This and previous notes can be found at Substack ( Asian Market Sense )
Check out ERI-C.com for interesting research and trading analysis
Apologies for no earlier notes but travelling back to HK today.
HSI +243pts (+0.9%) 28,801 HSCEI +57pts (+0.5%) 10,646 T/O HK$205.5bn (+46.5% DoD)
Markets opened flat and have trended lower. UK retail sales were weaker than expected and German PPI was stronger. Commodity prices were weak. Financials were weak but Industrial were +VE
Current Account Apr €31.4B vs €31B Mar (F/cast was €18.5B)
PPI May +1.5% MoM vs +0.8% Apr (F/cast was +0.5%)
PPI May +7.2% YoY vs +5.2% Apr (F/cast was +6.2%)
Retail Sales May -1.4% MoM vs +9.2% Apr (F/cast was +2.1%)
Retail Sales May +24.6% YoY vs +42.4% Apr (F/cast was +29.7%)
Retail Sales Ex Food & Energy May -2.1% MoM vs +9.1% Apr revised (F/cast was +2.1%)
Retail Sales Ex Food & Energy May +21.7% YoY vs 37.7% Apr (F/cast was 28.1%)
Were falling going into the open currently Dow -320pts, S&P -0.7% and NDX -0.6%
Triple Witching today so expect increased volatility.
CHINA CSI 300 closed flat @ 5,102
CSI 300 opened slightly lower but rallied to 5,128 in early trades but then trended lower into lunch. PM saw the market work higher to 5,122 by 2;20pm but then trended lower to close flat.
Kweichow Moutai saw significant selling
Shanghai Composite flat @ 3,525
Shenzhen Composite +111pts (+0.8%) @ 14,584
ChiNext Composite Index +51pts (+1.6%) @ 3,336
China's National Health Commission reported 23 newly confirmed cases yesterday (17th), with 22 of them being imported cases and 1 of them being a local case in Guangdong. No death cases has been newly added.
HSI Pre market opened @ 28,586 +34pts vs +125pts ADR’s
With E-commerce names +VE and Anta strong after its positive profit alert. Market rallied initially to the day high 28,823 as recent shorts covered but then eased back to trade sideways around the 28,725 level for the rest of the day but then tick +38pts in the closing auction.
JD.com rallied strongly on good 618 promotion results. Autos and Semiconductor were strong and Soho China continued to rally on the M&A news
HONG KONG DATA
The Census and Statistics Department released the preliminary figures of chain volume measures of GDP by economic activity for the first quarter of 2021. The net output in respect of all the services activities taken together increased by 6.7% in real terms in the first quarter of 2021 over a year earlier, as against the 3.8% decrease in the fourth quarter of 2020. The Hong Kong economy saw a visible recovery in the first quarter of 2021, yet the pace of recovery was uneven across industries and overall economic activity remained below the pre-recession level.
The Centre for Health Protection (CHP) reported 3 new covid cases imported (vs zero Thursday).
CARSGEN-B (02171.HK) closed at $30, down $2.8 or 8.5% against the listing price of $32.8, on volume of 54.39 million shares and turnover
of $1.6 billion. Excluding the handling fees, a book loss of $1,400 was reported per board lot of 500 shares.
YOURAN DAIRY (09858.HK), on debut closed @ $6.15 down 12%, having opened at $6.28, down 10% against the listing price of $6.98.
Short Selling +Friday 22.14% vs 16.92% Thursday
Top Shorts Xiaomi (1810) 43%, Henderson Land (12) 41%, Bank of China (3988) 37%, Hengan (1044) 33%, Baba (9988) 32%, Petrochina (857) 29%, CKAsset (1113) 29%, Country Garden (2007) 28%, Mengniu Dairy (2319) 26%, HSBC (5) 25%, Hang Seng Bank (11) 25%, Ping An (2318) 25%.
