macao” is rolled out from April to December 2021.   Starting from 10:00 today, interested residents can sign up at travel agencies under the umbrella of the project which not only covers a range of local tours but also introduces experience of local hotels. Every permanent and non-permanent resident of the Macao Special Administrative Region is entitled to a one-time subsidy for each of both categories – local tour and hotel staycation.  The “Stay, Dine and See Macao” project will run local tours between 25 April and 31 December. Tours will be available on weekends and public holidays. Every Macao resident is granted one MOP200 subsidy for hotel staycation. The cost of each hotel room can be subsidized for a maximal quota of two residents, i.e. MOP400.
The PBoC wrote in an article that Beijing shall fully loosen her grip on the maternity policies to timely encourage a higher childbirth willingness, or she will repeat other developed countries' mistake by overlooking the importance of maternity policies to demographic transition.  Not only should China optimize her maternity policies, she should also brush up her pensionary regime, said the central bank.
New-Type National (Shenzhen-Qianhai) Internet Exchange Center held the opening ceremony in Qianhai yesterday (14 April), reported Yangcheng Evening News.  The Center entered into agreements of intent with ten companies including Shenzhen Smart City Technology Development Group, TENCENT (00700.HK) and DR.PENG (600804.SH), making them the first batch of users of the Center.
On 8 April, China's NSSF disposed on-market of 77.60 million BANK OF CHINA (03988.HK) shares at an average price of $2.95 per share, according to shareholding disclosures at the Stock Exchange. Subsequently, the fund's shareholding in the bank decreased from 7.03% to 6.93%.
CK ASSET (01113.HK) announced that the Maximum Number of Shares to be bought back under the Share Buy-back Offer will be increased from 333 million Shares to 380 million Shares, representing 10.29% of the total share capital.  The Revised Share Buy-back Offer, if accepted in full, will involve HK$19.38 billion to be funded by cash resources of the Group.
XIAOMI-W (01810.HK) disclosed that on 14 April, it had repurchased at the Stock Exchange of 7.79 million shares, involving roughly $199 million.
CPIC (02601.HK) announced that the accumulated primary insurance premiums of China Pacific Life Insurance and China Pacific Property Insurance, both of which are the subsidiaries of the Company, for the first three months of 2021 amounted to RMB95.417 billion and RMB43.292 billion, respectively up 3.9% and 11.9% from the same period of 2020.
PING AN (02318.HK) announced that the accumulated gross premium incomes of the four subsidiaries of the Company for the first three months of 2021 totaled RMB243.775 billion, down 5.5% year-on-year.

Apr 15 FT Coinbase and Digital, HSBC focus on Asia, Toshiba, Ma's rectification. PPE implications


MARKETs @ 3:30pm Hong Kong time
AUSTRALIA 
ASX200 opened lower and initially tested the support around 6,990 level but worked better from about 10:30am for the rest of the day on good employment data to close just off the day high +36pts (+0.5%) @ 7,058
Data
Consumer Inflation Expectations Apr +3.2% vs +4.1% Mar (F/cast was +4.2%)
Part time employment Mar +91.5k vs -0.4k Feb revised from -0.5k (F/cast was +10k)
Unemployment rate Mar 5.6% vs 5.8% Feb (F/cast was 5.8%)
Employment change Mar +70.7k vs 88.7K Feb (F/cast was +20k)
Full time employment change Mar -20.8k vs 89.1k Feb (F/cast was +10k)
Participation rate Mar 66.3% vs 66.1% Feb (F/cast was 66.3%)
JAPAN
Nikkei opened lower but spiked higher to 29,720 in early trades, consolidated and then tested to. 29,790 before easing back into lunch.  PM opened lower around yesterdays close and traded sideways to close+22pts (+0.1%) @ 29,643  
Topix traded in a similar pattern but above yesterday’s closing level. Closed +7pts (+0.4%) @ 1,959
|Data
Foreign Stock investment ¥640.9B vs ¥977.6B prior
Foreign Bond investment ¥1714.4B vs ¥375.1B prior
Tomorrow we get the Tankan Index pre Market
S KOREA  
BoK left interest rate unchanged at 0.5% as expected
Kospi opened flat but rallied to test 3,205 around 10 am, it failed to break above and eased back to 3,185 around midday and then worked higher to retest 3,200 before easing slightly to close +12pts (+0.4%) @ 3,194
Kosdaq sold down initially to 1,008 before rebounding too 1,013 and then traded sideways to until around 2pm when it rallied to test yesterday’s closing level but failed to break above and closed -0.5pt (flat)@ 1,014
TAIWAN 
Opened lower but worked higher through the day and closed at the day high +210pts (+1.3%) @ 17,077
CHINA 
CSI300 opened lower and sold down to 4,900 through the morning. PM rebounded but closed -32pts (-0.6%) @ 4,949 ahead of key data tomorrow on the open (GDP data, House Price Index, Industrial Production & Capacity Utilisation, Retail Sales and Unemployment)
HONG KONG 
Pre mareket opened @ 28,873 -28pts vs -31pts ADR’s Sold down to 28,530 in the morning before a small bounce into lunch. PM working higher currently -141pts (-0.5%)@ 28,760
EUROPE Market opened slightly higher with caution ahead of earnings ( L’Oreal, Deliveroo, Unicredit AGM and Shell ito publish its annual environmental, social and governance update) and US initial claims.  German and French inflation numbers in line with estimates.  
Most sectors in the green with basic resources leading.
Data
Germany
Inflation Rate Final Mar +1.7% YoY vs +1.3% Feb (F/Cast was +1.7%)
Inflation Rate Final Mar +0.5% MoM vs +0.7% Feb (F/Cast was +0.5%)
France
Inflation Rate Final Mar +1.1% vs +0.6% Feb (F/Cast was +1.1%)
Inflation Rate Final Mar +0.6% vs 0% Feb (F/Cast was +0.6%)
Due later
UK BoE Credit Conditions
US Futures Opened in Asian time slightly higher Dow +50pts, S&P and NDX +0.2% but rose to Dow +100pts S&P and NDX slightly +VE
Data due:Retail Sales, NY Empire State Manufacturing Index, Philiadelphia Fed Manufacturing Index, Initial Claims, 4 week average Initial Claims, Continuing Claims, Industrial Production, Capacity Utilisation, Manufacturing Production, NAHB Housing Market Index, Business Inventories, EIA Natural Gas Report, Foreign Bond Investment, Net Long Term TIC Flows, Overall Net Capital Flows.
Earnings: Bank of America, Citigroup, UnitedHealth, PepsiCo, BlackRock, Alcoa, PPG Industries, U.S. Bancorp, Charles Schwab, Delta Air Lines, Rite Aid, Wipro, Taiwan Semiconductor, Truist Financial, SunTrust

FT PrintFront Page
Egypt seizes Suez ship
As canal operators demand $900m in compensation.
'The SCA made a claim for $916m on April 7, according to the UK P&I Club, an insurer that covers the owner, Japan-based Shoei Kisen Kaisha, against third-party liabilities. UK P&I said a counteroffer had been made and that it was disappointed by the decision to arrest the 220,000-ton vessel.’
I suspect that there will be a lot of claims and counter claims from this incident. -VE for insurers and re-insurers.
I would love the know the conversation between the Suez Canal ‘guide’ an the Captain as the incident unfolded.The canal authorities are placing the blame on the Captain saying that the guides only advises. But a ship has to carry two guides.
I guess its rather like when I was a pilot; all air traffic control instructions are mandatory…. unless it’s going to cause a crash… then they are advisory!
See also Page 4 Ever Given held as Egypt seeks $900m payment for Suez blockage
Looks into some more of the detail. Notes that 'Evergreen Marine, the Taiwanese operator of the 220,000-tonne vessel, said yesterday the SCA’s claims were “largely unsupported and lack any detailed justification”.“Evergreen is urging all concerned parties to facilitate a settlement agreement,” it said, adding it was also “investigating the scope” of the court order.'

Coinbase’s $76bn debut puts seal on cryptocurrencies asset class
• Digital exchange lists on Nasdaq • Market cap exceeds ICE • Powell voices reservations
“What we hope is it just brings a lot more transparency to this industry, and a lot more focus,” said Alesia Haas, chief financial officer of Coinbase. “We’ve seen that with the attention that Coinbase has received during the past few months.”
It went public via a direct listing rather than IPO or Spac
.“There’s no question that millennials and [younger people] really gravitate toward crypto,” Schuler (a partner at DFJ Growth,) said. “They look at the traditional financial infrastructure and they see it as rigged, and they’re right.”
It notes 'Bitcoin’s supporters have touted it as a technology for transforming the world’s financial system, though Jay Powell, chair of the Federal Reserve, was pouring cold water on that idea just as Coin-base began trading. Calling cryptocurrencies “vehicles for speculation”, the central bank boss said: “No one is using them for payments, for example, like the dollar. It’s a little bit like gold.”
I can understand Powell’s stance and a lot of other establishment voices but many of them are set in their ways. The US has only recently started to really look into digital currencies. Being in charge of the worlds reserve currency it is easy to see why they would be complacent; thinking ‘what could replace the USD’. As is quickly becoming apparent, and accelerated by covid and peoples reluctance to use cash, digital and I would think crypto too.
The Fed will be forced to explore and come up with its own because China and many other nations have too. It should have been something that the Fed was at the forefront of but as with 5G and IoT China is leading and directing the narrative. The question is whether the PBOC’s and China's State Administration for Market Regulation (SAMR) crackdown on its Ecommerce companies is doing to stymie the development of digital and FinTech in China?
Worth noting that currently popular tech guru Cathie Wood told CNBC on Monday that digital wallets and genomics would be the two biggest disruptive trends following Tesla and electric cars.
See also China envisions rise of digital rival to dollar below and 
LEX Coinbase: hodling up  Says its a bet on two entwined factors ‘the price of bitcoin and regulators’ tolerance of cryptocurrencies. Neither is certain.’  
It asserts that Coinbase investors must be crypto believers — or speculators cynically hitching a ride. (I would expect an element of both but many are retail and it is only when larger established funds get involved with its mainstream acceptance really be achieved). It suggest the valuation @ 79x trailing earnings is questionable, and whilst I agree to a degree it is an incredibly difficult entity to value because it wears so many hats, which could be a good thing or bad!
It concludes 'Coinbase’s listing tests mainstream acceptance of crypto. Reservations were already abating. Companies such as Square and Tesla have purchased bitcoin. PayPal allows users to pay with cryptos. Bank of New York Mellon is giving customers access to cryptocurrencies alongside other assets. Coinbase counts 7,000 institutions as customers.That bodes well for bitcoin, for now. If prices drop, so will trading volumes. Coinbase’s newfound profitability would evaporate. But steep prices are dangerous, too. They reduce the incentive for owners to spend bitcoin on daily payments. Without these transactions, the practical case for cryptocurrencies — and crypto exchanges — falls apart.’
Worth a read. The key now is who else will list, I was on Forkast yesterday and I think S Korea will be watching with interest, having so many crypto fans and investors and having has so many run in’s with the regulators. What Coinbase I think shows is that firms that are prepared to work with regulators will succeed.
Link to yesterdays show:
https://www.youtube.com/results?sp=mAEA&search_query=The+daily+forkast

Brussels banks on BioNTech as Danes drop AstraZeneca jabs over clot fears
The EU plans to massively increase its supply of the BioNTech/Pfizer corona-virus vaccine, as Denmark became the first European country to end use of the Oxford/AstraZeneca jab.Ironic that the EU battled so bitterly with AstraZeneca and is now scaling back because of the clotting issues.
As I have said before there is a lot we still don’t understand about the virus and for that matter the vaccines.

Page 2
IMF urges eurozone to boost spending
Increase would fuel bloc’s recovery and cut loss of jobs and output, says fund

Political polarisation hampers Spain’s pandemic response
Starts 'The candidate issued a heartfelt plea. “Please stop using this for political ends,” Edmundo Bal said as he denounced left and right alike for sowing “chaos and confusion” over Spain’s coronavirus strategy.’

OECD talks. Multinational levy. Devil is in the detail on US global tax plan
Europeans welcome Biden’s proposals but battle looms over setting a minimum rate. Especially from Ireland, the Netherlands, Luxembourg, Malta and Cyprus all of whom have low tax rates and are home to many of the world’s large companies. Everyone likes the idea until it hurts them. Key for the low tax companies will be at what level they set the global minimum rate.

Madoff, mastermind of ‘extraordinarily evil’ fraud, diesHe passed away at a federal prison in North Carolina, where he was serving a 150-year sentence after pleading guilty in 2009.

Page 3
Scientists step up efforts to test risks and rewards of mixing Covid shots
Oxford group hopes study means people will not be hostage to fortune if there are supply shortfalls. As mentioned above there is a lot we still don’t understand about the virus and for that matter the vaccines. But initial tests on animals has given encouragement.
AstraZeneca vaccine more effective in elderly than Pfizer jabThe Oxford/AstraZeneca vaccine induced a stronger cellular immune response in elderly adults than the BioNTech/Pfizer shot, potentially providing more protection against severe Covid-19 and new virus variants.
German police had close ties with Wirecard, inquiry shows
Germany’s top police agency co-operated closely over several years with Wirecard until late 2020, showing the extent to which the disgraced payments provider was intertwined with the country’s law enforcement establishment. Wirecard provided credit cards to the police unit for use during criminal investigations, no doubt giving it good insight into who was being investigated and where.
Not only the police but the secret services of Austria and Russia too.
Interesting quote '“In hindsight, the BKA units — surely unwittingly — put the fox in charge of the henhouse,” the special investigator’s report concluded. Wieland noted that the BKA was in charge of fighting money laundering and organised crime and should have scrutinised “its partners more critically”.’
Tanzania’s president draws line under Magufuli era
Hassan signals end of Covid denial and hostility towards large foreign investorsAn interesting read and would suggest good for Barrick Gold and other investors in the Country that suffered from Magufuli’s attitude to foreign investors.

Page 4
Brazil asks west for $1bn to protect Amazon
Cash upfront wanted but foreign diplomats keen to see deforestation cut firstThe issue could complicate Biden’s climate summit next week and illustrates the complicated nature of protection and enforcement.Brazil is strapped for cash and says it needs the money to implement enforcement. It also says its past actions deserve reward.
But critics ‘accuse Salles of wanting to tear down the rainforest to make way for commercial activity, but he pointed to Brazil’s historical preservation of the forest as grounds to receive cash now.’'
'The minister is viewed with suspicion by other nations and environmentalists following leaked comments last year in which he said the government should take advantage of the public’s distraction by the pandemic to push through laws to deregulate the environment.’
Also worth noting that 'Since the inauguration of Jair Bolsonaro’s administration in 2019, deforestation in the Amazon has risen to its highest level in more than a decade,’
Worth a read, it underlines that protection the environment is costly and that paying up doesn’t actually guarantee you success. The people who make money from the illegal and semi legal operations are often more will to pay!

Afghanistan. Battle against Taliban
Biden declares end to ‘America’s longest war’
President orders withdrawal of troops 20 years after 9/11 attacks that provoked conflict
An interesting read and I have to say I agree with his thought process. 'Biden has characterised efforts to create the perfect conditions for US withdrawal as futile.“We cannot continue the cycle of extending or expanding our military presence in Afghanistan hoping to create the ideal conditions for our withdrawal, expecting a different result,” he was expected to say.’
It will be interesting to see how the human rights lobby reacts, it is expected that human rights and especially women’s rights will be curtail after the US withdrawal. Interesting to note that Afghanistan borders Xinjiang.

US calls on Japan to support Taiwan at White House summit
Washington wants leaders to issue joint statement of support as it courts allies to counter China. An interesting read which sets out the pros and cons on what is a very tricky issues, especially with China seeking to confront Japan on the disputed Senkaku islands

Ecuador’s leader faces struggle against social and economic ills
Self-made millionaire Guillermo Lasso may have pulled off a big surprise by winning Ecuador’s presidential election but he faces huge challenges. Worth a read if only because Ecuador’s previous president was close to China.

Companies & Markets
Soaring Wall Street fees power US bank profits
• JPMorgan and Goldman to the fore
• Robust capital markets provide lift
Earlier in the week the FT outlined 5 things to watch
1. Bad loan provisions
2. Outlook for loan growth in the 2H, as existing loan balances have shrunk.
3. Deposit levels 'In the absence of loan growth, deposits are costly and require banks to hold more capital.’ So without good loan growth prospects or regulatory change (seems currently unlikely) the banks, especially Citi and JP Morgan face challenges.
4. M&A activity and Spac’s
5. Fees, especially from Trading and whether clients are still looking to Capital markets for funding.
JP Morgans results were boosted by writing back loan provisions and it warned that loan demand was weak; it also gave a flat outlook.
The article notes that 'But the traditional banking business of taking deposits and making loans continued to grow less profitable and executives warned that the boost to earnings from those activities would likely fade.'
'The search for more stable returns is behind Goldman’s push into the consumer business with Marcus. But the pandemic and lower interest rates forced it to push out the timeline for when it expects its fledgling consumer unit to be profitable by a year to 2022.’

Eastern promise HSBC relocates top leadership from London to Hong Kong
HSBC confirmed earlier indications but also added Nicolas Moreau, head of asset management, whose departure from London had not previously been reported.The result is that 'almost all of HSBC’s global revenue will be run out of Hong Kong. The decision also has symbolic importance considering the bank’s delicate geopolitical position, caught amid escalating tensions between the west and China as they face off over the future of Hong Kong.“These moves underscore the importance of the Asia-Pacific region . . . [which is] central to our future growth,” Quinn said in the email, which was seen by the Financial Times.
“An important part of our global strategy is to base more of our leadership population in Asia.”’
It will be interesting to see if HSBC commitment to Asia is welcomed by the potential clients in Asia and most importantly by China. In the past HSBC has tried to gain favour with China in some of its strategy but has never achieved the success that one might have expected. Investors will be watching to see if this time is different.

Glencore raises investor hackles with CEO pay plan
Glencore is facing the threat of investor dissent after an influential proxy adviser urged shareholders to reject new chief executive Gary Nagle’s incentive scheme and abstain from a key climate change resolution.
Energy groups are now a more complex foe for environmentalists
An interesting read is it better to try and effect change from outside or from within?
General Atlantic to repay Greensill debt
Private equity firm takes pricey €300m Goldman loan to protect reputation.An interesting move; worth a read if you are following the saga.

Toshiba chief ’s abrupt exit stirs doubts on CVC buyout
The departure of Nobuaki Kurumatani followed a shareholder rebellion, management’s defeat in a clash with activist funds, and signs of a split on the Toshiba board over the approach made by CVC and other private equity funds.Basically everything is in the air. It would appear that there are divisions within the board. As I wrote yesterday I think reveals that the old guard of Japanese management is still ingrained. They will tolerate a lot as long as they feel it is in the best interest of the company but bringing a company’s reputation into question is still taboo.
Now they have appointed Kurumatani predecessor as replacement CEO; which will raise some concerns; it was his decision in 2018 to issue $5.4bn worth of shares that resulted in the addition of some activist shareholders to the company register. Those shareholders are now likely to put more pressure on the board to solicit more bids for the company now that the company is seen to be ‘in play’. Whilst that is probably not the desire of the majority of the board, presuming that it was opposition to the privatisation that lost Kurumatani his job, they will at least have to go through the motions. The next few weeks are likely to be crucial for investors and for M&A arb players. Stock was trading higher again today +1.1% at a five year high.

Technology. Crackdown. Beijing dictates terms of Ma ‘rectification’
Demands prove more onerous than expected for Ant while Alibaba escapes the worst.
The key I think is that the PBOC is looking to access Ant’s data on the people that use its services. The article notes 'The PBoC and Ant have fought a multiyear, unresolved battle over the latter’s data, which the fintech has said it cannot share with other parties without customer consent. But that line of argument may not satisfy Beijing.’
Now it may not have an option because it will need to apply for a licence for its personal credit rating operations; that and the systems it has developed to interpret that data is the jewel of its business. That is more advanced than anything the PBOC or any of the SOE banks have and I think that is what they want most.
Unfortunately the PBOC’s actions are likely to prove Jack Ma’s speech right that the existing banking structure will hold back the advance of FinTech in China. It was leading, it is likely to now regress and allow the rest of the world to catch up and maybe even overtake.

Silver Lake acquires stake in UAE group G42Silver Lake has paid about $800m for a stake in G42, an artificial intelligence and cloud-computing group with links to Abu Dhabi’s ruling family, in a move that strengthens the US private equity firm’s ties with the wealthy emirate.
Restaurant-bill app receives seed funding
A hospitality-payment app called Sunday, created by the founders of Big Mamma restaurants has raised Europe’s largest seed-funding round in a sign of confidence in the sector as lockdowns begin to ease.Interesting quote about changing patterns; the key is it uses a QR code on the table to pay the bill via the app; which has promised to cut the commission that restaurateurs pay on customer bills by at least half. It should save time and hence allow quicker turnaround. Although I would imagine restaurants are going to need to know which tables have paid via the app to avoid people leaving without paying.
But a key quote from a manager “Before Covid I would never have put a QR code on my table. It seemed gross and then suddenly it became normal,” It concludes 'the QR code system was “not the endgame” and that he planned to develop Sunday to work off near-field communications, a contact-less technology that links two devices.The company plans to open four offices in London, Paris, Madrid and Atlanta and double its headcount to about 90 staff over the next six weeks.’

US warned it must become more self-sufficient in PPE production
Manufacturers that battled shortages fear supply chains rely too much on China imports.An interesting read not least because PPE exports are a significant part of the exports that have driven China’s recovery. With foreign countries building up their domestic capacity that element to the Chinese export numbers will disappear.
The question is then will the demand for China’s more normal exports have recovered. The amount is quite significant 'PPE imports are still almost three times above pre-Covid rates, according to Panjiva, the trade data company.’
It will take time for the US companies that have now tooled up for PPE production to win contracts and there is still going to be an element of pricing although it quotes Sara Greenstein, chief executive of Lydall, a specialist manufacturer, who says '“I absolutely believe that supply chains will no longer be [just] about lowest cost; they’ll be about reliability and quality, efficacy and cost,” she said. “It’s important that we know not just how to consume but how to produce.”’
Currently China is doing well because PPE has been exempted from section 301 import tariffs but that will change. For investors it will be a matter of watching how China deals with the reversion to more normal exports and whether they are recovering at the same pace that demand for Chinese PPE declines.
Univision agrees $4.8bn content tie-up with Mexican broadcaster
Mexico’s top broadcaster Televisa and Univision of the US have agreed a $4.8bn content merger backed by Japan’s SoftBank aimed at launching a Spanish-language streaming service to take on the likes of Netflix.
Virgin Media’s £31bn combination with O2 receives initial watchdog clearance
The UK competition watchdog has provisionally cleared Virgin Media’s £31bn tie-up with mobile operator O2 after finding it was unlikely to lead to reduced competition or higher prices for wholesale mobile services. That could signal a fresh wave of European telecoms consolidation +VE for the sector that is struggling to find critical mass.
Corporate America joins law firms in fighting moves to restrict voting rights
Hundreds of the biggest US companies, top executives and leading law firms have pledged to fight efforts to restrict voting rights in states across the country, in an escalation of corporate America’s battle with the Republican party over the issue.

Equities. Rotation. Investors braced for rare shift as momentum and value collide
Unusual melding of strategies may add more fuel to gains for energy and financial stocks.Many expect a major rebalancing from tech and healthcare into financials, energy, materials and industrials.
It also says that 'Although equities have historically been divided into distinct, static sectors — such as utilities or technology — investors are increasingly sorting the stock market by more dynamic financial characteristics known as factors. Unlike sectors, factors can and often do overlap, and companies can drop in and out of different baskets.
However, momentum and value are often seen as nemeses, with one usually doing badly if the other is on the upswing. After all, if a value stock climbs for long enough, it is no longer cheap enough to qualify as one.
Yet the superlative performance of many long-shunned areas that dominate the value stock universe has fed expectations that they will also be categorised as momentum stocks when weightings get periodically reshuffled.
A value-momentum convergence is the “holy grail” of quantitative investing, according to Bernstein strategist Inigo Fraser-Jenkins — something so rare that it is intriguing many investors in the field.’
A very interest read because the expectation is the convergence will last for longer than before and the fact that a number of value funds withdrew from the market last year, although I am sure they are already reforming and dusting of their tried and tested formula’s.
'Sydney-based Platinum Asset Management, Lee Ainslie’s Maverick Capital and London-based Lansdowne Partners are among funds already benefiting from the market rotation from once-hot “growth stocks” to value stocks. Some believe that the duration and depth of value stocks’ wretched run means there is left plenty of room for the recent rally to continue.“We’re at one of the most extreme positionings in markets in terms of value versus growth,” said Platinum co-founder Andrew Clifford, who believes such stocks could do well over the coming years. The recent rally, “while impressive, is quite small in the context of previous underperformance”.’
Mentions 'Currently, tech high-flyers like Tesla, Microsoft and Apple dominate momentum strategies such as the one followed by BlackRock momentum ETF.
Less glamorous technology names like Intel, IBM and Cisco sit atop the asset manager’s value factor fund with financial and energy companies also taking on a bigger weighting.’
Another interesting aspect is the re-ordering of momentum ETF’s which will/is; add to the volatility.

IEA raises oil demand forecast but stays cautious
The International Energy Agency revised higher its oil demand forecast for this year but warned of “lingering concerns” over the strength of the recovery in consumption.The report coupled with the fall in US inventories prompted a rally in oil prices last night.'“Reductions in surplus inventories as well as an expected pick-up in product demand will pave the way for a cautious recovery of oil market balance in the summer months,” the cartel said in its monthly report.'

Gold stages tentative recovery after central bank and consumer buying
Gold buying by central banks and consumers in India and China is stirring hopes for a recovery in the market, which has been hit by a wave of selling this year driven by large exchange traded fund outflows. Notes two key factors gold prices in China are rising and ‘the amount of gold withdrawn from the Shanghai Gold Exchange doubled in March from a year earlier to 168 tonnes, according to exchange data.’In India demand for gold jewellery has also rebounded with imports of gold hitting a two year high in March.
An interesting read but I think gold as an inflation hedge has lost some lustre to Bitcoin and other crypto currencies especially with millennials and Gen X, which is going to undermine some of its performance.
Vaccine boost for pound wears off with gains against dollar and euro eroded
The pound is paring gains against the euro and dollar while the optimism-fuelled drop in UK government bonds is easing as the effect of the country’s head start in vaccines starts to wear off.
China envisions rise of digital rival to dollar By Michael Hasenstab chief investment officer for Templeton Global Macro
Follows on from my comments about how the Feb has been slow.
Says the recent interest in Bitcoin is just the warn up for the digitalisation of the RMB and that could accelerate the decline in the USD’s dominance as the worlds reserve currency and the acceptance of the RMB internationally.Notes the advantages of a central bank digital currency (CBDC): 'greater fraud prevention, enable instantaneous international transactions, reduce transaction costs, permit greater financial inclusion and aid the provision of direct fiscal stimulus to individual citizens.’
The PBOC has been trialling the CBDC in 28 major cities since August 2020 and will include more this year like Beijing and Shanghai.
He notes that 'Some users outside China, particularly in the US, might be reluctant to use a digital currency controlled by China, given geopolitical tension. However, early adoption in parts of Asia, Latin America and Africa is likely to proceed significantly faster.’
Key is 'Global reserve currencies’ relative importance historically is explained by the macroeconomist Barry Eichengreen. Currencies are more prized as reserve assets when they satisfy two conditions: first, when they are stable, liquid and widely used in international transactions; and second, when they are backed by a country to which another state has important security links.’
He sets out how China satisfies a number of the requirements and also how a 'Lack of renminbi-denominated assets for foreigners to own has inhibited the rise of the renminbi as a reserve currency. But now the renminbi will be supported by the Chinese authorities opening their $15tn domestic bond market to foreign participants. Greater demand for these bonds will push down yields, lowering borrowing costs.’
Which, not mentioned, maybe one of the reasons the PBOC is reigning in debt in order to try an avoid significant bond defaults which would scare investors.
He notes the significance of the first mover advantage and the use of the BRI to enhance the RMB’s status.
He concludes 'Covid-19 might also be a catalyst for the greater acceptance of the renminbi as a global reserve currency. The economic carnage of the pandemic has sent already large fiscal deficits ballooning and driven even more accommodative monetary policy in the US.This historically unique combination of impending massive fiscal and vaccine-led growth, where short-term interest rates are anchored at zero, will expand an already large current account deficit, putting further pressure on the value of the dollar. The digitalisation of the renminbi will add to these economic and geopolitical factors. This will have a durable, transformative impact on the international economy.’
I think he is right in many aspects but the lack of convertibility at present is an issue and China’s tight control is going to be an issue. The clamp down on external investment is a indication of the concern, I think that given the chance a lot of money wants to leave China. That may be paranoid but it is a concern. It is interesting to wonder how the government’s direct knowledge of peoples finances will impact acceptance. China has been at the forefront with firms like Ant and the PBOC’s access to Ants data and systems could be important but the other key element is when only the consumer and Ant had the data, citizens were happy. If the PBOC/Govt has the data too, then there are increased concerns; not least in China regarding non declared income.
A good and well thought out piece, well worth a read.

For interest
FT BIG READ. INTERNATIONAL POLITICS. Quitting QAnon
Although its prophecies have proven false, the pro-Trump movement remains popular globally. Experts say that in the era of social media, it is even harder to persuade people to abandon a conspiracy theory.

Opinion
Grab is lunging for the top of the Spac market By Brooke Masters
Starts'The world’s largest Spac deal has lift-off: Singapore’s superapp Grab announced on Tuesday that it will use a special purpose acquisition company to float on Nasdaq at a value of close to $40bn.But the rest of the Spac market is deflating rapidly, with potentially dire consequences for investors and entrepreneurs who hope to tap a relatively quick method of joining a stock market.’
Concludes 'It is too hard right now for investors to tell these motives apart. The watchdogs should step in. The SEC has already warned de-Spacs about selling themselves with misleading predictions and taken a closer look at their accounting. Tough punishment should follow for those that misbehave.US regulators — and others seeking to lure Spacs — must do more. Tougher disclosure rules should set standards for projections and make it easier for investors to see who is profiting and how. Spacs aren’t for everyone but, done right, they have a place in the market.’Worth a read
Johnson plan to save the Union is muddle through by Robert Shrimsley
After a good start, the Iran nuclear talks still have far to go By Ali Vaez directs the Iran project at the International Crisis Group

Do China’s ‘wolf warrior’ diplomats have any bite?  By Lindsay Gorman a fellow for emerging technologies at the Alliance for Securing Democracy at the German Marshall Fund
Focuses on the fact that recently their attacks have misfired or backfired; 'exposing a more shadowy side of Beijing’s foreign policy to public scrutiny.’
Interesting to note 'Chinese officials have increasingly taken to Twitter over the past year in the face of mounting global concern about Xinjiang. That has now gone into overdrive. In just the last week of March, China’s diplomatic and state media accounts tweeted about the province more than 2,000 times — an eightfold spike in frequency, according to research complied by the Alliance for Securing Democracy, where we track authoritarian social media accounts.’
But quantity is not quality and is often far more damaging. 'As the French foreign trade minister wrote, “It is not by trying to intimidate our parliamentarians, researchers & academics that [China] will respond to legitimate concerns about the treatment of Uyghurs in #Xinjiang”. Beijing’s message rings similarly hollow in other key democracies. Last week, Japan called out China in an uncharacteristically strong statement. And at a bizarre media event in Canberra, the Chinese embassy gauchely paraded Uyghurs in an ill-received video presentation to journalists.’
'Beijing’s mixed messaging was neatly captured, mid-tweet, recently when the Chinese Embassy in Ireland mangled an Aesop’s fable. In its version of “the Wolf and the Lamb”, China accused the west of wolf-like attacks but then asserted: “The wolf is the wolf, not the lamb. BTW, China is not a lamb.” The real audience is likely to be party politicians back home, who want to see an emboldened China going punch for punch with the west.’
But 'China’s coercion has succeeded far better when it has been covert. A 2020 PEN America study on the Beijing government’s influence on Hollywood, for example, found that studios and filmmakers change “casting, plot, dialogue and settings . . . to avoid antagonising Chinese officials” who control whether their films gain access to the booming Chinese market.’
She concludes
'For democracies, activists, researchers and those concerned about the fate of the more than 1m imprisoned Uyghur Muslims, all this means meeting Beijing’s bluster with a continued spotlight and an open megaphone. As the 2022 Beijing Winter Olympics draw closer, and debates grow louder over whether and how democracies should participate, there may be just such an opportunity.’
A good read. As I have said before so many of these issues if China allowed foreign observers from the UN or other recognised international organisations free access they could quickly show how the west is wrong. The fact that they don’t I think reveals there is something to hide, as she says the 'Wolf Warriors' are for the benefit of the home market not real global diplomacy.

Apr 15 Asian Marco Initial Thoughts Expect a weaker open with caution on mixed US earnings


Asia
Outlook US Markets closed mixed as earnings got underway so expect cautious trading in Asia. TSMC earnings and Q2 guidance key today.  Tonight US Retail Sales and initial claims will be watched carefully tonight together with more earnings. Plus tomorrow China GDP and other key day also likely to keep investors wary.  The surge in covid cases in some Asian countries also a concern but it does not seem to have impacted turnover.
Australia  
Futures indicate market to open lower ahead of data on Consumer Inflation Expectation and the Employment Report. Rising oil prices +VE Beach and Woodside, but Gold weak -VE Newcrest and Resolute Mining. Results due from Bank of Queensland Limited will impact the banks
Japan 
Nikkei futures opened -5pts and are drifting lower. Expect the markets to open lower following the mixed US markets overnight. The surge in covid cases -VE for sentiment.
S Korea 
Expect markets to open flat following US markets. BoK rate decision this morning but no change expected.
Taiwan 
Market to open lower with caution ahead of TSMC earnings and conference call in focus. T/O Wednesday hit an all time time as the index tests towards the 17,000 level. Foreigners were net sellers but did see rotational buying in steel and shipping.
China 
Market to open flat and could see support from Team China again today but retail investors likely to remain cautious ahead of tomorrow’s key GDP data (along with House Price Index, Industrial Production & Capacity Utilisation, Retail Sales and Unemployment).
HK 
ADR’s indicate -31pts at 28,869 with weakness in Ecommerce and financials and Petrochems mixed. Expect cautious trading and worth noting turnover has been easing especially in the connect flows as China tightens
US Futures Opened higher, Dow +50pts, S&P  nd  NDX +0.2%

Thailand reported more than 1,300 new COVID-19 infections on Wednesday, setting another daily record and adding pressure on the government to speed up a nearly nonexistent vaccination drive and do more to control a surge that comes amid mass travel as the country celebrates its traditional New Year festival.

DOW +0.16%, NDX -1%, S&P -0.4%, Russel 2K +0.84% 
Markets opened flat but Dow worked higher initially and then drifted lower in the pm, selling down late afternoon. S&P traded sideways around flat but sold down late afternoon. NDX initially rose but trended lower from mid morning.
Pre Market Goldmans +2.3% as Q1 earnings beat significantly, JP Morgan -1.9% also beat helped by writing back bad loan provisions but warned new loan demand was weak. Broadly stocks initially rallied but sold down from midday.
Bed, Bath & Beyond -12.2% as Q4 earnings missed
Discovery -5% on news that Credit Suisse is still unloading its position in the wake of Archegos Capital Management’s blowup.
U.S. spy agency leaders warned on Wednesday of the "unparalleled threat" posted by China, citing Beijing's regional aggression, cyber capabilities and economic clout as they testified at a public congressional "Worldwide Threats" hearing for the first time in more than two years.
Banks JPMorgan Chase -1.9%, Citigroup +1.2% Wells Fargo +5.5% after earnings, Amex +1%
Work from home names: 
Facebook -2.2%, Apple -1.8% despite announcing a launch event, Amazon -2%, Netflix -2.5%,  Disney +1.1%, Zoom Video -4%, Alphabet -0.6% and Microsoft -1.1%,
Tech 
NXP Semi -1%, Nvidia -2.6%, Micron -1.6%, AMD -2.1%, Skyworks -0.8%
Re-opening stocks
  Boeing -0.3%, Caterpillar +1.4%, Simon Property +0.3%, Kohl’s -2%, Nordstrom +2%, Gap unch (opened flat rallied and sold down), United Airlines +0.5%, Carnival +0.4%, Wynn Resorts -0.6%, Chevron +2%, Exxon Mobil +2.9%,  
Lock down names 
Campbell Soup -0.9% General Mills -0.1%, JM Smucker +0.6%
DATA
MBA Mortgage Applications -3.7% vs -5.1% prior
MBA 30 yr Mortgage Rate 3.27% vs 3.36% prior
Import Prices Mar +6.9% YoY vs +3% Feb (F/cast was +6.3%)
Import Prices Mar +1.2% MoM vs +1.3% Feb (F/cast was +0.7%)
Export Prices Mar +9.1% YoY vs +5.3% Feb revised (F/cast was +7.6%)
Export Prices Mar ++2.1% MoM vs +1.6% Feb (F/cast was +0.8%)
EIA Gasoline Stocks Changes +0.309m vs +4.044m prior (Consensus was +0.786m)
EIA Crude Oil Stock Changes -5.889m vs -3.522m prior (Consensus was -2.889m)
Beige Book; US recovery accelerated to a moderate pace between February and April.
USD was slightly weaker vs Yen & Euro. Bitcoin -0.4% @ 62,651.78 eased from initial high as Coinbase debuted on the Nasdaq and closed at $328 off the early high of US$381VIX +2% @16.99 , US T10 @ 1.63%
OIL Brent +4.6%, WTI +4.9% as US inventories declined and IEA report boosted optimism for increasing demand.
Gold -0.5%, Silver +0.2%, Copper +1.9%, Platinum +1.2%, Palladium -0.6%.
AHEAD Retail Sales, NY Empire State Manufacturing Index, Philiadelphia Fed Manufacturing  Index, Initial Claims,  4 week average Initial Claims, Continuing Claims, Industrial Production, Capacity Utilisation, Manufacturing Production, NAHB Housing Market Index, Business Inventories, EIA Natural Gas Report,  Foreign Bond Investment, Net Long Term TIC Flows, Overall Net Capital Flows.
Earnings: Bank of America, Citigroup, UnitedHealth, PepsiCo, BlackRock, Alcoa, PPG Industries, U.S. Bancorp, Charles Schwab, Delta Air Lines, Rite Aid, Wipro, Taiwan Semiconductor, Truist Financial, SunTrust
DAX -0.17%, CAC +0.4%, FTSE +0.71% 
FTSE and DAX opened around flat but the CAC opened higher. FTSE trended slightly higher but the DAX and CAC traded sideways. Eurozone Industrial Production -VE but slightly better than expected along with UK Labour Productivity. Resources and Tech +1% with Utilities weak
LVMH +2.9% on good Chinese and US sales.
SAP +1.1% and Covestro +0.7% on raising their 2021 guidance
Tesco -2% after earnings -14.7% YoY
EasyJet +5.8 said it expects a fiscal first-half headline loss before tax of between £690 million ($950.6 million) and £730 million, but projected an uptick in flights from late May.
Credit Suisse +0.1% off initial lows after it told investors on Tuesday that $2.3 billion worth of its loans is exposed to ongoing uncertainties surrounding supply chain finance firm Greensill Capital.Barclays -0.4% but was -10% in early trading after was is assumed to be an error trade with 48,000 shares traded at £1.68, stock closed at £1.86
Data out
EUROZONE
Industrial Production Feb -1.6% YoY vs +0.1% Jan (F/cast was -2%)
Industrial Production Feb -1% MoM vs +0.8% Jan (F/cast was -3.2%)
UK
Labour Productivity Q4 Final -4.3% QoQ vs +6.5% Q3 revised (F/cast was -4.5%)
AHEAD
EUROZONE No data
GERMANY No data due
FRANCE No data due
UK No data due

JAPAN 
Nikkei futures opened -5pts and are drifting lower.  Expect the markets to open lower following the mixed US markets overnight.  The surge in covid cases -VE for sentiment.
Yen currently 108.95
Data due 
Foreign Stock & Bond Investments, BoJ Kuroda Speaks.
Osaka reported 1,130 new covid cases (vs 1,099 Tuesday) and Tokyo reported 591 new cases with other prefectures also reporting a surge in cases with the nationwide total of 4,280. -VE for sentiment as forth wave hits Japan, 100 days before the Olympics.
Suga-Biden summit offers chance to hash out a plan on China, next Friday in Oval Office
Japan's nuclear regulator said on Wednesday it would bar Tokyo Electric Power Co (Tepco), operator of the wrecked Fukushima Daiichi nuclear plant, from restarting its only operable atomic power station due to safety breaches uncovered last year. -VE
China on Wednesday asked Japanese Deputy Prime Minister Taro Aso to drink treated radioactive water accumulated at the crippled Fukushima Daiichi nuclear power plant, after he said it is safe to drink it.
Toshiba board members planned to oust CEO Nobuaki Kurumatani before CVC Capital Partners launched a $20 billion buyout bid last week, telling him the day before the offer was announced they would replace him, people familiar with the matter said. Puts the offers to take the company private in question -VE
Nissan’s flagship GT-R NISMO takes another step forward with the addition of a new Special Edition, which was previewed Wednesday in Yokohama. Slight +VE

SOUTH KOREA 
Expect markets to open flat following US markets. BoK rate decision this morning but no change expected.
Data due BoK rate decision; no change expected
KDCA recorded 731 new coronavirus cases, on Wednesday, as the country battles to stem the number of infections with more testing and vaccination efforts.
President Moon ordered officials on Wednesday to explore petitioning an international court over Japan's decision to release contaminated water from its wrecked Fukushima nuclear plant into the sea, amid protests by fisheries and environmental groups.
LG Chem Ltd and GM will announce a second U.S. battery cell manufacturing plant on Friday, revealing plans for a $2.3 billion factory in Spring Hill, Tennessee, three people familiar with the matter said. +VE
Korean Air aims to launch a single integrated entity with Asiana Airlines, its biggest acquisition to date, in 2024, its chief executive president said on March 31.  Explaining to reporters the post-merger integration plan, which it reported to Asiana’s main creditor earlier this month, Woo Kee-hong said Asiana Airlines would operate as a subsidiary of Korean Air for two years before being integrated into one brand.
SK Telecom said Wednesday it will set up a new holding company for its non-mobile subsidiaries to boost shareholder value and accelerate growth in its businesses. +VE
Hyundai Motor has installed its E-pit high-speed electric vehicle charging system at 12 rest stops on major expressways, as part of its efforts to expand their EV infrastructure, the company said Wednesday. +VE
After witnessing US President Joe Biden hold up a silicon wafer in front of the world’s chip industry leaders, including Samsung Electronics, calls are growing in South Korea that its leader, too, should act to help safeguard Korean chipmakers from an unfolding global war for chips. +VE
LG Chem said Wednesday that it had increased its production capacity of carbon nanotubes from 500 metric tons to 1,700 tons to meet growing demand for the raw material used in electric vehicle batteries. +VE
Posco International aims to expand its food business to become one of the world’s top 10 food trading companies, amid growing concerns over rising food prices, the South Korean trading company said Wednesday.  +VE
KT Corp. fined 165 million won ($147,000)by the regulator for delaying activation of its mobile network services for nearly 20,000 users who had preordered Galaxy Note 20 smartphones last year without proper cause. Slight -VE
South Korean banks' household loans grew at a slower clip in March, while the growth of mortgage loans remained at a high level, central bank data showed Wednesday. Slight -VE
Namyang Dairy Products, one of South Korea’s major dairy firms, soared to +29% intraday trading on Wednesday but closed -5% after the company claimed that its own yogurt lineup Bulgaris can reduce the infection risk of COVID-19.!

TAIWAN 
Expect market to open lower with caution ahead of TSMC earnings and conference call in focus. T/O Wednesday hit an all time time as the index tests towards the 17,000 level. Foreigners were net sellers but did see rotational buying in steel and shipping.
No data due  
Chris Dodd, a former US senator and long-time friend of Joe Biden, is expected to relay the US president’s concerns over the security of the Taiwan Strait and his desire for Taipei and Beijing to refrain from taking provocative action, observers said.  Accompanied by former US deputy secretaries of state Richard Armitage and James Steinberg, Dodd arrived at Songshan Airport in Taipei on Wednesday afternoon for a three-day visit. “Once again this visit, coming less than three months after Biden took office, demonstrates the firm Taiwan-US relationship and the US bipartisan support for Taiwan,” said Xavier Chang, a spokesman for the island’s President Tsai Ing-wen. China is holding ‘military exercises with live firings’ as a sign of its displeasure.
Global sales of semiconductor manufacturing equipment last year surged 19 percent to a record US$71.2 billion, up from US$59.8 billion in 2019, industry association SEMI reported yesterday. SEMI expects global sales of wafer processing equipment to hit a new record this year, after major chipmakers announced new capital expenditure plans for this year, +VE
TSMC said to be no longer accepting new orders from Phytium, one of seven Chinese entities involved in supercomputing blacklisted by the US last week. The blacklist could hurt China’s supercomputer efforts, but experts say it might not have much impact on military technology, a main concern of the US.  Conference call, with investors looking fo Q2 guidance.
Alchip Technologies Ltd  yesterday saw its shares fall by the maximum daily limit of 10% for the fourth consecutive session after having said it would no longer supply its key customer Phytium.  Yesterday, in a filing with the stock exchange regulator; required due to the volatility of the share price over the past few sessions,  Alchip reported that net profit last month increased 85.75 percent year-on-year to NT$143 million (US$5.03 million), while revenue increased 66.06 percent to NT$1.033 billion.  Earnings per share last month were NT$2.05, up 70.45 percent from a year earlier, the company filing said. Slight +VE but the loss of the key client is more pressing.
AU Optronics Corp is planning to expand capacity amid strong demand for high-end display panels used in premium notebook computers and monitors during the post-COVID-19 pandemic period, the company said yesterday.  The firm plans to boost capacity at its sixth-generation plant in Kunshan, China, to about 36,000 sheets per month from 27,000 sheets, AU Optronics said, adding that the expansion would be ready in the third quarter of next year.  +VE
MediaTek Inc on Tuesday posted record-high monthly and quarterly sales driven by big shipments of 5G smartphone and TV chips. The company posted consolidated sales of NT$40.15 billion for last month, up 23.33 percent from February and up 75.89 percent from last year — the first time its revenue has exceeded NT$40 billion in a single month. First-quarter sales also set a company record for a single quarter at NT$108.03 billion, up 12.06 percent from a quarter earlier and up 77.5 percent from a year earlier, MediaTek said. The figure beat the company’s earlier sales guidance for the quarter of NT$96.4 billion to NT$104.1 billion. +VE
Yulon Motor Co yesterday cut its forecast of vehicle sales in Taiwan to 427,000 units this year, attributable to effects of the COVID-19 pandemic, as well as supply constraints of automotive semiconductors and shipping containers.  Yulon forecast that sales would decline 3.8 percent from 444,000 vehicles sold last year. The automaker in November last year estimated a slower decline of 2.9 percent to 431,000 units. -VE
Kingray yesterday said it plans to raise capital to purchase equipment to massively expand production after it becomes an approved vendor for STMicroelectronics NV. “Getting that vendor code was a very difficult process,” Kingray chief executive officer Leo Tsou said, adding that STMicroelectronics would be a “key client.”  STMicroelectronics is the maker of time-of-flight (TOF) modules for Apple Inc, among other clients. TOF modules require a narrow band pass filter (NBPF) to isolate the infrared wavelength, which is optimal for facial recognition. +VE

CHINA 
Expect market to open flat and could see support from Team China again today but retail investors likely to remain cautious ahead of tomorrow’s key GDP data (along with House Price Index,  Industrial Production & Capacity Utilisation, Retail Sales and Unemployment). 
No data due but may get FDI (YTD)
China described its military exercises near Taiwan as “combat drills” on Wednesday, upping the ante as senior former US officials arrived in Taipei on a trip to signal President Joe Biden’s commitment to Taiwan and its democracy. PLA says it will hold live firing exercises.
The Philippines filed fresh diplomatic protests to China on Wednesday after accusing its giant neighbour of undertaking illegal fishing and massing more than 240 boats within the Southeast Asian country’s territorial waters.
China on Wednesday accused the United States of supporting unrest in Xinjiang as it continues to defend its clampdown on Muslim minorities in the region.  The Foreign ministry spokesman uses video of interview with sacked FBI contract translator Sibel Edmonds to support claim.  The People’s Daily, Chinese diplomats share footage on social media around the world
Serbia has ordered China's Zijin Mining Group to halt work at a shaft at the country's only copper mine and to complete a waste water treatment plant after it failed to comply with environmental standards, the mining and energy minister said on Wednesday.
China defends its US$944 million loan to Montenegro for motorway project.  Says the sum is less than 25% of Balkan nation’s total debt, and relatively high cost of project due to ‘unfavourable geological conditions’, Chinese embassy in Podgorica says. One would have thought they would have researched the conditions before starting the project. -VE as again suggests the project was for China’s benefit not Montenegro’s.
China debt: local government spending under microscope to protect national economy from ‘systemic risk’.  Local Chinese cadres will be held accountable for the rest of their lives if the debt raised during their terms is found to be problematic in the future.  Key policies or investment projects that would be funded with public money will have to undergo a ‘fiscal endurance’ evaluation -VE
Xinjiang cotton ban, due to forced labour claims has pushed China to step up plans for domestic Better Cotton Initiative.  The Switzerland-based Better Cotton Initiative, launched to promote good practice in cotton industry, has been pressured over handling of Xinjiang labour claims.  Now China has accelerated plans for its Weilai Cotton, or future cotton, project which were made two years ago and accelerated in January when Better Cotton Initiative cut off ties with Xinjiang.
China’s first mRNA vaccine ready for final stage trials overseas.  The vaccine ARCoV uses the same revolutionary technique as the Pfizer-BioNTech and Moderna products, and early trials suggest it may prove just as effective.   Work on a production facility in Yunnan province started last year and developers hope to produce over a hundred million doses a year.  
China considering a J-10C barter deal with cash-strapped Iran: 
• Tehran is said to be interested in buying 36 of the advanced Chinese fighter jets but finding the cash could be difficult. Military analysts say now is not the time to exchange weapons for oil but believe Beijing is considering the move. It might also raise concerns amongst Iran’s neighbours about China’s intentions; as the FT’s editorial said yesterday 'For China it is trying to be friends with everyone; 'On the same trip that took him to Tehran last month, Chinese foreign minister Wang Yi visited Iran’s arch-enemy Saudi Arabia, as well as Turkey, the United Arab Emirates, Oman and Bahrain. Much deeper Chinese ties with Iran will cause consternation in Israel, Saudi Arabia and other countries in the region and could suck Beijing into conflicts it neither wants nor understands.'

HONG KONG  ADR’s -31pts at 28,869 with weakness in Ecommerce and financials and Petrochems mixed.   Expect cautious trading and worth noting turnover has been easing especially in the connect flows as China tightens
No data due
Short Selling Wednesday 15% vs 14.6% Tuesday
Top Shorts 
Bud Apac (1876) 51%, Ping An (2318) 45%, Country Garden (2007) 39%, Sands China (1928) 38%, Bank Of China (3988) 34%, Mengniu Dairy (2319) 33%, BankComm (3328) 33%, Wuxi Bio (2269) 33%, Ali Health (241) 31%,  Sino BioPharm (1177) 26%, SHKP (16) 25%.

