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Biography




Andrew Sullivan

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

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

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

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

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

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

Open for job offers 
Available for regular briefings, consultancy and one off projects; please call  or WhatsApp (+855 8630 7062) or email andsullivan@gmail.com

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Sept 20 Asian Macro Australia & HK open; Japan, S.Korea, Taiwan and China closed


This and previous notes can be found at Substack ( Asian Market Sense )
Check out ERI-C.com for  interesting research and trading analysis. On Tuesday there is a free webinar on "Behavioural Finance Research & The Psychology of the Sell”  

Asia volumes expected to be light with a number of markets closed

Australia Futures indicaate market to open -68pts following the US; with weakness in Iron Ore, Gold and Oil names. Miners under pressure with UBS lowering numbers and cutting FMG to a sell.  TCL Trading halt for a $4bn entitlement offer at $13.00 per share.
AST gets an share/cash proposal from Brookfield AM.
BSL Investors day today.
A light week for data but Tuesday we get RBA minutes, Wednesday the Leading Index and Thursday we get PMI data
Japan Markets closed Autumninal Equinox Day re-opens Tuesday.
Later this week Inflation data and PMI data.
S Korea Markets closed Chuseok Holiday re-open Wednesday
Taiwan Markets closed Mid Autumn Festival re-open Tuesday.
This week we get an Interest Rate decision, Unemployment data, along with Retail Sales, Money Supply and Export Ordersdata
China Market closed Mid Autumn Festival re-open Wednesday
HK ADR’s -174pts at 24,493 broad weakness and with China and other regional markets closed volumes are likely to be light.  Evergrande still an overhang along with China policy.  No connect flows.
Europe gets Consumer Confidence data, PMI data and an ECB meeting. German PPI and Ifo data. French Business Confidence and Climate Indicator, UK BoE meeting, Public Sector borrowing
US FOMC meeting this weekHousing data in focus this week and PMI data. Also this week a ‘Quad’ meeting which underlines how many Asian countries are improving their ties with the US.

France recalls its ambassadors from the US and Australia following the decision for Australia to get nuclear powered submarines and cancelling its existing contract with France. The deal is part of the US looking to build up military resistance to China.

Iron ore fell below US$100 a metric tonne for the first time in 14 months as China’s moves to clean up its heavy-polluting industrial sector spurred a swift collapse. Futures prices sunk to as low as US$99.50 a tonne on the Singapore Exchange and wavered at about US$100 a tonne through the overnight trading session, which is daytime trading hours in the US.

JAPAN
Market closed for Autumnal Equinox Day
No data due.
Tokyo reported 565 new covid cases Saturday (-297 DoD). Nationally the tally was 3,401.
Japanese households held a record 1,992 trillion yen ($18 trillion) worth of assets at the end of June, up 6.3 percent from a year earlier, as the coronavirus pandemic continued to curb spending and stock prices gained, according to Bank of Japan data.
Cash and deposits rose 4.0 percent to 1,072 trillion yen, a fresh record high, partly because of summer bonus payments.
Leaders of the United States, Japan, India and Australia will agree to take steps to build secure semiconductor supply chains when they meet in Washington next week, the Nikkei business daily said on Saturday, citing a draft of the joint statement.
Two of the candidates vying to become Japan's next prime minister denied on Saturday they had toned down their positions on nuclear energy and gender issues to attract conservative backing in a tight ruling party leadership election this month.
The winner of the Sept. 29 contest to lead the Liberal Democratic Party (LDP) is almost certain to succeed Yoshihide Suga as the country's next premier because the party has a majority in the lower house.
Shinsei Bank's (8303.T) board has decided to use a poison-pill defence against an unsolicited $1.1 billion bid from shareholder SBI Holdings (8473.T), the Japanese lender said on Friday, as it scrambles for ways to thwart the takeover.  Shinsei plans to issue stock warrants to existing shareholders which would dilute SBI's stake, it said in a statement after a board meeting. -VE
Toyota Motor Corp. is planning to use hydrogen transported by a Kawasaki Heavy Industries Ltd. ship from Australia for the company’s hydrogen-powered cars as early as next year.
Hydrogen is expected to be an important energy source in the decarbonization drive. +VE

SOUTH KOREA 
Markets closed for Chuseok re-opens Thursday
No data due
Sunday KDCA reported 1,910 new covid cases (1,871 local infactions)
More than 60 cryptocurrency exchanges in South Korea must notify customers of a partial or full suspension of trading by Friday midnight, a week before a new regulation comes into effect.  To continue operating, exchanges must register with the Financial Intelligence Unit by Sept. 24, providing a security certificate from the internet security agency. They must also partner with banks to ensure real-name accounts. -VE
Disney+, the US entertainment giant’s streaming service, is expected to land in Korea via LG U+ first, the smallest of the country’s three IPTV providers. Then, it may team up with KT, the largest of the three, to further expand its reach. Earlier, Disney officially announced the Nov. 12 launch of Disney+, with a monthly subscription fee of 9,900 won ($8.40). +VE LG U+
Posco said Friday it has established a 1 million-ton production facility for giga steel, an ultrahigh-strength steel product used for cars. Amid the expanding global market for eco-friendly cars and rising demand for lightweight vehicles, Posco said it has invested about 500 billion won ($425 million) since 2017 to build and expand the production facility for the high-strength steel inside the Gwangyang steel mill in Gwangyang, South Jeolla Province +VE.
Eastar Jet Co., a debt-ridden South Korean budget carrier, said Friday it has submitted restructuring plans to a bankruptcy court to finalize an acquisition deal with a local property developer, aiming to resume flights next year.+VE
Hyundai Motor Group has begun test operating a robot to inspect safety at its automotive plant, in collaboration with robotics startup Boston Dynamics, the group said Friday.  Hyundai Motor Group, which operates two leading automotive companies Hyundai Motor and Kia, said it has deployed Spot, Boston Dynamics’ quadruped robot, to inspect safety at Kia AutoLand Gwangmyeong, Kia’s automotive plant facility in Gyeonggi Province. +VE
KT, one of South Korea’s leading telecom companies, said Friday it has created an organization dedicated to new investments and external partnerships in a bid to speed up the firm’s transformation into a digital platform business. +VE
Shinhan Bank said Friday that it has acquired a minority stake in a local information and communication technology solutions and services provider to bolster its partnership for development of a new corporate banking platform.

TAIWAN
Market closed Mid Autumn Festival re-opens Tuesday
No data due
CECC reported 12 new covid cases on Saturday but there are concerns about a rise in cases after the Mid Autumn festival.
Taiwan's economy minister expressed concern on Friday about China's "sudden" decision to apply to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and said it hoped it did not affect the island's application.
China filed to join the free trade agreement in a letter to New Zealand's trade minister, Damien O'Connor.
Innolux Corp which makes flat panels used in TVs and computers, yesterday said it is cutting production amid weakening demand and slumping prices.  The flat-panel maker’s comments came as demand began losing steam last month after experiencing the industry’s longest boom of one-and-a-half years.
“The flat-panel industry is cyclical by nature. After a long period of upticks, it is normal to see price adjustments,” Innolux chairman Jim Hung told reporters on the sidelines of a media briefing in Taipei. -VE
With COVID-19 coming under control in Taiwan, roughly two of every five employers in Taiwan believe their hiring will return to normal within six months, according to a survey by human resources advisory firm ManpowerGroup.

CHINA
Market closed Mid Autumn Festival re-opens Wednesday
No data due.
Covid-19 cases climbed again in Fujian, China’s southeastern province battling the country’s latest outbreak of the pandemic
,
as local authorities stepped up travel restrictions and suspended mass activities ahead of the upcoming Mid-Autumn Festival -VE.
China to use market tools to stabilise commodities says Premier Li, with macro level policies calibrated to the precise requirements of local businesses. +VE
On Saturday The People's Bank of China (PBOC) initiated 7-day and 14-day reverse repos of RMB50 billion each. The successful bidding rates for the 7-day and 14-day reverse repos were 2.20% and 2.35%, respectively. The single-day net investment reached RMB100 billion today.
China's Ministry of Culture and Tourism (MCT) shall do well in four key areas during the Mid-Autumn Festival and National Day holidays, CCTV.COM citing Hou Zhengang from the ministry's market management department. Firstly, MCT aims to sternly prevent the importation of Covid cases. Outbound and inbound group tours, as well as "air ticket + hotel accommodation" operations offered by travel agencies and online tourism firms will be suspended. Equally, a circuit breaker mechanism for cross-provincial travel will be strictly in place. Accordingly, trans-provincial group tours and "ticket + hotel" reservation services in provincial regions labelled as medium- or high-risk areas will be halted immediately.
Japan has said China’s “readiness” to join a transpacific trade pact originally designed by Washington to limit Chinese influence in the region would need to be judged on its merits after Beijing filed a surprise formal application.  For China to sign up to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, started by former US President Barack Obama, Beijing would need to meet the deal’s requirements in areas related to intellectual property, state subsidies and state-owned enterprises, Japan said. But the US could invoke a clause in its trade agreement with Canada and Mexico to block China’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a government official said yesterday.
The China-US Financial Roundtable meeting was held virtually on Thursday, focusing on the sector regulation and consolidation measures recently imposed by China, Bloomberg citing sources. Both sides talked about boosting the transparency of Beijing's sector oversight and reorganization.  Key request from international investors was for consistancy and insight into potential changes.
Beijing said other countries’ patrols in the South China Sea
were “provoking incidents” and “creating contradictions” as it rejected a German warship’s port call request. -VE 
for relations with Germany which had hoped theport visit would ease tensions about its joining the UK aircraft carrier’s Far East Tour.
Chinese consumers have placed more than 2 million pre-orders for the new 5G iPhone 13 line through Apple’s official store on JD.com as of Thursday, surpassing the 1.5 million iPhone 12 pre-orders on the same platform a year earlier, as the world’s largest smartphone market finds fewer high-end models on offer amid the decline of Huawei Technologies. +VE Apple

HONG KONG
ADR’s -174pts at 24,493 broad weakness and with China closed volumes are likely to be light. HK reported 3 imported covid cases on Sunday.
Data due after market
Inflation Rate Aug (Jul was 3.7%)

Short Selling HSI Friday 16% vs 18.5% Thursday
Top Shorts
Henderson Land (12) 48%, BYD Co (1211) 41%, Country Garden (2007) 39%, Xinyi Glass (868) 34%, Bud Apac (1876) 30%, Petrochina (857) 27%, Li Ning (2331) 27%, China Life (2628) 25%, HSBC (5) 25%.
POLITICS
Hong Kong's political elite began selecting the powerful committee on Sunday
which will choose the city's next leader and nearly half the legislature under a new "patriots only" system imposed by Beijing.  Carrie Lam and others endorsed the process.

