May 22 China seeks to enact law for HK -VE


Covid-19 Globally over 5m cases, 329k deaths
WHO says newly reported cases hit a daily record this week -VE
US CDC director warns of second wave
US Futures opened flat bit have turned slightly +VE
US Markets closed on Monday for Memorial Day


DOW -0.41%, NDX -0.97%, S&P -0.78%, Russel 2K +0.05% Markets opened lower and after initial selling traded sideways as Initial claims declined WoW but were higher than F/cast, meaning that the jobs are still being lost despite States opening up. Also PMI data was weak but better than F/casts. TECH remains in focus new intraday highs from Facebook +0.6% and Amazon -2% but then trade lower. Netflix -2.6%, Alphabet -0.2% and Apple -0.8%
Investors still monitoring US/China tensions as the Senate passed a bill that could ban Alibaba -2.1% but Baidu +1.4% (reported to be planning Nasdaq delisting) and JD.com -3.2% from listing on US exchanges.
L Brands +18.3% as Q1 results better than forecast
Trump said he wouldn’t close America again, even with a second wave; comes as new covid-19 cases rise as states re-open.
DATA
Initial Claims 2.438m vs 2.687m prior (F/cast was 2.29m)
Philadelphia Fed Manufacturing Index May -43.1 vs -56.6 Apr (F/cast was -50)
PMI Flash Data
Services May 36.9 vs 26.7 Apr (F/cast was 32)
Composite May 36.4 vs 27.0 Apr (F/cast was 32.5)
Manufacturing May 39.8 vs 36.1 Apr (F/cast was 39)
Existing Home Sales Apr -17.8% vs -8.5% Mar (F/cast was -24.1%)
CB Leading Index Apr -4.4% vs -7.4% Mar (F/cast was -6%)
EIA Natural Gas Stocks Change 81Bcf vs 103Bcf Prior (Consensus was 83Bcf)
USD slightly stronger vs Yen & Euro. Bitcoin % @ , VIX +5.5% @ 29.53, US T10 +0.68%
OIL Brent +0.87%, WTI1.28% on lower inventories and rising demand
Gold -1.5%, Silver -2.7%, Copper -0.21%
AHEAD Baker Hughes Oil Rig Count. US markets will be closed Monday of Memorial Day

DAX -1.41%, CAC -1.15%, FTSE -0.86% Markets eased although the PMI data was weak in general terms it was not as bad as forecast. Trading was light with a number of smaller markets closed for Ascension Day (Switzerland, Austria, Norway, Sweden & Denmark).
Italian Bank Nexi +7.7% (was called Istituto Centrale delle Banche Popolari Italiane) on possible tie up with smaller rival SIA
Lufthansa +2.7% (off initial highs) on news of rescue talks with the German Government
Whitbread -12.4% on news of a $1.2bn rights issue
Altice Europe -13.8% as Q1 earnings disappointed.
Natexis -8% on a report that its losses so far this year on equity derivatives had risen to €250m.
DATA
EUROZONE PMI Flash data
Manufacturing May 39.5 vs 33.4 Apr (F/cast was 40)
Services May 28.7 vs 12.0 Apr (F/cast was 26)
Composite May 30.5 vs 13.6 Apr (F/cast was 27)
GERMANY PMI Flash data
Manufacturing May 36.8 vs 34.5 Apr (F/cast was 41)
Services May 31.4 vs 16.2 Apr (F/cast was 27)
Composite May 31.4 vs 17.4 Apr (F/cast was 29)
FRANCE PMI Flash data
Manufacturing May 40.3 vs 31.5 Apr (F/cast was 38)
Services May 29.4 vs 10.2 Apr (F/cast was 30)
Composite May 30.5 vs 11.1 Apr (F/cast was 32)
UK PMI Flash data Manufacturing May 40.6 vs 32.6 Apr (F/cast was 34)
Services May 27.8 vs 13.4 Apr (F/cast was 25)
Composite May 28.9 vs 13.8 Apr (F/cast was 22)
CBI Industrial Trends Orders May -62 vs -56 Apr (F/cast was -60)
AHEAD 
GERMANY No data due
FRANCE No data due
UK Retail Sales Data

