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HSI +499pts (+1.8%) 27,760 HSCEI +176pts (+1.8%) 10,007 T/O HK$137.15bn (-12.6% DoD may reflect Japan being closed)
Markets opened higher and drifting higher ahead of the ECB decision; with earnings in focus as Unilever, Valeo, Publicis, ABB, Roche and Centrica and Mulberry Group reported, among others. Travel/Leisure leading, Household Goods the laggard.
EQT surged after a strong first-half earnings report.
Unilever weak after it cut its annual operating margin forecast citing higher commodity prices.
Temenos weak after issuing a cautious trading update.
Opened flat in Asia Dow +27pts, S&P and NDX slight +VE. and have risen slightly Dow +73pts, S&P +0.2%, NDX +0.1%. Key data ahead Initial claims and Existing Home Sales.
CHINA CSI 300 closed +8pts (+0.2%) @ 5,152
CSI 300 opened higher, and after an initial dip spiked to 5,170 but then trended lower over the next two hours to 5,140; which it tested acouple of times before bouncing into lunch @ 5,152. PM traded sideways in a tight range 5,142/156.
Sentiment weak after Henan flooding with concerns over industrial production and food prices as crops and swine herds being impacted.
FT has run a story about cash strapped SOE’s -VE and default concerns over Evergrande ripple through the market.
Beijing gives a briefing denying that covid escaped from a lab; comes as WHO want to revist Wuhan. Also gives ‘evidence’ of US cyber attacks.
Leader were Financials (inc Property), Resources and Materials firms
Laggard was healthcare; after recent gains and Consumer names.
Foreigner net buying A-shares via Stock Connect for 4th consecutive
Shanghai Composite +12pts (+0.3%) @ 3,575
Shenzhen Composite +50pts (+0.3%) @ 15,262
ChiNext Composite Index +11pts (+0.3%) @ 3,689
China's National Health Commission reported 12 local COVID-19 confirmed cases yesterday, with 11 of them being recorded in Jiangsu and the remaining one in Yunnan.
HSI Pre market opened @ 27,464 +240pts vs +309pts ADR’s. Market rallied to 27,690 in the first 15 minutes (signs of a general short squeeze) and then eased back to find support at 27,600 before working higher, resistance at 27,740. Closed at lunch +480pts @ 27,705. PM market traded sideways in a tight range felt like no one wanted to chase as the issues in China remain.
E-Commerce strong rebounding after the news of a clamp down on inappropriate on line content. Evergrande (and associates) bounced saying dispute with local Chinese bank resolved.
Police arrest 5 people (leaders of the General Union of HK speech Therapists) they are accused of conspiring to incite hatred against govt.
HONG KONG DATA
HK reported no new local untraceable covid cases and 1 imported cases.
Jun +0.7% YoY vs 1% May (F/cast was 1.1%)
Short Selling Thursday 14% vs 12.7% Wednesday
Top Shorts , Hengan (1044) 55%, Bud Apac (1876) 52%, Country Garden (2007) 47%, Mengniu Dairy (2319) 40%, Ping An (2318) 34%, Bank of China (3988) 26%, Longfor (960) 26%, ICBC (1398) 26%.
AFTER MARKET NEWS
DIDI Bloomberg Reports the Cyberspace Adminsitration of China (CAC) is considering serious andmaybe unprecedented penalties after the company went ahead with its IPO despite pushback. Saying they consider it a challenge to Beijing’s authority. I would think likely as the CAC is looking to make its mark. -VE for the sector.
The Development Bureau (DEVB) today (July 22) announced the receipt of the first application under the Land Sharing Pilot Scheme (LSPS). The application site, covering about 3.2 hectares involving two private lots and adjoining government land, is located at Lo Fai Road and Ting Kok Road, Tai Po. The land involved is currently zoned "Green Belt" and "Road". The application involves about 1,149 public housing/Starter Homes (SH) (exact choice of subsidised housing type to be determined by the Government) and 493 private housing flats with supporting facilities, with a total gross floor area of about 85,000 square metres. The applicant is Kam Luk Investment Limited. Its parent company is Nan Fung Development Limited.
