Nov 19 HK closes lower, China rebounds, Japan & S Korea +VE but Taiwan dips.

19 Nov

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HSI -270pts (-1.1%) 25,050 HSCEI -65pts (-0.7%) 8,971 T/O HK$136.51bn (+17.2% DoD)  

HK/CHINA Connect Flows
Northbound Rmb 40,920m Sell 18,497m vs 22,423m Buy
Southbound HK$ 9,891m Sell 4,602m vs 5,289m Buy
Northbound Rmb 58,279m Sell 26,956m vs 31,323m Buy
Southbound HK$ 12,326m Sell 5,860m vs 6,466m Buy

Markets opened flat but in the green, with UK Retail Sales slightly better than forecast.  But the resurgence of covid a concern along with earnings.  Miners leading and most sectors in the green.  But on news that Austria to enter a lockdown on Monday and compulsory vaccinations from Feb 2022.  Germany also considering more social distancing measures.  Markets turning lower.
Kingfisher weak after poor Q3 but guided that Q4 had started strong.
Ocado and Hermes both strong and InPost +VE after two successive sessions of steep declines.
Current Account
PPI Oct 3.8% MoM vs 2.3% Sept (F/cast was 1.4%)
PPI Oct 18.4% YoY vs 14.2% Sept (F/cast was 15.7%)
Unemployment Rate Q3 8.1% vs 8% Q2 (F/cast was 8.2%)
GfK Consumer Confidence Nov -14 vs -17 Oct (F/cast was -16)
Retail Sales Oct 0.8% MoM vs 0% Sept revised (F/cast was 0.7%)
Retail Sales Oct -1.3% YoY vs -0.6% Sept (F/cast was -1.6%)
Retail Sales Ex Fuel Oct 1.6% MoM vs -0.4% Sept revised (F/cast was 0.5%)
Retail Sales Ex Fuel Oct -1.9% YoY vs -1.9% Sept revised (F/cast was -1%)
Public Sector Net Borrowing Oct £-18.8B vs £-20.7B Sept revised (F/cast was £-16.4B)
US Futures  
Opened Dow +20pts, S&P and NDX both +0.1% but with US Options Expiry today expect more volatility.
Earnings Foot Locker, Buckle
Fed Speakers Governor Christopher Waller and Vice Chairman Richard Clarida

CHINA CSI 300 closed +52pts (+1.1%) @ 4,890
CSI 300 opened lower but worked back to 4,860 before easing back to trade around 4,850 through the morning. PM saw the market spike after 40 mins from 4,840 to 4,890 and then traded sideways into the close.
Leaders Logistics, Liquor, Metaverse, Property, Financials
Laggards Agri

After market China announced lowering fuel prices from Saturday

Shanghai Comp +40pts (+1.1%) @ 3,560 T/O US$63,587m (+4.4% DoD)
Shenzhen Comp +173pts (+1.2%) @ 14,753 T/O US$105,883m (-2.1% DoD)
ChiNext Comp +43pt (+1.2%) @ 3,710


Pre market opened @ 24,934 -385ptsvs -182pts ADR’s with Alibaba responsible for -200pts and not helped by margin call selling. Tried to regain 25,000 in early trades but failed and dipped to trade around 24,880 through the morning. PM saw a rally back to trade around the 25,000 level.

CHP reported 1 additional confirmed cases of coronavirus disease 2019 (COVID-19),

SHORT SELLING HSI Friday 22% vs 23% Thursday
Top shorts 
CG Services (6098) 58%, Country Garden (2007) 56%, CM Bank (3968) 48%, Bud APAC (1876) 47%, China Res Land (1109) 39%, Ali Health (241) 37%, Galaxy Ent (27) 36%, HSBC (5) 36%,  PingAn (2318) 35%, Longfor (960) 35%,  Petrochina (857) 33%, BoC Hong Kong (2388) 30%, Hang Seng Bank (11) 28%, Shenzhou (2313) 28%, ICBC (1398) 28%,  SHKP (16) 27%, HKEX (388) 27%, Sands China (1928) 26%, BoC (3988) 26%, Haidilao (6862) 26%, Henderson Land (12) 25%, CKI (1038) 24%.


