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HSI -402pts (-1.5%) 27,322 HSCEI -167pts (-1.7%) 9,839 T/O HK$139.57bn (+1.7% DoD)
Markets opened higher and trending higher German and Eurozone PMI data showed strength. UK Retail sales and PMI a little light as was the French. Earnings still in focus with Thales, Signify and Lonza among those reporting second-quarter results on Friday, while Vodafone issued a trading update and Mercedes-Benz announces a strategy update early afternoon.
Valeo strong Q2 earnings beat expectations and confirming its +VE outlook.
Signify weak despite reporting a 32% jump in Q2 profit, as it continued to grapple with supply chain issues.
Opened higher Dow +52pts S&P +0.24% and NDX+0.33% but rallied as Europe came in now Dow +165pts, S&P +0.5% and NDX +0.5%.
AHEAD Flash PMI’s (Manufacturing, Services, Composite), Baker Hughes Oil Rig data
CHINA CSI 300 closed -63pts (-1.2%) @ 5,089
CSI 300 opened lower and trended lower to 5,088 level before a bounce to 5,120 but didn’t hold and sold down into lunch (5,095).
PM opened lower and bounced along just above the 5,080 level
Pressure on E-commerce (as investors wait to see Didi’s punishment and uncertainty on Education names) and Financials (tighter control on Property financing and defaults) together with the implications of the flooding (-VE Insurers +VE Infrastructure). Also caution about China/U.S. ahead of the meeting in Tianjin between U.S. Deputy Secretary of State Wendy Sherman and Chinese Foreign Minister Wang Yi, as the U.S. continue accusing China was behind various cyberattacks.
ChiNext stocks led the decliners, while shares in consumer staples, healthcare, and real estate firms dropped.
Shanghai Composite -24pts (-0.7%) @ 3,550
Shenzhen Composite -234pts (-1.5%) @ 15,029
ChiNext Composite Index -65pts (-1.8%) @ 3,624
China's National Health Commission reported 48 confirmed COVID-19 cases yesterday (22 July) with 36 of them being imported cases and the remaining 12 being local cases, which were all recorded in Jiangsu.
HSI Pre market opened @ 27,741 +17pts vs -104pts ADR’s
Market trended lower through the morning to 27,400 before a small bounce into lunch. PM opened lower and traded slowly higher back to the lunch time level but then sold down from 2:30pm initially slowly but then accelerated around 3pm with Education leading declines. Support at 27,220 and a bounce into the close and ticked higher in the auction.
Broad weakenss; with Ecommerce and Healthcare leading the declines. Sportwear makers very weak and on increased volume as Olympics get underway without spectators.
HONG KONG DATA
HK reported no new local untraceable covid cases and 2 imported cases.
Short Selling Friday 15.8% vs 14% Thursday
Top Shorts Longfor (960) 46%, Bud Apac (1876) 46%, CLP (2) 45%, Country Garden (2007) 38%, Mengniu Dairy (2319) 36%, Ping An (2318) 36% (on Henan floods), Power Assets (6) 35%, BankComm (3328) 35%, HSBC (5) 33%, Ali Health (241) 32%, AIA (1299) 31%, Galaxy (27) 31%, Hengan (1044) 31%, Sinopec (386) 29%, Sands China (1928) 28%, Sino BioPharm (1177) 28%, HK & China Gas (3) 27%, Bank of China (3988) 26%, Geely Auto (175) 25%.
AFTER MARKET NEWS
CHINA OVERSEAS (00688.HK) announced that COHL, a controlling shareholder of the Company, acquired an aggregate of 500,000 shares of the Company in the market on 20 and 21 July.
CHINA BLUECHEM (03983.HK) issued a positive profit alert, announcing that the group expects to record a net profit of approximately from RMB1.23 billion to RMB1.26 billion for the six months ended 30 June 2021 as compared to the net profit of approximately RMB310 million for the six months ended 30 June 2020.
