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HSI +388pts (+1.5%) 25,474 HSCEI +192pts (+2.2%) 9,071 T/O HK$281.3bn (-22% DoD)
Expect markets opened flat but trending higher.
Earnings in focus with British American Tobacco, GlaxoSmithKline, Rio Tinto, BASF and Santander publishing results. Also in focus will be the US Fed decision.
Travel & Leisure +VE on news of UK easing restrictions. Chemicals weak.
Deutsche Bank Q2 big beat despite its all-important investment banking arm suffering a slide in revenues. The German lender reported a net income of 692 million euros ($818 million), smashing through analyst estimates of 328 million euros.
Barclays Q2 beat and boosted returns with its investment banking and equities businesses posting record incomes.
Consumer Confidence Aug -0.3 vs -0.3 Jul (f/cast was -2)
Import Prices Jun +1.6% MoM vs +1.7% May (F/cast was +1.2%)
Import Prices Jun +12.9% YoY vs +11.8% May (F/cast was +12.5%)
Consumer Confidence Jul 101 vs 103 May revised (F/cast was 101)
Nationwide House Prices Jul +10.5% YoY vs 13.4% Jun (F/cast was 11.5%)
Nationwide House Prices Jul -0.5% MoM vs +0.7% Jun (F/cast was +0.4%)
Opened Dow -91pts, S&P -0.3%, NDX -0.4% dipped in Asian time but NOW Dow -11pts and S&P & NDX have turned +VE
Ahead MBA Mortgage Applications and 30yr Mortgage Rate, Goods Trade Balance, Wholesale Inventories, EIA Oil report, Fed Interest Rate Decision and Press Conference.
Earnings due from Pfizer, McDonald’s, Qualcomm, Facebook, Ford, PayPal and others.
CHINA CSI 300 closed -174pts (-3.5%) @ 4,751
CSI 300 opened lower and traded sideways around 4,700 level for the first hour and 15 minutes; then rallied as State media said the sell-off was due to policy misunderstanding and downside would be muted. Market traded sideways around flat going into lunch. PM saw the market trading around flat, suggests Team China providing some support.
Shanghai Composite -20pts (-0.6%) @ 3,362 T/O US$79,226 vs 95,889 Tuesday
Shenzhen Composite -7pts (-0.05%) @ 14,086 T/O US$108,443 vs 124,463 Tuesday
ChiNext Composite Index -8pts (-0.2%) @ 3,420
HSI Pre market opened @ 25,357 +270pts vs +133pts ADR’s
Ticked higher in early trades but was short lived and sold down to 24,950 before bouncing back to 25,200. Traded around there for most of the morning but then sold down into lunch. PM opened lower and trending down to 24,850 level but rallied strongly at 1:30pm back to 25,400 level and then traded sideways into the close but on light volumes.
Southbound trading was some of the highest this year. European long only’s active into the close.
HONG KONG DATA
HK reported no new local untraceable covid cases and 1 imported case
Short Selling Wednesday 11.1% vs 12.4% Tuesday
Top Shorts Country Garden (2007) 42%, Haidilao (6862) 35%, Hang Seng Bank (11) 34%, Hang Lung Ppty (101) 30%, Bank Comm (3328) 30%, CCB (939) 29%, CLP (2) 28%, Bud Apac (1876) 28%, Bank of China (3988) 28%, ICBC (1398) 27%, CK Asset (1113) 27%, Wharf REIC (1997) 27%, Henderson Land (12) 26%, Hengan (1044) 25%, MTRC (66) 25%
AFTER MARKET NEWS
GEELY AUTO (00175.HK) announced that, Jirun Automobile, a subsidiary of the company, entered into the joint venture agreement with Sunwoda (300207.SZ) and Geely Holding Automobile, pursuant to which the parties agreed to form the joint venture to engage in the development, production and sales of hybrid battery cells, battery modules and battery packs. The registered capital of the joint venture will be RMB100 million, and will be contributed as to RMB41.5 million, RMB30 million and RMB28.5 million by Jirun Automobile, Sunwoda and Geely Holding Automobile, respectively.
*COMMODITIES MIXED OIL +VE as API data showed US inventories saw a greater draw down that expected and despite the current Covid surge triggering concerns about demand PETROCHINA (857 HK +1.5%) SINOPEC (386 HK +1.1%) CH OILFIELD (2883 HK +1.2%).
BASE METALS WEAK on profit-taking following recent outperformance. ZIJIN (2899 HK -4.9%) ANGANG (347 HK -1.9%) MAANSHAN (323 HK -1.7%).