Evergrande Real Estate's Shenzhen branch has so far resumed construction work fully for more than ten projects in six places, namely Shenzhen, Dongguan, Jiangmen, Shanwei, Zhuhai and Zhongshan, as EVERGRANDE (03333.HK)  +0.140 (+5.303%)    Short selling $16.49M; Ratio 8.302%   disclosed on its public WeChat account.

China's revenue in the national general public budget was RMB18.15 trillion for the first ten months of 2021, growing 14.5% year-on-year, announced by the Ministry of Finance (MOF).

In October 2021, the amount of foreign exchange settlement and sales by banks in China was RMB1.2 trillion and RMB1.09 trillion, respectively, with a surplus of RMB106.2 billion, according to the statistics of the State Administration of Foreign Exchange (SAFE).

During January to October 2021, the accumulative amount of foreign exchange settlement and sales by banks was RMB13.23 trillion and RMB11.96 trillion, respectively, with an accumulative surplus of RMB1.27 trillion.

SUNWAH KINGSWAY (00188.HK) announced that, during the period from 12 January 2021 to 19 November 2021, the Company, through its wholly owned subsidiaries, conducted on the Stock Exchange a series of on-market transactions to dispose of an aggregate of 293,000 CHINA MOBILE (00941.HK) Shares in the range of an average daily price between HK$41 and HK$56.8 per China Mobile Share for an aggregate consideration of approximately HK$14.833 million. The Disposals realised a loss of approximately HK$100,000.

In a statement, International Monetary Fund (IMF) said China must cope with financial risks in a clear and coordinated manner, while urging Beijing to temporarily change its contractionary fiscal policy approach for 2021 to a neutral stance

Macau's Novel Coronavirus Response and Coordination Center announced that, as at 11 am today (19th), the overall vaccination rate of Macau has reached 70%, with that of the targeted group of people reaching 78.8%.

Centa-City Leading Index (CCL) last printed at 188.34, up 1.22% WoW, with the upsurge being the sharpest in 29 weeks. 
CCL (large units) last reported at 188.62, up 1.97% WoW, with the largest increment in 26 weeks.
CCL Mass last stood at 190.35, up 1.22% WoW. CCL (small-and-medium units) came in at 188.29, up 1.08% WoW.
Prior to the U.S. announcement on shrinking bond-buying scale, the four major CCL indices marked notable rebound altogether in a single week, showing signs of home prices snapping losing streak, analyzed the research department of Centaline Property. Looking ahead, housing prices were expected to seek support in near term and stabilize at peak level.