BUYBACKS
TENCENT (00700.HK)'s statement disclosed that, on 17 September, it has repurchased 230,000 shares 
of the company on the Stock Exchange, at a price ranging between $445.4-467.4 per share, involving approximately $106 million. +VECKH HOLDINGS (00001.HK)’s statement disclosed that on September 17, it repurchased 280,000 shares of the company on the Stock Exchange at a price between $52.4-53.45 per share, involving a total of about $14.85 million.  +VE

YONGDA AUTO (03669.HK) announced that it has repurchased 4.629 million shares
up to now, involving about $54.62 million. +VE

CENTRAL CHINA (00832.HK) announced that on 17 September, Wu Po Sum, the Chairman and a controlling shareholder, through its wholly-owned Joy Bright, further acquired in aggregate 4.1 million additional Shares at the average price of HK$1.56 per Share on the open market. +VE

XIAOMI-W (01810.HK)'s statement disclosed that, on 17 September, it repurchased 892,400 shares 
of the company on the Stock Exchange, at a price ranging between $22.95-23 per share, involving a total amount of about $20.52 million. +VE

YUZHOU GROUP (01628.HK) announced that on 17 September, Lam Lung On, the chairman and a controlling shareholder of the Company, has acquired 3 million shares of the Company on the market for an aggregate consideration of HK$3.3952 million.  +VESIHUAN PHARM (00460.HK) announced that, on 17 September, the Company repurchased a total of 1 million shares of the Company on market at an average price of HK$2.129 per Share. The aggregate purchase price paid was approximately HK$2.13 million.  +VE

WATCH
China Evergrande Group has begun repaying investors in its wealth management products with real estate, a unit of its main Hengda Real Estate Group Co Ltd unit said.  
Evergrande, with over $300 billion in liabilities, is in the throes of a liquidity crisis here that has left it racing to raise funds to pay its many lenders and suppliers. It has a bond interest payment of $83.5 million due on Thursday. The company said in a WeChat post dated Saturday that investors interested in redeeming wealth management products for physical assets should contact their investment consultants or visit local offices.  -VE

China's MIIT has recently come up with special guidance opinions on external link management, announced TENCENT (00700.HK)'s WeChat official account. Accordingly, WeChat will put interconnection into practice under the bottom line on safety to ensure high-quality platform content and excellent user experience. Based on these principles and under regulators' guidance, WeChat will roll out the phased external link management steps bit by bit. The first stage will begin from 17 September. After upgrades, users will be allowed to visit external links in one-on-one chats under the premise of information security. +VE

TAI PING CARPET (00146.HK)  announced the results for the year ended 30 June 2021. Net profit was HK$16.63 million.  EPS
equaled HK7.84 cents. A final dividend of HK3 cents was declared. +VE

SUNWAH KINGSWAY (00188.HK) announced the results for the year ended 30 June 2021. 
Net profit was $31.76 million, against the loss of $40.93 million from a year ago. EPS was 4.44 cents. Final dividend amounted to 1.5 cents. +VE

INSPUR INT'L (00596.HK) announced that Eric Kong Lee has resigned as the chief executive officer of the Company with immediate effect due to his other personal and business commitments.
Following the resignation of Mr. Lee, the Company will no longer offer the position of chief executive officer. The duties of the chief executive officer will be borne by the General Manager of the Company. Meanwhile, Wei Daisen has been appointed as a General Manager of the Company.  Slight -VEHYSAN DEV (00014.HK) announced to acquire a completed office/retail mixed used development known as “City Link” located at Xinzha Road, Shanghai from CK ASSET (01113.HK). The Consideration is an amount equal to RMB3.5 billion (equivalent to approximately HK$4.235 billion). +VE

HKR INT'L (00480.HK) announced to purchase a retail cum office building, namely Jinsha INCITY located at Qiantang District, Hangzhou from Hangzhou Runhao at a total consideration of RMB414 million (equivalent to approximately HK$499 million). +VEHUISHENG INTL (01340.HK) announced that, on 15 September, the Company disposed of 10,000 HK AERO TECH (01725.HK) Shares on open market, together with the 160,400 Previous Sale Shares disposed, at an aggregate consideration of approximately HK$2.836 million. The Group expects to recognise a book gain in aggregate of approximately HK$2.615 million.  +VEEVERGRANDE (03333.HK) attaches great importance to some managers' early redemption of the Evergrande Wealth Investment Products, according to an official web announcement. The group has asked those six managers to return all monies redeemed in advance by deadline, along with severe punishment. +VEA main lender to the debt-strapped Evergrande Group has made loan loss provisions, while some creditors plan to give the Chinese developer more time to repay, Reuters citing sources. ABC (01288.HK) has reportedly made some loss provisions for certain loan exposure to Evergrande. -VE

HKEX (00388.HK) published a consultation paper, seeking market feedback on proposals to create a listing regime for special purpose acquisition companies (SPACs) in Hong Kong.
Bonnie Chan, HKEX Head of Listing, said she noted about the market concern that whether SPAC will run against the clampdown initiatives on "shell stock" speculations. Chan underscored that the proposals in the consultation paper forbid any assets which do not meet listing conditions to float by SPAC.
The proposals laid out requirements for the scale of initial fundraising, issuer qualifications, redemption rights and acquisition targets, in alignment with the prevailing reverse takeover regulations and measures to combat backdoor listing.

The Hong Kong Monetary Authority (HKMA) published the statistics of payment cards issued in Hong Kong for the second quarter of 2021. According to the quarterly statistics, the total number of credit cards in circulation was 19.22 million by the end of Q2/2021. The figure represents a 0.5 per cent decrease from the previous quarter and a 1.5 per cent decrease from the previous year. The number and value of credit card transactions are susceptible to seasonal factors and the general economic environment, making the trends more prone to fluctuation. The total number of credit card transactions was 236 million for Q2/2021, representing a 7 per cent increase from the previous quarter and a 15.3 per cent increase from the same period in 2020.
The total value of credit card transactions was HK$172.1 billion for Q2/2021, representing a 1.1 per cent decrease from the previous quarter and a 19.4 per cent increase from the same period in 2020. Of the total transaction value, HK$142.2 billion was related to retail spending in Hong Kong, HK$20.3 billion in retail spending overseas and HK$9.6 billion in cash advances.The Stock Exchange published a consultation paper seeking market feedback over the next 45 days on proposals to create a listing regime for special purpose acquisition companies (SPACs) in Hong Kong. The deadline for responses is 31 October 2021.
Accordingly, the subscription for and trading of a SPAC’s securities would be restricted to professional investors only. This restriction would not apply to the trading of the Successor Company shares post the De-SPAC Transaction.Centa-City Leading Index (CCL) last stood at 189.14, down 0.33% weekly. In the last seven weeks, the CCL rose for the first two weeks, before falling for the next two weeks, and then picked up for two weeks again, with the trend staying in volatility.
The research department of Centaline Property, said CCL Mass in New Territories East last reported at 208.27, up 2.43% weekly, logging the sharpest increase in the past 12 weeks.CKH HOLDINGS (00001.HK) and the Qatari mobile telecoms company Ooredoo announced to combine their respective Indonesian telecommunication businesses, Indosat Ooredoo and H3I. The MergeCo will be named PT Indosat Ooredoo Hutchison.
Canning Fok, Group Co-Managing Director of CKH HOLDINGS, said at the press conference that upon the merger of the two companies, the MergeCo will become a larger-sized company, and is projected to be Indonesia's second largest telco, serving 100 million customers and earning annual revenue of approximately US$3 billion. The merger will also help Indonesia build a better telecom network and render better customer services there. The Group deems Indonesia as one of its major destinations outside Hong Kong, Fok added.DOW -0.48%, NDX -0.91%, S&P %, Russel 2K +0.18 %
Markets opened flat but trended lower through the day with quadruple witching on the closebv. With concerns about the resurgent covid virus. With Large Cap Tech names under pressure ahead of the FOMC meeting this week with hopes of more detail about tapering. The FDA rejected a plan to givebooster shots of Pfizer -1.3% and BioNTech’s -3.6% vaccines (Moderna -2.4%). Invesco +5.5% after the Wall Street Journal reported the money manager is in talks to combine with State Street’s asset-management business.
The Senate Finance Committee has put forward a proposal to end the tax advantage of ETF’s and close the loopholes that the wealthy use to defer paying gains taxes.
Banks JPMorgan Chase -0.3%, Citigroup +0.2% Wells Fargo +0.4%, Amex +0.8%
Work from home names: Facebook -2.2%, Apple -1.8%, Amazon -0.7%, Netflix +0.5%,  Disney +0.1%, Zoom Video +3.4%, Alphabet -2% and Microsoft -1.8%,
Tech NXP Semi -1.7%, Nvidia -1.5%, Micron -0.4%, AMD -2.2%, Skyworks -2%
Re-opening stocks  Boeing, Caterpillar -1.9%, Simon Property %, Kohl’s -0.2%, Nordstrom +0.7%, Gap +0.6%, United Airlines +0.2%, Carnival +2%, Wynn Resorts -1.3%, Chevron -0.6%, Exxon Mobil -1.2%,  
Lock down names Campbell Soup -0.8% General Mills +0.3%, JM Smucker +0.3%
DATA
Michigan Data Prelim
Consumer Expectations Sept 67.1 vs 65.1 Aug (F/cast was 66)
5 yr Inflation Expectation Sept 2.9% vs 2.9% Aug (F/cast was 2.8%)
Consumer Sentiment Sept 71 vs 70.3 Aug (F/cast was 71.5)
Inflation Expectations Sept 4.7% vs 4.6% Aug (F/cast was 4.6%)
Current Conditions Sept 77.1 vs 78.5 Aug (F/cast was 78.5)
Baker Hughes Oil Rig Count 411 vs 401 prior
Baker Hughes Total Rig Count 512 vs 503 prior
USD holds near three week highBitcoin +0.98% @ 47,750.00, VIX +22.3% @ 20.8, US T10 @ 1.363%
OIL Brent -0.44%, WTI -0.88%
Gold -0.16%, Silver -1.9%, Copper -0.97% Platinum +0.82%, Palladium -0.79%.
AHEAD NAHB Housing Market Index, UN General Assembly.

