This and previous notes can be found at Substack ( Asian Market Sense )
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Topic: 'Why The Growing Deflationary Risk From China Sets The Scene for Higher Global Inflation
'Session 1 : 9am London 4pm HKT Click to register
Session 2: 3pm London 10am EST Click to register
The President of China, in pursuit of common prosperity, is attempting to re-orientate his financial system to redistribute wealth. This re-distribution will be largely effected through redirecting the credit of the state-run financial system.This shift comes at a time when China is already running too tight a monetary policy and with a large residential property market overhang. These are the ingredients to push the cost of credit higher, the price of property lower and raise questions as to the solvency of the private sector credit system.The Solid Ground has long accepted such a disinflationary/ deflationary outcome for China even as the developed world shifted decisively to inflationary policies in early 2020.So how do the deflationary forces emanating from China interact with the policy of monetary largesse in the developed world? Is there one last deflationary shock to come? How should investors position for the major structural transition already underway in China?
HSI +200pts (+0.8%) 25,225 HSCEI +96pts (+1.1%) 8,857 T/O HK$118.61bn (-1% DoD)
HK/CHINA Connect Flows
Northbound Rmb 53,456m Sell 27,034m vs 26,421m Buy
Southbound HK$ 13,068m Sell 7,207m vs 5,861m Buy
Northbound Rmb 59,346m Sell 29,001m vs 30,345m Buy
Southbound HK$ 11,567m Sell 5,494m vs 6,073m Buy
Expected to open higher after Fed statement but trading sideways with some caution ahead of BoE meeting with the expectation of a rate hike. Earnings still in focus with Credit Suisse, BMW, Commerzbank, Deutsche Post,Tate & Lyle, BT, Monte dei Paschi di Siena, Enel and SocGen reporting.
Credit Suisse Q3 beat analyst estimates but took a hit from charges settling allegations of corruption in Mozambique and other legal issues. It also revealed that it expects to report a net loss in the final quarter of 2021 and said it plans to scale back its investment banking operations.
Societe Generale Q3 beat on higher revenue in its corporate and investment banking business.
Alstria Office REIT strong after announcing a 3.5 billion euro ($4.1 billion) takeover bid from Brookfield Asset Management.
Tate & Lyle rose after a strong earnings report.
German chemicals company Lanxess weak after warning that increased costs would mean its 2021 core profit will come in at the lower end of its guidance range.
Services PMI Oct 50.7 vs 47.8 Sept (F/cast was 50.7)
Composite PMI Oct 50.7 vs 47.9 Sept (F/cast was 50.7)
PPI Sept 2.7% MoM vs 1.1% Aug (F/cast was 1.7%)
PPI Sept 16% YoY vs 13.4% Aug (F/cast was 14.8%)
Factory Orders Sept +1.3% MoM vs -8.8% Aug revised (F/cast was +2.5%)
Services PMI Oct 52.4 vs 56.2 Sept (F/cast was 52.4)
Composite PMI Oct 52 vs 55.5 Sept (F/cast was 52)
To come New Car Registrations
Services PMI Oct 56.6 vs 56.2 Sept (F/cast was 56.6)
Composite PMI Oct 54.7 vs 55.3 Sept (F/cast was 54.7)
New Car Sales Oct -24.6% vs -34.4% Sept (F/cast was -26%)
Construction PMI Oct 54.6 vs 52.6 Sept (F/cast was 54)
To come BoE Rate Decision
Opened Dow flat, S&P +0.08% and NDX +0.17% but have improved Dow +18pts, S&P and NDX +VE but now easing Dow -20pts S&P and NDX +VE
AHEAD Challenger Job Number, Balance of Trade, Unit Labour Costs, Non Farm Productivity, Initial Claims, 4 wk Ave Claims, Continuing Claims, Exports, Imports, EIA Natural Gas Change.
Earnings: AIG, Moderna, Regeneron, Pinterest, ViacomCBS, Dropbox, First Solar, Expedia, Airbnb, Shake Shack, Uber, Square, Kellogg, Cigna, Southern Co, Air Products, Hanesbrands, Barrick Gold, Citrix, CyberArk, Duke Energy, Wayfair, Planet Fitness, Sprouts Farmers Market, Allscripts, JDS Uniphase, Datadog, Cushman and Wakefield, Illumina, Occidental Petroleum, Skyworks Solutions.
