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HSI -230pts (-0.8%) 27,259 HSCEI -94pts (-0.9%) 9,865 T/O HK$139.53bn (-2.3% DoD)
Markets opened higher but trending lower. Strong earnings from UBS but warning of a quieter end of year. Bitcoin dropping below $30k, Tech weak but F&B seeing interest. Earnings in Focus
Alfa Laval strong after beating profit estimates.
Electrolux weak after issuing a supply chain warning.
Current Account May €4.3B vs €30.6B Apr revised (F/cast was €19.5bB
PPI Jun +1.3% MoM vs +1.5% May (F/cast was +1%)
PPI Jun +8.5% YoY vs +7.2% May (F/cast was +8.3%)
Opened in Asian time Dow +80pts, S&P +0.3% and NDX +0.4% but rallied as Europe came in now Dow +216pts S&P and NDX +0.5%
Ahead Housing Starts, Building Permits, Redbook, After market API Crude Oil Stock Change.
CHINA CSI 300 closed -4.5pts (-0.1%) @ 5,109
CSI 300 opened lower at 5,080 but rallied 5,114 in early trades, before selling down to 5,067 before boucing into lunch. PM the market traded sideways for the first 50 minutes before working higher but hit resistance at yesterday’s closing price. Sentiment weak over global covid cases surges, Evergrande situation and international relations over the computer hacking accusations.
Leaders were military, lithium battery, semiconductor sectors, MiniLED, winemaking, hydrogen energy, and rare earth sectors.
Laggards were online tourism, steel, port shipping, agricultural planting, and network security sectors
Foreign investors bought net 3.1b yuan of Chinese shares via stock connect.
Some reports of the power grid facing shortages which could impact industry as we enter the summer season.
Shanghai Composite -2pts (-0.07%) @ 3,537
Shenzhen Composite +19pts (+0.1%) @ 14,993
ChiNext Composite Index +23pts (+0.6%) @ 3,578
Loan Rates left unchanged as many had expected.
1yr @ 3.85% and the 5yr @ 4.65%China's National Health Commission reported 65 additional COVID-19 cases yesterday (19th), with 57 of them being imported cases and 8 of them being local cases (all located in Yunnan).
HSI Pre market opened @ 27,396 -95pts vs -285pts ADR’s. Initially tested Monday’s close but weakness after about 30 minutes; first to 27,300 then a small bounce to 27,450 before it sold down to 27,150 running into lunch. PM saw an brief initial uptick but then worked slowly better to 27,320 around 3:20pm before easing lower into the close. Evergrande and related stocks remained weak. Broad weakness but E-Commerce and Banks leading the declines. Oil and Healthcare weak.
HONG KONG DATA
HK reported no new local covid cases and 7 imported cases.
Unemployment Rate Jun 5.5% vs 6% May (F/cast was 6%)
Short Selling Tuesday 17.% vs 17.4% Monday
Top Shorts Country Garden (2007) 57%, Hengan (1044) 53%, Ali Health (241) 52%, AIA (1299) 45%, Bud Apac (1876) 42%, Ping An (2318) 40%, CLP(2) 40%, Haidilao (6862) 38%, ICBC (1398) 32%, China Life (2628) 29%, Wuxi Bio (2269) 28%, Sunny Optical (2382) 27%, Power Assets (6) 26%, Sino Bippharm (1177) 26%, CK Asset (1113) 25%, Bank of China (3988) 25%.
AFTER MARKET NEWS
SUNAC (01918.HK) announced that the company repurchased 6.8 million shares of the company on the Stock Exchange today (20th) at $22.1-22.6 per share, involving almost $153 million.
SRE GROUP (01207.HK) announced that the Company is in discussions with potential investor(s) in relation to possible subscription of new shares to be allotted and issued by the Company. No legally binding agreement or memorandum of understanding has been entered into between the Company and the potential investor(s) in respect of the Possible Subscription. The discussions are still in progress and the Possible Subscription may or may not proceed.
