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HSI +167pts (+0.6%) 28,194 HSCEI +99pts (+1%) 10,504 T/O HK$145.63bn (-3.5% DoD) but less if you exclude today’s IPO
Markets opened higher but drifted lower; no European data but weak data out of China and an increase in covid cases a worry. Also comments from PM Johnson about the spread of the Indian covid variant as pubs and restaurants re-open. Inflation concerns remain ahead of the FOMC minutes. The sell off in bitcoin also a concern.
Earnings from Ryanair who said it had seen a “strong snap back” in bookings in recent weeks, but reported a full-year net loss of 815 million euros ($989 million) as Covid-19 restrictions saw its traffic levels -81%.
Diploma higher after reporting a rise in fiscal first-half profit and projecting full-year earnings ahead of expectations.
Kinnevik plunged more than 34% as it it transferred its stake in online retailer Zalando to its shareholders.
Opened slightly higher in Asia but have slipped Dow now -116pts (from +40 pts). S&P 500 & Nasdaq futures -0.3% (were +0.2%). Media in focus as AT&T (+5% pre market) is in advanced talks to merge WarnerMedia, which includes HBO, with Discovery (+16% pre market). Bitcoin volatile with uncertainty over whether Tesla still holds bitcoin.
Data due NY Empire State Manufacturing Index, NAHB Housing Market Index, Foreign Bond Investments, Overall Net Capital Flows, Net Long-term Tic Flows.
Earnings : Hostess Brands, Lordstown Motors, Tencent
CHINA CSI 300 closed +74pts (+1.5%) 5,185
CSI 300 opened slightly higher and rallied to 5,200 despite the poor China data and new covid cases in China. Traded around the 5,200 in lunch. PM started by dipping lower to 5,180 level and then traded sideways into the close.
Team China active supporting the market for its best two-day run since February on hopes that Beijing will maintain its policy support for the economic recovery that from the data looks to be losing steam. There are still concerns about credit defaults and PBoC tightening. Little talk of covid;suggests the government is controlling the narrative.
Shanghai Composite +27pts (+0.8%) @ 3,518
Shenzhen Composite +248pts (+1.7%) @ 14,457
ChiNext Index +40pts (+1.3%) @ 3,098
China confirmed 25 additional COVID-19 cases Sunday (16 May), including five local infections, reported by National Health Commission.
China House Prices in 70 large & medium sized cities Apr +4.8% YoY vs +4.6% March (F/cast was 4.8%)
Retail Sales Apr 17.7% YoY vs +34.2% March (F/cast was +26%)
Industrial Production Apr +9.8% YoY vs +14.1% March (F/cast was +10%)
Unemployment Apr 5.1% vs 5.3% March (F/cast was 5.3%)
Fixed Asset Investment (YTD) Apr +19.9% YoY vs 25.6% March (F/cast is 19.5%)
Chinese National Bureau of Statistics announced that in April 2021, the sales prices of second-hand residential property in Beijing +10.1% YoY, Shanghai +9.3% YoY, Guangzhou +12.9% YoY and Shenzhen +12.9% YoY.
China's electricity generation +11% yearly to 623 billion kWh in April 2021, according to National Bureau of Statistics (NBS) data.
Pre market opened @ 28,131 +103pts vs +223pts ADR’s With slighty evevated T/O I think as a lot of last weeks shorts, which were put on when the market was trading below 28k covered. Market tested to 28,268 but failed to break higher and consoldiated back to 28,100 before a bounced to 28,165 and then traded around there into lunch.
PM working higher in choppy trading intial resistance at 28,200 which broke just after 2pm then around the 28,240 level but failed at its last attempt around 3pm and then trended lower to the close at 28,160 but then spiked 32pts in the closing auction.
Volumes remain constant but concerns after the weak China data and Beijing’s ability to stimulate the economy. Also covid concerns overhanging the market as China, Taiwan and other Asian countries report elevated cases.