CHINA CSI 300 closed -19pts (-0.4%) @ 4,821
CSI 300 Initially higher and worked up to 4,874 by 11am and then drifted lower into lunch. PM market traded sideways with good support at 4,860 to close +48pts (+1%) @ 4,869
Sentiment +VE on hopes of policy adjustments after Premier Li’s warning of downward pressure. BYD +VE on good EV sales and Solar rebounded as US actions discounted and Wind +VE on news China’s offshore capacity to surpass the UK’s. Semicons strong after good results from Qualcom. Coal weak after NDRC statements about controlling prices. T/O rebounded DoD.
Shanghai Comp +28pts (+0.8%) @ 3,527 T/O US$67,825m (+3.8% DoD)
Shenzhen Comp +188pts (+1.3%) @ 14,555 T/O US$95,840m (+11% DoD)
ChiNext Comp +45pts (+1.3%) @ 3,579
None Next event is Trade data due on Sunday
China's National Health Commission reported 104 confirmed cases of COVID-19 yesterday (3rd), with 87 of them being local infections (17 imported).
Pre market opened @ 25,141 +116pts vs +9pts ADR’s as recent shorts covered; which saw market then test to 25,245 but resistance around that level and around 11am market sold down heavily; weakness in Wuxi Bio and Chinese Developers. PM opened higher but trended lower with good support at 25,050 and then rallied but saw resistance at 25,200 but dipped into the close on more bad news from Kaisa -15% saying a Wealth Management product had missed a payment.
+VE interest in Solar as US action minimal damage at present, EV’s on good BYD numbers and Retail on the hope of border with China (just Guangdong initially) re-opening.
HONG KONG DATA
Hong Kong reported 7 imported covid cases.
SHORT SELLING HSI Thursday 18.4% vs 19.8% Wednesday
Top shorts Country Garden (2007) 63%, Wharf REIC (1997) 53%, Henderson Land (12) 51%, Hang Seng Bank (11) 51%, Hengan (1044) 46%, Bud Apac (1876) 40%, Mengniu Dairy (2319) 37%, BoC (3988) 36%, CM Bank (3938) 35%, ICBC (1398) 35%, Baba-SW (9988) 33%, CG Services (6089) 32%, HSBC (5) 32%, BoC HK (2388) 30%, Sinopec (386) 30%, Sunny Optical (2382) 28%, Techtronic (669) 27%, CCB (939) 26%, HK & China Gas (3) 25%, CK Asset (1113) 25%.
AFTER MARKET NEWS
A spokesman for the Hong Kong Special Administrative Region (HKSAR) Government said today (November 4) that the HKSAR Government will continue to strengthen anti-epidemic measures with the target of "zero infection" in order to foster favourable conditions for the early resumption of quarantine-free travel between the Mainland and Hong Kong in a gradual and orderly manner, with a view to meeting the aspirations of the general public. To enhance mutual understanding, a video conference exchange was conducted between the experts and relevant officials of the HKSAR Government and the Mainland authorities on November 2 to further discuss and elaborate on the feedback and information provided by the HKSAR Government in response to the first meeting held between the two sides on September 26. The video conference exchange was constructive, heading towards the goal of resumption of quarantine-free travel, and was conducive to the forthcoming second meeting.
CRRC (01766.HK) announced that it entered into certain contracts for the period from June 2021 to October 2021 with an aggregate value of approximately RMB27.81 billion.
CHINA OVERSEAS (00688.HK) announced that for October, the contracted sales amounted to RMB27.182 billion, with a year-on-year decrease of 6%; and the corresponding GFA sold was 1.264 million square meters, with a year-on-year decrease of 26.1%.
SJM HOLDINGS (00880.HK) announced the results for the first three quarters ended 30 September 2021. The loss expanded to HK$2.714 billion, as compared with a loss of HK$2.444 billion in the same period of 2020. This reflects the absorption of pre-opening costs and depreciation of Grand Lisboa Palace and interest expenses. Adjusted EBITDA was negative HK$970 million, narrowing from negative HK$1.766 billion in the same period of 2020.
COUNTRY GARDEN (02007.HK) announced that, for the single month of October 2021, the company achieved contracted sales of approximately RMB45.83 billion, down 14.99% YoY, with the contracted sales GFA amounting to approximately 5.95 million square meters.