NWS HOLDINGS (00659.HK) is expected to record profit attributable to Shareholders of not less than HK$1 billion for the financial year ended 30 June 2021 as compared to HK$253 million for FY2020, representing a year-on-year increase by not less than 295%.
MIJI INTL HLDGS (01715.HK) issued a profit warning, announcing that the group expects to record a net loss after tax of approximately RMB14.8 million for the six months ended 30 June 2021, as compared with a net loss after tax of approximately RMB12.3 million for the corresponding period in 2020.
Chinese robot company "Keyi Tech" recently obtained the Series B round financing worth tens of millions of USD with the lead investors being XIAOMI-W (01810.HK) and Shunwei Capital, attracting also investment from the existing shareholders like Source Code Capital and BlueRun Ventures. Keyi Tech's founder and CEO Yang Jianbo revealed that the financing proceeds will be utilized in building developer ecosystem and product development.
BYD COMPANY (01211.HK) announced that the 100,000th unit of the BYD Han vehicle has been rolled off, setting the fastest mid-size and large sedan production record among Chinese brands.
JOY CITY PPT (00207.HK) announced that for the six months ended 30 June 2021, the aggregate contracted sales of the company amounted to approximately RMB12.216 billion, up 78.57% YoY; with an aggregate contracted sales area of approximately 311,800 square meters, up 54.06%.
CHINA TELECOM (00728.HK) announced that the number of mobile subscribers reached 362 million in June, with a net increase of 1.82 million subscribers for the month. The number of 5G package subscribers hit 131 million, representing a net increase of 6.66 million subscribers for the month.
CHINA UNICOM (00762.HK) announced the operational statistics for the month of June 2021, with the aggregate number of mobile billing subscribers amounting to over 310 million, reflecting a net addition of 729,000 units MoM. The aggregate number of 5G package subscribers, on the other hand, amounted to 113 million in June, reflecting a net addition of 7.236 million units, lower than that of 7.529 million units in May. For 1H21, the cumulative net addition of 5G package subscribers amounted to 42.5 million units.
A spokesman for the HKSAR Government said that given the recent surge of confirmed cases in Singapore, the condition for launching the Hong Kong-Singapore Air Travel Bubble could not be met for the time being. Both sides agreed that a review of the way forward could be conducted in late August, taking into account the effectiveness of the enhanced infection control measures implemented by Singapore and the global situation at that time.
Hong Kong, Macau and Mainland China have been in close contacts for the two cities' convenient customs clearance, Radio Macau citing Ao Ieong U, Macau's Secretary for Social Affairs and Culture.
It is Macau's current plan to invite National Health Commission experts to inspect the city's fight against the pandemic and provide opinions on the Hong Kong-Macau border reopening, she added. However, there is no concrete timetable for the visit so far.
EVERGRANDE (03333.HK) has arranged to wire funds into the bond repayment account in advance today (20th), in order to repay the interests totaling around USD352 million, which were generated from the four batches of USD bonds issued by the company itself and its subsidiaries, reported Chinese media.
*COMMODITIES WEAK on speculation that demand growth may stall due the covid resurgence. CNOOC (883 HK -1.6%) CH OILFIELD (2883 HK -2.4%) after WTI tumbled 7% on virus concerns and the OPEC+ deal to boost supply into 2022.
MMG (1208 HK -1.8%) expects to record interim profit in the 1H of approx US$400m vs a net loss same period a year ago.
CH COAL (1898 HK -2.2%) June coal sales +1.3% YoY to 23.5m, 1H coal sales +28% YoY to 148.25m tons.
Reports though that the Power Grid is facing shortages
ANGANG (347 HK -4%) CHALCO (2600 HK -5%).
*FINANCIAL WEAK. China's Loan Prime Rate left unchanged for 15 months, as most expected. CCB (939 HK -1.2%) BOC (3988 HK -0.7%) CMB (3968 HK -1.3%).