HONG KONG DATA
The Centre for Health Protection (CHP) reported 1 new covid cases (vs 4 Sunday 3 imported and 1 local)
SF REIT (02191.HK) Opened -9.8% at $4.49 and closed at $4.16, down 82 cents or 16.5% against the listing price of $4.98, on volume of 84.08 million units, involving $361 million. Excluding the handling fees, a book loss of $820 was reported per board lot of 1,000 units.
Short Selling Monday 16.5% vs 16.9% Friday
Top Shorts Bud Apac(1876) 48%, Hengan (1044) 40%, Shenzhou Int (2313) 38%, MTRC (66) 38%, Sunny Optical (2382) 37%, Bank of China (3988) 36%, CK Assets (1113) 35%, Hang Seng Bank (11) 31%, HK & China Gas (3) 29%, Bank Comm (3328) 28%, Galaxy Ent (27) 28%, Baba (9988) 28%, CLP (2) 27%, Petrochina (857) 27%, Wharf REIC (1997) 27%, NWD (17) 26%, AIA (1299) 25%, Henderson Land (12) 25%, SinoBioPharm (1177) 25%, CKH (1) 25%.
AFTER MARKET NEWS
NEW WORLD DEV (00017.HK) disclosed that "The Pavilia Farm III", the residential property project co-developed with MTR CORPORATION (00066.HK) atop Tai Wai Station, has secured pre-sale consents. The Pavilia Farm III offers a total of 892 units in two towers.
JD LOGISTICS (02618.HK)'s IPO has registered nearly $98.9 billion margin as at around 5:30 pm. Based on the public fundraising amount of approximately $792 million, the IPO has been over-subscribed by more than 123.8 times so far.
Hong Kong Disneyland reported that FY20 revenue went down 76% yearly to HK$1.4 billion. Earnings before interest, taxes, depreciation and amortization (EBITDA) was negative HK$1.5 billion, and net loss was HK$2.7 billion. During the year, park attendance was 1.7 million, a drop of 73 percent compared to prior year.
GOLD PEAK (00040.HK) said that Asia has been its biggest market over the past three years, making up around 45% of the total turnover. Equally, the Company wishes to be one of the world's top-five consumer battery suppliers in 2025
Under structural overhaul, CATHAY PAC AIR (00293.HK) plans to trim the ground service unit's headcount to four grades from five, reported Apple Daily. Accordingly, the titles "Supervisor" and "Service Leader" for the department will be combined into "Service Excellence Lead", with effect from this September.
Oil CNOOC (883 HK -0.7%) CH OILFIELD (2883 HK +2.7%) PETROCHINA (857 HK +1.3%) Oil advanced as Israeli airstrikes hit Gaza and despite Indian oil demand falling about 20% in the first half of May from a month earlier and 28% YoY as a large number of nations remained lockdowned.
The momentum in commodity markets seems to have flagged after recent gains, with iron ore continuing to decline as China seeks to clamp down on surging prices. JIANGXI COPPER (358 HK +1.2%) CHALCO (2600 HK +2.5%) ANGANG (347 HK unch) MAANSHAN (323 HK -1%).
CH SHUNHUA (1088 HK +0.6%) reported April coal sales volume +38.1% YoY to 43.5m tons.
*E-COMMERCE/INTERNET FRIM despite ALIBABA's (9988 HK +0.4%) disappointing earnings.
JD LOGISTICS (2618 HK), the delivery arm of e-commerce giant JD.com Inc., is seeking to raise US$3.4 billion in its Hong Kong initial public offering. At US$3.4 billion, JD Logistics would be the second-largest IPO in the city this year.
JD.COM (9618 HK-0.9%) TENCENT (700 HK +3%) ahead of earnings. KUAISHOU (1024 HK +1.5%) BILIBILI (9626 HK +7.6%).
CHANJET GROUP (1588 HK +2.9%) announced that it will cooperate with MEITUAN (3690 +4.2%) to develop catering management system services for a period of five years. Meituan’s indirect wholly-owned subsidiary
*INSURERS WEAK China wants insurance companies to develop more pension products that last longer than 10yrs as the country seeks increased commercial retirement options for its aging population. A pilot program will kick off in the eastern province of Zhejiang and the western city of Chongqing from June, the CBIRC said in statement on Saturday. PICC Life Insurance Co., China Life Insurance Co. and 4 other insurers will join the one-year project. Sounds like a red flag for government finances.