AFTER MARKET NEWS
On the first day of public offering of Nayuki (02150.HK), brokers granted almost $72.86 billion margin to the IPO as at around 6 pm. The IPO was thus over-subscribed by more than 142 times based on the fundraising amount of $509 million from the public offering.
HUTCHMED (00013.HK) (HCM.US) , on its first day of public offering as well, recorded almost $277 million margin. The subscription was only 47.3% based on the public fundraising amount of $585 million.
SWIRE PACIFIC A (00019.HK) announced that CATHAY PAC AIR (00293.HK), of which 45% stake is held by SWIRE PACIFIC A, expected to incur a substantial loss in the first half of 2021, but the loss should be lower than that reported in both the first and second halves of 2020.
The company continues to face significant challenges and uncertainties in 2021 as a result of COVID-19. The effect on the Aviation Division, particularly Cathay Pacific, is severe. However, the performances of Swire Pacific’s businesses in the first half of 2021 are now expected to be somewhat better than was the case when the 2020 results were announced. As a result, Swire Pacific no longer expects to incur a recurring loss in the first half of 2021.
The Lands Department (LandsD) announced that a site, Fanling Sheung Shui Town Lot No. 278 at Area 24, Kwu Tung, New Territories, in the 2021-22 Land Sale Programme will be disposed of by public tender. The tender invitation for the lot will commence on June 25 and close on July 23. Fanling Sheung Shui Town Lot No. 278 has a site area of about 7,624 square metres and is designated for non-industrial (excluding godown, hotel and petrol filling station) purposes. The minimum gross floor area and the maximum gross floor area are 27,447 sq m and 45,744 sq m respectively.
CATHAY PAC AIR (00293.HK) announced that it carried a total of over 24,000 passengers last month, an increase of 30% compared to May 2020, but a 99.2% decrease compared to the pre-pandemic level in May 2019. The month’s revenue passenger kilometres (RPKs) rose 24.5% year-on-year, but were down 98.9% versus May 2019.
It said the first half of 2021 has seen the tightening of travel restrictions and quarantine requirements as Hong Kong and the company's major markets continued the fight against COVID-19. These measures and the resulting increased quarantine for its aircrew have restricted its ability to operate passenger services beyond a single-digit percentage of its passenger capacity and have reduced its effective freighter capacity.
However, with the cost-saving measures implemented in 2020 (which are continuing) and a strong underlying cargo performance, its losses in the first half of 2021, while still very substantial, are expected to be somewhat lower than the losses reported in both the first and second halves of 2020.
The Lands Department said it had received six tenders for the commercial site at New Central Harbourfront, the tender of which had closed today (18 June). CK ASSET (01113.HK), SHK PPT (00016.HK), HENDERSON LAND (00012.HK) and a consortium formed by SINO LAND (00083.HK), CHI MER LAND (00978.HK) and GREAT EAGLE H (00041.HK) were among the bidders.
JLL expressed that the commercial site at New Central Harbourfront received better-than-expected bidding reactions from the market. As this is first harbor-front site in the district to be up for sale in 25 years, with no other similar sites pending for sale in near-terms, JLL expects relatively aggressive bids from developers due to the scarcity of sites of this nature.
The Hong Kong Monetary Authority announced that the composite interest rate, which is a measure of the average cost of funds of banks, decreased by 1 basis point to 0.20% at the end of May 2021, from 0.21% at the end of April 2021.
The decrease in composite interest rate mainly reflected a decrease in the weighted funding cost for deposits during the month.
GREATWALL MOTOR (02333.HK) is weighing up acquiring a Daimler factory in Brazil in hopes of furthering its overseas expansion, Bloomberg citing insiders.
JD-SW (09618.HK) announced that the order value for JD's 618 Festival had accumulated to RMB305.6 billion from 12am on June 1st to 2:04pm today (June 18th).
Thailand decided to go ahead with its Phuket pilot project from July 1st by exempting fully vaccinated tourists from the 14-day hotel isolation. The Asian country is gearing up for a nationwide reopening slated as early as October.