JAPAN Expect Nikkei to open lower with caution over US/China relations and watching for China’s NPC/CPPCC meeting for signs of policy and stimulus. Pre market data on inflation also likely to influence trading. Yen currently 107.61
Data due Inflation Rate, Core Inflation Rate, Inflation Rate Ex Food & Energy
Govt hopes to lift state of emergency in Tokyo next week.
Govt planning ’surprise’ firework display to raise peoples spirits +VE firework makers
PM Abe has pledged to build 2,000 new ventilators for coronavirus patients that even the government says hospitals are unlikely to need. -VE
Panasonic Corp. will shut down a washing machine and refrigerator plant near Bangkok in late March 2021, informed sources said Wednesday. Production there will be transferred to a plant near Hanoi, the sources said. +VE
Convenience stores sales in April -10.6% YoY to ¥778.1 billion on a same-store basis, marking the steepest monthly fall on record, an industry group said Wednesday. -VE
SoftBank Group Corp. plans to raise as much as ¥313 billion ($2.9 billion) by selling a 5% stake in its Japanese wireless subsidiary this month, the latest in a series of asset divestitures intended to fortify its ailing balance sheet. -VE
Sunovion Pharmaceuticals Inc, a unit of Japan-based Sumitomo Dainippon, got US FDA approval for its sublingual film from for the treatment of "off" episodes in patients with Parkinson's disease, according to a label published by the agency. +VE
One in five Japanese companies are worried they may not have sufficient capital if the coronavirus crisis persists, a Reuters poll showed on Thursday, underscoring how even some of the world's biggest cash-hoarding firms are bracing for prolonged pain. Most are worried that the pandemic lasts for longer than 12 months -VE for sentiment

SOUTH KOREA Expect markets to open lower following US over night but cautiously work higher. Investors watching China’s NPC/CPPCC meetings for news of stimulus
No data due

South Korean police arrested a foreign national for violating the country's mandated 14-day quarantine rules for the first time on Thursday, amid fears of a potential second wave of the new coronavirus.
Ocado Solutions is in talks with major grocery retailers in South Korea to present its advanced automation system, according to its chief executive. -VE for existing delivery companies
Macrogen, a genomics biotech company, announced Thursday that its AxenTM Covid-19 RT test kit has gained the Drug Ministry’s approval for export. +VE
LG Electronics Inc. on Thursday introduced a new budget smartphone as the South Korean tech firm seeks to overcome a long slump in its mobile business. +VESamsung Electronics is preparing to construct another cutting-edge foundry manufacturing line in South Korea, taking one step closer to achieving its goal of becoming the No. 1 system-on-chip business by 2030. +VE

TAIWAN Expect market to open lower, dropping below the 11,000 achieved Thursday and see consolidation ahead of the weekend.
Data due Unemployment Rate

Due on Saturday Taiwan Industrial Production and Retail Sales.
Ministry of Economic Affairs yesterday said it is to issue the much-anticipated stimulus coupons in July, as part of the government’s broader efforts to spur economic growth, as the COVID-19 pandemic eases. Original budget of NT$11.1 billion (US$370.62 million) to fund the coupons; might expand the budget by NT$20 billion to maximize the coupons’ effect,
Life insurers’ first-year premiums -41% YoY in April -VE
Momo.com yesterday said it has set up a new logistics subsidiary, Fu Sheng Logistics Co, to oversee the company’s extensive shipping operations. Leveraging Momo’s 23 satellite warehouses and distribution centers nationwide, Fu Sheng will be in charge of executing the retailer’s same-day shipment plan for deliveries in Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung, Momo said in a press release. +VE

CHINA Expect market to open lower with concerns about worsening relations with the US and caution as NPC/CPPCC announce new policies, investors are still watching for news and details of stimulus policies.
No data due but NPC and CPPCC in session
China's parliament is poised to enact its first civil code, a wide-ranging legislative package that includes strengthening protection of property rights in a Communist Party-ruled country whose embrace of private ownership has long been awkward.
China said on Thursday it supports improving the system and mechanism related to the constitution and basic law of Hong Kong and Macau, in comments likely to stir concern that it could take measures to tighten its grip on Hong Kong.
In response the United States warned China against imposing a new national security legislation on Hong Kong, saying a high-degree of autonomy and respect for human rights were key to preserving the territory’s special status, State Department spokeswoman Morgan Ortagus said.
JPMorgan Chase & Co plans to hire at least 12 equity research analysts in China this year, two people with knowledge of the matter said, in its first major mainland hiring push as it takes advantage of eased ownership rules for financial firms.