The Urban Renewal Authority (URA) today (23 July 2021) invites a total of 33 property developers/ consortia to tender for the development of the Bailey Street / Wing Kwong Street development project in To Kwa Wan.
Information from Macau's Statistics and Census Service (DSEC) indicated that Macau's composite CPI for June 2021 (102.50) went down by 0.08% YoY, smaller than the decrease in May (-0.51%) by 0.43 percentage points. For the 12 months ended June 2021, Macau's average composite CPI decreased by 0.58% from the previous period (July 2019 to June 2020).
FIH (02038.HK) is likely to record a consolidated net loss of around, or below, US$30 million for the first half of 2021, compared with a consolidated net loss of around US$101 million for the first half of 2020.
The Lands Department received 12 bids for a residential site, Fanling Sheung Shui Town Lot No. 278 at Area 24, Kwu Tung, New Territories after closing the tender today (23rd).
Suitors included sole bidders CK ASSET (01113.HK), KAISA GROUP (01638.HK), K. WAH INT'L (00173.HK), HENDERSON LAND (00012.HK), FE CONSORT INTL (00035.HK), SHK PPT (00016.HK), KERRY PPT (00683.HK) and Wheelock. Chinachem Group and HYSAN DEV (00014.HK) submitted a joint bid.
CHINA RAIL CONS (01186.HK) announced that the value of newly-singed contracts for 2Q21 amounted to approximately RMB595.635 billion, up 11.2% YoY.
Following HKMA's enquiry, HSBC and BOC HONG KONG (02388.HK) are reconsidering their decision to suspend mortgages to buyers of EVERGRANDE (03333.HK)'s uncompleted residential projects in Hong Kong, Bloomberg citing sources.
The e-commerce platform for fresh food products Meicai is considering switching the location of its IPO from the U.S. to Hong Kong, reported Bloomberg News, citing people familiar with the matter. The sources suggested that the company has begun preliminary preparations for Hong Kong listing but is still possible to resume its U.S. IPO plan later. According to reports, Meicai may raise hundreds of millions of U.S. dollars through an IPO.
CHINA RE (01508.HK) issued a positive profit alert, announcing that the interim net profit of the group may increase by approximately 55% to 65% as compared to the corresponding period for the year 2020.
SSY GROUP (02005.HK) announced that Jiangsu Best (a wholly-owned subsidiary in the Group) and Shanghai Lepure Biotech entered into a “Strategic Cooperation Memorandum” on 23 July 2021. Both parties agreed to carry out all-round cooperation in areas including research & development, testing and promotion of application of bioprocessing films and related products, and to jointly develop the international and domestic markets of bioprocessing films, so as to strive to maximize the win-win cooperation.
Chaoyang People's Procuratorate has pressed a criminal charge against Qi Yumin, former Chairman of Huachen Automotive Group, of alleged bribery, misappropriation of public funds, and abuse of power by SOE staff at Chaoyang Intermediate People's Court, according to the website of Supreme People's Procuratorate.
China is weighing to request institutions which provide tutorial classes to transform themselves into non-profit organizations (NPOs), as Bloomberg cited sources. Such platforms may not be allowed to raise funds or go listing any longer, pursuant to the proposed regulation. Also, listing companies may be banned in investment or acquisition of education companies which teach school subjects, whilst foreign capital may also be forbidden foray into the industry.
JD-SW (09618.HK) and JD Technology have recently formed a strategic alliance with the Huadu District government of Guangzhou city on building the "JD (GBA) smart city", which includes the building of a GBA R&D operating center, air cargo business center of southern China, advanced manufacture park, etc., reported Guangzhou Daily. The partnership entails a fixed assets investment of no less than RMB100 billion with a target of annual production revenue also set at RMB100 billion.
Centa-City Leading Index (CCL) last stood at 186.89, -0.52% WoW
CCL Mass last stood at 189.15, -0.75% weekly.