LENOVO GROUP (00992.HK) announced the interim result ended September 2021. Infrastructure Solutions Group (ISG) benefited from strong commercial upgrades and reported record-breaking revenue, while narrowing its operating loss by 81 percent year-on-year to around US$17 million. Corporations are speeding up cloud migration amid the pandemic, leading to Lenovo's double-digit CSP revenue growth, said the latter's EVP and Data Center Group President Kirk Skaugen. He was confident about ISG's turnaround to profit for the fiscal third quarter ended December 2021, which will be the Group's key growth driver ahead. In order to achieve the medium-term growth target for net profit margin it will continue to pursue active and innovative strategy in future, revealed the CFO Wai Ming Wong. In the coming three years, the company plans to double up the R&D expenditure for each year, from FY2020-21's about US$1.5 billion to US$3 billion. Asked about the shortages of chips and components, Chairman Yang Yuanqing projected that the problem will persist into 1H22, yet citing the fact that the group still managed to reap growth in the last quarter despite component woe, thanks to its edges on supply chain.
HENDERSON LAND (00012.HK) won the bid for the commercial New Central Harbourfront Site 3 at $50.8 billion. At a video conference, HENDERSON LAND Co-chairman Peter Lee Ka-kit mentioned the good health of his father Lee Shau-kee, aka "Uncle Four". Colin Lam, the group's Vice Chairman, expressed that HENDERSON LAND's net gearing is expected to rise from about 20% at end-June to slightly above 30% after paying for the newly acquired land site, and yet such gearing will still be at a very reasonable level. Lam emphasized that the group's cash flow condition remains satisfactory at the moment and has therefore absolutely no need or pressure for rights issue. Also, HENDERSON LAND will keep its dividend distribution policy unchanged in the future.
The Census and Statistics Department (C&SD) announced that the value of total receipts of the restaurants sector in the third quarter of 2021, provisionally estimated at $24.5 billion, increased by 43.8% over a year earlier. The provisional estimate of the value of total purchases by restaurants increased by 41.2% to $8.0 billion. A Government spokesman said that business of restaurants improved further in the third quarter of 2021, thanks to the stable local epidemic situation, improved labour market conditions and the Consumption Voucher Scheme. The value of total restaurant receipts increased sharply by 43.8% in the third quarter over a low base of comparison a year ago. On a seasonally adjusted quarter-to-quarter comparison, it increased further by 2.1% after a strong rebound in the preceding quarter.
ANTA SPORTS (02020.HK)'s audit and supervision department found the Deputy Director of Adult Wear Department of FILA Shoe Purchasing to have suspected malpractices leveraging convenience of duty, as the company disclosed on its WeChat public account. The employee, surnamed Zou, had constantly and repeatedly extorted bribes on the company's suppliers, which ran into tremendous amount of money and posed grave influence. On 3 November, Public Security Bureau of Jinjiang City arrested and detained the suspect Zou at the ANTA's building in Xiamen for alleged bribery crime. ANTA SPORTS's share closed at $124.7 today, up about 2%.
The Shenzhen regulatory department will hold a special theme meeting tomorrow (5th), with the aim to discuss the liquidity issues of FANTASIA (01777.HK) and KAISA GROUP (01638.HK), reported Chinese media. The two companies have been required by the Bureau of Housing and Urban-Rural Development of Shenzhen to attend the meeting.
KAISA GROUP (01638.HK) Chairman Kwok Ying Shing has held a phone meeting with the group's investors in Shenzhen, through which Kwok reassured the investors that KAISA GROUP is a responsible company and that, given sufficient time, the group will be able to repay the relevant debts, reported Chinese media.
Kwok further added the group will announce the repayment plans for its wealth management products in the afternoon. Nearly 1,000 investors were involved, and the total amount of wealth management products approximated $12.7 billion, said the report.
Market opened higher and tested 7,416 in the initial trades then eased toward 7,400 before trended higher and testing 7,421. It remained in that range for the rest of the day to close +35pts (+0.5%) @ 7,428. Balance of Trade and Retail Sales broadly in line but Exports/Imports were weaker.
Financials and Tech lead but Energy sector was weak.
Afterpay +2.4% after Square Inc investors approved the $39 billion acquisition.
Earning in focus: Domino’s Pizza -18% after it flagged higher input costs and slowing momentum in Japan Wednesday evening after the market closed.
CSR +4.7% after reporting that its half-yearly profit after tax surged 163 per cent to$160.2 million and announcing an interim dividend of 13.5c per share.
Uranium miner Paladin Energy +13% after it gave an update on plans to re-open the Langer Heinrich Mine.
NIB Holdings +5.8% after telling investors at its AGM that of an 8.5 per cent rise in premium revenue for its first quarter to $669.5 million.
Ingham -5% after warning shareholders of sustained input cost pressures that have the potential to place upward pressure on pricing.
