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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.

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June 23 HK/CHINA WRAP HK strong rebound. China +VE but cautious. T/O moderate


This and previous notes can be found at Substack ( Asian Market Sense )
Check out ERI-C.com for interesting research and trading analysis

HSI +507pts (+1.8%) 28,817 HSCEI +204pts (+2%) 10,674 T/O HK$156.56bn (+10.7% DoD)

Europe
Markets opened mixed despite good PMI data +VE for the recovery.  Bitcoin remains volatile.  UK FTSE  opened flat and trading sideways, Germany and France trending lower.  Retail names  weak, Resources +VE as the reserve releases from China less than expected.
EuroZone

Flash PMI’s
Services Jun 58.0 vs 52.2 May (F/cast was 57.6)
Manufacturing Jun 63.1 vs 63.1 May (F/cast was 62.2)
Composite Jun 59.2 vs 57.1 May (F/cast was 58.9)
Germany
Flash PMI’s
Services Jun 58.1 vs 52.8 May (F/cast was 54.7)
Manufacturing Jun 64.9 vs 64.4 May (F/cast was 63.8)
Composite Jun 60.4 vs 56.2 May (F/cast was 56.9)
France
Flash PMI’s
Services Jun 57.4 vs 56.6 May (F/cast was 58.7)
Manufacturing Jun 58.6 vs 59.4 May (F/cast was 58.5)
Composite Jun 57.1 vs 57 May (F/cast was 58.7)
UK
Flash PMI’s
Services Jun vs 62.9 May (F/cast was 62.5)
Manufacturing Jun vs 65.6 May (F/cast was 64.5)
Composite Jun vs 62.9 May (F/cast was 62.7)
US Futures
Opened flat Dow +28pts, S&P flat and NDX +0.1% they rose in Asian time to Dow +82pts, S&P and NDX slightly +VE.  But now Dow +36pts S&P and NDX flat.
Ahead MBA Mortgage Applications and 30 yr Mortgage Rate, Current Account, Manufacturing, Services and Composite Flash PMI’s, New Home Sales, EIA Oil Report.
NY Fed Treasury Purchases 4.5 - 7 yrs, 2 yr FRN Auction and 5yr Note Auction.
FED Speakers Bowman, Bostic and Rosengren speak
Earnings: IHS Markit, Winnebago, KB Home, Steelcase

CHINA CSI 300 closed +25pts (+0.5%) @ 5,147
CSI 300 opened slightly higher, initially dipped but then rallied with resistance at 5,171 then eased into lunch +45pts (+0.9%) @ 5,167. Choppy trading suggesting Team China active. PM the market stepped lower, initially to 5,144, bounced, then down to 5,133 before a rally into the close.
Growth and tech-heavy ChiNext Index outperforming the broader
market, as risk-on mode returns after Nasdaq stocks rebound and Treasury yields dropped overnight.
Leaders photoresist, semiconductors, lithium batteries, and coal miners
Laggards white liquor, aviation, food and beverage, and petroleum names.
Brokers downgrading China growth targets to 8.4% from around 9%. China announced to release next month will include 20,000 tons of copper, 30,000 tons of zinc and 50,000 tons of aluminum. With the exception of zinc, the volumes look light compared with expectations.

Shanghai Composite +9pts (+0.3%) @ 3,566
Shenzhen Composite +148pts (+1%) @ 14,848
ChiNext Composite Index +38pts (+1.1%) @ 3,434

CHINA DATA
China confirmed 24 additional COVID-19 cases Tuesday (22 June), all being imported infections, reported by National Health Commission of the PRC.
Guangdong's National Health Commission reported zero additional local COVID-19 cases yesterday (22 June), along with three imported cases. 


HONG KONG
HSI Pre market opened @ 28,468 +158pts vs+82 pts ADR’s
With E-Commerce, Macau, Auto and Tech weak on intial margin call selling but then worked higher to 28,763 just before lunch and ticked lower to 28,717 (+407pts +1.5%) at lunch. PM saw the market trade sideways for the first 90 minutes it then ticked up to 28,880 and then worked higher but resistance at 28,894 and eased back into the close.
A strong rebound as Powell confirmed that stimulus and rates would not be chanfged anytime soon. Key though was that HK T/O was little changed


HONG KONG DATA
The Centre for Health Protection (CHP) reported 2 new covid cases 
all imported (vs 7 imported on Tuesday)
A mutant virus was found in sewage samples in Tai Po, involving fewer than five initially positive cases according to sources. One patient dwells in Tai Po. The Government announced that, since the sewage samples collected in a specified area in Tai Po have tested positive, and a very high viral load is detected in these samples, all buildings and structures within the area are covered by the compulsory testing notice today. They include Yat Nga Court, Tak Nga Court, King Nga Court, Classical Gardens, Grand Dynasty, The Balmoral, Ting Wai Monastery, Po Leung Kuk Tin Ka Ping Primary School, etc.

Short Selling Wednesday 15.6% vs 15.1% Tuesday
Top Shorts 
BankComm (3328) 45%, Bud APAC (1876) 45%,Bank of China (3988) 40%, Country Garden (2007) 36%, Citic (267) 35%, Haidilao (6862) 32%,  CLP (2) 32%, Ping An (2318) 29%, Henderson Land (12) 26%, MTRC (66) 25%, Meituan (3690) 25%.

AFTER MARKET NEWS

REGENT PACIFIC (00575.HK) announced that the stock short name of the Company for trading in the Shares on the HK Stock Exchange will be changed from “REGENT PACIFIC” to “ENDURANCE RP” 
in English with effect from 28 June 2021.  The stock code of the Company on the HK Stock Exchange remains unchanged.

The vice chairman and executive director of WYNN MACAU (01128.HK), Linda Chen, expressed her wish for the COVID-19 outbreak in Guangdong and Hong Kong to become under control, 
so that the number of inbound visitors to Macau would see a rebound during the Summer holiday and subsequently boost the GGR, reported Radio Macau.MTR CORPORATION (00066.HK) announced the next phase of the corporate reorganisation, where Adi Lau Tin-shing, currently the Managing Director – Operations and Mainland Business of the Company, will be appointed as the Managing Director – Mainland China Business and Global Operations Standards of the Company. He will continue to be a Member of the Executive Directorate of the Company. All changes will take effect from 1 July.

Bond (04246.HK), on debut, opened at $103.1, up 3.1%. It logged the peak and trough at $103.25 and $102.9. In last printing, the iBond stood at $102.95, up 2.95% 
against the offer price at $100.

FE CONSORT INTL (00035.HK)’s chief of property Raymond Fong expressed the company project in Shatin will be named "Mount Arcadia".  
The project will provide 62 flat units and 4 houses, with sizes of the flat units ranging from 1,018-1,548 sq.ft. and that of the houses ranging from 2,800-3,400 sq.ft..  Fong revealed that the prices will be ranging from approximately $25,000-30,000 per sq.ft. and that the project will be launched next month at the earliest and will be sold by way of tender as complete flats.

MARKET SECTORS
*COMMODITIES MIXED
prices continue to rise despite China trying to stabilise prices. A weaker USD also helps to support commodity prices. PETROCHINA (857 HK +2.5%) CNOOC (883 HK +0.9%)  despite Russia and other OPEC+ nations are considering raising production in the wake of a tightly-supplied  global crude market.
China plans to sell the first batch of 20,000 tons of copper from its state reserves on July 5-6. It will also sell 30,000 tons of zinc and 50,000 tons of aluminumm, which is lower-than-expected. JIANGXI COPPER (358 HK +2%) CHALCO (2600 HK +8.4%).
CH COAL (1898 HK +5%) YZ COAL (1171 HK +7.4%) as coal prices remain strong.
*E-COMMERCE/INTERNET STRONG on positive sector sentiment, after Nasdaq stocks rebound overnight, and newly listed ChiNext stock SUZHOU NANOMICRO TECH-A rocketed 1400% on trading debut.
KUAISHOU (1024 HK +6.2%) and China Central Broadcasting Corporation held a joint press conference in Beijing, announcing that the two parties have reached a short video strategy for the 2020 Tokyo Olympics and the 2022 Beijing Winter Olympics. Kuaishou also disclosed that its number of global monthly active users has reached 1bn. BABA (9988 HK +2%) JD (9618 HK +2.6%) MEITUAN (3690 HK +5.2%).
*TECH & COMPONENTS STRONG led higher by chip makers amid positive outlook on Chinese semiconductors. HUA HONG (1347 HK +7.6%) SMIC (981 HK +3%) SOLOMON SYSTECH (2878 HK +17%).
*AUTO MAKERS STRONG after TSMC predicts that most automotive chip orders will be resolved in Q3 of this year. GEELY (175 HK +6.2%) CEO gave +VE  press inteview.  BYD (1211 HK +3%) GREAT WALL (2333 HK +6%).
*CHINA PROPERTY FLAT 
CH EVERGRANDE (3333 HK -3.9%) bonds slumped yesterday after reports that several large Chinese banks are restricting credit to the firm and Fitch Ratings downgraded it deeper into junk territory -VE.
*PHARM/MEDICAL STRONG on positive news as China issues list of Covid vaccine available for EXPORTS, including SINOPHARM (1099 HK +3%), Sinovac, and CANSINO (6185 HK +12%).
CANSINO BIO also announced its meningitis vaccine has received regulatory approval.
HANSOH's (3692 HK +5.2%) hep B drug Imitenofovir Tablets has received regulatory approval in China.
VIVA BIOTECH (1873 HK +8.4%) announced that Totient, a biomed company it invested and incubated, reached an acquisition agreement with AbSci, to add new antibody and target discovery technologies to its therapeutic protein design and biomanufacturing optimization platform.

Regional Markets
Australia
ASX 200 sold down initially after PMI’s were lower than expected and news Sydneysiders were largely banned from leaving the city due to a rise in covid cases.  Market sold down to 7,303 but 7,005 was the support until 45 minutes before the close when the market trended lower held at 7,300 for a while but then dipped to 7,292 before a rally to close  -44pts (-0.6%) @ 7,299. The rise in covid cases -VE for travel names. Laggards Financials & Healthcare along with Woolies (announced a $50 m non-cash impairment across its metro stores due to the impact of COVID-19). Leaders BHP, Fortecue and Afterpay.
Data Flash PMI’s
Manufacturing Jun 58.4 vs 60.4 May (F/cast was 61)
Services Jun 56 vs 58 May (F/cast was 59)
Composite Jun 56.1 vs 58 May (F/cast was 59)
Japan
Nikkei opened slightly higher and traded sideways 29,008/28,860
Closed for lunch around the mid point. PM opened lower traded sideways in a tighter range 28,915/28,895 but sold down in the last 10 minutes to close -9pts (-0.03%) @ 28,875. Consumer names +VE but weakness in Shipping
Softbank AGM, Son says he’ll remain Chairman after 69, defends autocracy.
Topix Opened lower 1,955 rallied to flat but then dropped with support around the opening level. Then late morning sold down to 1,952 and traded sideways into lunch. PM drifted lower with support at 1,950 but sold down in last 10 minutes to close -10pts (-0.5%) @ 1,949
Data
Flash PMI’s
Manufacturing Jun 51.5 vs 53 May (F/cast was 53.1)
Services Jun 47.2 vs 45.7 May (F/cast was 47)
Composite Jun 47.8 vs 48.8 May (F/cast was 49)
PM
Coincident Index Final Apr 95.3 vs 92.9 Mar (F/cast was 95.5)
Leading Economic Index Apr 103.8 vs 102.4 Mar (F/cast was 103)
S Korea
Govt to propose a record extra budget +VE for sentiment but upside capped as KDCA announced 645 new covid cases ( +250 DoD) with 605 local transmissions
Kospi opened higher and traded 3,265/3,275 until late morning then stepped higher to trade 3,280/3,275 and closed +12pts (+0.4%) @ 3,276.
Kosdaq opened higher, ticked up to 1,018, eased and then worked slowly better but resistance at 1,020 after which it sold off to close +5pts (+0.5%) @ 1,027.
After market Govt announced to invest KRW220 billion (around US$190 million) in the next five years to be the first to develop 6G technology through joint research with the U.S., said the country's Ministry of Science and ICT at a meeting.
Taiwan
Taiex opened higher as covid cases drop and despite weak consumer confidence data. It traded around 17,150 for the first 30 minutes then rallied. but saw resistance approaching 17,300 and traded 17,250/300 until 1pm when the market ticked higher to 17,333 and worked higher to close +261pts (+1.5%) @ 17,337 T/O was US$18.74m vs US$19.51bn Tuesday.
CECC reported 104 new covid cases (all domestic) and the Level 3 restrictions were extended to July 12
After market a 4.9 earthquake hit Hualien in Eastern
After market
Industrial Production May +16.51% YoY vs +14.1% Apr revised from 13.62 (F/cast was +10%)
Retail Sales May +2.8% YoY vs +18.27% Apr (F/cast is +21%)

CONNECT FLOWS
Shanghai
Northbound Rmb 51,672m Sell 23,331m vs 28,341m Buy
Southbound HK$ 19,946m Sell 10,140m vs 9,805m Buy
Shenzhen
Northbound Rmb 64,214m Sell 30,513m vs 33,702m Buy
Southbound HK$ 21,987m Sell 10,984m vs 11,003m Buy

Active Heavyweights
MEITUAN (03690.HK)  +5.2%
AIA (01299.HK) +3%
PING AN (02318.HK) +2.1%
BABA (09988.HK) +2.1%
TENCENT (00700.HK)  +1.6%

HSI & HSCEI Constituents on Move:
SUNNY OPTICAL (02382.HK)  +7%
KUAISHOU-W (01024.HK) +6.2%
GEELY AUTO (00175.HK) +5.8%
HANSOH PHARMA (03692.HK) +5.2%
CG SERVICES (06098.HK) +4.6%
MENGNIU DAIRY (02319.HK) +4.3%
EVERGRANDE (03333.HK) -3.9%
ANTA SPORTS (02020.HK) +3.2%, hitting new high
SMIC (00981.HK) +3%
CKH HOLDINGS (00001.HK) +3%
PETROCHINA (00857.HK) +2.5%, hitting new high
CK ASSET (01113.HK)  +2%, hitting new high

HSMI & HSSI Constituents on Move:
C-MER EYE (03309.HK)  +19.9%, hitting new high
ANTENGENE-B (06996.HK) +17.9%
CANSINOBIO (06185.HK) +12.4%
UNI MEDICAL (02666.HK)  +11.5%, hitting new high


MARKET HOURS NEWS
.

The 5th phase of centralized drug procurement in China amounted to around RMB55 billion with the variety of the purchased drugs reaching a new high of 62 types, reported CCTV. Injection drugs became the focus for this phase, accounting for half of the procured drugs, involving 70% of the total expense.

HKTV (01137.HK)'s HKTVmall announced that, in response to the government's electronic consumption voucher scheme, the company will include Octopus, AlipayHK, WeChat Pay as the three new electronic payment methods, both online and offline, effective from early July.  In addition, HKTVmall will provide a 30% cash voucher discount to customers who use Octopus, AlipayHK or WeChat Pay to pay at any HKTVmall O2O stores from 1 July-21 July, allowing them to purchase the $500 HKTVmall cash voucher by $350.

NEXT DIGITAL (00282.HK)'s board of directors regrets to announce that due to the current circumstances prevailing in Hong Kong, Apple Daily in its print form will come to an end no later than the last edition on Saturday 26 June 2021 and the digital version will no longer be accessible no later than 11:59 p.m. on Saturday 26 June 2021.

The U.S. and China are discussing the possibility of arranging a meeting between The U.S. Secretary of State Anthony Blinken and Chinese Foreign Minister Wang Yi during the G20  meeting in Italy next week, reported Financial Times, citing people familiar with the matter.  The report added that the U.S. government has also expressed its wish for its Deputy Secretary of State Wendy Sherman to visit China in Summer to its Chinese counterpart.

Hong Kong Trade Development Council (HKTDC) announced that, marking its fifth consecutive quarterly increase, the 2Q21 HKTDC Export Index rose to 48.7, well up on the 39.0 recorded for the preceding quarter and a world away from the 16.0 scored for 1Q20 in the very early days of the Covid-19 outbreak.
HKTDC decided to raise its 2021 export growth forecast for the city to 5% from 15%, likely being the strongest export rebound since the post-financial crisis recovery in 2010 under low-base effect, said Director of Research Nicholas Kwan at the press conference.
Although transports by air, ocean and rail are all recording substantial growth, certain amount of the orders are expected to switch to air freight due to the increasing amount of orders with smaller quantities, which would entail prolonged pressure for air freight industry. The cost of ocean freights, however, TDC added, might not necessarily continue its climb as shipping companies are gradually adapting to the new norms.

KUAISHOU-W (01024.HK) and China Media Group held a joint conference in Beijing, where both sides clinched a strategic cooperation for broadcasting right for 2022 Winter Olympic Games in Beijing and Tokyo 2020 Olympic Games, Chinese media reported.  KUAISHOU-W has already possessed 1 billion monthly active users (MAUs) around the world, said the CEO Su Hua.

BABA-SW (09988.HK)'s new retail platform Hema announced to launch its warehouse member stores "X Member Store" across China, with two new stores in Beijing and Shanghai already opened from 18 June.  Hema expressed the preparation work for further expansion is already underway and targets to open ten "X Member Stores" within this year. Hema "X Member Stores" adopt an operation mode that synchronizes online and offline services such as "half-day delivery" to provide better shopping experience for its members.

Airlines around the globe continue to be hampered by the ongoing pandemic. After downsizing twice since the pandemic started, Hong Kong Airlines' management is expected to announce the dismissal of most of its cabin crew this afternoon (23rd), in particular junior flight attendants, reported HK01, citing sources. The report added that after this round of layoff, there would remain only about 100 people in the airline's cabin service team.CANSINOBIO-B (06185.HK) announced that application has been made by the Company to the Stock Exchange for the resumption of trading in the H Shares from 1:00 p.m.

The Hong Kong market continues to show flexibility and tenacity amid the global pandemic, with financial and property industries especially benefited from the situation, reported BlackRock.  BlackRock remarked that the financial industry has been hugely favored by the inflow of global capital and CNY appreciation, while the property industry continues to be supported by the rising property price induced by the structural demand shortage of Hong Kong.  BlackRock believes that as Hong Kong continues to find no new confirmed local cases, travel restrictions between Hong Kong and places like Singapore, Macau and China is likely to be eased up, which will in turn be salubrious to the local economy.  BlackRock suggested that the current regulatory cycle for certain  technology stocks might last as long as few years, taking BABA-SW  (09988.HK) as an example which was asked to submit self-compliance report to SAMR  for three years. Meanwhile, e-commerce companies endeavor to identify  the next growth driving force, meaning they need to invest in assets and  infrastructure, which would inevitably results in hampered  profitability.   BlackRock,  however, remains positive on the prospect of the Internet industry, but  stressed that the company will be focusing its attention on small-mid  scaled businesses, considering their lower risks to be involved in  anti-monopoly investigations and stronger growth momentum. BlackRock  recommended to keep tabs on short video companies or new generations of  social network.

MELCO INT'L DEV (00200.HK)  announced that a joint venture established between Melco Zhongshan (an indirect wholly-owned subsidiary of the Company) and Zhongshan Yachen (under AGILE GROUP (03383.HK)) succeeded in its bid for the land use rights in respect of Xisiwei, Nanlang Town (Qibu District, Cuiheng New District), Zhongshan at an acquisition price of RMB4 billion.  The Development Project involves the development of mixed-use properties on the Project Land and is expected to include residential, commercial, recreational and entertainment elements, featuring ancillary facilities such as hotels, parks and green areas.  Under the agreement, the Melco JV Parties shall be responsible for the development of a theme park to be constructed on the Project Land.

XIAOMI-W (01810.HK)'s outlook has been upgraded to positive with a "BBB-" rating to reflect the improving operating performance of the company as well as the projected promising cash flow in the coming 24 months, reported S&P Global Ratings.  S&P maintains its optimistic take on the overall profitability of XIAOMI-W as the company continues to acquire market shares in the Chinese smart phone market and increase revenue from internet services.

Facebook (FB.US) announced to expand its Shops service to WhatsApp in various countries and the U.S. Facebook Marketplace.  The Shops feature was launched last year, allowing users to search and purchase products on Facebook and Instagram, as a step of venturing into the e-commerce business.

CHINA DONGXIANG (03818.HK) announced the results for the financial year ended 31 March 2021. Net profit increased by 394.2% to RMB1.811 billion.  EPS  equaled RMB30.88 cents. A final dividend and a special dividend of RMB3.54 cents and RMB1.54 cents per share was declared, totalling RMB5.08 cents per share.

CANSINOBIO-B (06185.HK) spiked 10% this morning before trading being halted midway. National Medical Products Administration (NMPA)'s website revealed that the conjugate vaccine for type A and C meningococcal polysaccharide (CRM197 carrier) developed by the company was approved for market launch, with the issue date 22 June. The vaccine represented the third marketed vaccine product of the company following its Ebola and Covid vaccines.

HUTCHMED (00013.HK) (HCM.US), a biopharma company with CKH HOLDINGS (00001.HK) as its biggest shareholder, will fix its Hong Kong IPO  price at $40.09 per share in order to raise $4.17 billion, IFR reported.Tencent Cloud under TENCENT (00700.HK) announced to have formed a strategic partnership with Guangdong (International) Hotel Management (GDHM) group and Hachi Intelligent Technology on 22 June, focusing on revamping the hotels under GDHM across the country into smart hotels.  According to the agreement, Tencent Cloud will supply the core technologies, combined with the hotel managing and operating experience of GDHM along with the hardware and traffic advantage of Hachi, to smoothen the transition to digitalized and intelligence-based operation of the entire hotel industry.