BUYBACKS/INSIDER DEALING 
RAZER (01337.HK) announced that it repurchased 4.3 million shares through the Stock Exchange on 14 April, involving approximately $12.006 million.
XINYI GLASS (00868.HK) announced that Chairman Lee Yin Yee and CEO Tung Ching Sai had on 12 April purchased a total of 956,000 shares, involving $23.8825 million in total.
WATCH
HSBC HOLDINGS (00005.HK) is expediting its strategic shift to Asia, HSBC will move four of its top executives to Hong Kong from London, one more personnel than expected, the UK Financial Times reported.   The CEO Noel Quinn revealed in an internal memo that Greg Guyett, co-head of global banking and markets, Nuno Matos, CEO of wealth and personal banking, and Barry O’Byrne, CEO of global commercial banking, will move to Hong Kong in the latter half of the year. Nicolas Moreau, head of asset management, will join the relocation, whose departure from London has not been reported before.
HANS ENERGY (00554.HK) announced today the grant of share options carrying the rights to subscribe for a total of 396 million ordinary shares of the Company to David An, the chairman of the Board, an executive Director and a substantial shareholder of the Company, and Woo King Hang, an independent non-executive Director.
GANFENGLITHIUM (01772.HK) (002460.SZ) Positive Profit Alert announced preliminary results for the first quarter ended March 2021 that profit may reach RMB450-510 million, up 57.09-64.84 times yearly. Expected basic. EPS. is RMB1.36-1.54.
CHINA RES LAND (01109.HK) announced that for the month ended 31 March 2021, the Group achieved gross contracted sales of approximately RMB26.05 billion with contracted GFA of approximately 1.448 million square meters, up by 16.2% and 10.3% YoY respectively.It also announced that it had in March 2021 acquired four land parcels in Chengdu, Wuxi, Huai’an and Wenzhou with total gross floor area of approximately 849,800 square meters. The attributable land premium payable amounted to approximately RMB6.71 billion.
XIAOMI-W (01810.HK) Non-Executive Director Liu Qin disposed on-market of 32.9648 million shares in total, involving over $866 million, according to shareholding disclosures at the Stock Exchange.HongKong Land (HKL SP)  S&P Global Ratings has rented two floors at Three Exchange Square in Central. The space measures about 22,000 square feet in total, according to Hongkong Land.  Assuming the average rent is HK$100 per sq ft, the monthly rent will be about HK$2.2 million for S&P, according to local media reports.  S&P moved to International Commerce Centre in Kowloon in 2012. +VE
ECI TECH (08013.HK) announced that the Group has been awarded contracts from public sector. These projects include supply and installation of low system based on LoRA standard at various locations for the Government of Hong Kong.  The aggregate amount of contract sum awarded was approximately HK$6 million.
Daily Journal Corporation, chaired by Warren Buffett's closest partner Charlie Munger, acquired a position in BABA-SW (09988.HK) (BABA.US) in the first quarter.  The e-commence and software firm held over 165,300 Alibaba shares, representing a 19% portfolio weight as of late March, according to previous filings. Daily Journal owns and needs stocks "held as cash equivalents", as Barron's cited the company's statement.
ANTA SPORTS (02020.HK) announced that retail sales of ANTA branded products for the first quarter of 2021 recorded 40-45% positive growth compared to the same period of 2020, while retail sales of FILA branded products recorded 75-80% positive growth.
Watsons Hong Kong reported strong online sales growth amid the pandemic, having taken the lead in online sales expansion including user experience enhancement, said Managing Director Samuel Lee at a press conference. While store sales dwindled in tourist districts, Lee still saw opportunities for local residential neighborhoods.
SANDS CHINA LTD (01928.HK)'s Sands Macao Hotel in the Macao peninsula has no connection with "Sands Macao" as mentioned by Mainland reports, Macao Daily citing the former's clarification.  "Sands Macao", a cross-border online gambling chain, had illegally exploited SANDS CHINA LTD's name and trademark without permission. SANDS CHINA LTD stressed it has never participated in any form of online gambling activities, and will follow up all reports tied to trademark infringement.
Centa-Salesman Index (CSI) last reported at 70.89, down 1.73 pts from 72.62 in the previous week. The research department of Centaline Property, pointed out that the index has been zigzagging within narrow range around 70 for five weeks, showing that it has not turned south with steadiness. The index also indicated the front-line agent sentiment remained optimistic, hinting the housing price will continue to climb up.
The Hong Kong Monetary Authority (HKMA) today (April 14) announced that the external assets of the Exchange Fund decreased in March 2021 by HK$26.9 billion to HK$4,016.5 billion.  The Monetary Base, comprising Certificates of Indebtedness, Government-issued currency notes and coins in circulation, the balance of the banking system and Exchange Fund Bills and Notes issued, amounted to HK$2,107.9 billion.
The Commerce and Economic Development Bureau has been discussing with Singapore the necessary conditions for reviving a "travel bubble" between the cities for almost everyday, said Edward Yau, Secretary for Commerce and Economic Development.  However, Yau hoped not to see travel disruptions from time to time after rebooting the "travel bubble".
MTR CORPORATION (00066.HK)  announced that, in order to facilitate final trial operations of the full Tuen Ma Line (TML) commissioning, trains will run from Wu Kai Sha Station to Tuen Mun Station under a normal operating schedule during non-traffic hours of six to eight nights between April and June. The first trains of West Rail Line and TML Phase 1 on 2 May will be deferred by two hours to around 7:30am.

Apr 14 HK/CHINA WRAP Markets close higher as Ecommerce rebounds


HSI +404pts (+1.4%) 28,901 HSCEI +149pts (+1.4%) 10,999  T/O HK$138.1bn (-3.3% DoD) 

EUROPE 
FTSE and DAX opened around flat but the CAC opened higher. FTSE trended slightly higher but the DAX and CAC traded sideways. Eurozone Industrial Production -VE but slightly better than expected along with UK Labour Productivity. Resources and Tech +1% with Utilities weak
LVMH strong on good Chinese and US sales.
SAP and Covestro +VE raising their 2021 guidanceTesco weak after earnings -14.7% YoY
EasyJet +VE said it expects a fiscal first-half headline loss before tax of between £690 million ($950.6 million) and £730 million, but projected an uptick in flights from late May.
Credit Suisse weak; told investors on Tuesday that $2.3 billion worth of its loans is exposed to ongoing uncertainties surrounding supply chain finance firm Greensill Capital.
Data out
EUROZONE
Industrial Production Feb -1.6% YoY vs +0.1% Jan (F/cast was -2%)
Industrial Production Feb -1% MoM vs +0.8% Jan (F/cast was -3.2%)
UK
Labour Productivity Q4 Final -4.3% QoQ vs +6.5% Q3 revised (F/cast was -4.5%)
US Futures 
Opened in Asian time Dow +10pts, S&P +0.03% and NDX +0.02% but trending higher on strong earnings from Goldman’s and JPM; currently Dow +25pts S&P +0.1%, NDX +0.3%
Pre Market Goldmans +VE as Q1 earnings beat significantly, JP Morgan also beat.
Bed and Bath weak as Q4 earnings missed
Discovery weak on news that Credit Suisse is still unloading its position in the wake of Archegos Capital Management’s blowup.
AHEAD 
MBA Mortgage Applications and 30 yr Mortgage Rate, Import & Export Prices, EIA Oil report, Beige Book.Earnings still to come Wells Fargo, Infosys, First Republic Bank

IMF downgrades growth forecasts for Indonesia, Malaysia, the Philippines, Thailand and Vietnam to 4.9% in 2021, down from its previous projection of 5.2%.

Cambodia Moha Songkran 2564!  (It’s Khmer New Year)

CHINA 
CSI 300 closed +41pts (+0.8%) @ 4,981CSI 300 opened higher and rallied to test 4,980 which is did a couple of times in the first hour but unable to break higher it sold down to 4,947 and then ticked up into lunch. PM the market worked higher but hit resistance around the morning level at 2pm and eased back to 4,970 before rallying into the close. Having trended lower so far this week looks like Team China active ahead of key data on Friday.
Shanghai Comp +20pts (+0.6%) @ 3,417
Shenzhen Comp +210pts (+1.6%) @ 13,738
ChiNext Comp +52pts (+1.9%) @ 2,884

CHINA DATA No data

HSI 
Pre market opened @ 28,797 +299pts vs +79pts ADR’s.
Meituan rallied on denying share placement rumour and the Ecommerce names on an agreement with the regulator, Meitu +VE on Bitcoin’s rally and Geely on raising money to promote Lotus in China
Shorts squeezed but still some initial margin call selling then tested higher to 28,950 level where it met resistance eased back and traded sideways in a tight range. Rallied 45pts in the closing auction.
HONG KONG DATA 
The Centre for Health Protection reported 5 new covid cases (vs 13 cases Tuesday) so no conference today. None from unknown sources
Short Selling Wednesday 15% vs 14.6% Tuesday
Top Shorts  Bud Apac (1876) 51%, Ping An (2318) 45%, Country Garden (2007) 39%, Sands China (1928) 38%, Bank Of China (3988) 34%, Mengniu Dairy (2319) 33%, BankComm (3328) 33%, Wuxi Bio (2269) 33%, Ali Health (241) 31%,  Sino BioPharm (1177) 26%, SHKP (16) 25%.

AFTER MARKET NEWS 
RAZER (01337.HK) announced that it repurchased 4.3 million shares through the Stock Exchange today (14 April), involving approximately $12.006 million.
HANS ENERGY (00554.HK) announced today the grant of share options carrying the rights to subscribe for a total of 396 million ordinary shares of the Company to David An, the chairman of the Board, an executive Director and a substantial shareholder of the Company, and Woo King Hang, an independent non-executive Director.
GANFENGLITHIUM (01772.HK) (002460.SZ) Positive Profit Alert announced preliminary results for the first quarter ended March 2021 that profit may reach RMB450-510 million, up 57.09-64.84 times yearly. Expected basic. EPS. is RMB1.36-1.54.
The Commerce and Economic Development Bureau has been discussing with Singapore the necessary conditions for reviving a "travel bubble" between the cities for almost everyday, said Edward Yau, Secretary for Commerce and Economic Development.  However, Yau hoped not to see travel disruptions from time to time after rebooting the "travel bubble".
MTR CORPORATION (00066.HK)  announced that, in order to facilitate final trial operations of the full Tuen Ma Line (TML) commissioning, trains will run from Wu Kai Sha Station to Tuen Mun Station under a normal operating schedule during non-traffic hours of six to eight nights between April and June. The first trains of West Rail Line and TML Phase 1 on 2 May will be deferred by two hours to around 7:30am.
CHINA RES LAND (01109.HK) announced that for the month ended 31 March 2021, the Group achieved gross contracted sales of approximately RMB26.05 billion with contracted GFA of approximately 1.448 million square meters, up by 16.2% and 10.3% YoY respectively.It also announced that it had in March 2021 acquired four land parcels in Chengdu, Wuxi, Huai’an and Wenzhou with total gross floor area of approximately 849,800 square meters. The attributable land premium payable amounted to approximately RMB6.71 billion.
The Hong Kong Monetary Authority (HKMA) today (April 14) announced that the external assets of the Exchange Fund decreased in March 2021 by HK$26.9 billion to HK$4,016.5 billion.  The Monetary Base, comprising Certificates of Indebtedness, Government-issued currency notes and coins in circulation, the balance of the banking system and Exchange Fund Bills and Notes issued, amounted to HK$2,107.9 billion.
XIAOMI-W (01810.HK) Non-Executive Director Liu Qin disposed on-market of 32.9648 million shares in total, involving over $866 million, according to shareholding disclosures at the Stock Exchange.
ECI TECH (08013.HK) announced that the Group has been awarded contracts from public sector. These projects include supply and installation of low system based on LoRA standard at various locations for the Government of Hong Kong.  The aggregate amount of contract sum awarded was approximately HK$6 million.
Watsons Hong Kong reported strong online sales growth amid the pandemic, having taken the lead in online sales expansion including user experience enhancement, said Managing Director Samuel Lee at a press conference. While store sales dwindled in tourist districts, Lee still saw opportunities for local residential neighborhoods.
Daily Journal Corporation, chaired by Warren Buffett's closest partner Charlie Munger, acquired a position in BABA-SW (09988.HK) (BABA.US) in the first quarter.  The e-commence and software firm held over 165,300 Alibaba shares, representing a 19% portfolio weight as of late March, according to previous filings. Daily Journal owns and needs stocks "held as cash equivalents", as Barron's cited the company's statement.
ANTA SPORTS (02020.HK) announced that retail sales of ANTA branded products for the first quarter of 2021 recorded 40-45% positive growth compared to the same period of 2020, while retail sales of FILA branded products recorded 75-80% positive growth.
XINYI GLASS (00868.HK) announced that Chairman Lee Yin Yee and CEO Tung Ching Sai had on 12 April purchased a total of 956,000 shares, involving $23.8825 million in total.
SANDS CHINA LTD (01928.HK)'s Sands Macao Hotel in the Macao peninsula has no connection with "Sands Macao" as mentioned by Mainland reports, Macao Daily citing the former's clarification.  "Sands Macao", a cross-border online gambling chain, had illegally exploited SANDS CHINA LTD's name and trademark without permission. SANDS CHINA LTD stressed it has never participated in any form of online gambling activities, and will follow up all reports tied to trademark infringement.
Centa-Salesman Index (CSI) last reported at 70.89, down 1.73 pts from 72.62 in the previous week. The research department of Centaline Property, pointed out that the index has been zigzagging within narrow range around 70 for five weeks, showing that it has not turned south with steadiness. The index also indicated the front-line agent sentiment remained optimistic, hinting the housing price will continue to climb up.
MARKET COMMENT 
*PETROCHEMS STRONG after Oil climbed on a significant fall is US crude stocks and OPEC's increased optimism about recovering demand, boosting its 2021 oil-demand growth forecast to 96.5m barrels a day, as consumption is rising along with vaccination in some places. CNOOC (883 HK +1.8%) SINOPEC (386 HK +2.1%) CH OILFIELD (2883 HK +1.3%) PETROCHINA (857 HK +1.5%).
*TECH & COMPONENTS STRONG on the news that APPLE to hold first product unveiling of this year on April 20, preparing to show new products including upgraded iPad Pro with new screen, an accessory dubbed AirTags for tracking physical devices and new iMac desktops.
AAC TECH (2018 HK +5.5%) SUNNY (2382 HK +3%) TRULY (732 HK +3.3%) SMIC (981 HK +2.4%).XIAOMI (1810 HK +2%) bought back 16m shares for HK$398m on April 13; it has repurchased 120.3m shares since March 31. It announced that its Redmi brand has completed the entry-to-flagship product deployment, and the first Redmi game phone will be unveiled end-April.
*E-COMMERCE STRONG  rebounding from yesterdays weakness on regulatory concerns, after 34 Internet/E-commerce companies were reportedly called into a meeting by anti trust  regulators and have been asked to to conduct self checks within one month and rectify accordingly a number of the letters are reported in notes below.  MEITUAN (3690 HK +3.6%) TENCENT(700 HK +2.5%) JD (9618 HK +2.5%) BIDU-SW (9888 HK +3.2%). ALIBABA's (9988 HK +2%) Tmall announced to lower the threshold for new shop opening from next Monday April 19.
*PHARM FIRM  mostly traded higher except CANSIO BIO (6185 HK -7.7%), was -18% intraday, despite it saying that no serious blood clot cases had been reported so far in people using its Covid-19 vaccine Ad5-nCoV. It uses similar technology as Johnson & Johnson Covid vaccine, use of which has been paused in the US for at least a few days. FOSUN (2196 HK +1.3%) SINO BIOPHARM (1177 HK +1.2%) WUXI BIO (2269 HK +4.8%) CSPC PHARM (1093 HK +4.7%).
*HK PROPERTY FIRM as the virus spread is under control, social distancing rules may be eased as more HK residents get vaccinated. BUT  Govt announced that the Property Vacancy Tax put off last October could be reviewed as the Govt remains concerned about the housing situation.  HENDERSON LAND (12 HK +0.7%) is launching 19 units at Arbour in Tsim Sha Tsui on Saturday at discounted psf prices ranging from HK$24,653 to HK$30,836. SHKP (16 HK +2.6%) will release the first price list of Regency Bay phase two this week. The project offers 406 units.
*AUTO FIRM  led higher by GEELY (175 HK +5%) reportedly considering raising $1billion to help expand its Lotus Cars into the electric vehicles market in China. Geely also said to plan Lotus IPO as soon as 2022. GREAT WALL (2333 HK +4.2%) BYD (1211 HK +5.9%) GAC (2238 HK +3.5%).
*SHIPPING MIXED. PACIFIC BASIN (2343 HK +1.4%) announced its strongest quarterly time-charter equivalent performance in almost 10 years. OOIL (316 HK -14%) after a unit of CK HUTCH (1 HK +1%) Block sold OOIL shares with a 12% discount.


Regional Markets
INDIA closed
AUSTRALIA 
Opened higher and worked to 7,025 by midday helped by good consumer confidence data but then eased back below 7,000 before working higher again to close +46pts (+0.7%)@ 7,023
Data
Consumer Confidence Apr 118.8 vs 111.8 Mar (F/cast was 113)
Consumer Confidence Change Apr +6.2% vs +2.6% Mar (F/cast was +1%)
New Home Sales was due Mar (Feb was +22.9% (F/cast was +20%))
JAPAN
Nikkei opened lower as Machinery orders fell rather than grew.  The index found support around the 29,600 level bounced and has since traded sideways in a tight range 29,600/690  to closed  -131pts (-0.4%) @ 29,621.  Not helped by a surge in covid cases.
Topix traded in a similar fashion and closed -6pts (-0.3%) @ 1,952
Toshiba +5.8% on news the CEO has resigned.
Data pre market
Machinery Orders Feb -8.5% MoM vs -4.5% Jan (F/cast was +2.4%)
Machinery Orders Feb -7.1% YoY vs +1.55 Jan (F/cast was +2.1% YoY)
S KOREA  
Pre market data was mixed but high import prices suggests margins could be under pressure. Unemployment falling however was +VE
Kospi opened flat and initially tested 3,183 but reverted and traded around flat until around 1pm when it started to work higher; which continued all afternoon and closed just off the day high at +13pts (+0.4%) @3,182.
Kosdaq opened higher tested to 1,013 initially then pulled back to flat before working higher but saw resistance at 1,016 and eased back into the close; +4pts (+0.4%) @1,014
Data pre market
Export Prices Mar +5.6% YoY vs +0.6% Feb revised from +0.2%
Import Prices Mar +9% YoY vs -0.3% Feb revised from -0.8%
Unemployment Rate Mar +3.9% YoY vs +4% Feb 
TAIWAN 
Opened slightly higher but trended lower to 16,560 late morning but the reversed and worked back to flat and then ticked higher into the close Finished +41pts (+0.2%)@ 16,866
Tension with China running high but good results and increasing international support +VE
Alchip's share price plunged 9.9% today in Taiwan.
Taiwan's Economy Minister Wang Mei-hua said domestic chipmakers will comply with U.S. sanctions on seven Chinese firms and government labs, which had been included in the U.S. DOC's entity list.

CONNECT FLOWS
Shanghai 
Northbound RMB 36,037m Sell 17,248m : 18,789m Buy
Southbound HK$ 12,152m Sell 6,338m : 5,813m Buy
Shenzhen 
Northbound RMB 43,846m Sell 19,828m : 24,018m Buy
Southbound HK$ 13,518m Sell 5,846m : 7,672m Buy

Active Heavyweights
MEITUAN (03690.HK) +3.6%
TENCENT (00700.HK) +2.5%
BABA (09988.HK) +2%
HKEX (00388.HK) +1.6%
PING AN (02318.HK) +0.8%
AIA (01299.HK) -0.4%
HSI & HSCEI Constituents on Move:
NTES (09999.HK) +5.7%
AAC TECH (02018.HK) +5.5%
GEELY AUTO (00175.HK) +5%
WUXI BIO (02269.HK) +4.8%
CSPC PHARMA (01093.HK) +4.7%
ANTA SPORTS (02020.HK) +3.4%
BIDU-SW (09888.HK) +3.2%
ALI HEALTH (00241.HK) +3.2%
SUNNY OPTICAL (02382.HK) +3.1%
CG SERVICES (06098.HK) +3%
HSMI & HSSI Constituents on Move:
ZAI LAB (09688.HK) +25.3%
MOBVISTA (01860.HK) +19.6%
SIHUAN PHARM (00460.HK) +12.3%
FORTUNE REIT (00778.HK) +5%, hitting new high
CHOW SANG SANG (00116.HK) +4.4%, hitting new high
SUNLIGHT REIT (00435.HK) +3.1%, hitting new high
XTEP INT'L (01368.HK) +1%, hitting new high
SWIRE PACIFIC B (00087.HK) +0.7%, hitting new high

MARKET HOURS NEWS.
Moderna (MRNA.US) said its COVID-19 vaccine had been more than 90% effective against the virus up to six months following the second shot, reported CNBC. The vaccine's protection exceeded 95% against severe diseases.
The Government put off the introduction of first-hand property vacancy tax last October.   However, Secretary for Transport and Housing Frank Chan mentioned the Government's deep concern about property vacancy at today's special meeting of LegCo's Finance Committee. With updated data, it will make policy arrangements after keeping abreast of actual situations. Chan did not rule out the possibility of reviving talks on the vacancy tax bill.
ALI HEALTH (00241.HK) and Cainiao announced the launch of global logistics services for drug traceability to trace back China's drug export process to countries and regions worldwide. Thus, both parties aim to achieve the traceability of origins and whereabouts of medicine, while keeping drug temperature under control. They aim to create a global medical "electronic ID card".
The Government will further tighten the flight suspension mechanism. With effect from today, the criteria for invoking Cap. 599H to prohibit landing of passenger flights in Hong Kong will be tightened to: (a) A same passenger flight has 3 or more [current 5 or more] passengers confirmed to have COVID-19 by arrival test; or (b) A passenger flight has 2 or more passengers confirmed to have COVID-19 by arrival test on any two flights from the relevant original port of the same airline within a 7-day period [current 3 or more in two consecutive flights], the passenger flights from the relevant original port of the airline concerned will be prohibited from landing in Hong Kong for 14 days. While the remaining current criteria, i.e. a passenger flight has 1 or more passenger(s) confirmed to have COVID-19 by arrival test and 1  or more non-compliant case(s) - i.e. failed to comply with the requirement(s) specified under Cap.599H, on the same flight, will remain unchanged.
Meanwhile, the Government will impose an additional flight suspension criteria to run in parallel that if a total of 5 or more passengers with N501Y mutant strain are confirmed by arrival tests from any flight(s) originating from a specific country within a 7-day period, all flights from all airlines departing that specific country will be prohibited from landing in Hong Kong for 14 days.
Cathie Wood told CNBC that digital wallets and genomics would be the two biggest disruptive trends following Tesla and electric cars.  Wood, dubbed as "stock market goddess", was highly excited about e-wallet buildout, adding it will usurp the role played by lenders today.
Centaline said Sheung Wan offices' current vacancy rate as high as 8-9%, as compared with 1% in the past, may expose the rent level to downside pressures in a short run.  In the future, the rents may stay at the current level for a while along with new Grade A office supply in Tsuen Wan and office area available in Lai Chi Kok.      
The Government would provide cash allowance on a trial basis to eligible General Applicant (GA) households who are not living in public housing, not receiving the Comprehensive Social Security Assistance and have been waiting for PRH for more than three years, until these households are offered the first PRH allocation. In this connection, the Government will soon launch the three-year Cash Allowance Trial Scheme (the Scheme) to provide relief for grassroots families who have waited for PRH for a prolonged period of time, said Secretary for Transport and Housing Frank Chan.   Having secured the support of the Panel on Housing for the proposed Scheme, the Housing Department is now making active preparations with the target of receiving applications in the middle of this year and disbursing cash allowance from July onwards. It is estimated that around 90,000 GA households may be eligible upon the launch of the Scheme.
Apple will likely launch four new iPhones in 2H22, namely the high-end 6.7-inch and 6.1-inch devices, and the lower-end 6.7-inch and 6.1-inch phones, projected renowned Apple analyst Ming-Chi Kuo.  The high-end 6.7-inch and 6.1-inch iPhones will be equipped with the upgraded 48MP wide-angle camera, Kuo cited the latest study.
An average of more than 400 new overseas brands settled in BABA-SW (09988.HK)'s Tmall Global per month over the year, Chinese media reported.  The number of new brands making inroads into Tmall burgeoned 63% yearly in the first quarter of 2021, with over 600 new overseas brands entering the platform in January.
CANSINOBIO-B (06185.HK) said the vector of the Recombinant Novel Coronavirus Vaccine (Adenovirus Type 5 Vector) (the Ad5-nCoV) is Adenovirus Type 5 Vector, one of the commonly infective human adenovirus types, which is different from ChAdOx1 and Adenovirus Type 26 Vector, the respective vector of AstraZeneca COVID-19 vaccine and Johnson & Johnson COVID-19 vaccine.  As at the date of this announcement, no blood clot related serious adverse events have been reported in around one million vaccinations of Ad5-nCoV.
China Finance, the magazine by People's Bank of China's directors, revealed in an article that the central bank plans to unfold stress test on all of the 4,024 banking institutions in 2021.
ByteDance has filed its letter of engagement of underwriters to HKEX (00388.HK) as part of preparation for its planned Hong Kong IPO , China Securities Journal learnt from inside sources.
Worldwide PC shipments whopped 69.9 million units in the first quarter of 2021, up 32% yearly, as revealed by the preliminary results of Gartner. It represented the strongest growth since the record in 2000.
BIDU-SW (09888.HK)'s Apollo has launched the "V Partner"  autonomous driving program. The self-driving brand is among the first Chinese fleets to run unmanned tests on highways at night and under special weather conditions.   With tests started in Beijing, Apollo will conduct nighttime and special-weather tests at main roads in the city.
TENCENT (00700.HK) postponed the briefing session for the proposed issuance of US dollar bond today (14 April), Bloomberg cited people with the knowledge of the matter.   According to previous Bloomberg's report, the tech giant had planned to set price Wednesday for the issuance of the around US$4 billion bond.  The spokesman of TENCENT has not yet commented on the report.
Huaian Intermediate people's court has issued a judgement regarding MEITUAN-W (03690.HK)'s unfair competition practice that its Beijing Sankuai Technology shall pay Ele.me's subsidiary RMB352,000 in compensation, Cailian Press reported.
Overnight HIBOR last posted at 0.03714%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.10744%, down for 5 days, marking a 1-month low.
ByteDance's gaming unit Nuverse announced acquisition of C4games, as it seeks to solidify its presence in the game segment, cited Reuters.  The announcement came after Nuverse had agreed last month to acquire Shanghai-based gaming studio Moonton Technology.
TENCENT (00700.HK) will deepen its strategic partnership with GAC GROUP (02238.HK)   (601238.SH), set to sign a contract at the upcoming Auto Shanghai, Cailian Press citing insiders.
BYD COMPANY (01211.HK) clinched a strategic cooperation agreement with Anheuser-Busch Inbev China, whereby the latter will procure the pure electric tractor Q3 from the former and commence operation in numerous areas, such as Foshan, Guangdong; Tangshan, Hebei; and Wuhan, Hubei.
China's State Administration for Market Regulation (SAMR) is set to publish letters of commitment made by 34 internet platform firms relating to the law-abiding and compliant operation in three days starting today. 
MEITUAN-W (03690.HK)'s Beijing Sankuai Online Technology made the related commitment, vowing to respect platform operators' right to choose and not to force merchants to "pick one from two" through unjustified restrictions. Beijing Sankuai will immediately report illegal behavior to regulators upon discovery, and will actively comply with investigation.
BIDU-SW (09888.HK) (BIDU.US) 's Beijing Baidu Netcom Science and Technology has made seven commitments, including compliance with the law and safeguarding market order. The company vowed not to strikemonopolistic agreements with other operators, while striving for fair market competition and adhering to mutual benefit and win-win cooperation.
JD-SW (09618.HK) (JD.US)'s Beijing Jingdong Century Trading Co. has made seven commitments, including a vow against "picking one from two", abusing market dominance, monopolistic deals, unlawful concentration of operators, as well as improper competitive and pricing behavior. Equally, the company pledged not to collect and misuse personal information against the law.Beijing
Bytedance Technology Co., Ltd. has made 13 commitments, including a vow against "choosing one from two”. The company will shun away from improper pricing behavior, pledging to indicate prices clearly without dumping at low prices. Equally, user information will be collected and used under the minimum necessary principle.
Pinduoduo (PDD.US)'s Shanghai Xunmeng Information Technology Co. has released a commitment letter in this regard, vowing not to implement monopoly deals and concentration of business operators against the law. Equally, the company pledged not to practice improper pricing behavior
CKH HOLDINGS (00001.HK) through its wing Crest Apex, placed 7.75 million OOIL (00316.HK) shares to raise $853 million, reported IFR.The placing price was reportedly $110 each, representing a 12.3% discount to its previous closing price.

PRE MARKET HOURS NEWS 
Epic Games announced that it had completed a US$1-billion round of funding, which will allow it to support future growth opportunities. Epic's equity valuation is now US$28.7 billion. The TENCENT (00700.HK)-backed company mentioned that this round includes an additional US$200-million strategic investment from Sony Group.
SA SA INT'L (00178.HK) announced to further expand its online business coverage in Asia by setting foot on Lazada, the Southeast Asian e-commerce platform under BABA-SW (09988.HK)
WANT WANT CHINA (00151.HK) announced that it had on 13 April repurchased 3 million shares, involving $17.3167 million.
Chinese State Administration of Market Regulation has announced the first batch of compliance undertakings on online platforms, involving BIDU-SW (09888.HK), JD-SW (09618.HK), Weibo Corp (WB.US), Pinduoduo (PDD.US), Suning.com (002024.SZ), Vipshop Holdings Limited (VIPS.US), etc..
CG SERVICES (06098.HK) announced that its subsidiaries had entered into several Equity Transfer Agreements with COUNTRY GARDEN (02007.HK), involving RMB20 million.  The agreements involved the acquisition of 100% equity interest in Trade City Operation and Management.
Macao tourism sector players opined the tourist footfall will hopefully go back to 50,000-60,000 per day upon relaxed restrictions, which may turn out an incentive to Individual Visit Scheme visitors and Hong Kong visitors. This comment came after Macao Daily had cited Chief Executive Ho Iat Seng that the government was in talks with China about a mutual recognition mechanism of COVID-19 vaccinations, beginning with Guangdong, and that customs clearance with Hong Kong will be restored once the financial hub confirms no new cases for 14 straight days.
The Government last night zoned Tower 2 of Lido Garden, Tsuen Wan as specified "restricted area". As at 1am today, around 780 residents had undergone testing. No confirmed cases were found.
Apple (AAPL.US) announced a special event on 20 April, with the market anticipating it to roll out new iPad Pro models and the first Bluetooth tracker AirTags.  Apple did not reveal much in its media invitation letter, which reads "Spring Loaded"
GEELY AUTO (00175.HK)'s owner Zhejiang Geely Holding Group is weighing raising around US$1 billion to help expand the auto brand Lotus Cars into China's electric vehicle market, Bloomberg citing insiders.
CCASS shareholding information showed over 300 million MEITUAN-W (03690.HK) shares (or 5.12% shareholdings held in real name) had been transferred from investors to Goldman Sachs, as Guancha.cn cited media speculation. Rumor has it that MEITUAN-W's key shareholders would like to unload shares and quit the market.   MEITUAN-W replied that such market speculation was inaccurate. This CCASS change was a common practice for stake transfer among shareholders and alteration of custodian banks, the group explained.
The Shanghai-based Ford Mustang rolled out its first Mach-E EV model in China last night (13 April). The vehicle is connected to BIDU-SW (09888.HK) (BIDU.US)'s ecosystem to support Baidu's map, entertainment content and payment. Car owners will also be able to use NIO (NIO.US)'s charging network in the country.
Chinese Premier Li Keqiang, during a video call with U.S. industrial and business leaders, called for healthy development of US-China relationship. Based on the consensus reached between the two presidents, Washington and Beijing should step up conversation and cooperation on the principle of mutual respect and in the spirit of solidarity.  The de-coupling of the two countries will do no good to the world, opined Li.

Apr 14 FT US seeks Japan support on Taiwan, Toshiba CEO goes, Grab's Spac, China and Ecommerce


MARKETs @ 1:30 pm Hong Kong time
AUSTRALIA 
Opened higher and worked to 7,025 by midday helped by good consumer confidence data but then eased back below 7,000 before working higher again and currently +47pts (+0.7%)@ 7,022
Data
Consumer Confidence Apr 118.8 vs 111.8 Mar (F/cast was 113)
Consumer Confidence Change Apr +6.2% vs +2.6% Mar (F/cast was +1%)
New Home Sales was due Mar (Feb was +22.9% (F/cast was +20%))
JAPAN
Nikkei opened lower as Machinery orders fell rather than grew.  The index found support around the 29,600 level bounced and has since traded sideways in a tight range 29,600/690  Currently -110pts (-0.4%) @ 29,646.  Not helped by a surge in covid cases.
Data pre market
Machinery Orders Feb -8.5% MoM vs -4.5% Jan (F/cast was +2.4%)
Machinery Orders Feb -7.1% YoY vs +1.55 Jan (F/cast was +2.1% YoY)
S KOREA  
Pre market data was mixed but high import prices suggests margins could be under pressure. Unemployment falling however was +VE
Kospi opened flat and initially tested 3,183 but reverted and traded around flat until around 1pm when it started to work higher; currently +14pts (+0.5%) @3,183. Kosdaq opened higher tested to 1,013 initially then pulled back to flat before working higher; currently +6pts (+0.6%) @1,016
Data pre market
Export Prices Mar +5.6% YoY vs +0.6% Feb revised from +0.2%
Import Prices Mar +9% YoY vs -0.3% Feb revised from -0.8%
Unemployment Rate Mar +3.9% YoY vs +4% Feb 
TAIWAN 
Opened slightly higher but trended lower to 16,560 late morning but the reversed and worked back to flat and then ticked higher into the close Finished +41pts (+0.2%)@ 16,866 Tension with China running high but good results and increasing international support +VE
CHINA 
CSI300 opened higher and rallied to test 4,980 which is did a couple of times in the first hour but unable to break higher it sold down to 4,947 and then ticked up into lunch. PM has worked higher currently +37pts (+0.8%) @ 4,976.
Having trended lower so far this week looks like Team China active ahead of key data on Friday.
HONG KONG 
Pre market opened @ 28,797 +299pts vs +79pts ADR’s
Shorts squeezed but still some initial margin call selling then tested higher and traded sideways in a tight range. Ecommerce leading as firms signalled compliance with anti trust and self examination requirements, but the rally is broad based. Currently +387pts (+1.4%) @ 28,886
EUROPE 
Expect to open flat Eurozone important but investors will be watching for the US bank earnings to gauge the prospects for US earnings.
AHEAD
EUROZONE Industrial Production
GERMANY No data due
FRANCE IEA Oil Market Report
UK Labour Productivity
US Futures Opened in Asian time Dow +10pts, S&P +0.03% and NDX +0.02%
AHEAD MBA Mortgage Applications and 30 yr Mortgage Rate, Import & Export Prices, EIA Oil report, Beige Book.
Earnings: JPMorgan Chase, Goldman Sachs, Wells Fargo, Bed Bath and Beyond, Infosys, First Republic Bank

IMF downgrades growth forecasts for Indonesia, Malaysia, the Philippines, Thailand and Vietnam to 4.9% in 2021, down from its previous projection of 5.2%.

Cambodia Moha Songkran 2564!  (It’s Khmer New Year)

FT ONLINE
US pushes Japan to publicly back Taiwan at Biden-Suga summit
Washington wants leaders to issue joint statement of support as it courts allies to counter ChinaAn interesting read which sets out the pros and cons on what is a very tricky issues, especially with China seeking to confront Japan on the disputed Senkaku islands
Beijing hints at truce in war on Jack Ma’s business empire
Alibaba appears to escape tough punishment while Ant Group faces more severe measures; More on the unfolding saga.
LVMH benefits from demand for luxury goods in US and China
People are still treating themselves while travel and restaurants remain largely off limits'The quarter continues trends that have taken hold in the luxury sector since last summer with China and the US leading the recovery, while Europe remains mired in crisis.'

PRINT FRONT PAGE
Minnesota hit by more unrest
A second night of protests in Brooklyn Center, Minnesota, after Sunday’s shooting by police of Daunte Wright. Tension in the Minneapolis-St Paul metro area was already high in the midst of Derek Chauvin’s murder trial over the death of George Floyd — a killing that sparked worldwide protests against racial injustice.
See Page 3 Minneapolis braced for more unrest after police shooting for more on the story

J&J halts vaccine rollout in Europe as US agencies review blood clots
• Six cases raise alarm • Fresh setback for EU campaign • Biden team bullish on targets
Similar to the issue with the Astra-Zeneca shot. But the Whitehouse was still confident of hitting its target of 200m vaccinated in Biden’s first 100 days.

Toshiba chief to quit after CVC’s $20bn buyout offer triggers boardroom coup. 
A surprise, as Nobuaki Kurumatani had managed to survive a crucial shareholder vote, albeit under dubious circumstances. It confirms, as was mentioned yesterday, that there was a boardroom fight taking place. The fact that some shareholders were disappointed with the CVC offer, an offer which, based on Nobuaki Kurumatani past actions may have been arranged using his past associations with CVC to help fend off activist shareholders.
The fact that KKR have also prepared a bid, with Brookfield also said to be interested would have complicated the issue, especially as the offer by CVC was outside their normal remit and would have been subject to intense scrutiny.It also I think reveals that the old guard of Japanese management is still ingrained in some firms. They will tolerate a lot as long as they feel it is in the best interest of the company but bringing a company’s reputation into question is still taboo. The questions over the background to the earlier shareholder AGM voting would have been a big embarrassment. The fact that Kurumatani quit before the board meeting suggests that he realised that there was no way back.

Page 2 Looks at mainly European issues
Europe’s economy adapts to lockdown life
Data raise fresh hopes of recovery for business and households despite curbs

French business struggles to clear Brexit hurdles
Companies across Channel from UK face red tape, delays, customs checks and extra costs.Seems the EU is suffering as much as the UK from Brussel’s policies.

Polish health system reels from third wave of coronavirus

Biden seeks meeting with Putin in effort to improve relationsNo specifc timetable but a proposal to meet in a third country.  Biden’s diplomacy skills coming to the fore but also aware of the increased tension in Ukraine currently.

Page 3 Syrian crisis cracks bedrock of support from Alawi minority
Sanctions and Covid strain loyalty of sect that staffs regime’s secret police and army

US consumer prices edge higher than forecast
I guess it depends on whose forecasts you were using, the inflation data was inline with the data from Trading Economics, which I usually refer to.
But the important point is that it isn’t showing a significantly stronger than anyone was expected. The Fed is still maintaining that any inflation will be temporary and that it will allow the economy to run how. I still believe they are focused on wage inflation rather than CPI; which they can tolerate as long as it is accompanied with growth.My concern is that the Fed and Treasury both believe that should inflation take hold that they have the tools to control it. The T10 eased to 1.66% from 1.68% reflecting the markets appreciation that for the moment inflation is not the major issue.

Japan to release tainted water from Fukushima plant into sea
A very controversial decision; 'condemned by environmentalists, fishermen and neighbouring countries.’ It still has to be finally approved by the Nuclear authorities but the government decision was the key. The issue is that they have run out of storage space and say that ‘there was no risk to human health and that operating nuclear plants around the world release similar water every day.’
They say the release will exceed safety standards and note 'The contaminated water has been treated with an elaborate filtration system to remove most of the radioactive material. But there is no practical way to filter out tritium, a radioactive isotope of hydrogen and the lightest element in the periodic table.’ Its half-life is 12.3 years.
It says they considered 'evaporating the water into the atmosphere or injecting it into underground reservoirs. But experts argued that diluting the water and slowly releasing it into the ocean was the only viable choice.’
But many think they are choosing the cheapest option.
China and S Korea have lodged diplomatic protests and local fisherman are worried about some countries banning the import of Japanese fish.
Personally I think the decisions is wrong if only because even diluting the contaminated water the reality is that we don’t know what the impact on marine life is going to be and the oceans are already under huge pressure from the impact of waste materials.It will be interesting to see how ESG investors react to Tokyo Electric and others involved in the process.

Page 4 Iran raises stakes with uranium move
Enrichment plans put efforts to revive nuclear accord in jeopardy

Ukraine and west try to guess Putin’s appetite for conflict
Ukraine and its western allies are once again trying to work out whether Vladimir Putin means war.  Read also in Companies & Markets Rouble sinks as Ukraine tension adds to jitters A slide of 3% in past month shows geopolitics overshadowing robust economic forecasts

Fears grow for Czech public broadcaster
Critics say appointments to governing body threaten network’s independence

Brussels defence chief warns of hit to security
The EU’s defence chief has warned that the pandemic has weakened the ability of militaries to respond to security threats, calling for a greater focus on technology and expanding international maritime co-operation.

Australia Post’s ex-chief accuses PM of sexismThe former chief executive of Australia’s postal service has accused the country’s prime minister of forcing her out of her job in the latest sexism scandal to rock the government.

Companies & Markets
Black attended meeting of top brass at Apollo after quitting
• Ex-chief present days after resigning
• Gathering restyled as ‘informational’
Lingering damage as the company tries to put all associations with the late sex offender Jeffrey Epstein behind it.
It is an unfortunate reflection of the media’s influence on business because Leon Black was cleared by an investigation of any impropriety and yet has still been pushed out ‘for the good of firm’. But you have to wonder if, suddenly, the firm that he helped built, can really do without his skills. I guess it reflects the moral hypocrisy that businesses adopt these days. Gone is 'innocent until proven guilty' and remember he was cleared. A shame really and a poor reflection on business and society.

Hitching a ride Singapore’s Grab to pick up $4.5bn with US listing in biggest Spac merger
Grab, south-east Asia’s most valuable start-up, has agreed to the largest-ever merger with a special purpose acquisition company, raising $4.5bn in cash to go public in a US deal that will value its shares at close to $40bn.
Follows a number of recent articles about the possibility of a Spac listing.  The timing is opportune ahead of recent concerns by the regulators. The company is well liked but yet to be profitable but has been helped by the pandemic.  Investors mentioned BlackRock, T Rowe Price, Fidelity, Janus Henderson, Abu Dhabi’s Mubadala, Singapore’s Temasek, 'a number of wealthy Indonesian family offices’, SoftBank and  Uber (who received a stake when it Grab its SE Asia operations) LEX Grab: seizing the day. Starts 'Grab is often referred to as south-east Asia’s answer to Uber, the US ride-hailing app. In reality, the Singapore-based start-up is Uber, DoorDash and Ant Financial all rolled into one.Its superapp status in the region, along with the abundance of blank-cheque money sloshing about, have helped Grab secure a punchy valuation despite hefty losses.’
This deal will inject more cash that could help it win its battle with rival Gojek; with whom it did have merger talks which would have created an extremely powerful regional internet company and reduced cash burn. But it didn’t happen. So the Spac listing may be the answer.
It concludes 'The price is steep but the growth story is appealing. Opportunities of this size are rare.’
Of course if Gojek can raise more cash the story may not be quite so appealing. A deal would be the best, as was done with Uber.

Virgin Atlantic fears long-term fall in business travellers
Key “Will business travel return in the same way? No, I don’t think so. But do I think there will be a return to business travel? Absolutely,” said the CEO.
Virgin Atlantic expects corporate travel to be 20% lower in the next two years vs pre pandemic.
Personally I think a lot of business people will be keen to get back travelling and make up for lost opportunities.
The more interesting question is how are the airlines going to charge?
Will they price attractively to encourage customers to return or aggressively to make up for lost revenue and to pay off debt? Or could we see new pricing plans more closely linked to actual demand.
Of course for international flights a lot will depend on where you are traveling between. Business travellers from Taiwan are likely to be more cautious because Taiwan contained the virus better than most. Travellers from Europe and the US who have come through a severe outbreak are likely to have an attitude that they can survive anywhere. With tourism the decision is increasingly likely to be affected by things like how the destination country has coped with the vaccine.
Even then it is difficult because headline numbers regarding the virus rarely tell the whole story.
Personally. I’m looking forward to travelling again. I think inoculations and an increase in pre flight testing will help along with the fact that most people are aware of the personal measures they need to take for the benefit of everyone.

Private equity targets Japanese assets under Covid’s long shadow
Looks at how due to covid PE firms are expecting more property deals to present themselves because covid has radically impacted the railways and the property portfolios they hold. But it goes further.
Japanese banks last year were encouraged to support businesses and the presumption was that the pandemic would be relatively short-lived but with Japan seeing a new surge in cases and with less than 100 days before the Olympics the base case has changed.
PE believes that the Banks are nervous about their current accommodation of corporate clients and that the banks will put pressure on clients to sell assets and pay down debt; thus given the PE firms opportunities to acquire once in a lifetime real estate assets.
It quotes Jefferies analyst Hideyasu Ban; 'The code to look out for in coming months, says Ban, is Japanese banks talking about increasing their emphasis on “financial consultancy” services to corporate clients. These are the routes through which the banks will raise pressure on companies to restructure with asset sales.’
It is a interesting and reasonable assumption but even with the current pandemic Japanese companies are for the most part well cashed up. They also are aware of the value of those prime pieces of real estate, especial those around the rail links. Furthermore in Japan although work from home has been recommended the size of apartments does not usually make it a viable option which is why so many offices remain open and the rail services well used. I think you may see a few deals of a peripheral nature but it will take a lot longer for them to think about selling the core assets.

China tech confronted with antitrust ultimatum
Looks at the impact from the record fine on Alibaba and the implications for the rest of the sector.
'The regulators said they looked on China’s online “platform economies” positively, but wanted to use the “cautionary case of Alibaba” to warn others.’
It notes 'Alibaba and Ant’s competitors, by contrast, have been given the one-month amnesty to conduct “comprehensive self-inspections” of their operations and “completely rectify” any problems, following which they would need to publicly promise to abide by the rules and “accept society’s supervision”.After the month-long penalty-free period, the regulator said it would conduct its own inspections and “severely punish” companies not in compliance. Representatives from the market regulators’ local offices in cities across the country also attended the meeting.’
This is likely to mean the Chinese Ecommerce companies come into closer alinement with Western ones as Beijing claims down on some of the factors that allowed them to become so successful so quickly. The bigger question is whether it will curtail their innovation going forward; I have a feeling it will; as companies become more concerned about avoid fines from Beijing they are likely to be more reserved about launching new projects.

Credit Suisse’s $1.2bn Gupta exposure
Lender discloses extent of assets in suspended supply-chain funds
More on the Greensill saga.

Security experts warn over bugs in popular software tools
Millions of “internet of things” devices using software from groups including Siemens and Microsoft contain security flaws that could be used to compromise government servers or hospitals, research has found.
An interesting read and makes sense as a lot of the simple connection devices and systems where designed when the internet was new and hackers were hardly considered. It is really only in the last 10 years that hacking has become more prevalent. Undertaking a complete IT review is increasingly likely to be something we all have to do more of, both at work and home, especially if you are allowed to work from home.
It focuses on Siemans and Microsoft but it affects everyone.
It concludes 'Etalle said the flaws “stand out” in particular as they impact IT as well as operational technology, the computerised systems used to control industrial operations. Fixing software issues in the latter is typically far harder than the former, as doing so can be costly and disruptive to critical operations.’

Efforts to cut emissions fall far short
No sector is cutting emissions fast enough to meet 2050 net zero targets, with some big companies increasing carbon intensities since the Paris accord, according to a climate action investor group.
Looks at the just released Transition Pathway Initiative (TPI) report. TPI is backed by more than 100 investors that manage nearly $25tn in assets.
'Catherine Ogden, manager of sustainability and responsible investment at Legal & General Investment Management, said the report provided “both comfort and concern.”
The rise in the number of companies that had set “credible” net zero targets to 35 from last year’s 14 meant “the ranks of corporate climate leaders are swelling”, she said.’

Danes charge six with dividend tax fraud
Danish prosecutors have charged three US nationals and three British citizens with defrauding Denmark by $175m in the latest action in a sprawling European investigation into dividend tax fraud. It revolves around 'hundreds of fictitious share trades through a German bank in 2014 and 2015 to reclaim dividend tax that had never been paid.’

Babcock to slash jobs as it takes £1.7bn hit
Looks at the recent trials for the company
Also Lex Babcock: rearguard action A generally positive view.

Test of crypto faith as Coinbase platform stages historic listing
Volatile transactional revenues in lightly regulated markets make for a valuation challengeCompany lists today on the Nasdaq; looks at how it has got to where it is now and where it might go in the future.Key points; as a company its difficult to value because it wears different hats.Its expensive to trade through and not the best for liquidity but it is reliable and has worked closely with the regulator and so dodged issues that have impacted its competitors.It is seeking institutional investors to give it more stability.Worth a read

Silicon Valley talent shelters from Covid in Taiwan
Foreign business founders aid effort to build a dynamic software start-up sectorLooks at Taiwan’s success at attracting talent for its tech start sector and using that to help local companies to go global. The lower costs in Taiwan compared to the US mean people are prepared to try ventures that would be too costly in the US thus creating a dynamic spirit.
But it concludes that whilst many came to escape covid; 'Start-ups are concerned that the wave of foreign talent could recede as quickly as it came. “We are all working against an invisible deadline,” Bach said. “Once vaccines become prevalent, most of the founders will leave. And we need to plant enough seeds before then to effect sustainable change.”’
Also Taiwan dollar slides under threat of manipulator tag by USTaiwan’s dollar has fallen sharply on growing expectations that the US will brand it a currency manipulator, despite the two strengthening ties in the face of an increasingly aggressive China.Biden administration expected to add country to name-and-shame list despite strengthening ties. Another delicate position for Biden to use his skills to resolve with the minimum of damage to their mutual interests.
Concludes ‘ Taiwan’s central bank declined to comment on the country’s foreign exchange policy. Even if the US does brand Taiwan a currency manipulator, some analysts believed Washington was unlikely to follow through with tariffs given the delicate nature of regional geopolitics. “It’s not just economics when it comes to Taiwan, it’s always politics,” said ING’s Pang.'
An interesting read

Huarong bonds tumble to record low following execution of former boss
The prices of bonds issued by China’s largest manager of distressed debt tumbled to record lows as global investor fears mounted over its financial health following the execution of its former chair for bribery.
Whilst there are obvious concerns it notes 'The group is majority-owned by China’s finance ministry. S&P believes there is a “very high likelihood” Huarong has benefited from “extraordinary government support”, which has helped it borrow at low yields on international markets. In 2015, it launched an initial public offering in Hong Kong after strategic investments by foreign investors including Warburg Pincus and Goldman Sachs.’
Bond defaults remain a closely watched issue as the Beijing tries to balance investors owning the risk and loses from investing and being able to attract foreign capital for its companies. There is no easy answer.

Activist fund Petrus starts proxy fight at Aareal
The London-based activist hedge fund Petrus Advisers has launched a proxy fight at Germany’s Aareal Bank by nominating three executives to the real estate lender’s supervisory board.

United Airlines taps investors for $9bn to repay some government bailout funds
Whist it is only repaying a small part it does show that the government’s action in supporting the airlines when they needed it was useful and that now they can raise funds from other sources they will be able to repay the government.

Private lenders face threat of EM debt traps by Mohamed El-Erian
It became clear last week that private lenders to some of the most vulnerable developing countries do not share the sense of urgency about the risk of sovereign debt traps that is felt in governments and multilateral institutions.Lays out '5 main factors beyond complacency are in play here that explain the relaxed attitude of private lenders.’
He concludes 'The official sector needs to maintain existing liquidity support, expand debt maturity extensions and bolster the common framework by adding sticks to what has been a carrot-based approach to securing restructuring agreements.
Private creditors must better differentiate and actively manage their risk-taking in EMs lest a generalised and passive approach end up unnecessarily undermining the asset class as a whole.
Building back a stronger, fairer and more sustainable global economy requires more refined involvement from both public and private creditors.’

FT BIG READ. US GAMBLING. Paying for the pandemic
State legislators are legalising online sports betting as part of their efforts to plug holes in their budgets, while operators and sports leagues seek new revenues. But a spike in addiction could lead to a backlash.
An interesting read and one wonders what the difference is between on line gambling and trading for many? Will the rise in availability of on-line gambling impact on-line investing. Time will tell but it’s an interesting read.

Editorial China’s high stakes engagement with Iran
A strategic partnership deal will raise alarm in Washington
Thinks the recent deal is 's perilous for both sides — and could be a new source of instability just as America is poised to end its “forever wars” in the region.’A good read; notes that the Iranian regime saw domestic opposition to the deal. Plus 'Beijing’s tendency to underdeliver on promised infrastructure projects and Chinese infringement on sovereignty in other silk road countries also pose risks for Iran’s leaders.’
For China it is trying to be friends with everyone; 'On the same trip that took him to Tehran last month, Chinese foreign minister Wang Yi visited Iran’s arch-enemy Saudi Arabia, as well as Turkey, the United Arab Emirates, Oman and Bahrain. Much deeper Chinese ties with Iran will cause consternation in Israel, Saudi Arabia and other countries in the region and could suck Beijing into conflicts it neither wants nor understands. A Chinese offer to host direct talks between Israel and the Palestinians looks provocative at best and naive at worst.'
It sees one of the key issues being 'China’s leaders have already made clear they believe the US-led west is in terminal decline, while China is on an inexorable path to “great rejuvenation”. The prospect of an axis of authoritarian countries — possibly including Russia — united in their antipathy towards America and the west is the stuff of nightmares in Washington and Europe. Intentionally or not, President Xi Jinping is constantly contributing to that impression with actions such as the Iran agreement and when he commands his diplomats to “dare and draw their dazzling swords” and the military to “fight and win wars”.’
There are other factors like oil supply routes; Beijing wants not only to ensure free supplies of oil free from US disruption but also the potential disrupt US supplies from the Middle East.
It notes 'Some within the senior ranks of the Chinese Communist party grumble this posturing could spur conflict with the US long before China can win.’
It concludes 'The Biden administration should resist overreacting to the prospect of an authoritarian alliance. In some ways, Iran’s deal with Beijing looks like attention seeking from Tehran, when all it really wants is a return to warming relations with the west.Indirect talks between Washington and Tehran in Vienna last week were a good start. Rejoining the Iran nuclear deal under acceptable terms should be a priority. But the Sino-Iranian agreement is a timely reminder for America that the end of its longest wars will not — and should not — mean the end of its involvement in the region.’

Opinion
The US is too changed since the cold war to repeat it. By Janan Ganesh
Looks at why the US should not embark on a Cold War with China, which includes in his view trying to contain China. He worries that 'US Republicans of some rank talk up the “free world”. If the cold war trope was just a bad historical fit, it would be a merely academic irritant. But the risk is that it is also self-fulfilling. The US might talk itself into a posture that ignores how much its own society has changed.’
An interesting read but I think there is an understanding that a ‘Cold War’ is not practical option and is not being pursued. The US is aware of how interlinked trade is but it is still trying to pressurise China to accept the West’s rules based system and to get China to abide by all those international institutions; to respect its neighbours rights, human rights, the independence of Taiwan etc. Whether it is successful remains to be seem. China believes itself to be in the ascendancy and that it should be free from Western constraints. What the world needs is respect and consideration …on both sides.

