Sept 21 HK a small recovery ahead of the holiday. Japan closed lower on its re-opening.


21 Sep

This and previous notes can be found at asianmarketsense.com and Substack ( Asian Market Sense )
Check out ERI-C.com  for your research needs  Today there is a free webinar on "Behavioural Finance Research & The Psychology of the Sell”  
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HSI +122pts (+0.5%) 24,222 HSCEI +2pts (unch) 8,640 T/O HK$119.20bn (-15.9% DoD)

Europe
Markets opened higher, rebounding from Monday’s weakness.  Basic resources and oil & gas were the leaders.  Gas in focus as shortages become evident.
Universal Music Group shares surged in its stock market debut.
Airlines continue to rally on news the US will allow vaccinated foreign travelers
Kingfisher weak despite reporting a 61.6% jump in first-half pretax profit largely thanks to a home improvement boom during the pandemic.
Data
UK
 
Public Sector Net Borrowing Sept £-20.5B vs £-6.9B Aug revised (F/cast was £-14.2B)
CBI Industrial Trends Orders Sept (Aug was 18  F/cast is 15)
US Futures
Dow Jones futures +370 points by 4.45 a.m. ET. S&P 500 futures and Nasdaq 100 futures both also traded in positive territory.  
In Asian times Opened Dow Jones futures -12 points. S&P 500 futures were down less than 0.1% and Nasdaq 100 futures were about flat.
Ahead Current Account, Housing Starts, Building Permits, Redbook, API Crude Oil Stock Change. FOMC meeting starts.
UN General Assembly


CHINA Market closed; re-open Wednesday.  It reported 72 confirmed new covid cases yesterday (20th), with 30 of them being imported cases and 42 of them being local infections (all recorded in Fujian).

HONG KONG
Pre market opened @ 23,867 -231pts vs -248pts ADR’s  but market rallied back to flat in the first 15 minutes. Then traded sideways around 24,100 until 11am when it sold back down to the opening level before rebounding into lunch; -77pts (-0.3%) @ 24,022
China developers rebounding as R&F’s top executives pledge HK$8bn in short term financing to the company and its selling three businesses to Country Garden
HK developers rebounding after denials that Beijing was putting pressure on them. I would remain cautious; Sunday’s election removed some political power from the developers and I think Beijing still blames high property prices for the democracy uprising. Macau names rebound as they broadly support the review. Ping An remains weak along with Ecommerce names.
Laggards Consumer Discretionary, Comms, Energy, Healthcare & Industrials
Leaders Property, Financials, Macau, Utilities and IT
Market closed on Wednesday re-opens Thursday.

BUYBACKS
XINYI GLASS (00868.HK announced that it has repurchased 2.106 million shares of the company on 20 September, 
at a price ranging between $24.65-$25.85 per share, involving $53.953 million.

HONG KONG DATA
HK reported 1 new covid case; 
imported.  Now 35 days without a local case.

SHORT SELLING HSI Tuesday 17.1% vs 22.2% Monday
Top shorts   
Henderson Land (12) 49%, Wharf REIC (1997) 49%,   Country Garden (2007) 48%, Haidilao (6862) 44%, BYD (1211) 40%,       Bud Apac (1876) 38%, New World Dev (17) 35%, MTR (66) 34%, Hang Lung Ppty (101) 31%,  CK Asset (1113) 31%, Hang Seng Bank (11) 30%ICBC (1398) 30%,  Petrochina (857) 29%, Bank of China (3988)  27%,  AIA (1299) 26%, Sunny Optical (2382) 26%, Wuxi Bio (2269) 26%, Xinyi Glass (868) 26%, SHKP (16) 25%,


After Market News
CHINA TELECOM (00728.HK) announced that China Telecom Corp., the controlling shareholder of the company, proposed to increase its shareholding in the company's A-shares by an amount of not less than RMB4 billion, 
as and when appropriate, during the twelve-month period from 22 September 2021.