DAX -1.03%, CAC -0.79%, FTSE -0.91%
Markets opened higher but trended lower and closed at the day lows. UK retail sales were weaker than expected for a fourth month -VE plus concerns about slowing growth worry the market. Travel & Leisure lead the gains whilst Basic Resources were weak.
Dometic Group +1% after agreeing to a $677 million deal to buy U.S. drinkware manufacturer Igloo.
Anglo American -8.2% after UBS and Morgan Stanley both downgraded the stock and cut their price targets.
DATA
Eurozone
Current Account Jul €30.2B vs €24B Jun (F/cast was €29.1B)
Construction Output Jul 3.3% YoY vs 28% Jun (F/cast was 3.4%)
Core Inflation Rate Aug 1.6% YoY vs 0.7% Jul (F/cast was 1.6%)
Inflation Rate Aug 3% YoY vs 2.2% Jul (F/cast was 3%)
Inflation Rate Aug 0.4% MoM vs -0.1% Jul (F/cast was 0.4%)
UK
Retail Sales Aug -0.9% MoM vs-2.8% Jul revised (F/cast was 0.7%)
Retail Sales Aug 0% YoY vs 1.9% Jul revised (F/cast was 2.8%)
Retail Sales Ex Fuel Aug -1.2% MoM vs -3.2% Jul revised (F/cast was 0.9%)
Retail Sales Ex Fuel Aug -0.9% vs 0.9% Jul revised (F/cast was 2.6%)
AHEAD
Eurozone No data due
Germany PPI
France No data due  
UK  No data due 

Macro Data Impacting Asia 20 - 24 September Rate decisions and PMI data


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

Australia Key this week we get RBA meeting notes, Leading Index and PMI data.
Japan Key this week BoJ rate decision no change expected along with  Inflation and PMI data.
S Korea 20 day Import/Export Data and PPI.
Taiwan  This week we get Interest Rate decision, Unemployment data, along with Retail Sales, Money Supply and Export Orders data
China Market closed Mid Autumn Festival re-open Wednesday
HK ADR’s -174pts at 24,493 broad weakness and with China and other regional markets closed volumes are likely to be light.
Europe gets Consumer Confidence data, PMI data and an ECB meeting. German PPI and Ifo data. French Business Confidence and Climate Indicator, UK BoE meeting, Public Sector borrowing
US FOMC meeting this week with the expectation of more insight into the start of Tapering.   Also importatnt Housing data in focus this week and PMI data. Also this week a ‘Quad’ meeting which underlines how many Asian countries are improving their ties with the US.

Monday  20 September
AUSTRALIA No data due
JAPAN 
Market Closed Autumninal Equinox Day re-opens Tuesday
S KOREA Market Closed Chuseok Holiday No data due  
TAIWAN Market closed  Mid Autumn Festival No data due  
CHINA Market closed  Mid Autumn FestivalNo data due
HONG KONG Inflation Rate
EUROZONE No data due
GERMANY PPI
FRANCE No data due  
UK No data due  
US NAHB House Market Index
UN General Assembly

Tuesday 21 September
AUSTRALIA  
RBA Meeting Minutes
JAPAN Market re-opens  No data due
S KOREA Market Closed Chuseok Holiday No data due  
TAIWAN No data due  
CHINA Market closed  Mid Autumn FestivalNo data due
HONG KONG No data due  
EUROZONE No data due  
GERMANY No data due  
FRANCE No data due  
UK Public Sector Net Borrowing,  CBI Industrial Trends Orders
US Current Account, Housing Starts, Building Permits, Redbook, API Crude Oil Stock Change.
UN General Assembly

Wednesday 22 September
AUSTRALIA  
Leading Index
JAPAN BoJ Interest Rate Decision  
S KOREA 
Market Closed Chuseok Holiday No data due  
TAIWAN Unemployment Rate  
CHINA 
Market re-opens  Loan Prime Rate 1 & 5 year
HONG KONG 
Market closed  Mid Autumn Festival No data due  
EUROZONE 
ECB Non-Monetary Policy Meeting,  Consumer Confidence Flash  
GERMANY 
No data due  
FRANCE 
No data due  
UK 
No data due.
US MBA Mortgage Applications and 30 yr Mortgage Rate, EIA Oil Report, FOMC Interest Rate Decision.
UN General Assembly

Thursday 23 September
AUSTRALIA  
Flash PMI’s (Manufacturing, Services and Composite)  
JAPAN Foreign Stock and Bond Investment
S KOREA 20 day Export/Import data.
TAIWAN 
Interest Rate Decision, Retail Sales, M2 Money Supply,
CHINA No data due  
HONG KONG 
Market re-opens, Current Account.
EUROZONE 
ECB General Council Meeting, Flash PMI’s (Manufacturing, Services and Composite)  
GERMANY Flash PMI’s (Manufacturing, Services and Composite)  
FRANCE 
Business Confidence, Business Climate Indicator, Flash PMI’s (Manufacturing, Services and Composite)  
UK Flash PMI’s (Manufacturing, Services and Composite),  BoE Interest Rate Decision.  
US Chicago Fed National Activity Index, Initial Claims, 4 week Average Claims, Continuing Claims, EIA Natural Gas Report,  Flash PMI’s (Manufacturing, Services and Composite), CB Leading Index,  Kansas Fed Manufacturing Index, 10 yr TIPS Auction.
UN General Assembly  

Friday 24 September
AUSTRALIA  
No data due
JAPAN Inflation, Core Inflation, Flash PMI’s (Manufacturing, Services and Composite)  
S KOREA PPI
TAIWAN 
Export Orders
CHINA No data due  
HONG KONG 
No data due
EUROZONE No data due
GERMANY 
Ifo Business Climate, Current Conditions and Expectations.
FRANCE 
No data due
UK 
Gfk Consumer Confidence, CBI Distributive Trades,
US New Home Sales, Baker Hughes Rig Count.   Fed’s Powell speaks.
UN General Assembly

Sept 16 HK 4th down day; Macau & Chinese Developers weak. A shares weak ahead of holiday weekend.


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

HSI -365pts (-1.5%) 24,668 HSCEI -131pts (-1.5%) 8,806 T/O HK$150.82bn (-4% DoD but with Southbound connect)

Holidays next week
Japan Closed Monday and Thursday
S Korea Closed Monday to Wednesday for Chusok
Taiwan Closed Monday & Tuesday
China Closed Monday & Tuesday
Hong Kong Closed Wednesday

Europe
Markets opened higher DAX trading sideways but FTSE and CAC trending slightly higher.  Ignoring the weakness in Asia.  Travel & Leisure leading.  Resources weak.
Data
Eurozone
New Car Registrations Jul -23.1% vs +10.4% Jun (F/cast was -28%)
New Car Registrations Aug -19.1% vs -23.1% Jul (F/cast was -17.6%)
Balance of Trade Jul €20.7B vs €18.1B Jun (F/cast was €30.2B
France
New Car Registrations Aug -15% vs -35.3% Jul
US Futures
Opened Dow +30pts, S&P and NDX +0.1% Initial claims data and Retail Sales will be closely watched


CHINA
CSI 300 closed -60pts (-1.2%) @ 4,808
CSI 300 opened flat ticked higher initially but then sold down to 4,830 level around 10:15am then rallied back to 4,860 before selling down into lunch. PM trading was initially choppy; tested to 4,850 before selling down to test 4,800 and then traded sideways in choppy trading into the close.
Southbound Connect closed.
Broad based weaknss with concerns over covid and Evergrande, additional concerns bearing in mind the long weekend ahead. Interesting headline that China has started a second, larger scale, purchase of Hog reserves; likely to add to food price inflation. Shanghai Composite -49pts (-1.3%) @ 3,607 T/O US$96,580bn +10% DoD
Shenzhen Composite -278pts (-1.9%) @ 14,536 T/O US$122,756bn +5% DoD
ChiNext Composite Index -87pts (-2.5%) @ 3,450

CHINA DATA
China's National Health Commission reported 80 confirmed cases yesterday (15th), with 31 of them being imported cases and 49 of them being local infections (48 recorded in Fujian, 1 in Yunnan).

HONG KONG
Pre market opened @ 25,042 +9pts vs +15pts ADR’s but market sold down first to 24,680, small bounce to 24,835 before the selling pressure prevailed into lunch.   PM there was an initial bounce which faded and then the market traded sideways until around 3pm when the market worked better into the close and ticked higher into the closing  auction.
Macau and Chinese Developers and Financial under pressure. Also news that Chinese regulators are reviewing game content, to ensure suitable content.

BUYBACKS on Wednesday
Xinyi Glass buys 2m shares at a price ranging between $27.65-27.90 per share
Tencent buys 230k shares for $105m
CKH buys 130k shares for $7.03m
Xiaomi buys 8.52m shares for $198m

HONG KONG DATA
HK reported no new covid cases.
After Market
Unemployment Aug 4.7% vs 5% Jul (F/cast was 4.5%)

SHORT SELLING HSI Thursday 18.5% vs 15% Wednesday
Top shorts  
China Overseas (688) 48%, Wharf REIC (1997) 47%, Henderson Land (12) 46%, Country Garden (2007) 46%, Ali Health (241) 40%, HSBC (5) 40%, Haidilao (6862) 38%, BYD (1211) 36%, CK Asset (1113) 34%,  Xiaomi (1810) 34%, Mengniu Dairy (2319) 34%, Bank of China (3988) 32%, Wuxi Bio (2269) 32%, Power Assets (6) 31%, Shenzhou (2313) 31%, Xinyi Glass (868) 31%, Hengan (1044) 30%,  HKEX (388) 30%, MTR (66) 29%, SHKP (16) 29%, CM Bank (3968) 27%, CKI (1038) 26%, Bud Apac (1876) 25%


After Market News
China announced to release more metal reserves.  
Headline only on BBerg.

The Census and Statistics Department (C&SD) released today (September 16) the  volume  and price statistics of external merchandise trade for July.  In July 2021, the volume of Hong Kong's total exports of goods and imports of goods increased by 20.1% and 19.5% respectively over July 2020.  Comparing July 2021 with July 2020, the prices of total exports of goods and imports of goods increased by 5.6% and 5.5% respectively

EVERGRANDE Hengchi New Energy Vehicle (Guangdong) Co. Ltd. has changed its legal representative from Weng Manshan  to Zhang Mingming, with Weng also resigning from the positions of executive director and general manager, which will also be taken over by Zhang, reported Chinese media, citing data from qcc.com.

A spokesperson of China's Ministry of Commerce (MOC) expressed when asked about China-U.S. relationship that, China will endeavor to implement the vital understanding reached between the two nations during the leaders meeting and that the economic and trade teams of both countries have been in constant communication.  The ministry reiterated that unilateral trading is harmful to both China and the U.S., as well as the global economic recovery.

Tencent Games announced that, during the Mid-autumn festival holiday, the company's online games operating in China will continue to adhere to the playing-time restrictions for underaged players.  Minors are allowed to log into games between 8-9 pm every night during the Mid-autumn festival holiday (17, 19-21 September) with the exception of 18 September since it is a working day, the company illustrated.