*CHINA BANKS FIRM News reported that onshore bond defaults in China this year have already exceeded the 2020 total of 140.5b yuan. Over 32% of the defaults came from mainland developers. ICBC (1398 HK -0.2%) CCB (939 HK +0.7%) BOC (3988 HK +0.4%) ABC (1288 HK +1.1%).
*CHINA PROPERTYS and PROPERTY MANAGERS REBOUND from yesterday's heavy selloff after mainland media reported Beijing will limit land acquisitions. Developers which were included in China's "three red lines" scheme, are reportedly asked to spend no more than 40% of annual sales to buy land, mainland media reported.
CH EVERGRANDE (3333 HK -0.2%) yesterday cancelled its special dividend proposal.
SHIMAO (813 HK +1.3%) predicts 1H net profit to increase no less than 120% YoY.
COUNTRY GARDEN SERV (6098 HK +18%) intends to repurchase no more than 10% of the company shares in the market.
A-LIVING (3319 HK +8%) S-ENJOY SER (1755 HK +18%) SHIMAO SERV (873 HK +14%).
*E-COMMERCE/INTERNET REBOUND but upside was capped amid continuous regulatory fears.
TENCENT (700 HK +0.3%) said it was suspending new WeChat user registrations until early August, adding to uncertainty for China's technology sector. WeChat, which already has more than 1 billion users, is undergoing a "security technical upgrade" in accordance with laws and regulations, Tencent said.
ALIBABA's (9988 HK +1.8%) Alipay announced details of lowering fees for small and micro businesses, including exempting the handling fees for receiving Alipay payment and withdrawing cash with no single day upper limit for the coming 3 years.
MEITUAN (3690 HK +7.5%) JD.COM (9618 HK +3.7%) NTES (9999 HK +7.8%).
*EDUCATION PROVIDERS STRONG after being hammered in the last 2 days amid Beijing's clampdown. CH EDUCATION (839 HK +11%) NEW ORIENTAL (9901 HK +9.7%) VIRSCENT (1565 HK +8%).
*TECH & COMPOMENTS MIXED after APPLE warned that sales growth may be slowing as chip supplies are getting tight, putting a damper on excitement over a record-setting third quarter. AAC (2018 HK +2.7%) SUNNY OPT (2382 HK -3.8%) BYDE (285 HK +4.8%) TONGDA (698 HK -3.4%) TRULY (732 HK +5%).
*TELCOS MIXED. CH TEL (728 HK +5.8%) amid A-shr listing optimism.
HUTCH TEL (215 HK -12%) reported interim profit of HK$31m, down 79% YoY. The board declared a one-off special interim dividend of 19.80 HK cents per share for the 1H. Combined with the interim dividend, total dividends amount to 22.08 HK cents per share for the first six months of 2021.
*PHARMA REBOUND as sector has been sold off amid policy tightening speculation. SINO BIOPHARM (1177 HK +3%) announced that "Vortioxetine Hydrobromide Tablets", and antidepressant developed by the group, has obtained drug registration certification approval in China.
SIHUAN PHARM (460 HK +11%) expects 1H net profit to more than quadruple on year.
CANSINO (6185 HK +12%) FOSUN (2196 HK +5%) FRONTAGE (1521 HK +11%).
News of extending lockdown in Sydney -VE and raises concerns about the impact on GDP
Market opened lower coming off Monday’s high; initially traded sideways but then sold down 7,370 at 2pm on news that lockdowns would be extended. Then traded sideways before ticking up to close -52pts (-0.7%) @ 7,379
Materials, technology, financials, and consumer discretionary stocks dragging.
Q2 CPI data came out with a 0.8% quarterly increase, slightly higher than expected, an annual inflation running at 3.8%, above an expected 3.7% rise
Tokyo has reported 3,177 confirmed COVID-19 cases on Wednesday, setting a new high in the number of confirmed cases recorded in a single day.
Nikkei opened lower @ 27,675, saw an initial uptick but then traded sideways until 10:45am when selling increased, down to 27,600 before bouncing into lunch. PM opened lower and trended lower before finding support at 27,465 level. Small bounce at the end to close -389pts (-1.4%) @ 27,581
Topix trading in a similar pattern closed -18pts (-1%) @ 1,920
Remeber Topix re balance on the close Thursday.
Softbank -4.8 with increased volume getting hit badly due to its exposure to Tech and many pre IPO tech companies in China
Data out at 1pm
Coincident Index May 92.1 vs 95.3 Apr (F/cast was 92.7)
Leading Economic Index May 102.6 vs 103.8 Apr (F/cast was 102.6)
KDCA announced 1,896 new covid cases
Kospi opened lower but worked higher to 3,243 in the first hour but then reversed back to trade around flat until 12:30pm when selling increased down to 3,210 level at 2pm but then rallied to close +4pts (+0.1%) @ 3,237.
