Sept 20 HK Wrap and FT articles

20 Sep

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HSI -822pts (-3.3%) 24,099 HSCEI -309pts (-3.4%) 8,639 T/O HK$141.78bn

Japan re-opens Tuesday but closed Thursday
S Korea Closed Monday to Wednesday for Chuseok
Taiwan Closed Monday & Tuesday
China Closed Monday & Tuesday
Hong Kong Closed Wednesday
Markets opened lower and trended lower in early trades. Worries over the fallout in China and ahead of the US FOMC meeting.
Eurozone No data due
Germany PPI
France No data due
UK No data due

US Futures dropped 450pts with S&P and NDX futures both -VE too; following the HK weakenss.
Ahead NAHB House Market Index. UN General Assembly

Market closed; re-open Wednesday.
China's National Health Commission reported 49 confirmed COVID-19 cases yesterday (19th), 
with 21 of them being imported cases and 28 of them being local infections (all recorded in Fujian).

Pre market opened @ 24,640  -280pts vs -174pts ADR’s with Ping An -5.4%  on share placement news and HK Developers weak on news that China would no longer allow them to have a monopoly.   Plus the overhang from Evergrande.  With  HK the  main market open it was the fund managers ATM of  choice.
Relative Leaders Utilities, Staples and Healthcare
Laggards Financials, Mateials and Property/Construction.

HK reported 5 new covid cases; 
all imported.
The Census and Statistics Department (C&SD) announced that the overall consumer prices rose by 1.6% YoY in August 2021 (vs street forecast of 1.7%) smaller than the corresponding increase (3.7%) in July 2021.
  The larger increase in July 2021 was attributable to the low base of comparison arising from the Government's payment of public housing rentals and waiver of two-thirds of rent for tenants of Group B estates by Hong Kong Housing Society in July 2020.
Netting out the effects of all Government's one-off relief measures, the year-on-year rate of increase in the Composite
CPI (i.e. the underlying inflation rate) in August 2021 was 1.2%, larger than that in July 2021 (1%). The larger increase was mainly due to the enlarged increases in the costs for meals out and takeaway food and electricity charges. A Government spokesman said that the underlying consumer price inflation rate went up slightly to 1.2% in August, as the year-on-year increases in prices of some CPI components such as meals out and takeaway food as well as clothing and footwear widened somewhat amid the stabilised local epidemic situation. Nonetheless, pressures on many other components remained modest.

SHORT SELLING HSI Monday 22.2% vs 15.9% Friday
Top shorts  
Henderson Land (12) 56%, Country Garden (2007) 53%, Bud Apac (1876) 49%, MTR (66) 48%, SHKP (16) 45%, Wharf REIC (1997) 42%, Xinyi Glass (868) 42%, CM Bank (3968) 36%, CK Asset (1113) 36%, BYD (1211) 36%, Wuxi Bio (2269) 36%, Haidilao (6862) 34%,  Sunny Optical (2382) 34%, Petrochina (857) 33%, New World Dev (17) 33%, China Overseas (688) 30%,  Mengniu Dairy (2319) 30%, Xinyi Solar (968) 29%, China Life (2628) 29%, CLP (2) 27%, ICBC  (1398)  26%, Hang Lung Ppty (101) 26%, Hang Seng Bank (11) 25%.

After Market News
The Macao SAR government is holding a special public consultation session for casino companies and junket operators on gaming law revision this afternoon (20th), reported Macao Daily. 
Ku Mei Leng, Chief of Macao's Office of the Secretary for Economy and Finance, said the authorities have no stance when it comes to eligibility review and stepping up regulation. The government will listen to sector opinions with an open mind.

Hong Kong's overall GDP increased by 7.6% in real terms in the second quarter of 2021 over a year earlier, compared with the 8% increase in the first quarter of 2021, according to the preliminary figures released by the Census and Statistics Department (C&SD) today. 
Analysed by constituent services sector and on a year-on-year comparison, net output in respect of all the services activities taken together increased by 6.5% in real terms in the second quarter of 2021 over a year earlier, compared with the 6.7% increase in the first quarter.

According to the figures released by the Census and Statistics Department (C&SD), total employment in the private sector surveyed decreased by 0.4% or 11,700 persons in June 2021 compared with a year earlier. The total number of vacancies was 45,440, representing an increase of 16% or 6,320 over the preceding year.