INSURERS weak, CH LIFE (2628 HK -1.3%) PING AN (2318 HK -1.2%) NCI (1336 HK -2.4%).
*E-COMMERCE WEAK as regulatory clampdown continue to hit tech firms. MEITUAN (3690 HK -0.5%) ALIBABA (9988 HK -0.2%) KUAISHOU (1024 HK -2.8%).
TENCENT (700 HK -1.5%) is taking a majority stake in Stunlock Studios, game development company based in Sweden.
GAMER DEVELOPERS VERY WEAK amid growth concerns; HOMELAND (3798 HK -21%) ZENGAME (2660 HK -5.8%) FIRE ROCK (1909 HK -3.7%).
*CHINA PROPERTY WEAK as CH EVERGRANDE's (3333 HK -10%) liquidity crisis, stock fell as much as 16% following the news that some Chinese cities halted the developer's project sales on suspicion of misappropriation of funds. Losses were narrowed in the afternoon on the news that Later in the afternoon, news said sales of the projects were allowed to resume and that payments had been made but it remains fragile.
SUNAC (1918 HK -6.3%) SHIMAO (813 HK -3.8%) CIFI (884 HK -6%).
*BREWERS FIRM CR BEER (291 HK +2%) expects profit for the six months ended June 30 to increase at least 100% from a year earlier. The growth was attributed mainly to after-tax gain of about 1.3b yuan from land transfer along with increased gross profit from higher sales volume and average selling prices. TSINGTAO (168 HK +0.8%) BUD (1876 HK +0.2%).
Market opened lower following the US sell off and news Victoria extended its lockdown but worked better to 7,286 around lunchtime. Tested around there for a while before drifting lower to 7,235 before working better to close -34pts (-0.5%) @ 7,252
Oil remained weak but Oil Search +6.3% after it confirmed it had received a merger offer from Santos. Miners weak, Financials mixed.
RBA minutes reveal flexibility +VE
Latest covid surge -VE for sentiment; tokyo reported 1,387 cases with some related to the Olympic. Travel related names weak; JR West -VE for a 7th day. Canon +VE after raising FY forecasts.
Nikkei opened much lower but with better than expected inflation data and following Monday’s heavy selling worked better through the morning to 27,564 at lunch. PM opened lower traded sideways but sold down at the end to close -265pts (-1%) @ 27,388.
Topix traded in a similar pattern; rose to 1,899 at lunch. But closed -18pts (-1%) @ 1,889
KDCA reported 1,252 new covid cases (+26 DoD)
Kospi opened lower (3,223) and trended higher to 3,235 around 10:45am which was reistance. Then sold down to 3,228 and then traded sideways but sold down around noon to 3,214 before working better into the close -11pts (-0.4%) @ 3,233.
Kosdaq traded in a similar pattern; resistance at 1,049; the low was 1,036 and closed -6pts (-0.6%) @ 1,044
Taiex opened lower and trended lower through the day to 17,500 before trending higher; closed -261pts (-1.5%) @ 17,528. Shipping leading the declines on concerns over the global recovery. Finance next weakest then Electronics and then semiconductors. T/O was US$16.74bn vs US$16.69bn showing that there was little panic.