CATHAY PAC AIR (00293.HK) said it is negotiating with the Hong Kong government for removal of most quarantine restrictions on its flight crews since majority crew members have been inoculated, South China Morning Post reported. As at 19th, 97% of pilots, 84% of cabin crew and 79% of non-flight staff based in Hong Kong have been vaccinated.
India's smartphone shipments receded 13% QoQ to 32.4 million units for the second quarter of 2021, reported Canalys. By brands, XIAOMI-W (01810.HK) remained the local market leader with 9.5 million units in shipment and a 29% market share.
BUD APAC (01876.HK) announced that with effect from 22 July 2021, Carlos Brito has stepped down as co-chair of the board, a non-executive director, chair of the nomination committee and a member of the remuneration committee of the company; Michel Dimitrios Doukeris has been appointed as co-chair of the board, a non-executive director, chair of the nomination committee and a member of the remuneration committee of the company to succeed Mr. Brito.
A survey published by the Securities and Futures Commission (SFC) found that the asset and wealth management business in Hong Kong recorded a 21% year-on-year increase in assets under management (AUM) to HK$34.93 trillion (US$451 million) as at the end of 2020.
The AUM of the asset management and fund advisory business conducted by licensed corporations and registered institutions increased 20% to HK$24.04 trillion and the AUM of the private banking and private wealth management business grew 25% to HK$11.32 trillion.
Aberdeen Standard outlook Robust momentum of the energy prices, expiring subsidies and price pressures induced by the economic reboot have all contributed to the rising global inflation, said Jeremy Lawson, Chief Economist and Head of the Aberdeen Standard Investments Research Institute. Lawson, however, remarked that the spiking inflation is merely the result of a temporary base effect and is predicted to subside in a few months. Lawson also forecast the U.S. Federal Reserve to begin to shrink the scale of its asset-buying program from the beginning of next year and projected an interest rate hike in 2023. The Asian market sentiment was upset by epidemic flare-ups, social distancing restrictions, significant regulatory pressure from China, tightening of U.S. policies, coupled with concerns on inflation
and rising interest rates, opined Pruksa Iamthongthong, Senior Investment Director at Aberdeen Standard Investments Asia. That said, the Director remained enthusiastic about the market outlook within the year, forecasting a strong growth for Asian corporate earnings.
Although China's regulator is unrolling a slew of measures to sour scrutiny over mainland dotcoms, Iamthongthong viewed such move aims to facilitate the rapid innovative development of the industry in recent years. She was convinced that the regulator could strike a balance between promotion of innovation and realization of regulatory targets.
WUXI APPTEC (02359.HK) (603259.SH) announced the proposed reduction of not more than 330,900 shares (around 0.0112% of the Company's total share capital) by some directors and senior management members by way of centralized bidding.
SHK PPT (00016.HK) has obtained the pre-sale consent for Wetland Seasons Bay, its phase 1 residential project near Hong Kong Wetland Park, said Sun Hung Kai Real Estate Agency General Manager Allen Woo at a press conference. He expected the sales brochure, price list and show flats to be ready in two weeks, which may be uploaded and available in early August.
The Macao SAR Government is focusing on the Legislative Council election slated for 12 September, set to launch a public consultation on proposed gaming law amendments afterwards, BofA Securities citing SANDS CHINA LTD (01928.HK)'s management. The management called for considering extending the gambling licenses before they expire in 2022, adding such extension is an option should license renewal fail to proceed as scheduled.
The global economy is forecast to continue to recover over 2H as the vaccination rate for COVID-19 increased, with the global GDP growth for this year estimated to be at 5.9%, and 4.5% for next year, said Keiko Kondo, Deputy Head of Multi-Asset Investments, Asia, Schroders. Schroders holds an optimistic view for the equity market, in particular the U.S. stock market, which is predicted to be fueled by the earnings announcements of the corporates. It is estimated that the profit growth of US stock companies will reach 40%.
*COMMODITIES STRONG after Oil jumped as the EIA report showed declining fuel and distillate stockpiles during the U.S. summer driving season. China supplied about 22m barrels of oil from its strategic reserve to its largest refiners earlier this month in a bid to quell a price rally, news report.