Don’t get your flapper glad rags out just yet. By Megan Greene a senior fellow at Harvard KennedySchool
Looks at the re-opening post inoculation.
It concludes'Digitisation and automation may kick off a productivity boom, but this could sap economic growth. Large, superstar companies probably had the easiest access to capital for the shift. If so, market concentration will rise further, weakening competition and worker power and exacerbating inequality.
Automation also replaces some of the low-wage, low-hour workers hit hardest by the pandemic. People at the bottom of the pay scale have a greater marginal propensity to consume than those at the top, so this hits demand.
So, let us toast the reopening of the world and hope for a boom to follow. But it’s worth noting that the Roaring Twenties were followed by the Depression. Policymakers and corporate leaders must remember that parties and hangovers often go together.’
Worth a read.

HK/CHINA WRAP


FT Thoughts


Asian Macro Initial Thoughts


Macro Data


Several important events this week; primary being the month and quarter end and an expected significant re-balance with bonds being bought and equities being sold. The question is whether asset allocator's will stick to the 60:40 historical balance?  The hedge benefit of bonds is being called into question at present.We also get the US payrolls data and a lot countries releasing Manufacturing PMI data.

Also on the agenda is President Biden’s infrastructure plan due to be released Wednesday and expected to involve US$3-4tn.

For some it will be a short week, with the approach of Easter and a lot of markets closed for Good Friday; including Hong Kong which is also closed on the Monday and Tuesday
(Qingming Festival and Easter Monday).
Japanese year end, so their bond purchases are expected to increase.
Other key data this week in addition to the PMI data includes
Japan Retail Sales and the Tankan survey.
S Korea Business Confidence, Industrial & Manufacturing Production data, Retail Sales and Balance of Trade
China Official and Caixin PMI data
Hong Kong Retail Sales and a lot of company earnings up to end of Month .

Euro Zone sentiment data, Inflation
Germany Inflation, Import Prices, Unemployment and Retail Sales.
France Inflation and PPI
UK Mortgage applications, GDP Growth, Nationwide House Prices, Inflation.

US House Price Index, Pending Home Sales, ADP and Challenger Data, ISM data.

Saturday 27 March 
CHINA Industrial Profits YTD Feb +178.9% YoY vs +4.1% Jan (F/cast was +4.7%)
Suggesting the economy consolidated its recovery from last year's massive slump. Profits soared at both state-owned industrial firms (182%) and private-sector (136.7%). Among the 41 industries surveyed, 38 saw profit rises. The communications posted the largest increase in profit (-5,891.5%), followed by automobile (2,525.6%), chemical raw materials (498.4%), electrical machinery & equipment (430.8%), special equipment manufacturing (399%), general equipment (319.3%), ferrous metal smelting (3,895.8%), coal mining (204.4%), textile (142.5%), non-metallic mineral products (81.9%), and power, electricity (44.7%). In contrast, profits at oil and natural gas extraction industry fell (-28.7%).
Monday 29 March 
JAPAN BoJ Summary of Opinions
S KOREA No data due
TAIWAN No data due
CHINA  No data due
HONG KONG  No data due
EUROZONE  No data due
GERMANY  No data due
FRANCE  No data due
UK BoE Consumer Credit, Mortgage Lending & Approvals, Net Lending to Individuals.
US Dallas Fed Manufacturing IndexFed’s Waller speaks
Earnings Vaxcyte, Cal-Maine Foods

Tuesday 30 March
JAPAN Unemployment Rate, Jobs/application Ratio, Retail Sales
S KOREA No data due
TAIWAN No data due
CHINA No data due
HONG KONG Retail Sales
EUROZONE Economic Sentiment, Consumer Confidence, Consumer Inflation Expectations, Industrial Sentiment, Services Sentiment
GERMANY Import Prices, Inflation Rate,
FRANCE Consumer Confidence
UK No data due
US Redbook, Case-Shiller Home Price, House Price Index, CB Consumer Confidence, API Crude Oil Stock Change
Earnings: Lululemon Athletica, Chewy, McCormick, BioNtech, FactSet, Blackberry, PVH

Wednesday 31 March
JAPAN Industrial Production, Housing Starts, Construction Orders
S KOREA Business Confidence, Construction Output, Industrial Production, Manufacturing Production, Retail Sales
TAIWAN No data due
CHINA Manufacturing and Non Manufacturing PMI
HONG KONG  No data due
EUROZONE Core Inflation Rate and Inflation Rate
GERMANY Unemployment Change and Rate
FRANCE Inflation Rate, Household Consumption, PPI
UK Current Account, GDP Growth Rate, Nationwide Housing Prices, Business Investment,
US MBA mortgage Applications and 30 yr Mortgage Rate, ADP Employment Change, Chicago PMI, Pending Home Sales, EIA Oil Change, USDA Prospective Plantings Report.
Earnings: Walgreens Boots Alliance, Micron, Dave & Buster’s, Guess

Thursday 1 April 
JAPAN Tankan Survey (Large Manufacturers Index, Large All Industry Capex, Large Manufacturing Outlook, Large Non Manufacturing Index and Small Manufacturers Index). Foreigner Stock and Bond Investment,  Manufacturing PMI.  10 year JGB Auction
S KOREA Balance of Trade, Exports, Imports, Manufacturing PMI
TAIWAN Manufacturing PMI
CHINA Caixin Manufacturing PMI
HONG KONG No data due
EUROZONE Manufacturing PMI
GERMANY Retail Sales, Manufacturing PMI
FRANCE Manufacturing PMI, New Car Registrations
UK Manufacturing PMI
US Challenger Job Cuts, Initial Claims, 4 Week Average Claims, Continuing Claims, Manufacturing PMI, Construction Spending, ISM Manufacturing Data (PMI, New Orders, Prices and Employment), EIA Natural Gas Stocks, Baker Hughes Oil Rig Count, Total Vehicle Sales.
Earnings: CarMax

Friday 2 April 
JAPAN  No data due
S KOREA 
Inflation Rate
TAIWAN  No data due
CHINA  No data due
HONG KONG  No data due Market Closed for Good Friday
EUROZONE  No data due
GERMANY No data due Market Closed for Good Friday
FRANCE Budget Balance Market Closed for Good Friday
UK No data due Market Closed for Good Friday
US Market closed.  Non Farm Payrolls, Unemployment, Average Hourly Earnings, Average Weekly Hours, Participation Rate, ISM New York Index.

Read More  

Investors last week had two key questions answered.  The Fed will remain accommodative and US/China relations are not going change in the short term and for China might be slightly harder as the US presents a multi lateral approach.  It will be interesting to see how asset allocators position themselves in the next couple of weeks.This week investors will be watching the European PMI’s to see how much covid   has impacted.

Data wise for China is light; Prime loan data was left unchanged on Monday and on Saturday we get Industrial Profits.
For Japan just Coincident & Leading Economic indexes out Monday were a little light, next is PMI data Wednesday along with the BoJ meeting notes and then Tokyo Inflation data Friday.
S Korea PPI and Consumer Confidence.
Taiwan Unemployment and Exports due after market Monday. Industrial Production and Retail Sales Tuesday and M2 Money supply Wednesday.
HK Current Account and Inflation on Monday and trade data Thursday but it. Is a busy week for earnings with Petrochems and Ecommerce names reporting.

In Europe Flash PIM data in focus along with Confidence data from Germany and France. German also has Ifo data released.
UK Employment and wages data, inflation, PPI, Retail Prices and Sales

US Home Sales data will be closely watched, along with Chicago Fed National Activity Index , Richmond Fed Manufacturing Index, Durable Goods, PMI, GDP data, Personal Income and Spending, Wholesale Inventories, Michigan Consumer data and the Feds liked PCE data.




Monday 22 March 
JAPAN
Out Coincident Index final Jan 90.3 vs 88.2 Dec (F/cast was 91.7)
Leading Economic Index final Jan 98.5 vs 97.7 Dec (F/cast was 99.1)
S KOREA No data due
TAIWAN After market Unemployment and Export Orders
CHINA Out Loan Prime rates were announced unchanged; 5 yr 4.65% and 1 yr 3.85%;
HONG KONG After Market Current Account  and Inflation Rate
EUROZONE Current Account
GERMANY Bundesbank Monthly Report
FRANCE No data due
UK No data due
US Chicago Fed National Activity Index, Existing Home Sales
Fed Speakers Powell, Quarles and Bowman.

Tuesday 23 March
JAPAN No data due
S KOREA No data due
TAIWAN industrial Production and Retail Sales
CHINA No data due
HONG KONG No data due
EUROZONE No data due  
GERMANY No data due
FRANCE No data due
UK Claimant Change, Unemployment Rate, Average Earnings, CBI Industrial Trends Orders, 30yr Gilt Auction.
US Current Account, Redbook, New Home Sales, Richmond Fed Manufacturing Index, API crude Oil Stocks
Powell Testimoney, Brainard Speech

Wednesday 24 March 
JAPAN BoJ Policy Meeting Minutes, PMI Flash (Manufacturing, Services, Composite)
S KOREA PPI
TAIWAN M2 Money Supply
CHINA No data due
HONG KONG No data due
EUROZONE PMI Flash (Manufacturing, Services, Composite), Consumer Confidence.
GERMANY PMI Flash (Manufacturing, Services, Composite)
FRANCE PMI Flash (Manufacturing, Services, Composite)
UK Inflation Rate, Core Inflation Rate, PPI Core, PPI Input, PPI Output, Retail Price Index, PMI Flash (Manufacturing, Services, Composite)
US MBA  Mortgage Applications, 30 yr Mortgage Rate, Durable Goods, EIA Oil Report, PMI Flash (Manufacturing, Services, Composite) Powell Testimony

Thursday 25 March 
JAPAN Foreign Stock and Bond Investment
S KOREA No data due  
TAIWAN No data due
CHINA No data due
HONG KONG Balance of Trade, Exports, Imports
EUROZONE Loans to Households, Loans to Companies, M3 Money Supply
GERMANY Consumer Confidence
FRANCE Business Confidence, Business Climate Indicator, Unemployment Benefit Claims, Jobseekers Total
UK Car Production, CDI Distributive Trades
US Jobless Claims 4 week average, Initial Claims, Continuing Claims, Corporate   Profits, GDP Price Index, GDP Growth Rate, PCE Prices, Core PCE prices, EIA Natural Gas Report, Kansas Fed Manufacturing Index, 7 yr Note Auction.

Friday 26 March
JAPAN Tokyo Core CPI
S KOREA Consumer Confidence
TAIWAN No data due
CHINA No data due
HONG KONG No data due
EUROZONE No data due
GERMANY Ifo (Business Climate, Expectations and Current Conditions
FRANCE No data due
UK Retail Sales data
US Personal Spending and Income, PCE Price Index, Core PCE Price Index, Wholesale Inventories, Goods Trade Balance,  Michigan Data (Current Conditions, Consumer Expectations, 5yr Inflation Expectations, Consumer Sentiment, Inflation Expectations), Baker Hughes Rig Count.

Saturday 27 March 
CHINA Industrial Profits

Read More  

Exceptional trade data from China should see the market open higher and sentiment is likely to be positive after the good jobs report Friday and the fact that the T10 saw an initial move higher but then fell for most of the day.  Early Saturday morning the Senate approved Biden’s stimulus bill after some last minute adjustments, likely to be voted on by the House on Tuesday. Both of which could have implications for inflation and interest rates.  We get inflation data from a number of countries this week (incl the US on Wednesday) with February data expected to remain muted but lots of conjecture about the future; so it is likely that US Treasury auctions are going to be more closely followed in the weeks ahead.  Traders noting that Japanese institutional participation this month could be reduced ahead of their year end on March 31.

Worth reading Market Thinking March 'Rotating out of long Duration Assets’
https://market-thinking.com/2021/03/market-thinking-march/
Notes that March is a key month for Asset Allocators to reposition portfolios and with the ’new narrative’ of inflation or the reflation trade with commodities in focus along with Emerging Markets. Notes that industrial mining stock have outperformed gold and its role as a stabiliser has been usurped by Bitcoin.

AHEAD
US Earnings season effectively ended with the last few reporting, which is likely to mean a greater importance on Macro Data for day traders and longer term investors. Inflation/Reflation theme predominates along rotation trades.

For Asia
Japan focus on Household spending and GDP data
S Korea Only Current Account this week.
Taiwan Trade data and Inflation
China Trade data out NPC and CPPCC in focus. Additionally on Wednesday Inflation and PPI data; we could also get Loans data.

For Europe 
Eurozone Employment, GDP, ECB Rate Decision and Industrial Production
Germany Industrial Production, Balance of Trade and Inflation (on Friday)
France Industrial Production.
UK Balance of Trade, GDP data, Goods Trade Balance, Construction, Manufacturing and Industrial Production data.

US 
Inflation on Wednesday although that is historic and likely to be muted but also; Wholesale Inventories, Consumer Inflation expectations, Business Optimism, PPI, Michigan Prelim data. Treasury auctions also likely to be watched more carefully.

Sunday  7 March 
CHINA 
Foreign Reserves Feb $3.205tn vs 3.211tn Jan (F/cast was 3.2tn)
Balance of Trade Jan-Feb $103.25b vs 78.17b Dec (F/cast was 60b)
Exports Jan-Feb +60.6% vs 18.1% Dec (F/cast was +35%)
Imports Jan-Feb +22.2% vs 6.5% Dec (F/cast was +12%)
Much stronger data reflects that many Chinese factories did not shut down for the lunar new year due to covid travel restrictions. Key will be whether this is trade brought forward and restocking or real new demand. My feeling it is more of the former.

Monday 8 March
JAPAN Current Account and Bank Lending.  Later @ 12pm Prelim Coincident Index and Leading Economic Index then at 1pm Eco Watchers Survey Current and Outlook.
S KOREA No data due
TAIWAN No data due
CHINA No data due
HONG KONG No data due
EUROZONE No data due
GERMANY Industrial Production
FRANCE No data due
UK No data due
US Wholesale Inventories, Consumer Inflation Expectations
Earnings Stitch Fix, Casey’s General Store

Tuesday 9 March
JAPAN household Spending, Average Cash Earnings, GDP Growth data (Rate, Annualised, External Demand, Capital Expenditure, Private Consumption, Price Index), Machine Tool Orders
S KOREA Current Account
TAIWAN Balance of Trade, Exports, Imports, Inflation Rate, Wholesale Prices
CHINA No data due
HONG KONG No data due
EUROZONE Employment Change, GDP Growth Rate
GERMANY Balance of Trade, Exports, Imports, Current Account.
FRANCE Non Farm Payrolls data
UK No data due
US NFIB Business Optimism, Redbook, WASDE Report, API Crude Oil Stock Change Earnings H&R Block, Navistar, Thor Industries, Dick’s Sporting Goods

Wednesday 10 March 
JAPAN No data due
S KOREA
 No data due
TAIWAN
 No data due
CHINA 
Inflation Rate, PPI
HONG KONG No data due
EUROZONE No data due
GERMANY No data due
FRANCE Industrial Production
UK No data due
US Core Inflation Rate, Inflation Rate, EIA Oil Change Report, Monthly Budget Statement
Earnings Campbell Soup, Oracle, Vera Bradley, Tupperware, United Natural Foods, Adidas, Cloudera, Bumble, Fossil, Lending Club, Express, AMC Entertainment

Thursday 11 March 
JAPAN PPI, Stock and Bond Investment by Foreigners
S KOREA No data due
TAIWAN No data due
CHINA No data due but could get New Yuan Loans, Outstanding Loans, Total Social Financing an M2 Money Supply.  NPC due to close.
HONG KONG No data due
EUROZONE ECB Interest Rate Decision, Marginal Lending Rate, Marcoeconomic Projections
GERMANY No data due
FRANCE No data due
UK No data due
US Initial Claims, 4 Week Average Claims, Continuing Claims, JOLTs Job Openings, EIA Natural Gas Change Report.
Earnings Ulta Beauty, Vail Resorts, DocuSign, Poshmark, Gogo, Zumiez, JD.com, WPP, Party City

Friday 12 March 
JAPAN BSI Large Manufacturing
S KOREA No data due
TAIWAN No data due
CHINA No data due but could get FDI (YTD) and Vehicle Sales
HONG KONG Industrial Production
EUROZONE Industrial Production
GERMANY Inflation Rate
FRANCE No data due
UK Balance of Trade, GDP Data, Construction Output, Industrial Production, Manufacturing Production, Goods Trade Balance, NIESR Monthly GDP Tracker
US PPI, Core PPI, Michigan Data Prelim (Current Conditions, Consumer Sentiment, Inflation Expectations, Consumer Expectations, 5 year Inflation Expectations), Baker Hughes Rig Data, US Budget Plan.
Earnings Buckle

Read More  

US Earnings winding down but still some majors (including  Zoom Target, Kohl’s, Nordstrom, Costco and BJ’s Warehouse) along with Fed speakers who are expected to try and sooth inflation fears. US data PMI, ISM data, ADP, Factory Orders, Payrolls and Trade Balance are the key ones.
In Asia China PMI’s, and the ’two sessions’ annual political meeting of the National People’s Congress and Chinese People’s Political Consultative Conference. With investors watching for the next five plans as well as the short term priorities; will China focus on stimulus or dealing with the increasing bad debt problem?Next Sunday China releases its Trade Data, the PMI data suggests that it may show a slow down.
S Korean; Trade, Retail Sales, Manufacturing & Industrial production data, Inflation and GDP growth. Japan employment and Capital spending
In Europe lots PMI and Inflation data.  Also German and French Retail Sales and Factory output

Monday March 1
JAPAN Manufacturing PMI
S KOREA Balance of Trade, Exports, Imports Market Closed
TAIWAN No data due Market Closed
CHINA Caixin Manufacturing PMI
HONG KONG  No data due
EUROZONE Manufacturing PMI
GERMANY Manufacturing PMI, Inflation Rate
FRANCE Manufacturing PMI, New Car Registrations
UK Manufacturing PMI, Manufacturing PMI, Mortgage Lending, BoE Consumer Credit, Mortgage Approvals, Net Lending to Individuals
US Manufacturing PMI, Construction Spending, ISM Manufacturing data (PMI, New Orders, Prices & Employment), Total Vehicle Sales
Earnings  Zoom Video, MBIA, Ambac Financial, Hilton Grand Vacations, Inovio Pharma, Perrigo, Boingo Wireless, Tegna

Tuesday March 2
JAPAN Unemployment data and Capital Spending
S KOREA Industrial & Manufacturing Production and Retail Sales, Manufacturing PMI
TAIWAN Manufacturing PMI
CHINA No data due
HONG KONG No data due
EUROZONE Core Inflation Rate, Inflation Rate
GERMANY Retail Sales, Unemployment
FRANCE No data dueUK Nationwide House Prices.
US Redbook, ISM New York, IBD.TIPP Economic Optimism, API Crude Oil Change.
Earnings: Target, Box, Hewlett Packard Enterprise, Nordstrom, Ross Stores, International Game Technologies, AutoZone, Kohl’s, Abercrombie and Fitch, Hovnanian

Wednesday March 3
JAPAN Services and Composite PMI
S KOREA No data due
TAIWAN No data due
CHINA Caixin Services and Composite PMI
HONG KONG PMI
EUROZONE Services and Composite PMI, PPI
GERMANY Services and Composite PMI
FRANCE Services and Composite PMI
UK Services and Composite PMI, Budget Speech
US MBA Mortgage Applications and 30 yr Mortgage Rate, ADP Employment Change, Services and Composite PMI, ISM Non Manufacturing Data (PMI, New Orders, Business Activity, Prices, Employment), EIA Gasoline and Crude Stocks changes
Earnings: Wendy’s, Dollar Tree, Brown-Forman, Vivendi, Splunk, Marvell Tech, Snowflake, Vroom, American Eagle Outfitters

Thursday March 4
JAPAN Foreign Stock and Bond Investment, Consumer Confidence
S KOREA Inflation Rate, GDP Growth Rate
TAIWAN No data due
CHINA No data due
HONG KONG No data due
EUROZONE Retail Sales, Unemployment Rate, Construction PMI
GERMANY Construction PMI
FRANCE Construction PMI, Retail Sales
UK New Car Sales, Construction PMI
US Challenger Job Cuts, Initial Claims, 4 week Average Claims, Continuing Claims, Factory Orders, EIA Natural Gas Stocks Change,
Earnings: Broadcom, Costco, BJ’s Wholesale, Gap, Burlington Stores, Ciena, Michael’s Cos, IMAX, Kroger, Cooper Cos

Friday March 5
JAPAN Foreign Exchange Reserves
S KOREA No data due
TAIWAN  Foreign Exchange Reserves
CHINA No data due
HONG KONG Foreign Exchange Reserves
EUROZONE No data due
GERMANY Factory Orders
FRANCE Balance of Trade, Current Account
UK Halifax House Price Index
US Balance of Trade, Non Farm Payrolls, Unemployment Rate, Average Weekly Hours, Average Hourly Earnings, Participation Rate, Exports, Imports, Baker Hughes Rig Data
Earnings: Big Lots

Sunday March 6
China Balance of Trade, Exports, Imports, Foreign Exchange Reserves.

Read More  

Earnings still in focus but Treasury yields too especially as Fed's Powell to give semi annual testimonies to Senate and House this week.  Expect continued rotation out of Tech and into value or reflation trades.  The 2H recovery could start in Q2 driven by the growth in US household savings.

I expect resources linked to EV and green energy to see a new rally and for Japanese banks and brokers to see more interest too. Value plays back on the radar.  I still think Tech components have more upside. 

On Earnings watch Home Depot and Lowes; which are likely to impact Techtronics (669 HK) too.  Macy’s and TJX for a take on consumer attitudes in the US.
For HK: HSBC and Hang Seng Bank on Monday.

On data
For the US key will be durable goods, personal income & spending, PCE price index (a Fed favourite for inflation).
For Asia
Japan Friday’s Tokyo CPI and Retail Sales
S Korea the BoK rate decision along with Consumer and Business Confidence Taiwan GDP growth out Sat 20 Feb, then Industrial Production, Retail Sales and Unemployment.
China only House Price Index due this week
For Europe
Eurozone Inflation, Consumer & Business Sentiment
Germany Ifo data, GDP growth and Consumer Confidence
France Business and Consumer Confidence
UK Employment Data and House Prices

Saturday 20 February 
CHINA  Released Loan Prime Rate data - unchanged as expected

Monday 22 February
JAPAN No data due
S KOREA No data due
TAIWAN No data due
CHINA No data due
HONG KONG Inflation Rate
EUROZONE No data due
GERMANY  Ifo Business Climate, Current Conditions and Expectations.
FRANCE No data due
UK No data due
US Chicago Fed National Activity Index, Dallas Fed Manufacturing Index
Earnings: Dish Network, Royal Caribbean, Marathon Oil, Ingersoll-Rand, Occidental Petroleum, Transocean, Zoominfo, ONEOK, HSBC

Tuesday 23 February 
JAPAN No data due
S KOREA Consumer Confidence
 TAIWAN No data due
CHINA House Price Index
HONG KONG No data due
EUROZONE Core Inflation Rate, Inflation
GERMANY No data due
FRANCE No data due
UK Unemployment Rate, Claimant Count Change, Average Earnings, Employment Change, Labour Productivity, CBI Distributive Trades
US Redbook, Case-Shiller Home Price, House Price Index, Consumer Confidence, Richmond Fed Manufacturing Index,  API Crude Oil Index
Fed Chairman Powell semi-annual economic testimony Senate Banking Committee
Earnings: Home Depot, Macy’s, Intuit, Thomson Reuters, Square, Toll Brothers, Jazz Pharmaceuticals, McAfee, Medtronic, Pioneer Natural Resources, Bank of Montreal

Wednesday 24 February 
JAPAN No data due
S KOREA 
Business Confidence
TAIWAN Industrial Production, Retail Sales, M2 Money Supply
CHINA No data due
HONG KONG GDP Growth Rate
EUROZONE No data due
GERMANY GDP Growth Rate
FRANCE Business Confidence, Business Climate Indicator
UK No data due
US MBA Mortgage Applications and 30 yr Mortgage Rate, New Home Sales, EIA Oil Report
Fed Chairman Powell semi-annual economic testimony at House Financial Services Committee
Earnings: Lowe’s, NVIDIA, Viacom, Public Storage, Booking Holdings, TJX, Brookdale, Royal Bank of Canada, Apache, Petrobras, Pure Storage, L Brands, Casper Sleep

Thursday 25 February 
JAPAN Coincident Index, Leading Economic Index
S KOREA BoK Interest Rate Decision
TAIWAN Unemployment Rate
CHINA No data due
HONG KONG Balance of Trade, Exports and Imports
EUROZONE Loans to Household and Companies M3 Money Supply, Economic Sentiment, Consumer Confidence, Consumer Inflation Expectations, Industrial Sentiment, Services Sentiments
GERMANY Consumer Confidence
FRANCE Consumer Confidence
UK No data due
US Durable Goods Data, GDP Data (Price Index, Growth Rate), Initial Claims, 4 week Average Claims, Continuing Claims, PCE Prices, Core PCE Prices, Pending Home Sales, EIA Natural Gas Report.
Earnings: Salesforce.com, Norwegian Cruise Lines, Etsy, Best Buy, HP, Shake Shack, Beyond Meat, Anheuser-Busch Inbev, Dell Technologies, Virgin Galactic, American Tower, Cleveland Cliffs, Airbnb, Carvana, Door Dash

Friday 26 February 
JAPAN Tokyo Core CPI, Tokyo CPI, Industrial Production, Retail Sales, Foreign Bond and Stock Investments, Housing Starts and Construction Orders
S KOREA No data due
TAIWAN Current Account
CHINA No data due
HONG KONG No data due
EUROZONE No data due
GERMANY Import Prices
FRANCE GDP Growth Rate, Inflation Rate, Household Consumption, PPI, Unemployment Benefit claims, Jobseekers Total.
UK Nationwide Housing Prices, Car Production
US Personal Income and Spending, PCE Price Index,Wholesale Inventories, Goods Trade Balance, Core PCE Price Index, Chicago PMI, Michigan Data Final (Consumer Sentiment, Consumer Expectations, Current Conditions, 5 year Inflation Expectations, Inflation Expectations), Baker Hughes Rigs Count, US Budget Plan.
Earnings: Fluor, Cinemark, Draft Kings, Foot Locker, AMC Networks, Berkshire Hathaway (Saturday).

Saturday 27 February Taiwan Consumer Confidence
Sunday 28 February China Manufacturing and Non Manufacturing PMI

Read More  

Earnings continue this week; including CVS Health, Hilton, Walmart and Deere.  
Data wise for the US Fed minutes on Wednesday and Housing data will be closely watched, we also get PPI and Retail Sales. Expect the debate over inflation to continue. The passage of the stimulus package will also be watched.
In Asian Japan saw better than expected Prelim GDP data on Monday. Later we get Trade Data Wednesday and Inflation Data Friday. S Korea Import/Export Prices and PPITaiwan GDP data at the weekend, nothing for China but Unemployment for HK.
In Europe PMI data out Friday, ahead of that Trade data, GDP, Employment, Consumer Confidence amongst other data.  Germany ZEW data, France Unemployment and Inflation,  UK Inflation, PPI data and retail sales.

Monday Feb 15
JAPAN Data out Preliminary GDP data pre market Growth Rate Q4 +3% vs +5.3% Q3  (F/cast was +2.2%)
Growth Annualised Q4 12.7% vs 22.7% Q3 revised from 22.9% (F/cast was 9%)
Capital Expenditure Q4 +4.5% vs -2.4% Q3 (F/cast was 2.5%)
Extrernal Demand Q4 +1% vs +2.6% Q3 revised from+2.7% (F/cast was +1.2%)
Private Consumption Q4 +2.2% vs 5.1% Q3 (F/cast was +1.5%)
Price Index Q4 +0.2% vs +1.2% Q3
Industrial Production Dec -1% MoM vs -0.5% Nov (F/cast was -1.6%)
Industrial Production Dec -2.6% YoY vs -3.9% Nov (F/cast was -3.2%)
Capacity Utilisation Dec +0.8% vs -2.9% Nov (F/cast was -2%)
S KOREA Data out January Auto data Auto Exports +29.5%
Auto production +24.9% YoY Domestic sales +18.4% YoY
TAIWAN No data due market closed
CHINA No data due market closed
HONG KONG No data due market closed
EUROZONE Balance of Trade, Industrial Production,
GERMANY No data due
FRANCE No data due
UK No data due
US No data due market closed

Tuesday February 16
JAPAN Tertiary Industry Index.
S KOREA Import and Export Prices
TAIWAN No data due market closed
CHINA No data due market closed
HONG KONG No data due
EUROZONE Employment Change, GDP Growth Rate, ZEW Economic Sentiment Index
GERMANY ZEW Economic Sentiment Index & Current Conditions
FRANCE Unemployment rate
UK No data due
US NY Empire State Manufacturing Index, Overall Net Capital Flows, Net Long Term TIC flows, Foreign Bond Investment.
Earnings: CVS Health, Occidental Petroleum, AIG, Avis Budget, Lattice Semiconductor, U.S. Foods, Advance Auto Parts, Vulcan Materials, Palantir, Agilent, La-Z-Boy

Wednesday February 17
JAPAN Tankan Index, Balance of Trade, Exports, Imports, Machinery Orders
S KOREA  No data due
TAIWAN  No data due Market re-opens
CHINA No data due market closed
HONG KONG 
 No data due
EUROZONE 
Construction Output
GERMANY  No data due
FRANCE  No data due
UK Inflation Rate, Core Inflation Rate, Retail Price Index, PPI, PPI Core
US MBA Mortgage Applications and 30 year Mortgage Rate, Retail Sales, PPI, Core PPI, Redbook, Industrial Production, Capacity Utilisation, Manufacturing Production, NAHB Housing Market Index, Business Inventories, FOMC Minutes, API Crude Oil Stock Change.
Earnings: Hilton Worldwide, Synopsys, Pioneer Natural Resources, Cheesecake Factory, Tanger Factory Outlets, Hyatt Hotels, Owens Corning, Baidu, CF Industries, Marathon Oil, Analog Devices

Thursday February 18
JAPAN Foreign Bond and Stock Investment
S KOREA  No data due
TAIWAN  No data due
CHINA  No data due market re-opens
HONG KONG Unemployment Rate
EUROZONE New Car Registrations, Monetary Policy Meeting Accounts, Consumer Confidence Flash,
GERMANY  No data due
FRANCE  No data due
UK  No data due
US Import Prices, Export Prices, Initial Claims, 4 week average Claims, Continuing Claims, Housing Starts, Building Permits, Philadelphia Fed Manufacturing Index, EIA oil report, 30 year TIPS auction.
Earnings: Walmart, Applied Materials, Cabot Oil & Gas, Barrick Gold, Southern Co., Waste Management, Marriott, Dropbox, Trip Advisor, Consolidated Edison, Credit Suisse, Barclays, Airbus, Daimler

Friday February 19
JAPAN Inflation Rate, Core inflation Rate, Inflation Ex Food and Energy, Flash PMI (Services, Manufacturing and Composite)
S KOREA PPI
TAIWAN  No data due
CHINA  No data due
HONG KONG  No data due
EUROZONE Flash PMI (Services, Manufacturing and Composite)
GERMANY PPI, Flash PMI (Services, Manufacturing and Composite)
FRANCE Inflation Rate, Flash PMI (Services, Manufacturing and Composite)
UK Retail Sales, Flash PMI (Services, Manufacturing and Composite), Public Sector Borrowing, CBI Industrial Trends
US Flash PMI (Services, Manufacturing and Composite), Existing Home Sales, Baker Hughes Rig data.
Earnings: Deere, Eni, Allianz

Saturday February 20 
TAIWAN GDP Growth Rate, Export Orders

Read More  

Lunar New Year holidays make for a shortened trading week
Holidays this week
Japan closed Thursday for National Foundation Day
S Korea closed on Thursday and Friday re-opens Monday 15 February
Taiwan closed Monday re-opens 17 February
China closed from Thursday and re-opens Thursday 18 February
Hong Kong closed Friday and re-opens Tuesday 16 February
Singapore closed Friday re-opens Monday 15 February

Earnings continue, along with the passage of the US stimulus plan. Data is quite light; US CPI data (Wednesday) along with Powell speaking to the Economic club of New York also on Wednesday, with Michigan prelim data. Chinese Inflation data, German Trade and Inflation data, UK GDP and Trade data.

Sunday 7 February
China
Foreign Exchange Reserves Jan $3.211tn vs 3.217bn (F/cast was 3.2tn)

Monday 8 February
JAPAN Current Account, Bank Lending, Eco Watchers (Current & Outlook)
S KOREA Balance of Trade, Export and Import
TAIWAN Market Closed. Balance of Trade, Export and Import
CHINA No data due
HONG KONG No data due
EUROZONE No data due
GERMANY Industrial Production
FRANCE No data due
UK No data due
US Consumer Inflation Expectations
Earnings: Hasbro, KKR, Loews Corp., Softbank, Dun and Bradstreet, Take Two Interactive, Nuance, Leggett and Platt, Simon Property Group

Tuesday 9 February
JAPAN Average Cash Earnings Machine Tool Orders
S KOREA No data due
TAIWAN Market Closed 
CHINA No data due
HONG KONG No data due
EUROZONE No data due
GERMANY Balance of Trade, Exports, Imports, Current Account
FRANCE No data due
UK No data due
US Jolts Job Openings, WASDE Report, API Crude Oil Stock Change Report.
Earnings: Cisco, Twitter, Lyft, Dupont, Mattel, Honda, Nissan, Centene, Hanesbrands, Canopy Growth, Martin Marietta Materials, Masco, Sealed Air, S&P Global, Hains Celestial , Fox Corp, Akamai, Owens-Illinois

Wednesday 10 February 
JAPAN PPI
S KOREA Unemployment
TAIWAN Market Closed 
CHINA 
Inflation Rate, PPI
HONG KONG 
No data due
EUROZONE 
No data due
GERMANY 
Inflation Rate
FRANCE Industrial Production
UK No data due
US MBA Mortgage Applications and 30 year Mortgage Rate, Inflation Rate, Wholesale Inventories, EIA Crude Oil Stocks Change Report, US Budget Plan, Monthly Budget Statement, Powells speech to Economic club of New York.
Earnings: Coca-Cola, General Motors, Uber, Zillow, Under Armour, Cerner, Zynga, iRobot, MGM Resorts, Spirit Airlines, Lumen Technologies, Molina Healthcare, O’Reilly Automotive, Wyndham Hotels

Thursday 11 February
JAPAN Market Closed National Foundation Day
S KOREA Market Closed
TAIWAN Market Closed
CHINA 
Market Closed
HONG KONG No data due
EUROZONE No data due
GERMANY Wholesale Prices
FRANCE IEA Oil Market Report
UK No data due
US Initial Claims, Jobless Claims 4 week Average, Continuing Claims, EIA Natural Gas Stocks Change, Fed Monetary Policy Report.
Earnings: PepsiCo, Walt Disney, Kraft Heinz, Expedia, AstraZeneca, Generac, Virtu Financial, Yeti, Kellogg, AllianceBernstein, Borg Warner, Duke Energy, Molson Coors, Tyson Foods, ArcelorMittal

Friday 12 February
JAPAN Foreign Stock and Bond Investment
S KOREA Market Closed
TAIWAN Market Closed 
CHINA 
Market Closed Could get Vehicle Sales
HONG KONG Market Closed
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK Balance of Trade, Construction Output & Orders, GDP, GDP Growth Rate, GDP 3 Month Average. Industrial Production, Manufacturing Production, Business Investment, Good Trade Balance, NIESR Monthly GDP Tracker.
US Michigan Prelim Data (Current Conditions, Inflation Expectations, Consumer Sentiment, 5 yr Inflation Expectations, Consumer Expectations) Baker Hughes Rigs Data.
Earnings Moody’s, Newell Brands, ING Grope

Read More  

Covid and vaccines continue to overhang the market.

US Earnings remain in focus with 99 S&P companies set to report. Alphabet, Amazon, Alibaba, Snap, Exxon, Biogen, Pfizer and Chipotle being amongst them.   We also get the monthly jobs report. PMI and ISM data along with Trade Data at the end of the week.

For Asia PMI data on the agenda along with S Korean inflation. Japanese spending in focus on Friday along with Taiwanese Wholesale Prices and Inflation data.

In Europe again PMI data along with a Bank of England rate decision. Eurozone GDP data and unemployment. German Retail Sales, French Inflation being amongst the key items.

Monday 1 February 2021
JAPAN Manufacturing PMI
S KOREA Balance of Trade, Exports, Imports and Manufacturing PMI
TAIWAN No data due
CHINA Caxin Manufacturing PMI
HONG KONG No data due
EUROZONE Unemployment Rate
GERMANY Retail Sales, Manufacturing PMI
FRANCE Manufacturing PMI, New Car Registrations
UK Manufacturing PMI, Consumer Credit, Mortgage Approvals, Net Lending to individuals US Manufacturing PMI, ISM Manufacturing Data (New Order, Prices, Employment, PMI) Construction Spending. Senior Loan Officers Survey. Total Vehicle Sales
Earnings : Cirrus Logic, Rambus, ON Semiconductor, Vertex Pharmaceuticals, Otis Worldwide, Thermo Fisher, Nintendo, NXP Semiconductor, Warner Music, Cabot

Tuesday 2 February 2021
JAPAN No data due
S KOREA Inflation Rate
TAIWAN No data due
CHINA No data due
HONG KONG Retail Sales
EUROZONE GDP Growth Rate
GERMANY No data due
FRANCE Inflation Rate
UK Nationwide Housing Prices
US Redbook, ISM New York Index, IBD/TIPP Economic Optimism, API Crude Oil Stock Change
Earnings: Alphabet, Amazon, Exxon Mobil, Pfizer, UPS, BP, Amgen, Electronic Arts, FireEye, Chipotle, Viavi Solutions, PerkinElmer, ConocoPhillips, Sirius XM, Harley-Davidson, Alibaba, McKesson, Eaton, Marathon Petroleum

Wednesday 3 February 2021
JAPAN Services and Composite PMI
S KOREA No data due
TAIWAN No data due
CHINA Caixin Services and Composite PMI
HONG KONG PMI
EUROZONE Services and Composite PMI, Core Inflation Rate, Inflation Rate, PPI
GERMANY Services and Composite PMI
FRANCE Services and Composite PMI
UK Services and Composite PMI
US MBA Mortgage Applications and 30 yr Mortgage Rate, Services and Composite PMI, ISM Non Manufacturing Data (Business Activity, Prices, Employment, PMI, New Orders, EIA Oil Stocks Change Report.
Earnings: Qualcomm, Boston Scientific, GlaxoSmithKline, Abbvie, Biogen, Humana, Apollo Global Management, Allstate, eBay, PayPal, Check Point Software, Aflac, MetLife, Grubhub, KLA Corp

Thursday 4 February 2021
JAPAN Foreign Stock and Bond Investment
S KOREA
 No data due
TAIWAN
 No data due
CHINA
 No data due
HONG KONG
 No data due
EUROZONE
 Construction PMI, ECB Economic Bulletin, Retail Sales
GERMANY Construction PMI
FRANCE Construction PMI Retail Sale
UK BoE Rate Decision
US Challenger Job cuts, Unit Labour costs, Non Farm Productivity, Initial Claims,  4 week Average Claims, Continuing Claims, Factory Orders, EIA Natural Gas Report.
Earnings: Merck, Bristol-Myers Squibb, Ford, Hershey, Cigna, Clorox, Yum Brands, Intercontinental Exchange, Activision Blizzard, Gilead Sciences, Snap, Pinterest, Hartford Financial, Prudential Financial

Friday 5 February 2021
JAPAN Household Spending, Foreign Exchange Reserves, Coincident Index Prelim, Leading Economic Index Prelim,
S KOREA Foreign Exchange Reserves, Current Account
TAIWAN Wholesale Prices, Inflation Rate, Foreign Exchange Reserves,
CHINA No data due
HONG KONG Foreign Exchange Reserves
EUROZONE No data due
GERMANY Factory Orders
FRANCE Balance of Trade, Current Account
UK Halifax House Price Index
US Balance of Trade, Non Farm Payrolls, Unemployment Rate, Participation Rate, Average Hourly Earnings, Average Weekly Hours, Exports, Imports, Baker Hughes Rig Data
Earnings: Cardinal Health, Sanofi, Estee Lauder, Regeneron, Illinois Toolworks, Aon, CBOE Global Markets, Lazard, Biomet

Sunday 7 February
CHINA
Foreign Exchange Reserves

Read More  

US a big week ahead for earnings with over 100 companies reporting and for data we also get Q4 GDP and a Fed meeting (no change expected  but watch for comments on the new administration). We also get Durable goods and personal income and spending and the PCE deflator which the Fed watches closely.  Trump’s impeachment to start Monday likely a small distraction for most.

In Asia Japan: Key data BoJ minutes, Retail Sales, Jobs, Tokyo CPI and Consumer Confidence.S Korea: GDP Growth Rate, Consumer & Business Confidence, Retail Sales, Manufacturing & Industrial Production.Taiwan: Industrial Productions and Retail Sales on Monday and Consumer Confidence on Friday.China: Industrial Profits and then on Sunday Manufacturing and Non Manufacturing PMI.Hong Kong: Balance of Trade and GDP.

For Europe Eurozone: Sentiment data, Loans data, Germany: Ifo data, Inflation, Unemployment, Import Prices and GDP Growth rateFrance: Unemployment, GDP,  Household Consumption and PPIUK: Unemployment.

Monday 24 January 2021 
JAPAN No data due
S KOREA No data due
TAIWAN Industrial Production, Retail Sales, M2 Money Supply
CHINA  No data due
HONG KONG  No data due
EUROZONE  No data due but a number of ECB speeches
GERMANY Ifo Business Climate, Current Conditions and Expectations FRANCE  No data due
UK  No data due
US  Chicago Fed National Activity Index, Dallas Manufacturing Index
Earnings : Kimberly-Clark, Yamana Gold, Steel Dynamics

Tuesday 25 January 2021
JAPAN  BoJ Monetary Policy Meeting Minutes
S KOREA GDP Growth Rate
TAIWAN  No data due
CHINA  No data due
HONG KONG Balance of Trade, Export, Import
EUROZONE  No data due
GERMANY  No data due
FRANCE  No data due
UK Unemployment Data, CBI Distributive Trades
US FOMC meeting starts, IMF World Economic Outlook, Redbook, Case Schiller Home Prices, House Price Index, CB Consumer Confidence, Richmond Fed Manufacturing Index, API Crude Oil Stock Change.
Earnings: Microsoft, 3M, Johnson & Johnson, American Express, Starbucks, Raytheon, Verizon, Texas Instruments, Lockheed Martin, UBS, D.R. Horton, General Electric, Novartis, UBS, Freeport-McMoRan, Paccar, Capital One, Advanced Micro Devices

Wednesday 26 January 2021
JAPAN Leading Economic Index and Coincident Index
S KOREA Consumer Confidence
TAIWAN  No data due
CHINA Industrial Profits
HONG KONG  No data due
EUROZONE  No data due
GERMANY Consumer Confidence
FRANCE Consumer Confidence, Unemployment Benefits and Jobseekers Total.
UK No data due
US MBA Mortgage Applications & 30 yr Mortgage Rate, Durable Goods, EIA Oil Stocks report. FOMC Rate Decision and Press Conference.
Earnings: Facebook, Apple, Tesla, AT&T, Boeing, General Dynamics, Whirlpool, Norfolk Southern, Blackstone, Nasdaq, Anthem, Abbott Labs, Textron, Corning, Hess, VF Corp, Samsung, Teradyne, Canadian Pacific Railway, Raymond James, Levi Strauss

Thursday 27 January 2021
JAPAN Retail Sales, Foreign Stock and Bond Investment
S KOREA Business Confidence
TAIWAN No data due
CHINA No data due
HONG KONG No data due
EUROZONE  Sentiment (Economic, Industrial and Services) Consumer Confidence & Inflation Expectations.
GERMANY Inflation Rate
FRANCE No data due
UK No data due
US GDP Price Index & Growth Rate, Initial Claims, 4 week Ave Claims, Continuing Claims, Goods Trade Balance, Wholesale Inventories, PCE Prices, Core PCE, New Home Sales, CB Leading Index, EIA Gas Stock Change, Kansas Fed Manufacturing Report.
Earnings: McDonald’s, Dow, Visa, Mondelez, Northrop Grumman, Comcast, Mastercard, PulteGroup, Southwest Air, Altria, American Airlines, JetBlue, T.Rowe Price, McCormick, Brunswick, Marsh and McLennan, Sherwin-Williams, Stanley Black and Decker, Canon, Valero Energy, Beazer Homes

Friday 28 January 2021
JAPAN Unemployment Rate, Jobs/Application ratio, Tokyo Core CPI, Industrial Production, BoJ Summary of Options, Consumer Confidence, Housing Starts, Construction Orders.
S KOREA Industrial Production, Retail Sales, Manufacturing Production, Construction Output
TAIWAN Consumer ConfidenceGDP Growth Rate
CHINA No data due
HONG KONG GDP Growth Rate
EUROZONE Loans to Households & Companies, M3 Money Supply
GERMANY Unemployment Rate & Change, Import Prices,
FRANCE GDP Growth Rate, Household Consumption, PPI
UK Nationwide Housing Prices,
US Personal Income & Spending, Employment Cost Data (Wages, Benefits and Index), PCE Price Index, Core PCE Price Index, Chicago PMI, Pending Home Sales, Michigan Data (Current Conditions, Consumer Expectations, 5 year Inflation Expectations, Consumer Sentiment, Inflation Expectations), Baker Hughes Rig Data.Earnings: Chevron, Caterpillar, Colgate-Palmolive, SAP, Eli Lilly, Honeywell, Weyerhaeuser, Synchrony Financial, Booz Allen, LyondellBasell, Church and Dwight.

Sunday 30 December 2021
CHINA NBS Manufacturing and Non Manufacturing PMI

Read More  

Shortened trading week for the US with market closed on Monday.  
We also have Biden’s inauguration in Wednesday which gives Trump just a couple of day’s left to cause trouble. Also this week Housing Data, Tic Flows, TIPs Auction and Flash PMI data. That’s in addition to earnings season getting underway. The banks on Friday gave a positive cross read for MS and GS’s earnings.

China data in focus on Monday morning and then on Wednesday Loan Prime Rate.Other Asian data this week Japan’s Tankan Index and Industrial data.  Then later in the week  Trade data on Thursday and on Friday we get Inflation data and flash PMI data.  This week we also get Taiwanese Export Orders and Unemployment.  S Korea PPI and for Hong Kong Unemployment, Inflation and Business Confidence.

In Europe, Inflation data for Eurozone, Germany and UK. There is also an ECB meeting and Flash PMI data. In addition ZEW data for Eurozone and Germany. For the UK we get Retail Prices, Retail Sales, PPI and more.

Monday 18 January
JAPAN Tankan Index, Industrial Production and Capacity Utilisation
S KOREA No data due  
TAIWAN No data due  
CHINA NBS Press Conference Fixed Assert Investment (YTD), GDP Growth Rate Q4, Industrial Production Dec, Retail Sales Dec,  Unemployment Rate Dec  Industrial Capacity Utilisation Dec.Could get FDI data.  
HONG KONG No data due
EUROZONE No data due  
GERMANY No data due  
FRANCE No data due  
UK No data due  
US No data due  Market closed for Martin Luther King Jr Day.

Tuesday 19 January 
JAPAN No data due  
S KOREA No data due  
TAIWAN No data due  
CHINA No data due  
HONG KONG Unemployment Rate
EUROZONE New Car registrations, Current Account, Construction Output, ZEW Economic Sentiment Index
GERMANY Inflation Rate, ZEW Economic Sentiment Index and Current Conditions
FRANCE No data due  
UK Labour Productivity
US Redbook, Foreign Bond Investment, Net Long Term Tic flows, Overall Net Capital Flows

Wednesday 20 January
JAPAN No data due  
S KOREA 
No data due  
TAIWAN 
Export Orders
CHINA 
Loan Prime Rate
HONG KONG No data due  
EUROZONE Core Inflation Rate, Inflation Rate
GERMANY PPI
FRANCE No data due  
UK Inflation Rate, Core Inflation Rate, PPI Core Output, Retail Price Index, PPI Input, PPI Output, CBI Business Optimism and Industrial Trends Orders
US MBA Mortgage Applications and 30 year Mortgage Rate, NAHB Housing MarketBiden’s Inauguration Day.

Thursday 21 January 
JAPAN Balance of Trade,  Exports, Imports, Foreign Bond and Stock Investments, BoJ Interest Rate Decision
S KOREA PPI
TAIWAN No data due  
CHINA No data due  
HONG KONG Inflation Rate
EUROZONE ECB Interest Rate Decision, Marginal Lending Rate, ECB Press Conference
GERMANY No data due  
FRANCE  Business Confidence, Business Climate Indicator
UK No data due  
US Initial Claims, 4 week average Claims, Continuing Claims, Philidelphia Fed Manufacturing Index, Building Permits, Housing Starts, 10 year TIPS auction

Friday 22 January 
JAPAN Inflation Rate, Core Inflation, PMI Flash (Manufacturing,Services and Composite)
S KOREA No data due  
TAIWAN Unemployment Rate
CHINA No data due  
HONG KONG Business Confidence
EUROZONE PMI Flash (Manufacturing,Services and Composite)
GERMANY PMI Flash (Manufacturing,Services and Composite)
FRANCE PMI Flash (Manufacturing,Services and Composite)
UK Consumer Confidence, Retail Sales, Public Sector Net Borrowing PMI Flash (Manufacturing,Services and Composite)
US PMI Flash (Manufacturing,Services and Composite), Existing Home Sales EIA Natural Gas and Oil report, Baker Hughes Rig count data

Read More  

Covid cases impact on the markets is reducing, although new mutant strains could  change that.  US Politics and the erratic behaviour of Trump remain a big concern not only to the US markets but China/Hong Kong especially.  
Investors will also be looking for clues about additional stimulus from the Biden team once they take office.
US Earnings will increase in pace with the US Banks due to report Friday of this week.

Key
China Inflation, already out was higher than forecast, later in the week we get the Balance of Trade. Also likely this week in New Loans data which will give insight into China’s recovery.
US Inflation data along with Initial and Continuing Claims, Beige Book, Retail Sales Industrial and Manufacturing data along with the Michigan preliminary data

Monday 11 January 2021
JAPAN Market closed for Coming of Age Day
S KOREA No data due
TAIWAN No data due
CHINA Inflation and PPI
HONG KONG No data due
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK No data due
US Consumer Inflation Expectations

Tuesday 12 January 2021
JAPAN Current Account, Bank Lending, Eco Watchers Survey (Current & Outlook).
S KOREA  No data due
TAIWAN  No data due
CHINA  No data due
HONG KONG  No data due
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK  No data due
US Redbook, JOLT’s Job Openings, IBD/TIPP Economic Optimism.  After mkt API Crude Oil Stock ChangeEarnings: KB Homes, Albertsons

Wednesday 13 January 2021
JAPAN Machine Tool Orders
S KOREA Unemployment Rate
TAIWAN  No data due
CHINA  No data due But could get FDI, Vehicle Sales, New Yuan Loans, Outstanding Loan Growth, Total Social Financing, M2 Money Supply.
HONG KONG  No data due
EUROZONE Industrial Production
GERMANY Wholesale Prices
FRANCE  No data due
UK  No data due
US MBA Mortgage Applications and 30 year Mortgage Rate, Inflation Rate, Core Inflation Rate, EIA Oil Report, Monthly Budget Statement, Beige Book.Earnings: IHS Markit, Infosys, Wipro

Thursday 14 January 2021
JAPAN Machinery Orders, PPI
S KOREA Import and Export Prices
TAIWAN  No data due
CHINA Balance of Trade, Exports, Imports
HONG KONG  No data due
EUROZONE ECB Monetary Policy Meeting Accounts.
GERMANY GDP Growth, Government Budget
FRANCE  No data due
UK  No data due
US Initial Claims, 4 week average Claims, Continuing Claims, Export & Import Prices.Earnings: BlackRock, First Republic, Taiwan Semiconductor, Delta Airlines

Friday 15 January 2021
JAPAN Foreign Stock and Bond Investment, Tertiary Industry Index.
S KOREA BoK Interest Rate Decision
TAIWAN  No data due
CHINA  No data due
HONG KONG  No data due
EUROZONE  Balance of Trade
GERMANY  No data due
FRANCE Inflation Rate, Budget Balance
UK Balance of Trade, GDP,  GDP  3 Month Average, Industrial Production, Manufacturing Production, Construction Output, Goods Trade Balance, NIESR Monthly GDP Tracker.
US Retail Sales, PPI, Core PPI, NY Empire State Manufacturing Index, Industrial Production, Capacity Utilisation, Manufacturing Production, Business Inventories, Michigan Data Prelim (Current Conditions, Consumer Sentiment, Inflation Expectations, Consumer Expectations and 5 year Inflation Expectations), Baker Hughes Total Rig CountEarnings: JPMorgan, Wells Fargo, Citigroup, PNC Financial

Read More  

Covid continues to be an important factor overhanging the markets.

The US election also in focus as Trump continues to try and overturn the results and we get the Georgia run’s off taking place on Tuesday.

In Europe Brexit deal in place now the practicalities of making it work. Comes as rising covid cases mean more lockdowns are forecast; which is -VE for Asian exporters and the global recovery.

Data Monday starts with a lot of Manufacturing PMI data; giving a guide as to the direction of the trend; with Asia expecting to see a continued improvement. Later in the week we get the Services and Composite PMI’s too.