Woodside Petroleum -2.7%, Santos -3% and Oil Search -2.8%
Balance of Trade Sept A$12.24b vs 14.739b Aug (F/cast 12.5b)
Exports Sept -6% MoM vs +4% Aug (F/cast was +2%)
Imports Sept -2% MoM vs -1% Aug (F/cast was -0.7%)
Retail Sales Sept -1.3% MoM vs -1.7% Aug (F/cast was +1.3%)
Nikkei opened higher but trended lower through the morning to 29,790 at lunch. PM opened lower and traded sideways with a small upswing at the end to close +274pts (+0.9%) @ 29,794
Topix opened higher and traded sideways in a tight range 2,045/56 but with an upswing at the end to close +24pts (+1.2%) @ 2,056
+VE reaction to the FOMC comments and the Yen weakness. Earnings still in focus with key names like Toyota reporting. Nintendo weak on cutting Switch production earnings missed after market. Shippers sold down despite good results from KKK and Nippon Yusen. T/O increased as investors played catch-up and a large MOC basket responsible of the closing print of both indexes.
Leaders Textiles, Electric Apps, Warehouses, Machinery
Laggards Shippers, Miners, Utilities
Services PMI Oct 50.7 vs 47.8 Sept (F/cast was 50.7)
Composite PMI Oct 50.7 vs 47.9 Sept (F/cast was 50.7)
Local Inst and Foreign buying Tech, Internet and Autos but Retail selling. Nuclear power names in focus as China intends to build more power stations. Utilities bounced on the weaker oil price.
Earnings still in focus Kakao +VE on record quarterly earnings. Hyundai 2.6% on news of US EV production in 2022. NC Soft -9.4% on poor reception of ‘Lineage W’. KakaoPay -12.4% with foreign selling after strong IPO debut. T/O increased.
Kospi opened higher and tested 3,011 initially but then trended lower through the day with an uptick into the close. Some support at 3,000, 2990 but short lived, better support at 2,980. Closed +8pts (+0.3%) @ 2,983
Kosdaq Opened higher and tested 1,015 in early trades but failed to break out and sold down to trade around 1,005 for about an hour but then drifted lower and then sold down to 996 before rebounding to close -4pts (-0.4%) @ 1,001
Taiex opened higher tested to 17,020 but unable to break out and the late morning sold down and then trended lower. Support at 17,061. Closed -43pts (-0.3%) @ 17,079
T/O was US$11.07b vs US$11.69b Wednesday
The head of the first-ever official European Parliament delegation to come to Taiwan told President Tsai on Thursday that the visit is meant to send a clear message that Europe is standing by Taiwan in the defense of freedom. Comes as Pentagon report on China’s military says the PLA has sets 2027 military modernization goals to compel Taipei into talks.
MEITUAN (03690.HK) +9.000 (+3.249%) Short selling $1.05B; Ratio 22.412% closed at $286, up 3.2%
BABA (09988.HK) +5.000 (+3.113%) Short selling $1.26B; Ratio 32.827% closed at $165.6, up 3.1%
TENCENT (00700.HK) +11.800 (+2.516%) Short selling $611.43M; Ratio 7.782% closed at $480.8, up 2.5%
PING AN (02318.HK) -0.750 (-1.345%) Short selling $263.35M; Ratio 13.418% closed at $55, down 1.3%
CCB (00939.HK) -0.040 (-0.756%) Short selling $438.96M; Ratio 25.810% closed at $5.25, down 0.8%
AIA (01299.HK) -0.450 (-0.523%) Short selling $200.08M; Ratio 12.959% closed at $85.6, down 0.5%
HKEX (00388.HK) +1.600 (+0.346%) Short selling $188.06M; Ratio 19.459% closed at $464.4, up 0.3%
HSI & HSCEI Constituents on Move:
BYD COMPANY (01211.HK) +22.800 (+7.787%) Short selling $876.95M; Ratio 23.219% closed at $315.6, up 7.8%
JD LOGISTICS (02618.HK) +2.000 (+6.547%) Short selling $17.70M; Ratio 8.369% closed at $32.55, up 6.5%
WUXI BIO (02269.HK) -5.400 (-4.900%) Short selling $660.93M; Ratio 12.637% closed at $104.8, down 4.9%
WHARF REIC (01997.HK) +1.700 (+4.121%) Short selling $82.11M; Ratio 52.491% closed at $42.95, up 4.1%
LI NING (02331.HK) +3.450 (+3.952%) Short selling $187.78M; Ratio 11.181% closed at $90.75, up 4%
CHINA GAS HOLD (00384.HK) -0.720 (-3.879%) Short selling $14.77M; Ratio 3.359% closed at $17.84, down 3.9%
EVERG SERVICES (06666.HK) -0.150 (-3.788%) Short selling $4.28M; Ratio 3.466% closed at $3.81, down 3.8%