SINOPEC (386 HK +3.6%) said the production of oil and gas reached 235m BOE in 1H21, up 4.2% yearly; and that of crude oil 138m BOE, down 1.5% yearly. CNOOC (883 HK +3.4%) CH OILFIELD (2883 HK +1.8%).
BASE METALS STRONG as demand continues to rise, despite China increasing the size of state base metals sales to curb rising prices. The govt will sell 30,000 tons of copper, 90,000 tons of aluminum, and 50,000 tons of zinc on July 29, 50% to 80% higher than its earlier auction in July. ANGANG (347 HK +5.3%) MAANSHAN (323 HK +7.1%) CHALCO (2600 HK +6.6%).
*HK BANKS FIRM on the news that HSBC's (5 HK +2.2%) board of directors will meet on August 2 to consider payment of an interim dividend on the ordinary shares for the first half of the year. Earlier this month, the Bank of England scrapped its remaining pandemic curbs on dividends paid by top UK lenders, saying its stress tests showed they could cope with the fallout from Covid on the economy. HANG SENG (11 HK +1.5%) STAN CHART (2888 HK +2.3%).
*CHINA PROPERTY STRONG, led by CH EVERGRANDE (3333 HK +7.8%) who said it had resolved its legal disputes with China Guangfa Bank and that the two sides would deepen business cooperation, easing investor concerns that sparked a 3-day sell-off. It also said it’s exploring the prospect of listing its tourism business.
SUNAC CHINA (1918 HK +4.5%) paid HK$22.85-HK$23 apiece to buy back 3.3m shares on July 21st.
*AUTOS STRONG led higher by EV makers, after market analysts raised forecast for EV sales for the next 20 years, citing the European Union’s proposal to end the sale of gas-driven or hybrid cars and only allow the sale of zero emissions passenger vehicles from 2035. EVERGRANDE EV (708 HK +20%) BYD (1211 HK +2.4%).
GEELY (175 HK +2.4%) announced officially its premium CMA series named "Star", marking the company's venture into the high-end market with the aim to popularize high-quality premium products.
*MACAU FIRM after SANDS CHINA (1928 HK +3%) as LV SANDS reported 2Q results that trailed estimates, concerns on continued travel restrictions in Macau and Singapore, but said on a conference call with investors that they believe business in Macau would be stronger in 2H of this year. WYNN (1128 HK +1.6%) SJM (880 HK +2.6%) MGM (2282 HK +3.4%) GALAXY (27 HK +4.9%).
Market opened higher and tested 7,380 (a July high) in early trades but failed to break above, eased to 7,535 level mid morning before working higher to retest 7,380 around 2pm and then traded sideways at that level and closed on the low side @ +78pts (+1.1%) @ 7,386.40 a new high.
ZIP weak despite good results, hearing being heavily shorted; Afterpay weak. BHP +VE after striking a deal with Tesla to supply nickel.
Covid remains a concern with more cases being reported.
Market closed for Marine Day, closed Friday for Health Day and re-opens Monday.
Tokyo reported 1,979 COVID-19 confirmed cases today (22nd), setting a new high for the number of confirmed cases in a single day since January this year. The average daily number of confirmed case for the past seven days has hiked to approximately 1,373. -VE
KDCA reported 1,842 new covid cases; a new high but includes 270 cases on the Korean Naval vessel. Large buying of Kospi futures, looks to be short covering. Earnings in focus; Naver numbers inline. Tech, Financials and Auto leading.
Kospi opened higher initially testing 3,240 and then traded sideways, ticked higher around 10am after the Financial Minister announced support measures for 3 sectors, which the market liked and ticked higher to test 3,250. Failed to break above but then traded sideways around that level and closed +34pts (+1.1%) @ 3,250
Kosdaq traded in a similar pattern; tested to 1,052; then traded arond 1,050 for the rest of the day to close +8pts (+0.8%) @ 1,050
Taiex opened higher and worked higher to 17,650 in the first hour but then eased back to 17,535 level and traded sideways until noon then there was a short rally before the market sold down to close +114pts (+0.7%) @ 17,572. T/O US$20.87bn vs US$21.84bn Wednesday
Day traders active in tech laggards and still seeing some profit taking in shippers after their recent rally.