FUJIAN HOLDINGS (00181.HK) announced that Chen Yangbiao has resigned as the Chairman and an executive Director with effect from 21 September 2021 
due to other work commitments in Mainland China.FOSUN PHARMA (02196.HK) announced that the Company completed the issuance of the third tranche of super short-term commercial paper for 2021 in the aggregate principal amount of RMB1.2 billion with a term of 210 days. The value date is 18 September 2021. The coupon rate is 2.6%.

Regional Markets
Australia
Market opened lower and touched 7,192 in early trades but then worked better through the day to close +26pts (+0.4%) @ 7,274
Utilities and Banks still a drag but other sectors in the green.
AusNet trading halt whilst considering the latest bid for its assets, but the fact that APA’s share price is down; tells you that their shareholders certainly think the offer is generous. AusNet resumed trading and closed +9.75%. UBS points out that Monday’s Brookfield offer implies a premium over the KKR offer for Spark infrastructure but says this is justified based on what AusNet brings to the table.
Leaders: Miners staged a recovery, Qantas was higher as US announced opening to foreign vaccinated travelers and Domino’s moved higher too.
Laggards AMP, Pointsbet Holdings and gas business APA
Japan
Nikkei opened down -500pts but dipped to 29,833 in early trades and then worked back to 30,000 but then drifted lower into lunch. PM opened flat and traded sideways before dipping to close; -660pts (-2.2%) @ 29,840
Topix traded in a similar fashion, to close -36pts (-1.7%) @ 2,065
Laggards Iron/Steel, Machinery, Marine Transport, Autos on plant closures.
Leaders Airlines, Electric Power & Gas, Retail, Property along with Pharma.
Softbank weak on China exposure along with Toto, Nippon Paint, Komatsu, Daikin
Shinsei Bank weak after announcing poison pill defence from SBI bid.
MUFJ -VE on news its considering selling US operation
Daiichi Sankyo +VE on drug trial results
S Korea markets closed re-opens Thursday
Taiwan market closed re-opens Wednesday

No Connect Flows

Active Heavyweights:
AIA (01299.HK) +5.000 (+5.970%) Short selling $422.71M; Ratio 22.070% closed at $88.75, up 6%
PING AN (02318.HK) +1.250 (+2.434%) Short selling $157.66M; Ratio 7.000% closed at $52.6, up 2.4%
BABA (09988.HK) -2.600 (-1.716%) Short selling $258.23M; Ratio 12.702% closed at $148.7, down 1.8%
MEITUAN (03690.HK) -3.600 (-1.535%) Short selling $302.16M; Ratio 13.588% closed at $230.6, down 1.7%
HKEX (00388.HK) +6.000 (+1.253%) Short selling $193.98M; Ratio 24.359% closed at $484.4, up 1.2%
TENCENT (00700.HK) -4.200 (-0.925%) Short selling $426.55M; Ratio 10.293% closed at $450, down 0.9%
CCB (00939.HK) -0.010 (-0.185%) Short selling $190.51M; Ratio 27.407% closed at $5.4, down 0.4%

HSI & HSCEI 
Constituents on Move:
COUNTRY GARDEN (02007.HK) +0.590 (+9.008%) Short selling $94.17M; Ratio 50.669% closed at $7.13, up 8.9%
SUNAC (01918.HK) +1.100 (+8.475%) Short selling $86.78M; Ratio 21.118% closed at $14.08, up 8.5%
CG SERVICES (06098.HK) +3.000 (+6.652%) Short selling $78.64M; Ratio 13.101% closed at $47.9, up 6.2%
CHINA RES LAND (01109.HK) +1.250 (+4.505%) Short selling $48.71M; Ratio 16.254% closed at $29.1, up 4.9%
CK ASSET (01113.HK) +1.650 (+3.943%) Short selling $99.09M; Ratio 35.928% closed at $43.55, up 4.1%
SANDS CHINA LTD (01928.HK) +0.600 (+3.979%) Short selling $39.60M; Ratio 5.634% closed at $15.68, up 4%
GALAXY ENT (00027.HK) +1.400 (+3.470%) Short selling $143.91M; Ratio 22.627% closed at $41.75, up 3.5%
CHINA OVERSEAS (00688.HK) +0.540 (+3.413%) Short selling $29.97M; Ratio 18.610% closed at $16.32, up 3.2%