COUNTRY GARDEN (02007.HK) -0.270 (-3.689%) Short selling $160.14M; Ratio 63.157% closed at $7.05, down 3.7%
EVERGRANDE (03333.HK) -0.080 (-3.279%) Short selling $9.75M; Ratio 10.963% closed at $2.36, down 3.3%
HSMI & HSSI Constituents on Move:
KINTOR PHARMA-B (09939.HK) +7.250 (+20.714%) Short selling $2.89M; Ratio 1.885% closed at $42.25, up 20.7%
SKYWORTH (00751.HK) +0.680 (+16.152%) Short selling $40.36M; Ratio 9.095% closed at $4.89, up 16.2%
C TRANSMISSION (00658.HK) +0.900 (+15.625%) Short selling $3.43M; Ratio 2.346% closed at $6.66, up 15.6%
KAISA GROUP (01638.HK) -0.180 (-15.126%) Short selling $4.67M; Ratio 2.948% closed at $1.01, down 15.1%
YIXIN (02858.HK) +0.190 (+13.380%) Short selling $2.28M; Ratio 1.013% closed at $1.61, up 13.4%
HENGTEN NET (00136.HK) -0.320 (-12.030%) Short selling $6.15M; Ratio 0.924% closed at $2.34, down 12%
GOLDWIND (02208.HK) +2.020 (+11.609%) Short selling $49.31M; Ratio 8.494% closed at $19.42, up 11.6%
The Hong Kong-headquartered biotechnology company Insilico Medicine has confidentially filed the application for a U.S. listing last week, reported Bloomberg News. Insilico, backed by Warburg Pincus, is currently cooperating with advisors on its
IPO, through which the company hopes to raise approximately USD300 million.
CLP HOLDINGS (00002.HK)'s CLP Power Hong Kong Limited (CLP Power) announced that it is allocating HK$220 million to support people in different parts of society through the CLP Community Energy Saving Fund in 2022. A series of programmes will be launched to encourage people to reduce carbon emissions.
CLP Power has set aside HK$80 million to relaunch a second CLP Retail and Catering Coupons Programme in 2022, boosting consumer spending and supporting disadvantaged people by distributing two coupons in a total worth of HK$100 to nearly 800,000 households, including residential customers with low electricity consumption, elderly customers who qualify for concessionary tariff, and 10,000 tenants of subdivided units. CLP Power first launched the programme in 2021 which received a hugely positive response. In 2022, beneficiaries will be able to use the coupons, which are valid for six months, in more than 2,800 participating retail outlets and restaurants.
EVERGRANDE (03333.HK)'s finance company PROFIT CONCEPT FINANCE pledged the mortgage loans with higher LTV ratio, which were provided to the homeowners of the group's residential project in Tuen Mun, "Evergrande-Emerald Bay", as the collateral for further cash loans from another financer Lei Shing Hong, reported HK01. The pledge involved approximately 100 units with the total mortgage amount estimated to be worth of about $300-400 million, the report added.
According to the Guangzhou branch of the People's Bank of China (PBOC), within the first month since the Greater Bay Area (GBA) "Cross-border Wealth Management Connect" (WMC) scheme was launched (19-31 October), the number of participants of the scheme amounted to 7,600 in total, reported Jiemian News. Also, during the period, 1,752 cross-border remittances have been completed, involving RMB131 million.
EVERGRANDE (03333.HK) may offload stakes in HENGTEN NET (00136.HK) again, Chinese media cited market sources. The Chinese developer could pocket around $560 million should it dispose of more than 2.65% HENGTEN NET stakes in the secondary market, based on the latter's current market cap. Meanwhile, TENCENT (00700.HK) would replace EVERGRANDE as the top shareholder of HENGTEN NET, with a 23.9% shareholding. In reply, EVERGRANDE said it was unaware of the matter, and that official announcement shall prevail.
TENCENT (00700.HK) and Wuhan Municipal People's Government officially signed a strategic cooperation agreement at the 2021 Tencent Digital Ecosystem Summit. Pursuant to which, TENCENT will propel the deep digital tech application in municipal government affairs, development of industries and social services, while working off its digital sector cluster edges to accelerate Wuhan's development towards modernization, internationalization and ecological orientation.