Regional Markets
Australia
Market traded higher through the morning hitting 7,487 around 11.20am before easing back. Then worked higher but resistance at 7,480, has trended lower since 1.20pm; saw a small bounce but then trended lower to close +43pts (+0.6) @ 7,460 Employment data out generally +VE
Energy leading shares higher along with BHP and Commonwealth Bank and Macquarie. Myer +VE as it returns to profit and Telstra higher as it’s investor day takes place.
Data
Consumer Inflation Expectations Sept +4.4% vs +3.3% Aug (F/cast was +3.2%)
Employment Data
Part Time Change Aug -78.2k vs +8.1k Jul revised (F/cast was -18k)
Unemployment Rate Aug 4.5% vs 4.6% Jul (F/Cast was 4.9%)
Employment Change Aug -146.3k vs +3.1k Jul (F/Cast was -66k)
Full Time Employment Change Aug -68k vs -5k Jul revised (F/Cast was -48k)
Participation Rate Aug 65.2% vs 66% Jul (F/Cast was 65.6%)
New Home Sales Aug 5.8% MoM vs -20.5% Jul (F/Cast was -9%)
RBA Bulletin
Japan
Nikkei opened slightly higher but weak trade data prompted selling and the market trended lower through the morning. After lunch traded lower but seeing support around 30,200 level. Bounced and traded sideways around 30,300 to close -188pts (-0.6%)  @ 30,323
Topix traded in a similar fashion, support at 2,080 closed -6pts (-0.3%) @ 2,090
Leaders Oil/Coal, Mining, Foods
Laggards Other Products, Sec & Cmdty, Info & Comm.
Data
Balance of Trade Aug ¥-635.4B vs ¥441B Jul (F/cast was ¥-60B)
Exports Aug +26.2% YoY vs 37% Jul (Consensus was 34%)
Imports Aug +44.7% YoY vs 28.5% Jul (Consensus 40%)
Foreign Stock dropped but Bond Investment rose.
S Korea
KDCA reported 1,943 new covid cases
Foreigner and Local Institutions net sellers. Tech & Insurance weak but Chem seeing interest along with Internet names. Some closing of positions ahead of long weekend.
Kospi opened higher but sold down through the session but found support at the 3,130 level, and closed there -23pts.
Kosdaq traded in a similar fashion; closed -3pts (-0.3%) @ 1,039
Taiwan
Taiex initially rallied to 17,400 and traded around there until 9:30am but then sold down to flat which gave brief support but then sold down to 17,300 which gave support until 11:30am and then the market dipped lower. Closed -75pts (-0.4%) @ 17,279
T/O was US$8.62b vs US$9.55 Wednesday a new low ahead of the long weekend approaching.
CECC reported 12 new covid cases; 10 imported


CONNECT FLOWS  
Shanghai
Northbound RMB 79,297m Sell 39,576m vs 39,721m Buy
Southbound
Shenzhen
Northbound RMB 81,889m Sell 42,524m vs 39,365m Buy
Southbound
HK/China Connect Southbound closed today re-opens Thursday
Northbound will close Friday and re-open Thursday

Active Heavyweights:

HKEX (00388.HK) -12.300 (-2.438%) Short selling $334.93M; Ratio 32.329% closed at $492.2, down 2.4%
AIA (01299.HK) -1.900 (-2.111%) Short selling $216.58M; Ratio 17.553% closed at $88.1, down 2.1%
BABA (09988.HK) -2.500 (-1.623%) Short selling $191.51M; Ratio 8.559% closed at $151.5, down 1.6%
PING AN (02318.HK) +0.700 (+1.235%) Short selling $229.03M; Ratio 20.072% closed at $57.4, up 1.2%
MEITUAN (03690.HK) -1.400 (-0.598%) Short selling $275.47M; Ratio 14.285% closed at $232.6, down 0.6%
TENCENT (00700.HK) -2.400 (-0.529%) Short selling $253.97M; Ratio 4.371% closed at $451, down 0.5%
CCB (00939.HK) -0.020 (-0.352%) Short selling $164.33M; Ratio 18.713% closed at $5.66, down 0.4%

HSI & HSCEI Constituents on Move:
SUNAC (01918.HK) -1.740 (-11.255%) Short selling $184.66M; Ratio 34.307% closed at $13.72, down 11.3%
CG SERVICES (06098.HK) -5.800 (-10.701%) Short selling $63.16M; Ratio 10.641% closed at $48.4, down 10.7%
SANDS CHINA LTD (01928.HK) -1.340 (-7.957%) Short selling $109.79M; Ratio 6.164% closed at $15.5, down 8%
COUNTRY GARDEN (02007.HK) -0.520 (-7.232%) Short selling $62.44M; Ratio 35.570% closed at $6.67, down 7.2%
EVERGRANDE (03333.HK) -0.180 (-6.406%) Short selling $9.20M; Ratio 5.909% closed at $2.63, down 6.4%
GEELY AUTO (00175.HK) -1.300 (-4.924%) Short selling $127.51M; Ratio 19.740% closed at $25.1, down 4.9%
XINYI SOLAR (00968.HK) -0.840 (-4.746%) Short selling $29.01M; Ratio 13.088% closed at $16.86, down 4.7%
HAIDILAO (06862.HK) -1.200 (-3.883%) Short selling $32.27M; Ratio 33.738% closed at $29.7, down 3.9%
CK ASSET (01113.HK) -1.800 (-3.762%) Short selling $81.26M; Ratio 28.711% closed at $46.05, down 3.8%
LONGFOR (00960.HK) -1.250 (-3.650%) Short selling $36.23M; Ratio 23.381% closed at $33, down 3.6%
BYD COMPANY (01211.HK) -9.400 (-3.638%) Short selling $319.55M; Ratio 29.753% closed at $249, down 3.6%
CSPC PHARMA (01093.HK) -0.340 (-3.571%) Short selling $39.53M; Ratio 22.231% closed at $9.18, down 3.6%
EVERG SERVICES (06666.HK) -0.150 (-3.529%) Short selling $2.43M; Ratio 2.167% closed at $4.1, down 3.5%
CHINA RES LAND (01109.HK) -0.950 (-3.339%) Short selling $36.19M; Ratio 20.248% closed at $27.5, down 3.3%

HSMI & HSSI Constituents on Move:
SHIMAO SERVICES (00873.HK) -2.040 (-12.977%) Short selling $24.65M; Ratio 42.479% closed at $13.68, down 13%
GREENTOWN CHINA (03900.HK) -1.400 (-12.259%) Short selling $28.99M; Ratio 36.753% closed at $10.02, down 12.3%
SUNAC SERVICES (01516.HK) -1.780 (-11.898%) Short selling $46.48M; Ratio 12.095% closed at $13.18, down 11.9%
R&F PROPERTIES (02777.HK) -0.660 (-11.871%) Short selling $43.83M; Ratio 49.638% closed at $4.9, down 11.9%
JINKE SERVICES (09666.HK) -4.250 (-10.143%) Short selling $9.49M; Ratio 21.350% closed at $37.65, down 10.1%


MARKET NEWS
Chinese regulatory institutions are slowing down the pace at which approvals for new games are granted, in order to ensure that all the games are in compliance with the stricter requirements 
on content and minor protection which were introduced in August, reported Bloomberg News, citing sources.
Regulators are now revisiting the approval applications of the games developed by several game publishers, including TENCENT (00700.HK) and NTES-S (09999.HK) , the sources added.

China's handset industry is under the blow of chip shortage and pandemic. 
Under which, Chinese smartphone maker Oppo will axe around 20% of its key software and device staff after merging with its arm OnePlus, reported Bloomberg.

COUNTRY GARDEN (02007.HK)  invested in Wanda Light Asset Commercial Management, running into approximately US$1.5 billion, 
Chinese media reported.  Slated for Hong Kong listing by the year end, Wanda Light Asset Commercial Management has wrapped up the pre-IPO financing, capturing almost US$6 billion, according to earlier report. This round of financing purportedly introduced COUNTRY GARDEN, CITIC Capital, TENCENT (00700.HK) and Ant Group. The valuation is expected to whop US$28 billion as a result of the financing.

CHINA TELECOM (00728.HK) and NeuSoft (600718.SH) reached an agreement of strategic partnership on industry digitalization and 5G ecology construction, through which the two parties will actively cooperate in multiple major industry fields, with the aim to realize integration and complementarity of products, solutions, channels.

Stock prices of Dotcom giants went south amid market concerns over regulatory landscape changes for China's Internet and data platforms, along with uncertainties looming over the sector.

Particularly, China's Internet sector oversight is affecting the tech behemoth TENCENT (00700.HK) on multiple fronts, including tighter anti-indulgence policy supervision on games. TENCENT is piloting gameplay and spending restrictions for Honor of Kings and Game for Peace, where minors are limited to play games for an hour a day on each non-statutory holiday and two hours per day on each statutory holiday. Equally, gamers below 12 are banned from in-game spending. In this way, TENCENT aims to crack down on impostor accounts and trading of adult accounts by third-party platforms.
On another note, BOCOM International expected China's common prosperity program to account for 20% of leading Internet companies' GAAP profits in the coming 4-5 years.

The golden age of China's property industry has been gone a long time ago, said HANG LUNG PPT (00101.HK)  
Chairman Ronnie Chan at the Boao Real Estate Forum. Nevertheless, housing is a necessity for the people and this industry is thus bound to keep moving forward.

Didi Global (DIDI.US), the parent company of Didi Chuxing, floated in the U.S. in June, however, later, the company was ordered by Chinese watchdog to make rectification, 
under which the company suspended new user registration and removed their app from online platform, with data security check underway. Financial Times reported that Didi Global saw its number of daily users has fallen 30% since the parent's listing.

LONGFOR GROUP (00960.HK)'s Longfor Smart Service acquired the entire equity interest in a property management company in China from WHARF HOLDINGS (00004.HK), and has recently concluded a transaction agreement, Chinese media reported.
The acquisition of the property management company involves a contracted management area of almost 9 million sq.m., report said. The company manages mid-to-high-end residential projects in Shanghai, Suzhou, Wuxi, Changzhou, Hangzhou, Wuhan, and so on.

PwC lowered the full-year retail volume  growth forecast of Hong Kong to only 10%, representing a volume of $360 billion, lower than the February forecast of a 15% growth to $376 billion.  The downward revision on the forecast is mainly triggered by the fact that the originally predicted 4Q border reboot between Hong Kong and China is now deemed unlikely, remarked Michael Cheng, Asia Pacific, Mainland China and Hong Kong Consumer Markets Leader, PwC China.  Despite the relatively stabilized epidemic in Hong Kong since April, there has been no concrete timeframe in reopening the border due to the recent resurgence of Delta and Mu variants in areas outside of Hong Kong, analyzed Cheng, who contending that Hong Kong may embrace modest recovery from the pandemic with higher vaccination rate, eased social distancing measures, consumption voucher scheme and quarantine-exemption schemes "Return2hk" and "Come2hk".

Early this week, Chinese importers purchased 4-6 bulk cargoes of Brazilian soybeans with shipments slated for October and November, a rare procurement in the peak export period for the United States, its rival supplier, Reuters citing traders with knowledge of the deals.