Kosdaq traded in a similar pattern but dropped further and the rebound more muted; closed -11pts (-1%) @ 1,036
Taiex opened slightly lower and sold down to 16,900 in the first 30 mins. Tested the support before working bouncing and then trading 17,000/100 with a tick higher at the end to closed -135pts (-0.8%) @ 17,135 T/O was US$19.82b vs US$18.03b
CECC reported 20 new covid cases (Inc 2 imported)
Foreigners selling with Tech heavyweights under pressure
Northbound RMB 79,119m Sell 38,346m vs 40,774m Buy
Southbound HK$ 33,995m Sell 17,347m vs 16,648m Buy
Northbound RMB 92,818m Sell 43,597m vs 49,221m Buy
Southbound HK$ 45,538m Sell 29,091m vs 16,447m Buy
MEITUAN (03690.HK) Short selling $1.44B; Ratio 5.556% closed at $208.6, up 7.5%
BABA (09988.HK) Short selling $1.98B; Ratio 20.866% closed at $183.2, up 1.8%
PING AN (02318.HK) Short selling $601.24M; Ratio 15.723% closed at $65.95, up 1.5%
HKEX (00388.HK) Short selling $907.21M; Ratio 14.965% closed at $472.6, up 1.2%
AIA (01299.HK) Short selling $647.20M; Ratio 12.220% closed at $88.6, down 0.7%
CCB (00939.HK) Short selling $615.59M; Ratio 28.758% closed at $5.56, up 0.7%
TENCENT (00700.HK) Short selling $2.78B; Ratio 5.609% closed at $447.2, up 0.3%
HSI & HSCEI Constituents on Move:
CG SERVICES (06098.HK) Short selling $293.65M; Ratio 11.404% closed at $60.65, up 18.2%
JD HEALTH (06618.HK) Short selling $590.51M; Ratio 35.754% closed at $73.4, up 12.5%
WUXI BIO (02269.HK) Short selling $605.65M; Ratio 9.637% closed at $119.1, up 10.4%
ANTA SPORTS (02020.HK) Short selling $426.09M; Ratio 14.402% closed at $172.1, up 10%
NTES (09999.HK) Short selling $251.77M; Ratio 15.800% closed at $140.6, up 7.8%
HANSOH PHARMA (03692.HK) Short selling $46.75M; Ratio 25.648% closed at $26.9, up 7.8%
CHINA FEIHE (06186.HK) Short selling $146.00M; Ratio 13.939% closed at $14.14, up 7%
KUAISHOU-W (01024.HK) Short selling $383.96M; Ratio 24.810% closed at $114.7, up 5.3%
CHINA RES LAND (01109.HK) Short selling $73.58M; Ratio 5.697% closed at $27.35, down 5%
SHENZHOU INTL (02313.HK) Short selling $121.86M; Ratio 13.244% closed at $169.6, up 4.7%
TECHTRONIC IND (00669.HK) Short selling $116.80M; Ratio 15.668% closed at $136.5, up 4.6%
PSBC (01658.HK) Short selling $85.94M; Ratio 22.048% closed at $5.08, up 4.5%
GEELY AUTO (00175.HK) Short selling $391.14M; Ratio 16.146% closed at $23.75, up 4.4%
CSPC PHARMA (01093.HK) Short selling $59.28M; Ratio 8.403% closed at $10.1, up 4.3%
EVERG SERVICES (06666.HK) Short selling $19.43M; Ratio 5.151% closed at $5.38, up 4.3%
SUNNY OPTICAL (02382.HK) Short selling $507.06M; Ratio 20.590% closed at $217, down 3.8%
CM BANK (03968.HK) Short selling $329.41M; Ratio 24.919% closed at $60.5, up 3.8%
ALI HEALTH (00241.HK) Short selling $126.99M; Ratio 10.188% closed at $10.5, up 3.8%
JD (09618.HK) Short selling $591.72M; Ratio 22.957% closed at $251, up 3.7%
BYD COMPANY (01211.HK) Short selling $668.24M; Ratio 24.041% closed at $211, up 3.4%
BIDU-SW (09888.HK) Short selling $152.90M; Ratio 20.322% closed at $153.3, up 3.4%
XIAOMI (01810.HK) Short selling $796.37M; Ratio 18.862% closed at $25.1, up 3.1%
HSMI & HSSI Constituents on Move:
MARKET HOURS NEWS.