The trading of CANSINOBIO-B (06185.HK)'s shares has been suspended at 10:16 am with reasons pending to be announced.
CANSINOBIO-B surged 10.6% before the trading halt, last posted $408, on a volume of around 772 million shares.

GEELY AUTO (00175.HK), once rallying 8% to peak at $26.95, last printed at $26.65, up 6.8%. Essence International said in its report that "ZEEKR 001" of the company posted strong beat of market feedback since its launch, where deliverable orders for 2021 were sold out.  In the broker's view, the success of "ZEEKR 001" proved GEELY AUTO's tremendous capability in smart vehicle and advancement in broad platform. The broker retained the company's target price at $40 with rating kept at Buy.   Essence International furthered the company packed the second half of the year with new car launches, predicting sales of "NULL" model in early July.

According to price lists and sales arrangements, all 95 unsold flats under The Pavilia Farm I and The Pavilia Farm II, both co-developed by NEW WORLD DEV (00017.HK) and MTR CORPORATION (00066.HK) atop Tai Wai Station, will be launched. 23 units come from phase I and 72 from phase II.
2,939 flats have been sold under The Pavilia Farm project (phase I to III) in nine months, representing over 95% of the project and pocketing nearly $36 billion.

Lina Khan, who prefers taking a tough stance against the technology conglomerates, is likely to review Amazon (AMZN.US)’s recent acquisition of the movie production company MGM, as she was sworn in as the chair of FTC last week, reported Reuters, citing sources.  Amazon bought MGM this May at USD8.45 billion, in hope to compete with Netflix (NFLX.US) and Disney+.

Chinese media reported that Suning Real Estate will declare bankruptcy on 2 July, whereas 40% shares of Suning.com and Suning Logistics will be taken over by BABA-SW (09988.HK). In response, Suning said these were merely rumors. According to Suning Real Estate's official Weibo account, the company had called the police concerning online rumors and will seriously pursue the legal responsibility of rumor-mongers. The company urged the public not to spread and believe in rumors.

PRE MARKET HOURS NEWS

"Wealth Management Connect" could bring USD464 million of transaction fee revenue for banks every year, 
equaling to approximately HKD3.603 billion, reported Hong Kong Economic Journal, citing Bloomberg Intelligence.  The biggest beneficiaries are expected to be the four major national banks, HSBC and HANG SENG BANK (00011.HK), as a result of their more developed branch networks in GBA.HUTCHMED (00013.HK) announced that on June 22, the Company received approval from the NMPA for savolitinib for the treatment of patients with NSCLC with MET exon 14 skipping alterations, which is conditional on the completion of a confirmatory study in this patient population.

HSBC clarified that Hong Kong clients are able to use the online and mobile banking services as usual 
when they are overseas and that the bank has no plan to alter said services.
The recent update of the terms and articles regarding the services is merely intended for the convenience of its clients, HSBC added as they apologized for the confusion caused.

EMPEROR INT'L (00163.HK) announced the results for the year ended 31 March 2021. The loss decreased to HK$767 million from HK$3.644 billion in the same period last year. LPS was HK21 cents. A final dividend of HK1.2 cents per share was declared. Together with the interim dividend, the total dividends for the Year are HK2.4 cents per share.

CKH HOLDINGS (00001.HK)'s statement disclosed that it repurchased 650,000 shares on the Stock Exchange on 22 June at $59.80-60.20 each, involving approximately $39.07 million.  Year to date, the company bought back 7.4305 million shares, representing 0.1927% of the share capital of the company.

MIDLAND IC&I (00459.HK)  issued a positive profit alert. It is expected that the Group will record a net profit for the six months ending 30 June 2021 as compared to the net loss of approximately HK$8 million for the six months ended 30 June 2020. The expected turnaround of the Group’s results was mainly attributable to the rebound of non-residential property market in Hong Kong in the first half of 2021.

While a number of automakers were beleaguered by chip shortage and forced to suspend production, GEELY AUTO (00175.HK) CEO Gui Sheng Yue told our reporters that he believed the company will not lag behind its fellows since it has been tying up with bellwethers across all walks of industries with many "decent acquaintances".  In regards to the company's goal to sell 1.56 million vehicles this year, the CEO forecast that around 15% sales will be impacted due to insufficient chips in the first half of the year, conceding the company shoulders pressure in meeting the goal. Yet, he assured chip problem will be alleviated in the third quarter, paired with a wide range of popular new cars hitting the market in the second half, by which sales could be boosted and target be met.
It has debuted two key brands with a pivot towards new energy vehicles in recent years, namely Lynk & Co and Zeekr.  As a battery electric vehicle brand, Zeekr will gradually set up  experience stores for promotion in tier-1 cities said CEO Gui Shengyue, who is confident in the brand's ability to vie  with new emerging powers. The BEV brand will start delivering cars from  October and unveil future brand planning by then, added Gui.
Also the group has been building and producing necessary parts through joint ventures with partners, including battery JVs with CATL (300750.SZ) and LG Energy Solution, in hopes of engaging in high-tech development and taking the initiative.
Regarding market concerns about Jidu Auto, the group's JV with BIDU-SW (09888.HK), Gui suggested eyeing on their technological cooperation instead of distribution of the JV's equity interests. Geely he said must open up to the world, despite a bumpy road amid recent changes in Sino-Western relations, GEELY AUTO will vie with both European and American carmakers with the greatest products and a decent layout. Equally, the group has introduced the Geely brand to Eastern Europe through its Belarusian plant, while launching Lynk & Co in Europe with well-received response. The Chinese automaker will also debut its Zeekr brand in Europe going ahead. On another note, Gui said the A-share comeback upon Shanghai Stock Exchange's invitation will have no impact on the company's development.

June 23 FT Thoughts & Lunchtime update Covid on shipping, trust in China and the benefits of long


This and previous notes can be found at Substack ( Asian Market Sense )
Check out ERI-C.com  for your research needs

Asia at 12;45pm HK time
Australia
ASX 200 sold down initially after PMI’s were lower than expected.
Market sold down to 7,303 but 7,005 seems to be the support; key being to hold above 7,300. The rise in covid cases -VE for travel names. Laggards Financials along with Woolies (announced a $50 million non-cash impairment across its metro stores due to the impact of COVID-19). Leaders BHP, Fortecue and Afterpay.
Data Flash PMI’s
Manufacturing Jun 58.4 vs 60.4 May (F/cast was 61)
Services Jun 56 vs 58 May (F/cast was 59)
Composite Jun 56.1 vs 58 May (F/cast was 59)
Japan
Nikkei opened  slightly higher and traded sideways 29,008/28,860
Closed for lunch around the mid point. PM opened lower traded sideways in a tighter range 28,915/28,895. Consumer names +VE but weakness in Shipping
Softbank AGM, Son says he’ll remain Chairman after 69, defends autocracy.
Topix Opened lower 1,955 rallied to flat but then dropped with support around the opening level. Then late morning sold down to 1,952 and traded sideways into lunch. PM drifting lower. Currently -8pts (-0.4%) @ 1,952
Data
Flash PMI’s
Manufacturing Jun 51.5 vs 53 May (F/cast was 53.1)
Services Jun 47.2 vs 45.7 May (F/cast was 47)
Composite Jun 47.8 vs 48.8 May (F/cast was 49)
Due later
Coincident Index Final Apr vs 92.9 Mar (F/cast was 95.5)
Leading Economic Index Apr vs 102.4 Mar (F/cast was 103)
S Korea
Govt to propose a record extra budget +VE for sentiment
Kospi opened higher and traded 3,265/3,275 until late morning then stepped higher to trade around 3,278.
Kosdaq opened higher, ticked up to 1,018, eased and then worked slowly better again. Currently +9pts (+0.9%) @ 1,021
Taiwan 
Taiex opened higher as covid cases drop and despite weak consumer confidence data. It traded around 17,150 for the first 30 minutes then rallied. but saw resistance approaching 17,300 and traded 17,250/300 for the rest of the session.
After market we get
Unemployment May (Apr was 3.71% F/cast is 3.7%)
Industrial Production May (Apr was 13.62% YoY F/cast is 10%)
Retail Sales May (Apr was 18.27% YoY F/cast is 21%)
China 
CSI 300 opened slightly higher, initially dipped but then rallied with resistance at 5,171 then eased into lunch +45pts (+0.9%) @ 5,167
Brokers downgrading China growth targets to 8.4% from around 9%. China announced to release next month will include 20,000 tons of copper, 30,000 tons of zinc and 50,000 tons of aluminum. With the exception of zinc, the volumes look light compared with expectations.
HK 
Pre market opened @ 28,468 +158pts vs+82 pts ADR’s
With E-Commerce, Macau, Auto and Tech weak on intial margin call selling but then worked higher to 28,763 just before lunch and ticked lower to 28,717 (+407pts +1.5%) at lunch.
Europe
Expect markets to open higher following Asia but key will be the PMI data
Ahead 
Flash PMI’s (Services, Manufacturing and Composite) and  ECB Non Monetary Policy Meeting  
US Futures
Opened flat Dow +28pts, S&P flat and NDX +0.1% but have risen in Asian time Dow +82pts, S&P and NDX slightly +VE
Ahead MBA Mortgage Applications and 30 yr Mortgage Rate, Current Account, Manufacturing, Services and Composite Flash PMI’s, New Home Sales, EIA Oil Report.
NY Fed Treasury Purchases 4.5 - 7 yrs, 2 yr FRN Auction and 5yr Note Auction.
FED Speakers Bowman, Bostic and Rosengren speak
Earnings: IHS Markit, Winnebago, KB Home, Steelcase

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FRONT PAGE

G7 snubbed
Tax resistance in Bermuda
Bermudian finance minister Curtis Dickinson has told the Financial Times the island’s taxation regime is a matter of sovereignty, as he pushes back against the G7’s bid to agree a global minimum levy on profits and close loopholes.
Inside Bermuda pushes back against G7 pressure for global tax deal.  Island haven fears corporate levy would hit reinsurance sector and be complex

More than 5m people become millionaires despite pandemic
• Global wealth rises by $29tn • Rich-poor gap widens • Most adults have under $10,000 Looks at the result of a recent Credit Suisse report.
“The contrast between what has happened to household wealth and what is happening in the wider economy can never have been more stark,” the Credit Suisse report said. It found that the wealthiest benefited the most from a policy response that inflated assets, with the gap between rich and poor widening in most countries.’

Taiwan tech groups lock up migrant workers to contain Covid outbreak  Looks at the recent policy in Taiwan of keeping migrant workers confined as it struggled to cope with the recent surge in covid cases

INSIDE

Biden signals his bark and bite are same over Russian cyber attacks  An interesting read, it notes that by involving NATO there is the potential to invoke Article 5 that ‘stipulates an attack on one is an attack on all. “Allies recognise that the impact of significant malicious cumulative cyber activities might, in certain circumstances, be considered as amounting to an armed attack,” the Brussels-based military alliance said, noting cyber threats were “becoming ever more frequent”.   That could raise the stakes because ‘the US believes Russia has structured its policies so its engagements will always fall short of war.’
It also mentions the potential to use offensive cyber capacity; ‘potentially go after computer infrastructure used by ransomware hackers in Russia and Europe.’
Worth a read.

Covid outbreak at Shenzhen port worsens supply chain delays
Looks at the disruption that is occurring due to the recent outbreak of covid in China that resulted in the closure of the Yantain terminal in Shenzhen for one week. The closure was in May and yet the terminal has only recovered to 70% of normal operations and has caused knock on difficulties to other surrounding ports of Nansha and Skekou.
The lesson is the same globally that disruptions at ports or for crews can have global implications; from the piling up of goods at source, lack of space for containers for loading and unloading, shipping issues etc etc. all of which will have an impact of the global recovery and inflation. Also worth nothing that with restricted flights; airfreight is not an option. But container prices can now be over $11,000 vs $8,500 in May and $2,000 in October.
It notes that ‘Larry Hu, chief China economist at Macquarie Group, said that Chinese exports suppressed price growth. “The share of China in global exports has reached [a] new high, in response to the pick-up in goods demand globally and the constrained production elsewhere,” he said. “Otherwise, the global inflation pressure could be even higher.”’
For investors the outlook for shippers remains +VE

Australians’ trust in China falls amid diplomatic chill
looks at the result of the annual Lowy Institute survey, which ‘found that 16 per cent of respondents said they trusted China to act responsibly in the world, a 30 per cent fall since last year. In 2018, more than half of Australians said they trusted China.’
That contrasts with an increased trust in the US.
It also notes that ‘Despite growing distrust of Beijing and positive sentiment towards the US, more than half would prefer to remain neutral if China and the US went to war.’
I would imagine that might depend on the reason the two went to war.
But I think it illustrates how China’s Wolf Warrior diplomacy that was effective in the early days of the Trump administration has become a liability since China refused to allow an independent free investigation into covid. Recently President Xi has called for less outspoken diplomatic comments but in the meantime damage is still being done.

Companies & Markets
EU warned of emissions risk in green plans for shipping
• Proposal involves slower vessels
• MSC chief predicts larger fleets
An interesting read the big problem for the shipping industry is trying to find an alternative clean energy to power the ships that can be made available at all ports in a very short period of time. The fact that the industry has yet to come up with a preferred solution reflects the fact that there is not an easy alternative. Interestingly that indecision also resulted in a sector not engaging in its normal boom and bust cycle of building new ships when rates rise, although there are now signs that they are doing so.
That new willingness to order new vessels at a time of low interest rates could cause problems in the years to come, but in the short term the sectors is seeing good interest especially in Taiwan, Japan and S Korea.

Blackstone seals $6bn housing deal
Private equity firm shows confidence in US property with HPA acquisition.
Blackstone is recognised as being a shrewd property investor and I think this is a play on their view on inflation and bonds. Taking the view that real assets are going to be a much better investment than bonds going forward.
See also LEX Blackstone: home ownership ‘Home ownership is aspirational, but it is hard when single-family home rents in April grew at the fastest in 15 years, according to CoreLogic.
Institutional homeowners claim they provide a  valuable service to those unwilling or unable to buy a home. That may be  true. But the result of public policy and commercial failures means  they have also become rent-seekers, in both senses of the word.’

Backlash against S Korea’s Coupang grows after deadly fire
The fall out is being seen in a wave of boycotts and  a petition to hold  executives accountable, according to the article.  The company has faced many criticisms in the run up to its listing and since.  Today S Korean press is reporting that it’s facing its biggest backlash yet as criticism mounts over working conditions as the death of restaurant owner after dealing with Coupang Eats customer marks latest controversy surrounding the company.
So far its convenience and prices have outweighed the criticisms but there may be a point at which that changes.
Stock is trading around$40 off the low in May ($30) and the high on listing in March $69.00.
Management will need to make changes and that could hurt margins but failure to do so could be worse.

Panasonic defends $7bn price tag in acquisition of Blue Yonder
Insisting that the price is reasonable for the benefits it will achieve.
‘The sense of crisis driving Panasonic’s move is pervasive across Japanese companies, which once thrived in the era of consumer electronics hardware. Many have struggled as global demand shifted to software and with the creation of huge technology companies such as Apple and Amazon.’
An interesting read about the failure of Japanese companies to embrace software and also of their business acumen when it comes to buying stakes in companies or taking over companies.
Worth a read, I think it reflects the fact that Japan Inc tends to believe its ways are always right and remains resistant to change. The Toshiba scandal and others incidents reflect that.

Fitch cuts Evergrande rating over debt load
Despite claims from the company that all is well Fitch has downgraded the stock due to “ongoing pressure for Evergrande to downsize its business and reduce total debt”. “We believe the company’s debt reduction plan is achievable but it is subject to meaningful execution risk,” Fitch said.
Comes as Bloomberg reported that some Chinese banks are reportedly not going to renew loans when they become due.
It raises the wider question of debt defaults, credit shortages and whether Beijing is prepared to help large companies in trouble.
To date Evergrande has managed to call of friends and allies to support it and hurt short seller, but the share price has been trending lower since late 2017 and the outlook remains tough.
But it illustrates that normal business practices do not always work out as you would expect in China.

LEX Japanese chipmakers: power down  ‘The chip crunch has supported stock prices of Japanese  chipmakers in the past year. Shares of Renesas have gained more than 80  per cent. This is in line with gains for Taiwanese peer TSMC. However,  Renesas’s shares still trade at a valuation discount of at least 30 per  cent to global rivals.
Higashi notes that it takes at least a decade to build a world-class industry. Even with government support, capital spending will have to remain high for years. Until mass state support is provided, Japan’s chipmakers will continue to underperform global rivals in both technology and on valuation.’
Worth a read, highlights the the difficulties of building a semiconductor business and that is without the complication of US sanctions.

OPINION Economics
The healing of democracies starts at home
Principal threats to western values come not from Beijing but from inside our own societies By Martin Wolf.
Defends the G7 and the need for ‘for high-income democracies to co-ordinate policies in areas of common interests and shared values. This is particularly true when democracy itself is in recession and power is shifting away from the US and its allies, especially to China.’
But the biggest threat is ‘the failure to ensure widely-shared prosperity and defend democratic norms that matters most’
A good read.


FT BIG READ. ASSET MANAGEMENT
Baillie Gifford bets on a long tech boom
Early bets on Amazon and Tesla have made the Edinburgh firm an investment phenomenon and helped it record huge returns for shareholders. It now sees the most compelling opportunities in China.
A good read about the benefits of long term investing and retaining good staff.


Bitcoin rival monero emerges as crypto of choice for cybercriminals
Untraceable asset rises in popularity with ransomware gangs, posing problems for law enforcement.
An interesting read that highlights how not all crypto coins are equal.
‘Monero was launched as an open-source project in 2014 by a user of a bit-coin forum with the pseudonym “thankful_for_today”. Its original white paper argued that bitcoin’s traceability was a “critical flaw”, adding that “privacy and anonymity are the most important aspects of electronic cash”.
Ehrenhofer is among those who argues that bitcoin’s visibility should be rejected in favour of a fully private financial system. “The main goal is transaction indistinguishability — to make private and fungible money,” he said. “We want to make monero as similar to cash as possible, where one $10 bill is the same as another and the merchant doesn’t know where they came from.”’
An interesting read.

AI drug-discovery start-up raises $255m
Insilico, an artificial intelligence-based drug-discovery platform preparing to trial its first treatment in humans, has raised more than $255m from investors including Warburg Pincus and Sequoia Capital China.
Worth noting that this is a Hong Kong based start up with Baidu Ventures as an existing shareholder.

Australia’s pension titans set to storm private capital
Funds controlling $2tn are bypassing PE firms to place big bets on groups directly.
Worth a read, the large ones are following the Canadian funds and others in the search for yield are taking matters into their own hands.

June 23 Asian Macro Initial Thoughts markets to open higher after Powell's comments Tech and oil +VE


This and previous notes can be found at Substack ( Asian Market Sense )
Check out ERI-C.com for  interesting research and trading analysis

Asia Summary

Australia Futures indicate +5pts but pre market Flash PMI data missed forecasts and dropped more MoM than expects so the open may be muted BUT whilst oil was down small overnight the after market API report saw a bigger fall than expected. Gold names weak but resources +VE Tech still +VE following the US.
Flash PMI’s out and missed, later a speech from RBA’s Ellis.
Japan Nikkei futures opened +30pts  Chicago Futures +25pts; expect a muted open following Tuesday’s strong rebound. Tech remains +VE
S Korea Expect markets to  higher following the rebound in Tech in the US  
Taiwan Market to open slightly higher.  More heavy rain +VE for sentiment in alleviating water shortages.
China Expect market to open higher following the US but sentiment weak on credit and debt issues.
HK ADR’s +82pts at 28,391 with Financials weak, expect Petrochems to be strong after the US API report. Expect some initial margin call selling.  Evergrande in focus over its financial state.
US Futures 
Opened flat Dow +28pts, S&P flat and NDX +0.1%

DOW +0.2%, NDX +0.79%, S&P +0.51%, Russel 2K +0.43%
Markets opened flat and worked higher for most of the day but closed just off the day highs.  Nasdaq hits a new high.  Powells testimony in focus.  Bitcoin saw initial weakness dropping below $30k at one point but rebounded.  Tech rallied even Alphabet despite news of a EU commission probe into whether its advertising unit abused its position.
Powell’s comments, released Monday eveningsupported the notion that the Fed is ready to soon start discussing  removing some of its unprecedented stimulus measures enacted during the  pandemic. He was  positive on the recovery and maintained the view that inflationary signs were just transitory and woould settle back to 2% over the  long term; supporting the view the at the  Fed will delay raising rates  +VE for tech.
Blackrock buying Home Partners of America, a buyer and operator of single-family rental properties, for $6bn, a signal of confidence from the world’s largest real estate manager that the US housing market boom is here to stay. Reflects I think the expectation of inflation rising and real estate being a better asset than bonds.
GameStop +VE on news that the video game retailer had raised £1.13bn through the sale of 5m shares.
Korn Ferry +VE after reporting earnings per share of $1.21 for its fiscal fourth quarter, an all-time high and above the mean estimate of $0.98 expected by analysts polled by Refinitiv. It generated $555m in fee revenue during the same period, another “all-time record” it said, which represented a 26 per cent year-on-year rise

Banks JPMorgan Chase -0.1%, Citigroup +0.8% ,Wells Fargo +0.6%, Amex -0.3%
Work from home names: Facebook +2%, Apple +1.3%, Amazon +1.5%, Netflix +2.4%,  Disney -0.3%, Zoom Video +1.5%, Alphabet +0.4% and Microsoft +1.1%,
Tech NXP Semi +0.5%, Nvidia +2.5%, Micron +0.8%, AMD +1.2%, Skyworks +0.2%
Re-opening stocks  Boeing -0.6%, Caterpillar -0.04%, Simon Property -1%, Kohl’s +2.6%, Nordstrom +4.7%, Gap +2.2%, United Airlines -0.9%, Carnival -2.1%, Wynn Resorts -0.7%, Chevron +0.3%, Exxon Mobil +1.9%,  
Lock down names Campbell Soup +0.1% General Mills +0.1%, JM Smucker -0.4%

DATA
Redbook 17.6% YoY vs 16.4% prior
Existing Home Sales May -0.9% MoM vs -2.7% Apr (F/cast was -1%)
Richmond Fed Manufacturing Jun 22 vs 18 May (F/cast was 16)
After Market
API Crude Oil Stock Change -7.199m vs -8.537m (Consensus was -3.625m)
NY Fed Treasury Purchases TIPS 1 - 7.5yrs vs 2.025B
USD was unchanged vs Yen & Euro. Bitcoin -0.57% @ 32,296.12, but dip below 30k during the day.
VIX -6.9% @ 16.66, US T10 @ 1.467% dipped after Powells Congress testimony.
OIL Brent -0.09%, WTI -0.79% but after market API showed stocks dropped more than expected; expect continued strength.
Gold -0.22%, Silver -0.73%, Copper +1.09% Platinum +1.95%, Palladium -0.13%.