Northbound RMB 50,519m Sell 24,457m vs 26,062m Buy
Southbound HK$ 18,084m Sell 11,218m vs 6,866m Buy
Northbound RMB 59,541m Sell 29,041m vs 30,501m Buy
Southbound HK$ 17,128m Sell 8,735m vs 8,393m Buy
TENCENT (00700.HK) Short selling Ratio 5.440% -1.3%
CCB (00939.HK) Short selling Ratio 19.260% -1.3%
PING AN (02318.HK) Short selling Ratio 39.951% -1.2%
MEITUAN (03690.HK) Short selling Ratio 15.116% -0.4%
AIA (01299.HK) Short selling Ratio 44.581% -0.2%
HKEX (00388.HK) Short selling Ratio 20.779% -0.2%
BABA (09988.HK) Short sellingRatio 20.259% +0.1%
HSI & HSCEI Constituents on Move:
EVERGRANDE (03333.HK) Short selling Ratio 11.257% -10.2%
ALI HEALTH (00241.HK) Short selling Ratio 52.371% -7.4%
SUNAC (01918.HK) -6.3%
SHIMAO GROUP (00813.HK) Short selling Ratio 33.147% -3.8%
CG SERVICES (06098.HK) -3.7%
PETROCHINA (00857.HK) Short selling Ratio 20.832% -3.6%
HAIDILAO (06862.HK) Short selling Ratio 37.903% +3.5%
GEELY AUTO (00175.HK) -3.4%
GALAXY ENT (00027.HK) -3.2%
CHINA FEIHE (06186.HK) +3.1%
HSMI & HSSI Constituents on Move:
FOSUN TOURISM (01992.HK) Short selling Ratio 11.785% closed at $10.54, down 10.8%
MARKET HOURS NEWS.
KPMG published the "Chinese Banking Industry Research Report 2021", illustrating that the banking industry in China has shown tendency of continuous recovery and steady development amid the impacts from the global pandemic. In particular, the report added that, the Chinese banking industry accelerated the transition towards digitalization and concentrated on developing fintech capabilities and green finance, subsequently providing new opportunities for banking and financial institutions.
BABA-SW (09988.HK)'s co-founder Joe Tsai splurged approximately USD157 million to purchase two full-floor condo apartments in Central Park, Manhattan, which is expected to rank as the third most expensive apartment transaction deal in U.S. history, reported foreign media, citing people familiar with the matter.
LINKLOGIS-W (09959.HK) announced that at the request of Linklogis Inc., trading in the shares of the company on The Stock Exchange of Hong Kong Limited has been halted with effect from 1pm on July 20, 2021, pending the release of a clarification announcement in relation to the inside information of the company.
Housing authorities in Shaoyang, Hunan decided to unfreeze the pre-sales permits, online contract reports and pre-sale funds under projects of Evergrande Palace and Evergrande Future City due to active rectification. EVERGRANDE (03333.HK) narrowed its slide after midday.
The number of visitor arrivals in Macau in June hiked 22.4x YoY to 528,500, down 39% compared to that in May, mainly as a result of the tightened pandemic control measures enforced in Guangdong province and Macau in the beginning of the month, according to Macau's Statistics and Census Service (DSEC). The same-day visitor arrivals and overnight visitor arrivals recorded a decrease of 20.1% and 54.6% respectively.
The People's Government Office of the Tibet Autonomous Region expressed yesterday (19th) online in response to questions regarding the application for certificates of permitted birth under the new three-child regulation, that the National Health Commission has confirmed the three-child policy has been in effect after 31 May 2021.
The hotly anticipated ZEEKR, an NEV brand under GEELY AUTO (00175.HK), has hit impasse recently. A Chinese media reported on ZEEKR 001 owners' feedback that the car model added in Via as the supplier of electric drive and battery. ZEEKR official clarified that ZEEKR 001's electric drive has two suppliers - Japan's Nidec and China's Via, and the battery has CATL (300750.SZ) and Via. While Nidec's electric drive supply can satisfy the existing order delivery with sufficient capacity, the company is also confident of Via's electric drive. Hence, ZEEKR 001 will allow users to pick their own electric drives from the two brands, and promise to grant lifetime free warranty rights to buyers for the electric drives. For the choice of battery, users can only "open blind boxes" for the time being. The two specifications - 86 degree and 100 degree - are from Via and CATL respectively. The company said a more flexible supply plan will be adopted in future, contingent on the supply capacity of its partners.
U.S. Treasury Secretary Janet Yellen stressed the need to take prompt actions to ensure an appropriate regulatory framework for digital assets as the Treasury announced that heads of financial regulatory institutions are scheduled to meet to discuss stablecoins. Bitcoin plunged below the key support of USD30,000; last posted USD29,660.74, down 6%.