Tencent Security will collaborate with seven young artists from the three major academies of fine arts to launch a digital art exhibition, with each exhibit containing seven pieces of art work, reported Chinese media. The organizer will give out a limited amount of 6,007 exhibits, the report added.
HSBC announced to put its best lending rate on hold at the current level of 5%. The previous revision dated back to 1 November 2019, when the rate was axed by 12.5 bps.
Meanwhile, the bank held its HKD savings deposit rate steady. The additional interest rate for Total Relationship Balance worth $1 million or above was kept at 0.001% p.a.
The Department of Culture and Tourism of Yunnan Province announced that, starting from today (4th), the province will temporarily halt all operations of cross-provincial tours organized by travel agencies or online companies, and will strictly implement the "circuit breaker" mechanism, according to CCTV.
Sinopec and the U.S. Venture Global LNG clinched a sales and purchase agreement (SPA) for a term of 20 years involving 4 million tons of LNG a year. The deal is by far the largest long-term LNG agreement signed between China and the U.S..
Venture Global LNG will supply LNG long-term contract resources to Sinopec through its Plaquemines Parish project in Louisiana, U.S..
At lunch LENOVO GROUP(00992.HK) announced interim result ended September 2021. The revenue rose 24.9% year on year to US$34.798 billion. The net profit amounted to US$978 million, up 87% year on year and setting a record new high. EPS was US8.44 cents. An interim dividend of HK8 cents was declared, against a dividend of HK6.6 cents for the corresponding period of the previous year.
CHINA AOYUAN (03883.HK)'s AOYUAN HEALTHY (03662.HK) is pursuing to sell its property management business at approximately RMB3 billion, Chinese media eeo.com.cn reported. At present, potential buyers which have joined the talks include CG SERVICES (06098.HK), LONGFOR GROUP (00960.HK)'s Longfor Smart Service, and POLY PPT SER (06049.HK).
AOYUAN HEALTHY will only sell its property management unit this time, with a goal to complete the transaction of 55% stake in the business by the end of November, according to the report.
Earlier rumor had it that CHINA AOYUAN intends to sell stake in AOYUAN HEALTHY to HOPSON DEV HOLD (00754.HK), yet the latter shattered the rumor afterwards.
The one-month HIBOR hit 0.07% today (4 November), likely standing below 0.1% within the year. Eric Tso, Chief Vice President at mReferral Mortgage, expected the actual mortgage interest rate to hover around 1.5% this year, as the banks' new HIBOR plan rate may largely stay at about H+1.3%.
Given an all-time-high bank balance, Tso saw no pressing need for Hong Kong to raise interest rates, adding the rates could remain low next two years and hence support the property market.
The U.S. Fed announced to keep the benchmark policy rate unchanged and start scaling down bond-purchases by USD15 billion per month from November.
HSBC HOLDINGS (00005.HK)'s clients turned more accommodating to banking services via electronic channels amid the Covid pandemic, said Global Commercial Banking CEO Barry O'Byrne. Of which, the e-channel utilization rate in the rather traditional trade finance unit rose from 50% to 85%. O'Byrne mentioned the group's cooperation with fintech companies of all sizes, adding 85% Hong Kong clients are using its e-banking services.
Overnight HIBOR last posted at 0.04357%, logging a 1-month high, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.06786%.
Fitch Ratings downgraded the Long-Term Foreign-Currency Issuer Default Rating (IDR) of CHINA AOYUAN (03883.HK) to "B+", from "BB", with a Negative outlook. The group's senior unsecured rating and the ratings on its outstanding US-dollar senior unsecured notes were likewise downgraded to "B+", from "BB-". Fitch removed all the ratings from Under Criteria Observation (UCO). The rating agency remarked that the downgrading decision was made to reflect the decreased financial flexibility of CHINA AOYUAN amid the intensified capital market volatility. Fitch forecast that CHINA AOYUAN will utilize its cash balance to repay the maturing debts.
Shen Pei, general manager of strategic design on smart mobility of TENCENT (00700.HK), revealed that the installation volume
of TENCENT's TAI eco-Internet of Vehicle (IoV) leaped 100% YoY to over 7 million units of vehicles, reported Chinese media.
Hong Kong visitors may be allowed to enter Mainland China without being subject to quarantine by next month at the earliest, reported South China Morning Post. However, the visitors' movement will be limited to Guangdong province, with Shenzhen as the only entry point, the report added.
Beijing Kuaishou Technology clarified that the report published by the Chinese media "leiphone" on an organizational and structural adjustment of Kuaishou was completely false. Kuaishou stated that it would initiate legal procedures to defend its legitimate rights and protect the company from such malicious behavior of spreading false information.