MTR CORPORATION (00066.HK) announced to invite developers and/or consortia to submit Expression of Interest (EOI) for Tung Chung Traction Substation Property Development on 21 September 2021. The deadline for submission is 2:00pm on 28 September 2021.  The development is a residential development to be built atop the Tung Chung Traction Substation and its associated railway facilities with a maximum residential gross floor area of 87,288 square metres, and may provide 1,400 to 1,800 residential units, MTR added.

Regional Markets
Australia Market opened lower as expected with initial support 7,300 and then traded sideways until midday, after which it sold down again to trade around 7,250 for the rest of the afternoon to close -156pts (-2.1%) @ 7,248.
Iron ore weakness hurt the miners who also saw broker downgrades. Transurban unveiled a capital raise of close to $4 billion to help fund its $11.1 billion acquisition of the remaining 49 per cent of WestConnex; having won the NSW government’s auction for its stake in the road and would now take full control of the asset.
Japan closed re-opens Tuesday
S Korea closed reopen Thursday
Taiwan closed opens Tuesday

No Connect Flows

Active Heavyweights:
PING AN (02318.HK)  -3.150 (-5.780%)    Short selling $769.59M; Ratio 18.779%   closed at $51.35, down 5.8%
AIA (01299.HK) -4.350 (-4.938%) Short selling $566.11M; Ratio 19.456% closed at $83.75, down 4.9%
CCB (00939.HK) -0.230 (-4.071%) Short selling $419.92M; Ratio 22.566% closed at $5.42, down 4.1%
HKEX (00388.HK) -13.000 (-2.643%) Short selling $647.87M; Ratio 25.385% closed at $478.8, down 2.6%
MEITUAN (03690.HK) -6.200 (-2.575%) Short selling $642.15M; Ratio 23.458% closed at $234.6, down 2.6%
BABA (09988.HK) -3.400 (-2.195%) Short selling $246.31M; Ratio 8.994% closed at $151.5, down 2.2%
TENCENT (00700.HK) -7.600 (-1.646%) Short selling $661.64M; Ratio 9.407% closed at $454.2, down 1.6%

HSI & HSCEI Constituents on Move:
HENDERSON LAND (00012.HK) -4.400 (-13.193%) Short selling $289.37M; Ratio 55.455% closed at $28.95, down 13.2%
NEW WORLD DEV (00017.HK) -4.250 (-12.266%) Short selling $235.89M; Ratio 32.595% closed at $30.4, down 12.3%
EVERG SERVICES (06666.HK) -0.520 (-11.304%) Short selling $7.25M; Ratio 2.734% closed at $4.08, down 11.3%
SUNAC (01918.HK) -1.520 (-10.483%) Short selling $241.90M; Ratio 38.867% closed at $12.98, down 10.5%
SHK PPT (00016.HK) -10.900 (-10.342%) Short selling $1.34B; Ratio 44.901% closed at $94.5, down 10.3%
EVERGRANDE (03333.HK) -0.260 (-10.236%) Short selling $17.24M; Ratio 5.833% closed at $2.28, down 10.2%
CG SERVICES (06098.HK) -4.750 (-9.529%) Short selling $230.23M; Ratio 22.156% closed at $45.1, down 9.5%
CM BANK (03968.HK) -5.950 (-9.377%) Short selling $1.32B; Ratio 37.541% closed at $57.5, down 9.4%
CK ASSET (01113.HK) -4.300 (-9.317%) Short selling $392.65M; Ratio 36.251% closed at $41.85, down 9.3%
LI NING (02331.HK) -8.550 (-8.151%) Short selling $235.10M; Ratio 15.754% closed at $96.35, down 8.2%
COUNTRY GARDEN (02007.HK) -0.420 (-6.026%) Short selling $169.08M; Ratio 53.177% closed at $6.55, down 6%
GEELY AUTO (00175.HK) -1.500 (-5.825%) Short selling $198.90M; Ratio 13.748% closed at $24.25, down 5.8%
BYD COMPANY (01211.HK) -13.600 (-5.284%) Short selling $878.27M; Ratio 35.612% closed at $243.8, down 5.3%
ANTA SPORTS (02020.HK) -8.000 (-5.105%) Short selling $140.85M; Ratio 18.154% closed at $148.7, down 5.1%
HANG LUNG PPT (00101.HK) -0.900 (-5.039%) Short selling $32.19M; Ratio 25.466% closed at $16.96, down 5%
PSBC (01658.HK) -0.260 (-4.710%) Short selling $84.91M; Ratio 19.703% closed at $5.26, down 4.7%
SUNNY OPTICAL (02382.HK) -10.400 (-4.614%) Short selling $294.08M; Ratio 33.728% closed at $215, down 4.6%
WHARF REIC (01997.HK) -1.550 (-4.167%) Short selling $89.66M; Ratio 42.278% closed at $35.65, down 4.2%
JD (09618.HK) -12.800 (-4.164%) Short selling $304.35M; Ratio 25.509% closed at $294.6, down 4.2%
LONGFOR (00960.HK) -1.350 (-4.147%) Short selling $44.67M; Ratio 16.945% closed at $31.2, down 4.1%
ABC (01288.HK) -0.110 (-4.089%) Short selling $174.36M; Ratio 31.394% closed at $2.58, down 4.1%
JD HEALTH (06618.HK) -3.150 (-3.940%) Short selling $58.02M; Ratio 17.933% closed at $76.8, down 3.9%
CHINA LIFE (02628.HK) -0.500 (-3.864%) Short selling $168.59M; Ratio 28.505% closed at $12.44, down 3.9%
BANKCOMM (03328.HK) -0.170 (-3.736%) Short selling $37.74M; Ratio 30.687% closed at $4.38, down 3.7%
CPIC (02601.HK) -0.750 (-3.275%) Short selling $57.67M; Ratio 25.221% closed at $22.15, down 3.3%
XINYI SOLAR (00968.HK) -0.540 (-3.162%) Short selling $113.28M; Ratio 28.669% closed at $16.54, down 3.2%
HSBC HOLDINGS (00005.HK) -1.250 (-3.106%) Short selling $181.64M; Ratio 19.383% closed at $39, down 3.1%
MTR CORPORATION (00066.HK) -1.350 (-3.079%) Short selling $158.36M; Ratio 47.820% closed at $42.5, down 3.1%
LINK REIT (00823.HK) -2.000 (-3.001%) Short selling $152.72M; Ratio 15.733% closed at $64.65, down 3%