HK & CHINA GAS (00003.HK) and China's State Power Investment Corporation (SPIC) held the smart energy innovation TERRA Award in global pursuit of future-oriented smart energy innovative technology and solutions through competition. HK & CHINA GAS and SPIC are already partners in PV, wind power and other new energy projects in Mainland.
AlipayHK expressed that they will be partnering with a vast amount of offline and online businesses to give out rewards and discounts of a total worth of over $1 billion to users who choose to collect the consumption vouchers through AlipayHK.
Centa-City Leading Index (CCL) last stood at 186.58, up 0.49% weekly; CCL Mass last printed at 189.33, up 0.53% weekly;
CCL (small-and-medium flats) last reported at 186.80, up 0.47% weekly, said the research department of Centaline Property. The three key indexes logged 94-week highs altogether, and ascended for three weeks.
The national security unit of the Hong Kong Police Force arrested five executives of NEXT DIGITAL (00282.HK) yesterday morning (17th), on the allegation of infringing The National Security Law, and froze $18 million of assets belonging to Apple Daily and connected companies.The police has charged the CEO of NEXT DIGITAL Cheung Kim-hung and the chief editor Ryan Law for violating the article 29 of the law, namely colluding with a foreign country or external elements to endanger national security, reported local media. The two will be taken to the West Kowloon Magistrates' Courts for the first appearance to trail tomorrow morning (19th).
ASX 200 open lower but then rallied to 7,400 in the first hour. It tested a couple of times but failed to break out and then consolidated and traded sideways around 7,380 until around 2:20pm when it made another push higher but again hit resistance approaching 7,400 and then eased back to close +10pts (+0.1%) @ 7,369
Leaders were Tech and Health names
Laggards were Financials and Miners
A$ fell to its lowest since December. Woolies shareholders voted overwhelmingly to spin out the company’s bottle shop, pubs, and pokies business.
Pre market inflation data was better than expected but markets opened higher.
Nikkei opened higher at 29,137 but eased back and traded 29,050/120 range in the morning session. PM the market sold off initially down to 28,980 level, bounced back to flat but then sold off to close -54pts (-0.2%) @ 28,964
Topix opened flat and dropped to 1,953 in the first 10 minutes before working back to trade around 1,957 level for the rest of the morning. PM opened lower and sold down to 1,945 before a rebound but only to 1,953 and then sold down again to close around the day lows -17pts (-0.9%) @ 1,947
Inflation Rate May -0.1% YoY vs -0.4% Apr (F/cast was -0.3%)
Inflation Rate May +0.3% MoM vs -0.4% Apr (F/cast was +0.1%)
Core Inflation Rate May +0.1% YoY vs -0.1% Apr (F/cast was 0.0%)
Inflation Rate Ex Food & Energy May -0.2% YoY vs -0.2% Apr revised (F/cast was +0.4%)
BoJ Interest Rate Decision unchanged at -0.1% as expected
Sentiment positive as exepctations of a strong recovery offset concerns about earlier than expected talk of US tapering.
Kospi open slightly higher and rallied to 3,275 in early traded but then consolidated back to flat by mid morning. From then on it trended higher but in choppy trading to close +3pts (+0.1%) @ 3,268
Kosdaq open higher and rallied to 1,010 in early trades and then slowly worked better through the day to close at the highs +12pts (+1.2%) @ 1,016.
Trading volumes were moderate, Foreigners & Institutions net sellers with Retail buying. Samsung, Hynix, Hyundai and LG Chem closed lower but Samsung SDI along with Naver and Kakao closed higher.
Taiex opened lower and sold down to 17,350 in the first 25 minutes, then rebounded to 17,400 level but failed to hold and trended lower for the rest of the day in choppy trading. T/O was USD 19.24bn. News of more Chinese miitary aircraft intrusions -VE for sentiment.
CECC reported 188 new covid cases.
Taiwan dollar was weaker vs the USD. Taiwan's Central Bank disclosed on Thursday (June 17) the country has been working on a pilot platform for a potential Central Bank digital currency — though there is no timetable for a rollout at the moment.