Focus for many this week will be the US Non Farm Payrolls, but we also get US ISM data. Factory Orders, FOMC minutes and Wholesale Inventories.
For Asia Key data
Japanese Average Cash Earnings and Household Spending.
Taiwan Inflation rate and Trade data
S Korea Current Account
China Foreign Exchange Reserves will be watched.HK Retail sales

For Europe
Eurozone Loans data, Inflation, Consumer Confidence, Sentiment, Retail Sales and Unemployment
German and France; Trade Data, Retail Sales, Unemployment
UK Lending data and Halifax House Prices.


Monday 4 January 
JAPAN Manufacturing PMI
S KOREA Manufacturing PMI
TAIWAN Manufacturing PMI
CHINA Manufacturing PMI
HONG KONG Retail Sales
EUROZONE Manufacturing PMI
GERMANYManufacturing PMI
FRANCE Manufacturing PMI, New Car Registration
UK BoE Consumer Credit, Mortgage Lending, Manufacturing PMI, Mortgage Approvals, Net Lending to individuals.
US Manufacturing PMI, Construction Spending, Total Vehicle Sales (after market).

Tuesday 5 January 
JAPAN No data due
S KOREA  No data due
TAIWAN  No data due
CHINA  No data due
HONG KONG  No data due
EUROZONE Loans to Households and Companies, M3 Money Supply
GERMANY Retail Sales, Unemployment
FRANCE  No data due
UK New Car Sales
US Redbook, ISM New York, ISM Manufacturing (New Orders, Prices, Employment, PMI), API Crude Oil Stock Changes.

Wednesday 6 January 
JAPAN Services and Composite PMI, Consumer Confidence.
S KOREA Foreign Exchange Reserves
TAIWAN  Foreign Exchange Reserves
CHINA Caixin Services and Composite PMI.
HONG KONG  No data due
EUROZONE Services and Composite, PPI
GERMANY Services and Composite PMI, Inflation Rate.
FRANCE Inflation Rate, Consumer Confidence, Services and Composite PMI.
UK Services and Composite PMI.
US MBA Mortgage Applications and 30 yr Mortgage Rate,  Services and Composite PMI, ADP Employment Change, Factory Orders, EIA Oil Report, FOMC Minutes.

Thursday 7 January 
JAPAN Average Cash Earnings, Foreign Bond and Stock Investment,
S KOREA No data due
TAIWAN Inflation Rate, Wholesale Prices
CHINA Foreign Exchange Reserves
HONG KONG No data due
EUROZONE Construction PMI, Core Inflation, Inflation Rate, Sentiment (Economic, Services, Industrial), Retail Sales, Consumer Confidence & Inflation Expectations.
GERMANY Construction PMI
FRANCE Construction PMI, Retail Sales
UK Construction PMI
US Challenger Job Cuts, Initial Claims, 4 Week Average Claims, Continuing Claims, Balance of Trade, Exports, Imports, ISM Non Manufacturing Data (Business Activity, New Orders, Prices, Employment, PMI), EIA Natural Gas Report.

Friday 8 January 
JAPAN Household Spending, Foreign Exchange Reserves, Coincident Index, Leading Economic Index.
S KOREA Current Account
TAIWAN Balance of Trade, Exports, Imports.
CHINA No data due
HONG KONG No data due
EUROZONE Unemployment Rate
GERMANY Balance of Trade, Industrial Production, Exports, Imports, Current Account.
FRANCE Industrial Production, Balance of Trade, Current Account, Household Consumption.
UK Halifax House Price Index,
US Non Farm Payrolls, Unemployment Rate, Ave Hourly Earnings, Ave Weekly Hours, Participation Rate, Wholesale Inventories, Baker Hughes Oil Rig Count, Consumer Credit Change.

Read More  

HK/China Wrap


FT Thoughts


Asian Macro Initial Thoughts


HK/China Wrap


FT Thoughts


Asian Macro Initial Thoughts


HK/China Wrap


FT Thoughts


Asian Macro Thoughts


Trumpet blowing and reminiscing


In case you were lucky enough to have missed it here is the link to Tuesday 22 Dec Bloomberg Daybreak Middle East.   I was on for the start of the second hour.  If you click on the time bar at 55:45  you’ll get my 9 minute segment.
They still have me as being at Pearl Bridge but that was an error.

https://www.bloomberg.com/news/videos/2020-12-22/-bloomberg-daybreak-middle-east-full-show-12-22-2020-video

Separately here is a link to a piece by Matthew Brooker a journalist leaving Hong Kong after 28 years. Looking back at the City, the people and the fabric and how it has now changed.

A Farewell to the Hong Kong I Loved (bloomberg.com)
https://www.bloomberg.com/graphics/2020-opinion-hong-kong-is-now-a-city-of-the-past/?utm_medium=deeplink

I think many will identify with the fondness that the writer has for City and also the feeling of being a part of Hong Kong that many expats have, I know I do and my son does too.

I hope you enjoy the read.

Seasons Greetings

Andrew Sullivan
Open for jobs

HK raises Typhoon T8 @ 5:40am Expect market to at least see a delayed open


HK Obervatory T8 raised at 5:40am
Which means HK market could see a delayed open or be closed all day. Click the link for details

https://www.hkex.com.hk/Services/Trading-hours-and-Severe-Weather-Arrangements/Severe-Weather-Arrangements/Trading?sc_lang=en

Key is what time the signal is lowered
If lowered before 7am normal trading
If lowered after 7am but before 9am Trading begins on the first half hour at least two hours after the signal lowered
If lowered after 9am but before 11am Pre and Morning sessions cancelled. Trading starts at 1pm
If lowered after 11am but before 11:30am Pre and Morning sessions cancelled. Trading starts at 1:30pm
If lowered after 11:30am but before 12 noon Pre and Morning sessions cancelled. Trading starts at 2pm
If lowered after 12 noon No trading for the day

For an update on the signal and weather link to the HK Observatory

https://www.hko.gov.hk/en/index.html


Special Articles May


Market Wrap


FT Thoughts


Asian Marco Initial Thoughts


Market Wrap


FT Thoughts


Asian Macro Thoughts


Market Wrap


Lunchtime Updates


Asian Macro Initial Thoughts


Market Wrap


FT Thoughts


Asian Macro Initial Thoughts


Market Wrap


FT Thoughts


Asian Initial Thoughts


Market Wrap


uly 31 HK WRAP HSI -115pts After hours HK Govt postpones Local Elections -VE

HSI -115pts (-0.5%) 24,595 HSCEI -57pts (-0.6%) 10,039 T/O HK$119.15bn (-7.2% DoD)

EUROPE Markets opening mixed ahead of Euro GDP numbers.
US Futures opened strongly but gradually eased back to flat during the day. Covid concerns overhang the market despite good earnings after market Thursday.

EARNINGS include Caterpillar, Merck, Exxon Mobil, Chevron, Illinois Tool Works, Colgate-Palmolive, Lazard, Booz Allen Hamilton, LyondellBasell, Weyerhaeuser, Newell Brands

INDEXES
CSI 300 Closed +39pts (+0.8%) @ 4,695 
Market opened opened higher and rallied to day high as PMI data was slightly better but then sold down into lunch. PM market trading sideways but with a small rally around 2pm when Tech and Semi names were bought. It then traded sideways into the close.
President Xi called for a greater push on reforms to stimulate domestic demand to help the economy ride out mounting risks and challenges. But sentiment remains cautious on US/China tensions.

HSI Pre Market +36pts @ 24,747 vs -69pts ADRs @ 24,641 With TECH/Apple supply chain names strong but Financials weak. China data slight +VE but local sentiment weak due to the number of profit warnings and rising new covid cases which are running at over a 100 per day, for the past 10 days -VE.
Opened higher and rallied on China PMI data but unable to break higher and sold down to day low around 11am (24,530 level) before rebounding into the lunch. PM seeing selling pressure and traded sideways lower and ticked 50pts lower in the closing auction.


AFTER MARKET
HK Administration says it is delaying the local elections by 12 months due to covid
but no one is convinced. Huge -VE for public sentiment.
CHOW SANG SANG (116.HK) Profit Warning -VE . The Group is expected to record a decrease in its net profit to HK$200 million,-65% to -70% as compared to the corresponding period in 2019. Such decrease is mainly attributable to temporary closure of some stores or reduced opening hours of the Group’s jewellery retail network, a sharp decline in visitor arrivals to Hong Kong as well as weak consumer sentiment, caused by the outbreak of the coronavirus disease (COVID-19).
SINOPEC CORP (386.HK) unveiled the operational statistics for the first half of 2020. The production of oil and gas reached 226 million boe, down 0.4% yearly. The refinery throughput sank 10.5% yearly to 111 million tonnes in 1H20.
SWIREPROPERTIES (1972.HK) said that the occupancy of overall Hong Kong office reached 97% as at 30 June 2020, down 2 ppts from that in end-2019. Retail sales at Pacific Place -47.1%, Cityplaza -20.3%, and Citygate Outlets -25.6% in the first half of 2020.
The HKMA announced that as USD/ HKD triggered the Strong-side Convertibility Undertaking during Hong Kong trading hours, it undertook a selling order of US$150 million to inject HK$1.163 billion into the market. The balance of the banking system of Hong Kong will increase to HK$186.068 billion next Tuesday (4 August).
HKMA residential mortgage survey for June 2020 saw the number of mortgage applications in June -7.9% MoM to 13,829. Mortgage loans approved in June +16.3% MoM to HK$47.6 billion.
HKMA Exchange Fund total assets HK$4,195.3 billion as at June 30, 2020, HK$113.4 billion higher than that at the end of May 2020. Hong Kong dollar assets increased by HK$87.2 billion and foreign currency assets increased by HK$26.2 billion.
HKMA Total deposits with authorised institutions +1.6% in June 2020. Among the total, Hong Kong dollar deposits +2% and overall foreign currency deposits +1.2 %.  Renminbi deposits in Hong Kong -7.9% to RMB639.9 billion at the end of June. The total remittance of renminbi for cross-border trade settlement amounted to RMB542.8 billion in June, compared with RMB521.5 billion in May.
CHINA DONGXIANG (3818.HK) announced to sell the Kappa Japan Trademarks and the IP Miscellaneous Assets to Basic Trademark S.r.l. con socio unico, a subsidiary of the Italian firm BasicNet S.p.A, for a consideration of US$13 million (equivalent to approximately RMB91.26 million). The Group is expected to record an unaudited estimated gain on the Disposal of approximately US$10.93 million (equivalent to approximately RMB76.73 million).
The HK Government announced its financial results for the three months ended June 30, 2020. Expenditure for the period April to June 2020 amounted to HK$176.8 billion and revenue HK$67.8 billion, resulting in a cumulative year-to-date deficit of HK$109 billion.
Centa-City Leading Index (CCL) last printed at 181.69, -0.04% WoW after a three-week rally. The reading reflected the market condition for the week following COVID-19 resurgence in early July, said Centaline Property. They expected CCL to struggle at high levels in the near term with swelling volatility.
PBoC said that at the end of 2Q20, the balance of various RMB loans at financial institutions amounted to RMB165.2 trillion, up 13.2% yearly, as revealed by the latest data of the PBOC.

Market and Pre Market News at bottom of page.

Regional Markets
JAPAN 
opened lower despite good Marco data on unemployment and industrial production. It sold down on rising covid concerns and in the PM is drifting lower/sideways Currently -2.8%
S KOREA opened higher on good retail, industrial and manufacturing data. Kosdaq has opened higher, sold down rebounded sold down to day low and now working better sideways to close  +0.1%. The Kospi initially sold down but rebounding and trading sideways just below flat but sold down in the PM to close -0.8%.
TAIWAN opened lower but rebounded to flat but sold down again and then worked higher to close -0.5%

Short Selling HSI Friday 18.7% vs 20.7% Thursday
Top Shorts 
Hang Seng Bank (11) 44%, Wharf REIC (1997) 33%, SHKP (16) 32%, HSBC (5) 32%, Power Assets (6) 32%, CLP (2) 31%, Bank of China (3988) 29%, Sino Land (83) 28%, Swire Pac A (19) 27%, Galaxy (27) 26%, HK & China Gas (3) 25%, Ping An (2318) 25%, Petrochina (857) 25%.

CONNECT FLOWS
Shanghai
Northbound Rmb 54,523m Sell 28,669m : 25,854m Buy
Southbound HK$ 11,375m Sell 5,193m : 6,182m Buy
Shenzhen
Northbound Rmb 74,544m Sell 36,816m : 37,728m Buy
Southbound HK$ 12,104m Sell 5,150m : 6,954m Buy


DATA
CHINA Pre Market

Manufacturing PMI Jul 51.1 vs 50.9 Jun (F/cast was 51)
Non Manufacturing PMI Jul 54.2 vs 54.4Jun (F/cast was 54.1)

HONG KONG
Centre for Health Protection said there were 121 
additional COVID-19 cases in Hong Kong today; 118 were locally transmitted with 56 of unknown source.
After market The Government announced its financial results for the three months ended June 30, 2020. Expenditure for the period April to June 2020 amounted to HK$176.8 billion and revenue HK$67.8 billion, resulting in a cumulative year-to-date deficit of HK$109 billion.

Active Heavyweights
HKEX (388.HK) +2.1%
CCB (939.HK) -1.6%
AIA (1299.HK) -1.1%
PING AN (2318.HK) -0.7%
TENCENT (700.HK) -0.2%

HSI & HSCEI Constituents on the move
AAC TECH (2018.HK) +3.6%

HSMI & HSSI Constituents on the move
ZHENGTONGAUTO (1728.HK) +38.3%
ZHOU HEI YA (1458.HK) +11.7%
SHENGYE CAPITAL (6069.HK) +10.9%
XINYI ENERGY (3868.HK) +10.3%, hits new high
AUSNUTRIA (1717.HK) +10.2%
CHINAGRANDPHARM (512.HK) +8.3%, hits new high
HOPSON DEV HOLD (754.HK) +5.8%, hits new high
COFCO PACKAGING (906.HK) +4.1%, hits new high
JIAYUAN INTL (2768.HK) +3.4%, hits new high

COMMENT
*TECH & COMPONENTS STRONG
  after APPLE quarterly revenue beat forecasts as locked down consumers snapped up new iPhones, iPads and Mac computers to stay connected during the pandemic. AAC (2018 HK +3.6%) HUA HONG (1347 HK +2.4%) BYDE (285 HK +3.2%) SMIC (981 HK +5.9%) Q TECH (1478 HK +2.3%).
*MACAU FIRM after news reported that China authorities will resume issuing visas to allow the entry of mainland residents into the Macau SAR, with the exception of tourism visas, starting Aug. 12, which is earlier than expected. GALAXY (27 HK +1.3%) SJM (880 HK +2.3%) MELCO (200 HK +3.1%) WYNN (1128 HK +2.7%).
*CHINA PROPERTY FIRM as more developers plan spinning-off their property mgmt business for separate listing.
CHINA EVERGRANDE (3333 HK +1.6%) is reportedly hoping to spin off its property mgmt business in the mainland to raise around US$1b-US$2b.
CG SERVICES (6098 HK +1.8%) at record high on planned Ad-firm purchase.
*HK PROPERTY FIRM as supply of new units remain tight according to government data;  Home builds of private residential units fell to 8,100 as of end June, while that of completed units sank to 11,400. The number of first-hand private residential units available in the coming 3 to 4 years declined by 3,000 units quarterly to 92,000 units. CKA (1113 HK +0.8%) SINO LAND (83 HK +1%) SHKP (16 HK +1%).
WHARF REIC (1997 HK -2.2%) after earnings; recorded 1H net loss of HK$4.45b. Total retail sales in HK plunged by about one-third YoY. 1H underlying net profit -26% YoY to HK$3.84b.
*RETAIL WEAK as the value of total retail sales in HK in June  24.8% YoY to HK$26.5b, slightly below market expectations. Retail sales fell for 17 consecutive months, but the decline narrowed down in June.  I.T (999 HK -2%) said same-store sales in HK and Macau -49.1% YoY in the 3-months ended May. I.T also said it incurred a net loss in 1Q vs a net profit last year. BONJOUR (653 HK -7%).
*PHARMA FIRM on vaccine/drug development.
SINO BIO's (1177 HK -0.6%) Apixaban Tablet gets drug registration cert. ASCLETIS (1672 HK +3.7%) announces its all-oral HCV treatment for hepatitis C has been approved for marketing in China.
CANSINO's (6185 HK +2.4%) application for its A-shs offerings starts today. INNOVENT (1801 HK -2.5%) 3SBIO (1530 HK -1.7%).
*OTHER MOVERS: 
ZHENGTONG AUTO (1728 HK +38%) after controlling shareholder Joy Capital entered MOU with Xiamen ITG Holding Group, a state-owned business group under Xiamen municipal government, to sell ~29.9% interest in the company. ZHOU HEI YA (1458 HK +12%) as investors think the worst may be over, after the company warned of a 1H loss of 42m-50m yuan vs profit a year ago.

NEWS
MARKET HOURS
State Council's Antitrust Committee Mulls Probe Into Alipay, WeChat Pay:
Rumor.  Reuters citing insiders said the committee has already been gathering information on the payment apps for over a month.
Canalys: PRC 2Q Smartphone Shipment +25% QoQ to 90M Units but -7% YoY, as the smartphone market rebounded with economic activity, according to Canalys' report.
TikTok's owner ByteDance is considering spinning off its domestic business for listing in Hong Kong or Shanghai amid rising China-US tensions, Reuters citing insiders. Said to prefer Hong Kong more, the firm is in talks with HKEX (388.HK) and Chinese regulators. A listing could value the Chinese business at over US$100 billion in Hong Kong or on Sci-Tech Board, according to the report.
TENCENT (700.HK)'s League of Legends announced to gradually enact new gaming rules on underage users from 29 July, including a gaming curfew between 22:00 and 08:00. Minors are restricted to 3 hours of game-play on statutory holidays and 1.5 hours on normal days. For in-game spending, users aged below 8 are barred from topping up their accounts. Those aged 8-16 can top up as much as RMB200 per month. Minors aged above 16 have a maximum top-up limit at RMB400 per month. Slight -VE
AUSNUTRIA (1717.HK) Positive Profit Warning; it expects a revenue of RMB3.78 billion to RMB3.87 billion for the six months ended 30 June 2019, representing an anticipated increase of 20.1% to 23% vs that of the 2019 Interim Period; and a net profit of RMB400 million to RMB420 million, representing an anticipated increase of 53.6% to 61.3% when compared with that of the 2019 Interim Period.
EVERGRANDE (3333.HK) said it is considering a possible spin-off and separate listing of the property management services and related value-added services business of the Group (Property Management Business) on The Stock Exchange of Hong Kong Limited.
Warren Buffett’s Berkshire Hathaway increased stake in Bank of America further at US$522 million. So far, he has held 11.8% stake in total in the bank.
Li & Fung announced that it will accept the US$100-million strategic investment of JD-SW (9618.HK) by way of subscribing new shares at HK$1.25 per share of Li & Fung to further explore its digital supply chain. +VE
HK Rating and Valuation Department: HK Jun Private Domestic Price Index +0.1% Higher MoM to 386.1 in June, Rising for 2 months
Transport and Housing Bureau unveiled the statistics of private housing supply in primary market as of end-June 2020. The number of private residential units commencing construction fell to 8,100 during the period, while that of the completed units sank to 11,400. The number of first-hand private residential units available in the coming 3-4 years declined by 3,000 units quarterly to 92,000 units.


PRE MARKET
CKH HOLDINGS (1.HK)'s Husky Energy announced the 2Q results
. It reported a loss of CAD304 million, against a profit of CAD370 million. LPS was CAD0.31. DPS was CAD0.0125. During the period, the production dropped 7.8% yearly to 247,000 BOE per day.
ZHENGTONGAUTO (1728.HK) announced that on 29 July, Joy Capital, the controlling shareholder holding 51.29% of the Company's stake, entered into an MOU with Xiamen ITG, an independent third party, pursuant to which Joy Capital intends to sell 29.9% interests of the Company. Xiamen ITG is a state-owned business group under Xiamen Municipal Government.
HKD continued to strengthen near the Strong-side Convertibility Undertaking, and the spot USD T/T rate was last at 7.7502.
Diginex, a cryptocurrency and blockchain service company in Hong Kong, is seeking a backdoor listing on NASDAQ, local media reported. The company had reportedly scheduled to float its shares on the US market in March 2020 byacquiring a NASDAQ-listed company, 8i Enterprises Acquisition Corp. However, the plan was later delayed owing to pandemic.
MGM CHINA (2282.HK) unaudited results for the first half of fiscal 2020 of MGM Resorts International, the controlling shareholder of the company. The total revenue dropped 79.02% yearly to $2.37 billion. The adjusted EBITDA was a loss of $1.008 billion, versus a profit of $3.077 billion over a year ago.
STANCHART (2888.HK) CEO Bill Winters told Bloomberg that he believes Hong Kong dollar's peg to the US dollar is "unassailable" and underpinned by Hong Kong's robust monetary reserves. That is true from a market perspective but a change of mood politically leaves it vulnerable.

Read More  

July 30 HK WRAP -173pts  T/O +23% DoD. Broke 25k but then...

HSI -173pts (-0.7%) 24,711  HSCEI -87pts (-0.9%) 10,097  T/O HK$128.37bn (+22.9% DoD)  

EUROPE Markets opened lower with earnings in focus after Credit Suisse, Volkswagen and Renault among the corporate giants that reported before the bell.
US Futures opened flat but sold down; currently Dow -250pts, S&P and NDX weak ahead of big tech earnings.

EARNINGS include Apple, Amazon, Alphabet, Procter and Gamble, Comcast, Ford, Shake Shack, Dunkin Brands, Cigna, Dupont, Eli Lily, Northrop Grumman, Textron, Valero, ConocoPhillips, Comcast, Kellogg, AstraZeneca, Kraft Heinz, Southern Co., Stryker, Generac, Stanley Black and Decker, Marsh and McLennan, Electronic Arts


INDEXES
CSI 300 Closed -23pts (-0.5%) @ 4,656 
Market opened slightly higher and initially tested higher to the day high (4,705) but then trended lower in choppy trading for the rest of the day. Day low was 4,650 about 30 mins before the close.Chinese yuan was weaker on US/China tensions, while ChiNext and Star Board indexes both saw weakness. Construction Materials and Pharm names were outperormers.

HSI Pre Market +96pts @ 24,979 vs +72pts ADRs @ 24,955 With most E commerce names +VE except Meituan -0.4%. Pharma strong on rising covid cases.
Having opened at 25k market saw some initial consolidation down to 24,925 level in the first 30 minutes. Then worked higher for the rest of the morning to the day high 25,200 level at 11:45am. It then eased back into lunch. PM saw inital selling back down to the 25k level which though tested several times held for about 75 minutes. But then it collapsed and the market sold down to 24,800, and then 24,630. It saw a 75pt bounce and then traded sideways into the close. Increased turnover on a down day a slight -VE and likely to trigger some early margin selling tomorrow.


AFTER MARKET
Li Ka Shing Foundation Adds $101M Medical Support 
to 'Love Can Help II’ The coverage will be extended from local medical services to the social welfare sector.
Standard Chartered Bank (Hong Kong) Mary Huen Wai-yi, chief executive officer said the NIM of the bank will still come under downside pressure in 2H20, yet cautious provision was made in 1H20. She hoped that a result turnaround could be manifested upon economic recovery in 2H20. In 1H20, the bank reported a profit before tax decline of 19% YoY to $5.501 billion; and revenue fall of 1% YoY to $14.277 billion.
WHARF REIC (1997.HK) interim results ended 30 June 2020. Underlying net profit -26% annually to HK$3.844 billion. Inclusive of net investment properties revaluation deficit of HK$7.35 billion, the Group swung into loss of HK$4.454 billion from profit of HK$6.989 billion over a year ago. LPS equaled HK$1.47. An interim DPS of HK$0.78 was declared, against HK$1.1 over a year ago. Interim dividend payout ratio stayed unchanged.
Centa Valuation Index (Major Banks) (CVI) last printed at 45.31 this week, -2.86 pts weekly. Centaline Property, said CVI stood firmly around 45 for three weeks with a stabilizing sign. They believe the index will struggle in short run as the epidemic has yet to worsen further.

Market and Pre Market News at bottom of page.


Regional Markets
JAPAN 
opened slightly higher, Retail sales were better than forecast but the market drifted lower all day. Closed -0.3%
S KOREA opened higher but drifted lower, tested flat and then bounced before trading sideways; Solid earnings from Samsung Operating profit +23% on strong chip sales. Kosdaq Closed +0.7% and the Kospi +0.2%.Samsung results https://news.samsung.com/global/samsung-electronics-announces-second-quarter-2020-results
TAIWAN opened much higher, saw some initial selling but now trending higher on good earnings especially in the Tech sector Closed +1.5%

Short Selling HSI Thursday 20.7% vs 17.9% Wednesday
Top Shorts 
Hang Seng Bank (11) 38%, Ping An (2318) 37%, Bank of China (3988) 36%, CCB (939) 32%, China Shenhua (1088) 30%, MTRC (66) 28%, Mengniu Dairy (2319) 28%, BoC (HK) (2388) 28%, Henderson Land (12) 27%, NWD (17) 26%, Hengan (1044) 25%.

CONNECT FLOWS
Shanghai
Northbound Rmb 47,953m Sell 24,764m : 23,189m Buy
Southbound HK$ 11,231m Sell 4,314m : 6,917m Buy
Shenzhen
Northbound Rmb 70,688m Sell 37,726m : 32,963m Buy
Southbound HK$ 12,500m Sell 4,762m : 7,737m Buy

DATA
CHINA No data
HONG KONG
Centre for Health Protection said there were 149 
additional COVID-19 cases in Hong Kong today; 145 were locally transmitted.
HK RETAIL SALES Jun -24.8% YoY vs -32.9% May revised (F/cast was -29%)
It was the 17th consecutive decline in retail trade, as sales continued to fall at department stores (-7%); for other consumer good, not elsewhere classified (-10%); food, alcoholic drinks & tobacco (-13.2%); jewellery, watches and clocks (-56.5%); electrical goods & other consumer durable goods (-8.8%); wearing apparel (-38.8%); medicines & cosmetics (-57.4%); motor vehicles & parts (-17.9%); footwear, allied products & other clothing accessories (-39.7%); Chinese drugs & herbs (-29.0%); books, newspapers, stationery and gifts (-41.3%); and optical shops (-32.5%). On a seasonally adjusted quarterly basis, retail sales went up 4 percent in the three months to June 2020 compared with the prior quarter.

Active Heavyweights
AIA (1299.HK) -2.4%
CCB (939.HK) -1.5%
HKEX (388.HK) -1.3%
TENCENT (700.HK) -1.2%
PING AN (2318.HK) +0.0%

HSI & HSCEI Constituents on the move
CSPC PHARMA (1093.HK) +5.1%
PSBC (1658.HK) -3.3%

HSMI & HSSI Constituents on the move
GOLDWIND (2208.HK) +16.7%
COFCO MEAT (1610.HK) +15.8%, hits new high
CHINA LONGYUAN (916.HK) +13%, hits new high
CNBM (3323.HK) +9.3%, hits new high
KINGDEE INT'L (268.HK) +7.1%, hits new high
E-HOUSE ENT (2048.HK) +6%, hits new high


COMMENT
*PHARMA MIXED
CANSINO BIOLOGICS (6185 HK +7.7%) plans to raise 5.20b yuan through a listing on the Shanghai's Star board, and SSY (2005 HK +3.5%) on possible asset spin-off and listing plan in the mainland. Sector continuing traded mixed amid vaccine/drug speculations. INNOVENT (1801 HK -0.8%) 3SBIO (1530 HK -2.2%) SINOPHARM (1099 HK -0.2%) GENESCRIPT (1548 HK +4.9%) SINO BIO (1177 HK +1.7%).
*TECH & COMPONENTS MIXED  on earnings speculation. ASM PAC (522 HK -6%) profit-taking despite 1H net profit more than doubled YoY to HK$391m, driven by rising 5G sector demand. BYDE (285 HK +1.1%) AAC (2018 HK +1.5%) remained strong amid 1H earnings speculation.
*E-COMMERCE FIRM  ALIBABA (9988 HK +0.74%) and MEITUAN (3690 HK +1%) amid index inclusion speculation. Meanwhile, LI AUTO INC. will sell $380m in Class A ordinary shares to some existing shareholders, including a Bytedance Ltd. affiliate, via private placements. Company says a MEITUAN DIANPING affiliate will buy $300m in shares while the Bytedance affiliate will buy $30m in the transaction. Company is concurrently selling 95m ADS in an IPO.
*HK PROPERTY FIRM after VANKE PROP (Hong Kong) and CNQC INTL (1240 HK +8%) won the residential site at Ma Wo Road in Tai Po for HK$3.7b, in line with market estimates. This indicates that developers are positive about the outlook for the local home market, said Centaline. SHKP (16 HK +1.6%) NWD (17 HK +2.9%).HANG LUNG (101 HK +0.4%) underlying net profit attributable to shareholders -11% to HK$1,989m and a net loss attributable to shareholders of HK$2,537m.
*CONSTRUCTION FIRM Benefits from demand from recovery projects following the flood disaster. CONCH (914 HK +1.1%) CNBM (3323 HK +9.3%) ASIA CEMENT (743 HK +3.1%) CR CEMENT (1313 HK +2.4%)
*POST-EARNINGS MOVES: 
PRADA (1913 HK +4.9%) reported a net loss of 180m euros during 1H, with Asia-Pacific retail sales falling 18.8% as HK and Macau markets suffer from the pandemic. Losses per share were 0.70 euros and the company has suspended dividends. Retail net sales for 1H totaled 835m euros, down 32% YoY.
BUDWEISER APAC (1876 HK +4.9%) 1H net income US$185m, -69% YoY, 2Q net income US$226m, and 2Q Change in beer volume -6.1%.
STAN CHART (2888 HK -1.9%) 1H underlying profit before tax -25% to $2.0b, but 2Q earnings beat expectations.

NEWS
MARKET HOURS
China in 1H20, realised online retail sales of goods of RMB4.35 trillion, +14.3% yearly,
said Gao Feng, spokesman of Ministry of Commerce. Meanwhile, the number of online shoppers surged 100 million yearly, with the number of online retail stores +3.8% yearly.
The Government announced that as the local epidemic situation remains severe, it is necessary to continue to take measures to significantly reduce the flow of people and social contacts in order to stop COVID-19 from further spreading in the community. A spokesman for the Government announced that the special work arrangement for government employees will be extended for one week until August 9. Save for those involved in the provision of emergency services and essential public services, all other government employees will continue to work from home. The Government will closely monitor the epidemic situation and review the arrangement in due course.
Some MEITUAN-W (3690.HK) users have discovered the app no longer supports Alipay, only offering payment options like Meituan Monthly Pay, debit cards, WeChat Pay and Apple Pay. In response, MEITUAN-W co-founder Wang Xing asked on social media why Taobao does not support WeChat Pay, as WeChat Pay brags more active users than Alipay with lower transaction fees.
NATIONAL ARTS (8228.HK) says it poses overwhelming risks for it to be engaged in a single business amid the coronavirus crisis. The company thus proposes to take over CONVOY (1019.HK) and hopes the business diversification will spread the risks. Takingover of CONVOY will help NATIONAL ARTS achieve its goal to develop e-finance business, opined Sin. Leveraging on CONVOY's well established sales team, NATIONAL ARTS may more effectively sell its movie tickets and products as well.
EVERGRANDE (3333.HK) plans to spin off its property management business for Hong Kong listing as soon as 1H21 to raise US$1-2 billion, IFR citing insiders.
UBER in response to earlier disclosures to move its Asia-Pacific headquarters to Hong Kong, Uber stated that its regional headquarters will be kept in Singapore in the near term for not receiving the required level of certainty from HKSAR Govt.
BUD APAC (1876.HK) noted significant improvement in various channels and higher market share as China had gradually rebooted her economic activities in May and June, said Co-Chair and CEO Jan Craps. He envisioned an encouraging business performance in the second half of year, with unpredictable figures subject to changes amid the plague.
At lunch STANCHART (2888.HK) unveiled its interim results. The statutory profit before tax -33% yearly to US$1.627 billion, slightly ahead of the consensus. The statutory net profit -29% yearly to US$1.048 billion. In response to a request from the Prudential Regulation Authority, the Board had decided after careful consideration that no interim dividend on ordinary shares will be accrued, recommended or paid in 2020. The Board fully recognized the importance of dividends to its owners and it hoped to reinstate them as soon as prudently possible.
At lunch HANG LUNG PPT 1H20 Swings to $2.54B Net Loss; Underlying NP -10.8% to $1.99B; Interim DPS Kept at $0.17
HSBC announced to keep Best Lending Rate unchanged at 5%, and the interest rate on HKD savings accounts held steady as well.
HKMA in response to the US Fed's intact rate arrangement, said it believed the Fed to maintain its policy rate at near zero for some time. For Hong Kong, it said the liquidity in the banking system remains ample and its foreign exchange and money markets have continued to operate smoothly. The Strong-side Convertibility Undertaking under the Linked Exchange Rate System (LERS) was triggered again last night, the thirtieth time since April. The repeated triggering of the Strong-side Convertibility Undertaking has led to over HK$109 billion of funds flowing into the Hong Kong dollar. The HKMA will continue to monitor market developments and maintain monetary and financial stability in accordance with the LERS.
Savills said in its Prime Residential World Cities Index that the pandemic and the subsequent lockdowns evidently disrupted global real estate markets. The pandemic impact on prime residential values in cities around the world resulted in a fall of 0.5% for capital values. Nine out of the 28 cities monitored saw positive prime capital value movements over 1H20, given strong domestic demand and limited supply. In Hong Kong, housing prices continued to top the world. Although they dropped approximately 4.2% in 1H20, price per sq.ft. remained at US$4,440.
The Government intends to relax the dine-in service ban during breakfast and lunchtime from tomorrow, local media citing rumors. A maximum of two people are allowed at each table, and the patronage ceiling at 50% of the seat number at each restaurant.
Canalys wrote in its research report that Huawei topped Samsung and ranked top in smartphone shipment for the first time during the second quarter of 2020. During the period, Huawei shipped 55.8 million smartphones, -5% yearly.
China's gaming market achieved sales revenue of RMB139.493 billion from January to June, up 22.34% yearly, according to a game sector report. The size of game players burgeoned 1.97% annually to nearly 660 million in the period.
HUI XIAN REIT (87001.HK) said that due to the pandemic outbreak of COVID-19 and its impact on the global and Mainland China economy, the appraised value of the investment properties as at 30 June 2020 is expected to approximate RMB31 billion (compared to the appraised value of RMB32.938 billion as at 31 December 2019). With changes in fair value of investment properties taken to profit and loss account, HUI XIAN REIT expects to record a net loss for the six months ended 30 June 2020, compared to a profit for the corresponding period in 2019.
ByteDance Some investors are seeking to take over TikTok, valuing the social media app at US$50 billion, significantly higher than its peer Snap, Reuters citing people familiar with the matter.

PRE MARKET
XIAOMI-W (1810.HK) announced that Zeng Xuezhong 
will serve as the group's vice president and head of smartphone division. Zeng will be responsible for the handset R&D and production and will report to Chairman Lei Jun. Zeng has over 20 years of experience in the telecom sector, once serving as the CEO of ZTE's mobile division.
CKH HOLDINGS (1.HK)'s A.S. Watson announced that as an effort to prepare for consumer spending stimulation when the COVID-19 situation eases, it has decided to open up Moneyback to help all retailers to promote their business for free. The planned campaign is expected to encourage cross-retailer shopping in all 18 districts. The chain retailer now invites all retailers and caterers to register the program free of charge as an immediate step, said the statement.
WANDA HOTEL DEV (169.HK) announced to sell a 90% stake in Parcel C LLC, a subsidiary of the Company, at the consideration of US$270 million (equivalent to approximately HK$2.093 billion). Parcel C LLC owns a land known as Vista Tower, located at 363-401 East Wacker Drive, Chicago, Illinois, USA. The company applied for a trading resumption with effect from today.
In light of the community outbreak of novel coronavirus in Hong Kong, the Government should launch a universal free screening before the confirmed case figure surges geometrically like other countries, Zhong Nanshan, the team leader of senior experts of National Health Commission of the PRC, said in a CCTV interview. In order to prevent a rampant outspread of the highly transmissible respiratory disease, all residents are advised to take the test, opined the Chinese health expert. Given, however, the high charges in private hospitals, the Government should put together free tests for citizens.
SUCHUANG GAS (1430.HK) announced that the Company and CNOOC Gas and Power Group, a subsidiary of CNOOC (883.HK), entered into a cooperation framework agreement for a term of five years from the date of the Cooperation Framework Agreement to establish a cooperative relationship in relation to, among other things, the development of the liquefied natural gas (LNG) sector and the construction of an LNG receiving terminal at the Taicang Port in Jiangsu Province.
CANSINOBIO-B (6185.HK) announced that the A-share offer price is RMB209.71 per share, involving 24.80 million shares to raise RMB5.2 billion.
The TENCENT (700.HK) -backed WeDoctor was ruled out of listing for the sensitive patient and government data involved in its business overhaul, IFR citing sources. The firm will push back its IPO until early 2021. The healthcare solutions platform also plans for a pre-IPO funding to raise about US$300 million.
BUD APAC (1876.HK) results for the six months ended 30 June 2020. Revenue was US$2.575 billion, -26.9% yearly. Net profit amounted to US$185 million, -69.5% YoY.. EPS equaled US1.4 cents. No interim dividend was declared.
Chinese Premier Li Keqiang, hosting the executive meeting of the State Council on 29 July, laid out his blueprint on further stabilization of foreign trade and capital. The meeting guided that China should beef up the risk-off capability of foreign enterprises, for example promoting "Credit Insurance + Guarantee" to render foreign companies with credit support; and encouraging Midwest and Northeast China to leverage their strengths to undertake labor-intensive foreign trade industry.
New business models, like cross-border e-commerce, overseas warehouse, foreign trade comprehensive service business, should be supported. He also rolled out new initiatives for employment innovation for peasant workers to safeguard jobs and people's living. Li's initiatives included amplifying development of life service industry and labor-intensive industry; and offering greater policy incentive to attract peasant workers. He advocated to support peasant workers to work nearby their hometowns and increase wages-to-capital ratio to above 15% from 10%.
YINCHENG LS (1922.HK) Positive profit alert, expecting an increase in the consolidated net profit attributable to owners of the Company for the six months ended 30 June 2020 by not less than 60% as compared to the corresponding period in 2019, mainly attributable to an increase in the Group’s gross floor area under management.
CEC INT'L HOLD (759.HK) results for the year ended 30 April 2020. It swung into net profit of HK$12.35 million, against the loss of HK$9.52 million over a year-ago period. The EPS equaled HK1.85 cents. A final dividend of HK0.5 cents was declared.

Read More  

July 29 HK WRAP  HSI +110pts T/O -7%   Rising covid cases an overhang

HSI +110pts (+0.5%) 24,883  HSCEI +33pts (+0.3%) 10,184  T/O HK$104.44bn (-7.1% DoD)  

EUROPE Markets opened mixed DAX weak CAC and FTSE +VE Concerns over the next US stimulus and rising covid cases along with earnings and the FOMC announcement to come.
US Futures opened flat and have remained flat as I expected on Earnings, Covid, FOMC and Tech CEO’s in front of Congress.

INDEXES
CSI 300 Closed +110pts (+2.4%) @ 4,679
Market opened lower but rallied hard for the first hour before some consolidation and then a attempt to break higher before lunch which stalled at 4,660 and then eased back into lunch. PM saw the market continue to work higher to close at the day high. Following to weak performance of the New Third Board Select on Monday and Tuesday Team China keen to reinforce a positive market signal, ChiNext and Star Board were strong. Healthcare stocks strong as new covid cases rise in China and other countries. US China tension still fraught as Foreign Minister Wang Yi called out Mike Pompeo for trying to start a new Cold War. See FT Editorial on the subject, a good read.

HSI Pre Market -62pts @ 24,710 vs -174pts ADRs @ 24, 595 With weakness in E Commerce and Tech after the US weakness overnight. HSBC was up +0.6% after yesterday’s weakness. Market then rallied, first tot 24,840 and then to test 24,900, which it tried a couple of times before trending lower into lunch. PM saw an initial sell down of 75pts before working back up to test 24,900 a couple of times in the PM but failed to break above, a final attempt into the close stalled at 24,890 and ticked lower in the closing auction.
Covid in focus as Hong Kong goes into tighter social distancing. Turnover continues to drop as investors turn more cautious over earnings and US/China tensions.


AFTER MARKET
Vanke Property (HK), CNQC Win Residential Land at Ma Wo Rd
at $3.7B, In Line
The Lands Department announced that the tender for a site, Tai Po Town Lot No. 243 at Ma Wo Road, Tai Po, New Territories, was awarded to the highest tenderer, Wealth Honour Limited (parent companies: Vanke Property (Hong Kong) Company Limited and CNQC International Holdings Limited), on a 50-year land grant at a premium of $3.705 billion. The market valuation ranged $2.7-4.57 billion.
HENLIUS-B (2696.HK) announced that the first patient was dosed in a Phase 2 clinical trial of Recombinant Humanised Anti-PD-1 Monoclonal Antibody Injection (HLX10) in combination with Recombinant Anti-EGFR Humanised Monoclonal Antibody Injection (HLX07) as therapy for recurrent or metastatic head and neck squamous cell carcinoma (HNSCC) in mainland China.
Thailand's True and ZTE (763.HK) have recently entered into a commercial 5G contract. Pursuant to which, True will adopt ZTE's 5G RAN products and services to build a commercial 5G network in Thailand.
CITIC BANK (998.HK) announced that its subsidiary CNCB Investment had entered into the limited partnership agreement with Xingcheng Special Steel and other parties through Shenzhen Dingxin and Xinyin Hengtai, establishing Jiaxing Goldstone Pengheng Equity Investment Partnership to make equity investment in the target company Xuzhou Construction Machinery. CNCB Investment and Xinyin Hengtai will respectively contribute RMB277mn and RMB202mn.
Tencent 'Biped' on PRC 3rd Domestic Online Game Approval List for July China has approved the third batch of 57 domestic game edition numbers for July, including 7 online games, announced by National Press and Publication Administration. Biped, a title developed by TENCENT (700.HK)'s NExT Studios, was on the approval list. +VE
TAO HEUNG HLDGS (573.HK) Profit Warning -VE supplementary announcement, expecting a loss attributable to equity holders of HK$100 mn to HK$110 mn for the six months ended June 2020 as compared to a profit attributable to equity holders of HK$72 million for the corresponding period last year. -VE
Chinese Foreign Minister Wang Yi spoke with his Japanese counterpart Toshimitsu Motegi, saying China and Japan must stay on the right track of developing their relations. Both sides shall strengthen cooperation in fighting the epidemic, fostering economic revival and protecting regional stability. Particularly, Wang suggested building a two-way fast and convenient channel for personnel interaction.
Centa-Salesman Index (CSI) last printed at 44.58, -2.62 pts weekly.
CSI busted below 45 on a narrower decline, neutral for market sentiment and a panic-stricken home market slide, reported Centaline Property. They expect the index to struggle at around 45, which is not a signal of a market slump.

Market and Pre Market News at bottom of page.

Regional Markets
JAPAN 
opened lower after news that there were 980 new covid cases Tuesday. It trended lower thought out to close -1.2%
S KOREA opened flat Kospi initial rallied but then sold back down to flat and has traded sideways Kosdaq just traded sideways Kosdaq closed +0.1% and the Kospi +0.3%.
TAIWAN opened lower after yesterdays record day. Worked higher, then eased back to flat and trading sideways before selling down late in the session Closed -0.4%

Short Selling HSI Wednesday 17.9% vs 23% Tuesday
Top Shorts
Hang Seng Bank (11) 47%, Mengniu Dairy (2319) 39%, Ping An (2318) 38%, CCB (939) 34%, MTRC (66) 28%, Bank of China (3988) 27%, Henderson Land (12) 25%.

CONNECT FLOWS
Shanghai
Northbound Rmb 52,244m Sell 25,914m : 26,329m Buy
Southbound HK$ 11,361m Sell 4,698m : 6,663m Buy

Shenzhen
Northbound Rmb 75,590m Sell 34,137m : 41,453m Buy
Southbound HK$ 10,967m Sell 4,635m : 6,332m Buy


DATA
CHINA No data

HONG KONG
Centre for Health Protection said there were 118 additional COVID-19 
cases in Hong Kong today; 113 were locally transmitted. 46 with unknown source.
After Market GDP Growth Rate Q2 Adv -0.1% QoQ vs -5.3% prior (F/cast was -0.5%)
GDP Growth Rate Q2 Adv -9% You vs -9.1% prior (F/cast was -2.2%)
As the coronavirus pandemic was largely under control in Hong Kong in May and June, and the recovery of the Chinese economy also helped partly offset the external headwinds facing Hong Kong's exports of goods, the overall economic situation showed signs of stabilisation during the quarter. However, the COVID-19 pandemic remains a threat to the economy as it constrains exports while the recent surge in cases in Hong Kong impacts local activities.

Active Heavyweights
HKEX (388.HK) +1.2%
TENCENT (700.HK) -0.4%
PING AN (2318.HK) +0.4%
AIA (1299.HK) -0.3%

HSI & HSCEI Constituents on the move
SHIMAO GROUP (813.HK) +4.3%
CITIC SEC (6030.HK) +4.3%

HSMI & HSSI Constituents on the move
51 CREDIT CARD (2051.HK) +17.5%
HUA HONG SEMI (1347.HK) +13.3%
CNBM (3323.HK) +5.8%, hits new high
CG SERVICES (6098.HK) +1.3%, hits new high
BYD ELECTRONIC (0285.HK) +0.6%, hits new high


COMMENT
*IPO's: HKEX (388 HK +1.2%) 
thanks to a long list of forthcoming IPOs, including ANT GROUP.
HANGZHOU TIGER MED CONSULTING (3347 HK), a mainland clinical research service provider, saw the retail portion of its Hong Kong secondary listing oversubscribed by at least 50 times on the first day of its public offering.
SZ DJI TECH The world's largest maker of non-military drones, is said to be considering a HK IPO. DJI was valued at around US$16b after the latest round of financing worth of US$1b in April 2018.
*MACAU STRONG on news that Guangdong will expand the quarantine exemption to Macau residents crossing the border to the whole province from 9 major cities. GALAXY (27 HK +1.5%) MELCO INTL (200 HK +1.9%) MGM CHINA (2282 HK +3%).
SJM (880 HK +3.5%) recorded a net loss of HK$1.41b during the first half this year with an over 70% drop in revenue, as the sector was hard hit by the pandemic.
*HEALTHCARE/PHARMA STRONG  as China reported a rise in covid cases.
CANSINO (6185 HK +10%) jumped amid vaccine speculation.
WUXI BIO (2269 HK +3.9%) expects unaudited consolidated interim net profit will increase more than 58% YoY.
WUXI APPTECH (2359 HK -1%) after placing 68m new shares with a 5.2% disc at $108/shr.
*AIRLINES MIXED  CATHAY PACIFIC (293 HK -2.8%) to transfer a third of its passenger aircraft from HK in for parking the Australia to save money.
CSA (1055 HK +0.6%) offering a ‘all you can fly promotion.
AIR CHINA (753 HK +1%) CEA (670 HK unch) after news that Japan and China agree to take steps soon toward resuming travel.
*HOME APPLIANCES FIRM on recovery hopes, air conditioner sales and output continues to improve which may be on covid concerns; as seen in Japan and S Korea. GOME (493 HK +1.8%) HISENSE (921 HK +4.5%) SKYWORTH GROUP (751 HK +1.6%).
*DAIRY MAKERS STRONG on M&A news.
CH SHENGMU ORGANIC MILK (1432 HK +77%) after the firm said industry giant CH MENGNIU (2319 HK +1%) will become its largest shareholder after exercising warrants. CH MODERN DAIRY (1117 HK +6.9%).
*OTHER
HUTCHISON TEL HK (215 HK -4.4%) reported a 22.3% YoY decline in interim net profit to HK$146m.
KOOLEARN (1797 HK -7.6%) expects to record a substantial net loss of between RMB700m and RMB800m for the year ended 31 May 2020.

NEWS
MARKET HOURS
HSBC and Microsoft Hong Kong announced the start of their "Tech Me Up" 
partnership to boost Hong Kong SMEs' operating resilience. Through multi-dimensional support and technological resources, the service will help SMEs speed up their digital transformation to cope with new norms. Particularly, Microsoft Hong Kong will provide HSBC SME customers with remote office devices, cloud solutions, and technical support and training.
S&P: APAC Tech Firms May Lose US$25B on Huawei Sanctions opined S&P Global Ratings. Of which, OEMs like TSMC and SMIC (981.HK) may suffer a 15%-20% revenue loss, i.e. nearly US$7 billion.
TAO HEUNG HLDGS (573.HK)'s Ringer Hut announced via social media the shutdown of its Tseung Kwan O branch. The closure of its last branch in Hong Kong meant the Japanese noodle restaurant has dropped out of Hong Kong market.
World Bank wrote in its July report that Chinese economic growth will slow sharply to 1.6% this year, the slowest growth since 1976, followed by 7.9% growth in 2021.
ASM PACIFIC: No Guidance for 3Q New Orders given Uncertainties The economic performance, consumer sentiment and semiconductor demand were impacted by lockdown measures worldwide in wake of pandemic, said CEO Robin Gerard Ng Cher Tat. As a result, customers of semiconductor industry become more cautious in investment, while some of them even postpone or cancel their orders. Under murky environment, the group decided not to outline guidance for its 3Q20 new orders, whilst that of 3Q20 revenue ranges US$480-560 million. New orders in 2H20 may accelerate given higher 5G demand, although traditionally it will reduce in 2H20 from 1H20 for seasonal factors. The long-term sustainable development of 5G was believed to become the key driver to the group's three pillar segment in future.
China Three Gorges plans to sell its overseas asset portfolio in an amount up to US$4 bn, Bloomberg citing insiders. The group was in talks with Singapore's GIC and China Investment Corporation for potential disposal of 10-20% stakes in the group's international assets, said the report.
GAC GROUP (2238.HK) said that it has gained mastery of the next-generation power battery technology. EVs equipped with this battery will have a driving range of over 1,000 km.
The United Nations World Tourism Organization stated that the coronavirus lockdown restrictions resulted a 98% YoY slump in the global tourist figure in May 2020. International tourism receipts lost US$320 billion, over "three times the loss during the Global Economic Crisis of 2009".
A group of top US Senate Republicans have pressed Washington to assess threats of Beijing's electoral interference via TikTok. The lawmakers are very concerned about Chinese Communist Party may distort or manipulate political conversations using TikTok, hence sowing contradiction and discord among Americans, according to their letter to the Office of Director of National Intelligence, the acting secretary of the Department of Homeland Security, and the director of the Federal Bureau of Investigation (FBI).
Huawei is mulling over actions to "explore all evidence and remedies against HSBC" for allegedly presenting "misleading evidence" which led to the arrest of its Deputy Chairwoman Sabrina Meng Wanzhou, SCMP citing sources. The Chinese firm has hired five law firms to work on Meng's case, according to the report.
Apple was the fastest growing smartphone maker in China in 2Q20, with iPhone sales of 7.4 million units, up 32% yearly, as revealed by the data of Counterpoint Research. Last quarter, Huawei's sales grew 14% to 36.6 million units.
At a high-level discussion on China matters, Australian Foreign Minister Marise Payne told U.S. Secretary of State Mike Pompeo and Defense Secretary Mark Esper that Australia has no intention of hurting her relationship with China as their tie is important. Pompeo praised Australia for shouldering pressure from China. He said Washington and Canberra would jointly reassert the rule of law in the South China Sea.

PRE MARKET
China confirmed 101 additional COVID-19 cases yesterday (28 July), 
including 3 imported cases and 98 local infections, National Health Commission reported. 89 of the local cases came from Xinjiang.
GOLDIN FIN HOLD (530.HK) announced that it entered into an agreement on 27 July to sell the entire issued share capital of Rich Fast International, a subsidiary holding a residential site at Kai Tak Area 4B Site 4, to the new Purchaser Yan You for a consideration of around HK$3.477 billion. The Vendor, the Purchaser and the Property Company entered into a Profit Sharing Agreement in relation to the profit sharing arrangement for the future sale of the Units and Car Parks to be developed at the Property. GOLDIN FIN HOLD applied for a trading resumption with effect from today.
ASM PACIFIC (522.HK) interim results ended 30 June 2020. Net profit +116.9% yearly to $389 million with EPS of $0.95. An interim dividend of $0.7 was declared, against $1.3 in the same period a year ago.
IMAX CHINA (1970.HK) results for the six months to end 30 June 2020. Loss was US$35.248 million, against US$23.965 million of profit in a year ago's period. LPS equaled US$0.1. Interim DPS was HK15.5 cents.
WUXI APPTEC (2359.HK) announced a plan to place 68.2054 million new H shares at a placing price of $108 per share, representing 5.2% discount to the closing price yesterday. The net proceeds from the Placing are expected to be HK$7.29 billion.
At Asian Infrastructure Investment Bank's online briefing held yesterday, Chinese President Xi Jinping stated that the bank should act as a new platform that encourages its members to co-develop and take forward a "community with shared future for mankind", Xinhua News Agency reported. China remains unswerving in supporting and implementing multilateralism by going on to bolster and facilitate AIIB with other members in an open-minded, cooperative and win-win manner, in hopes of better preparing the world for risks and challenges and making more contribution in the path of co-development, added Xi.
China was alerted by the US Department of Commerce of naming 11 Chinese entities onto the "entity list" under export ban, Xinhua News Agency cited the spokesman of Chinese Ministry of Commerce. In response, China expressed staunch opposition. The spokesman stated that the US suppression on China is neither conductive to the US nor China nor the world, urging the US to stop such wrong behavior. Moreover, China will take all necessary actions to defend legitimate interests of Chinese companies.
Chinese Vice Premier Liu He exchanged dialogue with European Commission Vice President Valdis Dombrovskis in the 8th meeting through conference call, Xinhua News Agency reported. Both parties reaped fruitful consensus on cooperation in combating coronavirus pandemic, global economic governance, supply chain security, China-EU investment agreement negotiations, WTO reform, expanding market opening, digital economy, internet, finance and taxation.
CHINA SHENGMU (1432.HK) announced that on 27 July 2020, MENGNIU DAIRY (2319.HK) exercised all 1.197 billion Warrants of CHINA SHENGMU to subscribe for 1.197 billion Warrant Shares at the exercise price of HK$0.33 per Warrant Share, representing a premium of 37.5% over the closing price as quoted last trading day (28 July). Upon completion, MENGNIU DAIRY will hold in aggregate 1.467 billion Shares of CHINA SHENGMU, representing 17.8% of the total number of issued Shares and will become the single largest shareholder of CHINA SHENGMU.

