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HSI -131pts (-0.5%) 28,787 HSCEI -57pts (-0.5%) 10,748 T/O HK$144.47bn (-25% DoD)
Markets open lower as German Factory orders were weaker than expected -VE but UK housing data was slightly better. Sentiment cautious as UK re-opening may be delayed and weak China data.
FTSE trading sideways in the green, DAX & CAC worked back into the green and now working higher. Auto & Media leading, Basic Resources weak.
IWG weak on after warning of a sharp drop in profits.
Factory orders Apr -0.2% MoM vs +3.9% Mar revised (F/cast was +1.2%
Halifax House Price Index May +1.3% MoM vs +1.5% Apr revised (F/cast was +1%)
Halifax House Price Index May +9.5% YoY vs +8.2% Apr (F/cast was +9.6%)
BBA Mortgage Rate May 3.62% vs 3.62% Apr (F/cast was 3.61%)
Opened Dow +15 points in Asian time, or less than 0.1% dipped intraday to -8pts but now flat. Nasdaq -0.3% and S&P -0.1%
AHEAD Consumer Credit Change
Earnings Vail Resorts, Marvell Tech, Stitch Fix, Coupa Software.
No Fed speakers this week; blackout ahead of FOMC next week.
CHINA CSI 300 closed -5pts (-0.1%) @ 5,278
CSI 300 opened flat but sold off after 15 minutes but rebounded only to sell down again over the next 30 mins. Pushed back to the opening level but then sold down ahead of the trade data and then trended lower to 5,243 at lunch. PM worked better to around the opening level. Certainly looked like Team China working hard.
Trade data missed f/casts, balance missed badly, Imports were strong as expected but exports dropped more than expected. Worry as that data is before the recent covid outbreak that is impacting the ports. Later this week we get inflation data and probably loan data. Couple that with Katherine Tai saying that the US/China trade relationship had troubling elements and I would expect investors to remain cautious especially the exporters to the US.
Shanghai Composite +8pts (+0.2%) @ 3,600
Shenzhen Composite -8pts (-0.1%) @ 14,862
ChiNext Composite Index +12pts (+0.4%) @ 3,269
Balance of Trade May $45.54b vs 42.86b Apr revised from $42.85b (F/cast was $55b)
Exports May +27.9% YoY vs 32.3% Apr (F/cast was +31%)
Imports May +51.1% vs 43.1% Apr (F/cast was +50%)
Foreign Exchange Reserves May $3.22T vs 3.198T Apr (F/cast was $3.2T)
Key they increased for the first time in four months to USD 3.198 billion in April of 2021 from USD 3.17 trillion in March, in line with forecasts of USD 3.2 trillion. With the value of the gold reserves rose to USD 119.02 billion from USD 110.73 billion
HSI Pre market opened @28,986 +67pts vs +126pts ADR’s but sold down heavily in the first 30 mins to 28,616. Then traded sideways into lunch. Little reaction to the China trade data which seems to confirm that the recovery is both patchy and slowingPM worked slightly higher through the session and ticked higher in the closing auction.
With WH group strong on share buyback news but Tencent weak after Martin Lau (President) sold shares.
HONG KONG DATA
Foreign Exchange Reserves May $494.5B vs 490.6b Apr
The Centre for Health Protection (CHP) reported 7 new covid cases 6 imported, the local case was the sister of the female announced on June 5 (7 Sunday 6 imported and 1 locally linked)
Short Selling Monday 10.8% vs13.6% Friday
Top Shorts Shenzhou Int (2313) 39%, Sunny Optical (2382) 34% (after poor numbers from Largen), Bud Apac (1896) 32%, Bank Comm (3328) 30%, BoC HK (2388) 26%, Wharf REIC (1997) 25%, Country Garden (2007) 24%,
AFTER MARKET NEWS
Emperor Group announced that its Emperor Cinemas give away 20,000 tickets to encourage residents to get vaccination.
CRRC (01766.HK) announced that the Company is not included in the Annex to the latest Executive Order by US President Biden. prohibiting investment in relevant securities investments in certain Chinese companies.
Market opened higher rallied to 7,309 before trading sideways and then selling down to 7,283 before working back to flat at midday. But then trended lower to 7,270 around 2pm but then rallied back strongly to 7,290 before trading sideways to close -14pts (-0.2%) @ 7,281.