TSMC will spend USD100 billion on production expansion in the coming 3 years on a global scale, based on geopolitics and risk diversification concerns, reported Taiwanese media. The report stated that TSMC has confirmed to build a factory in Japan and is currently assessing to invest for another semiconductor plant in Germany.
CONNECT FLOWS (significantly increased flows DoD)
Northbound Rmb 60,023m Sell 30,921m vs 29,103m Buy
Southbound HK$ 18,643m Sell 9,076m vs 9,567m Buy
Northbound Rmb 67,439m Sell 33,330m vs 34,109m Buy
Southbound HK$ 21,433m Sell 10,378m vs 11,055m Buy
MEITUAN (03690.HK) +3.7%
PING AN (02318.HK) -1.7%
BABA (09988.HK) +1.6%
HKEX (00388.HK) +1.6%
TENCENT (00700.HK) +0.7%
CCB (00939.HK) unchanged
AIA (01299.HK) unchanged
HSI & HSCEI Constituents on Move:
CHINA GAS HOLD (00384.HK) -12.3%
WUXI BIO (02269.HK) +9.4%, hitting new high
XINYI SOLAR (00968.HK) +8.7%
SUNNY OPTICAL (02382.HK) +6.9%
ANTA SPORTS (02020.HK) +6.4%, hitting new high
GEELY AUTO (00175.HK) +5.3%
EVERGRANDE (03333.HK) -5.1%
CHINA RES LAND (01109.HK) -4.4%
BYD COMPANY (01211.HK) +4.2%
HANSOH PHARMA (03692.HK) +4.2%
HAIDILAO (06862.HK) +4.1%
SINOPEC CORP (00386.HK) -3.9%
JD (09618.HK) +3.5%
LINK REIT (00823.HK) +3.5%, hitting new high
SUNAC (01918.HK) -3.4%
CHINA OVERSEAS (00688.HK) -3.1%
ENN ENERGY (02688.HK) -3%
HSMI & HSSI Constituents on Move:
DAHSING BANKING (02356.HK) +19.2%, hitting new high
DAH SING (00440.HK) +18.1%, hitting new high
CHINA DONGXIANG (03818.HK) +12.2%
SITC (01308.HK) +10.6%
HUABAO INTL (00336.HK) +10%
MARKET HOURS NEWS.
Huitongda Network has filed for listing with the Stock Exchange, expecting to raise US$1 billion according to earlier rumors.
Having invested in Huitongda in 2018, BABA-SW (09988.HK) is now the second-biggest shareholder of Huitongda.
WeChat Pay HK welcomes details of the Consumption Voucher Scheme announced by the Hong Kong Government. Going all out to gear up and help with the scheme's rollout, WeChat Pay HK says the consumption voucher balance and the app's wallet balance will be handled separately.
Users can utilize their wallet balance, as well as credit cards or bank accounts which are linked to the app, in combination with their consumption voucher balance should the latter be insufficient.
Sino Group announced that 8 major shopping malls under the group will partner with several payment platforms to launch reward and rebate programs for customers during the period in which the consumption vouchers are being disbursed. The group expressed that they expect to see increases in the sales volume of the shopping malls as around 90% of the businesses in the group's malls will be collaborating with the 4 major electronic payment platforms.
Paul Chan, Financial Secretary, stated that the registration for the consumption voucher scheme will be open from 4 July until 14 August. Eligible citizens can choose to submit their applications via electronic or written means. Vouchers worth of $5,000 in total will be disbursed in 3 instalments for citizens using Octopus cards to collect, where users can expect to receive the first instalment of $2,000 by 1 August at the earliest and receive second and third instalments of $2,000 and $1,000 respectively later on. Vouchers collected through AlipayHK, Tap & Go, WeChatPay HK will be disbursed in 2 instalments with the first instalment of $2,000 ready to be collected also by 1 August at the earliest, and the second instalment of $3,000 available in October or November, depending on the date of registration.