Read More  

July 28 HK WRAP HSI +170pts T/O -10%. HSBC hits new low

HSI +170pts (+0.7%) 24,773  HSCEI +76pts (+0.8%) 10,152  T/O HK$112.41bn (-10.5% DoD) 

EUROPE Markets opened higher but sold down on covid fears and concerns over the next US covid relief stimulus package. Gold continues to rally
US Futures opened flat but now -120pts after weaker than expected McDonald and 3M earnings S&P and NDX also weak.

INDEXES
CSI 300 Closed +40pts (+0.9%) @ 4,568
Market opened higher and traded sideways in choppy trading. Opened higher and tested higher in early trades but then sold down to morning low (4,545) in first 30 mins. Rebounded and tested 4,590 level a couple of times before selling down into lunch. PM saw initial selling to 4,540 before bouncing, then sold down to day low 4,538 before rallying into the close. Team China working hard to support the market. Signs of rotation as investors remain wary as covid cases surge globally. Monday’s Industrial number suggest recovery but that was before the latest surge in covid cases. Data shows over 50% money going into Emerging Market ETF’s went to those focused on Chinese stocks and bonds. Earnings in focus with traders watching for the bellwether KWEICHOW MOUTAI's 1H results, in which should give some insight into domestic consumption/recovery

HSI Pre Market +339pts @ 24,942 vs +115pts ADRs @ 24,718 With E commerce names strong along with Dongfeng Motor on news of possible ChiNext IPO and Powering after +VE profit warning.Market initially squeezed higher to day high (24,943) as recent shorts covered and then trended lower for the 40 mins with some margin selling and covid concerns. Then rallied back but failed to regain the opening level and trended lower to 24,680 before a small bounce into lunch. PM saw market trend lower to day low (24,640 around 2pm) then traded sideways for a while before working higher from 2:30pm but only to 24,780 level. Then drifted sideways into the close. Turnover light and back to levels seen prior to the imposition of the new security law which suggests that Team China is now being refocused on the mainland markets. Sentiment slight +VE as the number of local covid cases dropped although the new stricter measures start tomorrow. Gold saw profit taking.


AFTER MARKET
SJM HOLDINGS (880.HK) interim result ended June 2020.
Net gaming revenue -74.4% YoY to HK$4.272 bin. The profit swung into loss of HK$1.412 billion. LPS was HK24.9 cents. No dividend was declared, versus HK8 cents over a year ago. For 1H20, adjusted EBITDA loss was HK$984 million, against adjusted EBITDA of HK$2.078 billion over a year ago. Following completion of construction work on the Grand Lisboa Palace in late 2019, the Group began the inspection and application process with the Macau Government. Subject to obtaining the necessary operating permits, the project is expected to open by the end of 2020.
The Hong Kong Housing Authority (HA)'s Subsidised Housing Committee (SHC) today approved the new arrangements for the sale of recovered Tenants Purchase Scheme (TPS) flats and additional incentives to encourage sitting TPS tenants to purchase the flats in which they reside. Currently, sitting tenants of the 39 TPS estates may still opt to purchase the flats in which they reside and will enjoy a special credit during the first two years of their tenancies. In order to encourage sitting TPS tenants to buy the flats in which they reside, the SHC approved to provide an additional discount of 17.5 per cent for one year starting from September 1, 2020, to sitting TPS tenants who no longer enjoy any special credit.
The Subsidised Housing Committee of Housing Authority approved a two-month rent waiver for public rental housing (PRH) tenants to offset the 9.66% rent hike. Equally, the Committee decided to waive PRH rents in September 2020 and September 2021. Well-off tenants can also enjoy a basic rent waiver.
CATHAY PAC AIR (293.HK) and its airlines will transfer their jetliners this week to Alice Springs, Australia for parking, as Apple Daily learnt from rumours. The Hong Kong flagship airline is set to transfer around a third of its passenger planes outside the city over the coming few months, as it replied to the press. It has decided to park some planes at desert area to minimise the impacts of humidity and storms thereon, said the report, and the decision may involve over 50 planes.
TSMC once led its market cap to over US$410 billion and became one of the most valuable companies in world +9.9% intraday and peaking at TWD466.5. The stock narrowed its gain at close and finished the day at TWD435, +2.5%.
Worldwide investment in 5G network infrastructure will nearly double this year to US$8.1 billion, accounting for 21.3% of the overall wireless infrastructure, said Gartner in a report.
Huawei has already completed its global 5G deployment, with sector application and unlocking 5G profit as its focuses in the next phase, said Rotating Chairman Guo Ping at the Huawei Better World Summit 2020, cited by Chinese media.
India’s Q2 PC shipments -33% YoY to 2.9 million units, according to Canalys' report. Of which, desktops (including workstations) underperformed the market, with shipments halving to 440,000 units. Canalys attributed this to consumers' preference for notebooks.
Asian airlines carried 724,000 passengers in June, -98% YoY due to suppressed air travel demand, according to the Association of Asia Pacific Airlines (AAPA). The average passenger load factor hit 36.3% only.
Chinese Foreign Ministry stated that HKSAR Government will suspend extradition and other mutual assistance in criminal matters with Britain, Canada and New Zealand and that these countries have seriously meddled in China's internal affairs by halting their extradition treaty with Hong Kong.

Market and Pre Market News at bottom of page.

Regional Markets
JAPAN
opened flat an initial worked better. Around midday is sold back to flat and trading around yesterday’s close before selling down at the end to Close -0.3%.
S KOREA Market opened higher and initially rallied but then trended lower from around 11am. Kosdaq dipped down to flat before rallying at the end to Close +0.8%. The Kospi was better all day and whilst it dipped slightly from mid morning it traded sideways in the PM and closed +1.8%.
TAIWAN Market opened higher but traded lower through the day to finish flat, Closed -0.01%

Short Selling HSI Tuesday 23% vs 21.5% Monday
Top Shorts 
MTRC (66) 49%, Ping An (2318) 42%, Wharf REIC (1997) 42%, Mengniu Dairy (2319) 41%, China Shenhua (1088) 39%, China Res Land (1109) 38%, Bank of China (3988) 38%, CCB (939) 31%, Sinopec (386) 31%, Hang Seng Bank (11) 30%, HK & China Gas (3) 29%,
Galaxy (27) 29%, CK Asset (1113) 29%, Country Garden (2007) 28%, CNOOC (883) 26%, Swire A (19) 25%.

CONNECT FLOWS (lower again after significant reduction Monday)
Shanghai
Northbound Rmb 46,488m Sell 25,110m : 21,377m Buy
Southbound HK$ 12,351m Sell 5,070m : 7,280m Buy

Shenzhen
Northbound Rmb 66,921m Sell 32,710m : 34,211m Buy
Southbound HK$ 11,260m Sell 4,804m : 6,456m Buy


DATA
CHINA None
HONG KONG
Centre for Health Protection said there were 106 additional COVID-19 cases in Hong Kong today; 98 were locally transmitted.

Active Heavyweights
TENCENT (700.HK) +4.5%
HKEX (388.HK) +2.7%
CCB (939 HK) -0.7%
AIA (1299.HK) +0.6%
PING AN (2318.HK) -0.2%

HSI & HSCEI Constituents on the move
MENGNIU DAIRY (2319.HK) +5.6%, hits new high
ENN ENERGY (2688.HK) +4.3%
BYD COMPANY (1211.HK) +3.6%

HSMI & HSSI Constituents on the move
HAICHANG HLDG (2255.HK) +22.2%
DONGFENG GROUP (489.HK) +13.5%
ZHAOJIN MINING (1818.HK) -12.1%
BYD ELECTRONIC (285.HK) +11.9%, hits new high
CHINA EDU GROUP (839.HK) +11.4%, hits new high
XINYI GLASS (868.HK) +4.3%, hits new high
CG SERVICES (6098.HK) +3.4%, hits new high

COMMENT
*GOLD MINERS WEAK
after recent rally in gold prices to record highs on Monday as US dollar weakened and expectations rise that central banks would continue pumping out stimulus. Spot gold +1.9% to US$1,937.73/ounce after hitting a record of US$1,944.71. ZIJIN (2899 HK -4.8%) ZHAOJIN (1818 HK -11.6%) CHINAGOLD (2099 HK -5.3%).
*ENERGY PROVIDER MIXED. OIL companies traded softer amid worries of oversupply given slowing demand due to a prolonged global recovery. PETROCHINA (857 HK-1.8%) plans to use some of the US$38b it will receive for selling its pipelines to start new businesses focusing on wind and solar power. The money will also go toward dividends, debt repayment and spending on its oil & gas biz, it said.
GAS DISTRIBUTORS FIRM amid speculation that setting up of the pipeline company would improve the industry's profitability. ENN (2688 HK +4.2%) CR GAS (1193 HK +1%) CH GAS (385 HK +0.8%).
*HANG SENG TECH INDEX FIRM For the further development of HSTI, HSI Company said it will discuss with HKEX the launch of tech index derivatives and ETF tracking the index. TENCENT (700 HK +4.5%) led the gainers, offers to buy remainder of SOGOU for US$9.00 per ADS. Proposed purchase price represents a premium of ~56.5% to the July 24 closing trading price of the ADSs, and a premium of 84.9% to the volume-weighted average price during the last 30 trading days, Tencent said.
*INSURERS FIRM on the news that PING AN (2318 HK -0.2%) and pharma company Shionogi HK Co. sign agreements to start JV's in Shanghai and HK, namely Ping An-Shionogi Co. and Ping An-Shionogi HK, according to a statement. Total investment is ~RMB2.94b. AIA (1299 HK +0.8%) CH TAIPING (966 HK +0.9%) NCI (1336 HK +0.2%).
*AUTOS STRONG DONGFENG MOTOR (489 HK +14%) plans A-shr listing on the ChiNext board, stock jumped as much as 25% intraday.
MEIDONG AUTO (1268 HK +9%) on a broker's upgrade amid earnings optimism.
State Grid Electric Vehicle, fully owned unit of State-owned electricity utility State Grid, has forged an agreement with carmaker BAIC GROUP (1958 HK +1%) to further cooperation on EV support facilities and help the energy and transportation industry's economic revival efforts.
EVERGRANDE HEALTH (708 HK +6%), plans to rename itself as CH EVERGRANDE NEW ENERGY VEHICLE, or simply EVERGRANDE AUTO. It runs NEV research and development globally, said it "strives to become the world's largest and most powerful new EV group within 3-5 years."
*F&B STRONG DAIRY/BABY FORMULA advanced as raw milk prices are expected to remain stable. CH MENGNIU (2319 HK +5.6%) posted a record high amid 1H earnings speculation. WANT WANT (151 HK +0.8%) H&H (1112 HK +1.2%). BREWERIES saw support ahead of MOUTAI's results, which is expected to be positive. CR BEER (291 HK +1.3%) TSINGTAO (168 HK +3.4%).
*OTHER MOVERS: 
HUOBI TECH (1611 HK +8%) surged after Bitcoin climbs as much as 4.8% after a 10% jump yesterday to the highest since August 2019.
CH BLUECHEM (3983 HK +3.5%) amid positive 1H profit-alert.
HSBC (5 HK -1.5%) but off intraday lows to a new record low, it is reportedly studying the option of selling related businesses in the US and Europe, given rising China/US tensions.

NEWS
MARKET HOURS
The first meeting of the Assessment Committee for the Funding Scheme to Support Transitional Housing Projects
by Non-government Organisations, chaired by the Under Secretary for Transport and Housing, was convened via video conferencing this morning (July 28). The Assessment Committee agreed to subsidise three transitional housing programmes, including a transitional housing development at Kong Ha Wai, Kam Tin, Yuen Long, by Pok Oi Hospital. With total funding of $1.099 billion, it is expected to provide about 1,998 units.
The ECB extended its recommendation that euro zone banks should not pay dividends until the end of 2020, while allowing the lenders to eat into capital and liquidity buffers amid the coronavirus pandemic.
Trip.com (TCOM US), also known as Ctrip, is in talks with potential investors for a privatization deal and delisting from Nasdaq, Reuters citing sources. The Chinese online travel giant declined to comment.
The PBOC has recently issued an urgent notice regarding an investigation on joint online consumption loans. By which, it will gather statistics on the related information of such operation, Chinese media quoted the banking sector. Joint online consumption loan generally refers to an internet loan jointly granted by a bank and a financial institution to an eligible borrower based on the joint loan conditions and contribution proportion. The investigation may reportedly affect the joint loan operations of Ant Group, WeBank, Ping An Puhui, JD Finance and so on. Slight -VE
Mapletree North Asia Commercial Trust announced that Festival Walk delivered gross revenue of SGD43.40 million, -33% YoY during Q1 ended 30 June 2020. During the quarter, the shopping mall's retail sales -38.6% YoY and footfall -44.9% YoY.
HKRMA In an open letter addressed to local shop landlords, the Hong Kong Retail Management Association wrote that the retail sector has been dealt by dual blows from social movements and coronavirus pandemic for more than a year. All struggling players are on verge of collapse. The association thus floated two appeals to retail landlords. First, it implored for suspension of legal actions or attempts to recover shops from tenants who fail to pay rents at this moment for no less than nine months. Second, landlords were asked to scrap upset rents and to receive rents based on tenants’ turnover for a term of 9-12 months. Over 60,000 local retail shops will be exposed to liquidation risks unless landlords are willing to spare a helping hand, said the letter. By then, more than 260,000 retail workers, as well as their families, will suffer livelihood difficulties.
Fitch Ratings confirmed China's Long-Term Foreign-Currency Issuer Default Rating at "A+", with a Stable Outlook. China's rating is underpinned by strong external finances, a track record of robust macro-economic performance, and its status as the world's second-biggest economy. However, the rating is constrained by structural vulnerabilities in the financial segment, relatively low per capita income, and softer governance metrics.
Overnight HIBOR last posted at 0.04643%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.25107%, marking a 1-month low.
For 1H20, China produced gold of 217.80 tons nationwide, -7.3% yearly, China Gold Association revealed. It consumed gold of 323.29 tons, -38.25% yearly.
GAVI vaccine alliance is looking at the range of potential prices for coronavirus vaccines, the highest level may be set at US$40 per dose, said the chief executive officer Seth Berkley.
Moderna and Pfizer announced one after another for the phase three clinical trial of COVID-19 vaccine in large scale, representing the first two related researches in the US that entered phase three trials. Two trials will involve 30,000 people, aiming to launch a vaccine by the year end with extensive use. Moderna's shares spiked 9.2% to US$79.91 yesterday (27 July). Pfizer shot up 1.9% to US$38.24 during extended trading hours.
Ahead of HSBC HOLDINGS (5.HK)'s interim results announcement slated for 3 August, Chairman Mark Tucker is reviewing the Europe and US segments, where business disposal is possible instead of ongoing rebooting, as Bloomberg learnt from inside sources. As US-China grapples, the London-based lender is also studying the possibility of a failed linked exchange system between HKD and USD, said the insiders.

PRE MARKET
XIAOMI-W (1810.HK) plans to roll out an international version reader
, Mi Ebook Reader, in overseas market, foreign media gizmochina reported. Certified by Bluetooth on 23 July, the product appears in the data bank of Bluetooth SIG.
VICTORY CITY (539.HK) announced that the Department of Commerce of the United States made a decision to sanction against a group of 11 Chinese entities for alleged involvement in human rights violations in Xinjiang Uyghur Autonomous Region (XUAR) in the PRC. Nanjing Synergy Textiles Limited, a subsidiary of the Company. The Sanction resulted in Nanjing Synergy facing new restrictions on access to US-origin items, including commodities and technology. The Group is of the view that there will not be any material impact on the Group’s operation since the Sanction is targeted at Nanjing Synergy in particular; and Nanjing Synergy has already ceased its production business in late 2019.
India has flagged 275 Chinese apps to examine if they pose any latent risks to her national security, according to the local press. TENCENT (700.HK)'s PUBG Mobile, XIAOMI-W (1810.HK)'s Zili and BABA-SW (9988.HK)'s AliExpress are on the examination list.
GOLDIN FIN HOLD (530.HK) Trading halted at 9:00 a.m. today (28 July), pending release of reasons.
SINO BIOPHARM (1177.HK) on 24 July Vice Chairwoman Cheng Cheung Ling acquired 2.38 million shares, involving $24.27 million.
SUNWAY INT'L (58.HK)   announced that it had on 15-24 July acquired a total of 105,000 SMOORE INTL (6969.HK) shares on the open market at an average price of $34.39 per share.

Read More  

July 27 HK WRAP  HSI -103pts T/O -25% DoD  as HK increases lockdowns

HSI -103pts (-0.4%) 24,603  HSCEI -5pts (-0.1%) 10,076  T/O HK$125.67bn (-24.6% DoD)  
EUROPE Markets opened mixed FTSE & CAC opened lower and traded sideway. DAX opened higher and traded sideways; US/China tensions and a second wave of covid cases weighting on investors. US earnings also being in focus.
US Futures opened flat but rose through the day and are indicting a higher open. Dow futures currently +124pts with S&P and NDX also indicating higher.

INDEXES
CSI 300 Closed +23pts (+0.5%) @ 4,529 
Market saw choppy trading throughout the day. Opened higher and tipped 4,550in early trades as the Industrial Profits number come in better than forecast after which it sold down before bouncing to the day high 4,558 (suggests some margin call selling) but then trended lower into lunch. PM initial sell off to the day low (4,482) before bouncing back After lunch initial selling down to 4,482 before bouncing back to PM high of 4,535, but then trended lower again before a final rally into the close. Sentiment appears fragile as US/China relations deteriorate with the US Consulate in Chengdu closing this morning. Also rising cases of covid in a number of countries, including Hong Kong and some parts of China. Property sector weak on increased curbing measures.

HSI Pre Market +204pts @ 24,909 vs +44pts ADRs @ 24,749 With E-commerce names +VE as the New HSI Tech index kicked off.Market tested the day high in early trades before selling down to 24,690 around Friday’s closing level in the first hour. It then bounced 130pts before gradually selling down into lunch at around the 24,680. PM saw initial selling down to the day low 24,527 in the fist 20 minutes and then effectively traded sideways into the close. Gold stocks were today’s star performers.Sentiment is weak with the rising number fo local covid cases and further social distancing rules which includes banning lunch ‘dine-in services’ and more mandatory mask wearing rules.
Market T/O was light despite the launch of the new Hang Seng Tech Index

AFTER MARKET
EVERGRANDE (3333.HK) said it will toughen up the footfall control 
at its exhibition hall at 16/F, Billion Plaza II, Cheung Sha Wan for its projects EMERALD BAY and THE VERTEX from 29 July, in a bid to work with the government's anti-epidemic policy.
The Education Bureau (EDB) announced today (July 27) that all schools would continue to suspend all on-campus activities from July 29 (Wednesday) to August 16 (Sunday). Schools may consider conducting make-up classes or other learning activities online.
Wheelock Properties announced that KOKO HILLS' exhibition halls are suspended today and tomorrow for thorough cleansing as part of reinforced precautionary measures.
SINGAMAS CONT (716.HK) announced that it has delivered a mobile Polymerase Chain Reaction (PCR) laboratory for COVID-19 testing to the Shanghai Pudong Airport on 8 July.
XIAOMI-W (1810.HK)'s Mi TV announced that its shipment topped China's TV sales chart for the first half of year, ranking no. 1 for the 6th straight quarter.

Market and Pre Market News at bottom of page.

Regional Markets
JAPAN 
re-opened at its lows and as worked better through the session. Closed -0.2%
S KOREA Market opened higher and rallied for most of the session but sold off into the close, the Kosdaq closed +0.8% and the Kospi closed +0.8%.
TAIWAN Market opened higher and has traded sideways/slightly lower, closed +2.3%

Short Selling HSI Monday 21.5 vs 18.4%Friday
Top Shorts
Hang Seng Bank (11) 49%, China Res Land (1109) 46%, Ping An (2318) 39%, Bank of China (3988) 39%, Sands China (1928) 37%, Swire A (19) 36%, China Shenhua (1088) 34%, HK & China Gas (3) 34%, CKH (1) 34%, Petrochina (857) 33%, CCB (939) 32%, HSBC (5) 32%, Sinopec (386) 31%, MTRC (66) 30%, Galaxy (27) 29%, AAC Tech (2018) 28%, BoC HK (2388) 27%, Citic (267) 26%, Henderson Land (12) 26%, Country Garden (2007) 25%.

CONNECT FLOWS (Significantly lower Monday)
Shanghai
Northbound Rmb 52,055m Sell 27.935m : 24,119m Buy
Southbound HK$ 11,486m Sell 6,020m : 5,467m Buy

Shenzhen
Northbound Rmb 73,184m Sell 35,441m : 37,743m Buy
Southbound HK$ 14,635m Sell 6,116m : 8,519m Buy


DATA
CHINA
Industrial Profits (YTD) Jun
-12.8% YoY vs -19.3% May (F/cast was -17%)
Showing signs of recovery but before the recent spike in cases)

HONG KONG
Centre for Health Protection said there were 145 additional COVID-19 
cases in Hong Kong today; 142 were locally transmitted. The department currently has 59 cases of unknown origin.
After Market
Balance of Trade Jun HK$-33.3b vs -13.7b May (F/cast was -15b)
Exports Jun -1.3% vs -7.4% May
Imports Jun -7.1% vs -12.3% May
Imports dropped mostly due to lower purchases of non-metallic mineral manufactures (-51.1%); miscellaneous manufactured articles (-29.1%); and photographic apparatus, equipment and supplies, optical goods, watches and clocks (-43.8%).
Exports went down as sales declined for miscellaneous manufactured articles (-29.7%); non-metallic mineral manufactures (-35.4%); articles of apparel & clothing accessories (-45.4%) and photographic apparatus, equipment and supplies, optical goods, watches and clocks (-37.3%).

Active Heavyweights
HKEX (388.HK) -1.8%
TENCENT (700.HK) -1.5%
CCB (939 HK) +1%
AIA (1299.HK) +0.7%
PING AN (2318.HK) -0.3%

HSI & HSCEI Constituents on the move
FOSUN INTL (656.HK) -3.9%
CHINA RES BEER (291.HK) +3.3%

HSMI & HSSI Constituents on the move
COMEC (317.HK) -14.3%
SD GOLD (1787.HK) +12.4%, hits new high
HUABAO INTL (336.HK) -10.1%
CNBM (3323.HK) +10.1%
E-HOUSE ENT (2048.HK) +4.9%, hits new high

COMMENT
*HANG SENG TECH INDEX 
debut today with backdated prices, tracking the 30 largest tech companies listing in HK, including TENCENT (700 HK -1.5%), ALIBABA (9988 HK unch),  MEITUAN (3690 HK -3%), and XIAOMI (1810 HK -3%).  Tracking the gauge this year would have returned 47% for investors, versus a loss of 12% for the Hang Seng Index. The tech measure dropped 1.2% today
*CHINA PROPERTY WEAK on news of more curbing measures. China's Dongguan tightens home purchase, non-resident buyers of existing homes in the southern Chinese city must have continuous social security payment record for at least 1 year. The city also bans resale of homes bought within the past 3 years.
SUNAC (1918 HK -2.3%) SHIMAO (813 HK -2.5%) R&F (2777 HK -2%) YUEXIU (123 HK -2.7%).
*HK PROPERTY WEAK across the boarding amid Covid-19 worries.
SHKP (16 HK -1%) sold 105 of 108 units offered at Regency Bay on Saturday;
HENDERSON LAND (12 HK -1.4%) NWD (17 HK -2.4%) CKA (1113 HK -1%). LINK REIT (823 HK -0.7%) has agreed to buy an office building in London for HK$3.68b, as it diversifies beyond core HK and mainland China markets.
FORTUNE REIT (778 HK +0.7%) reported 1H revenue -2% YoY and net property income dropped 4% YoY in the period. DPU was down 14%YoY to HK$22.60 cents, due to distributable income being down by 3%YoY, payout ratio cut to 90% from 100% in 1H19.
*GOLD MINERS STRONG  Gold prices climbed to an all-time high Friday as investors sought safety in the precious metal amid rising U.S.-China tensions and lingering fears over the coronavirus pandemic. August futures contract edged  up by 0.4% to settle at US$1,897.50 per ounce, marking gold’s sixth straight day of gains. ZIJIN (2899 HK +6.4%), ZHAOJIN (1818 HK +8.8%) CHINAGOLD (2099 HK +6.6%).
*RETAILERS MIXED on profit-alerts.
POU SHENG (3813 HK +0.6%) expects interim net profit to fall more than 90% YoY, affected by the Covid-19 outbreak.
GIORDANO (709 HK -1.8%) sees 6-month loss to by HK$170m-HK$180m as business as hurt by the pandemic.
EMBRY HOLDINGS (1388 HK +1%) expects interim net loss of HK$45m, said 2Q sales fell 30% due to temporary retail suspensions amid virus outbreak.
*JEWELERS FIRM as gold and silver prices keep climbing. LUK FOOK (590 HK +2.4%), CHOW TAI FOOK (1929 HK +1.1%) CHOW SANG SANG (116 HK +0.4%) TSL (417 HK +1.1%).
*PHARMA MAKERS WEAK as investors continue to take profit from the outperforming sector.
SINOPHARM GROUP (1099 HK +0.3%) to acquire 100% stake in Chengda Fangyuan Pharmaceutical Group Co. for 1.86b yuan via public tender. Chengda Fangyuan had 1,507 stores in 19 cities at the end of 2019. ASCENTAGE (6855 HK -8.4%) GENESCRIPT (1548 HK -5.7%) CANSINO (6185 HK -1.7%) 3SBIO (1530 HK -3.8%).
*OTHER MOVERS:
CNBM (3323 HK +10%) after unveiling a restructuring plan of cement assets with Shenzhen-listed subsidiary Xinjiang Tianshan Cement.
TAI HING (6811 HK -2.5%) and TSUI WAH (1314 HK -3.5%) as both lunch and dinner dine-in are banned in HK.
JD.COM (9618 HK +0.9%) is planning to spin off its online medical consulting e-commerce platform for pharmaceutical products platform, JD Health, to list in Hong Kong, raising at least US$1b.

NEWS
MARKET HOURS
Sinopec announced at a briefing held recently in Beijing that it has over 30,000 gas stations,
making it the second largest transport energy infrastructure network in world.
Huawei has axed its India revenue target for 2020 by up to a half to US$350-500 million, the Indian Economic Times reported. The Chinese tech giant is sinking 60-70% of its Indian workforce, which does not involve the R&D and global service centre.
The Executive Council passed the full-day dine-in ban on eateries, which will take effect from Wednesday (29 July), as local media cited sources. Also to tighten gathering ban to 2 persons from 4. Both for the next 7 days. Also to promote WFH for the next 7 days and residents to stay home. Mask wearing now for All public places and no exceptions for smokers who are called on to quit!
Smartphone sales in China -17% YoY but +9% QoQ in the second quarter of 2020, as Counterpoint wrote in a report. During the period, 5G devices accounted for a third of the smartphone sales.
Bitcoin price surmounted US$10,000 on Sunday, being the first time since early June. The price last stood at US$10,226.83, according to coindesk.com.
Intel has reached a deal with TSMC over 180,000 6nm chips for delivery next year, Chinese media citing rumours. AMD has also inked an agreement with the Taiwanese semiconductor giant that will boost its order for 7 and 7+nm chips to 200,000, said the report.
JINMAO HOTEL-SS (6139.HK) interim results ended June 2020. Loss attributable to the Holders of Share Stapled Units amounted to RMB157 mn, vs RMB166 mn of profit in a year ago's period. Loss per Share Stapled Unit equaled 7.86 fen. There was no distributable income recorded for the six months ended 30 June 2020. Accordingly, the group has resolved not to make an interim distribution for the six months ended 30 June 2020 to the Holders of Share Stapled Units.
Gold price set a historical high amid escalating tensions between China and the US, whose consulate closures have rattled investors and prompted fund flows to risk-aversion assets. Gold spot price surged 1.57% to an all-time high US$1,931.87, once peaking at US$1,944.71. The yellow metal is also riding on monetary easing worldwide.
Overnight HIBOR last posted at 0.04435%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.25393%, marking a 1-month low.
HKTVmall's parent HKTV (1137.HK) saw increased interest today in early trades as the Government will purportedly announce a footfall cap for wet markets and supermarkets today.
Apple's contract manufacturer Foxconn has been assembling iPhone 11 units in a factory near Chennai, India, TechCrunch citing sources. The first batch of locally-assembled iPhone 11 devices has been shipped to retail stores, but the current production yield is limited. Apple is interested in expanding production in India to reduce reliance on China, a source said.
Macao Government had carried out nucleic acid tests for a total of 25,000 casino frontline workers from SANDS CHINA LTD (1928.HK) and SJM HOLDINGS (880.HK), who were all tested negative for novel coronavirus, as Conde S. Januario Hospital told Macao Daily. Macao's current maximum screening capacity is 16,000 tests per day, said the report, while the Government is capable of boosting the screening capacity in light of the demands.
Chinese soybean imports from Brazil hit a a record high in June, driven by demand revival as China's pig herd recovers following the African swine fever outbreak, Reuters citing China's customs data. China imported 10.51 million tonnes of Brazilian soybean last month, up 91% yearly.
COUNTRY GARDEN (2007.HK) has offered to grant to two executive directors, namely YANG Zhicheng and SONG Jun of 189,400 and 291,300 share options respectively, at a subscription price of $10.16 per share.


PRE MARKET
China yesterday confirmed 61 additional cases of novel coronavirus infection,
including 57 local transmission cases, National Health Commission reported. There were 44 nil-symptom patients.
Centaline's ten major housing estates tracked 8 deals at weekend, down 2 deals or 20% WoW hitting a 16-week low since early April. Citizens stayed home at the weekend under tighter gathering ban, while some owners shut off their units, deeply affecting second-hand flat viewing activities, said Louis Chan, Asia-Pacific Vice Chairman and Managing Director for Residential Sales at Centaline.
WANDA HOTEL DEV (169.HK) Trading halted with effect from 9:00 a.m. on 27 July 2020 pending the publication of an announcement in relation to a very substantial disposal by the Company.
ESPRIT HOLDINGS (330.HK) said that Martin WECKWERTH has resigned as an Independent Non-executive Director of the Company. The Company has failed to meet the Stock Exchange's requirement of appointing independent non-executive directors representing at least one-third of the Board. The Board is endeavouring to identify suitable candidate to fill the vacancy as soon as possible.
CANSINOBIO-B (6185.HK) said it entered into a promotional services agreement with Pfizer, pursuant to which the Company authorized Pfizer to exclusively promote its Groups A, C, Y and W135 meningococcal conjugate vaccine product Menhycia in China during the Cooperation Period. The Company shall pay the service fee to Pfizer according to the achievement of the promotion target of each year as prescribed in the Agreement.
Hong Kong Stock Exchange was notified by Goldin Equities Limited of its suspension of trading from 24 July 2020 on the Exchange until further notice.
White House Economic Advisor Larry Kudlow told CNN that the U.S. economy is on the whole "very positive" and expected that "a V-shaped recovery" is coming. He also said a new round of coronavirus relief package is coming with the U.S. government to distribute US$1,200 to each citizen and lengthen the federal eviction moratorium that will bar landlords from evicting the tenants who fail to pay rents,
The U.S. is set to embrace "a very big rebound" in the third quarter, said Treasury Secretary Steven Mnuchin in a Fox News interview, who reiterated the estimate for 17% YoY growth.
Chinese Vice Premier Liu He and US Trade Representative Robert Lighthizer will hold talks next month to assess the implementation of the phase-one China-US trade deal inked in early 2020, SCMP citing sources. Although China has notably boosted purchases of US farm goods in recent months, the purchasing scale is way short of its pledges under the deal in wake of plague.
Link Asset Management Limited announced that it has agreed to acquire The Cabot, 25 Cabot Square, based on agreed property value of GBP380 million (HKD3.7685 billion). LINK REIT will fully fund the investment through internal resources as well as new facilities with the intention to fully hedge any foreign exchange fluctuations. Upon completion, its pro-forma adjusted ratio of debt to total assets will rise from 17.8% to 19.2%, based on its consolidated financial position as at 31 March 2020. Transaction due to complete 25 August
Hong Kong on Sunday added 128 new covid cases
Weaver Network (603039.SH) announced that shareholder Jin Kun Wei intended to transfer a 5% stake in the Company to Tencent Industrial Investment Fund by way of an agreement.
In response to the US authority breaking into the Chinese Consulate General in Houston after emptying, China expressed acrimonious dissatisfaction and staunch objection, saying she had lodged serious representations to the US. Chinese Ministry of Foreign Affairs (MoFA) said China will take appropriate and necessary actions in this regards.

Read More  

July 24 HK WRAP  HSI -558pts T/O +19% ahead of the weekend

HSI -558pts (-2,2%) 24,705  HSCEI -244pts (-2.4%) 10,081  T/O HK$166.65bn (+18.6% DoD)  

EUROPE Market opened much lower as US/China relations get worse.
US Futures Opened flat but fell as the day in Asia progressed. Currently -100pts with S&P and NDX lower too

INDEXES
CSI 300 Closed -207pts (-4.4%) @ 4,506
Opened lower a tick higher initially but basically trended lower all morning. Further selling after lunch on news China ordered the US to close its Consulate in Chengdu. Day low was 4,479 around 2.10pm. Market then saw a small rally but without conviction and then sold down into the close, just off the day lows. Most sectors weak but Military names rallied and the yuan weakened.

HSI Pre Market -222pts @ 25,040 vs -166pts ADRs @ 25,097 E-commnerce names were weak, Sinopec & Petrochina +VE of pipeline disposal. Sino Biopharm weak on placement news. Broadbased selling as investors de-risked, on news that China would not recognised BNO passports raising tensions with the UK and the rising number of local covid cases. I think Team China was trying to 25,000 level as it tried to break above there many times in the first 50 minutes but eventually the sellers dominated and the market trended lower into lunch. PM saw a further 130pt drop and then the market traded sideways in parallel with China until 3pm. Then drifted lower before working slightly higher in the last 30 minutes to close 100pts off the day lows.

AFTER MARKET
LIFESTYLE CHI (2136.HK) Profit Warnings -VE
For the six months ended 30 June 2020, it expects profit to fall 50% YoY. Mainly due to the pervasive business disruptions to department store and retail businesses caused by the outbreak of the novel coronavirus (COVID-19) since early 2020, which resulted in a decline in sales revenue and hence profit of the Group’s department store operations; and a drop in share of profit from the Beiren Group, associate of the Group based in Hebei Province, the People’s Republic of China.
GALAXY ENT (27.HK) will not shower senior managers and workers ranked below with summer special discretionary bonus this year, as Deputy Chairman Francis Lui told Macao Daily. The next salary review will be done in April 2021, subject to the results performance by then.
Centa-City Leading Index (CCL) last printed at 181.77, +0.53% WoW to a 36-week peak.
CCL (small-and-medium units) +0.64% WoW to 182.49;
CCL Mass +0.73% WoW to 184.98;
CCL (large units) -0.04% WoW to 178.05.
Centaline Property, mentioned the outstanding performance of New Territories. CCL Mass for New Territories East climbed 1.59% weekly to 194.78; and that for New Territories West surged 1.61% weekly to 167.24.

Market and Pre Market News at bottom of page.

Short Selling HSI Friday 18.4%vs 20.2% Thursday
Top Shorts 
Hang Seng Bank (11) 55%, MTRC (66) 45%, Ping An (2318) 34%, CCB (939) 34%, China Res land (1109) 31%, BoC HK (2388) 31%, Galaxy (27) 28%, HSBC (5) 27%, Sands China (1928) 27%, HK & China Gas (3) 26%, Country Garden (2007) 25%.

CONNECT FLOWS
Shanghai
Northbound Rmb 71,679m Sell 40,489m : 31,109m Buy
Southbound HK$ 20,557m Sell 12,317m : 8,240m Buy

Shenzhen
Northbound Rmb 91,794m Sell 49,426m : 42,368m Buy
Southbound HK$ 15,653m Sell 6,404m : 9,249m Buy


DATA
CHINA 
No data
HONG KONG
Centre for Health Protection said there were 123 additional
COVID-19 cases in Hong Kong today; 115 were locally transmitted.

Active Heavyweights
TENCENT (700.HK) -5.2%
HKEX (388.HK) -4.1%
CCB (939 HK) -1.7%
PING AN (2318.HK) -1.6%
AIA (1299.HK) -1.3%

HSI & HSCEI Constituents on the move
BYD COMPANY (1211.HK) -8.9%
SINO BIOPHARM (1177.HK) -8.6%
CITIC SEC (6030.HK) -6.8%
WHARF REIC (1997.HK) -5.7%
CSPC PHARMA (1093.HK) -4.8%
TECHTRONIC IND (669.HK) -4.3%
CHINA LIFE (2628.HK) -4.3%
SANDS CHINA LTD (1928.HK) -4.1%
AAC TECH (2018.HK) -4%
MENGNIU DAIRY (2319.HK) -3.6%
FOSUN INTL (656.HK) -3.5%
GALAXY ENT (27.HK) -3.4%
SUNAC (1918.HK) -3.3%
CONCH CEMENT (914.HK) -3.2%
ANTA SPORTS (02020.HK) -3.1%
PICC P&C (02328.HK) -3%

HSMI & HSSI Constituents on the move
FRONTAGE (1521.HK) -11.5%
HUABAO INTL (336.HK) -11%
WEIGAO GROUP (1066.HK) -10.3%
KINGSOFT (3888.HK) -10.2%
GREATWALL MOTOR (2333.HK) +7.2%, hits new high

COMMENT
*PETROCHEMS FIRM 
on asset sales. PETROCHINA (857 HK +2%) has agreed to sell its major oil and gas pipelines to PipeChina, the base transaction consideration is ~268.7b yuan. SINOPEC (386 HK unch) also proposes to transfer equity stakes in oil and gas pipeline companies to PipeChina to subscribe for PipeChina’s registered capital of 47.1 bn upon completion of the PipeChina reorganization. Appraised value of assets, as well as deal consideration, amounts to 47.1b yuan.
*PHARM/MEDICAL WEAK SINOPHARM's (1099 HK -3%) founder and CEO Tse Ping is selling as many as 400m shs worth US$560m in a share placement, with a discount between 1 to 3.5% from yesterday's close.
SINO BIOPHARM (1177 HK -9%) CANSINO (6185 HK -6%) INNOVENT BIO (1801 HK -7.5%) ASCENTAGE (6855 HK -8.6%) 3SBIO (1530 HK -9.6%).
*E-COMMERCE & TECH WEAK despite the launch on Monday of the Hang Seng Tech Index which will tracking the 30 largest technology companies listed in the city. That reflects the element of derisking ahead of the weekend.
MEITUAN DIANPING (3690 HK -4.6%) has rolled out a group purchase food delivery service, introducing group purchases at lower prices.
COMPONENT makers weak on concern that escalating China/US tension may disrupt orders and shipments; AAC (2018 HK -4.5%) BYDE (285 HK -9.2%) ZTE (763 HK -5.5%) HUA HONG (1347 HK -8.7%) XIAOMI (1810 HK -5.3%).
The concern seems to be that China has limited options to retaliate in strength. It’s strongest plays would Hirt its own economy
*AUTO MAKERS MAINLY WEAK but saw intraday strength after President Xi called for the boosting China's auto brands, given the competitiveness of the international car manufacturing industry.
GREAT WALL MOTOR (2333 HK +8%) rose on recovery optimism after it announced interim net profit -24% YoY to 1.15b yuan. The total operating revenue was 35.93b yuan, -13.2% YoY.
GEELY (175 HK -0.2%) BYD (1211 HK -7%) BRILLIANCE CHINA (1114 HK -2.5%).
*CHINA PROPERTY SLUMPED on new housing measures as Nanjing, Jiangsu's provincial capital, ‘asked' developers to offer at least 30% of flats in each batch of commercial residential projects to families without a house, in a move to curb people divorcing in order to qualify to buy a second home. EVERGRANDE (3333 HK -6%) CH JINMAO (817 HK -4.7%) CH VANKE (2202 HK -2.9%) TIMES CHINA (1233 HK -4%).
*TELCOS MIXED CH MOBILE (941 HK +0.8%) on speculation data usage may see a strong increase given lockdowns due to virus outbreak; CH TEL (728 HK +1.7%). China's three main telecommunications operators have built more than 400,000 5G base stations by the end of June 2020, the MIIT said. The ministry previously said it expected to build over 600k stations by end of 2020. CH TOWER (788 HK -1.4%) UNICOM (762 HK -1.5%).
*MACAU WEAK as virus outbreak in HK continues, delaying re-opening of the Greater Bay Area. SANDS CHINA (1928 HK -4.2%) recorded a net loss of US$549m in Q2, compared to net income of US$511m in the same period last year. MELCO (200 HK -4.7%) SJM (880 HK -4.5%) WYNN(1128 HK -3.8%).

REGIONAL MARKETS
JAPAN 
Market Closed re-opens Monday
S KOREA Market opened lower but initially traded higher and slightly into the green but then news of China demanding the US close its Chengdu Consulate has markets spooked.Kosdaq -0.9%, Kospi -0.7%
TAIWAN opened higher and traded sideways until the news about China demanding the US Chengdu consulate closure which prompted selling. Although it has seen a slight bounce but sold off at the end to close -0.9%


NEWS
MARKET HOURS

Indian and Chinese diplomats are set for talks today (24th) in attempt to resolve clashes along the Himalayan border, where roughly 20 Indian soldiers lost their lives. Maintaining peace on the border is the basis of bilateral relations, said India's foreign ministry spokesman Anurag Srivastava. New Delhi expected to sincerely work with Beijing, de-escalate the standoff as soon as possible, and fully restore peace and tranquillity in the border, added Srivastava.
China will revise the upper limit on private lending interest rates under judicial protection, reported Chinese media. Beijing intends to axe the interest rate ceiling on private loans from 24% to 15.4%, Caixin citing sources. The ceiling should be four times the one-year loan prime rate according to Supreme People's Court. As the one-year LPR currently stands at 3.85%, the legitimate private lending rate cap may come in at 15.4%.
MEITUAN-W (3690.HK) intends to take over Didi, which yet turned down the idea and said it preferred to develop independently, new.qq.com cited a source within the circle of Didi's management. The report said MEITUAN-W, Didi and two investors had interacted for a merger.
JD-SW (9618.HK) plans to spin off JD Health for Hong Kong IPO to raise at least US$1 billion, which may be completed as soon as end-2020 or early-2021, IFR reported.
Burberry announced that it is teaming up with TENCENT (700.HK) to create a brand new concept, "social retail”. A new store will on 31 July 2020 be opened at MixC Shenzhen Bay. Leveraging the technical support offered by TENCENT, Burberry hopes to create a motivating and inspirational space for consumers. Through the novel experience from the shop and social media, customers may fully interact with the brand and products.
XINGHUA PORT (1990.HK) Trading has been halted at 1:00 p.m today (24 July). The stock ended the midday at $2.1, up 5%, on volume of 2.77 million shares.
The tender for the residential site at Ma Wo Road, Tai Po has been closed at noon today (24 July). At least 13 bids have been received, according to on-site information.
TikTok's parent ByteDance is now in talks to invest in Lido Learning, an Indian online educator, although it remains uncertain whether the discussions will fructify into a deal, The Economic Times of India reported.
The US government ordered China to shut down its consulate-general in Houston within 72 hours, i.e. by 5am on 25 July (Hong Kong Time). Cai Wei, Chinese Consul General of Houston, told Politico that the office is running normally on 23 July, claiming Beijing has voiced objection and will not close the consulate upon Washington's order. Cai furthered the Houston Consulate remains functioning until further notice, saying "we will see what will happen tomorrow".
At midday news wires released news that Chinese Foreign Ministry this morning informed Embassy of the United States, Beijing that China has decided to deprive U.S. Embassy in Chengdu of the license of establishment and operation. Concrete requests have been raised therefor. Beijing is unwilling to see the current standoff between the two countries, of which the blame is purely on Washington, said the ministry. Beijing once again called on Washington to withdraw her decision to shut down China's Houston Consulate, which will lay the requisite ground for a re-normalised tie for the two countries.
Ministry of Finance (MOF) of China released a notice regarding the issuance for the fourth tranche anti-epidemic treasury bonds for 2020. The total face value of the bonds amounted to RMB70 billion. The issuance will be way of competitive tender during 10:35-11:35 a.m. on 30 July.
Overnight HIBOR last posted at 0.04298%, logging a 1-month low, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.26589%.
Ant Group will on the international level foster ties with e-wallet providers in different territories by helping its local partners bring their products to different markets and stay in close touch with local authorities, said SEA Regional Director Steve Shen at DBS Asian Insights Conference 2020. In Chinese market, the fintech giant is sparing no efforts in nudging digital transition of medium, small and micro enterprises and taking forward the inclusion and sustainable development of financial services, added Shen, while local governments are nurturing these enterprises by distributing e-coupons via AliPay.
Ant Group requires that the lead bank of its Shanghai IPO must subscribe for at least 2% of its issued share, subject to a RMB1-billion cap, Bloomberg reported. Global banks like Morgan Stanley and UBS will possibly miss out the chance to join this Shanghai IPO due to their limited capital in Chinese market.

PRE MARKET
GOLDIN FIN HOLD (530.HK) announced the proposed disposal by Golden Sphere, a
n indirect wholly-owned subsidiary of the Company and the holding company of Gold Flair, of the entire issued share capital of and shareholder’s loan owed by Gold Flair to the May Agreement Purchaser Top Family Group pursuant to the May Agreement. As the conditions precedent to completion of the May Agreement had not been fulfilled or waived, the parties entered into the termination agreement with mutual consent on 17 July. Gold Flair holds all the issued shares of the Property Company, the principal asset of which is a piece of land parcel situated at Kai Tak Area 4B Site 4. On 17 July, Gold Flair sold all the issued shares of the Property Company to the Purchaser Agile World, involving HK$2.5 billion.
SINO BIOPHARM (1177.HK) announced that Tse Ping, CEO an Exec director and a shareholder of the Company, intended to place 300 mn shares. The placing price of HK$10.5 per share represented a discount of 3.5% to the closing price yesterday. Tse expected to cash in HK$3.15 billion.
China noted that the US Department of Commerce had filed an investigation on the devaluation of RMB as one of the latter's countervailing cases, revealed a responsible person from the Trade Remedy and Investigation Bureau under Ministry of Commerce of the PRC. China strongly opposed the investigation of the US, accentuating the RMB rate is at a reasonably balanced level without being devalued.=
KUNLUN ENERGY (135.HK) noted that PipeChina also negotiated with PETROCHINA (857.HK), SINOPEC CORP (386.HK) and SINOPEC KANTONS (934.HK) on certain reorganization of pipeline assets, and recently reached formal agreements with these companies respectively. So far, the Company is still negotiating with PipeChina, and relevant details have not been finalized.
SINOPEC CORP (386.HK) announced that Sinopec Natural Gas, a subsidiary of the Company, proposed to transfer equity interests in the relevant oil and gas pipeline companies to China Oil & Gas Pipeline Network Corporation (PipeChina) for RMB119.435 billion. The aggregate percentage of capital contribution by the company and Sinopec Natural Gas is 14%. It is expected that the Transactions can lead to an increase in the profit before tax of the Group by approximately RMB36.594 billion.
The transaction is facilitating transformation of the company, and reducing future capital expenditures of the group. Together with Yuji pipeline assets sold by SINOPEC KANTONS (934.HK) earlier, a total of cash consideration of RMB52.655 billion was obtained.
PETROCHINA (857.HK) announced that it sold its pipeline business to China's National Pipeline Company (NPC) for RMB268.7 billion. Upon completion, the NPC will become an associate of PETROCHINA. The statement said the transaction aimed at long-term development of the company in future. After the pipeline restructuring, the company will make more efforts in the exploration of upstream oil and gas.
CK ASSET (1113.HK) announced the disposal of “Chengdu Le Parc” in Chengdu to a purchaser held as to 50% by YUZHOU GROUP (1628.HK) and 50% by Chengdu Ruizhuo. The estimated consideration is US$1.012 billion (roughly HK$7.847 billion). The estimated gain on the Disposal approximates HK$3.811 billion. Post disposal of a Chengdu project, stated that Senior Advisor Li Ka-shing and Chairman Victor Li remain bullish on Chinese and Hong Kong markets. Over the past decade, the group recorded an average income of roughly $28 billion per year from the disposal of Chinese property. It is capable of going on with accumulation of land bank in Hong Kong and Mainland for real estate development needs with its abundant capital position. As of end-19, cash balance approximated $60 billion.

Read More  

July 23 HK WRAP HSI +205pts as investors watch for China's response

HSI +205pts (+0.8%) 25,263  HSCEI +82pts (+0.8%) 10,325  T/O HK$140.57bn (-9.6% DoD)  

EUROPE Market opened higher but investors watching covid cases, earnings and deteriorating US/China relations.
US Futures Opened DOW -15pts with S&P and NDX little changed but worked higher through the day to +153pts with the S&P and NDX also higher.

INDEXES
CSI 300 Closed +2pts (-0.04%) @ 4,713
A weak open in reaction to the news of the Chinese consulate in Houston being forced to close. But market rallied into the green in early trading hitting the day high 4,731in the first 30 minutes but unable to hold and sold down 124pts to the day low of 4,607. It then rallied into lunch. PM swathe market work higher but with resistance at yesterday’s closing level which was tested several time but unable to break out.

HSI Pre Market +177pts @ 25,235 vs +8pts ADRs @ 25,064 E-commnerce names were mixed. Component makers were strong on news that AAC TECH introduced Xiaomi and OPPO as strategic investors for its optical business.With an initial spike as shorts covered followed by what looked to be making selling. Market found support at 25,000 and bounced into lunch. PM saw the market trade sideways slightly higher with an up tick in the closing auction.


AFTER MARKET
ICBC (1398.HK)'s new RMB loans in 1H 2020 carry average interest rates of 4.31%, 
down 45 bps yearly and below the market average, said President Gu Shu at CBIRC's press conference. During the period, the bank delivered additional inclusive loans of RMB168.4 billion, up 35.7%, added Gu.
HKT-SS (6823.HK) announced the launch of HEYPARK, a one-stop digital food ordering platform for dine-in and takeaway that accepts mobile payments. From now until August 31, HKT-SS is offering a promotion to support SMEs. Those who register now can enjoy free set-up and a 4-month waiver on monthly subscription fees.
ZDDC (600633.SH) stated that it had during 1H 2020 confirmed intended partnership with BABA-SW (9988.HK) over a new batch of data centre cabinet leasehold, Securities Times reported. By which, the company will also foster business ties with Huawei and TENCENT (700.HK) on marketing and e-sports business.
GREATWALL MOTOR (2333.HK) announced preliminary financial data for the interim period of 2020 prepared in accordance with the China Accounting Standards for Business Enterprises. Net profit -24.02% yearly to RMB1.153 billion. EPS equaled RMB0.12495.
China is going to consider BNO as an invalid passport and reserves her right to take further actions as Britain has breached her promise, said Chinese Foreign Ministry Spokesperson Wang Wenbin. London has broken her word and violated international laws by politically manipulating BNO matters despite Beijing's solemn negotiation, stated Wang.
Eu Yan Sang, HUNGFOOKTONG (1446.HK) and HKBN (1310.HK) announced a strategic partnership. With this partnership, they will gain exposure at each other’s extensive customer touchpoints, to further expand their sales channels and customer reach. Customers and employees of Eu Yan Sang, HUNGFOOKTONG and HKBN will get to enjoy exclusive membership/customers and employee discounts on a diversified range of product offerings at all three companies, starting from the end of July.
Centa Valuation Index (Major Banks) (CVI) last printed at 48.18 this week, +2.08 pts from 46.09 in the previous week. Centaline Property, elaborated that the index did not move itself deeper to the lower end of the critical point at 40 after breaking below 50, despite epidemic flare-up in Hong Kong. The turnaround of the index reversed the seven-week downswing, signaling a stabilization.

Market and Pre Market News at bottom of page.