HSMI & HSSI Constituents on Move:
SINIC HOLDINGS (02103.HK)  -3.350 (-87.013%)    Short selling $3.82M; Ratio 1.950%    closed at $0.5, down 87%
SHIMAO SERVICES (00873.HK) -2.180 (-13.780%) Short selling $28.12M; Ratio 21.438% closed at $13.64, down 13.8%
CHINA AOYUAN (03883.HK) -0.460 (-12.042%) Short selling $42.04M; Ratio 30.869% closed at $3.36, down 12%

The trading in the shares of SINIC HOLDINGS (02103.HK)   has been halted at 3:38 pm today (20th) with the reasons pending to be announced.  
SINIC HOLDINGS plunged over 87% before the trading halt; last stood at $0.5, on a turnover of $196 mn.

Tencent's Tencent Cloud announced the further partnership with dashboard supplier Grafana Labs to jointly develop and verify the new first-party product --
Grafana custody service. By combining Grafana Labs' open source software and Tencent Cloud, users are allowed to visualize data and monitor their cloud surveillance data.

Midland reported that the Midland Confidence Index (MCI) last posted at 68, down slightly by 0.1 pt or 0.1% WoW.
The Midland Property Price Index (MPI), on the other hand, dropped 0.4% WoW; last stood at 175.66. The index accumulated an increase of 7.45% YTD.

The notice on the Three-year Action Plan for Continuously Rectifying and Regulating Jiangxi Province's Property Market Order was issued by eight Jiangxi departments last weekend.  The Jiangxi-based SINIC HOLDINGS (02103.HK) nosedived 89% to last post at $0.415, once hitting an all-time low $0.385.

Ocean Park Chairman Lau Ming-wai spoke of the satisfactory ticket sales of Water World, to be open tomorrow (21 September), with nearly all tickets sold out for upcoming holidays and weekends. Going ahead, the ticket prices of Water World will be revised based on seasonality and holiday to reflect respective demand.

Starting from Wednesday (September 22), 21 Community Vaccination Centres (CVCs) under the COVID-19 Vaccination Programme will distribute same-day tickets to all eligible persons who want to receive a COVID-19 vaccination so that they can get vaccinated in a CVC at a designated time slot on the day of distribution.  
A government spokesman expressed that, after evaluating the actual situation, the government has decided to extend the same-day ticket arrangement to cover all eligible persons for receiving vaccinations to further enable members of the public to get vaccinated.

Macao government officials are set to meet with gaming sector players this afternoon to consult operators on the proposed casino law revision, reported Bloomberg.  
With gambling licenses expiring on 26 June 2022, the Macao SAR government has initiated a 45-day consultation on gaming law amendments last week. This meeting will be the first and only chance for the government to discuss with operators.