Altium +39% on news it rejected a T/O bid. Travel companies weak on concerns Melbourne lockdown may be extended. Crown Resorts weak on potential anti-money laundering; -VE also for NAB, The Star and SkyCity
Pre Market Services Index May 59 vs 61 Apr.
Later Job Advertisments May +7.9% MoM vs +4.9% Apr revised
S&P maintains the AAA credit rating for Australia and lifts its rating prospect from negative to neutral
Pre market Foreign Exchange reserves rose to $1,387.5b
Nikkei opened higher at 29,200 but trended lower to 28,973 just before lunch. PM opened higher and traded sideways to close +78pts (+0.3%) @ 29,019
Topix traded in a similar pattern, low was 1,957 and closed +2pts (+0.1%) @ 1,961
Toshiba announces buyback during the morning session.
Leading Economic Index Prelim Apr 103 vs 102.4 Mar revised (F/cast was 102)
Coincident Index Prelim Apr 95.5 vs 92.9 Mar revised (F/cast was 93)
Tomorrow we get GDP data.
Kospi opened higher and rallied to 3,264 in early trades but then reversed to the opening level before drifting lower to 3,233 around midday. It then worked back to 3,258 level mid afternoon but then sold down slightly and bounced back ahead of the close and finished +12pts (+0.4%) @ 3,252; a new high with Institutions and retail net buyers Foreigners net sellers of both indexes.
Kosdaq similar pattern, high was 993, low 982 and closed-1pt (-0.1%) @ 986
KDCA reported 485 new covid cases (vs 556 Sunday) slight +VE but could reflect less testing.
Taiex opened slightly higher but trended lower to 16,776 at 10am on news the Level 3 covid alert to be extended to June 28 but then worked better but resistance as it approached Friday’s closing level and closed -64pts (-0.4%) @ 17,084 T/O was US$17.65bn.
Signs or retail locking in gains in Shipping & Airlines. Buying of large cap tech as the market tested the day lows. Paper stocks +VE on news of price increases; Chung Haw Pulp and YFY limit up.
Covid still overhangs the market; CECC reported 214 new covid cases.
Some water restrictions were lifted on Monday after the recent rains.
CONNECT FLOWS (down DoD)
Northbound Rmb 42,525m Sell 21,824m vs 20,700m Buy
Southbound HK$ 17,404m Sell 8,878m vs 8,526m Buy
Northbound Rmb 51,045m Sell 26,946m vs 24,099m Buy
Southbound HK$ 19,475m Sell 10,286m vs 9,190m Buy
TENCENT (00700.HK) -1.8%
HKEX (00388.HK) -1.5%
BABA (09988.HK) +0.9%
MEITUAN (03690.HK) -0.7%
AIA (01299.HK) -0.6%
CCB (00939.HK) -0.5%
PING AN (02318.HK) -0.3%
HSI & HSCEI Constituents on Move:
WH GROUP (00288.HK) +7.7%
AAC TECH (02018.HK) +6.2%
GEELY AUTO (00175.HK) -5.2%
ALI HEALTH (00241.HK) -4.8%
JD HEALTH (06618.HK) -4.1%
XIAOMI (01810.HK) -4.1%
CHINA RES BEER (00291.HK) +3.9%
CHINA GAS HOLD (00384.HK) +3.5%
EVERGRANDE (03333.HK) +3.2%
HSMI & HSSI Constituents on Move:
CHINASOFT INT'L (00354.HK) +11.1%
PER ENERGY (02798.HK) -10.2%
CIMC (02039.HK) +6.3%, hitting new high
SINOPHARM (01099.HK) +4.9%, hitting new high
CIMC ENRIC (03899.HK) +3.6%, hitting new high
MARKET HOURS NEWS.
MTR CORPORATION (00066.HK) said the new Tuen Ma Line (TML) platform at Hung Hom Station (HUH) will be opened on 20 June (Sunday), i.e. one week before the commissioning of TML, and new interchange arrangements for the West Rail Line (WRL) and the East Rail Line (EAL) will be in place on the same day.
TENCENT (00700.HK)'s mobile payment platform WeChat Pay HK partners with Visa in support of the consumption voucher scheme launched by the government by providing discounts to the users who pay by Visa card through WeChat Pay HK. Local mid-small scaled businesses can also utilize the enormous users base, network and the brands of the two companies to launch series of promotion, in hope to achieve business growth during the period of the voucher scheme.