CCL (small-and-medium units) last stood at 187.08, -0.66% WoW
CCL (large units) last posted at 185.93, +0.24% weekly.
OIL weak with the broad market despite expectations of tightening supplies as demand recovers; PETROCHINA (857 HK -1.5%) CH OILFIELD (2883 HK -1.6%).
BASE METALS STRONG as demand continue to soar; ANGANG (347 HK +0.6%) MAANSHAN (323 HK +4%) JIANGXI COPPER (358 HK -0.1%).
*EDUCATION WEAK on policy risk; China is considering asking companies that offering tutoring on the school curriculum to go non-profit, according to news. Other rumours include; that platforms will likely no longer be allowed to raise capital or go public. Listed firms will also likely no longer be allowed to invest in or acquire education firms teaching school subjects while foreign capital will also be barred from the sector. NEW ORIENTAL (9901 HK -40%) SCHOLAR (1769 HK -28%) CH NEW HIGHER (2001 HK -8.5%) HOPE (1765 HK -5.2%).
*E-COMMERCE WEAK as investors wait to see what punishment Didi is given; ‘serious, maybe unprecedented, penalties following its IPO last month’. Potential measures include a fine, suspension of certain operations, introduction of a state-owned investor or even a forced delisting of U.S. shares. They see the decision to go ahead with the listing as a challenge to Beijing's authority. TECENT (700 HK -2.4%) ALIBABA (9988 HK -1%) KUAISHOU (1024 HK -11%) MEITUAN (3690 HK -2.4%).
*CHINA PROPERTY WEAK on news that Chinese regulators will strengthen control on financing of the property sector and improve existing financing rules for property developers, Securities Daily reports, citing an official in the nation’s housing ministry. The regulators will also enforce banks’ management over real estate loans. EVERGRANDE (3333 HK -7%) SUNAC (1918 HK -1.9%) LONGFOR (960 HK -2%) KAISA (1638 HK -3.3%).
*AUTO MIXED after the MoC release policies reform to promote whole chain of auto consumption, including the promotion of used car trading. GREAT WALL AUTO (2333 HK +8.2%) GEELY (175 HK -1%) GAC (2238 HK +0.6%).
*SHIPPING/LOGISTICS WEAK Shipping companies and industry associations should strengthen self-discipline, keep industry order and look at long-term interests, Chinese Ministry of Commerce official in charge of foreign trade dept Li Xingqian said. He said demand and supply in shipping has “lost balance”, and he hopes shipping companies and industry act with self-discipline. COSCO SHIP (1919 HK -7%) OOIL (316 HK -6.6%) SINGAMAS (716 HK -4.3%).
Market opened lower; coming off a new high as Flash PMI data missed expectations badly. The continued rise in covid cases and lockdowns also -VE. But after the initial weaknes market worked better and into the green around mid morning. Resistance approaching 7,400 tested a few times before selling back down to 7,375 at 2:15pm before bouncing back to flat and trading sideways to close +8pts (+0.1%) @ 7,394; another new high.
Leaders Healthcare and Tech; limiting the wider losses from Miners and Banks. Zip rebounding from yesterday’s weakness.
Manufacturing Jul 56.8 vs 58.6 Jun (F/cast was 57.5)
Services Jul 44.2 vs 56.8 Jun revised from 56 (F/cast was 55.5)
CompositeJul 45.2 vs 56.7 Jun revised from 56.1 (F/cast was 55.6)
Japan Closed re-opens Monday
Toyota reported 1,359new covid cases
KDCA reported 1,630 new covid cases down DoD but still high and Govt extended distancing measures. Focus was on results and encouraged by dovish ECB. Trading volumes were moderate
Kospi a weak open dipped into the red but then worked better to 3,264 in the first hour but then trended lower to flat around 1pm then trended slightly higher to close +4pts (+0.1%) @ 3,254.