Regional Markets
Market moved higher initially and trended higher through the day but in choppy trading (7,405 - 7,376) and closed +17pts (+0.2%) @ 7,397
Health, Consumer Staples and Energy the leaders. Miners remain weak with Iron Ore futures remaining weak.
Crown +16% on news that Blackstone had offered $12.50 a share, prompting a spike in the market. Altium hit a new high after its positive guidence with Jefferies hiking their target price to a street high of $43.69.
Treasury Wine +VE on Napa Valley premium wine purchase. But
Commbank +0.4% today but down around 9% on the week and Nanosonics -5% after warning profit margins would decline
Russell/Nomura index review implimented MOC prompted a rally into the close. PM Kishida confirmed Y79tn stimulus, with Y56tn for fiscal spending. Results and buyback news also in focus.
MSCI announced their factor related index review in the morning, to take effect MOC 30 Nov.
Nikkei opened higher on higher than expected stimulus spending prompting an initial spike to 29,730 before easing back and then working higher. Inflation was weaker than expected an slight drag on the market. Tested 29,750 ahead of lunch but failed to break out and eased back. PM tested 29,750 there times but failed to break and hold above; closed +147pts (+0.5%) @ 29,746
Topix saw an initial spike too, to 2,042 but then eased back to trade around flat. PM opened higher and traded above 2,040 and worked higher in the last hour to close +10pts (+0.5%) @ 2,045
Leaders Mining, Trading Houses, Precision Instruments, Non-Ferros and Autos
Laggards Airlines, Paper/Pulp, Brokers, Rail and Insurers
Mizuho -1.9% on rumours (denied) that CEO to step down after repeated system failures. Nomura -0.7% on news it’s to enter China Investment Banking.
Data pre market
Inflation Rate Oct 0.1% YoY vs 0.2% Sept (F/cast was 0.1%)
Inflation Rate Oct -0.2% MoM vs 0.4% Sept (F/cast was 0.1%)
Core Inflation Rate Oct 0.1% YoY vs 0.1% Sept (F/cast was 0.1%)
Inflation Rate Ex Food/Energy Oct -0.7% YoY vs -0.5% Sept (F/cast was -0.3%)
S Korea 
Local Institutions small rotation out of Game/NFT & Chemical and into Tech & Pharma. Foreigners rotate out of Chem and Financials and into Pharma. Having been quiet in the morning they turned buyers in the PM.
LTE +VE on news Apple accelerating their EV car into autonomous.
Hyundai +VE on share buyback news
Kospi spiked higher initially to 2,972 before selling back down to flat in the first 45 mins but then worked better through the day to 2,975 just before the close before easing back to finish +23pts (+0.8%) @ 2,970
Kosdaq spiked on the open but then sold down to 1,030 before working higher but then saw resistance around 1,042 which it tested a number of times, eased at the end to close +9pts (+0.9%) @ 1,042
Data pre market
PPI Oct 8.9% YoY vs 7.6% Sept revised (F/cast was 8.4%)
PPI Oct 0.8% MoM vs 0.4% Sept revised (F/cast was 0.5%)
Taiex opened higher and tested to 17,986 following strong moved in US tech after the Nivida numbers but then trended lower to test 17,800 support, which was tested a number of time, once easing to 17,786 before a uptick to close -23pts (-0.1%) @ 17,818
Leader Tech closed higher all other sectors closed in the red.
T/O was US$14.29bn vs US$14.2bn Thursday
CECC reported 10 new covid cases all imported
After market
Data Current Account Q3 $26.1b vs 28.04b Q2 (F/cast was 26B)
Hon Hai Industry Precision Co. has decided to set up a semiconductor design center in a smart industrial park located in New Taipei, as part of its efforts to develop electric vehicles (EV).

Active Heavyweights

BABA (09988.HK) -16.700 (-10.705%) Short selling $2.41B; Ratio 16.113% closed at $139.3, down 10.7%
MEITUAN (03690.HK) -4.600 (-1.612%) Short selling $595.06M; Ratio 12.235% closed at $280.8, down 1.6%
AIA (01299.HK) -0.350 (-0.412%) Short selling $134.02M; Ratio 11.926% closed at $84.6, down 0.4%
PING AN (02318.HK) -0.150 (-0.261%) Short selling $504.84M; Ratio 35.205% closed at $57.35, down 0.3%
CCB (00939.HK) -0.010 (-0.192%) Short selling $252.97M; Ratio 23.883% closed at $5.21, down 0.2%
TENCENT (00700.HK) -0.800 (-0.161%) Short selling $1.11B; Ratio 14.828% closed at $496, down 0.2%
HKEX (00388.HK) -0.400 (-0.086%) Short selling $292.99M; Ratio 26.818% closed at $464.4, down 0.1%

HSI & HSCEI Constituents on Move:
JD (09618.HK) +29.400 (+9.102%) Short selling $1.10B; Ratio 25.785% closed at $352.4, up 9.1%
SUNAC (01918.HK) +1.260 (+8.911%) Short selling $232.58M; Ratio 13.514% closed at $15.4, up 8.9%
CG SERVICES (06098.HK) -5.250 (-8.906%) Short selling $2.86B; Ratio 57.671% closed at $53.7, down 8.9%
CHINA RES LAND (01109.HK) +2.000 (+6.051%) Short selling $396.98M; Ratio 39.219% closed at $35.05, up 6.1%
COUNTRY GARDEN (02007.HK) +0.380 (+5.491%) Short selling $171.32M; Ratio 56.031% closed at $7.3, up 5.5%
EVERGRANDE (03333.HK) +0.140 (+5.303%) Short selling $16.49M; Ratio 8.302% closed at $2.78, up 5.3%
ALI HEALTH (00241.HK) -0.400 (-4.264%) Short selling $189.69M; Ratio 37.076% closed at $8.98, down 4.3%
HANSOH PHARMA (03692.HK) -0.760 (-4.158%) Short selling $7.19M; Ratio 7.737% closed at $17.52, down 4.2%
BIDU-SW (09888.HK) -5.100 (-3.261%) Short selling $230.57M; Ratio 34.597% closed at $151.3, down 3.3%