Responding to circulating rumor that the warehouse fire would affect the supply for 618 shopping festival, XIAOMI-W (01810.HK) clarified on Weibo that the warehouse that suffered from the fire incident is not one of the company's, and that all the damaged done to the company's goods are covered by insurance. The company stressed that despite some of the 618 goods are damaged by the fire, there will be no disturbance to the supply and logistics for the shopping festival.
The preparation work for the GBA Wealth Management Connect scheme has entered the final stage, SFC Deputy CEO, Julia Leung said. She said that SFC over the past year has been working closely with the Hong Kong Monetary Authority and Mainland authorities to prepare for the launch of the long-awaited Wealth Management Connect scheme. Under this scheme, the mode of sales would change to execution-only online platform and mobile apps.
BABA-SW (09988.HK) announced that its new retail platform Hema had established a new product incubation center "Hema x Accelerator". The center is to leverage the insight of both online and offline consumers, as well as product R&D and innovation capabilities. Thus, a Hema-oriented ecosystem with iterative optimization algorithm will be built for the whole process ranging from R&D to commercialization and sales.
For the litigation between BABA-SW (09988.HK) and China National Intellectual Property Administration (CNIPA) in respect of trademark registration, the trial of second instance in China has rejected the appeal of BABA-SW for the "Double 11" trademark on the basis that the label lacked uniqueness where the public might find it hard to identify as a service source and take it simply as a specific date. BABA-SW had in January 2019 registered for the "Double 11" trademark for its shopping festival, or "雙11 in Chinese indicating the date "11 November".
EVERGRANDE (03333.HK) has recently come into the center of attention concerning discounted property disposal, giving rise to rumors on the group's operation status and capital chain. In this regard, the developer issued a statement today specifying the company's normal production and operation. EVERGRANDE will take legal actions against any malicious rumor monger according to the law.
Hong Kong Airlines will roll out remedies including a one-year grounding of the A320 aircraft, which makes up roughly a third of its fleet, according to local sources. Equally, flights to and from Shanghai will be axed to one per week. The management is exploring another feasible cost-saving plan to scale down the overall headcount by half, involving around 1,000 staff members. The carrier will wrap up the plan as soon as this week, sources said.
Ant Group had no comment on the rumored "Xianghubao" shutoff on Friday (11 June), as Sina Finance cited the people concerned. Launched on 16 October 2018, "Xianghubao" is a mutual aid plan for critical illnesses on Alipay, as well as the world's largest mutual aid community.
In response to the government of Guangzhou city's call, BIDU-SW (09888.HK) announced that the local autonomous driving companies, led by BIDU-SW Apollo, have drafted proposals regarding the anti-epidemic resources delivery in Liwan district.
The proposals entail arrangement for technical staff to stand by and using driverless auto vehicles to deliver resources to isolated communities, so as to assist Liwan district in combating the pandemic.
Ant Technology Group established Chongqing Ant Consumer Finance with Huang Hao as the legal representative and registered capital of RMB8 billion, Chinese media reported. Its business scope included personal consumer loans, acceptance of deposits from shareholders' domestic subsidiaries and domestic shareholders, and more. The company's largest shareholder is Ant Technology Group, which holds 50% of the shares. Its shareholders also include CATL (300750.SZ), China Huarong Asset Management, etc.
The residential selling prices in April 2021 were merely 2% below the historic high as logged in May 2019, whereas the home ownership affordability index hiked to about 73% in 1Q21, notably higher than the average in the last 20 years, said Financial Secretary Paul Chan during his attendance at the Panel on Financial Affairs of the LegCo.
The housing price trend was exposed to several factors, including employment, economy and demand/ supply, Chan said, observing the mortgage repayment capability of citizens is still strong at the moment.
Overnight HIBOR last posted at 0.03821%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.08649%, marking a 1-month high.
GAC announced statistics which showed that, in the first 5 months of 2021, China's electromechanical products export stretched 31.9% year-over-year to CNY4.78 trillion with mobile phone export rose 28.8% to CNY354.87 billion and automobile surged 95.8% to CNY75.67 billion.
The setup for the recently announced consumption voucher scheme has already entered the final stage as the government continues to test relevant systems with the four selected SFVs and cooperating units, in order to ensure smooth registration and distribution, Financial Secretary Paul Chan said on the Panel on Financial Affairs. Chan states that the government hopes to release relevant details, including registration procedures and distribution arrangement, in late June, and to begin official registration from July.