HONG KONG ADR’s -427pts to open at 23,853, Futures also dropped -360pts on the news Expect more downside on news that China intends to present a motion to force HK to enact a secession law. The last time Article 23 was proposed in 2003, then 500k people protested and its been in abeyance. With Pro China parties possibly losing their majority in Legco in September Beijing is taking a hard line but it is likely to cause more problems for Hong Kong and Beijing and could result in HK losing its special status with the US.
No data due

After Market Thursday Inflation Rate Apr +1.9% vs +2.3% Mar (F/cast was +1.3%)
Netting out the effects of all Government's one-off relief measures, the year-on-year rate of increase in the Composite (ie the underlying inflation rate) in April 2020 was 2.3%, smaller than that in March 2020 (2.6%), mainly due to the smaller increases in private housing rentals and the decreases in the fuel cost variation charge for towngas. Looking ahead, inflationary pressure is likely to ease further in the near term, said a Government spokesman.

IPO KINTOR PHARMA-B (9939.HK), Debut today Listing price of $20.15, grey was H$21.30 +5.7% off earlier highs

Short Selling HSI Thursday 20.5% vs 20.1% Wednesday
Top Shorts Wharf REIC (1997) 45%, SHKP (16) 42%, Hang Seng Bank (11) 38%, Mengniu Dairy (2319) 35%, Want Want (151) 33%, Galaxy Ent (27) 32%, BoC HK (2388) 32%, CLP (2) 30%, NWD (17) 30%, Techtronic (669) 29%, ICBC (1398) 29%, Hengan (1044) 27%, CCB (939) 27%, BoC (3988) 27%, MTRC (66) 25%.

BUYBACKS/INSIDER DEALING Li Ka-shing and Victor Li through a wholly-owned subsidiary of Li Ka Shing (Global) Foundation acquired a total of 8.089 million shares in CK ASSET (1113.HK) on 15 May, 18 May, 19 May and 20 May 2020. As a result, the deemed interests of Li Ka-shing and Victor Li in CK Asset respectively increased from 34.70% to 34.92% and from 34.77% to 34.99%.

WATCH
Baidu reportedly is constantly exploring and discussing on what can be done, for instance, a secondary listing in Hong Kong or other places.
TONGCHENG-ELONG (00780.HK) Q1 results ended March 2020. Loss was RMB55.633 million, against RMB97.322 million in profit a year ago. Adjusted profit plunged 82.6% yearly to RMB78.075 million.
PROPERTY SHKP (16) received around 10k cheques for units at Wetlans Seasons Park phase 2 and will launch 200 units tomorrow. Key will be whether they see withdrawals on the news of Beijing imposing as security law on HK.
COUNTRY GARDEN (2007) and WANG ON PPTY (1243) launching 115 units left over units at Altissimo on Sunday, with 66 of them tendered until Aug 19.
Wheelock Properties named its Lam Tin residential project as "KOKO HILLS", which will be launched in three phases, said Managing Director Ricky Wong Kwong-yiu at a press conference.The developer is applying for the pre-sale consent of "KOKO HILLS" phase one, anticipating to debut the project as early as next month.
HYSAN DEV (00014.HK) has rolled out its first live-work space project Bizhouse. The units carry monthly rents in a range of $19,000-40,000.
EVERGRANDE (3333.HK) Chairman Hui Ka Yan, a standing committee member of CPPCC, said the group owns 1,023 projects in total, with more than 780,000 employees getting back to work.
Centa Valuation Index (Major Banks) (CVI) last printed at 70.31 this week, up 3.52 pts weekly,
The index surpassed 70, up 30.86 pts in three weeks with a clear upturn. This reflected that second-hand deals had remained vibrant with more upbeat mortgage stance among banks, which foretold a resurgence of home prices after slide