Short Selling HSI Thursday 20.2% vs 16.9% Wednesday
Top Shorts 
Hang Seng Bank (11) 34%, Want Want (151) 34%, HSBC 95) 32%, Mengniu Dairy (2319) 31%, Ping An (2318) 31%, Hengan (1044) 29%, CCB (939) 29%, China Res land (1109) 28%, BoC (3988) 28%, Petrochina (857) 27%, Citic (267) 26%, CNOOC (883) 26%, HK & China Gas (3) 25%, Henderson Land (12) 25%.

CONNECT FLOWS
Shanghai
Northbound Rmb 59,338m Sell 31,217m : 28,121m Buy
Southbound HK$ 14,293m Sell 6,315m : 7,977m Buy

Shenzhen
Northbound Rmb 81,828m Sell 41,193m : 40,635m Buy
Southbound HK$ 15,237m Sell 6,639m : 8,598m Buy


DATA
CHINA No data
HONG KONG
Centre for Health Protection 
said there were 118 additional COVID-19 cases in Hong Kong today; 111 were locally transmitted.

Active Heavyweights
HKEX (388.HK) +4%
TENCENT (700.HK) +3.3%
AIA (1299.HK) +1.3%
CCB (939 HK) -0.7%
PING AN (2318.HK) -0.3%

HSI & HSCEI Constituents on the move
AAC TECH (2018.HK) +12.9%
BYD COMPANY (1211.HK) +7.4%
CHINA RES BEER (291.HK) +6.2%, hits new high
SINOPHARM (1099.HK) +5.6%
SINO BIOPHARM (1177.HK) +4.4%
SUNNY OPTICAL (2382.HK) +3.5%
WHARF REIC (1997.HK) -3.4%
WH GROUP (288.HK) -3.3%

HSMI & HSSI Constituents on the move
WISDOM EDU INTL (6068.HK) +14.5%, hits new high
FOSUN PHARMA (2196.HK) +10.1%, hits new high

COMMENT
*TECH & COMPONENTS FIRM
despite deteriorating Sino-US relation, led by a jump in AAC TECH (2018 HK +12%) and optimism on the Hang Seng Tech Index. AAC TECH says investor group buying 9.5% stake in subsidiary AAC Communication for 1.15b yuan. Investors include firms controlled by smartphone makers XIAOMI (1810 HK +2%) and Oppo.
SUNNY (2328 HK +3.5%) BYDE (285 HK +7%) HUA HONG (1347 HK +3.6%) QTECH (1478 HK +3.4%).
*E-COMMERCE FIRM after yesterday's profit-taking, as investors remain optimistic on the new economy sector.
MEITUAN DIANPING (3690 HK +3.5%) will collaborate in a digital venture with Coca Cola (China), after the signing of a strategic coop agreement on July 21.
ALIBABA (9988 HK -0.5%) NTES (9999 HK +0.5%) ALI HEALTH (241 HK +3.2%).
*HK PROPERTY WEAK on amid surging Covid-19 cases. Empire Group and HK FERRY released 123 flats in their first price list of Seacoast Royale in Tuen Mun, with the cheapest flat worth just HK$2.91m. The average price was HK$13,578 psf after discounts, about 21% cheaper than the first price list of Regency Bay in the same district, developed by SHKP (16 HK -1.2%). HENDERSON (12 HK -0.3%) NWD (17 HK -0.3%) KERRY (683 HK -1.4%).
*PHARMA/MEDICAL FIRM on vaccine speculation.
INNOVENT BIO (1801 HK +2.8%) and shareholders together place a total of 78m new and existing shares at HK$50, representing a discount of 5% to closing price of HK$52.45 on Wednesday.
FOSUN PHARM (2196 HK +10%) jumped after its partner BioNTech SE reached a deal with the U.S. for supply of coronavirus vaccine. The US agreed to pay $1.95 bn for 100 million doses of a vaccine made by Pfizer and BioNTech
SINO BIOPHARM (1099 HK +4.4%) CSPC PHARM (1093 HK +1.3%) CANSINO (6185 HK +0.6%).
Other medical names also traded strong amid demand speculation. WEIGAO (1066 HK +6.4%) ASCENTAGE (6855 HK +3.6%).
*EDUCATION PROVIDER STRONG on news WISDOM EDUCATION (6068 HK +14.5%) will increase the tuition and boarding fees of certain new students enrolled in the group's schools, ranging from approx 9% to 38%, effective for the upcoming 2020/2021 school year. VIRSCEND EDU (1565 HK +12%) CH EAST ED (667 HK +5%).
*OTHER MOVERS:
DATANG POWER (991 HK+3%) expects 1H net profit to increase by about 83.3b yuan to 100.5b yuan, which translates to an increase of 97-117% YoY.
CR BEER (291 HK +6.2%) on Citi's upgrade to a fresh all-time high amid speculation its 1H results due in August, should reflect firm’s accelerated efforts to monetize its acquisition strategy.
BYD (1211 HK +7.4%) rallied on the news it has received US315m worth of mask order from California.

REGIONAL MARKETS
JAPAN 
Market Closed re-opens Monday
S KOREA Kosdaq opened flat but worked higher through the day to close +0.8%, Kospi opened lower and drift lower in the morning and then sideways in the PM. A slightly bounce late afternoon sold back down closed 0.6%
TAIWAN Opened lower and traded sideways just below Wednesday’s closing level. Finished -0.5%

NEWS
MARKET HOURS
TAO HEUNG HLDGS (573.HK) announced a temporary suspension
of all branches from 26 July in order to protect both customers and employees amid the epidemic. The restaurants are set for reopening on 5 August.
The Government announced that the special work arrangement for government employees will be extended for one week until August 2. Save for those involved in the provision of emergency services and essential public services, all other government employees will continue to work from home. Picturing the local epidemic situation as severe, the Government appealed to employers of private organisations to allow their staff members to work from home as far as possible according to their operational needs so as to reduce the flow of people and social contacts in the community.
MEITUAN-W (3690.HK) is running tests on "Pinhaofan", which is embedded in the Meituan Waimai (food delivery) app and its mini-programs.This function is known as Meituan Waimai's special offer edition, featuring budget group ordering, free delivery and free packaging.
Hong Kong Housing Authority is to postpone applications for the new round of Home Ownership Scheme (HOS) and White Form Secondary Market Scheme (WSM) slated for this month due to the covid-19 pandemic The authority will keep close tabs on the epidemic update and the government's anti-plague measures to decide on the new application period.
Starting from 24 July, the Hospital Authority will designate Lei Yue Mun Park Holiday Camp for community quarantine purposes, providing 350 beds for novel coronavirus patients in a stable condition. The patients to be admitted to the camp shall be aged below 50, capable of self-care, free of fever symptoms and in no need of oxygen supply, said the authority.
China issued RMB5 billion treasury bonds to institutional investors in Hong Kong by way of tender on 23 July, announced the Information Office of Ministry of Finance.
MAN WAH HLDGS (1999.HK) Chairman placed 106 mn shares of the company at a 9% discount to cash in over $800 million. Market sources rumored that the buyers include BlackRock and Hillhouse Capital.
UBS Wealth Management published the latest quarterly Investor Sentiment study, polling over 4,000 rich investors and business owners across 14 markets from late June to early July. As the COVID-19 pandemic eased, investors were more optimistic about the economy and the equity market.
Particularly, 46% of the respondents were upbeat on the global economy for the coming 12 months, up from 40% three months earlier. 38% were bearish on the world economy, down from 45%.
Those being optimistic on the regional economy for the next 12 months rose from 46% to 52%. Equally, 53% were positive on the regional economy in the coming 6 months, up from 45%.
WHEELOCK (20.HK) announced that the Scheme was sanctioned without modification by the High Court on 15 July 2020. The reduction of its share capital involved in the Scheme was also confirmed by the High Court on the same day. The listing of its shares on the Stock Exchange will be withdrawn at 9:00 a.m. on 27 July 2020.
US Secretary of State Mike Pompeo said India has the ability to move supply chains away from China and cut back reliance on Chinese telecoms and medical supplies. He believed India is in this position due to the trust of many countries, including the US, it has earned.
California State Governor Gavin Newsom announced an agreement extension with BYD COMPANY (1211.HK) for additional purchase of 420 million masks worth of US$315 million.
MIIT says: China Delivers 86.23M 5G Smartphones this year
Overnight HIBOR last posted at 0.04625%, logging a 1-month low, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.26875%.
The Lands Department posted notices in accordance with the Lands Resumption Ordinance, the Roads Ordinance and the Land Acquisition Ordinance for the resumption of land for the implementation of the First Phase Development of Hung Shui Kiu/Ha Tsuen New Development Area (HSK/HT NDA). A total of 195 private lots with an area of about 12 hectares and land involving 10 graves and 42 urns with an area of about 359.36 square metres will be resumed.
In a letter to US Treasury Secretary Steve Mnuchin, the US Rail Security Alliance, the United Steelworkers and others called for immediate, meaningful and permanent sanctions on CRRC (1766.HK) by invoking the International Emergency Economic Powers Act, in order to protect US economy and national security. The US Defense Department had unveiled a list of 20 firms, including CRRC, allegedly owned or controlled by the People's Liberation Army.
China constructed a total of 410,000 5G base stations as of the end of June, as Ministry of Industry and Information Technology (MIIT) announced on a press conference.
Nvidia, a US graphics chipmaker, will be in talks with SoftBank for proposed takeover of the latter's semiconductor design house ARM, as Bloomberg learnt from inside sources. The transaction, if realized, will become the largest acquisition in chip's history. It will be interesting to watch considering the current impasse over the ARM China operations and suggests that SoftBank does not expect the situation to be resolved in the near future.
China Banking and Insurance Regulatory Commission accentuated the baseline to refrain from systematic financial risks by making early deployment against sharply growing non-performing assets across all banks and lawfully dealing with illicit financial groups and fundamental risks. The Chinese watchdog also stressed the need to go on brushing up the internal governance of banks and insurers and to strictly monitor the stake management of shareholders, as well as to optimise the insurance scrutiny mechanism.
BANK OF E ASIA (23.HK) has fully disposed of Shops G16, G39 and G40 at Eldo Court, Tuen Mun for $134 million, Hong Kong Economic Journal citing market sources. The shops, of salable sales area of roughly 3,515 sq. ft., were sold to Kai Bo Food Supermarket's founder Lam Hiu-ngai and associated parties, said insiders.
China Foreign Exchange Trade Center announced, on 23 July, the central parities in the interbank forex market of transaction currencies, including the dollar against CNY, are as follows: USD/CNY = 6.9921, down 203 bps from yesterday's central parity.

PRE MARKET
CK ASSET (1113.HK): Looking At GOLDIN FIN HOLD (530.HK)'s Financial, Debt Position
Asked if the group is going to act as the white knight to rescue GOLDIN FIN from the plight, CK ASSET (1113.HK)'s Gerald Ma, Member of Executive Committee & General Manager, Corporate Business Development Department, stated that they are reviewing the financial and debt position of GOLDIN FIN HOLD who announced that Ma has been appointed as the Vice Chairman of the company with immediate effect.
Wheelock Properties' KOKO HILLS has sold 86 flats since the first launch, cashing in nearly $1.04 billion. The developer announced to debut the second batch of 88 units.  With a maximum discount of 21.5%, the selling prices of the second log would be $7.872-17.42 million, i.e. $20,770 per sq.ft. on average. The batch is expected to cash in roughly $1.2 billion.
BABA-SW (9988.HK) announced that Alibaba Cloud will provide clients in flooding areas with online financial services under a free "cloud banking counter" solution. Individual and small merchants in dire need of funds can make credit applications directly through video calls with customer service officers, in order to resume normal production and operations.
The PBoC has today started 7-day RMB50-billion reverse repos on open market, said foreign press. It also says it sees no immediate need to relax monetary policy further in a short run, as it does not want side-effects triggered by excessive stimulus, Reuters citing insider sources. However, this does not mean that the Chinese central bank is going to re-tighten policies, said the insiders.
ELEC & ELTEK (1151.HK) TRADING HALT with effect from 9:00 a.m. on 23 July 2020, pending the release of an announcement pursuant to the Code on Takeovers and Mergers of Hong Kong and the Singapore Code on Take-overs and Mergers, in relation to the voluntary cash offer made by GF Securities (Hong Kong) Brokerage Limited on behalf of Elec & Eltek International Holdings Limited having become unconditional on 22 July 2020.
INNOVENT BIO (1801.HK) said that it proposed to place 56.2 million new shares, representing 4.02% of the share capital of the company as enlarged. The placing price was $50 per share, being 4.67% discount to the closing price as quoted yesterday. The net proceeds amounted to $2.788 billion. On another note, Chairman cum CEO De-Chao Michael Yu planned to place 36.8 million shares at $50 per share to cash in $1.84 billion. The share cut represented 2.74% of the issued share capital of the company.
The French government told local telcos that their licences for purchasing Huawei's 5G equipment and components will be not renewed after expiry, Reuters citing 3 insiders. France's cybersecurity agency said it would allow local operators to use gear from Huawei under licenses of 3-8 years.
MAN WAH HLDGS (1999.HK) said that Chairman Wong Man Li plans to place up to 106 million shares at $7.68 each, representing 9.6% discount to the closing price yesterday, to cash in $814 million.
TENCENT (700.HK)'s AI Lab, together with Zhong Nanshan, the team leader of senior experts of National Health Commission of the PRC disclosed the research results of AI forecast on COVID-19 patient disease progression and critical probability, Shenzhen Special Zone Daily reported. The results can facilitate forecast on critical probability in 5, 10 and 30 days, assisting phased diagnosis for patients at early stage.
The research was published on Nature Communications, a sister magazine of Nature, dated 15 July.
The EC and the High Representative of the European Union for Foreign Affairs and Security Policy wrote in a joint report that the "One Country, Two Systems" had over the past one year been repeatedly eroded and that relevant concerns had been worsened by the legislation of Hong Kong National Security Law.  HKSAR Government wrote in a statement that it cannot agree with the remarks in the European Report about the implementation of the "One Country, Two Systems" in Hong Kong, and that the concerns about the erosion of HKSAR's high degree of autonomy and the legitimate rights and freedoms enjoyed by the people of Hong Kong are totally unfounded.
SANDS CHINA LTD (1928.HK)'s controlling shareholder, Las Vegas Sands Corp. announced its financial results for the fiscal Q2 ended June 30, 2020. On a US GAAP basis, total net revenues for SANDS CHINA LTD -98.1% yearly to US$40 million. Net loss was US$549 million, compared to net income of US$511 million in the same period of 2019. Its adjusted property EBITDA loss was US$312 million for the second quarter of 2020, compared to an adjusted property EBITDA of US$765 million for the same period of 2019. The Group's optimism about an eventual recovery, coupled with its financial strength, enables it to continue the execution of capital investment programs in both Macao and Singapore.
Macau's Novel Coronavirus Response and Coordination Centre stated that the quota of nucleic acid tests available to Macau residents has been boosted from 7,500 to 11,000 per day.
President Xi Jinping has recently hosted an entrepreneur forum in Beijing, reported CCTV News. Sinopharm Group has received green light to start the phase III international clinical trials of its COVID-19 vaccine at end-June, revealed Chairman Liu Jingzhen, a participant of the forum. The vaccine may be launched at the end of 2020.
ZHONGDI DAIRY (1492.HK) on 15 July, the shareholder Liu Dai completed the transfer of his controlling interest in Tai Shing to Marvel One. Before the transfer, Liu Dai held 6.76% of the share capital of the Company through his holding company, Tai Shing. After the completion, Liu Dai is no longer a shareholder of the Company under the Concert Parties Arrangement. The Company believes that the aforementioned Shareholder Disputes and Share Transfer are not relevant to the financial condition or normal operation of the Group at the current stage. The company applied for a trading resumption with effect from Thursday (23 July).
CIMC (2039.HK) connected transaction to acquire 63.4934 million CIMC VEHICLES (1839.HK) shares from Tai Fu Xiang Zhong at a consideration of RMB432 million.

Read More  

July 22 HSI -578 pts Late Selling on news Chinese Consulate in Houston to close


HSI -578pts (-2.3%) 25,057  HSCEI -202pts (-1.9%) 10,244  T/O HK$155.58bn (-3.8% DoD)  


EUROPE Expect market opened lower on covid-19 concerns asTrump admits its going to get worse before gets better. Also the deterioration in the US/China relations as the US orders China to close its Houston Consulate. No data so market focus will be results, covid and US/China relations.

US Futures Opened flat (-6pts ) but moved higher through the day to +128pts before selling off on news of rising US/China tensions. Currently indicating -100pts with the S&P and NDX moving lower too. Pre market reports from Biogen, Baker Hughes and Nasdaq. Then after the bell Microsoft, Tesla, Chipotle Mexican Grill, CSX and Las Vegas Sands report today.



INDEXES 

CSI 300 Closed +23pts (+0.5%) @ 4,715 Opened lower but was driven higher through the morning to the day high 4,790 shortly before lunch. President Xi said at am entrepreneurs forum that China will make additional proactive, flexible fiscal and monetary policy, and continue to cut tax, fees, rates to strengthen the nation's economy. President Xi's also called for the promoting of innovation and the speeding up of the development of key technologies as the world grapples with rising protectionism coupled with the economic slowdown. Upside capped as investors remain concern about the flood alerts and damage together with the deteriorating international relationship. Fintech firms still outperformed on media reports that PBOC has issued a notice regarding blockchain rules. The selling pressure in the afternoon saw the CSI 300 give up most of those gains. Team China in action I think in the morning to dispell concerns of China being excluded from the US Swift payments system or any other troublesome issues.

Market closed before the news of the Chinese Consulate in Houston being ordered to close.


HSI Pre Market -60pts @ 25,575 vs -11 pts ADRs @ 25,524 With weakness in E commerce names after yesterday’s strong rally. Petrocehms firm as oil rallied. Market saw initial weakness but then rallied through the morning following China, hit resistance at 25,760 despite trying a couple of times. Sold back down to flat at lunchtime. PM saw more selling the market is trending lower. Significant selling in the last 40 minutes and ticked lower by 60pts in the closing auction on the news the US Consulate in Houston was being forced to close by the US administration.


AFTER MARKET
US Department of State confirmed that it notified China to shut down its consulate in Houston in three days
as the US must protect her intellectual property and information in wake of aggravated tensions between the two countries, Reuters reported. China condemned vigorously to the decision of the US, threatening to revenge. It was known that China is considering to close the US consulate in Wuhan City.

BISON FINANCE (888.HK) announced that during the period from 17 June 2020 to 22 July 2020, the Trustee purchased a total number of 5 million Shares on the market for the purpose of the Share Award Scheme, involving $1.5256 million.

Shanghai Municipal Government held a contract signing ceremony today for foreign capital projects for the city, by which HSBC (China) inked a cooperation with Lingang New Zone, Shanghai, cs.com.cn reported. HSBC Bank (China) President and Chief Executive Officer Wang Yunfeng said the bank plans to establish a fintech services company in Shanghai, as the latest move of sequential investment in China, and an onset of digital-empowering wealth planning services, to provide technology and data services to the group's licensed financial institutions.

AAC TECH (2018.HK) announced that its subsidiary AAC Communication (engaging in optical business) introduced four strategic investors, namely Hubei Xiaomi Changjiang Industrial Fund (its controlling shareholder was Xiaomi Industry Investment Management Co., Ltd., ultimately controlled by XIAOMI-W (1810.HK) Chair Jun Lei), OPPO Guangdong Mobile Communication, Shenzhen Huiyou Haochuang Technology Investment and Nanjing Huarui Ruijun Entrepreneurship Investment Center. The parties agreed that the Strategic Investors will make a capital increase of RMB1.15 billion in aggregate to AAC Communication. The Strategic Investors will obtain a total of approximately 9.58% of the enlarged equity interest in the Target Company after the Capital Increase.

3SBIO (1530.HK) announced that the Proposed Spin-off Listing of Sunshine Guojian on the STAR Market and the Offering have been completed; and the dealings in the ordinary shares of Sunshine Guojian on the STAR Market commenced on 22 July 2020.

Empire Group, HK FERRY (50.HK) and HENDERSON LAND (12.HK) , released its first price list for phase one of Seacoast Royale, involving 123 standard units with saleable area of 207-548 sq.ft.. Prices on the list range $3.098-6.982 million. Deducting the maximum discount of 6%, the selling prices range $2.9121-6.5631 million, i.e. $13,578 per sq.ft. on average. The General Manager of Sales (1) Department at Henderson Land, said he remains slightly bullish on 2H20 property market, which may tend to stabilise. When asked about the tender for Tai Po residential site, the company stated that it is interested in all land parcels rich in potentials, subject to the price level.

Centaline Property, said the price list of Seacoast Royale Phase 1 represents 15% discount to the leftover first-hand units from the same districts for coronavirus factors. The project is very competitive as there are only 18 private homes priced below $3 million in Hong Kong now, according to Centaline's findings.

Midland's Residential Division Chief Executive. Said that being discounted by over 10% to the market level, the new project is set to be a new benchmark and spotlight, opined Po.

CATHAY PAC AIR (293.HK) announced in its rights issue circular that a + or - 5% in price of jet fuel would have increased/ decreased the Cathay Pacific Group’s other equity components by approximately HK$620 million. This is on the assumption that all other variables remain constant. The scale of reduced flights due to the COVID-19 pandemic means that the Cathay Pacific Group is in an over-hedged position with respect to expected fuel consumption. The marked to market losses as at 31 December 2020 could be significant. Despite all measures to produce cash savings, the drop in passenger revenue to around only 1% of prior year levels meant that Cathay Pacific was initially losing cash at the operating level at a rate of HK$2.5 to 3 billion per month as it serviced a high level of customer refunds. This has subsequently reduced and is expected to remain at a rate of approximately HK$1.5 billion per month whilst minimal passenger services are in place. While such passenger capacity cuts and cost management measures have helped to reduce expenditure, many costs are unavoidable regardless of the number of flights mounted. Accordingly, such measures will not fully offset the contraction in passenger revenue.


Market and Pre Market News at bottom of page.


Short Selling HSI Wednesday 16.9% vs 18.5% Tuesday 

Top Shorts China Res land (1109) 41%, CCB (939) 31%, Want Want (151) 31%, Ping An (2318) 29%, BoC HK (2388) 29%, China Shenhua (1088) 28%, Country Garden (2007) 26%, Wharf REIC (1997) 25%.


CONNECT FLOWS 

Shanghai

Northbound Rmb 62,409m Sell 32,134m : 30,276m Buy

Southbound HK$ 14,672m Sell 7,007m : 7,665m Buy

Shenzhen

Northbound Rmb 78,806m Sell 36,389m : 42,417m Buy

Southbound HK$ 15,648m Sell 6,461m : 9,186m Buy


DATA
CHINA No data

HONG KONG Centre for Health Protection said there were 113 additional COVID-19 cases in Hong Kong today; 105 were locally transmitted.


Active Heavyweights
HKEX (388.HK) -4.9% 
TENCENT (700.HK) -4.4% 
AIA (1299.HK) -1.8% 
PING AN (2318.HK) -1.6%
CCB (939 HK) -1%

HSI & HSCEI Constituents on the move
AAC TECH (2018.HK) -7%
BYD COMPANY (1211.HK) -5.6%
SUNAC (1918.HK) -5.4%
GEELY AUTO (175.HK) -5.1%
CHINA LIFE (2628.HK) -4.7%
SINOPEC CORP (386.HK) +4.5%
PETROCHINA (857.HK) +4.1%
CHINA RES LAND (1109.HK) -4%
SHIMAO GROUP (813.HK) -3.7%
CPIC (2601.HK) -3.6%
SUNNY OPTICAL (2382.HK) -3.5%
SHENZHOU INTL (2313.HK) -3.4%
SINO BIOPHARM (1177.HK) -3.2%
WH GROUP (288.HK) -3.1%
CHINA OVERSEAS (688.HK) -3%

HSMI & HSSI Constituents on the move

CG SERVICES (6098.HK) +1.3%, hits new high


COMMENT

*PETROCHEM STRONG on the news SINOPEC KANTONS (934 HK +4.2%) plans to sell its entire equity interest in Sinopec Yu Ji Pipeline for 3.2b yuan. Also helped byil surged to its highest level since early March in London on signals of economic recovery, while analysts expect U.S. inventories to tighten. SINOPEC (386 HK +4.5%) CNOOC (883 HK +2.4%) KULUN ENERGY (135 HK +10%) PETROCHINA (857 HK +4.5%).

*TECH & E-COMMERCE WEAK after yesterday's rally on Hang Seng Tech Board optimism. AAC (2018 HK -5.4%) HUA HONG (1347 HK -2.9%) QTECH (1478 HK -2.2%).

FIH (2038 HK unchg) reported prelim 1H loss $105m vs $83.8m loss a year earlier. It expects revenues for 1H of 2020 at USD 3.66 billion, vs 6.39b year ago.

O NET (877 HK unch) expect net profit to decline 40% to 50% in 1H, due to order-shipment delays and labour shortages.

E-COMMERCE investors de-risk from uncertainties; BABA (9988 HK -3.4%) JD.COM (9618 HK -4.6%) MEITUAN (3690 HK -6.2%) NTES (9999 HK -2.8%).

*HK PROPERTY WEAK as Covid cases surged TO over 2000 in HK, without ANY signs of slowing or the authorities identifying the sources.

HENDERSON LAND (12 HK -1.8%) has uploaded a sales brochure for 611 units at Seacoast Royale in Tuen Mun, jointly developed by HK FERRY and Imperium Group.

SHKP (16 HK -1.3%) confirmed its sales launch for 108 flats at Regency Bay in Tuen Mun this Saturday.

CKA (1113 HK -2.3%) SINO LAND (83 HK -2.4%).

*CHINA PROPERTY WEAK on profit-taking.

A-LIVING (3319 HK -0.8%) expects 1H net profit to rise at least 35% YoY.

SUNAC (1918 HK -5%) after it rallied on its plan to spin-off its property mgmt business for separate listing.

EVERGRANDE (3333 HK -3.2%) SHIMAO PROP (813 HK -3.5%) CIFI (884 HK -3.8%).

*PHARMA MIXED after mixed vaccine news and speculation of increased health care demand.

CANSINO (6185 HK +10%) shows promise in mid-stage vaccine studies.

CSPC (1093 HK -0.9%) announce that the “Memantine Hydrochloride Tablets (5mg, 10mg)”, a nervous system drug for the treatment of dementia, has obtained drug registration approval in China.

SINO BIOPHARM (1099 HK -2.2%) ASCENTAGE (6855 HK -4.5%) 3SBIO (1530 HK -7%) GENSCRIPT (1548 HK +9%) SHANDONG WEIGAO (1066 HK +6.2%) UNITED LAB (3933 HK +7.3%).

*LUXURY BRANDS WEAK . L'OCCITANE INTL (973 HK -4%) said net sales for 2Q fell 22.2% YoY to €274.2m, due to lockdowns and store closures. Sales in Hong Kong -60.9% YoY to €9.32m in the quarter, while sales in China +22.9% to €43.91m. PRADA (1913 HK -3.9%) SAMSONITE (1910 HK -1.6%).

*GOLD MINERS FIRM as Gold breaks and holds above US$1,800 level. Increasingly people are worrying about inflation ahead. ZHAOJIN (1818 HK +1.1%) ZIJIN (2899 HK +1.5%) CHINAGOLD (2099 HK +7.2%).


REGIONAL MARKETS 

JAPAN Market opened lower as expected PMI data was slightly better than forecast. Covid concerns remain. Market then traded sideways/lower through the day Nikkei closed -0.6%

S KOREA Markets opened around flat. Kospi trade sideways around yesterday’s closing level and closed -0.01%. The Kosdaq initially dipped but rebounded and then traded sideways lower above yesterdays closing level. Saw a small bounce at the end to close +0.6%

TAIWAN Opened higher and traded sideways just above yesterday’s closing level to finish +0.6%


NEWS
MARKET HOURS
Chinese Foreign Ministry Spokesperson reprimanded the US of politically provoking China by telling China on 21 July to shut down her Houston Embassy.
Beijing vigorously accused Washington of the wrongful decision, said the spokesperson, and Washington should revoke this decision immediately, or Beijing will make rightful and necessary responses.

PING AN (2318.HK) backed Lufax (Shanghai Lujiazui International Financial Asset Exchange) may float on the US stock market as soon as this year, Reuters cited several sources. The company has so far engaged Bank of America, Goldman Sachs, HSBC, JP Morgan and so on to deal with the listing work. The IPO fund-raising amount and share offer scale remain undecided.

SUNNY OPTICAL (2382.HK) and South Korea's Semco will in 2H20 and 2021 become a part of Apple's supply chain, Ming-Chi Kuo, a prominent Apple analyst at TF International Securities, wrote in a report.

TENCENT (700.HK)'s subsidiary Tencent Dadi Tongtu entered into a cooperation agreement with MapKing, a tech firm in Hong Kong. Under which, both parties will develop internet of vehicles (IoV) and unmanned driving technology together. MapKing will render immediate traffic condition services for the IoV system integrated by TENCENT. MapKing CEO Stanley Ng Wing Fai said an advanced GPS and transport mapping information system will help develop a driverless vehicle model that fits safety standards.

MEITUAN-W (3690.HK) chief scientist Xia Huaxia told Bloomberg that the company is now handling with millions of food orders a day, and expecting the orders to increase 3-4 times in coming five years. Xia said the company wished to cope with the spiking orders by means of AI and robots. At present, an automatic delivery technology is under trial in Beijing. In 3-5 years, the technology is expected to be mature for launch, the chief scientist said.

Singapore Exchange (SGX) and NASDAQ inked a framework document to expand cooperation, facilitating smoother second listing of companies on SGX, Bloomberg reported. Under the new framework, the filings required for second listing on SGX could be based on those contained in the US listing and subsequent filing documents to the US SEC and/ or Nasdaq, contingent on compliance with Singapore's disclosure regulation. The strengthened alliance between the two exchanges amid US-China tensions will intensify competition between Hong Kong and Singapore. Analysis said the tie-up will woo techs' flotation on SGX.

Overnight HIBOR last posted at 0.05012%, logging a 1-month low, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.25679%, down for 9 days, marking a 1-month low.

CATHAY PAC AIR (293.HK) has entered into an agreement with Airbus to hold off the delivery of A350s and A321neos and is in advanced talks with Boeing over putting off its 777-9 shipment.

Volvo Cars announced that its planned merger with Geely has been shelved briefly as GEELY AUTO (175.HK) proposes to list on Shanghai's Sci-tech Innovation Board. The merger talks were expected to resume this fall.

VIVA CHINA (8032.HK) and BOSSINI INT'L (592.HK) jointly announced that all the conditions precedent under the Share Purchase Agreement have been fulfilled. Pursuant to the Share Purchase Agreement, the Offeror acquired a total of 1.093 billion Bossini Shares, representing approximately 66.60% of the entire issued share capital of Bossini, at the Consideration of HK$46.62 million.


PreMarket
China is going to sell rice and wheat from her state reserves to animal feed producers,
Reuters citing insiders. Beijing is doing so in response to high corn prices, said the insiders.

Philips was in talks with Haier, Midea and other Chinese rivals to gauge their interest in buying its home appliance business, Bloomberg citing insiders. The Amsterdam-based appliance giant is also reaching out to Turkey's Arcelik AS and Vestel, as well as Blackstone, CVC Capital and KKR.

CATHAY PAC AIR (293.HK) announced that the Rights Issue Documents will be despatched to the Qualifying Shareholders and Overseas Shareholders who satisfy relevant requirements to its satisfaction on 22 July 2020. However, the Hong Kong government had announced the latest special working arrangements for government employees to combat COVID-19 on 19 July 2020. The Hongkong Post decided that mail delivery services are only being provided twice a week. As a result, mail delivery services may be subject to delay, which could lead to a delay in the receipt by Qualifying Shareholders and Overseas Shareholders of the Rights Issue Documents.

ESPRIT (330 HK) Karen Lo Ki-yan, a substantial shareholder further increased her stake in the latter by adding 12.83 million shares in ESPRIT HOLDINGS on open market on 20 July for $14.2 million. Upon completion, Lo's stake increased to 20.19% from 19.51%. The company also announced yesterday that it received a letter from Lo to withdraw the Requisition to remove the CEO and CFO. Marc Andreas Tschirner, Chiu Su Yi Christin and Wong Hung Wai were appointed as Executive Directors of the Company.

PROSPERITY REIT (808.HK) due to the pandemic outbreak of COVID-19 and its impact on the global and local economy, the appraised value of its investment properties as at 30 June 2020 is expected to be approximately HK$560 million lower than their appraised value of HK$11.13 billion as at 31 December 2019. As a result, the REIT Manager expects PROSPERITY REIT to record a net loss for the six months ended 30 June 2020, as compared to a profit for the corresponding period in 2019.

ZHENGTONG AUTO (1728.HK) has noted certain financial media reports of a default in the repayment of an outstanding instalment of a term loan facility in the principal amount of US$380 million owing by the Company as borrower. The company clarified that the Company has duly repaid 30% of the principal amount of the Loan and interest accrued thereon by two instalments and that due to the outbreak of COVID-19, the Company proposed in advance to the lenders of the Loan to revise the due date for payment of the third instalment in the sum of 25% of the principal amount of the Loan to 19 January 2021. The discussion is in constructive progress, and the parties target to revise the July Instalment repayment date within the next few weeks

President Xi Jinping said China should put forward a more active and productive financial policy and a more solid and flexible monetary policy, Xinhua News Agency cited Xi's speech at a CEO seminar in Beijing yesterday afternoon. The country should also continue to cut taxes and fees, rents and interest rates, to ensure government alleviation showering grass-root households directly, benefiting the market-oriented finance, and supporting export commodities.

China Re entered into a strategic cooperation agreement with CCB (939.HK) (601939.SH) in Beijing. Both parties will commence business innovation and alliance in fintech application, asset management and fund custody, insurance and reinsurance risk protection, and "One Belt, One Road" services and so on, harnessing their respective resources and channel edges, based on mutual benefits.

SINOPEC KANTONS (934.HK) connected transaction for the disposal of its natural gas pipeline business assets to its controlling shareholder, Yu Ji Pipeline Company, for a cash consideration of RMB179 million (HK$195 million). It is estimated that the Group will record a profit before taxation from the Disposal of RMB33.78 million (HK$36.82 million). It also announced that it sold 100% equity interest in Sinopec Yu Ji Pipeline Company Limited to an independent third party, China Oil & Gas Pipeline Network Corporation, for a cash consideration of RMB3.22 billion. It is estimated that the Group will record a profit before taxation from the Disposal of approximately RMB966 million (HK$1.053 billion).

LUK FOOK HOLD (590.HK) sales performance of retail business for Q1 impacted by COVID-19 pandemic, the Group’s overall SSSG was -71%. The SSSG of gold products 067% and fixed price jewellery products -77%.  It is expected to take time for the Mainland tourists arrival to Hong Kong and for retail atmosphere to recover. The Group will net reduce 5 shops in Hong Kong in the coming year, and seek opportunities for opening 2 more shops in Macau during FY2021.   The target for net addition of “Lukfook” shops in Mainland will be not less than 150 shops, while the target for new brands’ stores in Mainland is 50 shops, most of which will be licensed shops.

Read More  

July 21 Wrap HSI +578pts on hopes for New Tech Index


HSI +578pts (+2.3%) 25,636, HSCEI +150pts (+1.5%) 10,445 T/O HK$161.7bn (+19.2% DoD)



EUROPE Markets opened higher in news of a deal on the EU recovery fund.

US Dow Futures opened flat (-30pts) then trended higher on news of an EU recovery fund deal and look to open +170pts with the S&P and NDX higher too.



INDEXES      
CSI 300 Closed +11pts (+0.23%) @ 4,691
Market opened flat but spiked higher and then trended slightly higher in very choppy trading day high was around 10:30am (4,714), then sold down lot the low of 4,661 before a small bounce into lunch.  PM initial selling back to the morning low and then bounced but effectively traded sideways. Sentiment mixed but with Insurance companies allowed to invest more into equities the ‘managed bull market’ has scope to run further. BUT holding back the market is the continue threat of Flooding and Flood damage which could impact the spread/containment of Covid-19. Although the floods are seen as good for infrastructure and resources plays.  Also overhanging the market is the deterioration in China’s international relationships against the back drop of a slowing global economy.


HSI Pre Market HK Pre Market +369pts @ 25,427vs +105 pts ADRs @ 25,162. T/O was HK$7.38b With E commerce names in focus on the new Hans Seng Tech index and the IPO news which saw HKEX +5.7%. Market continued to work higher in choppy trading. PM saw initial selling but then rebounded currently and worked higher through to close at the day high after a 40pt up tick in the closing auction.

Increased Turnover on the announcement of a new Tech Tracker Index from Hang Seng Indexes as HSI portrays itself as a new Tech hub. Property sector, Financials and Telcos likely to see weakness as local investors rotate into the ’new’ sector.


AFTER MARKET
SHK PPT (00016.HK) Having unveiled the first two price lists of Regency Bay, 
announced to launch the Tuen Mun residential project at 10am this Saturday (25 July). A total of 108 flats will be offered, measuring saleable area of 261-437 sq.ft each. The discounted selling prices range $4.6888-7.3004 million sq.ft., i.e. an average of $17,498 per sq.ft.

FIH (2038.HK) announced additional inside information to its Profit Warning, expecting 1H20 revenue to exceed US$3.66 billion, down 42.7% yearly, and 1H20 consolidated net loss to approximate, or below, US$105 million, against US$83.839 million for 1H19.

HSBC clarified that the layoff plan as rumoured on the social media is groundless. Netizens circulated news recently that roughly 400 workers of the bank will be notified of redundancy.


Market and Pre Market News at bottom of page.

Short Selling HSI Tuesday 18.5% vs 21.3% Monday 

Top Shorts China Res land (1109) 53%, Want Want (151) 43%, China Shenhua (1088) 38%, CCB (939) 36%, Ping An (2318) 32%, Hang Seng Bank (11) 32%, BoC (3988) 29%, Citic (257) 29%, Link REIT (823) 27%, Mengniu Dairy (2319) 27%, China Life (2628) 26%, Country Garden (2007) 26%, Petrochina (857) 26%, New World New (17) 25%.


CONNECT FLOWS 

Shanghai

Northbound Rmb 61,510m Sell 32,605m : 28,906m Buy

Southbound HK$ 15,235m Sell 6,399m : 8,836m Buy

Shenzhen

Northbound Rmb 77,037m Sell 38,175m : 38,862m Buy

Southbound HK$ 14,286m Sell 5,804m : 8,483m Buy


DATA
CHINA
No data

HONG KONG 

Centre for Health Protection said there were 61 additional COVID-19 cases in Hong Kong today; 58 were locally transmitted.

After Market Data

Inflation Rate Jun +0.7% YoY vs +1.5% May (F/cast was +1.7%)

Lowest since March 2017. Prices slowed for food, in particular pork; housing and miscellaneous goods. Additionally, cost of durable goods dropped further while transport prices were unchanged, BUT the cost of miscellaneous services advanced at a faster pace. Also, prices declined less for electricity, gas & water and clothing & footwear. On a monthly basis, consumer prices went down


Active Heavyweights
HKEX (388.HK) +9.8% hits new high
TENCENT (700.HK) +7.9% hits new high
AIA (1299.HK) +1.8% 
CCB (939 HK) -0.5%
PING AN (2318.HK) +0.3%

HSI & HSCEI Constituents on the move
SUNNY OPTICAL (2382.HK) +7.5%
SINO BIOPHARM (1177.HK) +7%, hits new high
AAC TECH (2018.HK) +6.1%
TECHTRONIC IND (669.HK) +5.1%
CHINA TOWER (788.HK) +3.5%
SUNAC (1918.HK) +3.4%

HSMI & HSSI Constituents on the move

CHINA DONGXIANG (3818.HK) +31.8%, hits new high

KINGDEE INT'L (268.HK) +14.4%, hits new high

HUA HONG SEMI (1347.HK) +14.1%

TCL ELECTRONICS (1070.HK) +12.4%, hits new high

WEIMOB INC (2013.HK) +12.1%

HENGTEN NET (136.HK) +11.8%

HUIFU PAYMENT (1806.HK) +10.8%

ZHENGTONGAUTO (1728.HK) -10.7%

XD INC (2400.HK) +10.6%, hits new high

ND PAPER (2689.HK) -10.5%


COMMENT

*TECH & COMPONANTS STRONG as HSI Company to launch the Hang Seng Tech Index on July 27 tracking the 30 largest technology companies listed in Hong Kong that pass the three layers screening criteria; XIAOMI (1810 HK +5%) AAC (2018 HK +6%) SUNNY (2382 HK +7.5%), BYDE (285 HK +7.6%) HUA HONG (1347 HK +14%).

SMOORE (6969 HK +4.3%) +VE profit warning expects interim adjusted net profit to rise 38.1% to 42.9% YoY.

*E-COMMERCE/SOFTWARE STRONG on the HSI Index news; the "ATMX Quartet”; ALIBABA (9988 +7.3%), TENCENT (700 HK +7.1%), MEITUAN (3690 HK +8.5%) and XIAOMI(1810 HK +5%) will make up a third of the index in total. SOFTWARE names including KINGDEE (268 HK +13.5%) KINGSOFT (3888 HK +8.9%) NETDRAGON (777 HK +5.7%) jumped on inclusion speculation.

ANT's plans for an initial public stock offering on both the HKEX and Shanghai Star board also drove sector higher; HKEX (388 HK +9.8%) surged.

ALI HEALTH (241 HK +13%) PA GOOD DOC (1833 HK +10%) after China allows insurance coverage of online medical services.

CH LIT (772 HK -3.5%) to report net loss for 6 months ended June 30, affected by the non-cash impairment of goodwill and trademark rights relating to the acquisition of New Classics Media Holdings in 2018.

*PHARM STRONG on earnings speculation. WUXI APPTECH (2359 HK +6.6%) prelim 1H net income +62.5% to 1.72b yuan. Q2 Net profit Up YoY to 1.14b yuan, while revenue +29% to 4.04b yuan.

FOSUN PHARM (2196 HK +6.6%) SINO BIOPHARM (1177 HK +7%) SSY (2005 HK +7.2%).

*HK PROPERTY MIXED as the one-month HIBOR fell for a seventh consecutive trading day to a near four-year low. Also a survey showed that more than a third of Hongkongers expect home prices to pick up in the second half ALTHOUGH the survey was taken before the latest covid-19 outbreak!

HENDERSON LD (12 HK +1.9%) NWD (17 HK +1.3%) HANG LUNG PROP (101 HK +1.1%) WHARF (4 HK +1.5%).

*PAPER WEAK following yesterday's big gains on speculation paper price to fall and some broker downgrades NINE DRAGONS (2689 HK -10.5%) LEE & MAN (2314 HK -6.7%).

*RESOURCES WEAK as OIL COMPANIES traded softer on the news that SINOPEC (386 HK -0.3%) plans to cut refinery run rates at some of its coastal plants in China this month as massive flooding weighs on demand. PETROCHINA (857 HK -0.8%) CH OILFIELD (2883 HK -0.6%).

METALS mostly dropped on profit-taking following recent strong rebound as long-time laggards. ZIJIN (2899 HK +0.8%) expects its debt ratio to decline significantly after its gold and copper capacity rises. CHALCO (2600 H K-1.9%) JIANGXI COPPER (358 HK -3%) MAANSHAN IRON (347 HK -0.9%).

*OTHER MOVERS: 

ZHENTONG AUTO (1728 HK -10%) misses US$100m loan payment installment.

SUNAC (1918 HK +3.4%) plans to spin off its property management business.


REGIONAL MARKETS 

JAPAN Market opened higher as the Inflation was in-line. Market then traded sideways through the day Nikkei Closed +0.7%

S KOREA Markets opened higher, PPI was better than expected Kospi worked slight better to Close +1.4% and Kosdaq worked better but then eased back slightly late in the session Closed +1.1%

TAIWAN Opened higher and worked higher dipped slightly at the end Closed +1.8%


NEWS
MARKET HOURS
MEITUAN-W (3690.HK) announced that on July 20, 2020, 1.255 million Options
were granted to certain employees of the Company pursuant to the Post-IPO Share Option Scheme. The exercise price of the Options granted was HK$195.98 per Share.

XTEP INT'L (1368.HK) -VE Profit Warning announced that the Group is expected to record an approximately 45% to 55% YoY decrease in its consolidated profit for the six months ended 30 June 2020, as compared to that for the corresponding period in 2019. Said that the core Xtep brand reported retail sell-through growth (including offline and online channels) for the three months ended 30 June 2020 at low-single digit decline year on year. The retail discount level was at 30% - 35%, and the retail

inventory turnover was 5 - 5.5 months.

A-LIVING (3319.HK) +VE Profit Alert. The consolidated net profit and the unaudited consolidated net profit attributable to the Shareholders for the six months ended 30 June 2020 are expected to record a significant increase of not less than 50% and 35%, respectively, as compared to that for the corresponding period in 2019. Also announced a proposed change of company name from “A-Living Services Co., Ltd.” to “A-Living Smart City Services Co., Ltd".

In response to the Wall Street Journal's report that Beijing is pondering over reprisal against Nokia and Ericsson, Chinese Foreign Ministry Spokesperson Wang Wenbin told Global Times that the news is groundless and malicious made-up. Instead, China remains open to inviting the two European telecom giants and other European enterprises to participate in Chinese 5G infrastructure, clarified Wang.

L'OCCITANE (973.HK) announced that total net sales amounted to EUR274 mn during the three months ended 31 December 2020, down 22.2% on both reported and constant rates. In particular, Hong Kong net sales slid 62.1% on constant rates, the gravest in all markets.

The government will launch two residential sites in Tai Po this quarter, where the tender for Tai Po Town Lot No. 243 at Ma Wo Road will close this Friday (July 24), said Alex Leung, Senior Director of CHFT Advisory and Appraisal Limited. The site is located at the end of Ma Wo Road, northwest of Classical Gardens, with a maximum GFA of roughly 782,000 sq.ft. CHFTAA expected the site to sell at $4.25-4.57 billion, with a floor selling price of $5,400-5,800 per sq.ft.

SUNAC (1918.HK) plans to spin off its property management unit for a planned US$1 billion IPO, IFR reported.

SHUANGHUA H (1241.HK) announced the resumption of trading of its shares from 1pm today (21 July). The Company received a fax from the Stock Exchange (the Review Decision Letter) yesterday notifying the Company that the Listing Committee, having considered all the submissions (both written and/or oral) made by the Company and the Listing Division, decided to allow the Company’s review application.

AlipayHK announced that both the number and amount of transactions in 1H20 of the company delivered double-digit-percentage increment on a yearly basis. The number of small-to-medium merchants joining the alliance with the company in June also surged over 44% over a year ago.

In 2020, Hong Kong's retail sales will possibly slide 19.7% yearly to $346 billion, against the early-20 forecast for a 2.5% fall to $420 billion, said Michael Cheng, Asia Pacific & Hong Kong/China Retail & Consumer Leader, Assurance Partner at PwC Hong Kong. The actual drop may turn out even bigger than 19.7% unless Hong Kong can achieve customs clearance by November-December, opined Cheng.

BABA-SW (9988.HK) announced to expand its reach to consumers by working with Starbucks' upgraded mobile ordering services, "Starbucks Now". Consumers can place online orders on "Starbucks Now" conveniently for pick-up at stores. The "Starbucks Now" services will be available via Taobao, Amap, Koubei and Alipay through the Alibaba Business Operation System.

Overnight HIBOR last posted at 0.05196%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.25964%, down for 8 days, marking a 1-month low.

US Department of Agriculture announced that China had acquired additional 132,000 tonnes of U.S. soybeans for FY20/21 shipment, cited Reuters.

GREATWALL MOTOR (2333.HK) unveiled three major tech brands yesterday, namely a global intelligent modular design platform called "Lemon", a global smart and professional off-road platform called "Tank", and a smart system for future mobility called "Coffee Intelligence”. The launch will accelerate the transformation of Chinese carmakers to globalized tech mobility companies.

TENCENT (700.HK)'s WeChat Mini Games announced an upgrade to its refund system for minors, under which their guardian may file for refund for their mistaken top-up or irrational spending.

HKTV (1137.HK)'s HKTVmall announced that it will be running four online exhibitions in August 2020, namely online book fair, electronic gadget fair, infant appliance fair and toy fair, in light of several recently postponed major exhibitions amid the deteriorating coronavirus pandemic. The online shopping mall stated that major merchants will be invited to set up online shops on its platform at privileged commission.

Hong Kong's unique position in international economy and financial system is driven by its unreplicable edges, according to S&P Global Ratings. However, these edges are at risk of erosion under higher policy uncertainty, fraying social cohesion and competition from China which makes Hong Kong less distinctive. S&P modeled the city's economy growth to slide to 1.1% for 2030E. Economic growth slowdown would be inevitable, since Hong Kong is one of the Asian regions with the fastest population ageing.


PreMarket
Ant Technology Group Pre listing report
was founded in October 2000, with a registered capital of around RMB23.78 billion and Eric Jing as its legal representative, Securities Times' egsea cited Tianyancha. Hangzhou Alibaba is the largest shareholder of Ant Group, with a 33% shareholding. Other shareholders include China Life Insurance (Group) Company, National Council for Social Security Fund, and NCI (01336.HK)

CICC (3908.HK) announced proposed amendments to the plan and authorization for the A Share Offering. The number of A Shares to be publicly issued by the Company will be no more than 1.438 billion Shares, as compared with up to 459 million shares as previously planned.

Chinese Government is pondering over reprisal against Nokia and Ericsson if the European Union countries follow the lead of America and Britain in barring Huawei from their local 5G network contruction, as the Wall Street Journal quoted from people familiar with the matter.

MTR CORPORATION (66.HK) announced that it will temporarily adjust the non-peak hour train frequency of various railway lines starting from tomorrow. Train services during weekday peak hours will remain unchanged. Under the new arrangements, non-peak services and services on Saturdays, Sundays and public holidays on the Tsuen Wan, Kwun Tong, Island, South Island, Tseung Kwan O, East Rail and West Rail lines will be maintained at an average interval of around 3.5 to 8 minutes. Passengers may experience an extra waiting time of between about half a minute and two minutes on average during non-peak periods.

XIAOMI-W (1810.HK) Non-executive Director Liu Qin disposed of 12.2044 mn shares of the company on open market and cashed in a total of $206 mn, according to the shareholding disclosures on the Stock Exchange.

The Indian government identified at least seven Chinese firms operating locally with alleged links with People's Liberation Army (PLA) and overseas intelligence collection for the Chinese government, reported Indian media. The identified firms include BABA-SW (9988.HK), TENCENT (700.HK), Huawei and SAIC MOTOR (600104.SH). New Delhi is weighing up restrictions to reduce their involvement in the country's economy.

Pinduoduo, a Chinese e-commerce operator, was accused of inflating the gross merchandise volume (GMV) in 1Q. A Chinese media quoted Pinduoduo Strategy Vice President Jiuding's response that the data was properly disclosed, stressing that the calculation basis of the GMV aligned with those of BABA-SW (9988.HK) and JD-SW (9618.HK). The measurement is based on the total value of all confirmed orders of goods and services on the platform, including actual sales, delivery and returns, Jiuding said.

Former Federal Reserve Chairs Ben Bernanke and Janet Yellen co-wrote in an article that the central bank should look into the financial market breakdown in March and that massive hedge fund sell-off in the early days of the coronavirus outbreak had triggered the market malfunction The coronavirus crisis will possibly severely damage the economy and sharply shore up credit loss despite the strong financial presence of banks, opined the pair.

Airwallex, a global cross-border payment company, announced that Alibaba Entrepreneurs Fund had joined its round D+ financing and become a new investor. In April, Airwallex had completed round D financing of US$160 million. Its existing investors include TENCENT (700.HK), Sequoia Capital China, DST Global, ANZi Ventures, Salesforce Ventures, Horizons Ventures and so on.

BOC HONG KONG (2388.HK) announced the introduction of BOCHK iGTB MOBILE, whereby corporate users may handle payment, money receipt, payroll, deposit, trade financing through mobile gadgets and flexibly tweak and review different authorisation and empowerment online.

Chinese Embassy in the UK expressed vigorous discontent and objection against multiple moves made by the UK in regards of Hong Kong National Security Law. China deemed the UK was making mistakes in meddling with Hong Kong affairs, which are internal business of China. China called on the UK to stop any means of intervention in Hong Kong affairs immediately, and not to got herself into deeper troubles, or else the UK will only eat the bitter fruit of its own making.

CHINA LIT (772.HK) Profit Warning.The Group is expected to record a net loss for the six months ended June 30, 2020 as compared to a net profit for the corresponding period of last year. One of the reasons is that the Group expected non-cash impairment of goodwill and trademark rights of an amount ranging from RMB3.7 billion to RMB4.7 billion, relating to the acquisition of New Classics Media in 2018, a subsidiary engaging in TV series, web series and film production and distribution in China.

REGAL INT'L (78.HK) Profit Warning expecting a net loss in excess of HK$800 million for the 2020 Interim Period, while a profit of HK$379 million was recorded for the comparative six months in 2019.

CHINA RAILWAY (390.HK) announced that the aggregate value of new contracts for the first half of 2020 amounted to RMB870.34 billion, up 24.1% yearly.

CAR INC (699.HK) announced that UCAR, a substantial shareholder of the Company, has received a notice from the CSRC, it initiated an investigation on UCAR in connection with suspected violations of information disclosure laws and regulations by UCAR. The UCAR Investigation has not restricted the business and operations of UCAR.