Kosdaq traded in a tight range; traded higher from the open to 1,059 around 11am and then drifted lower for the rest of the day to close +5pts (+0.5%) @ 1,056
Taiex opened higher and worked better in the first hour but resistance at 17,670 level. Then trended lower to 17,510 level before rebounding to close flat. T/O was US$20.12 bn vs 20.87bn Thursday
After market CECC reported 24 new covid cases.
Industrial Production Jun +18.37% vs +16.88% May revised (F/cast was +14%)
Retail Sales Jun -13.3% vs +3.4% May revised (F/cast was +1.6%)
M2 Money Supply Jun +9.23% vs +9.21% May
Northbound RMB 60,631m Sell 30,069m vs 30,562m Buy
Southbound HK$ 17,902m Sell 10,364m vs 7,538m Buy
Northbound RMB 78,858m Sell 42,005m vs 36,853m Buy
Southbound HK$ 20,623m Sell 11,335m vs 9,288m Buy
HKEX (00388.HK) Short selling Ratio 19.689% closed at $521, -3.5%
TENCENT (00700.HK) Short selling Ratio 4.839% closed at $531, -2.4%
MEITUAN (03690.HK) Short selling Ratio 12.017% closed at $273.2, -2.4%
PING AN (02318.HK) Short selling Ratio 35.630% closed at $71.3, -1.5%
BABA (09988.HK) Short selling Ratio 22.222% closed at $205.2, -1.1%
HSI & HSCEI Constituents on Move:
KUAISHOU-W (01024.HK) Short selling Ratio 35.072% closed at $129.5, -10.8%
EVERGRANDE (03333.HK) Short selling Ratio 9.763% closed at $7.26, -7%
HAIDILAO (06862.HK) Short selling Ratio 18.308% closed at $41.65, -5.4%
EVERG SERVICES (06666.HK) Short selling Ratio 5.324% closed at $6.57, -5.2%
ANTA SPORTS (02020.HK) Short selling Ratio 11.655% closed at $169.8, -4.6%
CHINA FEIHE (06186.HK) Short selling Ratio 8.684% closed at $16.58, -4.2%
SUNNY OPTICAL (02382.HK) Short selling Ratio 15.911% closed at $226.4, -3.7%
CG SERVICES (06098.HK) Short selling Ratio 16.510% closed at $71.4, -3.4%
ALI HEALTH (00241.HK) Short selling Ratio 31.692% closed at $14.04, -.3%
WUXI BIO (02269.HK) Short selling Ratio 18.150% closed at $129.7, -3.1%
HSMI & HSSI Constituents on Move:
SCHOLAR EDU (01769.HK) Short selling Ratio 11.172% closed at $2.53, -28.5%
KOOLEARN (01797.HK) Short selling Ratio 28.970% closed at $5.92, -28.1%
HENGTEN NET (00136.HK) Short selling Ratio 19.349% closed at $3.73, -13.3%
TIANLI EDU (01773.HK) Short selling Ratio 9.614% closed at $2.57, -11.7%
GREATWALL MOTOR (02333.HK) Short selling Ratio 16.462% closed at $34.2, +8.2%, hitting new high
DFZQ (03958.HK) Short selling Ratio 1.445% closed at $6.35, +5.8%, hitting new high
IDREAMSKY (01119.HK) Short selling Ratio 3.878% closed at $7.99, +0.8%, hitting new high
MARKET HOURS NEWS.
Chinese education stocks went south. NEW ORIENTAL-S (09901.HK) nosedived 41% to last post at $29.95, once slipping 50% to bottom at $25.2. Its turnover hit $1.73 billion. China published a notice to ban education and training institutions from listing and financing activities, according to reports.
MOHURD, NDRC, SAMR, CBIRC, CAC and three other Chinese authorities decided to keep working on the rectification and regulation of real estate market order. Subsequently, they would strive to significantly turn the property market order around in about three years.