AHEAD
MBA Mortgage Applications and 30 yr Mortgage Rate, Current Account, Manufacturing, Services and Composite Flash PMI’s, New Home Sales, EIA Oil Report.
NY Fed Treasury Purchases 4.5 - 7 yrs, 2 yr FRN Auction and 5yr Note Auction.
FED Speakers Bowman, Bostic and Rosengren speak
Earnings: IHS Markit, Winnebago, KB Home, Steelcase

DAX +0.21%, CAC +0.14%, FTSE +0.39%
Markets opened flat and trading sideways/slightly higher through the day with a tick up into the close.  Investors try and work out Fed policy and watch for Powell’s testimony.  Market opened with Auto +VE Chemicals -VE but at the end of the day Resources were the leaders.
UK +VE sentiment as it starats the progress of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership
Vivendi +0.3% got approval from investors Tuesday to spin-off of its iconic Universal Music Group.
Travis Perkins +6.7% in afternoon trading after forecasting strong profits on the back of robust building materials demand.
British property groups Land Securities +3.2% and British Land +4.7% after JPMorgan upgraded their shares to “overweight.” British Land also selling part of a London project
Dutch internet investment firm Prosus -3.2% after HSBC cut its price target.
Swiss online pharmacy Zur Rose Group - 5.2%.
DATA
EUROZONE
Consumer Confidence Flash Jun -3.3 vs -5.1 May  (F/cast was -3)
UK
Public Sector New Borrowing May £-24.3B vs £-29.1B Apr revised (F/cast was £-28.4B)
CBI Industrial Trends Orders Jun 19 vs 17 May (F/cast was 25)
AHEAD
EUROZONE Flash PMI’s (Services, Manufacturing and Composite).   ECB Non Monetary Policy Meeting  
GERMANY Flash PMI’s (Services, Manufacturing and Composite)  FRANCE Flash PMI’s (Services, Manufacturing and Composite)  
UK  Flash PMI’s (Services, Manufacturing and Composite)  

JAPAN 
Nikkei futures opened +30pts  Chicago Futures +25pts; expect a muted open following Tuesday’s strong rebound and the pre market data. Tech remains +VE Softbank AGM today will be watched closely
Yen currently 110.64
Data due Pre market Jun Flash PMI
Services May was 46.5 F/cast is 47
Manufacturing May was 53 F/cast is 53.1
Composite May was 48.8 F/cast is 49
BoJ meeting notes
At lunch Coincident and Leading Economic Indexes
Tokyo reported 435 new covid cases (+199 DoD) with the nationwide total 1,437.
Tokyo Olympic organizers have given up on a plan to allow the sale of alcoholic beverages at competition venues during the global sports event, an official with knowledge of the matter said late Tuesday. -VE Brewers  
Toshiba Corp;  Hiromichi Mizuno, until recently an adviser to the Ministry of Economy, Trade and  Industry said he did not put pressure on Harvard University’s endowment fund to influence its voting at Toshiba’s contested shareholder meeting last year, and that the fund should “set the record straight”.  
Nissan Motor will adjust production at several factories next month due to the  global chip shortage, three sources with direct knowledge of the plan  told Reuters on Tuesday. Slight -VE  But at the AGM the CEO said financial performance in April and May was better than expected Slight +VE  Management faced a number of questions about Ghosn at the meeting .
Mitsui & Co said on Tuesday it had agreed to sell its stake in  Indonesia's PT Paiton Energy, which operates coal power plants, to RH  International (Singapore), a unit of Thai energy firm Ratch group PCL. +VE as will book a gain.
The head of a major inquiry into Japan's nuclear disaster and a former  senior Cabinet adviser have sounded alarm over plans this week to restart a 44-year old reactor, saying the industry and government have  not taken on board the lessons from Fukushima.  -VE for sentiment
Japanese police on Tuesday filed a notice of investigation against the  local office of food delivery service Uber Eats for suspected breach of  immigration law. -VE
The Bank of Japan must make its inflation target more flexible so it can  take into account not just price growth but also the output gap and job  creation when deciding on monetary policy, an academic close to BOJ  Governor Haruhiko Kuroda said.
Nvidia Corp. has an unlikely message for some of its most voracious customers: Please don’t buy our latest high-end computer-graphics chip.  The GeForce RTX 3080 Ti, a $1,199 graphics card, and the RTX 3070 Ti, which costs about half that amount, have had some of their capabilities deliberately stripped out. Nvidia wants them to be the exclusive preserve of its core gamer customer base and is nixing the products’ ability to effectively mine cryptocurrencies like Ethereum and Bitcoin +VE
SUMMARY
Cybozu (4776): Cuts full-year operating profit forecast 68% to 329m yen -VE
IHI (7013): Sign pacts with GE to develop ammonia fuels roadmapacross Asia +VE
Kansai Electric (9503): Mihama No. 3 nuclear reactor to restart Wednesday +VE
Kawasaki Kisen (9107): Raises full-year current profit forecast to 200b yen from 45b yen +VE
Mabuchi Motor (6592): To Acquire Electromag in All-Cash Deal; No Terms
Nitori (9843): June same-store sales -20.5% y/y
Nomura Holdings (8604): To book pretax gain of 36b yen for 1Q on NRI share sale
Nippon Telegraph & Telephone (9432): Dimension Data Co-Founder Jeremy Ord Steps Down: TechCentral
Tsuruha (3391): 4Q operating profit 8.7b yen vs analyst estimate 10.4b yen; forecasts OP of 51.2b yen for current fiscal year vsestimate 53.1b yen

SOUTH KOREA 
Expect markets to open higher following the rebound in Tech in the US
No data due

KDCA reported 395 new covid cases (+38 DoD) below 400 for a second day.
Samsung Electronics on Tuesday unveiled a set of innovative 5G  solutions, three chips and one antenna radio, at its first virtual  showcase event. +VE
South Korean property developer Sung Jung Co. said Tuesday the court has selected it as the final bidder to acquire financially troubled budget carrier Eastar Jet Co.
Coupang faces biggest backlash yet as criticism mounts over working conditions as the death of restaurant owner after dealing with Coupang Eats customer marks latest controversy surrounding the company. Comes as it is facing a  wave of consumer boycotts over its handling of a fire that killed one  person and destroyed its biggest logistics centre.  -VE
Daewoo Shipbuilding & Marine Engineering Co. (DSME) said Tuesday that it plans to set up a global research and development alliance to develop state-of-the-art shipbuilding technologies.
To sharpen its competitive edge in the construction of eco-friendly ships and smart ships amid their growing demand, DSME will establish the R&D alliance, along with four universities, five ship quality assurance and risk management companies, and five research institutes, the shipbuilder said +VE.
Subcontractors of financially troubled SsangYong Motor Co. will receive  additional financial help as the automaker is in search of a new  investor.   The state-run Korea Credit Guarantee Fund will provide  25 billion won ($22 million) for SsangYong's subcontractors, raising  such help to 75 billion won in total, according to the Ministry of  Trade, Industry and Energy. Slight +VE
LG Electronics Inc. on Tuesday unveiled a digital X-ray detector (DXD) with artificial intelligence (AI) solutions as the South Korean tech giant eyes to expand its presence in the medical equipment field.
Hyundai Motor Co. on Tuesday unveiled the Avante N high-performance model as it strives to strengthen its high-end product lineup.

TAIWAN 
Expect market to open slightly higher.  More heavy rain +VE for sentiment in alleviating water shortages.
Data due 
after market
Unemployment May (Apr was 3.71% F/cast is 3.7%)
Industrial Production May (Apr was 13.62% YoY F/cast is 10%)
Retail Sales May (Apr was 18.27% YoY F/cast is 21%)
After market Tuesday
Consumer Confidence May 74.88 vs 77.28 Apr
CECC reported 79 new covid cases (of which 1 was imported)
The Ministry of Economic Affairs yesterday announced that it was easing water restrictions in several regions, thanks to rainfall over the past few days.  The water supply alert level has been downgraded from “orange” to “yellow” for Taoyuan and Hsinchu and Miaoli counties, and from “orange” to “green” for Tainan and Chiayi County, the ministry said.
Taiwan’s representative office in Hong Kong would continue to operate even though most Taiwanese posted at the office have been forced home due to visa issues, Mainland Affairs Council (MAC) Minister Chiu Tai-san said on Monday.  Comes as academics yesterday criticized China after staff at Taiwan’s representative office in Hong Hong were required to sign a document supporting Beijing’s “one China” principle. +VE
TSMC plans to give capacity priorities to auto chips and Apple orders, followed by orders for PC, server and networking equipment chips, Chinese media citing semiconductor sector insiders.

CHINA 
Expect market to open higher following the US but sentiment weak on credit and debt issues
No data due
China plans to keep pandemic border restrictions in place for at least another year amid fears over the emergence of new variants and a calendar of sensitive events, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.  The provisional timeline for the second half of 2022 was set during a meeting of China's cabinet, or State Council, in mid-May, the WSJ said -VE
FT Reports ‘Covid outbreak at Shenzhen port worsens supply chain delays’ Says prodcutivity has only recovered to about 70 per cent of normal levels -VE.
Chinese Foreign Minister Wang Yi will chair a high-level meeting on Belt and Road international cooperation in Asia-Pacific today (23 June), according to MoFA Spokesperson Zhao Lijian. Foreign ministers or economic ministers from Asia-Pacific regions, and representatives of international bodies like the United Nations will attend the video conference. The meeting's theme will be strengthening anti-plague team-up and fostering economic recovery.
More than 40 countries urged China on Tuesday to allow the U.N. human rights chief immediate access to Xinjiang to look into reports that more than a million people have been unlawfully detained there, some subjected to torture or forced labor, Reuters reports. -VE
China and its allies called on Tuesday for an investigation into the discovery of the remains of indigenous children in Canada at the site of a former boarding school, prompting an angry response from PM Trudeau; condemning what he called "the systemic abuse and human rights violations" in Xinjiang, said a Canadian truth and reconciliation commission had worked from 2008 to 2015 to address the mistreatment of the indigenous population. "Where is China's truth and reconciliation commission? Where is their truth? Where is the openness that Canada has always shown and the responsibility that Canada has taken for the terrible mistakes of the past?" Trudeau asked.  -VE for sentiment and another example of how the ‘wolf warrior’ diplomacy is not working for China.
Germany needs an honest discussion about how to deal with trading partners such as China and must not duck confrontation if red lines on human rights are crossed, the head of the influential BDI industry association said on Tuesday. -VE
Huawei 5G ban is upheld by Swedish court -VE for its European plans

HONG KONG 
ADR’s +82pts at 28,391 with Financials weak, expect Petrochems to be strong after the US API report. Expect some initial margin call selling.  Evergrande in focus over its financial state. 
No data due but after market Tuesday
Inflation Rate May +1% YoY vs +0.8% Apr (F/cast +1%)
Current Account Q1 HK$59.8b vs 31.2B Q4 (F/cast was 30b)

Short Selling Tuesday 15.1 vs 15.8% Monday
Top Shorts 
Bank of China (3988) 39%, Bud APAC (1876) 39%, CLP(2) 36%, Hang Seng Bank (11) 33%, Country Garden (2007) 33%, Hengan (1044) 32%, Sands China (1928) 32%, Anta (2020) 32%, Power Assets (6) 32%, HKEX (388) 31%, Geely Auto (175) 30%, Longfor (960) 29%, MTRC (66) 29%, CKAsset (1113) 28%, Ping An (2318) 28%, Henderson Land (12) 27%, CKI (1038) 25%, Petrochina (857) 25%, Xinyi Solar (968) 25

WATCH
Foxconn offers workers record-high cash bonuses,
especially experienced ones, to sign on as it ramps up its production capacity ahead of Apple’s iPhone 13 launch +VE,

PHOENIX TV (02008.HK) announced that with effect from 22 June 2021, LIU Changle has tendered his resignation as the Chairman and an executive Director.
XU Wei, the chief executive officer of the Company, has been appointed as the Chairman and an executive Director. HO Chiu King, Pansy Catilina has been appointed as the Vice-chairman of the Board and a non-executive Director.

Fitch Ratings announced to downgrade the long-term foreign notes IDR of EVERGRANDE (03333.HK) and its subsidiaries including Hengda Real Estate Group Co., Ltd and Tianji Holding Limited from "B+" to "B". 
Fitch Ratings projected a negative prospect for EVERGRANDE as the company continues to be pressurized and is forced to reduce its business scale and reduce debts, which might impose a negative influence on the company's business in mid-terms. -VE

YUEXIU SERVICES (06626.HK) has decided to price its Hong Kong  IPO at $4.88 per share, which is the bottom price within the $4.88-$6.52 range of its listing price,
reported IFR, citing sources.
YUEXIU SERVICES's IPO offers over 369 million shares, if priced at the lower limit, it is estimated to raise approximately $1.804 billion. Slight -VE

SINO-OCEAN GP (03377.HK) announced that the Group had signed a strategic cooperation agreement between a bank and an enterprise with PAB (000001.SZ). 
Accordingly, PAB will provide SINO-OCEAN GP with an intentional credit facility of RMB30 billion, customized financial service products and solutions, as well as both domestic and overseas financing support. +VE

AIA (01299.HK) announces that the China Banking and Insurance Regulatory Commission (CBIRC) has approved AIA China to begin preparations to establish a new branch in Hubei province.
Lee Yuan Siong, AIA Group Chief Executive and President, said the group is delighted to receive approval to prepare for its branch in Hubei. This is an important next step in the group's geographical expansion strategy in Mainland China, following the recent launch of its newest operation in Sichuan province in April. +VE

NATIONAL SECURITY
First trial under the new law starts today, without jury; will be watched closely to see whether the National Security Law surpasses the Basic Law.
The Chief Executive Carrie Lam Cheng Yuet-ngor hit back on Tuesday against criticism of actions against pro-democracy tabloid Apple Daily as attempts to "beautify" acts that endangered national security,  "And don't try to accuse the Hong Kong authorities for using the national security law as a tool to suppress the media or to stifle the freedom of expression," she added.  -VE for sentiment.

June 22 HK/CHINA diverge, HK lower, China higher on lighter volumes


This and previous notes can be found at Substack ( Asian Market Sense )
Check out ERI-C.com for interesting research and trading analysis

HSI -179pts (-0.6%) 28,310 HSCEI -78pts (-0.7%) 10,479 T/O HK$141.37bn (-10.1% DoD)

Europe
Markets opened flat and trading sideways as investors try and work out Fed policy. Auto +VE Chemicals -VE
UK +VE sentiment on a progress on joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership
Vivendi awaits a vote from investors Tuesday on a proposed spin-off of its iconic Universal Music Group.
British property groups Land Securities and British Land both +VE after JPMorgan upgraded their shares to “overweight.” British Land also selling part of a London project
Dutch internet investment firm Prosus fell 2.7% after HSBC cut its price target.
Data
EUROZONE due later
Consumer Confidence Flash Jun (May was -5.1, F/cast is -3)
ECB’s Lane speaks
UK 
Public Sector New Borrowing May £-24.3B vs £-29.1B Apr revised (F/cast was £-28.4B)
CBI Industrial Trends Orders Jun 19 vs 17 May (F/cast was 25)
US Futures
Opened Dow +35pts, S&P +0.1% and NDX +0.04%; have eased to Dow +13pts S&P flat and NDX slightly -VE. Today more Fed speakers along with Powell’s testimony and  Redbook, Existing Home Sales, Richmond Fed Manufacturing


CHINA
CSI 300 closed +32pts (+0.6%) @ 5,122
CSI 300 opened higher at 5,106 and traded sideways until 10:25am when it rallied but saw resistance approaching 5,120 and eased back into lunch. PM opened higher but sold off down to 5,092 at 1.55pm before rallying back to the close slightly higher than the lunchtime open. Cautious trading with uncertainty over US interest rates.
Chinese solar names -VE on fears of a Biden ban which investors worry could widen to other areas.
Leaders banks, mining services, agricultural planting.
Laggards Harmony OS concept, digital currency, and domestic software.

Shanghai Composite +28pts (+0.8%) @ 3,557
Shenzhen Composite +55pts (+0.4%) @ 14,696
ChiNext Composite Index +12pts (+0.4%) @ 3,396

CHINA DATA
China confirmed 25 additional COVID-19 cases yesterday (21 June), 
including two local infections in Guangdong, reported by National Health Commission of the PRC.
Guangzhou city's National Health Commission reported no new confirmed cases domestically yesterday (21st).  The city has found no new cases in 3 consecutive days.


HONG KONG
HSI Pre market opened @  28,575 +86pts vs +168pts ADR’s  as margin call selling from Monday outweighed the ADR’s and short covering but then sold down to 28,400 before rebounding to traded around flat. PM has sold down again to test 28,400 and bounced to 28,440 but unable to hold and sold in the last hour to close on the day lows.

HONG KONG DATA
After market
Inflation Rate  May +1% YoY  vs +0.8% Apr (F/cast +1%)
Current Account Q1 HK$59.8b vs 31.2B Q4 (F/cast was 30b)

Inflation Netting out the effects of all Government's one-off relief measures, the year-on-year rate of increase in the Composite CPI (i.e. the underlying inflation  rate) in May 2021 was 0.2%, marginally larger than that in April 2021 (0.1%). The larger increase was mainly due to the enlarged increases in the costs for meals out and takeaway food as well as the smaller decreases in the prices of fresh vegetables.
A Government spokesman said that the underlying consumer price inflation rate edged up to 0.2% in May. Price pressures on all major CPI components stayed modest, though prices of meals out and takeaway food showed a slightly larger year-on-year increase amid stabilised local epidemic situation.

C&SD announced that the total employment in the private sector surveyed decreased by 2.7%  YoY or 73,600 persons in March 2021. The total number of vacancies was 39,350, representing a decrease of 7% or 2,920 over the preceding year.

The Centre for Health Protection (CHP) reported 7 new covid cases 
all imported.

Short Selling Tuesday 15.1 vs 15.8% Monday
Top Shorts 
Bank of China (3988) 39%, Bud APAC (1876) 39%, CLP(2) 36%, Hang Seng Bank (11) 33%,  Country Garden (2007) 33%,  Hengan (1044) 32%, Sands China (1928) 32%, Anta (2020) 32%,  Power Assets (6) 32%, HKEX (388) 31%, Geely Auto (175) 30%, Longfor (960) 29%, MTRC (66) 29%, CKAsset (1113) 28%,  Ping An (2318) 28%, Henderson Land (12) 27%, CKI (1038) 25%, Petrochina (857) 25%, Xinyi Solar (968) 25

AFTER MARKET NEWS

PHOENIX TV (02008.HK)  announced that with effect from 22 June 2021, LIU Changle has tendered his resignation as the Chairman and an executive Director.
XU Wei, the chief executive officer of the Company, has been appointed as the Chairman and an executive Director.  HO Chiu King, Pansy Catilina has been appointed as the Vice-chairman of the Board and a non-executive Director.

Fitch Ratings announced to downgrade the long-term foreign notes IDR of EVERGRANDE (03333.HK) and its subsidiaries including Hengda Real Estate Group Co., Ltd and Tianji Holding Limited from "B+" to "B". 
Fitch Ratings projected a negative prospect for EVERGRANDE as the company continues to be pressurized and is forced to reduce its business scale and reduce debts, which might impose a negative influence on the company's business in mid-terms.

YUEXIU SERVICES (06626.HK) has decided to price its Hong Kong
IPO  at $4.88 per share, which is the bottom price within the $4.88-$6.52 range of its listing price,
reported IFR, citing sources.
YUEXIU SERVICES's IPO offers over 369 million shares, if priced at the lower limit, it is estimated to raise approximately $1.804 billion.

SINO-OCEAN GP (03377.HK) announced that the Group had signed a strategic cooperation agreement between a bank and an enterprise with PAB (000001.SZ).  
Accordingly, PAB will provide SINO-OCEAN GP with an intentional credit facility of RMB30 billion, customized financial service products and solutions, as well as both domestic and overseas financing support.