As the registration for the consumption voucher scheme begins on 4 July, Paul Chan expressed the government's hope for the scheme to boost local economy and businesses when the vouchers are applicable across various aspects of the lives of the general public. Despite the fact that the pandemic is becoming under control in recent days and the gradually recovering economy, there remains a significant distance between Hong Kong's current unemployment rate and that in the pre-pandemic times, Chan said. In addition, Chan said the initial projection of the administrative expense for the scheme is far below $600 million.
Government Economic Adviser projected the consumption vouchers to fuel the economy by 0.7%, Financial Secretary Paul Chan indicated at the press conference. However, the actual effects will be contingent on various factors, such as whether citizens will change their original consumption after they receive the vouchers.
The administrative fee for each payment vehicles for the vouchers is the same, Chan furthered, while the government hoped such vehicle operators to give back to citizens and merchants out of the benefits they obtain under the scheme.
Macau's Statistics and Census Service showed that visitor arrivals to Macao totaled 866,000 in May 2021, an increase of 9.0% month-over-month and an upsurge of 52.7x year-over-year. Overnight visitors and same-day visitors added up to 473,800 and 392,200 respectively.Microsoft Corp plans to open four new China data centers in early 2022 to further expand its service capacity in the Asian market, Bloomberg citing insiders.A representative of MIIT stated during the 2021 China Auto Forum, that the 14th 5-year plan will be a critical phase for the Chinese automobile industry. MIIT illustrated several major objectives, including enhancing the overall industry level and product quality and propelling the development of infrastructure and facilities for new energy battery-charging and replacement.Wan Gang, Vice Chairman of the CPPCC, advised during the 11th China Auto Forum, that relevant authorities ought to expedite on formulating supportive policies in the post-subsidy era, while extending the policy to exempt and lower the purchase tax for new energy vehicles, reported China Securities Journal.JD-SW (09618.HK)'s chairman Richard Liu issued a letter to investors on the 18th anniversary of the company and to extend his gratitude for their longstanding trust and support, stating that JD-SW's businesses span across retail, technology, logistics, health and property, and have created enormous value. Over the next decade, Liu mentioned in his letter, JD-SW will endeavor to be a part of a larger ecosystem by opening up and forming external links while dedicating itself to developing a new generation of infrastructure, namely, JD’s smart supply chain. The company will use its technological and supply chain capabilities to help partners lower operating costs and increase efficiency, making it easier for all partners, especially middle and small-sized enterprises to access advanced technologies and resources, adjust smoothly to changing circumstances and better serve their customers.
RAZER (01337.HK) announced that the Company had repurchased 6.8 million shares at $2.09-2.11187 each through the Stock Exchange yesterday (17th), involving $14.3607 million.
Macau's Centre for Disease Control and Prevention expressed that should Hong Kong continues to find no new local cases for 14 days straight, Macau government will engage in a discussion with its Hong Kong counterpart in regards to easing up immigration measures for travels between the two cities.
Macau authorities said that no decision has been made at the moment as relevant details remain to be worked out along with the Hong Kong government.
MSCI is considering to launch indexes for cryptocurrency assets, for which the company has already engaged in a consultation with experts, said the index publisher's CEO Henry Fernandez. Fernandez, however, did not specify the assets on which the indexes will focus or give any concrete timeframe.
Soulgate, a Chinese social networking app backed by TENCENT (00700.HK), will go public in the U.S. to raise around US$198 million by offering 13.2 million ADSs at US$13-15 apiece, IFR reported.
Hong Kong was ranked seventh most competitive economy by the International Institute for Management Development in its World Competitiveness Yearbook 2021, compared to fifth last year. Among the four competitiveness factors, Hong Kong continued to rank top in government efficiency, while its rankings in economic performance, business efficiency and infrastructure were slightly lower than those in the previous report. On sub-factors, Hong Kong continued to top the ranking in business legislation. Its rankings in international trade, tax policy, finance and management practices also remained in the top-three positions globally.