MGM Resorts International (MGM.US) is selling The Mirage in Las Vegas, without revealing any potential buyers. The hospitality company is committed to maintaining and developing the existing Las Vegas portfolio, said Chief Executive Bill Hornbuckle in a letter to employees.
CK ASSET (01113.HK)'s #LYOS residential project in Hung Shui Kiu will offer the first log of 220 units this Saturday (6 November), with 200 units to be sold according to the price list and 20 to be put up for tender. More than 5,300 subscriptions have been received for the project so far, representing a 25.5 times over-subscription.
The Hong Kong Monetary Authority (HKMA) issued a statement to support the Central Banks and Supervisors Network for Greening the Financial System (NGFS) Glasgow Declaration, which reiterates the willingness to contribute to the global response required to meet the objectives of the Paris Agreement, and the commitment to expand and strengthen collective efforts towards greening the financial system. As a member of the NGFS, the HKMA is committed to delivering on the NGFS recommendations 1 in taking the necessary measures to foster a greener financial system.
Forbes released the 2021 Chinese Billionaire list, with the total amount of wealth owned by the listed billionaires rising to USD1.48 trillion from USD1.33 trillion last year. NONGFU SPRING (09633.HK)'s chairman Zhong Shanshan, with a worth of USD65.9 billion (approximately RMB424.4 billion), was crowned as the richest person in China. In comparison, BABA-SW (09988.HK)'s founder Jack Ma, who took first place last year, dropped to fifth place, with his wealth shrinking from last year's USD65.6 billion to USD41.5 billion (approximately RMB267.3 billion).
EVERG VEHICLE (00708.HK) will soon sell the British startup Protean Electric to EV company Bedeo, likely announcing the deal as soon as today (4 November), Bloomberg citing insiders.
Protean, developing in-wheel motor technology used in EVs, self-driving cars and commercial vans, has roughly 150 employees across the UK, China and the U.S.
Nicolas Aguzin, HKEX (00388.HK)'s CEO, expressed when delivering a speech at the Hong Kong FinTech Week that, at the moment, Hong Kong is the prime location for fostering fintech development and that enormous development opportunities can be found on a capital level. Also, Aguzin added that the capital circulation between China and Hong Kong will likewise provide immense opportunity for the potential development of both places in the international capital market, as only 5% of the A-shares are held by offshore investors.
CHINA AOYUAN (03883.HK) is in preliminary negotiation to sell its 55% equity interest in AOYUAN HEALTHY (03662.HK) to HOPSON DEV HOLD (00754.HK), Bloomberg had earlier cited REDD. Separately, HOPSON DEV HOLD purportedly intends to acquire AGILE GROUP (03383.HK)’s A-LIVING (03319.HK). However, Chinese media quoted HOPSON DEV HOLD that the related rumor was untrue. Meanwhile, people within the circle of A-LIVING also shattered the rumor. CHINA AOYUAN, on the other hand, said official announcement shall prevail.
Pre Market News
HENDERSON LAND (00012.HK) announced that Pacific Gate Development Limited, a wholly-owned subsidiary, has been awarded the tender to develop and manage Site 3 of Hong Kong’s New Central Harbourfront (Inland Lot No. 9088). Commenting on the success of this acquisition, Martin Lee Ka-shing, Chairman of the Group, said HENDERSON LAND is excited to take part in this world-class development. Henderson Land will invest HK$63 billion to develop Site 3, creating not only one of Hong Kong’s most iconic landmarks but also a social destination dedicated to public enjoyment along the harbourfront promenade.
In response to the US Fed FOMC meeting, the HKMA spokesman said the Fed has announced the arrangements for reducing asset purchases, and indicated that it would continue to monitor the relevant data, including the US economic and pandemic developments, in deciding the pace of asset purchases reduction and timing of interest rate hike. Due to uncertainty on the US
inflation and interest rate outlook, the public should stay vigilant as regards potential market volatilities and risks. The spokesman furthered that Hong Kong’s money markets continue to operate smoothly, with ample liquidity in its banking system. Hong Kong dollar exchange rate and interest rates remain steady. The HKMA will continue to monitor market developments and maintain monetary and financial stability in accordance with the Linked Exchange Rate System.
The People's Bank of China (PBOC) initiated a RMB50 billion 7-day reverse repurchase today (4 November), with a flattish successful bidding rate of 2.2%. With RMB200 billion reverse repurchase maturing today, the single-day net return reached RMB150 billion.