Typhoon In-Fa turned more northly and likely to hit China Sunday around Jiaojiang. CECC reported 33 new covid cases (3 imported)
Unemployment Rate Jun 4.76% vs 4.15% May (F/cast was 4%)
Northbound RMB 59,802m Sell 29,103m vs 30,700m Buy
Southbound HK$ 16,591m Sell 9,030m vs 7,561m Buy
Northbound RMB 73,271m Sell 34,471m vs 38,800m Buy
Southbound HK$ 18,109m Sell 9,454m vs 8,655m Buy
MEITUAN (03690.HK) Short selling Ratio 10.790% closed +3.6%
AIA (01299.HK) Short selling Ratio 19.278% closed +2.5%
BABA (09988.HK) Short selling Ratio 22.605% closed +2.2%
PING AN (02318.HK) Short selling Ratio 33.995% closed +2%
TENCENT (00700.HK) Short selling Ratio 2.795% closed +1.1%
HKEX (00388.HK) Short selling Ratio 23.470% closed +0.9%
HSI & HSCEI Constituents on Move:
EVERGRANDE (03333.HK) Short selling Ratio 6.387% closed +7.9%
KUAISHOU-W (01024.HK) Short selling Ratio 22.734% closed +6.9%
XINYI SOLAR (00968.HK) Short selling Ratio 7.324% closed +5.7%
SMIC (00981.HK) Short selling Ratio 8.370% closed +5.4%
TECHTRONIC (00669.HK) Short selling Ratio 8.397% closed +5.2%
CPIC (02601.HK) Short selling Ratio 9.071% closed +5.1%
GALAXY ENT (00027.HK) Short selling Ratio 13.760% closed +4.9%
SUNAC (01918.HK) Short selling Ratio 12.272% closed +4.6%
LONGFOR (00960.HK) Short selling Ratio 26.323% closed +4.4%
COUNTRY GARDEN (02007.HK) Short selling Ratio 46.968% closed +3.8%
EVERG SERVICES (06666.HK) Short selling Ratio 3.334% closed +3.7%
PETROCHINA (00857.HK) Short selling Ratio 10.015% closed +3.7%
SINOPEC CORP (00386.HK) Short selling Ratio 16.670% closed +3.7%
CNOOC (00883.HK) Short selling Ratio 7.298% closed +3.4%
SHIMAO GROUP (00813.HK) Short selling Ratio 8.965% closed +3.4%
JD (09618.HK) Short selling Ratio 23.401% closed +3.1%
CHINA RES LAND (01109.HK) Short selling Ratio 6.952% closed +3.1%
SANDS CHINA LTD (01928.HK) Short selling Ratio 18.900% closed +3.1%
HSMI & HSSI Constituents on Move:
SCHOLAR EDU (01769.HK) +26%
WEIMOB INC (02013.HK) +17.5%
KOOLEARN (01797.HK) +13.2%
MMG (01208.HK) +10.9%
IDREAMSKY (01119.HK) +10.4%, hitting new high
CMGE (00302.HK) +5%, hitting new high
CHINA RES POWER (00836.HK) +1.4%, hitting new high
MARKET HOURS NEWS.
Apple's CEO Tim Cook expressed on Weibo sympathy for the affected people and rescue personnel across the Henan province and that Apple will donate fund to aid the rescue and rebuilding works in the affected areas.
China's new vehicle sales were close to 12.9 million units in the first half of 2021, up 25.6% YoY, said Zhu Xiaoliang, MOC's Head of the Department of Market Operation and Consumption Promotion.
Overall, he anticipated a positive auto sales growth this year, turning around from the volume slide over the past three years.
EVERGRANDE (03333.HK) is studying the possibility of floating its tourism business to raise fund for debt repayment, foreign media reported. The plan is still in the initial phase, without final decision on valuation, listing venue and other details.