JD-SW (09618.HK)’s smart industrial park project in the Miyun District of Beijing was approved by the Beijing Municipal Commission of Development and Reform, 
reported Chinese media. The project is planned to be put into operation in June 2023.

CIMC VEHICLES (01839.HK)  (301039.SZ)   formally entered into a strategic cooperation agreement with SDQC in the Laiyang city of Shandong. 
Accordingly, both sides will jointly achieve market breakthrough against the backdrop of logistics and transportation under the van-type trend.PRE MARKET NEWS
HSBC HOLDINGS (00005.HK)  -0.100 (-0.249%)    Short selling $127.99M; Ratio 38.622%   's CFO Ewen Stevenson expressed on an online forum that the Chinese government's recent crackdown on the technological sectors may be beneficial to the group, as some of the companies which have planned for U.S. IPO may now switch to Hong Kong, while the group's fintech competitors are also expected to be affected negatively.  HSBC is planning to dispose as much as USD2 billion for acquisition and has already acquired the Singaporean business of AXA in August for USD575 million.

Hengda Real Estate Group announced that trading of all existing corporate bonds would be suspended for one trading day from market opening on 16 September. The trading will be resumed from market opening on 17 September. Trading methods of the above bonds will be revised from 16 September 2021.

Apple's largest OEM factory Foxconn's Zhengzhou production park has been hiring a vast amount of workers since August ahead of the release of iPhone 13, with the signing bonus ramped up from RMB6,000 in 1H to RMB12,700 by the end of last month, reported Chinese media.However, certain sources suggested that the incentive bonus for returning to the Foxconn Zhengzhou production park has been lowered to RMB7,000 as of mid-September, as the manufacture capacity could not be boosted due to the lack of production material and insufficient chip supply.

HENDERSON LAND (00012.HK) 's residential project located in Eastern District, Hong Kong Island -- "THE HOLBORN" will launch 128 units in its first selling round on Sunday (19th) and has already received over 800 checks as at 6:30 pm yesterday (15th), representing an oversubscription of nearly 5.3x, suggested market sources.  For the units set to be launched, the discounted selling prices range between $5.8083 million and $8.0342 million.

PING AN (02318.HK)'s chairman Ma Mingzhe purchased 64,000 A-shares of the company on Tuesday (14th), at an average price of RMB50.34 per share, involving a total amount of RMB3.2218 million, according to data from HKEX. After the purchase, Ma's stake in A-shares of PING AN stretched from 0.02% to 0.03%.
PING AN's Co-CEO Jessica Tan, likewise, acquired 40,000 H-shares of the company on the same day, at an average price of HKD58.45 per share, involving HKD2.338 million.

The Chuzhou Intermediate People's Court of Anhui has recently made a judgment on the unfair competition lawsuit regarding Ele.me, an O2O lifestyle service platform under BABA-SW (09988.HK), reported 21st Century Business Herald.   Accordingly, Ele.me was ordered to pay MEITUAN-W (03690.HK)  RMB80,000 for forcibly closing a merchant's store after the latter rejected to "choose one from two". The action tarnished the merchant's commercial interests, the Court added.

Cyber Administration of China (CAC) issued a notice highlighting specifically on the online platforms operators' responsibility on managing the information and content that is circulating on the platforms. The notice requires the online platforms to actively fulfil said obligations through various means, including perfecting community rules for the platform, strengthening account management and developing a complete content review system, etc..  Also, the CAC propounded to establish legal requirements for minors protection and to map out concrete plans for protecting underaged users in the cyber space. The internet corporates shall actively expand their input into developing and enhancing anti-addition system and adolescence mode for minors, in order to ensure that the minors are using the internet in a healthy and scientific manner, the notice added.C

Cyber Administration of China (CAC) issued a notice highlighting specifically the online platforms operators' responsibility on managing the information and content on their respective platforms, in which the CAC required the online platforms to set up detailed regulations on managing users accounts, to strengthen account oversight and to effectively regulate the accounts' behavior.
The notice propounded to harden the punishment for accounts involved in improper or rule-violating behavior. The online platforms are asked to establish a specific data base for the blacklisted accounts, with the aim to prevent them from re-registering under a different name, the notice added.

Based on the Metrology Law and the Measures on the Administration of Metrological Benchmarks, China's State Administration for Market Supervision (SAMR) has recently approved three new national measurement standards and replaced two existing measurement benchmarks with technologically-revised standards. These benchmarks involve four professional metrological fields, namely ionizing radiation, flow, optics and radio.

CHINA COMM CONS (01800.HK)  -0.010 (-0.225%)    Short selling $4.35M; Ratio 7.343%   announced that it has received a notice on 15 September 2021 from its controlling shareholder, China Communications Construction Group (“CCCG”), that it has increased its shareholding of H shares in the company by 3 million H shares via the  Shanghai-Hong Kong Stock Connect trading system of the Shanghai Stock Exchange. Subsequent to the increase of shareholding, CCCG holds 58.01% of the total issued shares of the company.  CCCG intends to continue to increase its shareholding of H shares in the company within twelve months and the cumulative percentage of shareholding increase will not exceed 2% of the total issued shares of the company.

AIR CHINA (00753.HK)  announced the key operating data of August 2021. Number of Passengers carried reached 3.2165 million, down 56% yearly and down 58.6% monthly. Total Cargo and Mail carried reached 88,000 tonnes in August, down 9.6% yearly and down 10.4% monthly.

Sept 16 Asia weak ahead of holidays next week. FT China Growth, Covid, Macau and more


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

Malaysia closed today
Holidays next week

Japan Closed Monday and Thursday
S Korea Closed Monday to Wednesday for Chusok
Taiwan Closed Monday & Tuesday
China Closed Monday & Tuesday
Hong Kong Closed Wednesday

HK/China Connect
Southbound closed today re-opens Thursday
Northbound will close Friday and re-open Thursday

Australia
Market traded higher through the morning hitting 7,487 around  11.20am before easing back.  Then worked higher but resistance at 7,480, has trended lower since 1.20pm; currently +44pts (+0.6) @ 7,461  Employment data out generally +VE
Energy leading shares higher along with BHP and Commonwealth Bank and Macquarie. Myer +VE as it returns to profit and Telstra higher as it’s investor day takes place.
Data
Consumer Inflation Expectations Sept +4.4% vs +3.3% Aug (F/cast was +3.2%)
Employment Data
Part Time Change Aug -78.2k vs +8.1k Jul revised (F/cast was -18k)
Unemployment Rate Aug 4.5% vs 4.6% Jul (F/Cast was 4.9%)
Employment Change Aug -146.3k vs +3.1k Jul (F/Cast was -66k)
Full Time Employment Change Aug -68k vs -5k Jul revised (F/Cast was -48k)
Participation Rate Aug 65.2% vs 66% Jul (F/Cast was 65.6%)
New Home Sales Aug 5.8% MoM vs -20.5% Jul (F/Cast was -9%)
RBA Bulletin
Japan
Nikkei opened slightly higher but weak trade data prompted selling and the market trended lower through the morning.  After lunch traded lower but seeing suppport around 30,200 level.
Topix traded in a similar fashion, support at 2,080 currently -10pts (-0.5%) @ 2,087
Leaders Oil/Coal, Mining, Foods
Laggards Other Products, Sec & Cmdty, Info & Comm.
Data
Balance of Trade Aug ¥-635.4B vs ¥441B Jul (F/cast was ¥-60B)
Exports Aug +26.2% YoY vs 37% Jul (Consensus was 34%)
Imports Aug +44.7% YoY vs 28.5% Jul (Consensus 40%)
Foreign Stock dropped but Bond Investment rose.
S Korea
KDCA reported 1,943 new covid cases
Foreigner and Local Institutions net sellers. Tech & Insurance weak but Chem seeing interest along with Internet names. Some closing of positions ahead of long weekend.
Kospi opened higher but sold down through the session but finding support at the 3,130 level.
Kosdaq traded in a similar fashion; -5pts (-0.5%) @ 1,038
Taiwan 
Taiex initially rallied to 17,400 and traded around there until 9:30am but then sold down to flat which gave brief support but then sold down to 17,300 which gave support until 11:30am and then the market dipped lower. Currently -78pts (-0.5%) @ 17,274
China 
CSI 300 opened flat ticked higher initially but then sold down to 4,830 level around 10:15am then rallied back to 4,860 before selling down into lunch. Southbound Connect closed. Broad based weakenss with concerns over covid and Evergrande. Interesting headline that China has started a second, larger scale, purchase of Hog reserves; likely to add to food price inflation.
HK 
Pre market opened 25,042 +9pts vs +15pts ADR’s but market sold down first to 24,680, small bounce to 24,835 before the selling pressure prevailed into lunch. Macau and Chinese Developers and Financial under pressure. Also news that Chinese regulators are reviewing game content, to ensure suitable content.
Europe
Expect markets to open lower with caution on the recovery following Asia and ahead of the US initial claims and  Retail Sales data.
Data
Eurozone New Car Registrations, Balance of Trade 

US Futures
Opened Dow +30pts, S&P and NDX +0.1% Initial claims data and Retail Sales will be closely watched
FT Front Page

US builds bulwark against China with UK-Australia security pact
• Boost for Canberra’s nuclear submarine plans • Signal to Beijing over Taiwan tension.
Key is that it gives Australia’s submarine fleet a significant boost although it will be years before they see the first nuclear powered submarine and there are no plays to arm them with nuclear weapons. It will also increase other security related ties.
But it is a reminder that its hegemony in the international waters of the South China Sea will not go unchecked.
It comes as China’s Foreign Minister says Taiwan is a "sea fortress" blocking China's expansion into the Pacific and is willing to share with other democracies its knowledge of countering Beijing's efforts to undermine it.

Digital marketplace OpenSea probes insider’s trading of non-fungible tokens.
OpenSea has launched an investigation after admitting that one of its executives used inside knowledge to buy items ahead of their promotion on the marketplace. Highlights the need for some regulation to avoid such incidents happening.

INSIDE
TikTok faces Irish probe over children’s data
Two allegations; one that data was transferred to China the other about how it processes the data for those under 18 and 13. The company denies the allegations saying it has appropriate systems and measures in place.
It is not just China that is concerned about data although the reasons behind the concerns may be different.

Covid outbreaks slow China growth
Latest data stoke concern that the country’s economy is losing momentum.
Both retail sales and Industrial production slowed; it notes that it may be due to ‘recent flooding, regulatory interventions, new infections and a property slowdown driving down growth expectations.’
All are reasonable explanations; certainly the surge in international and local cases would have an impact. It also notes that spending habits have changed and that people are eating out less but the recent outbreaks have prompted a curtailment in travel and that will continue over the long weekend and Golden Week after Beijing advised people not to travel. It will be interesting to see whether Beijing stick with its zero covid policy and shutdowns or adopts a more ‘live with covid’ policy in order keep the economy operating.
Looking forward it will be interesting to watch Retail spending and whether if following the crackdown on tutoring services whether people have more money to spend or whether they look for alternative ways to educate their children. Other factors to take into account will be the pull back in the stock markets since the late May highs and the new government focus on ‘common prosperity’. Another overhang will be what happens with Evergrande which could also impact consumer sentiment.
On the industrial side much will depend on the international re-opening but it is likely that new orders in some sectors are being curtailed because of the shortage of chips delaying wider production.