The SFC will enforce a real-name registration system on H-share trading, under which investors' names will be registered upon trading, according to local media. In order to allow enough time for stakeholders for preparation, including system upgrade and consensus seizure of collecting personal information, the SFC will give "reasonable" amount of time to the industry. The roll-out is expected as soon as next year.
Bowtie announced to team up with JP Partners Medical, establishing a one-stop health medical services center -- Bowtie & JP Health -- with the aim to promote the importance of disease prevention and upkeeping one's wellness. Bowtie's insurance premium and the number of new customers YTD have already surpassed that of last year, achieving a consistent monthly double-digit growth in the sales of insurance policies over 1H, remarked Bowtie's chief medical officer, Jacky Lio
S&P Global Ratings expressed that the profitability of Chinese banks has been undermined over two major reasons, one being the credit costs. S&P believes the negative impacts on asset quality induced by the pandemic may take two years to be digested, hence weighing on the profitability of the banks. On the other hand, the generally stable monetary policies in China along with the unchanged LPR interest rate also contributed to the decrease of the average revenue from loan business, added S&P.
As for Hong Kong banks, S&P forecast Hong Kong’s GDP growth in this year to be 6.5% with that of next year being 2.5%, contending that the economic recovery was mainly due to the local stimulus measures as well as the economic and trading growth in China.
An inhalation vaccine with adenovirus vector developed by China's Academy of Military Medical Sciences published its clinical data on an international academic journal, showing that the inhalation vaccine is very effective with no negative reactions on the body which injection vaccines tend to cause, reported Chinese media.
CANSINOBIO-B (06185.HK) which participated in co-developing the inhalation vaccine, surged nearly 12% at one point after lunch;
XIAOMI-W (01810.HK) Founder Lei Jun published a recruitment advertisement on his personal Weibo for the autonomous driving department of Mi Car. 500 technical talents will be hired in the first round, and work in multiple places nationwide.
ASM PACIFIC (00522.HK)'s inventory value as of the end of June reached $7.37 billion, compared to $5.77 billion last year. The group's CEO Robin Ng explained that amidst industry-wide semiconductor shortage and supply chain constraints, the group have built inventories for some key components by means including paying premiums selectively to acquire major electronic parts. Ng added that part of the increased raw material cost will be passed onto the customers within a reasonable range.
U.S. Secretary of Defense Lloyd Austin expressed that the U.S. is committed to building constructive and stable relationship with China, and hopes the two nations could work together on confronting common challenges.
"Father of emerging markets" Mark Mobius expressed during a Bloomberg interview that he believes Beijing government's recent crackdown on the Internet giants which have been dominating various sectors to be a beneficial factor for the Chinese market in the long run. Mobius added that with the monopolies of the large-scaled companies being eradicated, mid-small enterprises would be given room to flourish, which would add to their investment attractiveness.
Shanghai's China Banking and Insurance Regulatory Commission (CBIRC) fined 17 cases of illegal funds flowing into real estate market yesterday (27th), imposing a total penalty of RMB9.1 million. BANK OF CHINA (03988.HK), ABC (01288.HK), ICBC (01398.HK), CCB (00939.HK) and BANKCOMM (03328.HK) etc. were punished.
Cathie Wood's ARK ETF offloaded multiple Chinese concepts yesterday (27th). For HK market, her fund yesterday sold 2.0978 million shares of PA GOODDOCTOR (01833.HK), 1.2576 million shares of MEITUAN-W (03690.HK) and 3.1338 million shares of JD LOGISTICS (02618.HK) as disclosed by the Stock Exchange.
For US stocks, her fund sold JD.com (JD.US) , Pinduoduo (PDD.US) , Baidu (BIDU.US) , Tencent (TCEHY.US) , and more.
The accumulative revenue from Riot Games' mobile games - League of Legends: Wild Rift, Legends of Runeterra and Teamfight Tactics - has surpassed USD100 million, with the company's mobile games revenue leaping 3.4x YoY in 2Q to USD36.5 million, reported Sensor Tower.
BlackRock Inc. has purchased 1.512 million shares of SUNAC (01918.HK) on 22 July, at an average price of $24.0616 per share, involving $36.3811 million, hiking BlackRock's stake in SUNAC from 4.99% to 5.02%, according to data from The Stock Exchange.