Su Hua, founder and CEO of KUAISHOU-W (01024.HK) expressed that the company intends to strengthen its business expansion in the overseas market, with the target of reaching 250 million active monthly users outside of China, reported Bloomberg News. KUAISHOU-W remarked that the number of active monthly overseas users has grown 2x in 1H, with the number of daily active users in China amounting to approximately 300 million.
National Development and Reform Commission (NDRC) and National Energy Administration (NEA) jointly published the Guiding Opinions on Accelerating the Development of New Energy Storage. The Opinions proposed that China should shift its new energy storage from initial commercial stage to scale development by 2025. Given notably higher innovative power in new energy storage, China could have stronger autonomy in core technical equipment, with installed capacity exceeding 30 million kilowatts. New energy storage will play pivotal role in helping China achieve carbon peak and carbon neutrality, and promote the continuous cost reduction and commercial scale application of relatively mature new energy storage technologies, such as lithium-ion batteries.
Zhejiang Geely's Volvo announced interim earnings of SEK8.244 billion (HK$7.375 billion), against loss of SEK1.737 billion (HK$1.554 billion) in the same period last year. Volvo posted interim revenue of SEK141.131 billion (HK$126.213 billion), up 26.3% year-on-year.
Foxconn Chairman Young Liu expressed that the Zhengzhou flooding is forecast to pose limited impact on this year's results. Excluding the flooding factor, the overall outlook for 2H21 remains optimistic, with the lingering chip shortage also posing only a immaterial impact, added Liu.
About 20 Chinese companies with plans for U.S. IPO are currently pondering the possibility of switching the listing location from New York to Hong Kong due to the strengthening oversight from the Chinese government, reported Financial Times. The Chinese companies previously announced schedules for U.S. listing, with the total fundraising amount estimated to be USD1.4 billion.
CHINA MOBILE Hong Kong announced to launch a 24-hour streaming platform UTV Live, with over 30 hosts hired already.
The new platform will cover various lifestyle and entertainment aspects with a live chat feature, with the hope to become a local video-sharing and streaming social platform, said Waynffly Zhong, chief marketing officer at CHINA MOBILE Hong Kong.
China's MOC, CAC and MIIT jointly published a guidance to encourage faster layout of overseas R&D centers and product design centers by digital economy firms. Equally, these companies are motivated to beef up cooperation with offshore tech firms regarding big data, 5G, AI, blockchain and other digital technologies.
New Zealand Prime Minister Jacinda Ardern announced that New Zealand will be pausing the "air travel bubble" program with Australia for at least eight weeks starting from Friday night (23rd), as the Delta variant of COVID-19 rages in Australia, reported foreign media. Ardern contended that it was not a decision that the government has taken lightly but a necessary one to ensure the health and safety of the citizens of New Zealand.The registered capital of Shenzhen Tencent Animation and Comics Ltd. recently stretched exponentially by 3,900% from RMB10 million to approximately RMB400 million, reported Chinese media, citing data from Tian Yan Cha App.
CHINA UNICOM (00762.HK)'s branch company China Unicom Beijing and Huawei jointly deployed super uplink at more than 1,000 commercial sites as part of their joint 5G Capital project. It is the first thousand-site 5G network of its kind throughout the world. China Unicom Beijing tested 5G super uplink on its commercial networks in 2020 and then went on to deploy the technology at a smaller scale in May 2021, reported Chinese media.
CNBM (03323.HK) announced that the company has applied to the listing committee of the Stock Exchange for the approval of the listing of and permission to deal in 689 million H Shares. The company expressed that the listing approval was granted by the Stock Exchange.
NEXT DIGITAL (00282.HK) , with its shares remaining to be suspended from trading, announced to have on 29 June 2021 received a non-legally binding proposal from an independent third party purchaser in respect of a possible disposal by the group of its Taiwan operations. The management is currently in discussion with the potential purchaser about the transaction structure.