AIA (01299.HK) announces that the China Banking and Insurance Regulatory Commission (CBIRC) has approved AIA China to begin preparations to establish a new branch in Hubei province.
  Lee Yuan Siong, AIA Group Chief Executive and President, said the group is delighted to receive approval to prepare for its branch in Hubei. This is an important next step in the group's geographical expansion strategy in Mainland China, following the recent launch of its newest operation in Sichuan province in April.Chinese Foreign Minister Wang Yi will chair a high-level meeting on Belt and Road international cooperation in Asia-Pacific tomorrow (23 June), according to MoFA Spokesperson Zhao Lijian. Foreign ministers or economic ministers from Asia-Pacific regions, and representatives of international bodies like the United Nations will attend the video conference. The meeting's theme will be strengthening anti-plague team-up and fostering economic recovery.

The U.S. semiconductor manufacturer GLOBALFOUNDRIES announced to partner with the Singapore Economic Development Board and with co-investments from committed customers to expand its global manufacturing footprint with the construction of a new fab on its Singapore campus.  
GF's more than USD4 billion investment will play an integral role in meeting the growing demand for the company's industry-leading manufacturing technologies and services to enable companies worldwide to develop and scale their business. GF expressed that the global demand for semiconductor chips is growing at an unprecedented rate, with worldwide revenue projected to increase 2.1x in the next 8 years. The Singapore fab, when completed, will add a capacity of 450,000 wafers per year, bringing GF's Singapore campus up to 1.5 million wafers per year.

MARKET SECTORS
*PETRO STRONG
led the benchmark indexes higher after WTI+2.7%, as a U.S./Iranian deal uncertain and the dollar retreated from 2-month highs. PETROCHINA (857 HK +5.3%) SINOPEC (386 HK +3.5%) CNOOC (883 HK +3.3%).*E-COMMERCE/INTERNET WEAK Concerns over regulatory pressure as PBoC  ordered banks and ALIBABA's (9988 HK -1%) Alipay to not provide virtual currencies trading services. TENCENT (700 HK -2.9%) MEITUAN (3690 HK -2.4%).*TELCOS MIXED. CH TEL (728 HK -1.5%) despite after announced yesterday that it planned to raise its dividend payout ratio to 70%.
CH MOBILE's (941 HK +1%) number of mobile customers reached 942.78m in May, up 0.1% MoM. The number of 5G package customers rose by 8.11% to 221.95m in May.
CH UNICOM (762 HK -0.2%) said the aggregate number of mobile billing subscribers inched up by 0.08% MoM to 309.72m in May. The aggregate no.of 5G package subs rose by 7.63% to 106.094m in May.*MACAU WEAK as Macau will double the number of gaming inspectors and restructuring several departments in its latest move to ramp up supervision of the sector. The change comes just months before the expiry of multi-bn-dollar casino licenses to rebid for new gaming concessions. SJM (880 HK -3.6%) SANDS (1928 HK -2.5%) GALAXY ENT (27 HK -3.4%) MGM (2282 HK -5%).*SPORTSWEAR STRONG continued buying following Hilhouse's recent investment in XTEP (1368 HK +0.8%), while sector's outlook remains positive ahead of the Tokyo Olympic. VIVA CHINA (8032 HK +16%) LI NING (2331 HK +2.5%) ANTA (2020 HK +2.4%).*HK RETAILERS WEAK, except SASA INTL (178 HK +6.5%) on news it plans to close 15-20 stores in HK and open 30 on the mainland with a focus on the Greater bay area. The rest weak despite a further relaxing of social distancing measures from Thursday.  Plus plans for a 7-day quarantine for inbound travellers with antibodies (double vaccinated or recovered) from the end of the month. *GAS SUPPLIES STRONG as demand for gas remain robust, with China pushing to replace coal with natural gas as a rural energy source. SUNTIEN (956 HK +11%) CR GAS (836 HK +3%) KULUN (135 HK +3.1%).*OTHER MOVERS:
WANT WANT (151 HK -3.2%) reported at lunchtime, FY net income for the full year +14% YoY, inline with estimate.
XINTE ENERGY (1799 HK  -1.4%) but off lows after Politico reported the Biden administration is considering banning imports from Xinjiang of ultra-conductive metal used in solar panels.Regional Markets
Australia
Market opened higher and then worked slowly higher for most of the day to 7,366 before easing back to close +107pts (+1.5%) @ 7,342
Lead higher by Financials, Miners and Energy names. Healthcare and Tech were the laggards.
Flash PMI data tomorrow
Japan
Nikkei opened 500pts higher and worked higher into lunch at 28,800. PM traded sideways with support at 28,800 and ticked higher at the end to close +873pts (+3.1%) @ 28,884. Yesterdays big decliners rebought in early trading.
Topix similar pattern closed +60pts (+3.2%) @ 1960 Electronics and auto makers were the leaders
Flash PMI data tomorrow, BoJ meeting notes along with Coincident and Leading Economic Indexes.
S Korea
Pre Market PPI increased but not as much as forecast.
Trading volumes were moderate again ($13.4bn) Foreign net buyers, Institutions and Retail were net sellers. Hyundai +3.4%, LG Chem + 2.4%, Samsung edged higher Hynix flat, Naver -1.5% and Samsung Bio -0.9%.
After market MSCI said S Korea failed to join its World Index; Lack of offshore forex trading, English information, regulation on foreign investors were cited as reasons for world’s 8th-largest stock market left in emerging status.
Kospi opened higher, with yesterday’s shorts squeezed. Eased back and traded around 3,260 through to around 1pm; then worked higher in choppy trading to close +23pts (+0.7%) @ 3,264
Kosdaq opened higher and squeezed to 1,017 but then sold down to 1,008 around 10am before working higher but resistance at 1,013 which it tested a few time before easing to close +0.6pt (+0.06%) @ 1,012.
Data out
PPI May YoY +6.4% vs +5.6% Apr (F/cast was +5.9%)
PPI May MoM +0.4% vs +0.6% Apr (F/cast was +0.7%)
BoK Financial Stability Report out at 11am local time showed the economy stable but rising financial imbalances worrying the BoK.
KDCA reported 395 new cases (+38 DoD)
The Korea Fair Trade Commission (KFTC) announced recently to launch an anti-dumping investigation on aluminum hydroxide originating in China and Australia. The products involved are under HS code 2818.30.9000.
Taiwan
Taiex opened higher and rallied to 17,250 after a mixed Export data. Eased slightly and traded sideways for 45 mins before selling down to 17,100. Rebounded to traded around 17,175 until around 12:45pm when it sold down to close +13pts (-0.07%) @ 17,076 T/O was US$19.51bn vs US$18.27b Monday.
After Market
Consumer Confidence May 74.88 vs 77.28 Apr
CECC reported 79 new covid cases (of which 1 was imported)
TSMC plans to give capacity priorities to auto chips and Apple orders, followed by orders for PC, server and networking equipment chips, Chinese media citing semiconductor sector insiders.


CONNECT FLOWS
Shanghai
Northbound Rmb 51,642m Sell 26,551m vs 25,091m Buy
Southbound HK$ 19,269m Sell 9,774m vs 9,494m Buy
Shenzhen
Northbound Rmb 59,089m Sell 30,021m vs 29,068m Buy
Southbound HK$ 19,105m Sell 8,950m vs 10,155m Buy

Active Heavyweights
MEITUAN (03690.HK)  -3%
TENCENT (00700.HK) -2.9%
HKEX (00388.HK) -1.8%
BABA (09988.HK) -1.2%
AIA (01299.HK) +0.1%
CCB (00939.HK) unchanged
PING AN (02318.HK)  unchanged

HSI & HSCEI Constituents on Move:
PETROCHINA (00857.HK)  +5.8%
BYD COMPANY (01211.HK) -4%
HK & CHINA GAS (00003.HK) +3.7%
SINOPEC CORP (00386.HK) +3.5%
JD HEALTH (06618.HK) -3.5%
XIAOMI (01810.HK) -3.2%
GALAXY ENT (00027.HK)  -3.2%


HSMI & HSSI Constituents on Move:
AK MEDICAL (01789.HK)  +30.8%
CR HOLDINGS (01911.HK) +17.3%
KANGJI MEDICAL (09997.HK) +12.4%
GUORUI PPT (02329.HK) +11.9%
WEIGAO GROUP (01066.HK) +11.5%
CR MEDICAL (01515.HK) +11.4%, hitting new high
CGN NEW ENERGY (01811.HK) +10.3%
SHIMAO SERVICES (00873.HK) +8.5%, hitting new high
FRONTAGE (01521.HK) +6.3%, hitting new high
HYGEIA HEALTH (06078.HK) +3.5%, hitting new high
CIMC (02039.HK)  +3.4%, hitting new high

MARKET HOURS NEWS
.

Independent third party research institution and new media "Wogoo" announced to have completed a hundred million-grade Series B financing, with its major strategic investors including Lock Capital, XIAOMI-W (01810.HK) and Sina Corp.  Wogoo expressed upon the completion of this series of financing, the company will officially venture into the rating business in the capital market as well as the realm of trading software. Professional equity reporters team will also be established as the company files applications for related licenses and qualifications.

CK ASSET (01113.HK)'s luxury residential project at Mid-levels - 21 BORRETT ROAD - reported sales of another unit by way of tender today (22nd). Featured four bedrooms with a double parking space, the unit was dealt at $169.5 million. With a saleable area of 2,154 sq.ft., the price per sq.ft. is $78,700.

China's MoC, MIIT, NHC, and NMPA released a notice on the list of COVID-19 vaccine supplies approved for export.  Accordingly, COVID-19 vaccine products that have received NMPA's greenlight or conditional approval for commercialization and registration will be placed on the above list.  Specifically, these vaccine products come from Sinopharm's Beijing Institute of Biological Products Co., Ltd., CANSINOBIO-B (06185.HK) and other drugmakers.AlipayHK reached a partnership agreement with HKTV (01137.HK)'s HKTVmall, with the latter adding AlipayHK as a new payment method, in response to the government's consumption voucher scheme. AlipayHK and HKTVmall will jointly launch discounts for customers who collect their vouchers through AlipayHK, including exclusive HKTVmall shopping vouchers and a $20 rebate for any purchase of $300 or above.
China's purchase of U.S. goods in May further slacked, putting the trading target established in the 2020 trade deal even more out of reach, reported Bloomberg News.  China purchased products worth around USD10 billion from U.S.'s manufacture, agriculture and energy industries in May, smallest amount since last October.  Since January 2020, China has only purchased U.S. goods with an accumulative worth of around USD157 billion, representing merely 41.4% of the trading target upon which both countries agreed previously.

RAZER (01337.HK) announced a 68% YoY gross merchandise
volume (GMV) growth across networks during the latest 618 Shopping Festival. 
Such data came from the backstage of Tmall, JD.com and Douyin for the period between 1 June and 20 June.

WANT WANT CHINA (00151.HK) announced annual result ended March 2021. The revenue rose 9.5% year on year to RMB21.998 billion. The net profit amounted to RMB4.158 billion, up 13.9%. EPS  was 33.83 fen. A final dividend of US1.46 cents was declared, against US2.42 cents in the year-ago period.Canada announced that, from 5 July onwards, quarantine and testing will be exempted for Canadian citizens and permanent residents who have received both doses of COVID-19 vaccine that is approved by the Canadian government.  People entering Canada, however, are still required to follow other pandemic measures, including submitting virus testing results before departure and upon entry as well as keeping a list of close contacts for the first 14 days upon entry, etc.Several big Chinese lenders are limiting credit to EVERGRANDE (03333.HK) amid worries over its financial profile, Bloomberg citing insiders.  Three banks with huge credit exposure to Evergrande have recently decided not to renew loans to the latter when they expire at end-2021, the people said.  However, Evergrande denies the reported funding channel curb placed by banks, adding it has normal business relationships with all lenders and financial bodies without elaborating.

Nayuki (02150.HK) plans to price its shares at $19.8 each, the upper limit of the offer price range $17.2-19.8, IFR citing sources. The Chinese bubble tea chain expects to raise nearly $5.094 billion.  Nayuki decided to cut off subscription for its international offer section today due to overwhelming response, according to sources.

XIAOMI-W (01810.HK) unveiled certain patents on vehicle functions control, reported Chinese media.  The disclosed patents mainly surround methods of controlling vehicle functions, the controlling devices and the storage medium.  The patented technologies guarantee to provide sensor-less control functions while reducing the wear on the vehicle and terminals and subsequently lowering the cost on hardware.

Sotheby announced that a rare pear-shaped diamond will come to auction in Hong Kong on July 9, and it will accept bitcoin or ether as payment. The deal could likely fetch up to US$15 million.
The 101.38-carat pear-shaped diamond, named The Key 10138, will be one of the ten diamonds of over 100 carats ever to be put up for auction.

Partnering with Shanghai Institute of Digital Governance and MEITUAN-W (03690.HK) launched the country's first digital life services platform in Shanghai on 21 June.  Said platform has already been connected to the digital operating signs system of Shanghai and is expected to connect with 100 cities across the country in 3 years.

ALI HEALTH (00241.HK) formed a strategic alliance with Berry Oncology to build an innovative medical service model that combines cancer early diagnosis combined with digital platforms and medical insurance. The two companies will collaborate on various aspects, including medical products and services, disease preventions, health management services, popular science education and big data medical services, etc.

MTR CORPORATION (00066.HK) has established relevant arrangements in regards to the operation of Tuen Ma Line with Hong Kong government and KCRC.  The new line will commence its service on 27 June 2021 as MTR CORPORATION obtained the service operating concession of Tuen Ma Line for a period of of 2 years.

The chief executive Carrie Lam said, in response to the infringement of the National Security Law by NEXT DIGITAL (00282.HK), that the Hong Kong government will enforce the law fiercely in order to safeguard the safety and prosperity of Hong Kong.  Lam added that said arrests are totally unrelated to the freedom of the press and stressed that journalists would not be tolerated to use the freedom of the press to shield themselves from being prosecuted for criminal actions.  She avoided answering questions on how jounalists could avoid being prosecuted under the vaguely word law.Data from CoinShares showed that bitcoin investment products and funds had tracked the sixth consecutive week of outflows.  Bitcoin outflows aggregated US$89 million last week and US$487 million YTD, according to data.

RAZER (01337.HK) announced that the Company had repurchased 2.5 million shares 
at $2.13-2.13861 each through the Stock Exchange yesterday (21st), involving $5.3465 million.

BIDU-SW (09888.HK) 's Apollo announced its partnership with Science City (Guangzhou) Information Technology Group on establishing the country's first smart transport operator -- Vehicle City Network (Guangzhou) Intelligence Technology, which aims to propel smart transportation within cities as well as to develop the interconnected network between vehicles.  The company's businesses will cover the vehicle infrastructure cooperative system, transportation cloud system, etc.

PRE MARKET HOURS NEWS

The Hong Kong Government will not grant to unfreeze the assets of NEXT DIGITAL (00282.HK) as the case involving national security law is under investigation, Hong Kong Economic Journal cited sources.  
Security Bureau had earlier invoked the national security law to freeze the assets of three companies related to the operation of Apple Daily, running into $18 million.  Since majority of staff has resigned, Apple Daily may be shut down as soon as tomorrow (23rd), whilst the financial page of the newspaper announced no more updates from 00:00 on 22nd, Sing Tao Daily quoted people with the knowledge of the matter.

The US government is considering barring imports of the significant solar panel material polycrystalline silicon from Xinjiang in China, Politico citing insiders because of human rights abuses. 
US President Joe Biden hopes that polysilicon can help replace fossil fuels to achieve zero carbon emission for power generation by 2035. The goal could be hindered by such ban, as roughly half of the world's polysilicon supply stems from Xinjiang.

The price quotation and supply region confirmation for the 5th Batch of National Centralized Medicines Procurement in China is set to mount tomorrow (23rd), 
Economic Information Daily reported.
With reference to the procurement list as previously unveiled, 58 drug types and 137 speculations will be admitted this time, marking the most number of drug types.

Beijing Youth Daily reported the change in deposit interest rates among several Chinese banks.  
As for China's big four state-owned banks, the maximum interest rate was 3.25% for time deposits and 3.35% for large-denomination certificates of deposit after adjustment.

HSBC HOLDINGS (00005.HK) intends to overhaul its American investment banking operation following the resignation of four executives one after another,
including Robert Gelnaw, head of debt capital markets for North America, Bloomberg citing insiders.

China has to deepen its "Decentralization-Control-Service" reform on vehicle production and open up car OEM in an orderly way,
Securities Times citing an official in charge of MIIT's first department of equipment industry at the 11th China Auto Forum.
Beijing shall step up the oversight of product security, network security and data security while increasing industrial concentration, aiming to stifle blind investment and redundant construction, the official added.

China Mobile Group Design Institute, CHINA MOBILE (00941.HK)'s Guangdong company and ZTE (00763.HK)  had recently completed the sector's first commercial verification based on R16 standard for 5G
and the Up-link Time Difference of Arrival (UTDOA) positioning technique, reported Securities Times.

CCB (00939.HK) (601939.SH) announced that no institutions or individuals are permitted to set up accounts at the bank for top-up and withdrawal of trading funds for virtual currencies, 
or for purchase or sale of related transactions of top-up code. The PBOC had earlier consulted some banks and payment platforms regarding crypto speculations.
ICBC (01398.HK) announced that neither institutions nor individuals are allowed to mount financing or virtual currency dealings with tokens via the bank's accounts, products, services and channels.
Alipay equally said it will monitor and investigate any transactions which are involved in cryptocurrencies, and will block them right away if uncovered.

CKH HOLDINGS (00001.HK)'s statement disclosed that it repurchased 1.9695 million shares 
on the Stock Exchange on 21 June at $58.65-59.00 each, involving approximately $116 million.  Year to date, the company bought back 6.7805 million shares, representing 0.1758% of the share capital of the company.

XINYI GLASS (00868.HK) announced that the board lot size of the Shares for trading will be changed
from 2,000 Shares to 1,000 Shares with effect from Monday, 19 July.

June 22 FT thoughts & Asian update China vs Apple Daily, G7 and Xi's new way?


This and previous notes can be found at Substack ( Asian Market Sense )
Check out ERI-C.com  for your research needs

Asian Summary @ 1:30pm HK  time  
Markets rebounded by various degrees after Monday’s sell off
Australia
Market opened higher and then worked slowly higher for most of the day to 7,366 before easing back curently +115pts (+1.6%) @ 7,351
Lead higher by Financials, Miners and Energy names.
Flash PMI data tomorrow
Japan
Nikkei opened 500pts higher and worked higher into lunch at 28,800.  PM trading sideways slightly higher currently +832pts (+3%) @ 28,843.  Yesterdays big decliners rebought in early trading.
Topix similar pattern currently +56pts (+3%) @ 1966 Electronics and auto makers were the biggest boosts to the Topix.
Flash PMI data tomorrow and BoJ meeting notes
S Korea
Pre Market PPI increased but not as much as forecast
Kospi opened higher, with yesterday’s shorts squeezed. Eased back and traded around 3,260 through to around 1pm and then worked higher. Currently +23pts (+0.7%) @ 3,265
Kosdaq opened higher and squeezed to 1,017 but then sold down to 1,008 around 10am before working higher, currently +2pts (+0.2%) @ 1,013
Data out
PPI May YoY +6.4% vs +5.6% Apr (F/cast was +5.9%)
PPI May MoM +0.4% vs +0.6% Apr (F/cast was +0.7%)
BoK Financial Stability Report out at 11am local time showed the economy stable but rising financial imbalances worry the BoK.
KDCA reported 395 new cases (+38 DoD)
Taiwan 
Taiex opened higher and rallied to 17,250 after a mixed Export data. Eased slightly and traded sideways for 45 mins before selling down to 17,100. Rebounded to traded around 17,175 until around 12:45pm when it sold down to close +13pts (-0.07%) @ 17,076
After Market Unemployment data due
China 
CSI 300 opened higher at 5,106 and traded sideways until 10:25am when it rallied but saw resistance appraoching 5,120 and eased back into lunch. PM opened higher currently +21pts (+0.4%) @ 5,111
Chinese solar names -VE on fears of a Biden Ban
HK 
Pre market opened @ 28,575 +86pts vs +168pts ADR’s as margin call selling from Monday outweighed the ADR’s and short covering but then sold down to 28,400 before rebounding to traded around flat. PM has sold down again to test 28,400. E-Commerce names weak. Financials +VE Oil & Solar names +VE
Europe  
Expect markets to open higher but a renewed surge in the Indian varient covid cases a concern.
Data
EUROZONE Consumer Confidence Flash, ECB’s Lane speaks  
UK  Public Sector New Borrowing, CBI Industrial Trends Orders
US Futures
Opened Dow +35pts, S&P +0.1% and NDX +0.04%; have eased to Dow +25pts S&P +0.08% and NDX  flat.  Today more Fed speakers along with Redbook, Existing Home Sales, Richmond Fed Manufacturing Index and API Crude Oil Stock Change.

PRINT
Front Page
Laschet warns against cold war with China

• German CDU leader eyes continuity
• Beijing is a partner as well as a rival
Worth a read as he is expected to replace Merkel. Notes that he an Merkel agree on a number of fundamental points but he might not have the same freedom Merkel had if pushed into an power share with the Green’s.
Wants to avoid a cold war with China and cautious over curbing China’s ambitions. Also wants reasonable relations with Russia.
Suggests that he would be China’s preferred option for leader as he would maintain many of the existing policies; presuming that the Greens would allow him. See also the FT BIG READ. GERMAN POLITICS Germany’s continuity candidate.

Spanish pardon Sánchez plans to free Catalan separatists despite objections
highlights that the issue is still highly contentious.

Hong Kong’s press freedom at risk as Apple Daily forced to consider closure.
As authorities freeze its assets under the provisions of the National Security Law. Many see the issue as a threat to press freedoms after the publication had taken a tough editorial stance regarding the Hong Kong and mainland government actions.