NCI (1336 HK-0.2%) 4-mth premium income +7.39 YoY to 73.65b yuan; PING AN (2318 HK+0.5%) 4-mth premium income -5.8% YoY to 302.6b yuan;
PICC GROUP (1339 HK-0.7%) 4-mth premium income +1.9% YoY to 242.5b yuan; PICC P&C (2328 HK-0.1%) 4-mth premium income +2.8% YoY to 169.3b yuan.
*EDUCATION MIXED. News reported that private schools in the compulsory stage are banned from related transactions and must be non-profitable, according to China’s revised rules implementing the law promoting private education. No individuals or organizations are allowed to control private schools in the compulsory stage via mergers, acquisitions or deals, according to the rules that will take effect in Sept.
NEW ORIENTAL (9901 HK +3.6%) WISDOM (6068 HK -9%) CHINA MAPLELEAF (1317 HK -1.8%) VIRSCEND (1565 HK -1.5%) YUHUA EDU (6169 HK -9.8%).
*PHARMA FIRM as Covid cases surge around Asia, including China, Singapore, Japan, S Korea and Taiwan. The situation in India and Pakistan remains critical. CANSINO (6185 HK +4.8%) WUXI BIO (2269 HK +2.3%) SIHUAN (460 HK +6.2%) CR PHARM (3320 HK +4.3%) SINOPHARM (1099 HK+1.2%).
Market trended higher to test 7,060 and a high of 7,065 mid morning but then trended down to the 7,035 level and then traded sideways. Closed +9pts (+0.1%) @ 7,024 thanks to positive moves from the Gold Miners (Newcrest +2.6%) and Commonwealth Bank +1.3% but the other banks were lower and Macquaries Ex Div -4.9%. Xero bounced to close +5.6% off a two month low.
Crown officially rejected the improved $8.3b takeover offer from Blackstone but says it is still considering a bid from The Star.
Ampol and Viva Energy reached a deal with the federal government +VE for refining remaining in Australia.
Nikkei opened higher at 28,310but sold down as PPI came out stronger than expected and covid concerns ovrehang the market, hit a low of 27,633 after lunch and then edged higher; to close -260pts (-0.9%) @ 27,825
Topix traded in a similar pattern opened at 1,897, hit support at 1,870 and closed -5pts (-0.2%) @ 1,879
PPI Apr +0.7% MoM vs +1% March revised from +0.8% (F/cast is +0.6%)
PPI Apr +3.6% YoY vs +1.2% March revised from 1% (F/cast was +3.3%)
Machine Tool Orders Apr +120.8% YoY vs +65.1% March revised from +65% (F/cast was +50%)
GDP data due Tuesday pre market
KDCA reported 619 new civid cases; above 600 for a third day.
Kospi opened higher and tested 3,173 in early trades but then reversed, saw support at 3,140 for about an hour and then tested Friday’s closing level but failed and then sold down to 3,120 level around 1pm before bouncing back to 3,140 but then trened lower to close -19pts (-0.6%) @ 3,135 Trading volume was moderate; foreigners and local institutions were net sellers
Kosdaq opened higher and tested to 973 initially but then reversed and traded around Friday’s closing level until late morning when it saw increased selling down to 959 level around 1 pm but then worked better to 966 before slipping to close -4pts (-0.4%) @ 963
Taiex opened lower (15,555) in response in an increase in the number of new covid cases over the weekend and the closing of schools. The lower open prompting more margin calls and index dropped initially to 15,333 but then worked better to 15,720 but failed to get higher and trended lower to find support at 15,200 before working better to close -473pts (-3%) @ 15,354
Taiwan's Central Epidemic Command Center announced 335 new cases of novel coronavirus today, of which 333 were local infections.
Taiwan's Central Epidemic Command Center announced to suspend the entry of visitors without local residence permits and resident visas from 19 May. Travelers will not be allowed to transit at Taiwanese airports. The measures will be in place until 18 June.