CATHAY PAC AIR (00293.HK) announced that it carried a total of 135,400 passengers in August 2021, an increase of 278.4% compared to August 2020, but a 95.3% decrease compared to the pre-pandemic level in August 2019. CATHAY PAC AIR operated about 13% of the pre-pandemic level in August 2021, which was an improvement over previous months and the group will maintain its focus on prudent cash management, targeting cash burn of less than HK$1 billion per month for the rest of 2021, said Chief Customer and Commercial Officer Ronald Lam.

PING AN (02318.HK)  mentioned its clear strategy and solid finance in a statement, along with double-digit growth in interim operation profit. The insurer emphasized the controllable real estate investment risk, citing a 4.9% real estate investment exposure of its insurance funds, which was way below regulatory requirements.  Equally, PING AN has zero exposure to EVERGRANDE (03333.HK) and other risky real estate developers in market rumors.

Upon review and approval by China Chain Store & Franchise Association (CCFA), 16 Chinese e-commerce platforms announced to jointly establish a CCFA Online Consumption Platform Commission to regulate the orderly and healthy development of online consumption platform sector. The participants include BABA-SW (09988.HK), JD-SW (09618.HK), Vipshop Holdings Limited (VIPS.US), NTES-S (09999.HK)'s NetEase Yanxuan, MEITUAN-W (03690.HK) and KUAISHOU-W (01024.HK).

Macau's Health Bureau announced that the National Health Commission of the PRC has delivered a research report on Macau's pandemic during a recent meeting, which would serve as an important guidance for the Macau government.  The report suggested that the Macau government should concentrate on conducting pandemic-related tasks on high-risk occupational groups, including health monitoring, regular nucleic acid tests as well as active vaccination promotion among them.  Joint epidemic prevention and control among Guangdong, Hong Kong and Macau should be strengthened with the aim to boost the reaction efficiency in pandemic prevention and control.

CK ASSET (01113.HK) announced to sell 60% stake in the Shanghai City Link project to HYSAN DEV (00014.HK). 
The group, in reply, expressed that said transaction is merely part of CK ASSET's normal selling operation as a real estate company and that the group has obtained proceeds of approximately RMB2.1 billion in the transaction.  CK ASSET further revealed that Hong Kong and China remain as the major markets for the group's real estate operation and that its senior advisor Li Ka-shing and chairman Victor Li are both confident in Hong Kong and China.

The Hong Kong government will propose in the Policy Address next month to build a cross-border Hong Kong-Qianhai railway system near Hung Shui Kiu, suggested certain media reports.  
The Financial Secretary, Paul Chan, expressed that, with the "Qianhai Master Plan" being launched, along with the rapid development of the Greater Bay Area (GBA), the economic outlook and objective environment have changed compared to the past. The proposal of a cross-border railway connecting Hong Kong and Qianhai should, therefore, be looked into, said Chan.

In response to the recent volatile activities in the stock market triggered by the Chinese government's crackdown on multiple sector, Hong Kong's Secretary for Financial Services and the Treasury, Christopher Hui, expressed that regulatory measures are not unique to China. 
As the relevant industries are of a new type, the regulatory measures should also be constantly evolving with the times, Hui remarked, adding this is a common issue for the entire world.

Douyin announced to scale up its anti-addiction measures for minors. All underage real-name verified users who are below 14 will be directed to the adolescent mode by default and are allowed only 40 minutes of using time per day.

CKH HOLDINGS (00001.HK)  announced in early August to acquire the remaining 50% stake in Hongkong United Dockyards (HUD) from SWIRE PACIFIC A (00019.HK).  Should CKH HOLDINGS choose to apply to rebuild residential properties on the lot, the group could potentially construct 10,000 residential units, reported Chinese media. CKH HOLDINGS has issued no response to the said report.

Hong Kong's Financial Secretary, Paul Chan, expressed that it is paramount to create more favorable conditions for the intensive development of the bond market, so as to perfect and strengthen the financial service sector of Hong Kong.  Chan remarked that the Steering Committee on Bond Market Development in Hong Kong has already initiated a review on the "eco-system" of Hong Kong's bond market, covering various aspects of bond-related services including issuance, trading and clearing, etc.. The review is being carried out with the aim to enhance the transparency and efficiency of bond trading in Hong Kong, Chan added.

Yesterday (19th) was the first day of the Mid-Autumn Festival holiday, reported Radio Macau. Macau's Public Security Police Force announced passenger traffic of almost 300,000 yesterday, with visitations exceeding 54,000.