What is also highlighted is that ‘“Crowdfunding can’t work as banks are instructed not to process any payments. I have already heard from friends who have not been able to process payments to us,” he (Mark Simon) said.’
The governments line is ‘John Lee, the security minister, has accused the paper of criminal activities and said the police action was not a threat to press freedom. “They are different from ordinary journalists,” he said last week. “Do not engage in any relations with them.”’
I think the key worry must be the fact that the government can now force a company out of business even before the case has come to court. That could lead to companies doubting Hong Kong’s legal protections. Bloomberg reported that many in Hong Kong were now worried about speaking out and quoted activist shareholder David Webb who noted the fact that people were not prepared to speak out reflects worries about the National Security Law.

INSIDE
China lashes out after G7 leaders and Nato criticise ‘assertive behaviour’
Beijing flexes muscles in Taiwan and Hong Kong in retaliation over Biden-led ‘united front’
Worth a read; it is basically what China had hoped would not happen is occuring. It has prompting a significant ‘sabre rattling’ response from China but it is difficult to see what else they can do without escalating the issue and giving the west more ammunition.
It concludes
‘Some Chinese officials and analysts argue that while Beijing will continue to respond forcefully when criticised over Taiwan, Hong Kong or other “core interests”, this does not preclude co-operation with the US on other issues such as climate change or global tax reform.Fu Ying, a former Chinese ambassador to the UK, said recently that the Biden administration wanted to “prevent China from moving forward to replace the US”.Beijing “should stand firm on matters of principle but not be too distracted by anti-China hostility”, Gao said. “In the long term China will have a larger economy than the US. No one can change that. Time is on China’s side.”’

It will remain to be seen whether time is on China’s side. China face a number of internal issues with the wider recovery in China, credit/debt issues, domestic consumption and its dependence on US technology in tech. The bigger concern is likely to be that other nations, annoyed at China’s aggression or domineering nature in Asia decide to align with the west.

Japan allows limited numbers to watch games
Still subject to their not being another state of emergency being imposed. The max number being 10,000 per event or 50% of the total event capacity which ever is the lower.
Little impact on the games or sponsors and difficult to estimate the impact on PM Suga’s chances of winning the next election. Although the lack of spectators will mean the games will not achieve their budget targets; with the shortfall likely to be picked up by Tokyo residents.

Companies & Markets 
Big US banks gear up to return cash
Stress test passing grade set to trigger billions in buybacks and dividends.
Expects the banks to pass the tests and as a result return money to shareholder. Interesting after Jamie Dimon said last week said that JPM was saving cash in the expectation of investing opportunities.
Bearing in mind that the banks are looking over capitalised it is difficult to imagine them not passing the stress tests. Assuming they do then they will be free to return money. But it will be interesting to see how much they do and whether they look to hold cash for investing opportunities.
Many will also be watching the results on foreign banks like Credit Suisse after the Archegos blow up.

Volvo and Northvolt plan gigafactory
Looks at the tie-up between the two firms, which could, although not mentioned in the article, have an impact on Geely; the owner of Volvo going forward.

Private equity ‘raid’ on UK plc sparks fury in City of London
Traditional fund managers speak out against takeovers they say undervalue businesses.
An interesting read, the key being that the Private Equity firms have raised cash and are looking for opportunistic targets. The fact that funds are prepared to speak out reflects the concern that some companies might be willing to sell-out. The fact that Morrisons emphatically rejected the initial offer would suggest that most boards are aware of the improving outlook.
Worth a read and again another indication of the amount of cash in the system looking for an investment.

Prince bets against revival of 70s-style Great Inflation
Bridgewater boss forecasts only ‘moderate’ rise in US prices amid intense debate.
Makes the point that many are expecting some inflation but for it to be moderate.
He notes “There’s not nearly as much potential for a big inflation cycle from private sector credit and spending,” he said. “The government is having to push pretty darn hard with fiscal stimulation to get things going and in addition when you look at inflation, low inflation is a global phenomenon. It’s not a US phenomenon.”

It is a fair point. He also makes the point that a number of other Central banks are not being as aggressive as the US and that the circumstances in the 1970’s was very different. All that said he is still watching out for warning signs that could indicate the situation changing; like sustained wage rises. Something that is inline with what the Fed seems to be referencing too.

He also believes that even if the Fed tapers there will be a lot of other spending to keep the momentum going. But he is not expecting huge retail spending.

It’s an interesting read and a slightly different view from that put forward by his colleague Ray Dalio who was speaking yesterday at the Qatar Forum. He made the point that a worry he had was that the Fed had limited scope to tighten in the face of inflation, largely because of the length of asset duration has been extended beyond the norm.

China pledges to crack down on ‘malicious speculation’ in iron ore
Looks at how China’s NDRC is to investigate the recent spike in iron ore prices with a declaration to  “severely punish” any wrongdoing. It also mentioned the release of strategic reserves to reduce the price too (although that might be more of a threat than a practical option).
It both reflects the fear that China has that the surge in commodity prices could feed through to domestic inflation and the risks for speculators in China.
‘The NDRC said that it would “closely scrutinise changes to spot prices, swiftly investigate irregular transactions” and “severely punish and publicly expose acts such as monopolistic behaviour, spreading around information about price increases, driving up prices and hoarding”.’
The additional problem China has this time is that it is not the price setter (unlike last time). Noe other countries are also looking to source these resources as they too look to stimulate their economies with infrastructure works and as the global recovery continues to gather steam.

Beijing orders banks to intensify anti-bitcoin campaign
A further move against cryptos, following the banning of mining and part of its push to support its own digital Yuan. The PBoC said ‘trading cryptocurrency disrupts the financial system, breeds the risk of illegal cross-border asset transfers and money laundering and “seriously infringes on the security of people’s financial assets”.’
A number of people would question that statement but the key is that it will crimp peoples ability to use crypto in China.
For the PBoC the key is the use of the digial yuan which will allow the government more control and insight into people’s spending habits.
The other key for the PBoC is to try and reduce the dependence on the US dollar in Asia. By being a leader in the design of digital currency it can export that architecture to others and bring countries more countries and companies into its financial universe. Thus reducing the impact of the USD, something it see as more important as Trump has weaponised it. China will try and replicate the success it had in leading in 5G in phones in digital currency.
I think that is why Powell as said that the FOMC is looking at a digital dollar.

Solar power group shareholders burnt by rapid rise in raw materials costs
An interesting number coming as news breaks that Biden considering ban on Xinjiang polysilicon which would prompt a further rise in raw materials.
The article focuses on the ‘higher steel, polysilicon and freight costs.’ Along with supply chain pressures all coming at a time when governments are pushing the green agenda.
It notes that costs dropped 80% between 2010 and 2020 but now are rising. Recent increases have prompted analyst to lower their forecasts for solar installations as costs rise
Today in China a number of the solar names are being hit by the Biden news but as the article concludes
'“There’s certainly inflationary pressure in the space; the question is who absorbs it and it’s still unclear what that sharing will be,” said Max Slee, a portfolio manager at Ecofin in London.
“The macro and micro factors impacting the renewables sector for much of this year has resulted in heightened uncertainty among investors; however, the structural mid- and long-term outlook remains attractive.”
Martin also agreed that rising costs would not derail the solar boom, since it was still cheaper than building a new coal-fired power plant. “The drive to install solar is still as dramatic as it was two years ago,” he said.'

Markets Insight
Meme machine fuels distortion in share prices  By Robin Wigglesworth
Looks at how Meme’s ‘easily-digestible and shareable images or videos’ have influenced retail stock trading. Whilst isolated ones have limited impact; when they go viral they can move stocks. Equally if they are produced by people with a large numbers of followers they can have significant impact.
Effectively they are to retail what a leading analyst is to institutions and hedge funds. If enough people follow the meme or report they become self fulfilling.
It concludes ‘Litquidity (a prominent finance “meme lord” on Instagram), however, worries that the growing appreciation for how social media can be harnessed to make money means that market memefication might prove more resilient than many expect. “I don’t think it’s a good thing, but I don’t think it’s going anywhere unless some sort of regulations are put in place,” he said.’

Just in the same way the research reports are regulated I would suggest.

OPINION GLOBAL AFFAIRS
China has broken the Asian model
By Gideon Rachman
A very good read. Makes the point that whilst President Xi may claim ‘ that, under the wise guidance of the party, China has discovered a unique path to development that the rest of the world can now learn from.’ and ‘that China was “blazing a new trail for other developing countries to achieve modernisation”.’
It is not really true. The base model is the same one pioneered by Japan, S. Korea and Taiwan but China has added scale in its implementation. The other difference is that China has remained a one party state whilst the others liberalised.
China had now politicalised the model to offer authoritarianism vs western democracy.
It raises the question of whether the west’s backlash is too late to for the US to prevent China’s rise. It notes that for Biden this is about democracy or authoritarianism.
It concludes
‘Even so, Xi has taken a big risk by overtly challenging American power. During the first decades of China’s rise, the consensus in Washington was that China too would liberalise politically, as it grew richer. So the US took an encouraging and permissive attitude to China’s ascent — similar to its approach to the other east Asian tiger economies.
In the case of China, American “permission” has now been withdrawn. The US is restricting Chinese access to certain advanced technologies and is organising its allies to push back against Beijing. In this new geopolitical environment, Xi really does need to find a new “China model” — distinct from the east Asian model — if the rise of China is to continue uninterrupted.’
Well worth reading. Only time will tell but without US technology and systems China’s chances of success outside its own borders is made much more difficult. But the risk to the west is that its not impossible as seen in 5G and if it gets the lead in exporting its digital yuan architecture then maybe it will have found a new variant.

LEX HSBC: billionaire boomtime
Looks at HSBC’s aggressive expansion into wealth management in HK and the greater bay area. Notes that it is a very competitive business but thinks it is a good move.

LEX DIY retailers: varnishing returns
Worth a read; suggest that despite lumber prices falling the incentives for DIY remain and hence the outlook for Home Depot and Lowe’s remain good.  That should be good for  Techtronics in HK (669 HK), stock is off its recent high and struggling to regain the HK$140 level, probably worth accumulating at these levels.

Macro Data Impacting Asia 21 - 25 June


This and previous notes can be found at  SubStack ( Asian Market Sense )
Check out ERI-C.com for your research needs
Summary
Australia
Light in terms of data just Retail Sales (Monday) and Flash PMI’s (Wednesday).
Japan BoJ minutes and Flash PMI’s Wednesday along with Coincident and Leading Economic Index, then Tokyo Core CPI Friday.  
S Korea PPI Tuesday, Consumer Confidence Thursday and Business on Friday.
Taiwan Export Orders Monday, Unemployment Tuesday, Industrial Production and Retail Sales Wednesday and M2 Money Supply Thursday.
China Loan Prime Rate Monday and Industrial Profits next Sunday.
HK ADR’s closed -247pts @ 28,554 with only CLP and Unicom in the green.
Europe Flash PMIs,
Eurozone Loans data and M3 Money Supply
German 
Ifo data and Consumer Confidence
France Business Confidence & Climate data, Unemployment
UK
  BoE rate decision and Consumer Confidence, CBI Distributive Trades
US More housing data. Richmond Fed Manufacturing Index, Powell’s testimony, Flash PMI’s, Durable Goods, GDP & PCE data and Michigan Final readings

Powells testimony will be watched careful for more insight into the Fed’s new position and then later in the week the PCE data.

Investors seem to be reposition judging but the initial sell off in Asia; following the sell-off in the US of value names.

Monday 21 June

AUSTRALIA  Retail Sales
JAPAN 
No data due
S KOREA Exports  20 day
TAIWAN Export Orders
CHINA Prime Loan Rate 1 and 5 year
HONG KONG No data due
EUROZONE No data  Largarde Speaks
GERMANY Bundesbank Monthly Report
FRANCE No data due  (BTF Auctions)
UK No data due  
US Chicago Fed National Activity Index, 3 & 6 Month Bill Auction
FED Speakers Bullard and Williams speaks
 
Tuesday 22 June
AUSTRALIA  
No data due
JAPAN No data due
S KOREA PPI
TAIWAN  Unemployment
CHINA 
No data due
HONG KONG Inflation and Current Account
EUROZONE Consumer Confidence Flash  ECB’s Lane speaks  
GERMANY No data due
FRANCE No data due  
UK No data due
US Redbook, Existing Home Sales, Richmond Fed Manufacturing Index, NY Fed Treasuries Purchases TIPS 1 - 7.5 yrs, API Crude Oil Stock Change.
FED Speakers Powell Testimonyto Congress, Feds Mester and Daly speak
Earnings Korn Ferry

Wednesday 23 June
AUSTRALIA 
Manufacturing, Services and Composite Flash PMI’s.  RBA’s Ellis speaks
JAPAN BoJ Minutes, Manufacturing, Services and Composite Flash PMI’s, Coincident and Leading Economic Index.
S KOREA 
No data due
TAIWAN Industrial Production  & Retail Sales
CHINA 
No data due  
HONG KONG 
No data due  
EUROZONE 
ECB Non Monetary Policy Meeting, Manufacturing, Services and Composite Flash PMI’s
GERMANY 
Manufacturing, Services and Composite Flash PMI’s
FRANCE 
Manufacturing, Services and Composite Flash PMI’s
UK 
Manufacturing, Services and Composite Flash PMI’s
US MBA Mortgage Applications and 30 yr Mortgage Rate, Current Account, Manufacturing, Services and Composite Flash PMI’s, New Home Sales, EIA Oil Report.
NY Fed Treasury Purchases 4.5 - 7 yrs, 2 yr FRN Auction and 5yr Note Auction.
FED Speakers Bowman, Bostic and Rosengren speak
Earnings: IHS Markit, Winnebago, KB Home, Steelcase

Thursday 24 June
AUSTRALIA  
No data due  
JAPAN Foreign Stock and Bond Investment
S KOREA Consumer Confidence
TAIWAN 
M2 Money Supply
CHINA No data due  
HONG KONG 
No data due
EUROZONE 
ECB General Council Meeting
GERMANY Ifo Business Climate, Current Conditions and Expectations
FRANCE 
Business Confidence and Climate Indicator
UK BoE Interest Rate Decision, MPC Meeting Minutes, BoE QE. After Market Consumer Confidence
US Durable Goods, GDP Price Index, Corporate Profits, Goods Trade Balance, Wholesale Inventories, Initial Claims, 4 week Average Claims, Continuing Claims, Core PCE Prices and PCE Prices, EIA Natural Gas Report, Kansas fed Manufacturing Index.  Fed Bank Stress Test Results
NY Fed Treasury Purchases 22.5 - 30yrs
FED Speakers Bostic, Williams and Bullard
Earnings: Accenture, Darden, Rite Aid, Nike, FedEx, Blackberry

Friday 25 June
AUSTRALIA 
No data due
JAPAN Tokyo Core CPI & CPI
S KOREA Business Confidence
TAIWAN 
No data due
CHINA No data due  
HONG KONG 
No data due
EUROZONE Loans to Households and Companies, M3 Money Supply
GERMANY 
No data due
FRANCE 
Unemployment Benefit Claims, Jobseekers Total  
UK 
CBI Distributive Trades, BoE Quarterly Bulletin.
US Personal Income  & Spending, PCE Price Index, Core PCE Price Index,  Michigan Final (Inflation Expecations, Consumer Sentiment, 5yr  Inflation Expectations, Consumer Expectations, Current Conditions),  Baker Hughes Rig Count, NY Fed Treasury Purchases (2.25 - 4.5 yrs).
FED Speakers Mester and Rosengren
Earnings: CarMax, Paychex

Sunday 27 June
China 
Industrial Profits.

HK/China Wrap


FT Thoughts


Asian Macro Initial Thoughts


Macro Data


This and previous notes can be found at  SubStack ( Asian Market Sense )
Check out ERI-C.com for your research needs
Summary
Australia
Light in terms of data just Retail Sales (Monday) and Flash PMI’s (Wednesday).
Japan BoJ minutes and Flash PMI’s Wednesday along with Coincident and Leading Economic Index, then Tokyo Core CPI Friday.  
S Korea PPI Tuesday, Consumer Confidence Thursday and Business on Friday.
Taiwan Export Orders Monday, Unemployment Tuesday, Industrial Production and Retail Sales Wednesday and M2 Money Supply Thursday.
China Loan Prime Rate Monday and Industrial Profits next Sunday.
HK ADR’s closed -247pts @ 28,554 with only CLP and Unicom in the green.
Europe Flash PMIs,
Eurozone Loans data and M3 Money Supply
German 
Ifo data and Consumer Confidence
France Business Confidence & Climate data, Unemployment
UK
  BoE rate decision and Consumer Confidence, CBI Distributive Trades
US More housing data. Richmond Fed Manufacturing Index, Powell’s testimony, Flash PMI’s, Durable Goods, GDP & PCE data and Michigan Final readings

Powells testimony will be watched careful for more insight into the Fed’s new position and then later in the week the PCE data.

Investors seem to be reposition judging but the initial sell off in Asia; following the sell-off in the US of value names.

Monday 21 June

AUSTRALIA  Retail Sales
JAPAN 
No data due
S KOREA Exports  20 day
TAIWAN Export Orders
CHINA Prime Loan Rate 1 and 5 year
HONG KONG No data due
EUROZONE No data  Largarde Speaks
GERMANY Bundesbank Monthly Report
FRANCE No data due  (BTF Auctions)
UK No data due  
US Chicago Fed National Activity Index, 3 & 6 Month Bill Auction
FED Speakers Bullard and Williams speaks
 
Tuesday 22 June
AUSTRALIA  
No data due
JAPAN No data due
S KOREA PPI
TAIWAN  Unemployment
CHINA 
No data due
HONG KONG Inflation and Current Account
EUROZONE Consumer Confidence Flash  ECB’s Lane speaks  
GERMANY No data due
FRANCE No data due  
UK No data due
US Redbook, Existing Home Sales, Richmond Fed Manufacturing Index, NY Fed Treasuries Purchases TIPS 1 - 7.5 yrs, API Crude Oil Stock Change.
FED Speakers Powell Testimonyto Congress, Feds Mester and Daly speak
Earnings Korn Ferry

Wednesday 23 June
AUSTRALIA 
Manufacturing, Services and Composite Flash PMI’s.  RBA’s Ellis speaks
JAPAN BoJ Minutes, Manufacturing, Services and Composite Flash PMI’s, Coincident and Leading Economic Index.
S KOREA 
No data due
TAIWAN Industrial Production  & Retail Sales
CHINA 
No data due  
HONG KONG 
No data due  
EUROZONE 
ECB Non Monetary Policy Meeting, Manufacturing, Services and Composite Flash PMI’s
GERMANY 
Manufacturing, Services and Composite Flash PMI’s
FRANCE 
Manufacturing, Services and Composite Flash PMI’s
UK 
Manufacturing, Services and Composite Flash PMI’s
US MBA Mortgage Applications and 30 yr Mortgage Rate, Current Account, Manufacturing, Services and Composite Flash PMI’s, New Home Sales, EIA Oil Report.
NY Fed Treasury Purchases 4.5 - 7 yrs, 2 yr FRN Auction and 5yr Note Auction.
FED Speakers Bowman, Bostic and Rosengren speak
Earnings: IHS Markit, Winnebago, KB Home, Steelcase

Thursday 24 June
AUSTRALIA  
No data due  
JAPAN Foreign Stock and Bond Investment
S KOREA Consumer Confidence
TAIWAN 
M2 Money Supply
CHINA No data due  
HONG KONG 
No data due
EUROZONE 
ECB General Council Meeting
GERMANY Ifo Business Climate, Current Conditions and Expectations
FRANCE 
Business Confidence and Climate Indicator
UK BoE Interest Rate Decision, MPC Meeting Minutes, BoE QE. After Market Consumer Confidence
US Durable Goods, GDP Price Index, Corporate Profits, Goods Trade Balance, Wholesale Inventories, Initial Claims, 4 week Average Claims, Continuing Claims, Core PCE Prices and PCE Prices, EIA Natural Gas Report, Kansas fed Manufacturing Index.  Fed Bank Stress Test Results
NY Fed Treasury Purchases 22.5 - 30yrs
FED Speakers Bostic, Williams and Bullard
Earnings: Accenture, Darden, Rite Aid, Nike, FedEx, Blackberry

Friday 25 June
AUSTRALIA 
No data due
JAPAN Tokyo Core CPI & CPI
S KOREA Business Confidence
TAIWAN 
No data due
CHINA No data due  
HONG KONG 
No data due
EUROZONE Loans to Households and Companies, M3 Money Supply
GERMANY 
No data due
FRANCE 
Unemployment Benefit Claims, Jobseekers Total  
UK 
CBI Distributive Trades, BoE Quarterly Bulletin.
US Personal Income  & Spending, PCE Price Index, Core PCE Price Index,  Michigan Final (Inflation Expecations, Consumer Sentiment, 5yr  Inflation Expectations, Consumer Expectations, Current Conditions),  Baker Hughes Rig Count, NY Fed Treasury Purchases (2.25 - 4.5 yrs).
FED Speakers Mester and Rosengren
Earnings: CarMax, Paychex

Sunday 27 June
China 
Industrial Profits.

Read More  

This and previous notes can be found at SubStack ( Asian Market Sense )
Check out ERI-C.com for your research needs

The G7 conference over now Biden travels to Europe to meet Nato allied and the trip culminates with a summit with Putin.

The main focus will be the FOMC meeting press conference and any tweaks over it’s forecasts for inflation, interest rates or talk of talks regarding tapering. Ahead of that we get US Retail Sales, PPI and Industrial Production data.
Bonds on Friday eased but that probably technical; reflecting the wall of money currently in the market looking for a home rather than any fundamental indication of the outlook for interest rates.