CAR INC (699.HK) announced that UCAR, the substantial shareholder of the company, and Amber Gem terminated the transfer of 28.92% share capital of the company to SAIC HK, a wholly owned subsidiary of SAIC MOTOR (600104.SH). Meanwhile, UCAR and Amber Gem would transfer 28.91% share capital to Jinggangshan BAIC, involving approximately 613 million shares for a total consideration of $1.901 billion.


Read More  

July 20 HK WRAP HSI -31pts  T/O +5% Shorts @ 21%


HSI -31pts (-0.1%) 25,058, HSCEI +92pts (+0.9%) 10,295 T/O HK$135.61bn (+4.7% DoD)


EUROPE Markets opened lower as EU leaders failed to reach agreement over the EU recovery fund. Dax rebounded into the green but drifting lower. FTSE hit resistance at Friday’s close. CAC recovered into the green but dipped back into the red

US Dow Futures opened flat +45pts but have edged slightly higher in the morning but have since dipped and are currently indicating -50pt, with the S&P and NDX also indicting lower. Caution over the covid impact on the economy and the fact that earnings season is underway.


INDEXES      CSI 300 Closed  136pts (+3%) @ 4,680. Market opened higher and saw initially selling at China left its Loan Prime Rate unchanged as expected.  Market found support at Friday’s closing level and the then worked higher through the morning to close at 4,660 at lunchtime.  Market then trade sideways for the next hour with support at 4,640 before working higher into the close.  Signs of a rebound last weeks sell-off with rotation out of recent favourites like Pharma and BioTech into Financials and Industrials.  Which is strange considering the Govt took over a number of Financial institutions from theTomorrow Group at the weekend but the PBoC did announce linking its bonds markets.  But the overall action suggest Team China remains the main player.


HSI Pre Market HK HK Pre Market -70pts @ 25,020 vs +20prs ADRs @ 25,109  T/O HK$1.7b with E-Commence names mixed, Handset Components +VE There was a 150pts spike before selling down 400pts in the first 20 mins to the day low 24,766. Market then worked higher in choppy trading to the day high just before lunchtime 25,222. After lunch some initial selling but this time it found support at Friday’s closing level. Then traded sideways until 3pm when further selling came in taking. The market down to 24,990 level before it climbed back above 25,000 into the close. Sentiment cautious with a number of profit warnings over the weekend along with increased covid cases and a reimposition of social distancing requirements; all -VE. Despite the low pre market volume the morning recovery for the HSI suggests that Team China is back to support the market. Local sentiment is weak on the threat of sanctions overhanging the market combined by renewed strict social distancing measure. Worth noting that whilst the administration is saying nothing will change due to the US enacting the HK Autonomy Bill the HKMA was discussing with banks alternatives in case it loses its special status.


AFTER MARKET
Didi Chuxing, a ride-hailing company in China, plans to ignite an IPO in Hong Kong 
as fast as this year, according to the sources of chinastarmarket.cn. The company is now in talks with investment banks for the IPO with a target valuation of approximately US$80 billion, equivalent to over HK$600 billion, which is likely to become one of the biggest IPOs in Hong Kong in recent years.

CHINA TELECOM (728.HK) June, the mobile subscribers numbered 343.47 million with a net increase of 2.27 million, among which 5G package subscribers had a net increase of 7.79 million, slackening from 8.35 million in May.

MIRAMAR HOTEL (71.HK) -VE Profit Warning, expecting that the revenue and profit attributable to shareholders during the six months ended 30 June 2020 will be significantly reduced as compared with the corresponding period in the year of 2019.

ADTIGER CORP (1163.HK) +VE Positive Profit alert. The Group is expected to record an increase in adjusted net profit (which is a non-HKFRS measurement and is calculated by excluding the effect of one-off listing expenses) of not less than 40% as compared with the adjusted net profit for the six months ended 30 June 2019 (which is a non-HKFRS measurement and is calculated by excluding the effect of one-off listing expenses).

FULUM GP HLDG (01443.HK) has been notified by Centre for Health Protection that four patients diagnosed with novel coronavirus had on 11 July been to Fulum Restaurant at Tuen Mun Central Square. In order to guarantee the health and safety of staff and customers, the eatery group has shut down the said branch for four days with immediate effect for throughout disinfection and sterilisation until 24 July.

Macau's Statistics and Census Service (DSEC) indicated that there were 22,556 visitor arrivals in June 2020, a decline of more than 90% YoY. Same-day visitors and overnight visitors totalled 13,205 and 9,351 respectively. In the first half of 2020, number of visitor arrivals reduced by 83.9% YoY to 3.2689 million.

Alipay's owner Ant Group (formerly known as Ant Financial) today announced to kick-start the simultaneous IPO plan on the Main Board of HKEX (388.HK) and Sci-Tech Innovation Board of Shanghai Stock Exchange. Under which, Ant Group looks to ramp up domestic consumption by underpinning digital upgrades for the service industry. The group also seeks sustainable development through stronger global team-up and support for its technological R&D and innovation. +VE for HK EX (388 HK)

WUXI APPTEC (2359.HK) +VE PROFIT WARNING total operating revenue for the first half of 2020 was expected to grow around 22.68% yearly to RMB7.23 billion. Net profit was expected to rise roughly 62.49% yearly to RMB1.72 billion, and basic EPS up by about 63.04% yearly.

CHINA UNICOM (762.HK) aggregate number of mobile billing subscribers amounted to 309.5 million in June 2020, representing net addition of 783,000 for the month. During the month, the aggregate number of 4G subscribers neared 261 million, representing net addition of 2.503 million for the month vs 1.905 million for May.

Hang Seng Indexes Company announced that it will launch the Hang Seng TECH Index on 27 July 2020 (Monday). This new index will track the 30 largest technology companies listed in Hong Kong that pass the index’s screening criteria.

Rankings|Stocks|Weightings

1 |BABA-SW (9988.HK |8.53%

2 |TENCENT (700.HK) |8.52%

3 |MEITUAN-W (3690.HK) |8.33%

4 |XIAOMI-W (1810.HK) |8.11%

5 |SUNNY OPTICAL (2382.HK) |8.02%

6 |SMIC (981.HK) |5.96%

7 |ALI HEALTH (241.HK) |5.08%

8 |JD-SW (9618.HK) |4.84%

9 |KINGDEE INT'L (268.HK) |4.47%

10 |PA GOODDOCTOR (1833.HK) |3.98%


SMOORE INTL (6969.HK) -VE Profit Warning the Group expects that the profit and total comprehensive income for the six months ended 30 June 2020 will decrease by approximately 89.1% to 94.0% compared to that of the six months ended 30 June 2019. On an adjusted net profit basis, the Group expects to record a profit in the range of approximately RMB1.286 billion and RMB1.331 billion for the Period compared to a profit of approximately RMB931 million for the Comparable Period, representing an increase ranging from approximately 38.1% to 42.9%.

HSBC Insurance, CEO said online insurance applications have indeed burgeoned during the COVID-19 epidemic, citing a sharp increase in online applications for insurance coverage in the first three months of 2020 and the first half of year. The insurer believed this trend should persist even after the pandemic eases.


Market and Pre Market News at bottom of page.


Short Selling HSI Monday 21.3% vs 22.3% Friday

Top Shorts CCB (939) 43%, Hang Seng Bank (11) 38%, Sands China (1928) 38%, Ping An (2318) 38%, Mengniu Dairy (2319) 34%, Sunny Optical (2382) 33%, HSBC (5) 33%, MTRC (66) 32%, Galaxy (27) 30, China Shenhua (1088) 30%, New World New (17) 29%, BoC (3988) 28%, Wharf REIC (1997) 25%


CONNECT FLOWS 

Shanghai

Northbound Rmb 66,944m Sell 32,300m : 34,644m Buy

Southbound HK$ 16,624m Sell 6,929m : 9,695m Buy

Shenzhen

Northbound Rmb 83,475m Sell 45,859m : 37,616m Buy

Southbound HK$ 15,855m Sell 7,047m : 8,808m Buy


DATA
CHINA

Loan Prime Rate 1 year 3.85% no change as expected

Loan Prime Rate 5 year 4.65% no change as expected


HONG KONG Centre for Health Protection said there were 73 additional COVID-19 cases in Hong Kong today; 66 were local transmission -VE

After Market Unemployment Jun 6.2% vs 5.9% May (F/cast was 6.3%)

The unemployment rate (not seasonally adjusted) increased across almost all the major economic sectors, with more distinct increases observed in the decoration, repair and maintenance for buildings sector; import and export trade sector; and warehousing and support activities for transportation sector.

As to the underemployment rate, increases were mainly seen in the transportation sector and education sector.

Commenting on the latest unemployment figures, the Secretary for Labour and Welfare, Law Chi-kwong said the labour market continued to deteriorate for the second quarter of 2020 as a whole, but the pressure faced by the labour market showed signs of easing towards the end of the quarter as the local epidemic situation abated in May and June. The launch of the Employment Support Scheme also helped counter the headwinds facing the labour market. WORTH noting that was before the latest wave of Covid cases -VE


Active Heavyweights
PING AN (2318.HK) +1.7%
CCB (939 HK) -0.5%
TENCENT (700.HK) +0.3%
AIA (1299.HK) -0.3% 
HKEX (388.HK) -0.2%

HSI & HSCEI Constituents on the move
BYD COMPANY (1211.HK) +12.2%
CHINA LIFE (2628.HK) +8.3%
CONCH CEMENT (914.HK) +7.9%
CITIC SEC (6030.HK) +6.9%
WHARF REIC (1997.HK) -5.9%
SUNAC (1918.HK) +5.3%
CHINA TAIPING (966.HK) +5.2%
SHIMAO GROUP (813.HK) +5.2%
GALAXY ENT (27.HK) -3.9%
CPIC (02601.HK) -3.9%
CHINA VANKE (02202.HK) +3.6%
CONCH VENTURE (00586.HK) +3.4%
CHINA RES BEER (00291.HK) -3.1%
TECHTRONIC IND (00669.HK) -3%

HSMI & HSSI Constituents on the move

COMEC (317.HK) +22.4%

HUABAO INTL (336.HK) +15.8%

CNBM (3323.HK) +13.9%

PANDA GREEN (686.HK) +13%

NCI (1336.HK) +10.8%

AVICHINA (2357.HK) +10.7%

WISDOM EDU INTL (6068.HK) +10.6%

WESTCHINACEMENT (2233.HK) +10.3%

ZOOMLION (1157.HK) +10.1%, hits new high

CHINAGRANDPHARM (512.HK) +8.3%, hits new high

SINOTRUK (3808.HK) +7.8%, hits new high

CHINA LESSO (2128.HK) +5.8%, hits new high

CHINA EDU GROUP (839.HK) +4.7%, hits new high


COMMENT

*CHINA BANKS FIRM after China took a further step in integrating its fragmented bond markets. The PBOC said on Sunday China to integrate trading of US$14t local bond markets. The regulators will allow market intermediary agencies for the two venues to connect issuance, trading & settlement. CMB (3968 HK +2.3%) ICBC (1398 HK +0.4%) BOC (3988 HK +0.4%) ABC (1288 HK +0.7%).

Largely ignoring the news of the Govt taking over more of the Tomorrow Group’s companies.

*CHINA INSURERS STRONG as CBIRC announced that insurers are allowed to increase equity investment up to 45% from 30%, some expect more industry reform ahead. Also means more ammunition for Team China to support the rally. CH LIFE (2628 HK +8.3%). NCI (1336 HK +10.8%) CH TAIPING (966 HK +5.2%) CPIC (2601 HK +3.9%).

*E-COMMERCE FLAT. Australia is considering an investigation into social media platforms such as TikTok, according to local newspaper. The probe will not be a formal public inquiry, but will look at the security threats posed by TikTok, as well as WeChat and Weibo; TENCENT(700 HK +0.3%). ALIBABA (9988 HK +0.3%) traded within range after SoftBank quiet sold another US$2.2b of Alibaba stake via options with 2024 expiry.

*HK PROPERTY WEAK as the third wave of Covid-19 infections continued to weigh on the property sector; secondary market transactions at 10 blue-chip housing estates were -28% WoW to 10 over the past weekend, said Centaline.

Also news that purchasers walking away from deposits of HK$250m +10% YoY

CKA (1113 HK -1.3%) NWD (17 HK -0.5%) HENDERSON LD (12 HK -0.9%). SHKP (16 HK -1.3%) released 50 flats in the second price list of Regency Bay in Tuen Mun yesterday, at an average price of HK$17,991 psf after discounts, 4% higher than the first price list. SHKP has received around 1,000 checks for the 138 units in the first 2 price lists, making them together 6X oversubscribed.

*MACAU CASINOS WEAK after the Macau Gaming Inspection and Coordination Bureau announced that gross gambling revenue -83.39% QoQ (-95.59% YoY). The second-quarter gross gambling revenue was 3.23b Macau pataca. Revenue from the VIP rooms -89.85% QoQ or -95.65% YoY.

SANDS (1928 HK -2.5%) GALAXY (27 HK -3.9%) WYNN (1128 HK -2.6%).Taking with a friend in Macau over the weekend they said there are still more staff that guests.

*BUILDING MATERIALS & EQUIP STRONG As I mentioned investors expect increased demand following the recent flooding. ASIA CEMENT (743 HK +9.4%) despite expecting Jan-June profit to fall 40%-45% YoY due to declines in sales volume and selling prices amid virus outbreak.BBMG (2009 HK +8.7%) CONCH CEMENT (914 HK +7.8%) BBMG (3323HK +14%).SANY (631 HK +4.2%). ZOOMLION (1157 HK +11%) WEICHAI POWER (2338 HK +4.6%)

*AIRLINES FIRM as Chinese domestic travel gradually picks up. AIR CHINA (753 HK +1%) June Passenger traffic -64.9%. CH EASTERN (670 HK +1.4%) June passenger traffic -61.5%. CHSOUTHERN (1055 HK +1.1%) June passenger traffic -53.3%.

*COMMODITIES STRONG as material prices advanced amid optimism on Chinese economic recovery. CHALCO (2600 HK +9.5%) ANGANG (347 HK +2.4%) JIANGXI COPPER (358 HK +5.1%) MAANSHAN IRON (323 HK +4.3%).

*AUTOS STRONG BYD (1211 HK +12.2%) on the news that China is pushing automakers to improve fuel economy of combustion vehicle while promoting electri vehicles. DONGFENG (489 HK +3.6%) GREATWALL (2333 HK +3.3%) BRILLANCE (1114 HK +3.5%).FT reports Volkswagen to focus its EV car production on China


REGIONAL MARKETS 

JAPAN Market opened slightly higher but has trended lower. Pre market data was not as good as had been hoped for and combined with increased covid cases sentiment remains weak. Market dipped to just below Friday’s close then worked higher to Close +0.1%

S KOREA Markets opened higher but trended lower for the first hour before staging a bounce back but failed to break above Friday’s closing level Closed Kosdaq -0.2% and Kospi -0.1%

TAIWAN Opened higher but initially sold down in the first 15 minutes but worked its way back and traded just below flat for the rest of the day. Closed -0.1%



NEWS
MARKET HOURS
Nestle has started exploring the best option for its Chinese bottled water business
which may involve a potential disposal, according to China Business Network. Nestle's Chinese bottled water arm is formed by local brands like Nestle Pure Life, and premium brands like Perrier and S.Pellegrino.

In 1H20, the number of registered equitable mortgages of residential properties reached 3,528, plunging 4,187 from 2H19, said Centaline Property. The figure was an all-time now HoH since 2017.

The Buildings Department approved 19 building plans in May, with five on Hong Kong Island, five in Kowloon and nine in the New Territories. Of the approved plans, nine were for apartment and apartment/commercial developments, three were for commercial developments, three were for factory and industrial developments, and four were for community services developments.

JLL said the coronavirus crisis is hurting the Asia-Pacific property market deeper in 2Q20 than 1Q20. In 1H20, Asia-Pacific property investment shrank 32% yearly. 2Q20. turnover slid 39% yearly, steeper than 1Q20's 26%.

Large global banks' wealth management divisions are examining if their clients are tied with pro-democracy movements in Hong Kong, in an attempt to shun troubles as a result of the new national security law, Reuters citing people with knowledge of the matter. Such banks include Credit Suisse, HSBC (5.HK), Julius Baer Gruppe and UBS.

Beijing Automotive Group (BAIC Group) intended to rekindle the proposed acquisition over CAR INC (699.HK), Cailian Press reported. On 1 June, CAR INC had announced it had nailed a non-legally binding strategic cooperation agreement with BAIC Group. Later in the afternoon, just before the close Ucar announced that it intended to transfer no more than 443 million shares of CAR INC (699.HK) to Jiangxi Jinggangshan BAIC Investment Management Co., Ltd. or other designated third party. Upon completion, the company will no longer hold any shares in CAR INC.

Today, SAIC announced that it ceased the acquisition of CAR INC's shares.

SAIC MOTOR (600104.SH) announced that its wholly owned subsidiary SGMW (HK) had earlier entered into an acquisition offer with Ucar and Amber Gem for the proposed acquisition of not more than 613 million shares of CAR INC. However, new condition came up during the course of negotiation of subsequent equity transfer agreement. Both parties failed to reach consensus on condition precedents to completion within the planned time frame. SGMW (HK) decided to terminate the deal to protect the company's interest. Trading in the shares of CAR INC (699.HK) has been halted at 1:00 p.m. today (20 July). The stock last traded at $2.93, slumping 4.9%, before trading halt.

Standard Chartered announced that it is setting up a Standard Chartered Greater Bay Area Centre in Tianhe District, Guangzhou, with a total investment of US$40 million (approximately HK$310 million). It is expected to be put into operation this quarter and the number of its employees will exceed 1,600 by the end of 2023. It will be located in Guangzhou International Commerce Center (Guangzhou ICC), a new landmark for Guangzhou's main axis.

Overnight HIBOR last posted at 0.05024%, logging a 1-month low, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.275%, down for 7 days, marking a 1-month low.

CHINA MOBILE (941.HK) June total mobile customers amounted to 946.7 million; down 240,000 monthly. Cumulative net loss of customers for the Year was 3.538 million. During the month, 5G package customers amounted to 70.199

Inland Revenue Department announced that from July 20, the department will suspend the provision of all of its services, except Central Enquiry Counter, Central Telephone Enquiry, Business Registration Office and Stamp Office. The department further announced that deadlines for tax payments, lodgement of objections and holdover applications, and submission of tax returns and information that fall between July 20 and July 26 will be automatically extended to July 27.

Japan confirmed 477 new COVID-19 cases Sunday, taking the tally to 26,100 (including those on the Diamond Princess ship), reported Kyodo. The death toll reached 999. Of which, Tokyo confirmed 188 infections.

Hong Kong Monetary Authority and sector representatives discussed the US elimination of special treatment and possible sanctions on Hong Kong at their regular meeting, Sing Tao Daily citing sources. HKMA may timely guide the banks to develop contingency plans in case Washington lays out concrete sanction details, according to a source.

China's one-year loan prime rate (LPR) remained unchanged at 3.85% in July, according to data from the People's Bank of China. The five-year LPR remained intact at 4.65%. Both readings were consistent with street forecasts.
HSBC announced that effective today, 20 July, banking hours at all its retail branches will be shortened
from 9:00 a.m. to 4.00 p.m. on Mondays to Fridays. Saturday banking hours will remain unchanged from 9:00 a.m. to 1:00 p.m. The Bank’s three mobile branches will be suspended until further notice.

Standard Chartered (Hong Kong) stated that banking hours at all its retail branches will be shortened to 9:30 a.m. - 4:30 p.m. on Mondays to Fridays, and Saturday banking hours to 9:30 a.m. - 12:00 p.m.

Social Distancing As a result of over 100 additional confirmed coronavirus cases yesterday, Chief Executive Carrie Lam announced tightened anti-pandemic measures, including extending the coverage of the mask-wearing order from public transport to indoor public premises and stretching the ban on dinnertime dine-in services by seven days. Harsh social distancing may be coming back unless the plague goes less rampant, furthered the city leader. Regarding Legislative Council Election, slated for 6 September, as a solemn matter, Lam stated that there is no change to the schedule up to now.



PreMarket
China confirmed 22 additional COVID-19 cases yesterday
(19 July), including 5 imported cases (in Sichuan, Inner Mongolia and Shandong) and 17 local infections (all in Xinjiang), National Health Commission reported.

BOC HONG KONG (2388.HK) notified its customers and the general public that in view of the current novel coronavirus outbreak, 11 branches in Kowloon and New Territories will be suspended from 20 July 2020 (Monday) until further notice. More than 180 BOCHK branches across the city will maintain normal services and the bank will continue to fully support the community efforts against the outbreak and adopt necessary sanitisation practices in all branches.

BABA-SW (9988.HK) recorded agricultural product transaction value of around RMB200 billion last year, where Tmall sold over 250,000 tonnes of unsalable farm goods in more than four months, revealed by a report from AliResearch and the Center for Agricultural and Rural Development

ALI HEALTH (241.HK) stated on Weibo that reports on BABA-SW (9988.HK)'s stake cut to 67.51% by dumping about 154 million shares of the Company were merely fake news. The healthcare service provider called on the market to clarify the truth.

Paul Chan in response to concerns from certain financial firms about National Security Law, wrote on his blog that the legislation only targets four kinds of behaviour and activities in extreme erosion to national security and that their business will be running as usual as long as they operate under the existing local statutory framework. The so-called sanctions from the U.S., despite doubts triggered thereby, have limited impacts on Hong Kong economy, added Chan. However, Washington's behaviour has seriously breached international law and basic principles of international relation and fallen into double standard and hegemony.

Canalys wrote in a report that smartphone shipments in India fell 48% yearly to 17.30 million devices in the second quarter of 2020, as the nation economy was stalled by epidemic in 2Q. In terms of brands, XIAOMI-W (1810.HK)remained at the top spot, whose shipment however sank 48% yearly to 5.3 million units.

SHOUGANG RES (639.HK) said that a conditional cash offer will be made by the Company, subject to the fulfilment of the Conditions, to buy-back for cancellation up to the Maximum Number of Shares, being 250 million Shares, representing approximately 4.72% of the total issued Shares at the Offer Price of HK$2 per Share. The deal will involve HK$500 million which will be funded by internal resources. The company applied for a trading resumption with effect from today.

Macau Novel Coronavirus Response and Coordination Centre announced that the city extends quotas for COVID-19 testings to 7,500 from 5,000 per day from today as Macau-Guangdong custom has been running smoothly after residents have been familiar with the conversion of health codes between the two cities, Xinhua News Agency reported.

China Passenger Car Association predicted a monthly seasonal decline in China's auto retail sales for July 2020. However, the figures may deliver a slight growth due to lower base in July 2019. The July auto retail sales is estimated at 1.53 million units.

RICI HEALTH (1526.HK) announced that it acquired a 30% equity interest in each of the 7 medical examination business subsidiaries from a connected person, Shanghai XDWYS, at a total consideration of RMB155 million.

TESSON HOLDINGS (1201.HK) announced the audited annual results for 2019. The loss amounted to HK$104 million, against a net profit of HK$59.16 million. LPS equaled HK8.77 cents. No final dividend was declared.

AMBER HILL FIN (33.HK) to place up to 223 million new shares, representing 16.67% of the share capital of the Company as enlarged. The gross proceeds will be HK$23.5 million.

E-COMMODITIES (1733.HK) announced that the Company on 17 July repurchased an aggregate of 1.584 million shares of the Company at $0.196-0.201 per share, involving approximately $316,000.

TOWN HEALTH (3886.HK) expected to record a loss of not less than HK$80 million for the six months ended 30 June 2020, as compared with the profit for the six months ended 30 June 2019 of HK$26.9 million.

CH DISPLAY OPT (334.HK) expected to record a net loss of over RMB120 million for the 6 months ended 30 June 2020, compared to the net profit of RMB10.6 million for the 6 months ended 30 June 2019.

LIFESTYLE INT'L (1212.HK)  expected to record a loss of HK$280 million for the six months ended 30 June 2020, as compared to a profit of HK$1.286 billion recorded in the corresponding period last year.

Read More  

July 17 HSI +119pts but T/O -36% DoD short rise.


HSI +119pts (+0.5%) 25,089, HSCEI +70pts (+0.7%) 10,204 T/O HK$129.52bn (-35.2% DoD)



EUROPE Markets opened flat initially trended lower but now working higher as EU leaders meet for stimulus talks.

US FUTURES opened +60pts and initially climbed but eased back to flat. I would expect a mixed open with Options expiry confusing early trading . Rising covid cases suggest more caution.



INDEXES      
CSI 300 Closed  +29pts (+0.6%) @ 4,545
Market opened higher and saw an initially rally to the day high 4,600 around 10:30 but with lighter volumes it lacked conviction and that prompted selling down into lunch. PM saw an initial bounce which was sold down and then the market trended higher into the close. Retail much less apparent following the late losses yesterday.

SMIC closed -7% following yesterday’s 200% rise.

President Xi Jinping pledged to provide a better business environment for foreign firms as the US seeks too get supply chains moved out of China. Chinese companies come under increased scrutiny abroad for various reasons


HSI Pre Market +171pts @ 25,142 vs +152pts ADR's @ 25,123 With E-Commerce names, Handset names and Financials +VE A choppy open between shorts being squeezed and margin call selling but once that was out of the way the market worked to the day high 25,264 around 10:30am but with light volumes it lacked momentum and then sold back down to 25,070 level before a small bounce into lunch. PM saw initially selling down to the day low 25,015 before working back to the lunchtime level and then worked slightly higher to the afternoon high of 25,160 but without conviction and sold down into the close and ticked down 32pts in the closing auction. Local sentiment cautious over the increase in covid-19 cases and concerns over the impact of the new security law on Hong Kong longer term status.



AFTER MARKET
SOLOMON SYSTECH (2878.HK) announced that after the market close on 17 July 2020, the Company granted share options 
to certain employees of the Group to subscribe for a total of 2 million ordinary shares of HK$0.1 each in the capital of the Co

BEXCELLENT GP (1775.HK) PROFIT WARNING The Group is anticipated to record a loss for the year ending 31 July 2020 of not less than HK$16 million as compared to the profit of HK$11.9 million for the year ended 31 July 2019.

Airport Authority Hong Kong announced that for June, the Hong Kong International Airport recorded year-on-year decreases in passengers and flight movements of 99.1% and 71.8% to 59,000 and 9,945, respectively. Cargo throughput saw a decrease of 7.7% to 357,000 tonnes compared to the same month last year.

CHINA SOUTH AIR (01055.HK) announced that in June 2020, passenger capacity measured by available seat kilometres of the Group -43.92% YoY

In terms of cargo operations, in June 2020, cargo capacity (measured by available tonne kilometres - Cargo and Mail) +12.16% YoY

The Government announced that as of 17 July, it has distributed monies or notification of cheque withdrawal to more than 5.3 million qualified residents under Cash Payout Scheme.

Lands Department announced today (July 17) that a site, Lot No. 1003 in Demarcation District No. 214 at Hiram's Highway near Heung Chung Road, Ho Chung, Sai Kung, New Territories, in the 2020-21 Land Sale Programme will be disposed of by public tender. The tender invitation for the lot will commence on July 24 (next Friday) and close on August 21.

It has a site area of about 3,563 square metres and is designated for private residential purposes.

HKMA announced that the composite interest rate, which is a measure of the average cost of funds of banks, decreased by 10 basis points monthly to 0.71 per cent at the end of June 2020.

Hang Seng Indexes Company Limited announced that it will host an online press conference next Monday's afternoon (20 July) to unfold the details on a new technology index.

More than 10 million small shops and merchants have applied for Alipay's nationwide coupon handout this month, giving the incentive to 1 billion shoppers for consumption, reported Chinese media.

SUPERLAND GROUP (368.HK) finished its debut day at $0.7, up 7 cents or 11% against the listing price $0.63, on volume of 61.14 million shares and turnover of $49.03 million. Excluding the handling fees, a book gain of $280 was reported per board lot of 4,000 shares.

Centa-City Leading Index (CCL) last printed at 180.81, +1.04% WoW

CCL Mass last stood at 183.65, +1.11% WoW.

CCL (small-and-medium units) last posted at 181.33, +1.02% WoW

CCL and CCL (small-and-medium units) +1.31% and +1.12% in two weeks, regaining lost ground and nearly hitting a nine-week high. Given ballooning local infections, Centaline Property, foresaw CCL choppiness in the near term with an unchanged uptrend. The index will likely reach 190 in autumn.


Market and Pre Market News at bottom of page.

Short Selling HSI Friday 22.3% vs 19.1% Thursday

Top Shorts Mengniu Dairy (2319) 46%, MTRC (66) 45%, BoC HK (2388) 40%, CCB (939) 39%, China Shenhua (1088) 38%, PetroChina (857) 34%, Hang Seng Bank (11) 34%, HK & China Gas (3) 33%, China Res Land (1109) 32%, Sands China (1928) 29%, SHKP (16) 29%, Henderson Land (12) 28%, HSBC (5) 27%, Tencent (700) 27%, ICBC (1398) 27%.



CONNECT FLOWS (Significantly reduced)

Shanghai

Northbound Rmb 62,852m Sell 31,227m : 31,625m Buy

Southbound HK$ 12,753m Sell 12,753m : 6,631m Buy

Shenzhen

Northbound Rmb 83,069m Sell 41,212m : 41,857m Buy

Southbound HK$ 11,456m Sell 5,049m : 6,406m Buy



DATA
CHINA No data
HONG KONG Centre for Health Protection 
said there were 58 additional COVID-19 cases in Hong Kong today; 50 were local transmission -VE

AFTER MARKET Business Confidence Q3 -11 vs -37 Q2 (F/cast was -32)


Active Heavyweights
HKEX (388.HK) +3.2%
TENCENT (700.HK) +1.6%
PING AN (2318.HK) -0.7%
HSBC (5) -0.7%
AIA (1299.HK) -0.6% 

HSI & HSCEI Constituents on the move
HENGAN INT'L (1044.HK) +7.1%
CHINA RES BEER (291.HK) +5.9%, hits new high
SINO BIOPHARM (1177.HK) +4.4%
TECHTRONIC IND (669.HK) +4.4%
MENGNIU DAIRY (2319.HK) +4.3%
ANTA SPORTS (2020.HK) +3.1%

HSMI & HSSI Constituents on the move

WEIMOB INC (2013.HK) +11.3%

CHINA EDU GROUP (839.HK) +10.9%

CHINA EAST EDU (667.HK) +9.8%, hits new high


COMMENT
*PETROCHEMS MIXED 
as oil ended its two-day rally as the weaker demand outlook was underscored by the OPEC+ decision to taper production cuts and US economic data signaling a slowing recovery in the labour market. CNOOC (883 HK -0.6%) PETROCHINA (857 HK +1.5%) SINOPEC (386 HK -0.9%).

OILFIELD SERVICES (2883 HK +1%) reportedly have accumulated contracts with a value totaled 10b yuan, achieving 79% of its full year target.

*TECH & COMPONENTS MIXED Sentiment remains cautious after news reported that the Federal Communication Comissions is building a list of equipment makers who pose a national security risk, a further clampdown on Chinese components makers, after its earlier ban on Hauwei and ZTE (763 HK- 2.5%). HUA HONG (1347 HK -0.5%) FIT HONG TENG (6088 HK +8%) SMIC (981 HK +1.4%) AAC (2018 HK -0.8%).

*E-COMMERCE FIRM, TENCENT (700 HK +1.4%) ALIBABA (9988 HK +2.4%) JD (9618 HK+2.3%).

APP PROVDERS also saw support, despite news said China's MITT will examine more than 50 mobile apps that are reported to have illegally collected users’ information. CHINA YOUZAN (8083 HK +21%) CH LIT (772 HK +2%) MEITU (1357 HK +0.6%) MEITUAN (3690 HK +2.1%) ALI HEALTH (214 HK +2%) PA GOOD DOC (1833 HK +2%).

*HK PROPERTY WEAK as surging virus cases hurt sentiment and project launches are expected to be affected. SHKP (16 HK -1%) launched its first batch of 88 flats at Regency Bay in Tuen Mun at an average price of HK$17,377 psf after discount, with the cheapest unit priced at HK$4.68m. CKA (1113 HK -1.1%) NWD (17 HK- 1.6%).

*PHARMA MIXED. Some drug makers advanced on drug/vaccine speculation, but correction was seen in selective names as their valuations are seen as stretched following recent rally.

CANSINO (6185 HK -6.7%) as China and Canada reportedly in talks on Cansino's vaccine access.

ASCENTAGE-B (6855 HK -3.8%) CSPC (1093 HK +2.6%) 3SBIO (1530 HK+2.6%).

SINOPHARM (1099 HK -0.1%) and G42 Healthcare have started Phase III clinical trials on a Covid-19 vaccine in Abu Dhbai. opening registration for trial volunteers.

*AIRLINES WEAK as CATHAY PACIFIC (293 HK -1.8%) warned prelim 1H loss of HK$9.9bn. CEA (670 HK +0.4%) CSA (1055 HK -2%) AIR CHINA (753 HK -0.6%).

*BROKERS WEAK as investor sentiment hurt by yesterday’s losses in the A-shs market yesterday, and concerns that the managed bull market would not happen due to sentiment reversal and high valuation. CITIC SEC (6030 HK -1.9%) HTSC (6886 HK -2.3%) CGS (6881 HK -1%) GF (1776 HK -1%).


REGIONAL MARKETS 

JAPAN Opened slightly higher following the US but trended lower through the day Nikkei 225 currently -0.5%

S KOREA Opened slightly higher Kopsi closed +0.8% and the Kosdaq +1.1% having traded sideways for moist of the day.

TAIWAN Opened higher and has traded sideways around flat Closed +0.2%


NEWS
MARKET HOURS 

He Gang, former CTO of Luckin Coffee, has recently joined Nayuki, a trendy beverage store in China, according to mainland media. Nayuki is reportedly considering a stock listing.  It submitted an IPO application in the US in early the year, Nayuki however withdrew her application later as the epidemic took toll on the US stocks and incident of Luckin Coffee has put Chinese concepts at credibility crisis, as the report quoted sources within the circle of Nayuki.  The beverage company may tweak its listing destination to Hong Kong instead, sources added.

After Guangdong-Macau customs clearance measures were updated, the Director of Macao Government Tourism Office, told Macao Daily that it may take a longer while for the city to reclaim the pre-pandemic tourist traffic as nucleic acid test proof is one of the prerequisite for customs clearance. However, a limited amount of tests are available, whereas Mainland's travel pass is still restricted. After the new measures were put into practice, roughly 2,000 visitors entered Macao on a daily basis. A substantial upsurge in the figure is hardly possible in a near future, said the director.

A total of 886 bankruptcy petitions were filed in Hong Kong in June 2020, +35.7% YoY but -57.4% MoM according to data from Official Receiver's Office. An aggregate of 4,497 bankruptcy petitions were submitted in the first half of 2020, up 16.5% annually.

The American Chamber of Commerce in Hong Kong in a statement, expressed its regret the revocation of Hong Kong’s special trade status with the United States under the United States-Hong Kong Policy Act, which it believes will hurt American businesses in Hong Kong.

CATHAY PAC AIR (293.HK) Chief Customer and Commercial Officer Ronald Lam stated that the group is still yet to see any significant signs of immediate improvement. In June 2020, the group operated about 4% of its normal passenger flight capacity, slightly more than that in May 2020. Load factor remained low at 27.3%, and on average the group carried approximately 900 passengers a day only. The group adjusted overall capacity for July to approximately 7% and expected its airlines to operate up to 10% of the normal flight schedule in August.

SWIRE PACIFIC A (19.HK) PROFIT WARNING as CATHAY PAC AIR (293.HK) announced an estimated net loss of approximately HK$9.9 billion for the six months ended 30 June 2020, which compares to a net profit of HK$1.3 billion for the same period in 2019.  Swire Pacific holds 45% of the shares in CATHAY PAC AIR. The share of the estimated net loss of CATHAY PAC AIR which is attributable to the shareholders of Swire Pacific is approximately HK$4.5 billion.

CATHAY PAC AIR (293.HK)  PROFIT WARNING. In its 2019 annual results announcement dated 11 March 2020, the Group had disclosed that it expected to incur a substantial loss for the first half of 2020. For the six months ended 30 June 2020, the Group expected to record a net loss of approximately HK$9.9 billion, which compares to a net profit of HK$1.3 billion for the same period in 2019. This includes impairment charges amounting to approx HK$2.4 bn, which mainly relate to 16 aircraft that are unlikely to re-enter meaningful economic service again before the 2021 summer season together with certain airline service subsidiaries assets. This estimated interim net loss is in the process of being reviewed by our auditors and may be subject to adjustments.

HKEX has given a green light to TIGERMED (300347.SZ)'s secondary listing application, which may raise around US$1.0 billion, Bloomberg citing insiders.

Overnight HIBOR last posted at 0.06875%, logging a 1-month low, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.29411%, down for 6 days, marking a 1-month low.

TENCENT (700.HK)'s Honor of Kings was the world's top-grossing mobile in June, amassing 50.4% YoY more revenue to US$193 million, according to Sensor Tower's report. 95% of the user spending was from China, followed by 2.1% from Thailand and 1.8% from Taiwan. Its PUBG Mobile came in second, with gross revenue of US$168 million in June (+12.8% YoY). 53% of the revenue was from Game For Peace, its localized version in China.

NBS: PRC 2Q20 Financial Sector GDP +7.2% YoY China’s GDP for the financial sector +7.2% yearly in Q2 according to preliminary calculation by National Bureau of Statistics. The GDP +4.1% annually for the real estate sector, and -18% yearly for the accommodation and catering industry.

Macau's GGR MOP3.234 billion for 2Q20, -95.6% YoY from MOP73.351 billion in 2Q19. Macau's VIP GGR reached MOP1.503 billion in the quarter, with weighting down to 46.47% from 47.2% YoY.

The PBOC mounted a RMB200-billion seven-day reverse repos today by way of interest rate tender with the rate staying flat at 2.2%, in a bid to maintain the reasonably sufficient banking liquidity of China.
JD-SW (9618.HK) announced that the "All-channel 88 Shopping Festival" co-organized with Walmart kick-started on 16 July. This year, the event invited TENCENT (700.HK) to join as well.
The three parties are poised to satisfy customer demand online and offline by integrating multiple consumption scenarios and pooling 180+ premium brand merchants through flagship stores of Walmart on JD-SW and over 400 physical outlets of Walmart in China and mini programs.

BABA-SW (9988.HK)'s UCWeb sacked its employees in India due to the country's ban on UCWeb which consistently disrupted the company's service capability in India, Reuters cited sources. UC Browser has 130 million active users in India. Prior to the ban, India had already forbidden 59 mobile apps from China, including UC Web’s browser and two other products.

TSMC confirmed it has put a brake on processing new orders from Huawei to comply with American export regulations, reported foreign media. TSMC Chairman Mark Liu said the firm has not taken new orders from Huawei since 15 May, and will not deliver shipments to the latter after 14 September.



PRE MARKET
White House economic adviser Larry Kudlow suggested ByteDance to spin off TikTok 
and operate it as an independent US company. Yet to make a final decision, however, the White House found it better for TikTok to separate from its owner than to be banned. Kudlow did not specify if TikTok's ownership will change under the proposal, and declined to comment on whether American firms are allowed to acquire TikTok.

GOLDIN FIN HOLD (530.HK) Trading halted with effect from 9:00 a.m. on 17 July 2020 pending the release of an announcement on inside information of the Company.

GREAT EAGLE H (41.HK) announced that it is indirectly interested in roughly 1.365 billion Share Stapled Units of LANGHAM-SS (1270.HK) representing approximately 63.61% of the Share Stapled Units in issue. Therefore, it will subscribe for 682 million Share Stapled Units and intends to apply, by way of excess application, for the maximum number of LHI Rights Share Stapled Units allowed to be applied for under the Listing Rules. The Company estimates that the maximum number of LHI Rights Share Stapled Units that the Company could be allocated by way of excess application would be approximately 312 million Share Stapled Units.

The Guangdong (GD) Provincial Government announced last night adjustments of the prevention and control measures for persons entering Guangdong from Hong Kong.

Save for persons who received prior approval by GD for performing essential official and business duties, cross-boundary goods vehicle drivers, cross-boundary students, as well as persons who fall under the mutual recognition of compulsory quarantine by GD, Hong Kong and Macao, all other persons would be required to present a valid proof of a valid negative COVID-19 nucleic acid test result issued by one of the testing institutions recognised by the HKSAR Government. The negative test result would only be considered valid if it is within 72 hours from the date of collecting samples They shall also be subject to compulsory quarantine of 14 days after entering the province.

HKEX (00388.HK) announced two senior appointments to its Listing Division. Janice Wu has been appointed Managing Director, Co-Head of IPO Vetting. Together with Stephanie Lau, Wu will have oversight of all HKEX issuer listing applications. Karen Lok has been appointed Senior Vice President, Head of Listing Compliance.

VINDA INT'L (3331.HK) Interim results ended June 2020. Total revenue $7.634 billion, -3.3% YoY . Net profit reached $913 million, +107.5% yearly. Basic EPS $0.763. Interim DPS was 10 cents, as compared with 7 cents a year ago. It also announced that Johann Christoph MICHALSKI has tendered his resignation as an Executive Director and the Chief Executive Officer of the Company with effect from 1 October 2020 to pursue his career development. L Jielin, currently an Executive Director and the Deputy Chief Executive Officer of the Company, will be appointed as the Chief Executive Officer of the Company. She is the daughter of Chairman LI Chao Wang.

SING TAO (1105.HK) announced that Luckman Trading, a company wholly-owned by HO Tsu Kwok, Charles, the chairman and a controlling shareholder of the Company, sold 150 million shares of the Company through the Placing Agent. The placing price was HK$1.5 per share, representing a 18.03% discount to the closing price on the last trading day (16th). The deal involved HK$225 million.

HKC (190.HK) +0.090 (+1.957%) announced that during the period from 5 June 2020 to 16 July 2020, the Group acquired on the open market a total of 244,100 TENCENT (700.HK) Shares at an aggregate consideration of HK$119 million.


Read More  

July 16 HSI -511pts T/O +40% DoD After weak China data.

HSI -511pts (-2%) 24,971  HSCEI -257pts (-2.5%) 10,134  T/O HK$199.79bn (+39.8% DoD)  

EUROPE Markets opened lower following the weak China data.

US FUTURES opened +VE but turned lower on the weak China data


INDEXES      CSI 300 Closed -228pts (-4.8%) @ 4,516 Market opened slight lower and initially sold down after the release pre market of the China House Price Index +4.9% MoM but still the slowest pace since May 2018.  Markets then rallied into the green ahead of the rest of the China data, which was mixed and of most concern was the weak Retail Sales number which is a concern and suggests Domestic sentiment is very weak. Markets then sold down first support was 4,670 which held a couple of times and then 4,640 ahead of lunch.  PM saw increased selling and the market closed around the day lows.  No doubt some retail just sold out but I would expect more retail margin calls tomorrow to create some early selling pressure.  Sentiment weak as governments funds indicated they were selling over the past couple of days and concerns over China’s worsening relationships with US. UK, EU, Australia, India and a number of Sea China Sea countries too.

BUT SMIC closed +202% having risen as much as 245% on its debut on the Star Board


HSI Pre Market +67pts @ 25,549 vs +44pts ADR's @ 25,525 E-commerce names weak. Along with new of share placements from Zhengtong Auto (1728 HK) and Jiumaojiu (9922 HK). After the initial uptick market tested yesterday’s closing level before working higher ahead of the China data but then sold down on the weak Retail Sales data. Morning support was around 25,150 ahead of the lunch break. PM saw initial selling down to 25,060 level followed by a bounce back to the lunchtime level but after 2pm as Europe came in the selling continued for the rest of the session into the close.

No doubt there were some retail margin calls in the afternoon and I would expect more overnight so expect selling pressure on the open tomorrow.

Sentiment weak as White House officials create a list of names for target sanctions which includes Carrie Lam although Trump said no more sanctions for the time being. China called the US ambassador to protest at Trump’s signing of the HK Autonomy Bill saying it violated International Law, which is difficult to see how and ironic when one considers China's attitude to international laws it doesn’t agree with; like over the South China Sea 9 dash line! Also hurting sentiment were the statements from the Hong Kong and Macau Affairs Office about the Pro Democrat ‘preliminaries’ last weekend and the rising number of Covid cases and deaths in Hong Kong.



AFTER MARKET
EDVANTAGE GROUP (382.HK) will see the end of the second semester 
of the 2019/2020 school year within this month, while students will gradually return to schools starting from end August to early October, revealed Chief Operating Officer Wenqi Liu. Liu expected the 2020/21 full-time student enrolments to grow to roughly 38,300 from about 34,800 a year ago, up by around 3,500 students.

COSCO SHIP ENGY (1138.HK) +VE PROFIT WARNING expects to record a net profit for the six months ended 30 June 2020 in the range of RMB2.81 billion to RMB3.01 billion, as compared to approximately RMB470 million net profit for the same period of 2019.

The Hong Kong Jockey Club stated that the local betting turnover of local horserace -8.3% QoQ to $93.2 billion during the year of 2019-20.

Deutsche Bank's new Asia CEO will be based in Singapore, instead of Hong Kong, Bloomberg reported. Alexander von zur Muehlen will take office as Asia CEO in Singapore, in replacement of Werner Steinmueller who will be retired at end-July, said a spokesperson.

SHK PPT (16.HK) unveiled the first price list for its Tuen Mun residential project, Regency Bay, involving 88 flats measuring 261-437 sq.ft. each. The units comprise of 21 open studios, 43 one-bedroom flats and 24 two-bedroom flats. The project priced each flat at $6.0113-9.158 million. With a maximum 22% discount, the selling prices ranged $4.6888-7.1432 million, i.e. $17,377 per sq.ft. on average.

Centraline MD said Regency Bay, the first project to unveil price list amid the 3th wave of COVID-19 outbreak, was launched with down-to-earth pricing as its developer aimed to sound out market response, The total selling prices are enticing despite aggressive price per sq.ft. for the first batch, he added.

FENGXIANG CO (9977.HK) closed at $3.36, up 3 cents or 0.9% against the listing price of $3.33, on volume of 70.82 million shares and turnover of over $243 mil

CBHB (9668.HK) concluded the day at $4.8, flattish with the listing price, on

volume of 176 million shares and turnover of $840 million.

JIAXING GAS (9908.HK) closed at $11.04, up $1.04 or 10.4% against the listing price of $10, on volume of 4.42 million shares and turnover of $58.42 million. Excluding the handling fees, a book gain of $520 was reported per board lot of 500 shares.

Centa Valuation Index (Major Banks) (CVI) at 46.09, -6.90 pts WoW

The steeper slide in reading hinted at banks' proactive efforts in controlling credit risks amid unfinished social conflicts and their ongoing prudence to mortgaging due to the community outbreak of novel coronavirus. Home prices may go on jumbling in a near term, rather than turning around into a fall, unless the index busts below the critical level 40. The fresh round of anti-pandemic measures rolled out this week and the deprival of Hong Kong privileged treatment by the U.S. may reflect on CVI in the coming two weeks.


Market and Pre Market News at bottom of page.


Short Selling HSI 
Thursday 19.1% vs 20.3%Wednesday

Top Shorts Wharf REIC (1997) 51%, SHKP (16) 33%, Hang Seng Bank (11) 32%, CCB (939) 31%, Bank of China (3988) 30%, Ping An (2318) 29%, Henderson Land (12) 28%, BoC HK (2388) 28%, HSBC (5) 27%, MTRC (66) 26%, NWD New (17) 26%, China Res Land (1109) 25%, HK & China Gas (3) 25%.


CONNECT FLOWS 

Shanghai

Northbound Rmb 78,829m Sell 40,600m : 38,229m Buy

Southbound HK$ 26,245m Sell 13,870m : 12,375m Buy

Shenzhen

Northbound Rmb101,205m Sell 52,877m : 48,328m Buy

Southbound HK$ 22,485m Sell 10,292m : 12,194m Buy



DATA
CHINA
PRE MARKET 
House Price Index Jun +4.9% YoY vs +4.9% May (F/cast was +5%) Softest since May 2018

DURING MARKET 

GDP Growth Rate Q2 +3.2% YoY vs -6.8% prior (F/cast was +2.4%)

GDP Growth Rate Q2 +11.5% QoQ vs -9.8% prior (F/cast was +10.2%)

Clearly beat but concerns about the resurgence in Covid-19 cases since the data was collected

Industrial Production Jun +4.8% YoY vs +4.4% May (F/cast was +4.8%)

Retail Sales Jun -1.8% YoY vs -2.8% May (F/cast was +0.5%)A big concern

Unemployment Jun 5.7% vs 5.9% May (F/cast as 5.7%)

Industrial Capacity Utilisation Q2 74.4% vs 67.3% prior (F/cast was 75%)

Fixed Asset Investment (YTD) Jun -3.1% YoY vs -6.3% May (F/cast was -3.3%)


HONG KONG 

Centre for Health Protection said there were 67 additional COVID-19 cases in Hong Kong today; 63 were local transmission with 35 sources unknown -VE

AFTER MARKET 

Census and Statistics Department released today (July 16) the volume and price statistics of external merchandise trade for May 2020, Volume of Hong Kong's total exports of goods -6.7% YoY and imports -11% YoY

Prices of total exports of goods -0.8% YoY and imports -0.9% YoY


Active Heavyweights
HKEX (388.HK) -5.7%
TENCENT (700.HK) -5.5%
PING AN (2318.HK) -1.6%
AIA (1299.HK) -0.9% 

HSI & HSCEI Constituents on the move
Fell between 12% and 31%

HSMI & HSSI Constituents on the move

Fell between 25% and 10%.  Except CNLP (1589.HK) +3.5%, hits new high


COMMENT

*FUND-RAISING CH ZHENGTONG AUTO (1728 HK -19.4%) to sell as many as 245.2m shares at HK$1.09 in top-up placement, represents 15.5% discount to last closing price of HK$1.29.

JIUMAOJIU (9922 HK -7.9%) share sale/top-up placement to raise US$135m. An offering of 86m Jiumaojiu International Holdings shares in a concurrent top-up placement and stake sale at HK$11.99 each, a 5.44% discount to Wednesday’s closing price of HK$12.68.

*METALS/RESOURCES WEAK Concerns about US/China relations; related ministries to announced the mining quota for rare earth minerals after China's Ministry of Foreign Affairs has spoken and will take all necessary measures to safeguard the legitimate rights and interests of Chinese enterprises! CH RARE EARTH (769 HK unch) MMG (1208 HK -7.7%) CHALCO (2600 HK -4.8%) JIANGXI COPPER (358 HK -5.7%).

*TECH & COMPONENTS WEAK . SEMICONDUCTOR makers plunged despite SMIC's (981 HK -22%) But its A share closed +202% on it debut in Shanghai surging more than double the offer price. Heavy selling seen in SMIC as the premium gap narrows following SMIC's listing;

HUA HONG SEMI (1347 HK -18%) FIT HON TENG (6088 HK -11%).

US Sec State announced new visa restrictions for some Huawei employees, said linked to Chinese Communist Party’s human rights abuses, including against Muslims and other minorities. ZTE (763 HK -4.4%) AAC TECH (2018 HK -4%) BYDE (285 HK -6.8%) TRULY (732 HK -7.8%).

*E-COMMERCE/SOFTWARE WEAK as investors locks in gains from the speculation of HSI Tech & Innovation index and index inclusion on recently-listed large cap names and comments from the US about action against TikTok and WeChat.

ALIBABA (9988 HK -4%) NETEASE (9999 HK -4.5%) MEITUAN (3690 HK -7.9%) TENCENT (700 HK -5%).

SOFTWARE/APPS providers mostly slumped on the back of ChiNext A-sh heavy correction.

*CHINA PROPERTY WEAK China's average new home prices rebounded in June, with avg price of new homes in 70 cities +0.58% MoM, and average new home price +4.87% YoY BUT that is the slowest since May 2018.

Also news that Shenzhen announced new restrictions on home purchases yesterday in a fresh bid to curb sharp price rises and market speculation. Now buyers have to have residency permits and made tax or social security contributions for three years before being eligible to buy. Previously, anyone with a residency permit could buy.

HOPSON DEV (754 HK +6.3%) said 1H contracted sales grew by 14.6% YoY to 13b yuan.

EVERGRANDE (3333 HK -4.8%) SUNAC (1918 HK -3.9%) JINMAO (817 HK -3%) SHIMAO (813 HK -4.7%).

*CHINA CONSUMERS WEAK after poor China retail sales numbers and ANTA (2020 HK -6.8%) pre market warned its net profit for the first half could drop up to 35% YoY. Also pre market CH LILANG (1234 HK -3.5%) expects to see a 30-35% YoY drop in net profit.

LI NING (2331 HK -3.6%) CHINA DONGXIANG (3818 HK -7.8%).

SKYWORTH (751 HK +2.6%) expects interim net profit to rise more than 60% YoY due to better operations management, improving control over operating costs and reducing the negative impact of the COVID-19 pandemic to the Group’s operations;

GOME (493 HK -1.7%) HISENSE (921 HK -2.2%).

BUT CR BEER (291 HK -2.9%) and TSINGTAO (168 HK -5.5%) following weakness in A-shs white liquor names after state media took aim at the high price of Kweichow Moutai, saying the alcohol was often used in corruption cases.