HSMI & HSSI Constituents on Move:
TONGDAO LIEPIN (06100.HK)  +2.160 (+20.112%)    Short selling $48.10K; Ratio 2.913%    closed at $12.82, up 19.4%
R&F PROPERTIES (02777.HK) +0.510 (+11.888%) Short selling $26.78M; Ratio 30.425% closed at $4.81, up 12.1%

MARKET NEWS
The central government has asked Hong Kong developers to cooperate with it and resolve the city's land issue, according to foreign media. 
Stewart Leung, chairman of executive committee at the Real Estate Developers Association of Hong Kong (REDA), claimed he was unsure whether certain developers had met with Beijing officials. However, REDA will hold a regular meeting on Friday (24 September) to discuss, among others, such incident.

HENDERSON LAND (00012.HK)'s residential project located in Ap Lei Chau -- "The Upper South" has uploaded a new price list with relevant sale arrangement today (21st), announcing the additional offer of 16 units this Saturday (25th). 
The new price list includes 21 units in total, with discounted selling prices between $4.49 million and $7.365 million.  The project has sold 75 units since the commencement of its sale, cashing in over $420 million.

The Government announced today that the application period of the 100% Personal Loan Guarantee Scheme (PLGS) will be extended to end-April 2022, 
so as to keep providing a supplementary financing
option to individuals suffering from cessation of main recurrent incomes from employment in Hong Kong during the COVID-19 pandemic. Individuals wishing to apply can continue to contact the participating banks

The Government announced further enhancements to the support measures under the SME Financing Guarantee Scheme (SFGS). 
The maximum duration of principal moratorium for the 80% Guarantee Product, the 90% Guarantee Product and the Special 100% Loan Guarantee under the SFGS will be extended from 18 months to 24 months, and the application period for principal moratorium will also be extended to end-June 2022.  The Government has also announced earlier an extension of the application period of the Special 100% Loan Guarantee by six months to end-June next year.

Information from Macau Statistics and Census Service (DSEC) indicated that visitor arrivals decreased by 48.2% month-on-month to 409,200 in August 2021,
on account of the temporarily tightened entry and exit requirements as local COVID-19 confirmed cases were reported in early August; however, the figure represented an uplift of 80.2% year-on-year.

PRU (02378.HK)  announced to offer approximately 131 million shares, with 5% being the Hong Kong public offer section and the remaining 95% being the international placing. 
The international offer section is already oversubscribed by several times, reported IFR under Reuters, citing people familiar with the matter.

The Ng Teng Fong Charitable Foundation (NTFCF) under the Sino Group and CHINESE EST H (00127.HK) announced to extend the registration period for the Phase 2 Lucky Draw until 30 November 2021. 
Meanwhile, the NTFCF announced to donate 200 additional prizes, in the form of a pre-paid card or credit card with a value of $10,000 each, for the Lucky Draw among vaccinated Hong Kong residents aged 70 and above.

Hong Kong's Chief Executive, Carrie Lam, expressed that she believes that the cooperation between experts from Hong Kong and China would commence very soon with the aim to tackle the issue of border reboot, which remains the utmost concern for citizens and the business sector.  
Lam added that, starting tomorrow (22nd), she will be visiting China for one week, during which she will meet with local leaders of three cities, namely Chengdu, Chongqing and Xi’an.

Chief Executive Carrie Lam found it hard to comment on the rumored dialogue between the central government and Hong Kong developers. However, she restated Beijing's deep concern about the city's livelihood issues.  
Based on her personal experiences in recent years, developers are very willing to cooperate with government policies. For instance, half of the land parcels under transitional housing scheme were donated voluntarily by developers to the government.

