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Topic: Snow White & The Seven Dwarves (The 5th Great Energy Crisis)
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Description:Mark Latham, founder of Commodity Intelligence believes a global downturn is looming as energy prices push to new highs. The current global energy crisis is happening ahead of the seasonal pick-up in winter demand. Mark believes energy prices could go parabolic over the colder winter months. He remains structurally bullish on energy prices but would avoid more cyclical commodities such as copper and lithium due to his view that we are heading for a global downturn.
HSI -55pts (-0.2%) 25,100 HSCEI -36pts (-0.4%) 8,864 T/O HK$146bn (+8% DoD)
HK/CHINA Connect Flows
Northbound Rmb 67,254m Sell 32,953m vs 34,301m Buy
Southbound HK$ 13,872m Sell 6,897m vs 6,976m Buy
Northbound Rmb 67,403m Sell 33,193m vs 34,210m Buy
Southbound HK$ 14,226m Sell 6,613m vs 7,614m Buy
Mixed open with caution ahead of the Manufacturing PMI’s and the COP26. FTSE lower (Mining leading declines), CAC flat and DAX higher but most sectors in the red.
Caution as FOMC meeting gets underway and ahead of: BoE, OPEC later this week. Earning’s today Fresenius, HelloFresh (beat), DSM, Adecco Group, Standard Chartered (in-line), BP (beat) and Ferrari.
Manufacturing PMI Final Oct 58.3 vs 58.6 Sept (F/cast was 58.5)
Manufacturing PMI Final Oct 57.8 vs 58.4 Sept (F/cast was 58.2)
Manufacturing PMI Final Oct 53.6 vs 55 Sept (F/cast was 53.5)
To come New Car Registrations Oct vs -20.5% Sept (F/cast was -16%)
Opened Dow -5pts, S&P and NDX flat having closed at new highs. They slipped during Asian hours to Dow -51pts but then recovered to Dow -3pts with S&P and NDX flat.
Ahead IBD/TIPP Economic Optimism, API Crude Oil Stocks Change FOMC begins two-day meeting
Earnings: Pfizer, Amgen, BP, DuPont, ConocoPhillips, Under Armour, KKR, Ralph Lauren, Martin Marietta Materials, Estee Lauder, Marathon Petroleum, Eaton, Cummins, Bausch Health, Akamai, Denny’s Devon Energy, Caesars Entertainment, Match Group, Zillow, Assurant, Prudential Financial, Perkin Elmer.
CHINA CSI 300 closed -18pts (-0.4%) @ 4,891
CSI 300 opened flat and initially worked better to 4,911 in the first 20 minutes before trending lower to flat at about 10:30 and then down to 4,850 before an uptick into lunch. PM lower and traded sideways to close -51pts (-1%) @ 4,840
Worth noting that Caixin reports the top 100 property developers say sales declined by 33% in October comes as their funding costs spike due the default from Evergrande and others. PBoC drained another 190bn yuan from the system this morning. EV/Battery plays still strong which is keeping the SZ Comp +VE. Defence names remain +VE but Cyclicals weak as Mysteel announces that Steel demand in China drops to its lowest since March 2020. Also SouthGobi announced halting production because border with China closed due to covid -VE Coal and Power names.
Talk of special bonds being issued by local governments in November to aid the slowing economy.
Shanghai Comp -39pts (-1.1%) @ 3,506 T/O US$84,550m (+3.8% DoD)
Shenzhen Comp -99pts (-0.7%) @ 14,377 T/O US$104,175m (+1.1% DoD)
ChiNext Comp -3pts (-0.1%) @ 3,536
Beijing Center for Disease Prevention and Control reported that, as at 11 am today (2nd), there have been four newly recorded local confirmed cases of COVID-19 in Beijing.
As a result, classes of 18 schools in the Chinese capital city have been suspended. As of now, the city of Beijing has reported 35 local infections of COVID-19 during the latest wave of outbreak, with 33 of them being confirmed cases and the remaining 2 being asymptomatic cases.
Caixin PMI data due Wednesday. Trade data due next Sunday.
Pre market opened @ 25,609 +455vs +185pts ADR’s Broad rebound with Ecommerce (as Double 11 sales take off) and Insurers leading and recent shorts squeezed. At the open the only names in the red; Henderson Land, China Res Land (1109) and Hang Lung Ppty (101) in the red. Market then trended lower through the morning at lunch +185pts @ 25,339. PM opened lower and trended lower to close around the day lows -55pts (-0.2%) @ 25,100.