In Asia it is a short trading week for Australia, Taiwan, China and Hong Kong who are all closed Monday. China due to release Fixed Asset Investment, Industrial Production, Retail Sales, Unemployment Rate on Wednesday which will be watched for signs of slowing in the recovery. Then the House Price Index Thursday.
Japan Industrial Production Monday, Trade data Wednesday and Inflation Friday.
S. Korea no major data. Taiwan Interest Rate decision Thursday no change expected.
Australia more RBA minutes and Housing Data Tuesday, Lending Index Wednesday and Employment data Thursday.

Europe
Eurozone Key will be inflation on Thursday but we also get Industrial Production, Trade Balance, Labour costs, wage growth and construction output.
Within Europe German & French Inflation Tuesday and then German PPI Friday.
UK Employment data Tuesday, Inflation data Wednesday along with PPI and Retail Price Index and then Retail Sales Friday.

Monday 14 June
AUSTRALIA Market Closed No data due
JAPAN 
Industrial Production, Capacity Utilisation
S KOREA No data due  
TAIWAN Market Closed No data due  
CHINA Market Closed No data due  
HONG KONG Market Closed No data due  
EUROZONE Industrial Production
GERMANY No data due
FRANCE No data due  
UK No data due  
US Consumer Inflation Expectations

Tuesday 15 June
AUSTRALIA  
RBA Meeting Minutes, House Price Index
JAPAN Tertiary Industry Index
S KOREA No data due  
TAIWAN No data due
CHINA No data due
HONG KONG Industrial Production
EUROZONE Balance of Trade  
GERMANY Inflation Rate
FRANCE Inflation Rate  
UK  Claimant Count, Employment Change, Unemployment Rate, Average Earnings.  BoE Gov Baily Speaks.
US Retail Sales, PPI and Core PPI, NY Empire Stake Manufacturing Index, Redbook, Industrial Production, Manufacturing Production, Capacity Utilisation, Business Inventories, NAHB Housing Market Index, Foreign Bond Investment, Net Long Term Tic Flows, Overall Net Capital Flows, API Crude Oil Stock Change.
Earnings: Oracle, La-Z-Boy, H&R Block

Wednesday 16 June
AUSTRALIA  
Lending Index
JAPAN Balance of Trade, Exports, Imports, Machinery Orders
S KOREA 
No data due  
TAIWAN No data due  
CHINA 
NBS Press Conference, Fixed Asset Investment, Industrial Production, Retail  Sales, Unemployment Rate.
HONG KONG 
No data due  
EUROZONE 
Labour Cost Index, Wage Growth.
GERMANY 
No data due  
FRANCE 
No data due  
UK 
Inflation Rate, Core Inflation Rate, PPI Core Output, PPI output, PPI Input, Retail Price Index,
US MBA Mortgage Applications and 30 yr Mortgage Rate, Import Prices, Export Prices, Housing Starts, Building Permits, EIA Oil Report, FOMC Rate Decision, FOMC Economic Projections, Fed Press Conference.
Earnings: Lennar, The Honest Company

Thursday 17 June
AUSTRALIA  
Part Time Employment, Unemployment Rate, Employment Change, Full Time Employment Change, RBA Bulletin, Participation Rate
JAPAN Tankan Index, Foreign Stock and Bond Investment
S KOREA No data due
TAIWAN Interest Rate Decision
CHINA House Price Index.  May get FDI (YTD)  
HONG KONG 
Unemployment Rate
EUROZONE 
Construction Output, Core Inflation Rate, Inflation Rate.
GERMANY No data due  
FRANCE 
No data due
UK No data due
US Philadelphia Fed Manufacturing Index, Initial Claims, 4 week Average Claims, Continuing Claims, Leading Index, EIA Natural Gas Report, 5yr TIPS Auction.
Earnings: Adobe, Kroger, Jabil, Commercial Metals, Smith and Wesson

Friday 18 June
AUSTRALIA  
No data due
JAPAN Inflation Rate, Core Inflation, BoJ Interest Rate Decision.
S KOREA No data due  
TAIWAN 
No data due  
CHINA No data due  
HONG KONG 
No data due
EUROZONE Current Account
GERMANY 
PPI
FRANCE 
No data due
UK 
Retail Sales
US Baker Hughes Rig Count.

Read More  

This and previous notes can be found on SubStack
Check out ERI-C.com for your research and trading analysis needs

Inflation remains in focus this week, especially in the US with few remaining earnings and no Fed speakers (blackout ahead of next weeks FOMC meeting) although meme stocks still prominent. China and Taiwan also reporting inflation data this week. Foreign reserves out from a number of Countries with China’s likely to be the most closely watched.

Trade data from China, Taiwan, France and Germany.

We are also likely to get Chinese Loans data

Monday  7 June

AUSTRALIA  Services Index
JAPAN Foreign Exchange Reserves, Leading Economic Indicators
S KOREA 
No data due
TAIWAN No data due  
CHINA 
Balance of Trade, Exports, Imports, Foreign Exchange Reserves  
HONG KONG 
Foreign Exchange Reserves  
EUROZONE No data due
GERMANY Factory Orders
FRANCE No data due  
UK Halifax House Price Index, BBA Mortgage Rate
US Consumer Credit Change
Earnings Vail Resorts, Marvell Tech, Stitch Fix, Coupa Software

Tuesday
AUSTRALIA  
New Home Sales, Business Confidence
JAPAN Ave Cash Earnings, Current Account, GDP data (Growth Rate, Price Index, Bank Lending, Private Consumption, Capital Expenditure)
S KOREA Current Account
TAIWAN Wholesale Prices, Inflation Rate, Balance of Trade, Exports, Imports
CHINA No data due
HONG KONG No data due  
EUROZONE Employment Change, GDP Growth Rate, ZEW Economic Sentiment Index  
GERMANY Industrial Production, ZEW Economic Sentiment & Current Conditions
FRANCE Balance of Trade, Current Account
UK No data due
US Balance of Trade, Exports, Imports, Redbook, JOLTs Openings, API Crude Oil Stock Change
Earnings Thor Industries, Casey’s General Stores, Navista

Wednesday
AUSTRALIA  
Consumer Confidence Change & Index, Building Permits,
JAPAN Machine Tool Orders.
S KOREA 
Unemployment Rate, GDP Growth Rate
TAIWAN No data due  
CHINA 
Inflation Rate and PPI
HONG KONG 
No data due
EUROZONE 
No data due  
GERMANY 
Balance of Trade, Exports, Imports and Current Account.
FRANCE 
No data due  
UK 
No data due
US MBA Mortgage Applications and 30 yr Mortgage Rate, Wholesale Inventories, EIA Oil Report.
Earnings : Chewy, Dave & Buster’s, Signet Jewelers, John Wiley

Thursday
AUSTRALIA  
Consumer Inflation Expectations
JAPAN Foreign Stock and Bond Investment, PPI
S KOREA No data due
TAIWAN 
No data due
CHINA No data due but could get New Yuan Loans, Ourstanding Loan Growth, Total Social Financing, M2 Money Supply
HONG KONG 
No data due
EUROZONE 
ECB Rate Decision
GERMANY No data due  
FRANCE 
Non Farm Payrolls, Industrial Production
UK No data due
US Core Inflation Rate, Inflation Rate, Initial Claims, 4 week Average Claims, Continuing Claims, EIA Natural Gas Report, WASDE report, Monthly Budget Statement

Friday
AUSTRALIA  
No data due
JAPAN  BSI Large Manufacturing  
S KOREA Import Prices
TAIWAN 
No data due
CHINA No data due Could get Vehicle Sales
HONG KONG 
No data due
EUROZONE No data due
GERMANY 
Bundesbank Semi Annual Forecasts
FRANCE 
IEA Oil Report
UK 
Construction Output, Industrial & Manufacturing Production, GDP 3-month average, Goods Trade Balance, GDP, NIESR monthly GDP tracker
US Michigan Data Prelim (Current Conditions, Inflation Expectations, Consumer Sentiment, 5year Inflation Expectations, Consumer Expectations) Baker Hughes Rig Count.

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This and previous notes can be found at asianmarketsense.com and on SubStack
Check out ERI-C.com for your research needs

Globally covid concerns remain and whilst the situation in India is improving; concerns remain. Another concern is the USD weakness and the surge in commidities hard and soft. 

Asia

A busy week; Japan, S Korea, Taiwan, China and Australia releasing PMI data.
Japan Monday pre market Industrial Production Retail Sales then later Consumer Confidence, Housing Starts and Construction Orders. Tuseday Capital Spending and Friday Household Spending.
S Korea Monday pre market Construction Output, Industrial & Manufacturing Production then later in the week Trade & Inflation data
Taiwan later in the week GDP Growth Rate and Foreign Reserves
Australia Housing data, GDP, Trade data, Retail Sales amongst the data to be released.
US
Focus
will be on the May Jobs report but there is also important ISM data on the manufacturing and services sector activity along with the Beige Book.  Also in focus will be the amount of liquidity in the system and the amount of cash being placed with the Fed.
Europe 
Loans and Inflation data along with PMI data (Manufacturing, Services and Construction), retail sales.


Monday 31 May
AUSTRALIA  
Private Sector Credit,
JAPAN 
Industrial Production, Retail Sales, Consumer Confidence, Housing Starts and Construction Orders.
S KOREA Industrial Production, Construction Output and Retail Sales  
TAIWAN No data due  
CHINA Manufacturing and Non Manufacturing PMI
HONG KONG No data due
EUROZONE Loans to Households, Loans to Companies, M3 Money Supply
GERMANY Inflation Rate
FRANCE No data due  
UK No data due Market closed
US No data due Market closed

Tuesday 1 June
AUSTRALIA  
Manufacturing Index, Manufacturing PMI, Inflation Gauge, Building Permits, Company Gross Profits, Current Account and RBA Interest Rate Decision.
JAPAN Capital Spending, Manufacturing PMI  
S KOREA Balance of Trade, Exports and Imports, Manufacturing PMI
TAIWAN Manufacturing PMI
CHINA Caixin Manufacturing PMI
HONG KONG Retail Sales
EUROZONE Manufacturing PMI, Core Inflation Rate, Inflation Rate, Unemployment  
GERMANY Manufacturing PMI, Unemployment data
FRANCE Manufacturing PMI, New Car Registrations
UK Manufacturing PMI, Nationwide Housing Prices
US Manufacturing PMI, Construction Spending, IBD/TIPP Economic Optimism, ISM Manufacturing Data (PMI, Employment, New Orders, Prices) Dallas Fed Manufacturing Index,  Logistics Managers Index Current, Total Vehicle Sales (after market).
Fed Speakers Quarles and Brainard
Earnings Canopy Growth, Hewlett Packard Enterprise, Ambarella, Zoom Video

Wednesday 2 June
AUSTRALIA  
GDP Data (Growth Rate, Capital Expenditure, Final Consumption, Deflator), RBA Chart Pack
JAPAN No data due  
S KOREA 
Inflation Rate
TAIWAN No data due  
CHINA 
No data due  
HONG KONG 
No data due  
EUROZONE 
PPI
GERMANY 
Retail Sales
FRANCE 
Budget Balance
UK 
BoE Consumer Credit, Mortgage Lending, Mortgage Approvals, Net Lending to Individuals
US MBA Mortgage Applications and 30 yr Mortgage Rate, Redbook, Beige Book, API Crude Oil Stock Change.
Fed Speakers Harker, Bostic, Evans and Kaplan
Earnings: Advance Auto Parts, Lands’ End, NetApp, Splunk, Cloudera, PVH, C3.ai

Thursday 3 June
AUSTRALIA  
Construction Index, Services and Composite PMI, Balance of Trade, Exports, Imports and Retail Sales.
JAPAN Foreign Stock and Bond Investment, Services and Composite PMI
S KOREA Foreign Exchange Reserves
TAIWAN 
No data due
CHINA Caixin Services and Composite PMI,
HONG KONG 
No data due
EUROZONE 
Services and Composite PMI,
GERMANY Services and Composite PMI,
FRANCE 
Services and Composite PMI,
UK Services and Composite PMI,
US Challenger Job Cuts,  ADP Employment Change, Initial Claims, 4 week Average Claims, Continuing Claims, Services and Composite PMI,  ISM Non Manufacturing Data (PMI, Employment, New Orders, Prices), EIA Oil Report, EIA Natural Gas Report.
Fed Speakers Bostic, Kaplan, Harker and Quarles.
Earnings: Broadcom, Lululemon Athletica, Five Below, Hovnanian, Express, J.M. Smucker, DocuSign, Cooper Cos, CrowdStrike

Friday 4 June
AUSTRALIA  
Home Loans, Investment Lending for Homes
JAPAN Household Spending.
S KOREA No data due  
TAIWAN 
GDP Growth Rate, Foreign Exchange Reserves
CHINA No data due  
HONG KONG 
No data due
EUROZONE Construction PMI, Retail Sales
GERMANY 
Construction PMI, New Car Registrations
FRANCE 
Construction PMI, Retail Sales
UK 
New Car Sales, Construction PMI
US Non Farm  Payrolls, Unemployment Rate, Average Weekly Hours, Average Hourly Earnings, Participation Rate, Factory Orders, Baker Hughes Rig Count.
Fed Speakers Chairman Powell on central banks and climate change

Read More  

This and previous notes can be found at SubStack Asian Market Sense
Check out ERI-C.com for your research needs

I was on Bloomberg Radio Friday talking about Asian markets
: https://www.bloomberg.com/news/audio/2021-05-21/andrew-sullivan-on-the-markets-radio

The last week of trading for May; Economic releases are relatively light this week. But speeches from Central Banks will be watched carefully for references to inflation. The markets seem to be buying into the Fed’s line that it will be transitory, I remain unconvinced. Also Bitcoin/Crypto remains in the headlines on regulation, emission and the fact that whislt the PBOC, FED and others crack down on it they are thinking about Central Bank Digital currencies. Covid also continues to overhang the markets.
US Earnings winding down but still some key names and Monday we have the Lordstown Motor Spac reporting. Later in the week: Toll Brothers, Dicks Sporting Goods, American Eagle, Nvidia, Snowflake, Workday, Best Buy, Dollar General, Dollar Tree, Medtronic, Gap, Costco, SalesForce, Dell, Big Lots and others.
Hedge Funds continue to be active looking for opportunities created by the volatility in the crypto world; along with a number of M&A and privatisation deals in Asia. June is AGM month in Japan which typically hedge funds use as an opportunity to look for insight into targets; Mitsubishi Logistics and Toshiba are high on the list.
Markets continue to trade at highs raising concerns about a potential major correction. Tech (non internet) remains strong on good demand (confirmed by Tech companies increasing Capex to meet demand). Interestingly US REITs had a strong week; which suggest investors are more confident that the general economic recovery’s will have a positive impact on property.

Key Asian data
Australia Construction Work Done, Leading Index, Private Capex.
Japan Coincident & Leading Indexes then Friday Jobs and CPI.
S Korea Consumer & Business Confidence and BoK rate decision.
Taiwan Jobs, Industrial Profits, Retail Sales, M2 Money supply.
China only Industrial Profits.
Hong Kong Trade Data
Europe
Eurozone Consumer Confidence final, Sentiment data
German GDP, Ifo data, Consumer Confidence, Import Prices
France Consumer & Business Confidence, Unemployment, GDP, Inflation and Inflation.
US
More housing data, Richmond Fed, Durable Goods, GDP Growth & Price Index, PCE data, Corporate Profits, Personal Income & Spending, Goods Trade Balance, Wholesale Inventories, Michigan Final reading, Chicago PMI

Monday 24 May
AUSTRALIA  No data due
JAPAN No data due BoJ Kuroda speech
S KOREA No data due  
TAIWAN Unemployment, Industrial Production, Retail Sales  
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 Chicago Fed National Activity Index
Fed Speakers Atlanta Fed President Raphael Bostic Noon
Kansas City Fed President Esther George After Market
Earnings: Lordstown Motors

Tuesday 25 May  
AUSTRALIA 
No data due  
JAPAN No data due  
S KOREA Consumer Confidence
TAIWAN No data due  
CHINA No data due  
HONG KONG No data due  
EUROZONE No data due  ECB’s Lane Speech  
GERMANY GDP Growth Rate, Ifo (Business Climate, Expectations and Current Conditions),
FRANCE No data due  
UK CBI Distibutive Trades. BoE’s Tenreyro Speech
US Redbook, Case-Shiller Home Price Index, House Price Index, Consumer Confidence, New Home Sales, Richmond Fed Manufacturing Index, 2 yr Note Auction, API Crude Oil Stock Change (after market).
Fed Speakers Fed Vice Chairman Quarles 3:30pm
Earnings: Nordstrom, Toll Brothers, Intuit, Agilent, Autozone, Cracker Barrel, Pershing Square Holdings, Urban Outfitters, Zscaler

Wednesday 26 May
AUSTRALIA  
Construction Work Done, Leading Index
JAPAN Coincident Index, Leading Economic Index, BoJ’s Suzuki Speech
S KOREA 
Business Confidence
TAIWAN No data due  
CHINA 
No data due  
HONG KONG 
No data due  
EUROZONE 
No data due  
GERMANY 
No data due  
FRANCE 
Business & Consumer Confidence, Business Climate Indicator.
UK 
No data due  
US MBA Mortgage Applications and 30 yr Mortgage Rate, EIA Oil Report, 2 yr FRN Auction, 5yr Note Auction
Fed Speakers None
Earnings:
NVIDIA, Snowflake, Bank of Montreal, Capri Holdings, Abercrombie and Fitch, Dick’s Sporting Goods, American Eagle Outfitters, Workday, Pure Storage, Designer Brands

Thursday  27 May
AUSTRALIA  
Private Capital Expenditure
JAPAN Foreign Stock and Bond Investment
S KOREA BoK Interest Rate Decision
TAIWAN 
No data due  
CHINA Industrial Profits
HONG KONG 
Balance of Trade, Exports, Imports
EUROZONE 
No data due, ECB’s Guindos,  Elderson & Schnabel Speeches
GERMANY No data due, Bundesbank Weidmann Speech
FRANCE 
Unemployment Benefit Claims, Jobseekers Total
UK No data due BoE’s Vlieghe Speech
US Durable Goods Orders, GDP (Price Index & Growth Rate), Corporate Profits, Initial Claims, 4 week Average Claims, Continuing Claims, Core PCE Prices, PCE Prices, Pending Home Sales, EIA Natural Gas Report, Kansas Fed Manufacturing Index,
4 & 8 week Bill and 7year Note Auction,
Fed Speakers None
Earnings
: Best Buy,Salesforce.com,Costco,Dell Technologies, Box, Ulta Beauty, VMWare, Autodesk, Lions Gate, Canadian Imperial Bank, Toronto Dominion, Burlington Stores, Dollar General, Dollar Tree, Royal Bank of Canada, Medtronic

Friday 28 May
AUSTRALIA  
No data due
JAPAN Unemployment, Job/Application Ratio, Tokyo Core CPI and CPI
S KOREA No data due  
TAIWAN 
No data due
CHINA No data due  
HONG KONG 
No data due
EUROZONE Consumer Confidence & Inflation Expectations, Sentiment (Economic, Industrial and Services),
GERMANY 
Import Prices
FRANCE 
GDP Growth Rate, Inflation Rate, Household Consumption, PPI
UK 
No data due
US Personal Spending and Income, Goods Trade Balance, Wholesale Inventories, PCE Price Index, Core PCE Price Index, Chicago PMI, Michigan Data Final (Current Conditions, Consumer Expectations, 5 yr Inflation Exepctations, Consumer Sentiment, Inflation Expectations) Baker Hughes Rig Count Presdients FY 2022 Budget.
Fed Speakers None

Read More  

This and previous notes can be found at Substack
Check out  ERI-C.com ; for your research needs

Quite light for Asian data this week but China data on Monday and Japan’s GDP data on Tuesday, Trade Data Thursday plus Inflation and Flash PMI Friday are the highlights. China also releases it Loan Prime Rate on Thursday but no change expected. A broken trading week with S Korea, HongKong closed Wednesday for Budda’s Birthday.
In Europe; Flash PMI out Friday for most countries. Ahead of that employment data for the EU and UK along with Eurozone GDP and Inflation data. UK Inflation, PPI and Retail Sales in focus.
German PPI and the Bundesbank Report.
US Housing data, FOMC minutes and Flash PMI’s in addition to the normal weekly data.

Earnings US  Retail earnings in focus this week with Walmart and Home Depot will report Tuesday. Target, TJX and Lowe’s release results Wednesday, and B.J.’s Wholesale and Kohl’s on Thursday.  