Northbound Rmb 47,386m Sell 22,527m vs 24,859m Buy
Southbound HK$ 16,370m Sell 6,615m vs 9,756m Buy
Northbound Rmb 53,350m Sell 26,552m vs 26,798m Buy
Southbound HK$ 21,565m Sell 8,125m vs 13,440m Buy
MEITUAN (03690.HK) +4.2%
TENCENT (00700.HK) +3%
AIA (01299.HK) +0.7%
HKEX (00388.HK) +0.6%
PING AN (02318.HK) +0.5%
BABA (09988.HK) +0.4%
HSI & HSCEI Constituents on Move:
HANSOH PHARMA (03692.HK) +4.7%
BIDU-SW (09888.HK) +3.9%
CHINA RES BEER (00291.HK) +3.8%
GEELY AUTO (00175.HK) +3.8%
MENGNIU DAIRY (02319.HK) +3.3%
HSMI & HSSI Constituents on Move:
SCHOLAR EDU (01769.HK) +20.4%
REDCO GROUP (01622.HK) +11.5%
VIVA BIOTECH (01873.HK) +10.3%
GENSCRIPT BIO (01548.HK) +2.1%, hitting new high
MARKET HOURS NEWS.
The Government of the Hong Kong Special Administrative Region (HKSAR) announced today (May 17) that in view of the recent COVID-19 epidemic situation in Singapore, the Governments of the HKSAR and Singapore have decided to defer the target date of the inaugural flights under the bilateral Air Travel Bubble (ATB) scheduled for May 26. A Government spokesman said that the Singapore Government had yesterday (May 16) launched enhanced anti-epidemic measures, which would last till June 13. During this period, both sides will continue to maintain communication, exchange relevant data and statistics, and review developments closely before deciding on the way forward with the inaugural flights under the ATB. A further announcement will be made on or before June 13.
Indonesian ride-hailing firm Gojek announced a merger with e-commerce platform Tokopedia, creating the country's biggest-ever deal. Tokopedia is backed by BABA-SW (09988.HK) and SoftBank Group, while Gojek's investors include Warburg Pincus and TENCENT (00700.HK)
Bitcoin plummeted 20% on Tesla CEO Elon Musk's earlier netizen-cited remark. Later, Musk clarified in a tweet that the EV maker has not sold any of its bitcoin holdings.
JD-SW (09618.HK)'s spin-off unit JD LOGISTICS (02618.HK) was fully subscribed in its international placing on its first day of IPO, IFR citing insiders.
JD-SW (09618.HK) has entered into cooperation with Douyin E-commerce to open an official Douyin store, Chinese media learnt from inside sources. Pursuant to the deal, JD-SW is going to monetize RMB20 billion in GMV this year.
CLP HOLDINGS (00002.HK) announced that the Company declared the first interim dividend for 2021 of HK$0.63 per share, flattish year-over-year.
After issuing earlier a ban against cryptocurrency transactions, CITIC BANK (00998.HK)stated it had done so to protect the property interest of the public and uphold the fiat currency position of RMB. The recent ban against Bitcoin by some major commercial banks may involve new signals of strict compliance, China Securities Journal wrote in an editorial.
The Hong Kong Monetary Authority has engaged an independent third party in running an audit to TRACKER FUND (02800.HK), while studying if its manager needs to be changed, Apple Daily citing sources.
Shanghai Lazhasi Information Science Technology, a subsidiary of BABA-SW (09988.HK)'s food delivery platform Ele.me, has been fined RMB500,000 by State Administration for Market Regulation's Shanghai division for luring consumers or other operators into transactions by means of false or misleading pricing strategies, according to Tianyancha.
DoubleLine Capital CEO Jeffrey Gundlach told Yahoo! Finance that US actual inflation rate would have been 8% in April if owners' equivalent rent was replaced with median home prices. He will get worried if the inflation stays high through the summer and bond yields begin to test the US Fed's resolve.
More than 330 new homes were transacted at the weekend, of which L.Living 23, co-developed by YAU LEE HOLD (00406.HK) and Urban Renewal Authority, sold 108 of the 117 units launched yesterday.