Laggards Property, Energy and some Financials
Leaders Healthcare, Consumer Discretionary
Stand Chart (2888) numbers out at Lunchtime; in-line
HONG KONG DATA
Hong Kong reported 2 imported covid cases.
Retail Sales Value Sept 7.3% vs 11.9% Aug (F/cast was 11.9%)
Retail Sales Volume Sept 4.7% vs 10.6% Aug (F/cast was 10.8%)
SHORT SELLING HSI Tuesday 16.4% vs 21.2% Monday
Top shorts Country Garden (2007) 43%, Wharf REIC (1997) 41%, BYD (1211) 35%, ICBC (1398) 35%, Hang Seng Bank (11) 34%, Xinyi Solar (968) 33%, Techtronic (669) 33%, Ali Health (241) 31%, HSBC (5) 30%, Citic (267) 29%, Ping An (2318) 27%, HKEX (388) 27%, CM Bank (3938) 27%, Sinopec (386) 27%, China Overseas (688) 27%, Bud Apac (1876) 27%, NWD (17) 27%, Hengan (1044) 27%, BoC (3988) 26%, CKI (1038) 26%, Mengniu Dairy (2319) 26%, Haidilao (6862) 25%.
AFTER MARKET NEWSMEDBOT-B (02252.HK) closed at $45.8, up $2.6 or 6% against the listing price of $43.2, on volume of 21.82 million shares and turnover of $960 million. Excluding handling fee, the book gain was $1,300 per board lot size of 500 shares.
Market opened higher and tested 7,396 in early trades but then trended lower to 7,311 around 1:45pm before working higher but seeing resistance at 7,355 level and then trended lower to close -47pts (-0.6%) @ 7,324.
Energy names like Whitehaven -10%, BeachEnergy -4.5% (MD resigned) and IGO -9%, BHP -3%, Rio -3.1% as Iron Ore futures tank as demand in China drops to its lowest since March 2020 says Mysteel report. Financials weak as Westpac downgraded other banks weak too. IAG -7% as claims from extreme weather higher than expected. Goodman Group +5.6% raised FY guidance.
RBA kept rates unchanged and abandoned the bond yield rate policy; the currency and bonds moving lower. Briefing after market said that there was no inflation problem in Australia and that Stimulus measures would be rolled back.
Info Tech and Games +VE as Nexon announces to launch a mobile version of D&F in S Korea in Q1 2022 +VE as it fills a pipeline hole.
Earnings still in focus both analysts notes and numbers coming out.
Expectations of new stimulus to be announced but some caution ahead of tomorrow’s holiday (Culture Day); re-opens on Thursday.
Leaders Airline (talk of Japan easing quaratine restrictions), Marine, Wholesale.
Laggards Insurance, Property and Non Ferrous
After lunch the Airlines issues 100b Yen play FY Net Loss F/cast less than expected
Nikkei opened lower after the BoJ minutes and despite the positive moves in the US. But market bounced back to 29,570 level before easing back and traded around 29,550 level before ticking higher into lunch. PM opened lower and trading around 29,520.
Topix opened lower but tested 2,040 in early trades before trending lower down to 2,031 before a tick higher into lunch. PM opened lower and now trading -11pts (-0.6%) @ 2,033
Pre market data in-line. Foreign buying of futures prompting short covering. Local Institutions also broad buying but a skew towards large tech Samsung pushing higher. All sectors +VE but Telcos & Utilities relative under-performers; earnings still in focus. After market BoK mentioned that it expected CPI to remain above 2% for some time.
Kospi opened higher around the 3,000 level and traded up to trade just above 3,020 for most of the session but dipped slightly around 2:15pm and closed +35pts (+1.2%) @ 3,014.
Kosdaq traded a similar pattern. Rallied to 1,010 in the first hour and then traded around that level, dipped around 2.15pm but then worked better to close +11pts (+1.1%) @ 1,009
Inflation Rate Oct 3.2% YoY vs 2.5% Sept (F/cast was 3.2%)
Inflation Rate Oct 0.1% MoM vs 0.5% Sept (F/cast was 0.2%)
BoK Minutes due out after market.
Taiex opened higher and rallied to test 17,240 in the first 20 minutes before reversing and trended down to flat over the next two hours and traded around there before closing -2pts (flat) 17,066.
T/O Tuesday US$13.91bn vs US$11.68bn Monday; the highest for sometime.