BIDU-SW (09888.HK) has commenced trial operation of its Apollo Robotaxi service in Changsha, Cangzhou, Beijing and Guangzhou after launching an unmanned business trial run in Beijing's Shougang Park in May. Additionally, the group will deploy over 3,000 Apollo Robotaxi vehicles and expand the service to 30 cities next three years, aiming to serve over 3 million users.
The People's Bank of China supports the early and pilot implementation of Shanghai's free and cross-border Renminbi use in accordance with the principles of "anti-money laundering, counter-terrorist financing and anti-tax avoidance", said Wang Xin, Director-General of PBoC's Research Bureau.
Kakao Pay, South Korea's biggest online payment service provider held as to 45% by Ant Group, was asked by local watchdog to revise its prospectus, reported Bloomberg. This is the second time for South Korean regulators to intervene in an initial public offering in recent weeks, following Krafton.
At a seminar, HKEX (00388.HK) CEO Nicolas Aguzin spoke of his bafflement over the Stock Exchange's market halt when the Black Rainstorm Warning was in place, reported Bloomberg. While Aguzin gave no instructions for changes, his comment indicates the global financial market's further pursuit to back out of outdated rules as remote working gains popularity amid the pandemic. With people getting used to working from home, HKEX will focus on whether it shall explore how to continue market operation using relevant experience, Aguzin opined.
Short-seller Valiant Varriors published a report, blasting LINKLOGIS-W (09959.HK) exposing the company's overstatement of revenues, covering up of tens of billions in bridge loans and related-party transactions through subsidiaries, massive financial risk and blatant violation of Notice 205 of China Banking and Insurance Regulatory Commission. The report further illustrated that LINKLOGIS-W overly relied on real estate business and exaggerated its technology capabilities. LINKLOGIS-W last posted $11.44, down 8.6%, on a turnover of $70.90 million.
Digital infrastructure investment company DigitalBridge Group Inc. is currently in discussion with PCCW (00008.HK) in respect of a potential acquisition of the latter's data center asset, which could be valued at more than USD600 million, reported Bloomberg News, citing sources. The two parties are working out the details of the agreement and might announce the deal within this month at the earliest, the report added.
TENCENT (00700.HK)'s TiMi Studios has opened a new triple-A game studio in Montreal, Canada, being its third game studio in North America, reported foreign media. TiMi Montreal will decide its own creative destiny with plans to evolve into a sizable team by end-2021.
The People's Bank of China announced that the digital yuan had been applied to more than 1.32 million scenarios as of 30 June 2021, covering utility payments, catering services, transportation, shopping, government services and other fields. Over 20.87 million personal wallets and some 3.51 million public wallets had been established, with deals exceeding 70.75 million and transaction value approximating RMB34.5 billion.35,000 Hong Kong residents received their first shots of Covid vaccine yesterday, versus over 40,000 registrations, as Chief Executive Carrie Lam told reporters ahead of the ExCo meeting. If such trend continues, the CE forecast the vaccination rate to hit 70% or above by the end of September.
CHINA MOBILE (00941.HK) announced the operating data in June 2021, with the total number of mobile customers amounting to 945.5 million, reflecting a net increase MoM of 2.722 million units. The total number of 5G package customers in June was reported to be 250 million, reflecting a net increase MoM of 28.745 million units, surpassing the net increase of 16.651 million units in May.
BYD COMPANY (01211.HK) announced that its British bus manufacturer partner Alexander Dennis Limited (ADL) and National Transport Authority (NTA) of Ireland had entered into a strategic cooperation framework agreement. Under the agreement, ADL will provide NTA with 200 12-meter BYD ADL Enviro200EV pure electric single-deck buses in the next five years. The first batch of 45 buses will be delivered starting from 2022.