Ministry of Industry and Information Technology (MIIT) expressed that 14 applications including QQ Reading, Le.com and iJianJi, failed to comply with reform requirements and have to complete relevant reforms before 3 August. MIIT added that it will take corresponding disciplinary actions towards the applications should they fail to complete the reform works by the deadline.CHINA TOWER (00788.HK) said it had clinched agreements with Huawei Digital Power, BYD Verdi Battery, Baidu AI Cloud, PSBC (01658.HK) and others, according to Chinese media. CHINA TOWER's subsidiary Tower Energy will stretch the power guarantee capabilities of communication base stations to the society, and render diversified smart energy services, such as tower battery replacement and tower power backup.BABA-SW (09988.HK) (BABA.US) submitted disclosure documents to the U.S. SEC yesterday, showing that as of 22 July, SoftBank remains the largest shareholder of the group, holding a 24.8% stake, which translates into approximately 5.39 billion shares.
CG SERVICES (06098.HK) announced that it noted the decrease in the trading price and the increase in the trading volume of the shares of the Company since yesterday (26 July). Having made such enquiry with respect to the Company as is reasonable in the circumstances, the Board confirms that it is not aware of any reasons for these price and volume movements or of any information which must be announced to avoid a false market in the Company’s securities or of any inside information that needs to be disclosed under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).
Separately, the company viewed that the Shares have been trading at a price level which does not fully reflect the underlying value of the Company. As such, depending on the market conditions and the Company’s actual needs at the relevant time, the Board may repurchase not more than 307 million Shares, representing 10% of the total number of issued Shares on the date of the annual general meeting of the Company in the open market.
SINO BIOPHARM (01177.HK) announced that the company's senior vice chairman and executive director Tse Ping and executive director Tse Hsin have splurged over $100 million in total on 18.3 million shares yesterday (27th). On the same day, the group has also repurchased around 4.505 million shares at a consideration of approximately $28.53 million, reflecting the management's confidence in the development outlook of the group.
PRE MARKET HOURS NEWS
The 40nm OLED-driven chip developed by Huawei has completed trial production, and is expected to achieve mass delivery to suppliers at the end of the year, Chinese media reported. It will be highly likely that the chip will be produced by SMIC (00981.HK) (688981.SH) , report added.
China is yearning to become the biggest and the most important economy throughout the world before mid-2040s, said U.S. President Biden after his visit to the Office of the Director of National Intelligence (ODNI). However, Biden added that the U.S. would still cooperate with China and Russia on issues such as climate change.HUTCHMED (00013.HK) announced that the company and AstraZeneca (AZN.US) had initiated a Phase II study of ORPATHYS (savolitinib), an oral, potent, and highly selective small molecule inhibitor of MET, a receptor tyrosine kinase, in patients with advanced or metastatic MET amplified gastric cancer or adenocarcinoma of the gastroesophageal junction. The first patient was dosed on July 27, 2021.
IMAX CHINA (01970.HK) announced interim result ended June 2021. The loss swung into profit of US$19.198 million. EPS was US$0.06. An interim dividend of HK$0.217 was declared.
Hello Inc., a bike sharing company in China backed by Ant Group, announced that it had called off its U.S. IPO plan, according to Chinese media.
ASM PACIFIC (00522.HK) announced interim result ended June 2021. The revenue rose 41.5% year on year to HK$9.514 billion, logging a new high. The net profit amounted to HK$1.252 billion, up 221.6%. EPS was HK$3.05. An interim dividend of HK$1.3 was declared.
BABA-SW (09988.HK)’s CEO Daniel Zhang expressed in his letter to the shareholders that the company wishes to achieve even better integration with the consumer Internet and industry Internet and that such goal will act as an important beacon for the company's future direction.
MELCO INT'L DEV (00200.HK) announced the financial results for the second quarter ended 30 June 2021 of Melco Resorts, a listed subsidiary of the company. Total operating revenues for the second quarter of 2021 were USD566 million, representing an increase of 222% for the comparable period in 2020. The net loss attributable to Melco Resorts for the second quarter of 2021 was USD186 million, compared with net loss of USD368 million in the second quarter of 2020.CHINA RAILWAY (00390.HK) announced that for the period from April to June 2021, the value of new contracts reached RMB704.44 billion, while the aggregate value of new contracts for 1H amounted to RMB1.03 trillion, representing an increase of 18.8% over same period of last year.
HUANENG POWER (00902.HK) announced the interim results for the six months ended 30 June 2021. The Company and its subsidiaries recorded consolidated operating revenue of RMB95.116 billion, representing an increase of 20.2% yearly. The net profit was RMB4.019 billion, representing a decrease of 26.1% yearly. The
earnings per share was RMB0.19. No interim dividend was declared.
WHARF REIC (01997.HK) issued a positive profit alert, announcing that the group expects to record a profit of not less than HKD2.5 billion for the six months ended 30 June 2021 (corresponding period in 2020: loss of HKD4.454 billion).