HSMI & HSSI Constituents on Move:

KERRY LOG NET (00636.HK) +3.600 (+17.102%) Short selling $9.10M; Ratio 4.797% closed at $24.65, up 17.1%, hitting new high

Market News 

Swiss Re announced that it has entered into a partnership with BIDU-SW (09888.HK) to provide risk management expertise and innovative insurance products for Baidu's autonomous driving business. The partnership between Swiss Re and Baidu aims to further develop the autonomous driving industry and create a new industry paradigm. It allows reinsurers to tailor autonomous driving insurance products. This partnership will advance risk management research and insurance protection for autonomous vehicles, representing an important step forward in building a comprehensive ecosystem of mobility services.

BYD Chairman cum President Wang Chuanfu forecast that the sales of new energy vehicles (NEVs) in China this year are expected to tower 3.3 million units, and the penetration rate of NEVs in China to surpass 35% by the end of next year.
Electric vehicles are hailing an unprecedented growth period in China, said Wang at a summit, citing the NEV penetration rose to around 20% last month from 5-6% in early year.

HKEX (00388.HK)'s CEO Nicolas Aguzin expressed that China's continued expansion will spark a "financial big bang" as the country seeks to expand investments externally, according to multiple media reports. Aguzin forecast the scale of the Chinese capital market to stretch by 2x within the next decade, which will render it the world's largest economy.  The CEO of the Hong Kong bourse also refuted the argument that China is decoupling from the rest of the world, citing that regardless of whichever indicators, the interactions between China and other regions are increasing. Hong Kong, likewise, has not seen any significant financial decoupling, and has, in fact, achieved a certain degree of growth in terms of the volume of financial activities, he observed.

Hong Kong's Food and Health Bureau has met with the catering industry yesterday (18th) to discuss the possibility of expanding the usage of LeaveHomeSafe in restaurants, reported local media. Sources suggested that the government will roll out a new pandemic measure by next Thursday (25th) at the earliest, requiring all dine-in customers of type A to D restaurants to use LeaveHomeSafe application, meaning they can no longer fill in registration forms as substitution.

As one of the owners of East Fo Tan Industrial Area, CK ASSET (01113.HK)  has submitted a rezoning application to the Town Planning Board through Hybonia Limited, proposing to rezone the area for residential and Government, Institution or Community (GIC) purposes to address Hong Kong's increasing housing demand.  The group plans to transform East Fo Tan Industrial Area into residential area with 24 blocks of 28-38 storey apartment buildings, including a floor of retail stores, a floor of residential lobbies, and two floors of basement garages. The total site area will be around 53,000 sq.m. and the GFA will be about 266,000 sq.m., where over 4,700 homes measuring 56.5 sq.m. each could be built.

BYD COMPANY (01211.HK) (002594.SZ) has officially launched the "Ocean" platform, which is the next integrated sales network of BYD, selling products with new energy attributes and younger trends, as Chinese media reported.  The "Ocean" platform will be upgraded to host two major product lines, namely the pure electric marine life series with platform 3.0 technology, and the warship series equipped with DM-i super hybrid technology.

Ant Group and Shenzhen National FinTech Evaluation Center (NFEC) have formed an alliance to formally establish a joint laboratory specializing in data security and privacy computing, reported Chinese media. Through the partnership, the two parties will cooperate on various aspects such as personal data protection, corporate data security management, privacy computing technology, etc., the report added.

EVERGRANDE (03333.HK)'s Pearl River Delta Company revealed that the 63 residential projects under construction in 15 regions in China, such as Guangzhou, Foshan, Zhaoqing, Yangjiang, Qingyuan, Huizhou and Heyuan, have been resumed fully. As its next step, the company will keep bending over backwards to ensure quality and quantity in housing delivery.