A Ministry of Commerce (MOC) spokesperson said more than 23,000 foreign-owned enterprises were set up in China for the first half of 2021, up 47.9%. The foreign capital actually used by the manufacturing sector burgeoned 9.9%, the fastest growth of the same period in almost a decade.
Lei Wai Nong, Macau's Secretariat for Economy and Finance, expressed during an interview that the government will begin consultations on the gambling law in the second half of the year and that he believes there will be ample time for the citizens to voice out their opinions in respect of any important bills. Lei added that the Macau government maintains the full-year GGR goal of reaching MOP130 billion.
HK Express announced the launch of two new services this summer. Customers will be able to fly direct from Hong Kong to Taipei and Kaohsiung with the airline from this August. Services to Taipei are set to launch on 23 August 2021, while flights to Kaohsiung will launch on 26 August 2021.
OPPO, along with its sub-brands OnePlus and realme, have taken the second place in the global smartphone shipment in May, accounting for 16% of the market shares, edging out Apple (AAPL.US) which ranked third with 15% share and XIAOMI-W (01810.HK) Short selling $195.30M; Ratio 12.395% at fourth place with 14% share, according to reports from Counterpoint.
Hip Shing Hong announced the first price list for Madera Garden at 5 Victory Avenue, Ho Man Tin, offering 30 units measuring 286-465 sq.m. each. Based on the 10% maximum discount, the selling prices of the project range between $6.8-13.55 million.
Canadian union Unifor announced to have served a 72-hour strike notice to Rio Tinto, following a series of fruitless negotiations in respect of the workers' retirement income and benefits which lasted for nearly seven weeks.
Macau's chief executive Ho Iat-Seng expressed that the travel arrangement between Guangdong and Macau with the 7-day valid nucleic acid test results remains the same, but overly lenient border measures are not allowed in Macau by the National Health Commission in light of the recent COVID-19 outbreak at the Nanjing airport, reported Radio Macau.
Overnight HIBOR last posted at 0.03881%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.07339%, down for 9 days, marking a 1-month low.
"Muji" will accelerate its store-opening pace which represented 2x of the current pace from the 2024 fiscal year (which will end in August 2024) with a target to open 50 stores in China every year, reported Nikkei. The relevant guidance has been included in the company's 3-year interim operating plan and an operating team handling specifically the business in China will be established to speed up the store-opening pace in areas with relatively less stores currently.
As of the end of June, the total number of mobile phone base stations reached 9.48 million, reflecting a net increase of 170,000 stations compared to the end of last year, according to Ministry of Industry and Information Technology (MIIT). The total number of 5G base stations amounted to 961,000, with 190,000 new stations built in 1H.
BEIGENE (06160.HK) (BGNE.US) announced that it had struck strategic partnership with the TENCENT (00700.HK)-backed WeDoctor on 21 July to accelerate the building of their digital oncology healthcare community, which will center on patients suffering from tumors.
Japan's Foreign Ministry announced that the country has reached an agreement with Italy, Turkey, Austria, Bulgaria and Poland, on the proposed vaccination passport program, which will exempt or shorten the quarantine period for travelers.
BIDU-SW (09888.HK) Robin Li, Chairman and CEO said that China has seized the development opportunity in the trend of smart economy and has achieved uplifting results in the aspects of digitalization and AI application, reported Chinese media. Li remarked that BIDU-SW's smart transportation engine is already put into operation in over 20 regions across the country including Shanghai, Beijing, Guangzhou and Chongqing, and has been building world-class smart transportation system clusters in Chinese cities.
PRE MARKET HOURS NEWS
Didi Chuxing has formed a command group for flood prevention, disaster relief and protection out of emergency. Equally, Didi has donated the first batch of RMB100 million to Henan through Didi Charity. GALAXY ENT (00027.HK) announced to donate MOP10 million. LUK FOOK HOLD (00590.HK) to donate RMB3 million. ANTA SPORTS (02020.HK) to donate RMB50 million in cash, equipment and supplies. WYNN MACAU (01128.HK) and MGM CHINA (02282.HK) have donated MOP10 million each. NTES-S (09999.HK) to donate RMB50 million. Fosun Foundation to donate RMB50 million. SANDS CHINA (01928.HK) donated MOP10M, MELCO Resorts donated MOP 10 million
BYD COMPANY (01211.HK)’ Charity Foundation donated RMB20 million. The company furthered it has also switched on emergency rescue service channel for car owners, and opened all 4S shops as contingent refuges in Zhengzhou, in which citizens can seek help.