REGIONAL MARKETS 

JAPAN Opened lower effectively traded sideways for most of the morning but sold down into lunch. After lunch it opened lower and traded sideways with a small uptick into the close Nikkei 225 Closed -0.8% and the Topix index -0.7% having followed a similar pattern

S KOREA Opened slightly higher but initial sold down into the red before trading sideways then sold down late morning and then trading sideways Kosdaq then sold off in the PM with bounce at the end to close -0.8% whilst the Kospi continued to trade sideways to close -0.8%. BoK left interest rate unchanged.

TAIWAN Opened lower initial trended higher into the green but again sold down late morning, and then gradually recovered in the PM to close -0.4%


NEWS
MARKET HOURS 

TSMC 2Q20 revenue increased 28.9% YoY to TWD310.699 billion. In the quarter, net profit after tax reached TWD120.822 billion, up 81% yearly and beating TWD110.55 billion in consensus.

The Hong Kong Monetary Authority (HKMA) alerted members of the public to an alleged fraudulent website of Livi Bank Limited, which has been reported to the HKMA

BEIGENE (6160.HK)  -10.500 (-7.123%) said  the completion of issuance of 146 million common shares of the company at a face value of US$0.0001 per share to specific existing investors.  Each common share was sold at a purchase price of US$14.2308, equivalent to US$185 per ADS. The total issuance income was about US$2.08 billion. Deducting administrative fee of the issue, the net income amounted to US$2.07 billion.

Overnight HIBOR last posted at 0.07286%, logging a 1-month low, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.30446%, down for 5 days, marking a 1-month low.

Chinese President Xi Jinping in a letter to Global CEO Council, pointed out Beijing's preparation to facilitate plague prevention and control as well as economic and social development, reported Xinhua. The country aims to build a moderately prosperous society in all respects and alleviate poverty. China's long-term economic growth fundamentals remain unchanged and will not change, Xi added The country will continued to deepen reforms and scale up market liberalization.

HKEX (388.HK) CEO Charles Li opined at an online forum that Hong Kong National Security Law plays a pivotal role in calming the social turmoils which broke out since last year and that the legislation may bolster "One Country, Two Systems”. While "Hong Kong Autonomy Act" passed by the White House is not something the financial hub wants, the act will unlikely trigger underlying changes because China and the rest of the world still need the city, in Li's opinion. He also said that investors may have to wait till next year for a meaningful breakthrough in "Commodity Connect”. Amid the 20th anniversary of listing, HKEX has become the largest exchange in world in terms of market value with its share price spurting from $3.88 on debut to the current level, added Li.

HKEX celebrated a fruitful year in 2020, when returns had been reaped from its investment over the past few years, furthered Li, expecting the growing ADT to favour its financial and business performances.

The US will meet her target of a coronavirus vaccine by end-2020, reports Reuters citing Anthony Fauci, Director of the U.S. National Institute of Allergy and Infectious Diseases. Fauci foretold Moderna’s vaccine trial results to be promising.


PRE MARKET
FOSUN PHARMA (02196.HK) Said that Fosun Pharmaceutical Industrial, 
a subsidiary of the Company, was approved by the National Medical Products Administration to initiate a phase I clinical trial of the COVID-19 mRNA vaccine in Mainland China. The cumulative R&D investment in the vaccine was in the amount of RMB14.06 million.

JobsDB unveiled the survey findings on the workplace amid epidemic, showing over one-fourth of employees had suffered a salary cut of 30% or above. 46% of the respondents saw suspended or reduced bonuses, halted pay raises and frozen salary under the pandemic. An independent research institution was engaged by JobsDB to survey 3,100 employees and over 800 employers in May.

TENCENT (700.HK)’s Clash Royale, a game launched by Supercell four years ago, has surmounted US$3 billion in lifetime revenue to be the second-highest grossing mobile title of all time, according to Sensor Tower's report. It sits at No. 2 to Clash of Clans, which has amassed nearly US$7 billion to date. Clash Royale has mainly derived its revenue from the United States (30.8%), followed by Germany (9%) and China (6.8%).

COSCO SHIP PORT (1199.HK) June throughput inched down 0.6% YoY to 8.5997 million TEUs.

FOSUN INTL (656.HK) has dropped out from talks for investments in two Indian healthcare firms, which involve more than US$300 million, amid increasing China-India disputes, Indian press reported.

GOLDIN FIN HOLD (530.HK) said the Company and subsidiaries received several notifications concerning certain indebtedness owed by Smart Edge, Cheng Mei and Goal Eagle. The notes and loans, in addition to the related interest rates, involved approximately $8.54 billion. The company has resumed the trading in its shares today.

The White House has a list of sanctioned Chinese officials, including Hong Kong Chief Executive Carrie Lam and Chinese Vice Premier Han Zheng, Bloomberg citing insiders. However, US President decided to hold off the announcement and implementation of sanction list before clearing Hong Kong Autonomy Act as he did not want escalation in tensions against China, said the report.

MACAU On the first day of resumed Macao-Guangdong customs clearance yesterday and with travellers between Macao and Guangdong no longer subject to a 14-day quarantine, the visitor footfall remained low as the Individual Visit Scheme pass has not yet resumed, whereas gamblers were required to show nucleic acid test results before entering casinos, Macao Daily reported. In Centro, around 1-2 gamblers entered casinos each some 10 minutes, while luxury brand stores and restaurants nearby were far from the pre-pandemic prosperity, said the report. As for Cotai, casino staff still outnumbered customers!

PICC GROUP (1339.HK) announced that due to work arrangements, Miao Jianmin has tendered his resignation as an executive director, the chairman, and the chairman of the Strategy & Investment Committee of the Board. Meanwhile, Miao has resigned as the chairman of the Board and an executive director from PICC P&C (02328.HK) with immediate effect.

HKC (HOLDINGS) (190.HK) said that during the period from 1 November 2019 to 15 July 2020, the Group acquired on the open market a total of 2.4635 million CK ASSET (1113.HK) Shares (representing 0.067% of the share capital) at an aggregate consideration of HK$119.5 million at an average price of HK$48.53 per Share.




Read More  

FT Thoughts


July 31 FT. Recovery questions? HK Elections, StandChart, China Cold War? And more

MARKETs at 1:30pm HK time
JAPAN opened lower despite good Marco data on unemployment and industrial production. It sold down on rising covid concerns and in thePM is drifting lower/sideways Currently -2.4%
S KOREA opened higher on good retail, industrial and manufacturing data.  Kosdaq has opened higher, sold down rebounded sold down to day low and now working better currently +0.4%.  The Kospi initially sold down but rebounding and trading sideways just below flat currently -0.2%.
TAIWAN opened lower but rebounded to flat but sold down again and now working higher  currently -0.5%
CHINA opened higher and rallied to day high as PMI data was slightly better but then sold down into lunch. PM market trading sideways  Currently +0.4%
HONG KONG Opened higher despite ADR’s indicating lower rallied ahead of China PMI data. Unable to break higher and sold down to day low around 11am (24,530 level) before rebounding into the lunch.  PM seeing selling pressure Currently -0.1%
EUROPE Expect markets to open flat following good US earnings but with covid concerns still evident.
US Futures opened strongly expect a positive open but earnings and covid remain in focus


Plunge in US and German output signals gruelling road to recovery.  Record 10% contractions in GDP • Bond markets rally • Covid flare-ups imperil rebound
The key for me is that it seems to make the prospect of a V shaped recover less likely. Plus the fact that we are seeing a resurgence in cases is a cause for worry. Worth also reading Fed in dovish mood as it hopes for best and plans for worst. Which again underlines the fact the the FOMC and other Central Banks remain very cautious about a speedy recovery; as he said it “depend significantly on the course of the virus”.

Hong Kong bars campaigner from elections. The article looks at the disqualification of Joshua Wong from standing in the forthcoming local elections (unless they are postponed) under the New Security Law. He was not the only one. So far 11 others have also been disqualified and the administration has said there could be more. It also notes that four students (including a teenager) were arrested by the police on Wednesday for forming a group to advocate Hong Kong independence on social media.
Whilst Joshua Wong is well know the administration also barred some members of the Civic party who are known to be more moderate. The reality is that the local elections are not going to be a vote of free expression as Beijing seeks to influence the outcome already.

StanChart warns over Hong Kong tension. Lender highlights dispute between US and China as bad loan provisions triple. Not as badly positioned as HSBC but facing the same struggles with the threat of reprisals from both China and the US.
Interestingly Bill Winters mentioned the massive inflows of capital into the City in Q2 but allude to where it had gone from. The bank mentioned it was seeking legal opinions on how to manage compliance and taking advice from the Hong Kong Monetary Authority.
I don’t think I have every heard of that happening before to such an established bank but it highlights how unusual the situation is.
See LEX Standard Chartered: a Winters’ toil. Notes that Mr Winters is doing well but still needs to cut costs to close the gap with HSBC

Opinion A cold war does not answer China’s challenge Notes that we use history to try and answer the present. A while ago US/China rivalry summed up using Thucydides prediction of the inevitable conflict between an established hegemon and rising power. Now its being likened to the era of soviet stand off . The writers point is that none of that is particularly useful. He looks at Mike Pompeo’s recent speech “Communist China and the Free World’s Future”, and looks at the background of Nixon’s opening China. In that he focuses on George Kennan the the US diplomat who set the framework for America’s cold war policy of Soviet “containment” and the real reason for Nixon opening China which was to isolate the Soviets.
Today the writer says China’s ambitions are not the same as the Soviet ones were. He doesn’t think it is about competing systems but competing states. He doesn’t think that Beijing is seeking to defeat capitalism across the world. Where the Soviets sought to crush capitalism China he thinks depends on it.
He notes that 'Mr Trump and Mr Pompeo, however, are seemingly ignorant of the most important piece of advice in Kennan’s dispatch from Moscow. As vital as it was that the west resisted any Soviet advance, the answer was not provocation or war but to ensure “the health and vigour of our own society”.
Kennan’s last sentence might have been written specifically for Mr Trump: “The greatest danger that can befall us in coping with this problem of Soviet communism, is that we shall allow ourselves to become like those with whom we are coping.”It is an interesting read but I think he is wrong if he thinks that China is not seeking to defeat capitalism. It will happily take advantage of capitalism along to road to achieving its goal which is the demonstration that only communism, as defined by the party leaders ie Mr Xi, is the way.

Samsung eyes recovery in device demand. Expects a good 2H to follow the good results announced yesterday. Worth noting that the high levels of automation at its memory chip factories meant little disruption during the pandemic. I would expect to see robotic companies see improved business as many companies come to realise the benefits. But for Samsung the key will be new smartphone launches which are expected to keep DRAM demand high. It will be interesting to see whether demand for new phones remains resilient if lockdowns continue. The article notes that analysts are also expecting this with the launch of a foldable phone and Galaxy Note flagship phone along with cheaper models. Some also think that is will benefit from the US/China tension as the US puts more pressure on Huawei. I think the likes of Samsung will continue to do well thanks to its diversified range of offerings.

Air travel sector struggles to take off again. Aviation industry battles to restore confidence that flying is not as risky as it may seem. Looks at the pro’s and con’s. Key is that there is not much real data but some good indicators. But I don’t think its going to make much difference in the foreseeable future. Worth a read.

Alcohol volume AB InBev celebrates better sales as beer lubricates easing of lockdowns. Better than expected but still wary of a resurgence in lockdowns and social distancing measures.
See Lex AB InBev: half cut 'Filling up the drinks cabinet and ripping out costs proved a decent strategy for 3G, the Brazilian investor trio. But it has left a big tab behind the bar. Net debt as of end-June stood at $87.4bn. AB InBev spent more than $1bn on finance costs in the quarter.
Depressed volumes stymie the underpinning strategy of operational leverage. AB InBev’s cost of sales per hectolitre rose 15 per cent over the period. Its robust margins — the sine qua non of 3G’s strategy — shrank 825 basis points to 33.2 per cent on the basis of normalised ebitda.
Reducing the net debt/normalised ebitda ratio to the targeted 2 times looks an ever bigger stretch with the end-June multiple standing at 4.86 times. Last year’s dividend cut is unlikely to be the last.'

Investors drive surge in gold price as lockdown squeezes jewellery industry. Notes that data released by the World Gold Council yesterday showed global jewellery demand almost halved in the six months to June, -46% YoY to 572 tonnes. But demand for gold from ETF’s was +734 tonnes. Gold was a little weaker overnight but with all the unknowns about covid and the timing of a vaccine or cure I think Gold will continue to move higher.

Big Tech bosses squirm at antitrust inquisition. Silicon Valley titans accused of throwing their weight around in pursuit of market dominance and then putting up fortifications. Also Blows from Congress did not build a case against Big Tech Whilst there was side points scored its going to be a long battle with no easy answers but at least the dialogue has started. Some interesting admissions came to light and I am sure that there are a lot more out there they the big tech bosses hope remain hidden. Also read the editorial Digital ‘gatekeepers’ face a moment of reckoning
American antitrust laws are no longer adequate for the online era. And also Avoiding a bloodbath on the UK high street A shake-up of how retailers are taxed is long overdue.
The reality is that business has transformed but taxes haven’t really changed at all. No one wants to overhaul the tax system because it is a huge undertaking and there are loads of nuances and loopholes and vested groups. But maybe the pandemic is the right time to start?

For interest
Pandemic has led to tipping point in understanding risk. Sets out that we need to update our assessment and definition of risk. Risk going forward will need to be ‘multidimensional’ it is suggested. Referenced to government bonds will also need to be reviewed as with negative interest rates due to central bank asset purchase programmes distort the risk free rate and distort allocation of credit and solvency issues. Regulatory changes, ESG, covenant variances and even social intolerance are all becoming issues of more importance.
As she says
'Companies that do not pursue sustainable practices on a day-to-day basis are creating real operational and reputational risks — at a time when new regulations can make or break entire industries.
That is why active risk management is vital to delivering consistent returns. By understanding and targeting risk in a measured and informed way, investors are building the foundation of future value creation.'

Private equity has a taste of its own medicine. Notes how buyout groups such as Apollo are complaining in court about aggressive tactics from other creditors in debt battles. In most cases those tactics are ones that groups such as Apollo have used!

Building back better’ requires systemic shifts. Looks the situation in the UK. 'We face systemic challenges. Is this the crisis that will finally trigger real changes — as the 2008 financial one did not? The public appetite seems to be there, as reflected in political upheavals in many countries. The challenge for policymakers talking about building back better is to make sure they mean it.'

Read More  

July 30 FT Suing the Police in China, US Blacklists, China markets different this time? and more

MARKETs at HK lunchtime
JAPAN opened slightly higher, Retail sales were better than forecast but the market has drifted lower. Currently -0.1%
S KOREA opened higher but drifted lower, tested flat and then bounced before trading sideways; Solid earnings from Samsung Operating profit +23% on strong chip sales. Kosdaq currently +0.4% and the Kospi +0.1%.Samsung results https://news.samsung.com/global/samsung-electronics-announces-second-quarter-2020-results
TAIWAN opened much higher, saw some initial selling but now trending higher on good earnings especially in the Tech sector currently +1.2% CHINA opened slightly higher but has seen choppy sideways trading Currently at lunch -0.1%
HONG KONG Opened higher and tested 25k in early trades, then sold down 24,920 support level before working higher to almost 25,200 before easing back into lunch.  At lunch +1.1%
EUROPE  Expect markets to open higher after the FOMC decision and moves in Asia but covid concerns and earnings still overhang the markets.
US Futures opened flat expect upside after some good earnings but today is another big day for tech so initial upside limited.  Rising covid cases still a concern likely to limit upside.

On Line
How safe is air travel during coronavirus pandemic? Aviation industry battles to restore confidence that flying is not as risky as it may seem. Looks at the pro’s and con’s. Key is that there is not much real data but some good indicators. But I don’t think its going to make much difference in the foreseeable future. Worth a read.

A cold war does not answer China’s challenge Guarding the west’s interests and values should not mean an ideological confrontation with Beijing. Notes that comparing the current crisis to the soviet stand off is not that useful.


In Print
Xi critic sues police after university sacking
. Notes how Xu Zhangrun, the former constitutional law professor at Beijing’s elite Tsinghua University, who was detained by police in early July and held for a week on charges of “soliciting prostitution” before being released is to sue the Qingyang district public security bureau in Chengdu who brought the charges. His legal team Mo Shaoping and Shang Baojun are among China’s best-known rights lawyers and previously defended Nobel Peace Prize-winning dissident Liu Xiaobo. He is protesting his innocence and wants the charges rescinded and to get his position back at the university. The article mentioned that many former students sent him money on hearing that he had been fired but he didn’t take the money saying he would work to earn a living.
It is notable that in the past he has focused on trying to hold China’s leaders accountable for “extrajudicial acts that betray the transformation of China into becoming a modern constitutional nation”.
It will be worth watching, not least because such a case is so unusual and now it is in the public domain. For many it highlights the opaque way in which justice can work in China. It also reveals that there are many Chinese who are passionate about their love of China but disagree with the way the current regime is pursuing the goal of making their country great.

FedEx pilots seek to halt Hong Kong flights. Cargo company air crew claim city’s quarantine rules put them at risk. The union is referring to an incident where three of its pilots who tested positive but showed no symptoms where put into a Government hospital for 10 days. Another union Alpa said that several pilots who tested negative but who had been in close proximity with infected people were also put into government camps. This was before the latest clampdown. Now aircrew have to provide proof of a negative coronavirus test taken up to 48 hours prior to boarding a flight to Hong Kong, or be tested on arrival.
Alpa said their concern was that the flight crews were quarantined in conditions that involved up to five patients per room with one shared bathroom, and that the government camps provided “very sparse provisions”.
In Singapore aircrew have to remain in the designated accommodation at all times, on eFedEx pilot was given a four week sentence for going out to buy medicines.
IATA has said it does not support general testing for aircrew as a pre-requisite for flying.
It would appear to me that testing before travelling would make sense, especially for a group that is travelling so regularly. But equally quarantine ought to be in isolation otherwise it would appear to me the risk of cross infection is raised.
We still have a lot to learn about the virus.

US blacklisting fails to derail ambitions of China AI start-ups Megvii and SenseTime. The blacklisting was in connection with the “repression, mass arbitrary detention and high-technology surveillance” in the western Chinese region of Xinjiang. Initially the blacklisting impacted them and their ability to source components from US suppliers but not they see to how found alternatives. Megvii’s has backing from Macquarie and the Abu Dhabi Investment Authority said it has no revenue from projects in Xinjiang in 1H 2019.
The article says that the companies have many contacts within China. For investors it will be a matter of ensuring that that companies revenue is coming from where they say it is and no doubt the US authorities will be watching as closely as the Megvii’s facial recognition does.

China’s rally can avoid the boom and bust of 2015. By Diana Choyleva chief economist at Enodo Economics in London.
She sets out that margin financing is well below the 2015 levels and at historically low levels.
The authorities are focused on reducing risk in the financial system. So they don’t mind new money being attracted to the stock market as long as it reflects an increased risk appetite and not borrowed cash. She notes that Beijing is likely to encourage new money in especially as 'debt-for-equity swaps have emerged as the preferred method to clean up bad loans.’
She also notes that President Xi is determined to halt property inflation making homes to be lived in not as investments only. He sees property as widening the divide between rich and poor and so is trying to address that. She notes that during the pandemic there has been no easing of property curbs as part of the stimulus efforts. The hope being, that people are not tempted to put their savings into property. Although I would note that developers are still running 'lucky draws' for the chance to buy units at a lot of the new projects! She does note that she isn’t expecting a great rotation from property to equity.
A third difference she notes is that China is now part of the MSCI and more open to international money which should bring better governance, risk assessment and professionalism (in time). It is still very much a retail market but it is changing. She doesn’t think that the ’national team’ has been active but I do.
Overall she is right that changes have taken place since 2015 and most are for the better but with so much retail money driven by press reports and tabloid type research there are also still a lot of risks.
The poor performance on the New Third Board Select on Monday shows how retail still expects IPO’s to always go up regardless of fundamentals and that is they don’t the ‘faith’ in the market could be lost.
A good read.

LEX Nomura: beginner’s luck Its new CEO in his first quarter has seen results beat forecasts, obviously thanks to his predecessors and market circumstances has as volatility increasing clients need to rebalance portfolios. Now the question is what to do next. Mr Okuda therefore has a conundrum ahead of him. Nomura must implement cost cuts in excess of the continuing ¥140bn restructuring plan while simultaneously sustaining growth overseas. Lex remains sceptical about the outlook.

Covid crisis drives hard bargain for retail leases Commercial property landlords under pressure to link tenants’ rents to how much turnover their businesses generate.
Historically commercial property has played a part in a lot of UK institutional portfolio’s. Owning freeholds that were capable of giving good income with upward only rent reviews and historically 25 year leases. Over the years the structure has changed, along with the lease terms. The current situation will mean that asset allocators will be reviewing again the asset allocation to the sector in the light of the changing lease structures especially for retail leases.
The article looks at the move to turnover rents which makes sense but many landlords are saying the turnover rents should include an element of on-line sales too. Determining how much will be a very thorny problem. Property valuation was always seen as an art, now maybe it's about to get abstract too.

For interest
FT BIG READ. INTERNATIONAL FINANCE
When a $20tn market wobbles For a brief period in March, the US Treasury bond market seemed as if it might collapse. With conditions now stable, the authorities are working out how to buttress the bedrock of the global financial system.

ETFs are the canary in the bond coal mine. What the Covid-19 market shock has shown is that while the banks played a starring role in the previous big financial crisis, non-bank financial structures, such as ETFs, matter much more now, and not just in the corporate bond world. That means ETFs deserve more scrutiny and debate — from politicians, as well as investors.

Antique Chinese bonds are now in play among dealers. Are investors betting that Mr Trump will really use the bonds to put pressure on the Chinese government? Perhaps. But they may also hope his rhetoric alone will be enough to boost their value. Stranger things have happened

Read More  

July 29 FT China Second Wave? New Third Board Select?, Japan/China, Gold, Central Banks

MARKETs
JAPAN opened lower and has trended lower thought out Currently -1.2%
S KOREA opened flat Kospi initial rallied but then sold back down to flat and has traded sideways Kosdaq just traded sideways Kosdaq currently -0.2% and the Kospi -0.16%.
TAIWAN opened lower after yesterdays record day. Worked higher, then eased back to flat and trading sideways currently -0.14%
CHINA opened lower but driven higher, slight off their highs currently +1.5%
HONG KONG Opened lower but rallied before easing back to flat Currently -0.1%
EUROPE I would expect markets to open flat/lower with concerns over covid cases and caution ahead of Earnings and the FOMC statement.
US Futures opened flat then rose slightly I would expect a flat open Earnings, Covid, FOMC and Tech CEO’s in front of Congress.

Xinjiang rise in infections adds to fears of national second wave. Comes as China’s National Health Commission said there were 64 locally transmitted cases of which 57 were found in Urumqi, Xinjiang’s capital. In recent weeks there are have been a number of new cases announced. Previously when new cases have arisen the authorities have been swift to look down area’s in order to contain the spread. In addition it has implemented contact tracing and testing. Despite China’s best efforts small clusters continue to appear which underlines how little we know about how the virus is able to spread.
China relative to most other countries has been successful in containing the spread and for most people life in China continues relatively normally.
In Hong Kong new strict social distancing measures were introduced to try and control the recent surge in new cases. With the administration saying that is will seek to close any loopholes in the current quarantine requirements. The disruption to everyday life has been immense. Many restaurants are closing for the next seven days rather than just providing take-out services. Leisure facilities are closed and the wearing of masks in public areas has restricted running and other leisure activities during the current very hot weather. The impact on low paid jobs in the leisure and restaurant trade is likely to be very high.

China’s newest trading venue gets off to a stumbling start. Looks at the start of the New Third Board Select (NTBS). The Small-cap board’s initial losses were a blow to investors who are used to seeing stocks surge on their first day regardless of the fundamentals. But on Monday some stocks went up and some went down. That according the article has ‘undermined’ some investors confidence in the market. The article notes that covid has hit millions of SME’s in China and in order to try and help them get access to finance they came up with the NTBS, which has looser listing requirements than the other exchanges; with many of those listed having had previous IPO submissions rejected. Monday was mixed, Tuesday saw 30 or the 32 stocks rising but 20 are still below their IPO level. Retail interest in IPO has been a big driver in China; the article notes 'Public records show that more than 95 per cent of new listings in Shanghai and Shenzhen over the past two decades have jumped on their first day of trading.’ It’s been seen as a ’sure way’ to make money BUT the article warns that if that stops being the case then investors will look for other ways and that will make IPO’s more difficult which would be a big -VE for China. In the past the Government has controlled the IPO prices so investors got a good deal. The NTBS is supposed to be a test bed for new ideas and reforms. Various rumours surround Monday’s performance, analysts the article says think it was institutional investors trying to sell out to retail which drove prices down. But that still leaves the question as to why institutions had taken the shares in the first place if they had no intention in holding them. The reality is that you cannot really have a ‘controlled’ market with arranged valuations and questionable listing data. Open markets find the right levels. It suggests that China needs to do a lot more in its allocation of capital to companies. With the small companies being responsible for around 60% of GDP and 80% of jobs (Govt data) they deserve better treatment by the SOE banks and others.

Japan treads carefully in dealings with China Geographical proximity and business ties are reflected in the response from Tokyo. Notes how after 20 years of trying to get the world to be more aware of the threat from China, Japan appears to have had some success and is now taking a more back seat approach. Japan is aware that it cannot decouple completely from China and so it will need to ‘manage’ its dealings and stance for practical and economic reasons.
Japan is already under threat from China; incursions into its airspace and territorial waters. Japan actions may not appear as strong as some other countries actions but by its standards and considering all the issues at stake it has been forthright. China takes 20% of Japan’s exports and many Japanese companies have operations in China, so it needs to manage the situation carefully but without appearing weak which could lead China to thinking that it could be more assertive with its military incursions. It is a tricky problem for most countries who would like to do business with China but want the business to be fair and balanced. Only a few countries have been hugely confrontational with China and none of them are close neighbours to China.

Nissan warns of record $4.5bn operating loss as pandemic crushes demand. Looks at the poor results as the company continues to battle with numerous issues. At this stage it does not look like cost cutting alone will be able to reverse the company’s fortunes. The results were much worse than expected. See also LEX Nissan: crumple zone 'Nissan’s share price is down by a third this year. That does not fully reflect its predicament. It takes many years to build — or in Nissan’s case, rebuild — a brand. Cash flow constraints mean time is a luxury Nissan cannot afford. The odds of the business continuing in its current form just widened.'

Editorial Rise of gold is a sign of uncertain times By normal standards, the yellow metal is not an attractive investment. Basically makes the point that whist gold is generally not an attractive investment currently the alternatives are worse. Historically Gold rarely holds its highs for long before its disadvantages become apparent. That is all true. I just think that the current circumstances just mean that it may hold out at the top for longer than on previous occasions.

Editorial The US-China rift has now become ideological. What started as a tariff war is morphing into a battle of values. Draws parallels from the US/Soviet confrontational era. It notes that in some ways good has come about in the airing of subjects that had been obscured. But the risk is if it comes down to ideology there is unlikely to be a solution. Noting that the US/Soviet schism was only ended when the Soviet system collapsed. Worth a read.

Rage against central banks is misdirected 'Rocketing house prices, zombie companies, rising inequality, a runaway stock market, struggling savers and even the outright destruction of capitalism — perhaps the only thing that does not get blamed on easy monetary policy from central banks is the weather.’ Sets out that central central concept to economics is the ’natural rate of interest’ and there is little central banks can do to influence it. It cites Japan as the example of what happens if you try to hold rates above their natural rate. An interesting read but I think it fails to appreciate that Central banks since the GFC and maybe before have not just influenced interest rates but also used other tools too try a ’save the economy’ but at no stage have they actually unwound and put away the tools they took out which were only supported to be temporary. For not doing that, I think Central Banks deserve some blame.

Big Tech chiefs face Washington grilling together for first time. Looks at how Apple, Amazon, Alphabet and Facebook heads are set to encounter questioning today before Congress. Looks at some of the issues. The problem with these events, having watched some in the past the time time limits put on the members of the panel and the fact that some of the time is wasted in political niceties. It seems to me that the congressmen and women would do better to agree their questions before hand and devote the time to seeing how the respective heads answer.

Read More  

July 28 FT USD weakness, HK Banks sanctions hit, Tech fizzle?  Evergrande and more

MARKETs at 1:45pm HK time
JAPAN opened flat an initial worked better. Around midday is sold back to flat and current ly trading around yesterday’s close. Currently -0.1%
S KOREA Market opened higher and initially rallied but then trended lower from around 11am Kosdaq currently +0.4% having bounced of flat and the Kospi +1.4% which is starting to trend higher again.
TAIWAN Market opened higher but traded lower and now trading around flat currently -0.3%
CHINA Market opened higher but initially sold down, then bounced back then sold down into lunch. PM trending lower again Currently +0.5%
HONG KONG Opened higher but trended lower through the the morning and into the afternoon. Currently +0.4%
EUROPE I would expect Europe to open flat again with investors watching US/China tensions, new Covid cases and earnings.
US Futures opened flat. Another big day for earnings and investors will be watching covid cases. Gold expected to continue to rally and traders to be cautious as the FOMC two day meeting starts.

Online
Xinjiang reported 57 new Covid-19 cases Xinjiang Monday
, its highest one-day tally since an outbreak was reported there two weeks ago. A separate outbreak in the north-east province of Liaoning also grew with a further 6 cases of Covid-19,
Beijing says it has one new case linked to the Dalian outbreak.
It really is quite amazing how few cases there are in China when the rest of the world is seeing such a dramatic up tick in new cases.


PRINT
Dollar hits two-year low as gold soars on fears over virus-hit US.
As Gold prices rose rising questions over the US recovery. Which comes as the FOMC begins its two day meeting today. The lack of political consensus is a major stumbling point for the parties, no doubt made worse by it being an election year. It quotes Kit Juckes, foreign exchange strategist at Société Générale, who said: “The thing that’s changed in the last few days is that it’s not just gold that has gone up against the dollar, but almost everything. That’s partly driven by a sense that the US is having a harder time controlling the virus than others, which will see the US economy underperform.”
The reality seems to be that having aggressively eased at the start of the pandemic and pumped dollars into the system it put downward pressure on the dollar. With the recovery now faltering that is adding to the pressure on the US. Investors will be catching tomorrows press conference closely to guage the reaction and intentions of the Fed going forward.

Foreign banks refuse accounts of senior Hong Kong officials. As part of the US sanctions HK officials are finding that International banks are no longer able to accept their business and that their accounts are being closed. It notes that the official said that US banks and HSBC were declining to do business with him and others due to the Hong Kong Autonomy Act. At the same Timothy banks are pushing regulators to determine is closing an persons account under the HK Autonomy Act would constitute a violation of the new security law.

Hong Kong tech index falls short of wowing investors and fizzles on debut. Looks at the less than impressive start for Hong Kong’s Tech board on a day when the wider market saw significant selling pressure due to the deteriorating US/China relations and Covid. It probably also reflected the caution about investing in Hong Kong when US there is still potential for more US sanctions. But the promotion of Tech in Hong Kong will see the further demise of Property, Telcos and Finance as the drivers for the Hang Seng. The Tech is Chinese and it is too early to say whether it will gain enough prominence to become a global tech hub but it further cements Hong Kong’s place a the preferred listing venue for Chinese tech companies who need international finance. In the next few weeks watch for derivative products to become available too which will help. I still think there is the potential for the US to restrict US investors investing in Chinese Tech companies and until that overhang is removed there will be caution.

AstraZeneca agrees $6bn Daiichi deal UK group pays Japanese peer to develop potential breast cancer treatment. As ever the devil will be in the detail but the deal appears to allow to Daiichi to use the money saved to be invested in other drugs and for Astra to get the clinical data it requires. It seems to make sense that there should be more co-operation between drug companies in the future but ownership of the data etc will always be a sticking point.

Network trailblazers look to usurp Huawei. Open-source movement gears up to challenge grip of big equipment vendors.
Looks at the growth of ‘OpenRAN’ which is on the verge of launching a national 5G network without Huawei, Ericsson and Nokia.
RAN is Japan’s first new mobile radio access network for more than a decade being developed by Rakuten and it intends to upgrade it to 5G speeds in October. The development is being watched closely, to see if the open source network can work at scale. Traditional networks use proprietary hardware and software from the tradition vendors. OpenRAN is seeking to change that and Rakuten is not the only player out there investigating the concept.
Key it that it opens the playing filed to a lot more entrants to compete.
Detractors say it lacks scale and risks being over hyped. It is early days and it does need more investment; whether it gets it or not remains to be seen but it could be revolutionary. However as one person cautioned; it is low margin, difficult and with little risk capital.

Industry needs a rare earths supply chain outside China. China accounts for 80% of the globally mined supply of rare earths and an even higher amount of the powerful rare earth magnets. As such the US, Europe and Australia are now looking at establishing their own supply chain; which is focusing on Australia and Lynas Corp. But there are another 15 rare earth mineral projects that are struggling to get funding with private investors reluctant to get involved because of the barriers to entry. Namely the process to separate them from the dirt into the constituent parts which involves technical and environmental challenges. At a time when China’s dominance allows it to control prices.
So this week the Pentagon decided to provide funding to Lynas and US based MP Materials to develop processes to break the Chinese monopoly.
Whilst a good start there is a long way to go and further industry co-operation will be required, with western companies focusing they purchasing power on the new non Chinese companies. This is an area China has made its own and now the rest of the world needs to compete. It will take time and commitment but with the Pentagon behind it, it's got a good start.

LEX China property/ Evergrande: disconsulate. Looks at how office vacancies in China have risen to their highest in 10 years in Q2 according to CBRE. Even before covid overcapacity was evident. Covid has made it worse and US companies are delaying lease renewals as China/US relations get worse. That is spooking some foreign investors; debt financings are getting harder; funds raised by the sector fell 10% earlier this year.
Chinese developers look resilient; the housing market is buoyant and buyers enter lotteries for the chance to buy units. Evergrande the biggest raised tis annual sales target and its shares have double from their March low. BUT its looking to sell 200 properties including offices to reduce debt; which will be tough. Even if it sold all its commercial properties at current prices that would cover around 10% of its 2019 debt according to the article. Its debt to equity is currently 230%.
Evergrande has defied prophecies of its demise before. The nature of home building and pre-sales keeps the cashflow working but at some point it could stumble!

Store closures and travel curbs hit LVMH. 1H Operating profit -68%, even after cutting spending onshore leases, hiring and advertising. It was worst than expected. DFS was hit hard. They cut costs but didn't want to cut too far because they want to be ready for the recovery when it comes. It also notes that the ultra wealthy have continued to spend and do not tend the trade down when crisis hits; although it would appear that a number of their clients have judging from the results!

Pandemic sparks race to launch contactless touch screens for cars, shops and elevators. With concerns over touching services firms are looking at the alternatives. An interesting read.

OPINION Genocide or not, the Uighurs need urgent international support. Spends some of the article looking at the creation the word Genocide by Raphael Lemkin; He amalgamated the Greek word genos (tribe or race) and the Latin word cide (killing), to create it and then spent his efforts getting it recognised in the post WWII trials and elsewhere. The key point I think he’s trying to make is that wherever there is the potential of genocide taking place the world needs to act against it. The trouble is that it is not easy. It is amazing that the in today’s world of Facebook and TikTok it is still difficult to mobilise people into action against things like genocide but easy to get thousands of people to watch a swimming pool being cleaned! Something is clearly amiss and those carrying out atrocities are happy about that.

Read More  

July  27  FT  Covid new cases HK & China, Chinese US listings, HSBC denies entrapment

MARKETs
JAPAN
re-opened at its lows and as worked better through the session. Currently -0.3%
S KOREA Market opened higher and rallied for most of the session, he Kosdaq currently +1.1% and the Kospi which is starting to trend lower +1%.
TAIWAN Market opened higher and has traded sideways/slightly lower, currently +2.5%
CHINA Market opened higher but trended lower in very choppy trading. Morning low was just above Friday’s closing level. I would expect more downside in the PM Closed for lunch at +0.3%
HONG KONG Opened higher but sold down to below Friday’s closing level in the first hour. Bounced but again trended lower to a new day low before lunch. Close for lunch at -0.1%
EUROPE I would expect Europe to open flat with investors watching US/China tensions, new Covid cases and earnings.
US Futures opened -60pts but have worked higher since then and are currently +140pts with S&P and NDX also indicating higher. Gold continues to move higher as US/China tensions rise. Investors will be watching new covid cases and earnings with McDonald’s, Pfizer, Alphabet, Apple and AMD amounts others due to report this week. Traders are watching for new of news stimulus as Mnuchin says Republicans had finalized a bill for about $1 trillion in coronavirus relief funds, which he hopes will find bipartisan support. But many doubt that as a wide gap exists between the GOP and Democrats, especially on unemployment benefits and state and local gov’t aid.

FT On line
Coronavirus latest: China and Hong Kong report hundreds of new cases
Hong Kong recorded 261 covid-19 cases over the weekend with clusters around an abattoir, a police station and a university hall of residence amongst others. The government announced new rules which mean ships crews will now have to stay abroad their vessels, If crews are being changed then they can only leave the ship when direct transport to the airport has been arranged.

China reported 57 new covid-19 cases in Xinjiang and Liaoning. It still seems strange to me that Hong Kong should see such a surge in new cases and yet China seems to be unaffected. I was wondering if the surge in new cases was as a result those allowed to travel across the border for business? Many of the new cases are not imported but must be coming from somewhere suddenly. China’s numbers remain low. Underlying how little we know about how this virus really spreads.


In print
Chinese listings surge on Wall Street despite tensions. IPOs more than double this year even as Beijing’s relations with Washington plummet. The rush to list in American seems at odds with the current threat that some Chinese firms will be forced to delist due to auditing standards. To my mind it highlights how China knows it needs the US capital fro its companies to grow and that the way currently relations are that source of funds is under threat of being cut off. The US is th biggest source of liquidity and they want to tap it while they can. For investors I think they should be seeking a higher risk premium to reflect the political risk that should be added to the mix. Trump has ‘advised’ government funds not to invest in Chinese companies; ‘advising’ private money to do the same is only a small step further down that line and can be done without time consuming legislation, under the banner of saving US jobs.

HSBC denies Huawei entrapment claim Allegations in Chinese media rejected as bank is dragged into Sino-US fight. At the weekend HSBC posted a message on WeChat saying that it was not involved in th decision to investigate Huawei or arrest Ms Meng. This was in response to claims in the State controlled Global Times that is was involved. The share price dropped 2.2% in trading this morning, reflecting investor concerns that the bank is falling out of favour with Beijing. It is currently trading at a 5 year low.


Rapid fund churn fuels equity rally in China. Notes that Chinese funds that were launched in Q1 have seen massive outflows in Q2. The ease with which investors can enter and exit funds is undermining them. It mentions E Fund Management, China Universal and GF Fund Management as examples. It notes that the relationship managers who advise clients can earn lucrative commissions by getting clients to buy into new launches and get fees from their clients selling out too. In only one quarter it is hard to believe that investors had time to see any sort of performance; good or bad, that might drive them to exit a product so quickly.

Read More  

FT Weekend. Chinese US listing surge. India, China, US relations. Chips and Gold

No Hong Kong specific stories but a couple of China ones.
Locally investors are concerned by the number of new covid-19 cases which hit 113 on Saturday.
Local press also reports that thousands gathered to see the closure of the US consulate in Chengdu, it's interesting that crowds also gathered to see the closure of the Chinese consulate in Houston.
Tensions remain elevated as China reports that the US flew a record 50 sorties over the South China Sea in the first three weeks of July.

Talk of the US showing its true colours in trying to isolate and overthrow the Communist Party instead of finding ways to coexist as its previous policy had intended are I think interesting.
Comments from Pompeo and others certainly suggest that is th new policy. The fact that the Chinese have highlighted it too raises some interesting points.
Firstly for me is the fact that the previous policy not only did not work, it was used by China to advance China's goals with no thought of co-existence with its neighbours. The example of the South China Sea occupation, the intention to retake Taiwan, by force if necessary, infringement into Japanese airspace and contesting ownership of islands outside its normal waters and more recently the push to confront India.
The reality is that things are becoming increasingly tense and therefore the chance of an ‘accident’ leading to a bigger incident are increasing.


On line
Chinese listings surge on Wall Street despite tensions. IPOs more than double this year even as Beijing’s relations with Washington plummet. The rush to list in American seems at odds with the current threat that some Chinese firms will be forced to delist due to auditing standards. To my mind it highlights how China knows it needs the US capital for its companies to grow and that the way currently relations are that source of funds is under threat of being cut off. The US is the biggest source of liquidity and they want to tap it while they can. For investors I think they should be seeking a higher risk premium to reflect the political risk that should be added to the mix. Trump has ‘advised’ government funds not to invest in Chinese companies; ‘advising’ private money to do the same is only a small step further down that line and can be done without time consuming legislation, under the banner of saving US jobs.


Print
Researcher from China arrested at US consulate. 
Looks at the case of Juan Tang is allegedly a member of the Chinese military who was working as a researcher at the University of California. Who is alleged to have made fraudulent statements on her visa application. She was reported to have sought refuge at the Chinese consulate in San Francisco before being arrested on Thursday evening. She is one of four Chinese military operatives recently arrested for visa fraud.
Somewhat embarrassing for the Chinese who last week asked the US to supply evidence of spying, the reason given for closing the Chinese Houston Consulate.
Additionally on Friday, a Singaporean national admitted to spying for China in the US; his task was to recruit military and government employees with high-level security clearances. Which he did by setting a fake consulting company and placing fictions adverts in order to harvest CV’s and then passing the ‘interesting’ ones on to the Chinese Authorities. He would also recruit people with specialist knowledge to provide reports of specific topics.

India to curb Chinese bids for state contracts. It is citing ‘national security’ concerns following what is considers to be China’s recent aggressive behaviour. The exception being procurement of medical supplies to help battle covid-19.
The border clash which was widely seen as being part of an effort by China’s to put India down but it has triggered nationalistic feelings within India, of a far greater level that I suspect China was expecting.
It is similar to the nationalistic feeling often incited in China. I would imagine that China is a little surprised that another country’s citizens would react in the same way that China has managed to get its citizens to do.
Going forward the loss of another market to China whilst not huge in itself is nonetheless going to hurt China. It needs access to as many markets as possible if it s going to engineer and strong recovery. China exports to India were $68bn reports suggest in 2019. That is going be difficult to replace in the current environment.

China’s tech juggernaut steams ahead Looks at how the DJI, Chinese made drones were used to assist French fire fighters tackle the blaze at Notre-Dame Cathedral last year. But before they could the French had to lift restrictions to allow them to fly.
Some Chinese tech is world class but Chinese companies are largely on the periphery of world markets. Currently as they seek to build their global market share they are facing the same barriers that Western companies have for years in trying to build their businesses within China.
A bipolar world. Countries that allow Chinese tech and those that don’t; who tend to be aligned with the US.
The relationship between whom hit new lows this week with ’tit for tat’ closures of Consulates.
The current situation is a result of the Great Chinese Firewall, which China started building back in late 2002. It primarily prevented foreign competition to its domestic internet and allowed Chinese players to build world class systems. Baidu its equivalent to Google but with heavy censorship and restrictions. Alipay vs PayPal but Alipay runs the worlds largest money market fund, does credit ratings and owns an online bank. (In fact it probably knows more about people than the government does which caused some friction earlier this year). Other giants include WeChat which offers more functions vs the west's WhatsApp but again with surveillance traits.
It notes how some Chinese firms have branched out like Alibaba and Tencent and have had some success although in some areas have struggled to adapt to life outside the Great Chinese Firewall they have had success. Also Huawei who grew unnoticed by most of us into the worlds leading 4G and 5G supplier. After China had learnt the lessons from trying to build its own 3G system in the hope it would be globally adopted. This time Huawei became the standard specifier for 5G.
But now having secured a dominating position Chinese companies are under attack from western politicians and regulators. Just was western ones have been for years in China. The difference being that the Chinese have not been asked to share their technology or hand it over but are facing market access restrictions just like the ones western companies in China have for years.
The article says its playing havoc with China’s ambitions but if we stand back, we can see how China's attitude has played havoc with the growth of many western firms for years.
In many cases the opposition has been on security reasons and the handling of personal data. Inside the Great Chinese Firewall citizens have very little control over what happens to their personal data with the state taking the view that it has a right to see everything. Which most recently has come to a head over TikTok and to an extent the new security law in Hong Kong. The key being that in 2017 China introduced the National Intelligence Law. That requires “any organisation or citizen shall support, assist and co-operate with state intelligence work in accordance with the law”. The law makes it impossible for companies such as TikTok, which denies it has handed over user data to the Chinese government, to prove it hasn’t. Just like with the Hong Kong national security law which makes it illegal to say in some cases that you have handed over information to the authorities.
So recently things have peaked with black lists and bans. But will that stop the Chinese development? The straightforward answer is No. China’s tech companies have deep pockets. BUT as we saw last year with ZTE and to an extent Huawei the US does have some levers that could bring it to a holt. The article mentions Ant Group which is to list in Hong Kong and Shanghai soon and has a $200bn valuation. The key to me is that is Trump decides to ban US pension and investment money then the company will struggle.
It quotes Michael Power at Ninety-One AM who says that in many technologies China is winning and its quite a long list 5G, high-speed rail, high-voltage transmission lines, renewables energy, new energy vehicles, digital payments, areas of artificial intelligence to mention a few.
Not covered but key is what is the west going to do?
It is clear that China is a leader in many areas but it still relies on western tech for some of the key elements that goes into these technologies and that at present is one advantage the west has. For example catching up on chips will not be easy or cheap plus as TSMC always says, they are not waiting for the competition to catch up. Which to me is another reason why the west should be more supportive of Taiwan.
The west has been given a wake up call how it reacts now will be key to the balance going forward.

Launch of Intel next-gen chips pushed back by six months This announcement prompted a sell-off for the stock and sector on Friday in the US and Europe and confirmed TSMC’s leadership. With reference to the China’s tech juggernaut steams ahead article above it also illustrated that problems that China will face too as it seeks to advance in this area. It also undermines the commercial significant of Taiwan to the west and China!

US-China tension and virus outbreaks spur gold to longest winning streak since 2011 looks at the recent rally in the commodity to surpass its 2011 high with people now talking about US$2,000 now possible. Key is that it may indicate people are less convinced by the v shaped recovery and also that more speculative or momentum money was involved, the availability of Gold ETF’s probably also helping the moves. Silver has also seen a recent run and I think Palladium is probably due for a run too.

Brighter numbers for US earnings but investors still wary. Looks at the first two weeks of US earnings. It notes that
1. Analysts were very bearish. They lacked company guidance which may or may not have helped. But the fact that company results consistently beat their forecasts should prompt the regulator to examine the basis on which analysts are forecasting.
2. Companies that are seen to be doing well under covid, who’s numbers then miss got flogged.
3. With no end or solution to covid at hand company guidance has been light.
It was a low bar and many beat, its unclear why; it could have been the stimulus ot the Fed action but as of Thursday 80% had beaten on EPS with earnings about 13% above estimates. Better than the five year average.
It's an interesting read with no real answers. It notes that many economists have raised their number whilst analysts remain bearish.


FT Magazine
For sale: useless gadgets bought during lockdown. Looks at how many ‘gadgets’ purchased during the boredom of lockdown will turn out to be be money wasted. It mentions a new electric air pump and a hair trimming device. Things that looked good on-line but actually turn out to be money wasted. Some people will always buy them. The barrage of advertising these days, especially online makes it almost inevitable. Many of the items seem to have been made in China, so that will help China. No doubt middle men have had a slice of too but for many it will be money wasted. It also notes that some people have spent their time and money on buying things that add value to their property or garden, which will probably turn out to be a better investment.
It's not a new issue, slick advertising and skillful camera work can make a lot of 'ropey' products look good. It's usually not illegal as long as the products don’t make exaggerated claims. But one wonders if it ought to be better controlled to prevent people making impulse decisions that they then regret.











Read More  

July 24 FT HK Knives, HK/UK Property, Consultates China orders US Chengdu to close the next stage..

Markets At 1:10 Hong Kong time
JAPAN closed re-opens Monday
S KOREA Market opened lower but initially traded higher and slightly into the green but then news of China demanding the US close its Chengdu Consulate has markets spooked.Kosdaq -0.9%, Kospi -0.6%
TAIWAN opened higher and traded sideways until the news about China demanding the US Chengdu consulate closure which prompted selling. Although it has seen a slight bounce currently -0.5%
CHINA Opened lower and trended lower into lunch. Seeing more selling in the PM on the consulate closure news Currently CSI 300 -4%
HONG KONG HSI opened lower following the US overnight with signs of Team China giving support to try and hold 25k level but after several attempts the market gave up and then trended lower into lunch. New about the US consulate in Chengdu being ordered to close has prompted further selling in the PM. Expect some margin call later and again on Monday. Currently -2.4%
EUROPE. I would expect markets to open lower on hightened US/China tensions and caution over covid and company results.
US Futures opened flat but expect more downside on the China retaliation.

Breaking news that China has called on the US to close its Chengdu Consulate having revoked the Chengdu consulate’s licence to operate. Saying it was “a legitimate and necessary response to the unreasonable actions of the United States”.

Hong Kong buyers boost UK property market British homes are relatively cheap for territory residents unnerved by China’s actions. Looks at how some Hong Kong home owners are finding that UK house prices will make the potential move to the UK attractive. Especially as the Hong Kong home prices have remained relatively stable. Also making the UK attractive is the weakness of the UK pound at present. Lastly the advantage of the UK is that the property law is very similar to that of Hong Kong with the added bonus of being able to acquire freeholds.
From a lifestyle point of view the UK is also attractive from a language and education option too. It's also worth noting that those leaving are unlikely to trigger a market sell off on Hong Kong property.
For the UK the potential buyers are seem as helping otherwise slow markets but because the interest will be across the whole of the UK again the impact is unlikely to be significant.

LEX Hong Kong stocks: falling knives. Notes how the HSI still looks over valued. Thinks that unlike the mainland markets Hong Kong cannot rely on Beijing’s support. It expects further downside. I would agree with much of what it is saying but Hong Kong will be supported by Beijing until such time as the mainland markets are fully open to International investors and the Rmb is fully convertible. Until then China needs Hong Kong for access to international money. Which is why Trumps threat to remove China’s access to the Swift system or restrict US funds from investing in Chinese equities is so powerful. Without access to USD investments China would be thrown into disarray.

Consulate closure deepens US-Sino hostility The risk of a new cold war has increased, fear some analysts, but others are less convinced. Some say China will retaliate and it has just been announced that China has ordered the US to close its Chengdu Consulate.
Others say the action as necessary to show China that its past and current actions are not acceptable as the deputy US secretary of state, told a Senate hearing on Wednesday; China had failed to embrace the rules-based international order. “The unfortunate trends we see in China make our actions all the more urgent.”
From China’s point of view they are finding it increasingly difficult to find things to retaliate with that don’t actually hurt China too. Equally making a big statement now could have unintended consequences after the US elections depending on who wins.
Today will be interesting as the Houston Consulate says that it intends to remain open saying that it has appealed against the move by the US….. but only after burning a lot of papers.
I think increasingly nations are becoming tired of China taking advantage of their openness and not reciprocating with access to China and also of claiming the benefit of this international norms that benefit China but not those that would have consequences for China.
If you want to play then you have to play by all the rule not just the ones that suit you.

Morgan Stanley reins in China interns over security fears. Chinese interns can’t remotely access the Morgan Stanley virtual networks. Interesting because the other large US banks are allowing their interns access. If it was about security laws and liabilities then surely all the banks would have the same approach.

Beware the effect on savings from new era of financial repression by Russell Napier
He has recently changed his viewing is now the option that there will be a new. Era of inflation. He thinks that holding as much gold as possible and as little government debt is the way forward. Equities that are doing well at the moment will not be able to maintain that performance as governments force life insurers and mutual funds to buy government debt at rated below the inflation rate. That means those investors will see their savings being eaten away by inflation. Worth a read. I listen recently to a talk he gave and it does make sense.

FT BIG READ. ECOMMERCE The struggle to deliver profits. Covid-19 has led to a surge in shoppers buying their groceries online. But the costs of running a delivery network are high, leaving supermarkets struggling to turn a profit from the increased demand.
Nice quote from Sainsbury’s chief executive Simon Roberts summed the situation up, saying Covid-19 was “moving sales out of our most profitable convenience channel and driving a huge step-up in online grocery participation, our least profitable channel”.
A good read which illustrates the difficulty of adapting store to online. Notes that Ocado does well because it didn’t have stores to start with. Some Chinese stores are starting with the delivery and working back which also sets to work.
The key points are that for the UK the move to on-line came quicker than anyone was expecting. It has establish infrastructure which isn’t ideal or easily adapted.
There are a number of different models but costs are high.

Financiers’ call for grants rather than loans is flawed. Worth reading because of the risks involved; namely that badly run companies would benefit better than well run companies; which not only unfair but also lowers the quality of business for all.
Nice quote '“Grants, not loans,” was the student slogan. Our campaign was doomed because we failed to understand that we would be the prime beneficiaries of our higher education, not society at large.'

Read More  

July 22 FT Trump now worse before better, HK cases -VE,  HKEX top but, Chinese spying, and more

Markets at 3:30pm
JAPAN 
Market opened lower as expected PMI data was slightly better than forecast. Covid concerns remain. Market then traded sideways/lower through the day Nikkei closed -0.6%
S KOREA Markets opened around fla