President Tsai Ing-wen is hoping to use this year's Asia Pacific Economic Cooperation (APEC) forum in New Zealand in December as an opportunity to push Taiwan's bid for admission into a Pacific rim trade bloc. At a news conference Tuesday, Tsai announced that TSMC founder Morris Chang would serve as Taiwan's representative to the leaders' summit at the APEC forum and said she asked him to seek backing for Taiwan's entry into the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Hewlett-Packard Enterprise (HPE) has laid out a plan to make Taiwan its global next-generation innovative technology and strategic supply chain hub, focusing on technologies such as 5G applications, edge computing and high performance computing.
HTC Corp. has reported another quarterly net loss in the third quarter but its gross margin continued to improve. It posted a net loss of NT$770 million (US$27.5 million) in the July-September period, higher than the NT$550 million net loss seen a quarter earlier.
Hurt by its struggling smartphone business, HTC has run a net loss every quarter since the second quarter of 2015 except for the first quarter of 2018, when an asset sale helped HTC run a quarterly net profit.
CECC reported 4 new covid cases, all imported.
MEITUAN (03690.HK) +3.600 (+1.346%) Short selling $537.37M; Ratio 17.711% closed at $271, up 1.3%
BABA (09988.HK) +2.100 (+1.317%) Short selling $507.12M; Ratio 25.329% closed at $161.6, up 1.3%
TENCENT (00700.HK) -5.600 (-1.193%) Short selling $422.28M; Ratio 5.625% closed at $464, down 1.2%
HKEX (00388.HK) -4.200 (-0.897%) Short selling $166.73M; Ratio 33.506% closed at $464, down 0.9%
CCB (00939.HK) -0.030 (-0.563%) Short selling $101.53M; Ratio 14.760% closed at $5.3, down 0.6%
AIA (01299.HK) +0.350 (+0.398%) Short selling $116.23M; Ratio 18.952% closed at $88.2, up 0.4%
HSI & HSCEI Constituents on Move:
SUNAC (01918.HK) -1.580 (-9.599%) Short selling $66.49M; Ratio 16.385% closed at $14.88, down 9.6%
CITIC (00267.HK) -0.500 (-6.361%) Short selling $25.76M; Ratio 22.506% closed at $7.36, down 6.4%
EVERG SERVICES (06666.HK) -0.240 (-5.882%) Short selling $3.11M; Ratio 5.247% closed at $3.84, down 5.9%
CM BANK (03968.HK) -3.800 (-5.672%) Short selling $115.70M; Ratio 33.334% closed at $63.15, down 5.7%
LONGFOR (00960.HK) -2.050 (-5.548%) Short selling $24.27M; Ratio 12.852% closed at $34.9, down 5.5%
XINYI GLASS (00868.HK) -1.000 (-4.598%) Short selling $8.45M; Ratio 7.027% closed at $20.75, down 4.6%
BYD COMPANY (01211.HK) +10.400 (+3.621%) Short selling $970.00M; Ratio 39.493% closed at $297.6, up 3.6%
BIDU-SW (09888.HK) +4.800 (+3.055%) Short selling $77.46M; Ratio 33.384% closed at $161.9, up 3.1%
NTES (09999.HK) +4.600 (+3.014%) Short selling $47.38M; Ratio 15.948% closed at $157.2, up 3%
HSMI & HSSI Constituents on Move:
GENSCRIPT BIO (01548.HK) -4.200 (-12.670%) Short selling $7.78M; Ratio 1.792% closed at $28.95, down 12.7%
Blockchain Association Singapore (BAS) and AntChain signed a memorandum of understanding (MOU) on 1 November, pursuant to which both sides will begin their close partnership to propel further blockchain popularization and development in Singapore and the entire Southeast Asia region. Under the MOU, BAS and AntChain will familiarize industries and society with and help them understand blockchain by co-organizing activities and launching projects in Singapore and China. Through continuous innovation, both parties aim to promote the use of blockchain technology across sectors.
China is set to pilot a quarantine-free border reopening with Hong Kong at the end of year, covering persons from business sectors and those making compassionate care visits, family visits and attending funerals, HK01 citing sources. The weekly entry quota for the business sector would be 1,000. It is unclear how applicants will have to prove their need for compassionate visits and attending funerals, according to sources.
Zhong Nanshan, a member of the Chinese Academy of Engineering, remarked that China's "zero infection" policy is in fact a low-cost strategy against the COVID-19 pandemic, compared to some other countries' strategy of administrating treatment after infection, reported Chinese media. Zhong forecast that the "zero case" policy is likely to stay in place for a substantial period of time, the report added.