The International Finance Corporation (IFC) announced that it will partner with the Hong Kong Monetary Authority (HKMA) and another institutional investor to create a new US$3 billion global platform for climate-smart investment aligned with the Paris Agreement. The new program, Managed Co-Lending Portfolio Program (MCPP) One Planet, combines institutional investor contributions with IFC’s own funds to scale up climate-responsible financing for private companies in emerging markets.
IFC Managing Director Makhtar Diop said that MCPP One Planet will create a global model for mobilization of institutional investor financing in support of the climate agenda for the most vulnerable communities on the frontlines of climate change - in emerging and developing economies.
HSBC HOLDINGS (00005.HK) announced that it has repurchased approximately 2.8013 million shares of the company in the London market yesterday (3rd), at a price ranging between GBP4.404 and GBP4.4445, with a volume weighted average price of GBP4.424, involving about GBP12.393 million (about HKD132 million).
China's Ministry of Industry and Information Technology (MIIT) announced the inspection result on various mobile applications, in relation to the improper behavior of excessive personal data collection. MIIT said 38 apps, including Tencent News and Xiaohongshu, were engaged in said improper behavior and asked to rectify such issue before 9 November. Those who fail to make rectifications within the given time or fail to make proper rectifications shall be punished in accordance with laws and regulations and be subject to administrative penalties.
MANULIFE-S (00945.HK) announced that, for 3Q ended by 30 September 2021, the group's net income attributable to the shareholders amounted to CAD1.592 billion, down 23.02% YoY. The core earnings grew 4.4% to CAD1.517 billion. The diluted
EPS was CAD0.8. A quarterly dividend of CAD0.28 per common share was declared.
At a State Council executive meeting, Chinese Premier Li Keqiang stressed the effective rollout of pre-emptive and minor adjustments to address new downward pressures facing the economy and new plights for market entities. The State Council had recently made on-site supervision and inspection across 16 provinces, set to implement established policy well and rectify issues upon discovery in the next step, according to the meeting.
HENDERSON LAND (00012.HK) won the bid for the commercial New Central Harbourfront Site 3 at HK$50.8 billion. The Company is optimistic of the long term prospect of this world-class development, which will form one of the most important and strategic additions to Hong Kong’s Central Business District. The investment is expected to create not only one of Hong Kong’s most iconic landmarks but also a social destination dedicated to public enjoyment along the harbourfront promenade. The Board believes that the terms of the Memorandum of Agreement are normal commercial terms, and the Acquisition is fair and reasonable and in the interests of the Company and its shareholders as a whole.
Chinese solar power company LONGi (601012.SH) issued an official notice, confirming the circulating rumors that some of the company's products have been detained by the U.S. Customs under the Withhold Release Order (WRO). The company, however, stated that the scheduled delivery to the U.S. market is still being carried out, in order to meet the demand from the U.S. customers. The notice remarked that the WRO issued by the U.S. Customs has not created a severe negative impact on the company's operation at the moment and that the company will continue to monitor and assess the potential impact of the WRO on the product delivery to the U.S. market.
MGM CHINA (02282.HK) announced that, for the third quarter, the group recorded total revenue of approximately HK$2.2 billion, down by 7% from second quarter. Adjusted property EBITDA was approximately HK$101 million, down by 13% sequentially. Overall occupancy rate was 50.9%, compared to 65.5% in the previous quarter. During the Period, MGM CHINA outperformed the market with market share grew to approximately 13.8% in the third quarter, from 11.2% the previous quarter, the announcement added. The daily GGR of the group in the third quarter was 38% of 4Q19 pre-pandemic levels, compared to Macau market of 26%.
CHINA VANKE (02202.HK) announced that for the month ended 31 October 2021, the Company achieved a contract sales amount of RMB41.95 billion, down 19.8% yearly; with a contract sales area of 2.581 million sq. m., down 29.5%.
KAISA GROUP (01638.HK) announced that the total contracted sales of the Group for the first ten months of 2021 amounted to RMB95.744 billion with the total contracted GFA of approximately 5.5873 million sq.m., representing an increase of 23.2% and 24.1% as compared with corresponding period in 2020, respectively.
BYD COMPANY (01211.HK) announced that the total auto production volume of the Company for the month of October burgeoned by 87.7% yearly to 89,028 units. The auto sales volume surged by 88.4% to a total of 89,935 units.
SEAZEN (01030.HK) announced that in October, the Group achieved contracted sales of RMB22.102 billion, representing a YoY decline of 20.5%. Contracted sales area was 2.4899 million sq.m., down 7.4%.