PRE MARKET HOURS NEWS
CATHAY PAC AIR (00293.HK) expressed that the Immigration Department would only agree to renew the working visas for foreign pilots but not for the flight crew with a foreign nationality, reported South China Morning Post, citing the company's internal notice. CATHAY PAC AIR regrets the department's decision and stated that the company will continue to communicate closely with the Immigration Department in the future in regards to application for working visasMSCI announced to remove BRILLIANCE CHI (01114.HK) from the MSCI Indexes as the stock had been suspended from trading for more than 50 days.
At an occasion of The Chinese Manufacturers' Association of Hong Kong, Chief Executive Carrie Lam voiced her opinion that Hong Kong's economy has seen green shoots. On the ride of China's boost to global economic revival, the total exports of goods of Hong Kong delivered over 30% surge in 4M21, and the unemployment rate also showed improvement. The city's GDP in 1Q21 grew by 7.9% year-on-year, ending six consecutive quarters of contraction, Lam said, assuming the growth to hit 5.5% this year as long as the epidemic continues to taper off.MSCI announced to remove CHINA HUARONG (02799.HK) from relevant indexes with effect from June 22 given the stock's trading suspension of at least 50 consecutive trading days.
US President Joe Biden's executive order in regards to the protection of sensitive data might force certain Chinese applications to enforce stricter measures to safeguard personal information, reported Reuters, citing people familiar with the matter. The U.S. Department of Commerce may, the report continued to state that, issue subpoenas to collect information from certain smart phone, tablet or computer applications.
The department will subsequently specify to relevant Chinese companies conditions which they have to fulfill if they want to remain in the U.S. market, or even directly impose a ban on those applications.
The U.S. Federal Communications Commission (FCC) voted unanimously for a plan to bar local telecoms equipment sales by Chinese firms considered national security threats, including Huawei, ZTE (00763.HK), Hikvision, Dahua Technology and Hytera.
The number of transactions via JD Pay advanced more than a double yearly as at 00:00-00:10 on 18 June, as revealed by the data from JD Finance.The Hong Kong Monetary Authority (HKMA) launched today a new Regtech Adoption Practice Guide series to provide banks with detailed practical guidance on the implementation of Regtech solutions.
The publication of the Regtech Adoption Practice Guide series forms part of the HKMA’s two-year Regtech promotion roadmap announced in November 2020. It succeeds the Regtech Watch series and builds on it to provide banks with detailed guidance on how to overcome implementation challenges associated with Regtech adoption.
XIAOMI-W (01810.HK) official Weibo account showed that, from 1 June to 18 June, XIAOMI-W accumulated over RMB15 billion worth of payment for the 618 festival across different platforms.
The total sales figure of JD supermarket rocketed more than 10x year-over-year within 3 mins of the commencement of the 618 shopping festival, with substantial sales number recorded across various types of products, including dried food, alcohol and personal care products, reported Chinese media.
Guangdong's National Health Commission reported one more local COVID-19 cases yesterday (17 June), which was stemming from Foshan.
WEIGAO GROUP (01066.HK) announced that the offer price of the proposed spin-off and separate listing of Shandong Weigao Orthopaedic Device Company (Weigao Ortho) on the Sci-Tech Board is fixed at RMB36.22 per share. It is estimated that Weigao Ortho will receive total proceeds of RMB1.5 billion from the Offering.
CK ASSET (01113.HK)'s statement disclosed that it repurchased 242,000 shares on the Stock Exchange on 17 June at $51.90-51.95 each, involving approximately $12.57 million. Year to date, the company bought back 3.15 million shares, representing 0.0853% of the share capital of the company.
CKH HOLDINGS (00001.HK)’s statement disclosed that it repurchased 2.096 million shares on the Stock Exchange on 17 June at $59.05-59.45 each, involving approximately $124 million. Year to date, the company bought back 3.706 million shares, representing 0.0961% of the share capital of the company.