The Financial Secretary, Paul Chan said that the malicious smear and allegations against the National Security Law (NSL) made in the 2021 Investment Climate Statements released by the United States Department of State is unfounded. Chan expressed that the Hong Kong government strongly objects and condemns the US Administration's repeated attempts to smear the NSL and grossly interfere in Hong Kong's affairs and that the government takes great exception to the malicious comments relating to the NSL in the Statements.
BABA-SW (09988.HK)'s Ali Cloud expressed that the OBS Cloud jointly developed by the company and Olympic Broadcasting Services will be utilized for the first time during this year's Tokyo Olympic Games, providing technical support on cloud broadcast for broadcasting organizations for the event around the globe.
PRE MARKET HOURS NEWS
HSBC China announced on its official Weixin account that the group's major institutions in China have donated RMB5 million jointly to Henan province through China Charity Federation, with RMB2 million scheduled to be used for providing disaster relief resources to the affected areas and the remaining RMB3 million to be used for future natural disaster responses.
China Passenger Car Association (CPCA) announced yesterday that China's narrow-sense PV retail sales volume may have fallen 4.3% YoY to 1.53 million units in July.
CATHAY PAC AIR (00293.HK) announced that it has conducted two live flight trials involving volunteer customers travelling between Hong Kong and Singapore using The Commons Project’s CommonPass app earlier this month. The volunteer customers used their personal vaccination and/or pre-departure COVID-19 PCR test records to create digital health passes using the CommonPass app. Customers on Cathay Pacific flight CX691, which departed from Hong Kong to Singapore on 6 July, used the Hong Kong SAR Government’s vaccine code (generated using the iAM Smart app).China's State Council announced to fully support the disaster relief works in Henan province by expanding the scale of donation, reported Xinhua News Agency. As at 7 pm yesterday (22 July), 89 Chinese SOEs have donated a total of RMB1.044 billion in cash to support Henan province.
BABA-SW (09988.HK)'s Ant Group could reboot its listing procedure in full preparation before too long, Nikkei citing Fred Hu, Ant's board member and the Chairman of Primavera Capital Group. Hu said the group's fundamentals remain strong, along with prevailing demand for technology, innovation and tech-driven financial services.Chinese SAMR units across prefectures had investigated into and handled 3,128 unfair competition cases in the first half of 2021, collecting RMB206 million in fines and forfeitures, reported Xinhua.
China insists on the premise of its housing policy that real estate are for residence, rather than speculation, as Xinhua News Agency cited Chinese Vice Premier Han Zheng.
Han said real estate should not be manipulated as short-term economic booster, instead should be put under a long-effective mechanism which emphasizes stable land price, housing price and outlook, so as to prompt healthy development of real estate market.
CHINA TELECOM (00728.HK) announced that the Issuance Examination Committee of the China Securities Regulatory Commission (the CSRC) reviewed the application of the Company for the A Share Offering on 22 July 2021. According to the result of the review, the Company’s application for the A Share Offering has been approved. Currently, the Company has not received the written approval from the CSRC. The Company will make further announcement(s) upon receipt of the official approval from the CSRC.
ANTON OILFIELD (03337.HK) announced that during the second quarter, the Group won new orders of RMB1.776 billion, representing an increase of 117.3% compared to the same period last year.
LIFESTYLE CHI (02136.HK) is expected to record an increase of not less than 60% for the six months ended 30 June 2021 as compared to the profit of RMB99.2 million for the corresponding period last year.
LIFESTYLE INT'L (01212.HK) is expected to record a profit of approximately HK$220 million for the six months ended 30 June 2021, as compared to a loss of HK$227 million recorded in the corresponding period last year.
CSC (06066.HK) announced that, in accordance with the PRC GAAP, the interim net profit ending June 2021 decreased by 1.1% to RMB4.529 billion, representing a slight decrease from the higher base over the corresponding period of the previous year. EPS equaled 55 fen.