US and Taiwan remain split on island’s plans to foil Beijing invasion.
Looks at the difference between how the US sees the best way to defend Taiwan and Taiwan’s own perspective on the issue. A key point being that if Taiwan were to adopt the US’s policy it would be less able to fend off China’s current encroachments which might embolden China to launch an attack.
The key being that the US would like Taiwan to focus on developing a ‘porcupine’ strategy that could wage a guerrilla war against the PLA.
It’s an interesting read with both viewpoints have valid points. Of course what Taiwan really needs is for the major nations of the world to acknowledge that it is a nation state; set up embassy’s and give it membership of the UN.

China Land auctions suspended after changed rules fail to damp demand  and Xi rejects Biden’s call for face-to-face summit 
Covered in yesterday’s note.

Companies & Markets
EU urged to provide €20bn chips subsidy
Soitec chief says package needed if continent is to build sovereign supply.
Worth a read because it illustrates how expensive it is to get involved in the sector. It notes that the US is agreeing a $52bn subsidy package.
So the cost for China to become self sufficient in the sector would be huge, which is why President Xi no longer sees property as the next step foward. Property has served it purpose and he want to take the next step forward.

Macau regulatory crackdown triggers $20bn losing streak for casino stocks 
Looks at the surprising news yesterday of a new consultation which is really just Beijing tightening its grip on the gaming industry in Macau.
An interesting article and worth a read. As we so many activities in China the rule book is being re-written.
See also LEX Casinos/Macau: gambler’s fallacy worth a read, concludes ‘The gamble for investors involves guessing which operator will renew its licence and which will not. That risk outweighs any opportunities of a return of high-rolling mainland gamblers. Don’t double down.’

Laos looks to exploit China curb on digital currencies
Laos has authorised mining and trading of cryptocurrencies in a policy shift by the debt-laden country that positions it to profit from the crackdown on digital currency mining in China. Taking advantage of its cheap power but concludes ‘“You should always be concerned when countries with poor regulatory records start to get involved in things like cryptocurrency,” said Zachary Abuza, a professor at the National War College in Washington, specialising in south-east Asia. “To say that the Laotian financial system is immature would be a brutal understatement, and we have to be concerned if they are rushing into this.”’

FT BIG READ. FINANCE
‘Dirty money’ fears surround DeFi
Decentralised finance, where smart contracts replace intermediaries like banks and brokers, is a boon for those seeking growth in cryptocurrencies. But it makes anti-money laundering efforts even more difficult.
An interesting read.

Dual circulation policy in China; what does it mean to your portfolio? Evergrande an example.


By way of acknowledgement my thanks to Stewart Paterson of Capital Dialectics for the explanation, he produces a monthly Capital Markets News letter looks at Macro issues and how they impact fundamentals of investing.  I listened to his presentation last night and I thought it useful to share.  If you would like more details log on to ERI-C and you can listen to his explanation or ask me for more details.

Summary 
If you don’t have to invest in China at present then there are better EM/Frontier markets.
If you do have to then SOE’s and those companies closely aligned with ‘Xi’s thoughts’ are likely to outperform going forward as ideology takes precedence over growth.

Background
China often comes out with often vague slogan driven economic policies. Sometimes it is hard to western ears to understand then but it is a mistake to ignore them.
The dual circulation policy is the next step from the 1987 Great International Circulation Policy, that was the framework that provided for the opening up of the Chinese economy. If you had correctly interpreted that as being the pursuit of merchantilist export orientated growth and the link of the monetary base, banking system and money creation to China’s export surpluses would have lead you to invest in the for the likes of Li & Fung, Techtronics, the Shipping companies and Property companies in the 1990’s. So clearly these statements, policy pronouncement are important for long term investment policy.
Also bear in mind that China makes policy pronouncements that set the frame work for the long term.

So Dual Circulation  
Dual Circulation then is about International and Domestic policies.
In China’s case:-
Building up resilience in the Economy, putting the Economy on a ‘cold war’ footing. Preparing the economy for a period of great power rivalry.
So Geopolicitics is very important but also a recognition that the days of prioritising high GDP growth are over. Also a recognition that the goals of the communist party are now the priority and to achieve those the country can no longer high growth. It would be impossible to do both.
The Domestic element effectively means revising the social contract with the people. From you give us monopoly on power and accept the restraints we put on society and we will make you richer year in year out by growing the economy very fast. Now without that fast growth a new definition of the contract is required and it is what President Xi now calls ‘The China Dream’ or the ‘National Rejuvination’.
To understand it one must look at most policy statements through a geopolitical prism, not everything but he refers an earlier report which subscribers have access to ‘Investing in Cold War II’. Many issues can be viewed in a normal way; for example the recent changes in Education, that was not about punishing US investors but all to do with social harmony and a better lifestyle for the mass of the people.
Important whilst geopolitics is important to Dual Circulation it is not everything.
There are 3 key parts of Dual Circulation
1. Party being central to everything; President Xi described it as North South East West. Party control in Society, the economy, everything is paramount. That presents challenges to investors historic thinking and leaning towards the private sector, particularly sectors not dominating the commanding heights of the economy and so more managerial freedom of action this new principle challenges that and hence the investing rationale that underlies that.
2. Going forward ideology trumps pragmatism. So if you looking at the people being promoted, look at the scope for debate on policy, that is being closed down. So if part of the social contract was that the party said our monopoly of power comes with technocractic excellence. Therefore we make the right decisions because we are not under the same pressures as democratic countries that operate under the threat of re-election and so can take a long term view; founded in science and sound policy. That principle is also being challenged.
So there is a rise of social scientists over technocrats. Seen in the growth of small working groups over ministerial responsibility. So now for policy implementation it is a matter of ideology purity over pragmatism and technocrats. That to an extent means loyalty to Xi is replacing loyalty to the party as the means of success. Loyalty to Xi is being conflated with loyalty to China. But with 90 million party members not all agree with all his ideology so some of the statements are deliberately vague so that allows everyone of them room to agree. Plus the party machinery is being worked to ensure that his ideology is paramount.
3. Economic growth is no longer the key driver of policy. Social harmony is a key ingredient of national power, social cohesion and so if rejuvination of the China Dream is the policy goal of the party it is a mistake to look at policy from the standpoint of saying XYZ policy is not good for growth and hence will not happen. That would be a mistake. Growth is no longer a priority.

So on that basis Dual Circulation is an umbrella policy that allows other elements to operate.  The 14th 5 year plan lays out some of those policies.
But you also have subsiduary plans put in place and by looking at them and their objectives & consequences are; you get a much better idea about what it means.
So on the International dimension it is all about national power and there are two elements.
Offensive elements; developing China’s sphere of influence geographically it would be the Belt and Road Initiative (BRI). But also increasing influence by standard setting in things like IoT in tech, AIIB multilaterial development banking and promoting BRI. Its position in the WHO which has been coming under scrutiny recently.
Defensive would be reducing its dependency on any country that will either resist its moves as it hedgemony grows or worse bring attention to them like Australia did over covid. Looks at China’s trade patterns; diversification of hydrocarbons towards countries like Angola and Iran where there is an asymmetric power relationship. It is also looking to weaponise those countries that are reliant on China is key to Dual Circulation.

Domestically its looking at common prosperity means; that will involve challenging the assumption in the models we have regarding
1. The taxing of corporates and individuals
2. Removing economic moats and economic rents; ensuring that there are no longer opportunities for super profits.
The aim being to deliver a lower the cost of living to the masses; hence the recent moves on healthcare and housing being very important.
Common prosperity is about ensuring social unity & harmony and support for the current regime.

So a good example of this is and building resilience into the wider economy can be seen in the concept that is currently working out and hurting investors is in the three red lines policy. He then again referred to a recent report ‘Chinese Real Estate the next great deflationary shock’.
So 3 red lines through the prism of dual circulation and the objectives of the regime we see:
Firstly to limit leverage in order to protect the banking system.
40 years ago property was important China was a third world nation and its property stock reflected that even in the major cities. But no longer, today its property stock is world leading. So what does it do today for China’s national power? That phase of China’s progress is effectively complete. Future real estate development is relatively unproductive.
Today its property now ties up money that could be better used in other parts of the economy, namely not financing activities that will help China move up the tech ladder.
Furthermore property is where people have been parking money, hoarding wealth outside the state financial system. Remember Xi saying ‘property is for living in’ because he wants the money tied up there being used elsewhere.
Also property has become socially divisive and expensive disadvantaging those who did not get on the ladder early. So a challenge to social harmony.
Then you have the current problems of Evergrande and maybe R&F and others posing a threat to the financial system because of leverage.
Property development should be an asset light process considering that pre sales are allowed and yet Property liabilities account for 65% of GDP. Furthermore local land sales give local authorities cash and hence some local economic control which is at odds of the current theme and trend towards Central Party Control.
So through that prism three red lines makes perfect sense.
It might hurt economic growth short term but its about the quality of the growth going forward and redirecting ‘national resources’ the national savings pool; towards more productive objectives that will help achieve the China Dream.
Going Forward 
We are likely to see a progressive tax system implemented which is likely to include a property value tax, assessed locally and maybe collected locally but sent to the Central Government and then redistributed to those sectors or regions ‘in need’ in order to get the desired balance.
So dual circulation is ideology, re-distribution of wealth that is under central control. Its not all about communism; it is about meeting genuine social and economic needs that exist.
So what have the last 12 months shown us and mean for investors?
It is well known that China saves too much, meaning that there is a capital stock is bloated so total productivity is falling. Meaning no easy growth. Meaning China needed to redefine its social contract.
Dual Circulation doesn’t change that outlook for capital in China but may make it worse. Growth is reduced because resource allocation becomes more planned and less market driven. But China cannot afford to be generous to capital there is too much capital and the stresses on society from a bloated capital stock earning higher returns is too great. So we are likely to see greater state direction of capital.
For example in 2020 China needed to recycle circa $800bn of capital outside the country. Current account rising in part due to covid, strong inflows into China from bond buying, equity and FDI remained firm. That meant China was funding about 5% of the rest of worlds gross fixed captial formation, directly or indirectly; that is a lot of money wanting to get out or being channel out. Which prompts the question why do they need foreign capital. Also how does foreign capital fit into the China Dream?
Key to remember the purpose of Dual Circulation is resilience and that means autonomy in advanced manufacturing; like semiconductors or generally moving up the value chain to reduce foreign dependency on IP etc. So what is the role for foreign capital and how can you earn returns that are sustainable that justify the jurisdictional risk.
The answer is you need to ensure the need to make sure you are aligned with Party objectives (Huawei being a prime example), that in itself raises questions and other risks connected with ESG for example.