EVERGRANDE (03333.HK) issued a statement, saying that the company has long been maintaining sound business partnership with China Guangfa Bank. In regards to the civil proceedings by the company on property preservation prior to litigation, both parties have settled the dispute smoothly upon adequate communication. The developer furthered that both sides will constantly solidify and deepen their business collaboration looking ahead, and will keep strengthening cooperation to achieve win-win outcome and joint development.
The International Monetary Fund's managing director Kristalina Georgieva forecast the full-year global economic growth for this year at 6%, unchanged to the previous forecast made in April, reported Reuters. Georgieva further predicted that the economic recovery will continue to be hampered unless the pace of COVID-19 vaccination quickens on a global scale. Georgieva believes that the target of ending the pandemic by the end of next year will not be reached at the current pace.
LINKLOGIS-W (09959.HK) announced that it noted a research report issued by Valiant Varriors on July 20, 2021 which contains certain allegations relating to the Company. These allegations are groundless and the Report contains various misrepresentations, false allegations, and obvious factual errors. The Company has sought legal advice and initiated formal legal action against Valiant Varriors. It has also applied for trading resumption of its shares this morning. The Company clarified that, approximately 45% of the total volume of supply chain assets processed by the Group’s technology solution for the six months ended June 30, 2021 was related to underlying anchor enterprises attributable to its customers in the real estate industry sector. In terms of the number of customers, as of June 30, 2021, financial institutions and anchor enterprises accounted for approximately 40% and 60% of the total number of the Group’s customers, respectively. Among such anchor enterprise customers, approximately 25.5%, 24.8% and 10.6% of them belong to the manufacturing, real estate, and construction industry sectors, respectively.
SANDS CHINA LTD (SCL) (01928.HK)'s controlling shareholder Las Vegas Sands Corp. (LVS.US) unveiled the results for the fiscal second quarter ended June 30, 2021. On a US GAAP basis, the total net revenues for SCL increased 20.2 times yearly to US$849 million. Net loss for SCL was US$166 million, narrowing from the US$549 million in the second quarter of 2020. SCL’s adjusted property EBITDA was US$132 million, compared to an adjusted property EBITDA loss of US$312 million for the second quarter of 2020. Robert G. Goldstein, chairman and chief executive officer of LVS, said the company remained enthusiastic about the opportunity to welcome more guests back to its properties as greater volumes of visitors are eventually able to travel to Macao and Singapore.
At the State Council executive meeting, Chinese Premier Li Keqiang mentioned the orderly facilitation and notable progress of opening up the financial industry in recent years, reported Xinhua. He affirmed the need to deepen financial reform and opening-up, while using both domestic and international markets and resources to keep luring foreign investment.
Equally, China shall keep the RMB exchange rate basically solid at a reasonable and balanced level.WEIMOB INC (02013.HK) announced that the Company noted the decrease in the trading price and increase in trading volume of the shares of the Company during past weeks. Having made all such enquiries with respect to the Company as is reasonable in the circumstances, the Board confirms that it is not aware of any reasons for those price or trading volume movements. The Board also confirms that the operations of the Company remain normal, and is not aware of any change in the regulatory regime or in the business ecosystem which may result in material negative impact on the business prospects of the Company.
GCL NEWENERGY (00451.HK) announced that Suzhou GCL New Energy, a subsidiary of the Company, sold 28 operational solar power plants in the PRC with an aggregate grid-connected capacity of approximately 301MW to Yixing Hechuang, an independent third party. The net proceeds is expected to be approximately RMB1.156 billion, which the Company intends to use for repayment of its debts.
EB SECURITIES (06178.HK) announced the preliminary financial data for the first half year of 2021. Based on accounting principles of the PRC, net profit was RMB2.262 billion, representing an increase of 5.1% as compared with the corresponding period of last year. EPS equaled 48 fen.