STANCHART (02888.HK) announced that underlying profit before tax went up 44.3% YoY to USD1.075 billion in the third quarter of 2021. Statutory profit before tax shot up 129% to USD996 million. Basic EPS increased 70% to US23.1 cents. The Group is accruing a foreseeable dividend in respect of the final 2021 ordinary share dividend in the third quarter. This is not an indication of the Group’s final 2021 ordinary share dividend, which will be proposed by the Board at the presentation of the 2021 full-year results. Underlying profit before tax surged 44% YoY in 3Q21 to USD1.1 billion, while the statutory profit before tax leaped 1.29x to USD1 billion. The group remarked that the strong underlying business momentum throughout 2021 should enable the income growth to return to the 5-7% guidance range next year.
JD-SW (09618.HK) announced the official launch of the Double 11 shopping spree at 8pm on 31 October. As of 1 November, a total of 139 brands tracked order value of over RMB100 million on the platform. Of which, the order value of brands like Apple, XIAOMI-W (01810.HK) , Haier, LENOVO GROUP (00992.HK), Midea and Huawei exceeded RMB1 billion. More than 43,200 merchants saw turnover growth of above 200% YoY.
FAST RETAIL-DRS (06288.HK) announced that the Board of Directors approved the payment of the final dividend for the year ended 31 August 2021 to its shareholders amounting to JPY240 per common share. The payment will be made from 5 November 2021 onwards. Based on the Japanese Yen / Hong Kong dollar exchange rate of 0.070 as of 2 November 2021, the estimated Hong Kong dollar amount of the proposed final dividend is approximately HK$0.168 per HDR. The final amount of the dividend in Hong Kong dollars will be determined on 5 November 2021.
Multiple NTES-S (09999.HK)'s connected companies, including NetEase (Hangzhou) Network, Guangzhou NetEase Computer System, have recently applied to register trademarks such as "NetEase Metaverse", "Leihuo Metaverse" and "Fuxi Metaverse", according to Tianyancha App. The international categorizations of the trademarks involve advertising, sales, education, entertainment and website service, etc..
The latest survey conducted by HSBC revealed that 75% of the interviewed businesses are planning to expand the scale of their operation in the Greater Bay Area (GBA) over the next three years. 73% of the surveyed international companies are selecting Hong Kong, Guangzhou, Shenzhen and Macau as their first stops. 37% of those international firms expressed that Hong Kong has been chosen as an entry point into the GBA mainly due to the city's connection to the international capital market and its first-class professional services.
AlipayHK announced the launch of Q Credit Card in partnership with Standard Chartered Hong Kong. This is Hong Kong's first physical and virtual credit card issued by an e-wallet in collaboration with a bank, providing users with instant approval, card use and rewarding experiences.
XIAOMI-W (01810.HK) announced that the payment amount across all channels on debut of "Double 11" Shopping Festival as at 1 November breached above RMB7 billion, with handset products ruling the sales board. Among which, Note 11 series' sales towered 500,000 units during the first hour.
HKEX (00388.HK) announced that the period of consultation on the potential SPAC listing system in Hong Kong has ended on 31 October. HKEX, according to the consultation results, is currently studying whether to arrange flexible treatment for three specific SPAC requirements, namely the number of professional investors, the investment ratio of independent third-party PIPE, merged bundle of share redemption and objection votes, reported Sing Tao Daily.
Surgical robots represented a pivotal direction for medical development abroad, being widely adopted on all fronts, said MEDBOT-B (02252.HK) Executive Director and President He Chao. Given insufficient penetration in domestic market and huge room for buildout, the President expected several MEDBOT-B products to hit the shelves upon approval between end-2021 and 2022. Equally, the group will speed up the large-scale commercial use and clinical application of surgical robots post registration and approval.
Dong Xin, CEO of China Mobile, expressed at the China Mobile Global Partners Conference 2021 that the company has successfully built over 560,000 5G base stations and that the number of completed stations will further expand by the end of the year.
The Australian government announced that two new permanent residence visa streams have been introduced for people from Hong Kong currently in Australia. The pathways to permanent residence will open on 5 March 2022 for eligible Hong Kong and British National (Overseas) (BNO) passport holders. The new visas will provide a pathway to permanent residence for temporary graduates and temporary skilled workers from Hong Kong currently in Australia, expressed the country's Minister for Immigration, Alex Hawk.