So for investors what does this mean.
At a very basic level if you don’t need to invest in China then don’t.
There are other EM markets and Frontier markets that offer better opportunities, markets that are in the same position that China was 20 years ago and will offer similar opportunities to those seen in China when the External Circulation Policy was first put in place. These are countries that will benefit most from bifurcation of the global economy. They will benefit from the cost escalation in China, the geopolitics and the diversification of supply chains and building in resilience in those supply chains.

If you are a dedicated China fund and have to invest you need to rethink the positions. Historically the thinking has been to invest in private companies; where there is dynamism, good management and alignment of minority interest. Companies that benefit from economic rents from brands, oligopily or dominant position. So most foreign portfolio’s are concentrated into areas now under attack from dual circulation.
Going forward there is probably going to be a narrowing of the profit spreads between private sector and public sector; with the private sector less able to command historic profits. The government will ensure that SOE’s do better (they have always been advantages and that is likely to continue and enhanced) so valuations of the private sector companies probably need to be revised lower to reflect levels of profitability that the regulator will allow. So SOE risk is diminished and hence they are likely to outperform

He then went onto to look at China’s ambitions in Taiwan?
Core to the China Dream, unification and the access to the semiconductor business. Peaceful unification is a dream of hope but never achieved, a reminder of past grievences. Politically is serves a purpose to maintain the nationalist dream and is better served by not being achieved. But HK has demonstrated that a peaceful agreement is unlikely to be adhered to and therefore very unlikely.
There were more interesting questions well worth listening too.

HK/CHINA Asia Wrap


FT Thoughs


Asian Macro Initial Thoughts


Macro Data


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

Australia Key this week we get RBA meeting notes, Leading Index and PMI data.
Japan Key this week BoJ rate decision no change expected along with  Inflation and PMI data.
S Korea 20 day Import/Export Data and PPI.
Taiwan  This week we get Interest Rate decision, Unemployment data, along with Retail Sales, Money Supply and Export Orders data
China Market closed Mid Autumn Festival re-open Wednesday
HK ADR’s -174pts at 24,493 broad weakness and with China and other regional markets closed volumes are likely to be light.
Europe gets Consumer Confidence data, PMI data and an ECB meeting. German PPI and Ifo data. French Business Confidence and Climate Indicator, UK BoE meeting, Public Sector borrowing
US FOMC meeting this week with the expectation of more insight into the start of Tapering.   Also importatnt Housing data in focus this week and PMI data. Also this week a ‘Quad’ meeting which underlines how many Asian countries are improving their ties with the US.Monday  20 SeptemberAUSTRALIA No data due
JAPAN 
Market Closed Autumninal Equinox Day re-opens Tuesday
S KOREA Market Closed Chuseok Holiday No data due  
TAIWAN Market closed  Mid Autumn Festival No data due  
CHINA Market closed  Mid Autumn FestivalNo data due
HONG KONG Inflation Rate
EUROZONE No data due
GERMANY PPI
FRANCE No data due  
UK No data due  
US NAHB House Market Index
UN General Assembly

Tuesday 21 September
AUSTRALIA  
RBA Meeting Minutes
JAPAN Market re-opens  No data due
S KOREA Market Closed Chuseok Holiday No data due  
TAIWAN No data due  
CHINA Market closed  Mid Autumn FestivalNo data due
HONG KONG No data due  
EUROZONE No data due  
GERMANY No data due  
FRANCE No data due  
UK Public Sector Net Borrowing,  CBI Industrial Trends Orders
US Current Account, Housing Starts, Building Permits, Redbook, API Crude Oil Stock Change.
UN General Assembly

Wednesday 22 September
AUSTRALIA  
Leading Index
JAPAN BoJ Interest Rate Decision  
S KOREA 
Market Closed Chuseok Holiday No data due  
TAIWAN Unemployment Rate  
CHINA 
Market re-opens  Loan Prime Rate 1 & 5 year
HONG KONG 
Market closed  Mid Autumn Festival No data due  
EUROZONE 
ECB Non-Monetary Policy Meeting,  Consumer Confidence Flash  
GERMANY 
No data due  
FRANCE 
No data due  
UK 
No data due.
US MBA Mortgage Applications and 30 yr Mortgage Rate, EIA Oil Report, FOMC Interest Rate Decision.
UN General Assembly

Thursday 23 September
AUSTRALIA  
Flash PMI’s (Manufacturing, Services and Composite)  
JAPAN Foreign Stock and Bond Investment
S KOREA 20 day Export/Import data.
TAIWAN 
Interest Rate Decision, Retail Sales, M2 Money Supply,
CHINA No data due  
HONG KONG 
Market re-opens, Current Account.
EUROZONE 
ECB General Council Meeting, Flash PMI’s (Manufacturing, Services and Composite)  
GERMANY Flash PMI’s (Manufacturing, Services and Composite)  
FRANCE 
Business Confidence, Business Climate Indicator, Flash PMI’s (Manufacturing, Services and Composite)  
UK Flash PMI’s (Manufacturing, Services and Composite),  BoE Interest Rate Decision.  
US Chicago Fed National Activity Index, Initial Claims, 4 week Average Claims, Continuing Claims, EIA Natural Gas Report,  Flash PMI’s (Manufacturing, Services and Composite), CB Leading Index,  Kansas Fed Manufacturing Index, 10 yr TIPS Auction.
UN General Assembly  

Friday 24 September
AUSTRALIA  
No data due
JAPAN Inflation, Core Inflation, Flash PMI’s (Manufacturing, Services and Composite)  
S KOREA PPI
TAIWAN 
Export Orders
CHINA No data due  
HONG KONG 
No data due
EUROZONE No data due
GERMANY 
Ifo Business Climate, Current Conditions and Expectations.
FRANCE 
No data due
UK 
Gfk Consumer Confidence, CBI Distributive Trades,
US New Home Sales, Baker Hughes Rig Count.   Fed’s Powell speaks.
UN General Assembly

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Inflation data in focus this week with the US the main focus but also from Eurozone, France and the UK. Retail sales data important too for a gauge of consumer sentiment both in the US, China and the UK
China data in focus too watching for signs of a slowdown.

Overall a light week for data but with the covid delta variant and now the mu variant too that will remain a concern.
Investors will also be watching for more clarification on what Dual Circulation and Common Prosperity are going to mean for investments in China.
US/China policy also in focus with talk that the US is reconsidering tariffs on China. Also in the US there will also be focus on the Infrastructure bill, whilst in China the concern over Evergrande and the property sector. As I wrote in my article on Dual Circulation I think Property for the Chinese authorities is less important and the ideology, and moving up the advanced manufacturing ladder is more important than growth. Happy to discuss let me know if you would like a call.

Monday 13 Sept 
AUSTRALIA  Consumer Inflation Expectations
JAPAN 
BSI Large Manufacturing data, PPI Aug
S KOREA First 10 day Import and Export numbers
TAIWAN No data due  
CHINA No data due, could get FDI (YTD) at any point.  
HONG KONG No data due
EUROZONE No data due
GERMANY Wholesale Prices
FRANCE No data due  
UK No data due  
US Consumer Inflation expectations and Monthly Budget Statement.
Earnings from Oracle
 
Tuesday 14 Sept
AUSTRALIA  
Business Confidence, House Price Index
JAPAN Industrial Production and Capacity Utilisation.
S KOREA Export and Import Prices  
TAIWAN No data due  
CHINA No data due  
HONG KONG No data due  
EUROZONE No data due  
GERMANY No data due
FRANCE IEA Oil Market Report
UK Claimant Count, Employment Change, Ave Earnings, Unemployment Rate.
US NFIB Business Optimism Index, Inflation Rate, Core Inflation, Redbook, API Crude Oil Stock Change

Wednesday 15 Sept
AUSTRALIA  
New Home Sales, Consumer Confidence Index & Change.
JAPAN Tankan Index, Machinery Orders, Tertiary Industrial index
S KOREA 
Unemployment Rate
TAIWAN No data due  
CHINA 
House Price Index, Fixed Asset Investment (YTD), Industrial Production, Retail Sales and Unemployment.
HONG KONG 
No data due  
EUROZONE 
Industrial Production, Labout Cost Index, Wage Growth.
GERMANY 
No data due  
FRANCE 
Inflation Rate
UK 
Inflation Rate, Core Inflation, Retail Price Index, PPI (Input, Output, Core Output)
US MBA Mortgage Applications and 30 yr Mortgage Rate, Export  & Import  Prices, NY Empire State Manufacturing Index, Industrial & Manufacturing Production, Capacity Utilisation, EIA Oil Report

Thursday 16 Sept
AUSTRALIA  
Employment Data (Part Time, Unemployment, Employment Change,  Full Time Employment Change, Participation  Rate)  RBA Bulletin
JAPAN Foreign Stock & Bond Investment, Balance of Trade, Exports, Imports.
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 Retail Sales, Philadelphia Fed Manufactruing Index, Business Inventories, Initial Claims, 4 week Average Claims, Continuing Claims, EIA Natural Gas Report, Foreign Bond Investment, Overall Net Capital Flows, Net Long Term Tic Flows,  

Friday 17 Sept
AUSTRALIA  
No data due
JAPAN No data due
S KOREA No data due  
TAIWAN 
No data due
CHINA No data due  
HONG KONG 
No data due
EUROZONE Current Account, Construction Output, Core Inflation, Inflation
GERMANY 
No data due
FRANCE 
No data due
UK 
Retail Sales,
US Michigan Data Prelim Sept (Consumer Expectations, 5year Inflation Expectations, Consumer Sentiment, Inflation Expectations, Current Conditions) Baker Hughes Rig Count.