PRE MARKET HOURS NEWS
EVERGRANDE (03333.HK) plans to spin off its Evergrande Spring bottled water business for Hong Kong listing next year to raise several hundred million US dollars, Bloomberg citing insiders. The Group is in early talks with investment banks on the IPO. EVERGRANDE Chairman Hui Ka Yan also disclosed FCB Group's plan to have spin-off listing at the year end, or not, early next year.
In June, China's production and sales volume of commercial vehicles reached 388,000 and 446,000 units, down 26.3% and 16.8% yearly, according to the data of China Association of Automobile Manufacturers (CAAM).
China's home service platform Daojia is holding back its U.S. listing plan as Beijing steps up scrutiny on offshore listings and cybersecurity, Bloomberg citing insiders.
The Ministry of Housing and Urban-Rural Development (MOHURD) of Shaoyang city in Hunan province has temporarily halted the pre-sales permits, online contract recording and grant of the pre-sales funds for the two projects of EVERGRANDE from today until 13 October. EVERGRANDE is accused of storing and using additional pre-sales fund without informing the authorities and intentionally evading oversight.
VINDA INT'L (03331.HK) announced that on 19 July, LI Jielin, the Chief Executive Officer and an Executive Director of the Company, made on-market purchases on the Stock Exchange of an aggregate of 100,000 shares of the Company at an average price of HK$19.874 per Share, involving HK$1.9874 million.
YanAn Bicon (002411.SZ) announced that a holding subsidiary of the company, Jiujiujiu Technology, had sealed a long-term cooperation agreement with BYD Supply Chain. Both sides agreed that Jiujiujiu Technology would supply lithium hexafluorophosphate to BYD Supply Chain for long term. Jiujiujiu Technology pledged to supply no less than 1,150 tons from July to December 2021; no less than 3,360 tons in 2022; no less than 3,360 tons in 2023.
SMIC (00981.HK) (688981.SH) announced that on 19 July, the Board had considered and passed the Proposal in relation to the Grant of Restricted Shares to the Participants under the First Grant in writing, thus confirming the grant of 67.5352 million restricted shares to 3,944 participants at RMB20 each on the same day. Accordingly, SMIC Co-CEO Liang Mong Song and three other management staff were each awarded 400,000 incentive shares.
TONGDA GROUP (00698.HK) announced that it proposed rights issue on the basis of one rights share for every two existing shares held on record date. It would issue 3.239 billion shares at an offer price of $0.232, representing a discount of 49.01% to the closing price as quoted on the last trading day (19th). It was estimated that the company would raise $737 million of net proceeds.
MECOM POWER (01183.HK) is expected to record an increase of over 300% in the net profit for the six months ended 30 June 2021 as compared to the net profit for the six months ended 30 June 2020.
HKTV (01137.HK) announced that the change of the company's name took effect from 13 July 2021. The stock short name of the Company will be changed from “HKTV” to “HK TECH VENTURE” with effect from 22 July 2021.
SHENZHOU INTL (02313.HK) announced that, to cooperate with the social distancing measures imposed by the Vietnamese government, started from today, the production capacity at the Group’s fabrics production base in Tay Ninh Province, Vietnam will operate at approximately 30% of its normal production capacity and the Group’s garment factory in Tay Ninh Province, Vietnam will suspend operations.
EVERG SERVICES (06666.HK) issued a positive profit alert. The profit attributable to the Company’s shareholders for the six months ended 30 June 2021 is expected to increase substantially by approximately 70% as compared with the same period last year.
VINDA INT'L (03331.HK) announced that on 19 July, YU Yi Fang, the Vice Chairman of the Company, made on-market purchases on the Stock Exchange of an aggregate of 100,000 shares of the Company at an average price of HK$20.6 per Share.
CHINA RES BEER (00291.HK)’s profit attributable to the shareholders of the Company for the six months ended 30 June 2021 is expected to increase by not less than 100% as compared with the corresponding period in 2020.