As of the end of October, China's installed power generation capacity grew by 9% YoY to approximately 2.3 billion kilowatts, according to data released by the National Energy Administration (NEA). In particular, the installed wind power capacity stretched by 30.4% YoY to about 300 million kilowatts, while the installed solar power capacity amounted to about 280 million kilowatts, up 23.7% YoY.

AGILE GROUP (03383.HK)  announced that among the Facility set up in 2018 by the Group, there are HKD Loan in an amount of about HK$3.345 billion and USD Loan in an amount of US$60 million to be due on 22 November 2021 respectively. The Company had remitted funds to the designated bank account of the Facility Agent for the repayment of the two loans on the Repayment Date as scheduled. The Company considered that there will be no material impact on its financial position as a result of the Repayment.

Xiaomi Automobile Technology Co. Ltd was founded on the 18th (yesterday), 
with Lei Jun being its legal representative and a registered capital of RMB1 billion, reported Chinese media, citing data from Qcc App.  The operation of the new company covers EV manufacture, technical development, etc., the report added.

The automobile electrification has fostered a major reform unprecedented in a hundred years, and has reconstructed the industrial supply chain system, as BYD Chairman cum President Wang Chuanfu was quoted as saying by The demand of electric vehicles on semiconductors increased by 5-10x compared to that of traditional vehicles.  If the development of electric vehicles is in the first half of the game, Wang envisioned, that of intelligent vehicles will be in the second half. Wang forecast the demand of intelligent vehicles on semiconductors will be even greater.

India will step up cryptocurrency regulation and only allow products pre-approved by the government for listing and trading on stock exchanges, in a bid to deter investors from holding cryptos, Reuters citing people familiar with the discussions.
Indian Prime Minister Narendra Modi said on Thursday that all democratic countries must work together to ensure cryptos will not end up in wrong hands.

Tsinghua Unigroup, as of 19 November, has preliminarily recognized creditors' right of RMB34.51 billion among the credit claims of RMB56.55 billion, reported 21st Century Business Herald, citing people who participated in the creditors meeting among seven companies including Unigroup. The total credit amount recognized by the group has amounted to RMB142.61 billion in total so far.
Previous report suggested that a consortium led by BABA-SW (09988.HK) may emerge as the frontrunner to take over Tsinghua Unigroup, with the transaction value potentially exceeding RMB50 billion.

XPENG-W (09868.HK) unveiled the brand-new G9 flagship SUV model at the Guangzhou Auto Show. The G9 model is equipped with a new proprietary smart EV platform, which integrates features such as X-EEA 3.0 architecture, XPower 3.0 powertrain system and a more premium intelligent in-vehicle system, etc.

The business reform of the Aion brand is projected to be completed by the end of the year, expressed GAC GROUP (02238.HK)'s general manager Feng Xingya.  The group's chairman Zeng Qinghong likewise remarked that multiple institutions have already approached the group and expressed interest in becoming the strategic investors of Gac Aion.

Although EVERGRANDE (03333.HK) purportedly intends to lure real estate agencies to quicken sales of "Emerald Bay" with a new commission scheme, Shih Wing Ching, Founder of Centaline Group, was quoted as saying by SCMP that he would not accept the offer as EVERGRANDE should repay what it owes no matter what. He added that even if they accept the offer, they may not get the commission eventually given expensive prices of new units and sluggish market sentiment.   Separately, Dave Ma, Hong Kong Property Services (Agency) COO and director for Kowloon, said the company would not consider such package at this juncture.  At a recent meeting with local real estate industry, EVERGRANDE reportedly propounded that it will settle a commission for two units with similar prices in previous outstanding payment whenever an agency can sell one unit of "Emerald Bay". The company also promised to settle the related commission within three days.

GAC GROUP (02238.HK)  introduced the "2(6) Energy Action", under which a battery replacement version for all models based on the brand new GEP3.0 platform will hit the market progressively from 2023, Cailian Press reported. Meanwhile, the company promised to achieve carbon neutrality of all product lifecycles by 2050, or even earlier 2045.

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