ANGELALIGN (06699.HK) informed its investors that its international offer section will cut off subscription one day earlier by around 5pm today (7th), reported IFR, citing people familiar with the matter. ANGELALIGN's IPO will end tomorrow (8th) and the company is expected to begin to be listed on 16th. It is rumored that its international offer section has already recorded sufficient subscription during the first hour on the first day of its IPO.
TENCENT (00700.HK) is currently in the application process for a trade mark for its "Fenfu (分付)", which carries an international category of finance, property management and communication services business, reported Chinese media. "Fenfu" is said to perform functions similar to that of "Huabei Installment" (Alipay Ant Credit Pay), enabling WeChat users to loan money through the application, while differing in their charges. "Fenfu" is still in the testing phase at the moment.
S&P Global Ratings downgraded HK & CHINA GAS (00003.HK)'s long-term issuer credit rating from "A" to "A-", with a stable outlook. This reflected the company's benefit from its robust and solid gas business in Hong Kong, along with reviving profitability in China. The agency projected the firm's ratio of funds from operations (FFO) to debt to stay below 30% during 2021-23, given high level of capex and dividend payout
JD LOGISTICS (02618.HK) announced that the first batch of JD smart delivery cars has arrived in Guangzhou to aid the anti-pandemic campaign and will prioritize securing resources and delivery needs of the 14 communities in Guanggang Xincheng located in Liwan District. The company is already undergoing technical tests and planning for transportation routes between respective delivery destinations at the moment.
The Pavilia Farm III, a residential project co-developed by NEW WORLD DEV (00017.HK) and MTR CORPORATION (00066.HK) atop Tai Wai Station, has successfully sold out all 331 units listed in the first round of sales on last Saturday (5th), cashing in over $4.37 billion. A third price list was subsequently released by the developer on the same day, containing 338 new units, with salable area ranging from 307-1,022 sq.ft. and discounted selling price from $6.889-$25.9 million. As for second-hand properties, Hong Kong Property's top ten housing estates reported 16 deals last weekend, marking a double-digit for five weeks.
CK ASSET (01113.HK) announced that the Share Buy-back Offer involving 380 million Shares bought back by the Company was completed. As a result, immediately after the Completion, the total number of issued Shares was reduced from 4.027 billion to 3.647 billion Shares; and the aggregate interests held by the Controlling Shareholder Group increased from approximately 41.29% to approximately 45.6% of the total issued Shares.
Companies are being cautioned by Goldman Sachs that adopting cryptocurrency is going to be a long and excruciating journey, as several cryptocurrency-related accounts are suspended on Weibo, causing a plunge in Bitcoin price, last posting USD36,366.6. This seems to be about the Weibo platform censoring rather than Govt action as those suspended looked to be ‘influencers’ and some just switched their views to twitter. Suggesting it was more about the platform pre-empting the regulator than being told too.
Also, Goldman Sachs' report showed that Bitcoin is not particularly favored by CIOs, citing the CIO roundtable meetings held this week.
Roughly 1,700 tourism practitioners were assigned short-term jobs for operation, management and administration support at 24 vaccination centers under the Anti-epidemic Fund's Job Creation Scheme, said Secretary for the Civil Service Patrick Nip.
The tourism industry has been one of the sectors bearing the brunt from the Covid onslaught, Nip added on social media.
Boeing Company CEO Dave Calhoun warned that a China-US trade impasse would threaten the full-fledged comeback of its 737 Max unit and the firm's role as an American industrial leader, Bloomberg reported. Boeing has resumed 737 Max flights in most of the US and European regions, but China has yet to approve the aircraft's return.
As Hong Kong COVID-19 pandemic continues to stabilize, the government is constantly endeavoring to solidify the current success of fighting against the virus and hopes to assist various industries with their recovery, said Paul Chan, Financial Secretary, on his blog. Chan furthered that the construction industry, despite the high current unemployment rate of 10.9%, has displayed signs of recovery and is expected to further improve its employment situation so long as the society and the government keeps contributing in combating the pandemic and building immune barrier at construction sites.
Apart from including the medium or high-risk areas as listed by the National Health Commission, reference will also be made to the confirmed and infected cases as notified by the Mainland and Macau health authorities. A sub-district will be adopted as the smallest unit on the list and no further classification by individual buildings or phases within sub-districts will be made.