Pre Market News
In relation to the market rumors that the Geometry sub-brand of GEELY AUTO (00175.HK) will be adopting the HarmonyOS of Huawei, internal sources of Huawei responded that they have not heard of such rumor, reported The Paper. Separately, Huawei has not issued any official response regarding the said rumor.
HSBC HOLDINGS (00005.HK) announced that, it has repurchased 2.2317 million shares of the company in the London market yesterday (1st), at a price ranging between GBP4.424 and GBP4.475, with a
volume weighted average price of GBP4.462, involving GBP9.958 million.
MODERN LAND (01107.HK) previously announced the non-payment of a batch of USD senior notes issued by the company, which was due last Monday (25 October). The company has recently received a notice from a creditor of the offshore debt obligations of the group demanding early repayment of the outstanding principal amount and accrued interests in the amount of approximately US$23.6 million and declaring certain related security arrangement enforceable in connection with a facility agreement. The group is in discussion with the creditor for a waiver in respect of the acceleration and enforcement actions. In light of the unexpected liquidity issue faced by the group, in order to preserve the cash resources of the group for its operations and for better working capital management purposes, the board has resolved to withdraw its recommendation for payment of an interim dividend of HK4.81 cents per share, the announcement added.
Since the travel restrictions become less acute in Macau, the number of visitor arrivals has been gradually recovering, Macao Daily News cited Macau Hoteliers and Innkeepers Association. Over the past week, the occupancy rate of hotels in Macau rose 10%, compared to the previous week, representing 60-70% of the pre-COVID level.
The Association predicted that the visitor number will continue to rebound, starting from this month.
For the first three quarters this year, the companies listed on the main board of the Shanghai Stock Exchange (SSE) realized operating revenues of RMB33.44 trillion in total, up 21.43% YoY, according to data from SSE. The net profit attributable to the companies' shareholders amounted to RMB3.08 trillion, up 27.14% YoY. The overall performance extended the momentum of stable growth YTD.
Companies listed on the Science and Technology Innovation Board achieved net profits attributable to shareholders of RMB63.02 billion for the first three quarters of 2021, up 64.01% year-over-year, according to statistics from the Shanghai Stock Exchange.
Traditional Chinese medicine-related deals on Tmall Pharmacy burgeoned nearly 600% year-on-year just an hour past the launch of the Double 11 Shopping Festival, learnt China Securities Journal.
In his written speech to the COP 26 UN Climate Change Conference, Chinese President Xi Jinping proposed safeguarding multilateralism and other means to cope with climate change and propel global economic revival, reported Xinhua. Equally, Xi stressed the need to expedite green and low-carbon energy transition, develop renewable energy vigorously, and plan and build large-scale wind power and photovoltaic base projects.
CFLD (600340.SH) announced that the Company and its subsidiaries had recently failed to repay bank loans and trust loans in the principal and interest amount of RMB7.916 billion as scheduled. Up to now, the Company has missed debt payments of RMB93.979 billion.
TONGDA GROUP (00698.HK) announced that the Group has submitted the application for the separate listing of the A-shares of Tongda Smart Tech on the Main Board of Shenzhen Stock Exchange and received a notice of acceptance of the listing application from the CSRC on 1 November.
POP MART (09992.HK) announced that overall revenue for the third quarter of 2021 recorded positive growth of 75%-80%, compared to the same period in 2020.
SUNART RETAIL (06808.HK) announced the result for the six months ended 30 September 2021. Net profit was RMB117 million, representing a decrease of 86% year-on-year. EPS was 1 fen. No interim dividend was declared.
CKH HOLDINGS (00001.HK)'s statement disclosed that on 1 November it repurchased 93,500 shares of the company on the Stock Exchange at a price between $52.1-52.3 per share, involving approximately $4.88 million. YTD, the company has repurchased a total of 19.8735 million shares, accounting for 0.5153% of the company's share capital.
CHINA AOYUAN (03883.HK) made an announcement to clarify articles concerning a corporate loan dispute of Kinghand Property, a wholly-owned subsidiary of the Company. The Dispute happened in 2017 and was a historical dispute that occurred before the Company’s acquisition of Kinghand Property. On 30 September 2021, Kinghand Property and the counterparty have reached a settlement agreement, which is currently being enforced. After making enquiries, the restriction on consumption orders on Kinghand Property has been removed and Kinghand Property is not listed as a dishonest person.