Chief Executive Carrie Lam said the pandemic is still hitting hard on some industries and leaving them with financing difficulty despite economic rebound in the first half of year. Hoping to offer help to the best of its ability, the Government decided to extend the raft of rental and fee concession measures announced previously. Meanwhile, the period of three corporate and individual financing schemes will be extended by six months.

EVERGRANDE (03333.HK)'s chairman Hui Ka Yan issued a letter to all EVERGRANDE employees to express his gratitude for their hard work as well as to pay respect to the employees' families, reported Chinese media.  Hui remarked in the letter that, with its leaders and workers united, he believes that EVERGRANDE would be able to recover from its darkest moment soon. Xu further stressed the company's goal to ensure smooth and on-time property delivery and to fulfil social responsibilities.

As the debt crisis of EVERGRANDE (03333.HK) continued to intensify, the White House press secretary, Jen Psaki, expressed at a press conference yesterday that all of EVERGRANDE's business activities are conducted within China and that the U.S. Department of the Treasury is closely monitoring the global market
and assessing potential risks of the said crisis on U.S. economy, so as to implement corresponding measures when necessary.

The semiconductor market is predicted to realize a growth of 17.3% this year, reflecting a quicker growth pace than the 10.8% recorded in 2020, expressed international data institution IDC. 
IDC expects the industry to normalize by mid-2022, with the demand-supply dynamics becoming balanced. With the semiconductor sector estimated to initiate even larger-scaled capacity expansion from the end of 2022, IDC suggested that the market may see overcapacity by 2023.

Reuters previously reported that Hong Kong developers have been asked by the Chinese government to help resolve the housing shortage issue in Hong Kong.  
The chairman of executive committee at the Real Estate Developers Association of Hong Kong (REDA), Stewart Leung, expressed when replying to media inquiries, that the association has not heard of any meeting between the Chinese government and individual developers.  Leung added that the association has been maintaining close cooperation and communication with the government and believes that neither the central government nor the HKSAR government wish for monopolistic behavior in the real estate industry.


PRE MARKET NEWS
Several EVERGRANDE (03333.HK)  project companies are facing loan interest payments by the 23 September deadline, and their likely default could broadly shake investors' confidence in the Chinese real estate sector, opined S&P Global Ratings. 
This may lead to reduced financing channels for speculative-grade projects as well.  The ratings agency did not expect the central government to lend a helping hand directly to EVERGRANDE unless it would be forced to do so in case multiple key developers are shutting down amid a deeper shock.

Macao SAR held the first special consultation session for casino companies and junket operators on gaming law revision yesterday, reported Macao Daily. 
The top-six casino firms generally agreed to pursuing a comprehensive legal system and anticipated more information and details. The prevailing gaming law system has been in place for two decades, said Ku Mei Leng, Chief of Macao's Office of the Secretary for Economy and Finance. Thus, the Macao SAR government found it necessary to keep up with the times by optimizing and making up for deficiency of the existing law. The government will listen to sector opinions with an open mind during the consultation period.

SHK PPT (00016.HK) expressed, in light of recent media reports regarding the Chinese government exerting pressure on Hong Kong real estate developers, that, until now, the company has received no pressure from the central government and that the company is utterly opposed to market monopoly. SHK PPT remarked that, the company has been fulfilling promises in terms of environmental, social and corporate governance (ESG), while actively cooperating with the HKSAR government by participating in the Land Sharing Pilot Scheme and building large-scale transitional homes.

Didi Chuxing issued a statement on its official Weibo account, expressing that the company is actively cooperating with the cyber security review. The statement further clarified that certain rumors suggesting changes in Didi's management previously reported by Reuters are false. Didi Chuxing strongly condemns certain media which has repeatedly spread malicious rumors about the company.

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