In accordance with the requirements under the scheme, Hong Kong residents who have stayed in any area in the Mainland that is included on the list of at-risk areas on the day of arrival at Hong Kong or during the 14 days before that day will not be exempted from compulsory quarantine under the scheme upon their entry into the city. They will have to undergo a 14-day compulsory quarantine at home.
PRE MARKET HOURS NEWS
US Trade Representative Katherine Tai pointed out the "significant imbalance" in China-US trade relationship, adding the Biden administration is striving to level such imbalance. The US government is reviewing her stance towards China, without major change in the policies adopted by the Trump administration.
The U.S. president Biden's proposed USD4 trillion spending plan would be beneficial to the country, even if it results in rising
inflation and higher interest rates, said U.S. Treasury Secretary Janet Yellen during a Bloomberg News interview.
Yellen mentioned that the U.S. has been combating excessively low inflation rate and interest rate for a decade now, and the potential increase on inflation and interest rates might actually alleviate said problem and conducive to restoring a normal interest rate environment to the country.
ZHENGTONG AUTO (01728.HK) said the Company has noted the fluctuations in the trading price and trading volume of the shares of the Company on 4 June. 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 or of any information that needs to be disclosed under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). Shareholders and potential investors of the Company are advised to exercise caution when dealing in securities of the Company.
ESUN HOLDINGS (00571.HK) jointly announced that MEDIA ASIA has conditionally agreed to allot and issue an aggregate of 83.3333 million subscription shares at the subscription price of HKD1.2 per subscription share, to THL G Limited -- a direct wholly-owned subsidiary of TENCENT (00700.HK), at a discount of approximately 11.11% to the closing price on last Friday.
The net proceeds from the allotment and issue of the subscription shares are estimated to be approximately HKD97 million and the company intends to use the net proceeds for general working capital and for the future development of the group’s business.
SUNAC (01918.HK) announced that in May 2021, the Group achieved contracted sales value amounted to approximately RMB70.81 billion, representing year-on-year increase of 57%, and contracted sales area amounted to approximately 5.119 million sq.m., with contracted average selling price of approximately RMB13,830 per sq.m..
WH GROUP (00288.HK) resolved for a conditional voluntary cash offer to be made to buy-back up to 1.917 billion shares, representing 13% of the issued share capital of the company as at the date of this announcement at a cash consideration of HKD7.8 per share.
The consideration for the offer, being approximately HKD14.952 billion if the offer is accepted in full, will be paid in cash and will be funded partially by internal resources of the Group and largely by a committed facility. The company has applied for a trading resumption today (7 June).
NISSIN FOODS (01475.HK) aims at flattish or maximum 10% growth of sales this year, as Chairman cum CEO Kiyotaka Ando told our reporters. The company registered sales hike in China last year since people tended to enjoy cup noodles and instant noodles at home in wake of epidemic. Although the epidemic in China has subsided, sales maintain the momentum. He assumed the 3Q and 4Q performance to keep shining. The Chairman further revealed that the company has no plan to hike product prices this year, adding a new flavored "Chili Tomato" cup noodles will hit the market in Hong Kong at end-June or not July.
China's polycrystalline silicon price hit RMB198,000/ton on 4 June, up 7.03% weekly, 30.26% monthly and 260% yearly, Securities Times citing Baiinfo's data. Silicon undersupply has been exacerbated by rather frequent gear examination and repair at silicon plants in June, according to analysis.
The Longgang District of Shenzhen reported one Covid-19 diagnosis yesterday (6th), according to the district's Covid-19 prevention and control command center office.
The Futian District of Shenzhen launched an urgent Nucleic Acid Test (NAT) screening for all personnel. Roughly 1.769 million people will have to complete NAT tests during 6-8 June.
Guangzhou reported nine Covid diagnoses on 5 June, announced the city's National Health Commission yesterday. In a Covid prevention and control notice, Guangzhou suggested residents avoiding non-essential outbound travel. Starting today, those leaving Guangzhou must present their negative NAT results within 48 hours. Equally, confined entertainment venues shall be suspended. All yellow code holders should conduct NAT tests at once.
GREENTOWN CHINA (03900.HK) announced that from January to May 2021, Greentown Group recorded a contracted sales amounting to RMB102.9 billion, increased by 142% year-on-year.
KINGMAKER (01170.HK) issued a positive profit alert. The Group is expected to record a profit attributable to equity holders of the Company of not less than HK$65 million for the year ended 31 March 2021 as compared with a loss attributable to equity holders of the Company for the year ended 31 March 2020.