Monday 17 May
AUSTRALIA  
Consumer Inflation Expectations
JAPAN 
PPI, Machine Tool Orders
S KOREA No data due  
TAIWAN No data due  
CHINA China House Prices, NBS Press Conference, Retail Sales, Industrial Production, Unemployment and Fixed Asset Investment
HONG KONG No data due  
EUROZONE No data due  
GERMANY No data due  
FRANCE No data due  
UK No data due  
US NY Empire State Manufacturing Index, NAHB Housing Market Index, Foreign Bond Investments, Overall Net Capital Flows, Net Long-term Tic Flows.
Earnings Hostess Brands, Lordstown Motors, Tencent

Tuesday 18 May
AUSTRALIA  
RBA Meeting Notes
JAPAN GDP Data (Rate, Annualised, Price Index, Capital Expenditure, External Demand, Private Consumption) Tertiary Index
S KOREA No data due  
TAIWAN No data due
CHINA No data due
HONG KONG No data due  
EUROZONE Balance of Trade, Employment Change, GDP Growth Rate
GERMANY No data due
FRANCE No data due  
UK  No data due
US Housing Starts, Building Permits,  Redbook, API Crude Oil Stock Change
Earnings Walmart, Home Depot, Macy’s, Baidu, Take-Two Interactive, Trip.com, NetEase

Wednesday 19 May
AUSTRALIA  
Consumer Confidence (Index and Change) Wage Price Index
JAPAN Industrial Production, Capacity Utilisation
S KOREA 
No data due
TAIWAN No data due  
CHINA 
No data due  
HONG KONG 
No data due  
EUROZONE 
New Car Registrations, ECB Financial Stability Review, Core Inflation Rate, Inflation Rate.
GERMANY 
No data due  
FRANCE 
No data due  
UK 
Inflation Rate, Core Inflation Rate, PPI Core Output, Retail Price Index, PPI Output and Input,
US MBA Mortgage Applications and 30 yr Mortgage Rate, EIA Oil Report, FOMC minutes.
Earnings Target, Lowe’s, JD.Com, Cisco, Shoe Carnival, TJX, Eagle Materials, Analog Devices, L Brands

Thursday 20 May
AUSTRALIA  
Part time & Full time Employment Change, Employment Change, Unemployment Rate, Participation Rate.
JAPAN Tankan Index, Balance of Trade, Export, Imports, Machinery Orders, Foreign Stock and Bond Investment
S KOREA No data due
TAIWAN 
Export Orders, Current Account.
CHINA Loan Prime Rate 1 and  5 year.
HONG KONG 
Unemployment Rate
EUROZONE 
Current Account, Construction Output
GERMANY No data due  
FRANCE 
No data due
UK CBI Industrial Trends Orders
US Philadelphia Fed Manufacturing Index,  Initial Claims, 4 week Average Claims, Continuing Claims, EIA Natural Gas Report,  CB Leading Index.
Earnings BJ’s Wholesale, Kohl’s, Petco, Ralph Lauren, Applied Materials, Ross Stores, Deckers Outdoor, Hormel Foods, Palo Alto Networks

Friday 21 May
AUSTRALIA  
Manufacturing, Service and Composite Flash PMI, Retail Sales.
JAPAN Inflation Rate, Core Inflation Rate,  Inflation Ex Food & Energy, Manufacturing, Service and Composite Flash PMI
S KOREA PPI
TAIWAN 
No data due
CHINA No data due  
HONG KONG 
Inflation Rate
EUROZONE Manufacturing, Service and Composite Flash PMI, Consumer Confidence Flash,
GERMANY 
Manufacturing, Service and Composite Flash PMI, Bundesbank Monthly Report,
FRANCE 
Manufacturing, Service and Composite Flash PMI
UK 
Retail Sales,  Manufacturing, Service and Composite Flash PMI
US Existing Home Sales, Baker Hughes Rig Count.
Earnings Deere, Foot Locker, Buckle, VF Corp, Booz Allen Hamilton 

Read More  

Whilst it is a light week for Asian Data focus is likely to be on China Inflation data and the possible release of New Loans data.  
Outside of that Japanese household spending and Bank Landing are likely to be closely watched.
S Korean Unemployment and Export and Import prices are the only releases.
Taiwan no data this week
Hong Kong Industrial Production and GDP Growth Rate

In Europe; ZEW data, German Inflation and French Unemployment
UK GDP Growth and Balance of Trade in focus.
For the US Inflation data out Wednesday will be the main focus but also PPI and Retail Sales.
Earnings continue but with fewer heavyweight names.
Multiple Fed speakers are on the calendar, including Vice Chairman Richard Clarida, who speaks a half-hour after the CPI print Wednesday. Other officials speaking include Federal Reserve Board Governor Lael Brainard, New York President John Williams and Dallas Fed President Rob Kaplan.

Also federal income tax return filing date of May 17 could be adding pressure to tech stocks as investors may be selling winners to pay their taxes.

Monday 10 May 
AUSTRALIA  Business Confidence and Retail Sales
JAPAN No data due
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 ISM New York Index and Consumer Inflation Expectations

Earnings: Marriott, BioNTech, Jacobs Engineering, Simon Property Group, International Flavors and Fragrances, Wynn Resorts, SmileDirectClub, Duke Energy, Air Products, Tyson Foods, Party City, Energizer, Coty

Tuesday 11 May
AUSTRALIA  New Home Sales
JAPAN Household Spending, BoJ Summary of Options
S KOREA No data due  
TAIWAN No data due  
CHINA Inflation Rate, PPI. Could also get Vehicle Sales, New Yuan Loans, Outstanding Loan Growth, Total Social Financing, M2 Money Supply.
HONG KONG No data due  
EUROZONE ZEW Economic Sentiment Index
GERMANY ZEW Economic Sentiment Index & Current Conditions, Wholesale Prices
FRANCE No data due  
UK No data due
US Redbook, JOLT’s Job Openings, API Crude Oil Stock Change

Earnings: Electronic Arts, Chesapeake Energy, Hanesbrands, Aramark, International Game Technology, Palantir Technologies, Perrigo, Unity Software, Opendoor Technologies, Kinross Gold, Lemonade, Vizio

Wednesday 12 May 
AUSTRALIA  Building Permits
JAPAN Foreign Exchange Reserves, Coincident Index, Leading Economic Index
S KOREA 
Unemployment
TAIWAN No data due  
CHINA 
No data due  
HONG KONG
Industrial Production
EUROZONE 
No data due  
GERMANY 
Inflation Rate
FRANCE 
No data due  
UK 
Balance of Trade, GDP Growth Rate, GDP, Business Investment, Industrial Production, Manufacturing Production, Construction Output & Orders, Goods Trade Balance, NIESR Monthly GDP Tracker.
US MBA Mortgage Applications and 30 yr Mortgage Rate, inflation Rate, Core Inflation Rate, EIA Oil Report, Monthly Budget Statement

Earnings: Toyota, Wendy’s, Fossil, Bumble, Allianz, Jack in the Box, Vroom, SoftBank, Sonos, Bayer, 1Life Healthcare

Thursday 13 May
AUSTRALIA  Consumer Inflation Expectations
JAPAN Foreign Stock and Bond Investment, Current Account, Bank Lending, Eco Watchers Survey Outlook and Current
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 PPI, Core PPI Initial Claims, 4 week Average Claims, Continuing Claims, EIA Natural Gas Report.

Earnings: Walt Disney, Airbnb, Plantronics, Burberry, Casper Sleep, Brookfield Asset Management, Door Dash, Petrobras, Aurora Cannabis, Alibaba

Friday 14 May
AUSTRALIA  No data due
JAPAN No data due
S KOREA Export and Import Prices
TAIWAN 
No data due
CHINA No data due  May get FDI (YTD)
HONG KONG 
GDP Growth Rate
EUROZONE Monetary Policy Meeting Account
GERMANY 
No data due
FRANCE 
Unemployment Rate
UK 
No data due
US Retail Sales, Industrial Production, Manufacturing Production, Capacity Utilisation, Business Inventories, Michigan Data (Sentiment, Inflation Expectations, Consumer Expectations 5 year Inflation Expectation and Current Conditions)  Baker Hughes Rig Count.

Earnings: Honda, Rosneft

Read More  

Asia a light week for data and trading with Japan closed until Thursday and China until Wednesday.  S Korea closed on Wednesday too.  We do get Manufacturing PMI data and inflation for S Korea and Taiwan. China Trade data will be watched for slowing.
Europe Retail Sales, PMI and Traded data and the BoE rate decision.
US the focus will be earnings and the Jobs report Friday with people listening to the Fed speakers for hints on progress regarding its goals for the economy; especially in regard to bond purchasing as the economy recovers faster than expected.  We also get PMI and ISM data.
Earnings also in focus, so far 87% of S&P have beaten with earnings growing by more than 46% prompting some to raise their full year forecasts but others feel the good news is priced in and markets are due some consolidation.

Worth noting some of the comments from Buffett and Munger (now 97 and doing well) at the Berkshire Hathaway AGM They were surprised but the speed of the recovery and seeing inflationary pressures in some of the companies they own.  Buffett expects more inflation “People have money in their pocket and they’ll pay the higher prices.”. Negative on bitcoin and crypto, worried about tax changes but would adapt and defended their buybacks as being good for existing shareholders. Buffet doubted the Spac craze would last. Munger worried that unchecked Federal spending would be disastrous and that Modern Portfolio Theory was not the answer; (see my note on the ERIC Shilling/Napier deflation debate).Buffet said selling some Apple was probably wrong but owning Cheveron was OK as it will adapt to renewable energy; it was a matter of being reasonable.  Doesn’t want to own airlines still not confident about the outlook.  

Interestingly started with a list of today’s 20 largest companies; asking how may would be around in 30 years; in the list were; Apple, Saudi Aramco, Microsoft, Amazon, Alphabet and Facebook.  He then said that none of the top 20 companies from 1989 was on the list; which then had over 50% Japanese banks and industrials with the only US firms being Exxon, GE, Merck, IBM, American Tel & Tel and Philip Morris.  So capitalism had worked, the world would change and he still thought the best way to invest was investment funds.  

Monday 3 May 
AUSTRALIA  Manufacturing Index, Manufacturing PMI, Inflation Gauge , Job Advertisments
JAPAN Market closed Constitution Memorial Day
S KOREA Manufacturing PMI.  Short Selling resumes.
TAIWAN Manufacturing PMI
CHINA Market closed Labour Day Holiday
HONG KONG GDP Growth Rate,  
EUROZONE Manufacturing PMI
GERMANY Retail Sales, Manufacturing PMI
FRANCE Manufacturing PMI, New Car Registrations
UK Market Closed
US Manufacturing PMI, Construction Spending, ISM Manufacturing Data (PMI, Prices, New Orders and Employment), Total Vehicle Sales

Earnings Avis Budget, Loews, Alexion Pharmaceuticals, Rambus, Leggett and Platt, Vornado, American Water, Iamgold, Mosaic, Apollo Global Management, ZoomInfo, Estee Lauder, ON Semiconductor

Tuesday 4 May 
AUSTRALIA  Balance of Trade, Home Loans, Imports, Exports, Investment Lending for Homes, RBA Interest Rate Decision.
JAPAN Market closed Greenery Day
S KOREA Inflation Rate
TAIWAN No data due
CHINA Market closed Labour Day Holiday
HONG KONG Retail Sales
EUROZONE No data due  
GERMANY No data due
FRANCE Budget Balance
UK Mortgage Approvals, Mortgage Lending, BoE Consumer Credit, Manufacturing PMI, Net Lending to Individuals.
US Balance of Trade, Exports, Imports, Redbook, ISM New York, Factory Orders, Factory Orders Ex. Transportation,  IBD/TIPP Economist Optimism, API Crude Oil Stock Change.

Earnings Pfizer, CVS Health, ConocoPhillips, Martin Marietta Materials, Activision Blizzard, DuPont, KKR, T-Mobile, Akamai, Pioneer Natural Resources, Lattice Semiconductor, Denny’s, Hyatt Hotels, Host Hotels, PerkinElmer, Prudential Financial, Viavi, Caesars Entertainment, Thomson Reuters, Cummins, Vulcan Materials

Wednesday 5 May 
AUSTRALIA  Construction Index, Services and Composite PMI, Building Permits, RBA Chart Pack
JAPAN Market closed Children's Day
S KOREA 
Market closed Children’s Day
TAIWAN Foreign Exchange Reserves  
CHINA 
No data due  
HONG KONG 
PMI
EUROZONE 
Services and Composite PMI, PPI
GERMANY 
Services and Composite PMI
FRANCE 
Services and Composite PMI
UK 
New Car Registrations
US MBA Mortgage Applications and 30 yr Mortgage Rate, ADP Employment Change, Services and Composite PMI, ISM Non Manufacturing Data (PMI, Prices, New Orders and Employment), EIA Oil Report

Earnings  General Motors, Hilton Worldwide, Booking Holdings, Fox Corp., Uber Technologies, Etsy, PayPal, Allstate, Accolade, Cognizant Technology, MetLife, Marriott Vacations, CF Industries, Marathon Oil, CyberArk Software, Emerson Electric, Amerisourcebergen, BorgWarner, Zynga, Tanger Factory Outlet, Twilio

Thursday 6 May
AUSTRALIA  No data due  
JAPAN BoJ Meeting notes
S KOREA Foreign Exchange Reserves
TAIWAN 
Wholesale Prices, Inflation Rate
CHINA No data due  
HONG KONG 
No data due
EUROZONE 
Construction PMI, Retail Sales
GERMANY Factory Orders, Construction PMI
FRANCE 
Construction PMI, Retail Sales,
UK Services and Composite PMI, BoE Interest Rate Decision, BoE Quantative Easing, Local Government Elections.
US Challenger Job Cuts, Unit Labour Costs, Nonfarm Productivity, Initial Claims, 4 week Average Claims, Continuing Claims, EIA Natural Gas Report,

Earnings Regeneron, ViacomCBS, Kellogg, Moderna, Murphy Oil, Beyond Meat, Shake Shack, Square, Roku, Axon, Cushman and Wakefield, Tapestry, Neilsen, AIG, Anheuser-Busch, EOG Resources, Consolidated Edison, DropBox, Expedia, Roku, Peloton Interactive, Datadog, Cardinal Health, Ambac Financial

Friday 7 May
AUSTRALIA  Services Index, RBA Statement on Monetary Policy
JAPAN Average Cash Earnings, Services and Composite PMI,
S KOREA Current Account
TAIWAN 
Balance of Trade, Exports, Imports.
CHINA Caixin Services and Composite PMI, Balance of Trade, Exports, Imports, Foreign Exchange Reserves
HONG KONG 
Foreign Exchange Reserves
EUROZONE No data
GERMANY 
Balance of Trade, Exports, Imports, Industrial Production, Current Account
FRANCE 
Balance of Trade, Exports, Imports, industrial Production,
UK 
Construction PMI
US NonFarm Payrolls, Unemployment Rate, Ave Weekly Hours, Ave Weekly Earnings, Participation Rate, Wholesale Inventories,  Baker Hughes Rig Count, Consumer Credit Change.

Earnings Cigna, Siemens, Gannett, AMC Networks, Draftkings, Liberty Broadband, Elanco Animal Health

Read More  

Data likely to take second place to earnings for the main part with 33% of the Dow and S&P 500 reporting including a lot of the big tech names.  Similar in HK as earnings pick up including Cinda AM, HSBC, WM Group, Jiangxi Copper, Huaneng Power, Anhui Conch, Sinopharm,  Cosco Shipping, Chalco, BYD, HKEX and more (see full list below).BUT the FOMC meeting will be in focus as investors look for clues on whether the inflation being seen is still viewed as temporary.  For Asian the BoJ meeting and quarterly outlook will be studied for the impact of covid and the emergency state impositions.

For Asia 
Japan Retail Sales, Inflation and Unemployment data in a short trading week as Golden Week starts Thursday but still get data Friday.
S Korea a busy week; GDP growth rate, business and consumer confidence, Construction Output, Industrial & Manufacturing Production, Retail Sales, Consumer Confidence, Housing Starts and Construction Orders and then Trade Data on Saturday
Taiwan only GDP Growth rate on Friday. /China Industrial Profits and Non and Manufacturing PMIs
China just Industrial Profits along with Non and Manufacturing PMI
Australia inflation data, Export and Import prices, PPI and private sector credit.
In Europe 
Eurozone nothing until Thursday and Friday; Loans data, Consumer Confidence, Sentiment (Economic, Industrial and Services), Consumer Inflation Expectations, Flash Core Inflation Rate, GDP Growth Rate,  Inflation Rate.  Unemployment  Rate.
German Ifo data, consumer confidence, Unemployment, inflation and GDP Growth
France Unemployment, consumer confidence, GDP Growth Rate, Inflation Rate, Household Consumption, PPI.
UK CBI Distributive Trades, Car Production and Nationwide House Prices.
US main focus FOMC but also get Durable Goods, more Housing data, PCE data (a Fed favourite), Personal Income and Spending and Michigan data amongst other data.

Monday 26 April 
AUSTRALIA  No data due
JAPAN Final Coincident Index and Leading Economic Index
S KOREA No data due  
TAIWAN No data due  
CHINA No data due  
HONG KONG No data due  
EUROZONE No data due
GERMANY Ifo data (Business Climate, Current Conditions and Expectations) FRANCE No data due  
UK No data due  
US Durable Goods Orders, Dallas Fed Manufacturing Index
Earnings Tesla, Canadian National Railway, Canon, Check Point Software, Otis Worldwide, Vale, Ameriprise, NXP Semiconductor, Albertsons, Royal Phillips

Tuesday 27 April 
AUSTRALIA  No data due
JAPAN BoJ Interest Rate Decision and Quarterly Outlook
S KOREA GDP Growth Rate
TAIWAN No data Due
CHINA Industrial Profits
HONG KONG Balance of Trade, Exports and Imports
EUROZONE No data due  
GERMANY No data due  
FRANCE Unemployment Benefit Claims, Jobseekers
UK CBI Distributive Trades
US Redbook, Case-Schiller Home Price Index, CB Consumer Confidence, Richmond Fed Manufacturing Index API Crude Oil Stock Change. FOMC meeting starts
Earnings Microsoft, Alphabet, Visa, Amgen, Advanced Micro Devices, 3M, General Electric, Eli Lilly, Hasbro, United Parcel Service, BP, Novartis, JetBlue, Pultegroup, Archer Daniels Midland, Waste Management, Starbucks, Texas Instrument, Chubb, Mondelez, FireEye, Corning, Raytheon

Wednesday 28 April
AUSTRALIA  Inflation Rate and CPI data
JAPAN Retail Sales
S KOREA 
Consumer Confidence
TAIWAN No data due  
CHINA 
No data due  
HONG KONG 
No data due  
EUROZONE 
No data due  
GERMANY 
Gfk Consumer Confidence
FRANCE 
Consumer Confidence
UK 
No data due
US MBA Mortgage Applications and 30 yr Mortgage Rate, Wholesale Inventories, Goods Trade Balance, EIA Oil Report, FOMC Rate Decision and Press Conference.
Earnings: Apple, Boeing, Facebook, Qualcomm, Ford, MGM Resorts, Humana, Norfolk Southern, General Dynamics, Boston Scientific, eBay, Samsung Electronics, GlaxoSmithKline, Yum Brands, SiriusXM, Aflac, Cheesecake Factory, Community Health System, CIT Group, Entergy, CME Group, Hess, Ryder System

Thursday 29 April 
AUSTRALIA  Export & Import Prices
JAPAN No data due
S KOREA Business Confidence
TAIWAN 
No data due
CHINA No data due  
HONG KONG 
No data due
EUROZONE 
Loans to Households, Loans to Companies, M3 Money Supply, Consumer Confidence, Sentiment (Economic, Industrial and Services), Consumer Inflation Expectations
GERMANY Import Prices, Unemployment Rate, Unemployment Change, Inflation Rate,
FRANCE 
No data due
UK Car Production
US Initial Claims, 4 week Average Claims, Continuing Claims, GDP (Growth Rate and Price Index), Core PCE Prices, PCE Prices, Pending Home Sales,  EIA Natural Gas Report.
Earnings: Amazon, Caterpillar, McDonald’s, Twitter, Bristol-Myers Squibb, Comcast, Merck, Northrop Grumman, Airbus, Kraft Heinz, Intercontinental Exchange, Mastercard, Gilead Sciences, U.S. Steel, Cirrus Logic, Texas Roadhouse, Cabot Oil, PG&E, Royal Dutch Shell, Church & Dwight, Carlyle Group, Southern Co.