The Chinese government has set out a series of major policies to strengthen anti-monopoly and regulatory grip, with initial results from preventing uncontrolled capital expansion and solid uptrend in fair market competition and order, reported Economic Daily. Based on laws and regulations, regulatory departments have been scaling up the enforcement against anti-unfair competition, and have been striking directly at the market's pain points.  The Chinese government should continue to tighten the regulatory grip and establish an effective and orderly market environment for benign and fair competition, the report added.

Shenzhen Tencent Bowen Technology Co., Ltd. has been founded with a registered capital of RMB40 million, according to data from Tianyancha app.  T
he new company's operation covers corporate management consultation, marketing strategy planning, corporate image planning, etc., and is wholly-held by Shenzhen Tencent Enterprise Management Co., Ltd. under TENCENT (00700.HK)

Chinese Vice Premier Han Zheng, also a member of the Communist Party's Politburo Standing Committee, met with HKSAR Chief Executive Carrie Lam in Shenzhen, Guangdong on 18 September, reported Xinhua News Agency.  
Han spoke of the Central government's staunch support for Hong Kong to cement its global financial center position and to become an international I&T hub. He anticipated the HKSAR government to lead different community sectors and continue to do well on epidemic prevention and control, with an aim to enhance people's livelihood and welfare.

At the China-German video conference on fintech and global payment panorama, the People's Bank of China Governor Yi Gang gave an opening speech on Chinese regulators' efforts to balance the relationship between spurring development and risk prevention, reported Securities Times. The watchdog insists that all financial activities should be included in financial oversight and financial operations must be licensed. Meanwhile, China will disconnect improper connections between payment tools and other financial products.  Equally, Yi suggested the "winner-takes-all" attribute of large fintech companies could result in market monopoly and low innovation and efficiency.

China Securities Regulatory Commission (CSRC) announced to revise the special regulations to optimize the arrangement for the issuance of new securities while scaling up the oversight on securities underwriters, 
so as to achieve a more balanced dynamics between buyers and sellers, and to foster high-standard growth of the real economy.   In said revision, CSRC cancelled the pricing and subscription arrangements for the issuance of new stocks, while allowing the Shenzhen Stock Exchange to specify the relevant rules in its business regulations.

The Education Commission of Beijing's Dongcheng District attached great importance to netizens' report that New Oriental schools had started collecting after-school training tuition fees for the second session of Fall, 
according to sources from The Commission immediately summoned the person in charge of New Oriental for talks, stressing no tuition fees would be allowed at the moment.

Front page
Taliban rules spur protests
Afghan women activists protested yesterday against the latest Taliban restrictions, which include an order for female municipal workers in Kabul to stay at home. They gathered in front of the former ministry of women’s affairs, which is being repurposed as the ministry for the propagation of virtue and the prevention of vice.
See also Hardline youth put Taliban vow of moderation to the test   Uncompromising attitudes of young fighters appear at odds with overtures of leaders

Australia defends Aukus nuclear submarine pact as France fumes
• Biden asks for call with Macron • Morrison denies dishonesty • Paris ridicules UK role
Read also inside Australia to gain upgrade in strike power with change of direction on submarines

Big Tech sets record for buying rivals as ‘under the radar’ deals face scrutiny   Looks at purchases by US firms as US politicians and regulators prepare to crack down such deals.  The concern being over the over the ‘stifling competition and harming consumers.’  Key being that transactions under $92m do not need to be reported to US regulatory authorities. ‘The FTC study revealed that Apple, Facebook, Amazon, Google and Microsoft made 819 acquisitions between January 2010 and December 2019 that were not registered because they failed to meet reporting requirements. They declined to comment.’

Fed poised to give signal on taper timeline
FOMC meeting expected to give answers on future of bond-buying strategy. I suspect the market will be disappointed if they Fed doesn’t give some clear guidance.

Energy price surge will hit recovery, say experts
Economists warn of threat to household budgets and post-pandemic rebound

Japanese leadership race causes rush to hire consultants  Fund managers are seeking insight into the election

Companies & Markets
UK energy groups seek ‘bad bank’ for gas crisis
• Emergency talks after prices surge
• Smaller suppliers at risk of failure

Evergrande chiefs face ‘severe punishment’
Executives forced to repay money after redeeming investments early. Having found some insiders had redeemed their investments they are being punished as Evergrande tries to various methods to meet its liabilities. The paying of creditors with property units is unlikely to appeall to many of its suppliers who probably need to cash to pay their suppliers.

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