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Monday 6 September
AUSTRALIA  Job Advertisements
JAPAN 
No data due
S KOREA No data due  
TAIWAN Foreign Exchange Reserves  
CHINA No data due  
HONG KONG No data due  
EUROZONE Construction PMI
GERMANY Factory Orders, Construction PMI, New Car Sales
FRANCE Construction PMI
UK New Car Sales  
US No data due Market closed for Labour Day  

Tuesday  7 September 

AUSTRALIA  Services Index, Building Permits, RBA Interest Rate Decision
JAPAN Household Spending, Ave Cach Earnings, Foreign Exchange Reserves, Coincident Index, Leading Economic Index
S KOREA Current Account
TAIWAN Balance of Trade, Exports and Imports, Inflation Rate, Wholesales Prices
CHINA Foreign Exchange Reserves
HONG KONG Foreign Exchange Reserves
EUROZONE Employment Change, GDP Growth Rate, ZEW Economic  Sentiment Index
GERMANY ZEW Economic  Sentiment Index & Current Conditions
FRANCE No data due  
UK BBA Mortgage Rate
US LMI Logistic Managers Index Current

Wednesday 8 September
AUSTRALIA  
RBA Chart Pack
JAPAN Current Account, GDP Data (Growth Rate, Price Index, External Demand, Private Consumption, Growth Annualised, Capital Expenditure) Bank Lending,  Eco Watchers 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 
Non Farm Payrolls, Private Non Farm Payrolls, Balance of Trade, Exports and Imports,
UK 
No data due
US MBA Mortgage Applications and 30 yr Mortgage Rate, Redbook, IBD/TIPP Economic Optimism, JOLTs Job Openings, Consumer Credit Change, API Crude Oil Stock Change EIA Oil Report

Thursday 9 September
AUSTRALIA  
No data due  
JAPAN Foreign Stock and Bond Investment, Machine Tool Orders
S KOREA No data due  
TAIWAN 
No data due  
CHINA Inflation Rate PPI
HONG KONG 
No data due  
EUROZONE 
ECB Interest Rate Decision
GERMANY Balance of Trade, Exports and Imports,  Current Account.
FRANCE 
No data due
UK No data due
US Initial Claims, 4 week Average Claims, Continuing Claims, EIA Oil Report,

Friday 10 September
AUSTRALIA  
Consumer Inflation Expectations
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 
Inflation Rate.
FRANCE 
Industrial Prouction
UK 
Balance of Trade, Construction Output, Industrial Production, Manufacturing Production, GDP data, NIESR Monthly GDP Tracker.
US PPI, Core PPI, Wholesale Inventories, WASDE Report,  Baker Hughes Rig Count.

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US earning season effectively winds up this week with just 10% of companies still to report. Focus likely now to be on Inflation, Fed tapering and covid resurgence.
China regulation on E commerce and other social items still a focus. HK earnings continue with some key names on the horizon.

A number of holidays this week;
Monday Japan and Singapore,
Tuesday Malaysia,
Wednesday Indonesia
Thursday Thailand
Monday  9 August AUSTRALIA  No data due
JAPAN 
Market Closed (Mountain Day), No data due.  
S KOREA No data due  
TAIWAN Balance of Trade, Exports, Imports
CHINA Inflation and PPI  data
HONG KONG No data due  
EUROZONE No data due
GERMANY Balance of Trade, Exports, Imports and Current Account
FRANCE New Car Registrations
UK No data due  
US Consumer Inflation Expectations

Tuesday 10 August
AUSTRALIA  
New Home Sales, Business Confidence and Building Permits
JAPAN Current Account, Bank Lending, Eco Watchers Survey (Current and Outlook)
S KOREA No data due  
TAIWAN GDP Growth Rate
CHINA No data due
HONG KONG No data due  
EUROZONE Zew Economic Sentiment Index
GERMANY Zew Economic Sentiment Index and Current Conditions
FRANCE No data due
UK No data due
US NFIB Business Optimism Index, Unit Labour, Non Farm Productivity, Redbook, API Crude Oil Stock Change

Wednesday 11 August
AUSTRALIA  
Consumer Confidence Index and Change
JAPAN Machine Tool Orders  
S KOREA 
Unemployment Rate
TAIWAN No data due  
CHINA 
Could get Vehicle Sales, New Yuan Loans, Outstanding Loan Growth, Total Social Financing, M2 Money Supply.
HONG KONG 
No data due  
EUROZONE 
No data due  
GERMANY 
Inflation Rate
FRANCE 
No data due  
UK 
No data due  
US MBA Mortgage Applications and 30 yr Mortgage Rate, Core Inflation Rate, Inflation Rate, EIA Oil Report, Monthly Budget Statement

Thursday 12 August
AUSTRALIA  
Consumer Inflation Expectations 
JAPAN PPI 
S KOREA No data due  
TAIWAN 
No data due  
CHINA No data due  
HONG KONG 
No data due  
EUROZONE 
Industrial Production
GERMANY No data due  
FRANCE 
IEA Oil Market Report
UK Balance of Trade, Business Investment, GDP Growth Rate, Construction Output, Industrial Production, Manufacturing Production, GDP 3 Month Ave, GDP, Goods Trade Balance, Labour Productivity, Construction Orders, NIESR Monthly GDP Tracker.
US PPIInitial Claims, 4 week Average Claims, Continuing Claims, Core PPI, EIA Natural Gas Report, WASDE Report

Friday 13 August
AUSTRALIA  
No data due  
JAPAN Foreign Stock and Bond Investment
S KOREA Import and Export Prices
TAIWAN 
No data due  
CHINA FDI (YTD)
HONG KONG 
GDP Growth
EUROZONE Balance of Trade
GERMANY 
Wholesale Prices
FRANCE 
Unemployment Rate, Inflation Rate
UK 
No data due  
US Export and Import Prices, Michigan Prelim Data (Consumer Senitment, 5yr Inflation Expectations, Comsumers Expectation,  Inflation Expectations, Current Conditions) Baker Hughes Rig Count.

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End of the quarter and first half so expect some window dressing and possibly more rotation ahead of another earnings season.

Shortened week for HK with markets closed Thursday for SAR day and an important week for China with the 100th anniversary of the communist party. There is also an OPEC meeting on 1 July too.

Main focus is the US jobs report because of the implication for Fed policy, only two Fed speakers, both on Monday.

Summary of Key data this week
Australia Private Sector Credit, Balance of Trade, Home Loans
Japan Unemployment, Retail Sales, Industrial Production, Consumer Confidence, Housing Starts, Tankan Survey, Manufacturing PMI
S Korea Industrial & Manufacturing Production, Retail Sales, Construction Output, Balance of Trade, Manufacturing PMI, Inflation Rate.
Taiwan Manufacturing PMI
China Data wise Manufacturing & Non PMI’s but key will be the Party Annicversary on July 1
HK Balance of Trade, Retail Sales

Europe focus
Eurozone 
Sentiment and Confidence data, Inflation, Unemployment, PPI and Manufacturing PMI
German Inflation, Unemployment, Retail Sales and Manufacturing PMI  
French Inflation, PPI and Manufacturing PMI
UK Manufacturing PMI

US Focus likely to be Friday’s jobs report. Still a few interesting earnings due; like Constellation Brands, General Mills, Micro Tech, Bed Bath & Beyond, Walgreen Boots and others but only a couple of Fed Speakers on Monday.

Sunday 27 June 
China Industrial Profits May 83.4% vs 106.15 Apr (F/cast was 82%)

Monday 28 June
AUSTRALIA  No data due
JAPAN 
BoJ Summary of Options
S KOREA No data due  
TAIWAN No data due  
CHINA No data due  
HONG KONG Balance of Trade, Exports and Imports after market
EUROZONE No data due
GERMANY Import Prices  
FRANCE No data due  
UK No data due  
US Dallas Fed Manufacturing Index
Fed Speakers Williams and Harker

Tuesday June 29
AUSTRALIA  
No data due
JAPAN Unemployment, Jobs/Applications Ratio, Retail Sales
S KOREA No data due  
TAIWAN No data due
CHINA No data due
HONG KONG No data due  
EUROZONE Consumer Confidence, Sentiment (Economic, Industrial and Services), Consumer Inflation Expectations
GERMANY Inflation Rate
FRANCE Unemployment Rate, Consumer Confidence
UK Nationwide Housing Prices, Car Production, Mortgage Approvals, Mortgage Lending, BoE Consumer Credit, Net Lending to Individuals
US Redbook, Case-Shiller Home Price, House Price Index, Consumer Confidence,  NY Fed Treasuries TIPS Purchases, API Crude Oil Stock Change.

Wednesday June 30
AUSTRALIA  
Private Sector Credit
JAPAN Industrial Production, Consumer Confidence, Housing Starts, Construction Orders
S KOREA 
Industrial Production, Retail Sales, Construction Output, Manufacturing Production.
TAIWAN No data due  
CHINA 
Manufacturing and Non PMI
HONG KONG 
Retail Sales
EUROZONE 
Core Inflation Rate, Inflation Rate,  
GERMANY 
Unemployment Rate, Unemployment Change
FRANCE 
Inflation Rate, Household Consumption, PPI,  
UK 
Current Account, Business Investment, GDP Growth Rate,
US MBA Mortgage Applications and 30 yr Mortgage Rate, ADP Employment Change, Chicago PMI, Pending Home Sales, EIA Oil Report

Thursday 1 July
AUSTRALIA  
Manufacturing Index, Manufacturing PMI, Balance of Trade, Exports and Imports
JAPAN Tankan Survey (Large Manufacturers Index & Outlook, Non Manufacturers Index & Outlook, Large All Industry Capex, Small Manufacturers Index), Foreign Stock and Bond Investment, Manufacturing PMI
S KOREA Balance of Trade, Exports, Imports, Manufacturing PMI
TAIWAN 
Manufacturing PMI
CHINA Manufacturing PMI
HONG KONG 
Market closed SAR Day
EUROZONE 
Manufacturing PMI, Unemployment Rate
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 (PMI, Prices,  New Orders,Employment), EIA Natural Gas Report,

Friday 2 July
AUSTRALIA  
Home Loans, Investment Lending for Homes
JAPAN No data due  
S KOREA Inflation Rate
TAIWAN 
No data due  
CHINA No data due  
HONG KONG 
No data due  
EUROZONE PPI
GERMANY 
No data due  
FRANCE 
Budget Balance
UK 
No data due  
US Balance of Trade, Non Farm Payrolls, Unemployment Rate, Ave Hourly Earnings, Participation Rate, Ave Weekly Hours, Government Payroll, Manufacturing Payrolls, Exports, Imports, Factory Orders, Baker Hughes Rig Count.

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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.

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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.

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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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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

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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

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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  

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 Thoughts


HK/CHINA WRAP


FT Thoughts


Asian Macro Intial Thoughts


HK/China Wrap


FT Thoughts


Asian Macro Initial Thoughts


HK/CHINA WRAP


FT Thoughts


Asian Macro Initial Thougths


HK/CHINA WRAP


FT Thoughts


Asian Macro Initial Thoughts


FT Thoughts


Asian Macro Initial Thoughts


HK/China Wrap


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.


Read More  

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

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

EUROPE Markets opened lower following the weak China data.

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


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

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


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

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

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



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

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

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

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

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

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

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

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

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

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

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

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


Market and Pre Market News at bottom of page.


Short Selling HSI 
Thursday 19.1% vs 20.3%Wednesday

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


CONNECT FLOWS 

Shanghai

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

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

Shenzhen

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

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



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

DURING MARKET 

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

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

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

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

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

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

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

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


HONG KONG 

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

AFTER MARKET 

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

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


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

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

HSMI & HSSI Constituents on the move

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


COMMENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


REGIONAL MARKETS 

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

S KOREA Opened slightly higher but initial sol