Friday 30 April 
AUSTRALIA  PPI, Private Sector Credit
JAPAN Unemployment Rate, Tokyo CPI, Jobs/Application Ratio, Industrial Production, Foreign Stock and Bond Investment, Manufacturing PMI
S KOREA Construction Output, Industrial & Manufacturing Production, Retail Sales, Consumer Confidence, Housing Starts and Construction Orders
TAIWAN 
GDP Growth Rate
CHINA Non and Manufacturing PMI
HONG KONG 
No data due
EUROZONE  Flash Core Inflation Rate, GDP Growth Rate,  Inflation Rate.  Unemployment  Rate
GERMANY 
GDP Growth Rate
FRANCE 
GDP Growth Rate, Inflation Rate, Household Consumption, PPI
UK 
Nationwide Housing Prices
US Personal Income and Spending, Employment Cost data (Index, Benefits and Wages) PCE Price Index, Core PCE Price Index, Chicago PMI, Michigan Data Final (Consumer Expectations, Current Conditions, 5 year Inflation Expectations, Consumer Sentiment) Baker Hughes Rig Count.
Earnings: ExxonMobil, Chevron, Colgate-Palmolive, AstraZeneca, Clorox, Barclays, AbbVie, BNP Paribas, Weyerhaeuser, Illinois Tool Works, CBOE Global Markets, Lazard, Newell Brands, Aon, LyondellBasell, Pitney Bowes, Phillips 66, Charter Communications

Saturday 1 May
S Korea Balance of Trade, Exports and Imports


Full list of HK listed companies due to report this week, listed by stock code
2012/04/26      Monday 
China Tian Yuan Healthcare Group Limited
00557.HK Hotel & Resorts
Zhengzhou Coal Mining Machinery Group Company Limited - H Shares
00564.HK Machinery & Equipment QTR RES
Xinjiang Tianye Water Saving Irrigation System Co Ltd -H Shs
00840.HK Machinery & Equipment
Tianjin Capital Environmental Protection Group Co. Ltd.-H Sh
01065.HK Water Supply
China Cinda Asset Management Co., Ltd. - H Shares
01359.HK Investments & Assets Management
China New Higher Education Group Limited
02001.HK Other Support Services
China Aluminum International Engineering Corp. Ltd.-H shares
02068.HK Construction & Decoration
Shanghai Fosun Pharmaceutical (Group) Co., Ltd. - H Shares
02196.HK Medicine
Xinjiang Goldwind Science & Technology Co., Ltd. - H Shares
02208.HK Electric Equipment

2021/04/27       Tuesday 
HSBC Holdings plc
00005.HK Banks
Hang Seng Bank Ltd.
00011.HK Banks
WH Group Ltd.
00288.HK Agricultural, Poultry & Fishing Production
Jiangxi Copper Co. Ltd. - H Shares
00358.HK Nonferrous Metal
Guangshen Railway Co. Ltd. - H Shares
00525.HK Public Transport
Skyworth Group Limited
00751.HK Household Appliances
China Education Group Holdings Limited
00839.HK Other Support Services
Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd.- H Shs
00874.HK Medicine
Dongjiang Environmental Co. Ltd. - H Shares
00895.HK Environmental Goods
Huaneng Power International, Inc. - H Shares
00902.HK Electricity Supply
Anhui Conch Cement Co. Ltd. - H Shares
00914.HK Construction Materials
Sinopec Yizheng Chemical Fibre Company Limited- H Shares
01033.HK Petroleum & Gases Equipment & Services
Sinopharm Group Co. Ltd. - H Shares
01099.HK Medicine
COSCO SHIPPING Ports Limited
01199.HK Marine & Harbour Services
China International Marine Containers (Group) Co., Ltd.- H Shares
02039.HK Machinery & Equipment
Aluminum Corporation of China Ltd. - H Shares
02600.HK Nonferrous Metal
China Molybdenum Co., Ltd. - H Shares
03993.HK Nonferrous Metal
China Merchants Securities Co., Ltd.-H shares
06099.HK Securities
China YuHua Education Corporation Limited
06169.HK Other Support Services

2021/04/28     Wednesday 
First Tractor Co Ltd. - H Shares
00038.HK Machinery & Equipment
Guangdong Land Holdings Limited
00124.HK Property Development
Jiangsu Expressway Co. Ltd. - H Shares
00177.HK Road and Railway
Guangdong Investment Ltd.
00270.HK Water Supply RES
BYD Electronic (International) Co. Ltd.
00285.HK Telecomm. & Networking Equipment
Maanshan Iron & Steel Co. Ltd. - H Shares
00323.HK Steel
Sinopec Shanghai Petrochemical Co. Ltd. - H Shares
00338.HK Petroleum & Gases
Hainan Meilan International Airport Company Limited - H Shares
00357.HK Airlne Support
China Petroleum & Chemical Corporation - H Shares
00386.HK Petroleum & Gases
Hong Kong Exchanges and Clearing Ltd.
00388.HK Other Financials
China Railway Group Ltd. - H Shares
00390.HK Infrastructure
Shenzhen Expressway Co. Ltd. - H Shares
00548.HK Road and Railway
Nanjing Panda Electronic Co. Ltd. - H Shares
00553.HK IT Hardware
Shandong Molong Petroleum Machinery Co. Ltd. - H Shares
00568.HK Petroleum & Gases Equipment & Services
Beijing North Star Co. Ltd. - H Shares
00588.HK Property Development
Sinotrans Ltd. - H Shares
00598.HK Marine & Harbour Services
Wai Chun Bio-Technology Limited
00660.HK Agricultural, Poultry & Fishing Production
Haitong International Securities Group Ltd.
00665.HK Securities
China Overseas Land & Investment Ltd.
00688.HK Property Development
China Telecom Corporation Ltd. - H Shares
00728.HK Telecomm. Services
Asia Cement (China) Holdings Corporation
00743.HK Construction Materials
ZTE Corporation - H Shares
00763.HK Telecomm. & Networking Equipment
Hisense Home Appliances Group Co., Ltd. - H Shares
00921.HK Household Appliances
China Construction Bank Corporation - H Shares
00939.HK Banks
Datang International Power Generation Co., Ltd. - H Shares
00991.HK Electricity Supply
Anhui Expressway Co. Ltd. - H Shares
00995.HK Road and Railway
China Gem Holdings Limited
01191.HK Investments & Assets Management
Guangnan (Holdings) Ltd.
01203.HK Steel
BYD Co. Ltd. - H Shares
01211.HK Automobiles & Components
China Maple Leaf Educational Systems Ltd.
01317.HK Other Support Services
The People's Insurance Co. (Group) of China Ltd. - H Shares
01339.HK Insurance
Lanzhou Zhuangyuan Pasture Co., Ltd. - H Shares
01533.HK Dairy Products
Bojun Education Company Limited
01758.HK Other Support Services
Hope Education Group Co., Ltd.
01765.HK Other Support Services
Ganfeng Lithium Co., Ltd. - H Shares
01772.HK Nonferrous Metal
GF Securities Co., Ltd. - H Shares
01776.HK Securities 1
BAIC Motor Corporation Limited - H Shares
01958.HK Automobiles & Components
Bank of Chongqing Co., Ltd. - H Shares
01963.HK Banks
PICC Property and Casualty Co. Ltd. - H Shares
02328.HK Insurance
China Pacific Insurance (Group) Co., Ltd. - H Shares
02601.HK Insurance
Shanghai Pharmaceuticals Holding Co., Ltd. - H Shares
02607.HK Medicine
Guotai Junan Securities Co., Ltd.-H Shares
02611.HK Securities
China Life Insurance Co. Ltd. - H Shares
02628.HK Insurance
AAG Energy Holdings Ltd.
02686.HK Petroleum & Gases RES
Liaoning Port Co., Ltd. - H Shares
02880.HK Marine & Harbour Services
China Oilfield Services Ltd. - H Shares
02883.HK Petroleum & Gases Equipment & Services
Hangzhou Tigermed Consulting Co., Ltd.- H Shares
03347.HK Biotechnology
Qinhuangdao Port Co., Ltd. - H Shares
03369.HK Marine & Harbour Services
Pharmaron Beijing Co., Ltd- H Share
03759.HK Medicine
CITIC Securities Co. Ltd. - H Shares
06030.HK Securities
Wisdom Education International Holdings Company Limited
06068.HK Other Support Services
Bank of Zhengzhou Co., Ltd. - H Shares
06196.HK Banks
China Everbright Bank Co. Ltd. - H Shares
06818.HK Banks
Haitong Securities Co., Ltd. - H Shares
06837.HK Securities
Flat Glass Group Co., Ltd. - H Shares
06865.HK Industrial Goods
Jilin Province Huinan Changlong Bio-pharmacy Co. Ltd. - H Shares
08049.HK Medicine
Shenzhen Hepalink Pharmaceutical Group Co., Ltd. - H Share
09989.HK Medicine

2021/04/29     Thursday 
Northeast Electric Development Co. Ltd. - H Shares
00042.HK Electric Equipment
Sichuan Expressway Co. Ltd. - H Shares
00107 HK Road and Railway Beijing
Jingcheng Machinery Electric Company Limited - H Shares
00187.HK Machinery & Equipment
CSSC Offshore & Marine Engineering (Group) Company Limited - H Shares
00317.HK Commercial Vehicle
Angang Steel Co. Ltd. - H Shares
00347.HK Steel
China Eastern Airlines Corporation Ltd. - H Shares
00670.HK Airline Services
Air China Ltd. - H Shares
00753.HK Airline Services
Xinhua Winshare Publishing and Media Co., Ltd. - H Shares
00811.HK Publishing
PetroChina Co. Ltd. - H Shares
00857.HK Petroleum & Gases
China Longyuan Power Group Corporation Ltd. - H Shares
00916.HK Electricity Supply
China Suntien Green Energy Corporation Ltd. - H Shares
00956.HK Gas Supply
China CITIC Bank Corporation Ltd. - H Shares
00998.HK Banks
Chongqing Iron & Steel Co. Ltd. - H Shares
01053.HK Steel
China Southern Airlines Co. Ltd. - H Shares
01055.HK Airline Services
Huadian Power International Corporation Ltd. - H Shares
01071.HK Electricity Supply
Dongfang Electric Corporation Ltd. - H Shares
01072.HK Electric Equipment
Luoyang Glass Co. Ltd. - H Shares
01108.HK Industrial Goods
COSCO SHIPPING Energy Transportation Co., Ltd.- H Shares
01138.HK Marine & Harbour Services
Zoomlion Heavy Industry Science and Technology Co., Ltd-H Sh
01157.HK Machinery & Equipment
Yanzhou Coal Mining Co. Ltd. - H Shares
01171.HK Coal
China Railway Construction Corporation Ltd. - H Shares
01186.HK Infrastructure
Agricultural Bank of China Ltd. - H Shares
01288.HK Banks
Dynagreen Environmental Protection Group Co., Ltd. - H Share
01330.HK Environmental Goods
New China Life Insurance Co. Ltd. - H Shares
01336.HK Insurance
Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co. Ltd. - H Shares
01349.HK Biotechnology
Industrial and Commercial Bank of China Ltd. - H Shares
01398.HK Banks
GUOLIAN SECURITIES CO., LTD.-H shares
01456.HK Securities
Red Star Macalline Group Corporation Ltd. - H Shares
01528.HK Property Investment
Metallurgical Corporation of China Ltd. - H Shares
01618.HK Infrastructure
Shanghai Dazhong Public Utilities (Group) Co., Ltd.-H shares
01635.HK Gas Supply
Postal Savings Bank of China Co., Ltd.-H shares
01658.HK Banks
RRC Corporation Ltd. - H Shares
01766.HK
Shandong Gold Mining Co., Ltd. - H Shares
01787.HK Precious Metal
Xinte Energy Co., Ltd. - H Shares
01799.HK Alternative Energy
China Communications Construction Co. Ltd. - H Shares
01800.HK Infrastructure
Shanghai Junshi Biosciences Co., Ltd. - H Shares
01877.HK Biotechnology
COSCO SHIPPING Holdings Co., Ltd.- H Shares
01919.HK Marine & Harbour Services
China Minsheng Banking Corp., Ltd. - H Shares
01988.HK Banks
BBMG Corporation - H shares
02009.HK Construction Materials
China Zheshang Bank Co., Ltd. - H Shares
02016.HK Banks
Yantai North Andre Juice Co. Ltd. - H Shares
02218.HK Soft Drinks
Guangzhou Automobile Group Co., Ltd. - H Shares
02238.HK Automobiles & Components
Weichai Power Co. Ltd. - H Shares
02338.HK Automobiles & Components
WuXi AppTec Co., Ltd. - H Shares
02359.HK Biotechnology
BOC Hong Kong (Holdings) Ltd.
02388.HK Banks
Shanghai Electric Group Co. Ltd. - H Shares
02727.HK Electric Equipment
COSCO SHIPPING Development Co., Ltd.- H Shares
02866.HK Marine & Harbour Services
Bank of Communications Co., Ltd. - H Shares
03328.HK Banks
Chongqing Rural Commercial Bank Co., Ltd. - H Shares
03618.HK Banks
Bank of Qingdao Co., Ltd. - H Shares
03866.HK Banks
Zhuzhou CRRC Times Electric Co., Ltd. - H Shares
03898.HK Commercial Vehicle
China International Capital Corporation Ltd. - H Shares
03908.HK Securities
DFZQ-H shares
03958.HK Securities
China Railway Signal & Communication Corporation Ltd. -H Shs
03969.HK System Applications & IT Consulting
Bank of China Ltd. - H Shares
03988.HK Banks
Shanghai La Chapelle Fashion Co., Ltd.-H Shares
06116.HK Apparel
JOINN Laboratories (China) Co., Ltd.- H Shares
06127.HK Medicine
Everbright Securities Company Limited-H shares
06178.HK Securities
CanSino Biologics Inc. - H Shares
06185.HK Biotechnology
Qingdao Port International Co., Ltd. - H Shares
06198.HK Marine & Harbour Services
Haier Smart Home Co., Ltd. - H Shares
06690.HK Household Appliances
Shenwan Hongyuan Group Co., Ltd. - H Shares
06806.HK Securities
Yangtze Optical Fibre and Cable Joint Stock Ltd. Co. - H Shs
06869.HK Telecomm. & Networking Equipment
China Galaxy Securities Co., Ltd. - H Shares
06881.HK Securities
Huatai Securities Co., Ltd. - H Shares
06886.HK Securities

2021/04/30     Friday 
Modern Media Holdings Ltd.
00072.HK Publishing
Zhejiang Expressway Co. Ltd. - H Shares
00576.HK Road and Railway
Huscoke Holdings Limited
00704.HK Coal
Comtec Solar Systems Group Ltd.
00712.HK Environmental Energy Material
Shanghai Zendai Property Ltd.
00755.HK Property Development
Carnival Group International Holdings Ltd.
00996.HK Property Development
Greater Bay Area Dynamic Growth Holding Limited
01189.HK Hotels & Resorts
Mobile Internet (China) Holdings Limited
01439.HK Printing, Publishing & Packaging
Leader Education Limited
01449.HK Other Support Services
China Datang Corporation Renewable Power Co., Ltd. -H Shares
01798.HK Alternative Energy
China Wood Optimization (Holding) Ltd.
01885.HK Forestry & Timber
China Chunlai Education Group Co., Ltd.
01969.HK Other Support Services
Zhixin Group Holding Limited
02187.HK Construction Materials
CNNC International Ltd.
02302.HK Other Minerals
Good Friend International Holdings Inc.
02398.HK Machinery & Equipment
China National Building Material Co. Ltd. - H Shares
03323.HK Construction Materials
Icon Culture Global Company Limited
08500.HK Advertising

Read More  

A light week for data but investors will be looking for signs of inflation in the earnings out this week which really ramps up; with 328 companies due. Costs and profit margins will be key.  
At the same time with markets trading at highs; Dow above 34,000, FTSE above 7,000 and Japan, S Korea and Taiwan at 5 year highs (China & HK have pulled back in the last month) so any disappointments are likely to be harshly received.  But helping analysts; from the results so far; it the fact that we are seeing companies giving guidance again. In the US earnings growth for the S&P 500 is 30.2%; making it the best quarter since the third quarter of 2010, according to FactSet.  So expectations are raised.  Also worth noting that so far in the US companies have beaten earnings estimates by a wide margin of more than 84%, suggests that analysis were either overly pessimistic or their models don’t work without management guidance.
A full list of US earnings can be found at https://finance.yahoo.com/calendar/earnings/

Key data PMI data out at the end of the week.
Ahead of that:
Japan Trade data Monday and Inflation data Friday.
S Korea PPI
Taiwan Export Orders, Unemployment, Retail Sales and Industrial Production China Loan Prime Rate
Europe ECB Rate Decision, German PPI, UK Employment, Inflation Retail Sales and PPI data
US Home Sales Data, Chicago Fed National Activity Index, Kansas Fed Manufacturing Index and 5 year TIPS auction.

Monday 19 April 
AUSTRALIA  No data due but could get New Home Sales.
JAPAN Balance of Trade, Exports, Imports, Industrial Production, Capacity Utilisation.
S KOREA No data due  
TAIWAN No data due  
CHINA No data due  
HONG KONG No data due  
EUROZONE Current Account, Construction Output
GERMANY Bundesbank Monthly Report
FRANCE No data due  
UK No data due  
US No data due  
Earnings Coca-Cola, IBM, United Airlines, Zions Bancorp, FNB, Steel Dynamics

Tuesday 20 April 
AUSTRALIA  RBA Meeting Minutes
JAPAN Tertiary Industry Index
S KOREA No data due  
TAIWAN Export Orders
CHINA Loan Prime Rate (1 and 5 year)
HONG KONG No data due  
EUROZONE No data due  
GERMANY PPI
FRANCE No data due  
UK Claimant Count Change, Employment Change, Average Earnings (Inc & Ex Bonus), Unemployment Rate.
US Redbook, API Crude Oil Stock Change
Earnings Johnson & Johnson, Travelers, Procter and Gamble, Netflix, Abbott Labs, CSX, Lockheed Martin, Intuitive Surgical, Tenet Healthcare, Philip Morris, Northern Trust, Fifth Third, KeyCorp, Comerica

Wednesday 21 April
AUSTRALIA  Retail Sales, Leading Index
JAPAN No data due  
S KOREA 
PPI
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 
Inflation Rate, Core Inflation, PPI Core, PPI Output, PPI Input, Retail Price Index,
US MBA Mortgage Applications and 30 yr Mortgage Rate, EIA Oil Report.
Earnings Verizon, Chipotle, Whirlpool, Nasdaq, Baker Hughes, Anthem, Netgear, Spirit Airlines, Canadian Pacific Railway, Lam Research, Discover Financial, SLM, Halliburton, Knight-Swift Transportation

Thursday 22 April 
AUSTRALIA  No data due  
JAPAN Foreign Stock and Bond Investment
S KOREA No data due  
TAIWAN 
Unemployment Rate
CHINA No data due  
HONG KONG 
Unemployment Rate
EUROZONE 
Government Budget to GDP and Government Debt to GDP, ECB Rate Decision and Press Conference
GERMANY No data due  
FRANCE 
No data due
UK CBI Industrial Trends Orders and Business Optimism Index
US Chicago Fed National Activity Index, Initial Claims, 4 week Average Claims, Continuing Claims, Existing Home Sales, EIA Natural Gas Report, Kansas Fed Manufacturing Index, 5 year TIPS auction.
Earnings AT&T, Intel, D.R. Horton, American Airlines, Union Pacific, Alaska Air, Pentair, Tractor Supply, Celanese, Seagate Technology Biogen, Dow, Credit Suisse, SAP, Boston Beer, Mattel, Snap, Valero Energy, Freeport-McMoRan, Quest Diagnostics

Friday 23 April 
AUSTRALIA  PMI Flash (Manufacturing, Services and Composite)
JAPAN Inflation Rate, Core Inflation, PMI Flash (Manufacturing, Services and Composite)
S KOREA No data due  
TAIWAN 
Retail Sales, Industrial Production, M2 Money Supply
CHINA No data due  
HONG KONG 
Business Confidence, Inflation Rate.
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, Retail Sales Ex Fuel, Public Sector Net Borrowing, PMI Flash (Manufacturing, Services and Composite)
US PMI Flash (Manufacturing, Services and Composite), New Home Sales, Baker Hughes Rig Count.
Earnings American Express, Honeywell, Daimler, Regions Financial, Schlumberger, Kimberly-Clark

Read More  

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  

Beijing is working to kick the US dollar out of Asia


This and previous notes can be found at asianmarketsense.com  and Substack ( Asian Market Sense)
Check out ERI-C.com for  interesting research and trading analysis

This comes from an ERI-C webinar by Mike Howell of Cross Border Capital, its still available to listen to.Beijing is working to kick the US dollar out of Asia

I was listening to Mike Howell of Cross Border Capital webinar entitled 'Will a skidding dollar finally force the Fed into a near-term tightening taper?';  which is very topical of itself but towards the end he mentions about China working to kick the dollar out of Asia.

Basically he notes that Asian currencies has been relatively stable since 2016 when there was a ‘Shanghai accord’, which was originally secret but later made public; the aim of which was to stem the strength of the US dollar. He thinks from analysing the data that there is evidence of currency targetting. Noting that China would love it if there was was Asian equivalent to the Euro. Then China’s Yuan would be like the Deutschemark within the Euro; he calls it the ‘Yuan in Asian clothing’. It would enable China to heavily influence its currency but escape blame because its currency would be part of a basket.

The driver behind this is that China is undergoing a major financialisation of its economy and is trying to get the Yuan into a position to displace the USD particularly Asia; which is a stated Chinese party goal.

The mechanism it is aiming to use is trade credit. That entails opening up more trade credit markets in Yuan, to try and re-price more goods in Yuan. It is evidenced by the fact China has 32 swap line arrangements with regional and other central banks world wide.

He then asks why would it be doing that if it wasn’t in order to design a trade credit system in Yuan?

This at a time when it is opening up its bond and equity markets to foreign capital and developing its digital Yuan to facilitate peer to peer transfers. Each of which will deminish the role of the US dollar.

A key point being it is not so much the use of the digial Yuan but its architecture because as a leader that technology can be exported to other countries and economies in Asia and central Asia (and I would say Belt and Road Countries globally) who would also be draw into using Yuan pricing), pulling those countries into the orbit of Beijing.

Personally suspect that it is that realisation that has prompted the Fed to say it is looking at a digital dollar. Not because Powell believes in it but to counter and provide an alternative to anything coming out of China. This is an area that China realised the west wasn’t focused on and so is focusing its efforts; similar to the way it managed to dominate 5G.

He then goes on to look what a weaker US dollar means for at asset allocations; basically weak dollar, stronger Asian liquidity and rising European currency which is +VE Asian Equities & Property markets, European bond markets and international commodities. But it would be -VE for the Euro zone recovery and raise internal Euro zone tensions over.

Key for him is that could then be an inflection point for the US dollar and then would have a major impact on monetary policy worldwide.

It makes a lot of sense especially since Trump ‘weaponised’ the US dollar.

The whole webinar is very good and available for free on ERI-C. com It is also possible to get a trial of Michael’s products (Cross Border Capital) they specialise in monitoring and analysing global liquidity flows in order to determine asset prices (currencies, bonds, equities and real estate). If you want more information or are interested in a free trial please let me know.

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


HK/CHINA WRAP


FT Thoughts


Asian Macro Initial Thougths


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 Initial Thoughts


HK/China Wrap


FT Thoughts


Asian Macro Thoughts


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.

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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.

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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.

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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.


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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.


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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.'

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