As for the second-hand market, Centaline's ten major housing estates tracked 28 deals, up 17 deals or 65% weekly.
The People's Bank of China (PBOC) announces that it will issue Renminbi Bills through the Central Moneymarkets Unit (CMU) of the Hong Kong Monetary Authority (HKMA). A tender of three-month and one-year RMB Bills of the PBOC will be held on 21 May 2021, for settlement on 25 May 2021. A total of RMB10 billion three-month Bills and RMB15 billion one-year Bills will be made available for competitive tender on a coupon-bid basis by any qualified CMU members through the CMU BID.
PRE MARKET HOURS NEWS
TENCENT (00700.HK)'s Tencent Music Entertainment Group plans to reshuffle its management structure, reported Chinese media.
For the QQ music business line, Tencent Music Vice President Hou Deyang and QQ Music General Manager Hu Chen will be replaced.
Accordingly, Tencent Music CEO Liang Zhu and Liu Xiankai, General Manager at Tencent Music's Commercial Advertising Department, will be responsible for the QQ music business line and the platform product department.
Paul Chan: Coming Jobless Rate May Notably Fall as Econ, Pandemic Situation Getting Better. Also in order to solidify and accelerate Hong Kong's green financial market development, the Government must foster cross-sector coordination and cooperation in the financial industry and nail down an effective strategy favorable to green and sustainable financial development, he said in his blog.
The upcoming unemployment and underemployment rates are set to track a notable slide, opined Chan, citing the lately improving economy and pandemic situations, although the ongoing betterment of the labor market will hinge largely on whether the plague can go further muted.
Trading in the shares of NEXT DIGITAL (00282.HK) halted with effect from 9:00 a.m., pending release of reasons.
Secretary for Security John Lee has frozen NEXT DIGITAL founder Jimmy Lai's shares of Next Digital Limited, and his property of three companies in local bank accounts under the Hong Kong National Security Law.
CHANJET (01588.HK) announced that Tianjin Hanbo, an indirect wholly-owned subsidiary of Meituan, and the Company entered into a strategic cooperation agreement, pursuant to which, Tianjin Hanbo and the Company have agreed to jointly provide customers with the comprehensive restaurant management system services for a term of five years.
China has so far completed more than 819,000 5G base stations, representing roughly 70% of the global total, Xinhua News Agency learnt from Chinese Ministry of Industry and Information Technology.
In view of the worsening local epidemic situation in Taiwan, the HKSAR Government announced that with effect from 0.00am on May 17, the quarantine and testing arrangements for persons arriving from Taiwan will be tightened. All persons who have stayed in Taiwan on the day of boarding or during the 14 days before that day, will have to present at boarding a negative result proof of a nucleic acid test for COVID-19 conducted within 72 hours before the scheduled time of departure of the aircraft, as well as the confirmation of a room reservation in a designated quarantine hotel in Hong Kong.
SUN ENT GP (08082.HK) announced that the loss for the first quarter ended 31 March 2021 expanded to HK$7.96 million from HK$7.37 million in the same period of 2020. LPS equaled HK0.6 cents. No dividend was declared.
CHINA INFO TECH (08178.HK) announced the disposal of an aggregate of 9 million TOMO HOLDINGS (06928.HK) +0.050 (+3.623%) Shares on 14 May to an independent third party by way of an off-market block trade. The Group is expected to recognise a gain of HK$1.98 million. Upon Disposal, the Group will cease to hold any TOMO HOLDINGS Shares.
MIDLAND IC&I (00459.HK) announced to acquire from independent third party Lilly Company the Property and lease of Shop 3 on Ground Floor, Bijou Apartments, Prince Edward Road West, Kowloon with a gross floor area of approximately 356 sq. ft. at a cash consideration of HK$27.8 million.
RS MACALLINE (01528.HK) announced the disposal of a 100% equity interest in each of Red Star Financial Leasing and Red Star Commercial Factoring to RSM Holding, a controlling shareholder of the Company, at respective considerations of RMB1.006 billion and RMB204 million. The estimated loss from disposal will be approximately RMB20,000.