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HSI +255pts (+0.9%) 29,166 HSCEI +63pts (+0.6%) 10,856 T/O HK$164.29bn (-2.1% DoD)
Markets opened slight higher but currently trading around flat with investors concerns over inflation being eased by Fed speakers overnight. Travel & Leisure leading but Banks the laggards
Marks and Spencer +4.5% in early trade, despite reporting an 88% slump in annual profit as multiple lockdowns in the U.K. demolished clothing sales. “If this proves to be the year to kitchen sink the numbers, then M&S needs to continue its accelerated transformation to remain relevant. All things being equal, it is expecting to achieve profits of between £300 and £350 million this year, as some exceptional costs drop away and as revenues grow to exceed pre-pandemic levels.”
Softcat +4.2% after projecting full-year results ahead of expectations.
British Land -1.2% after it posted its third straight annual loss, with the pandemic hitting its office and retail portfolio valuations.
“There is no mistaking the challenge British Land is facing. It’s not only being threatened by the rising tide of homeworking, but like a sandcastle, it faces fresh erosion from the heavy spade of e-commerce,”
HelloFresh due to hold its AGM.
Business Confidence May 107 vs 104 Apr (F/cast was 105)
Consumer Confidence May 97 vs 95 Apr revised (F/cast was 95)
Business Climate Indicator May 108 vs 96 Apr revised (F/cast was 97).
Opened slightly higher in Asia Dow +53pts S&P +0.19% and NDX +0.26% and worked higher Dow +89pts S&P and NDX +0.3% Sentiment +VE as new covid cases drop below 25,000. Bitcoin/crypto also rebounding now above$40k
Nordstom -6% as earnings missed but Urban Outfitters +7% beat. Banks in focus as execs testify to Senate Banking committee
MBA Mortgage Applications -4.2% vs+1.2% prior
MBA 30 yr Mortgage Rate 3.18% vs 3.15% prior
EIA Oil Report, 2 yr FRN Auction, 5yr Note Auction
Fed Speakers Quarles speaks in the morning and after lunch
Earnings: NVIDIA, Snowflake, Bank of Montreal, Capri Holdings, Abercrombie and Fitch, Dick’s Sporting Goods, American Eagle Outfitters, Workday, Pure Storage, Designer Brands.
CHINA CSI 300 closed +2pts (flat) 5,321
CSI 300 opened higher but tested down to Tuesday’s close before bouncing to 5,344 only to sell down to flat at lunch. PM opened flat; dipped to 5,310 before rebounding to 5,332 then eased back to flat before trying to work higher but saw resistance and sold down into the close and finished flat. Leaders Materials and financials as the yuan rises to 3-year high as PBOC signals comfort with the yuan's recent strength. Foreign Traders Buy Net $1.4b Chinese Shares via Stock Connect.
Shanghai Composite +12pts (+0.3%) @ 3,593
Shenzhen Composite -53pts (-0.4%) @ 14,794
ChiNext Index -13pts (-0.4%) @ 3,185
None But on Thursday it announces Industrial Profits on the open
China confirmed 13 additional COVID-19 cases yesterday (25 May), including three local infections in Guangdong, reported by the National Health Commission.
Pre market opened @ 29,056 +145pts vs -17pts ADR’s
After some initial volatility traded sideways around 29,125 level. PM opened higher trading sideways; most of the time in the range 29,100/200 but dip to 29,077 once and peaked to 29,262 but closed near where it opened after lunch. Mainland Traders Buy Net $105m HK Shares via Stock Connect
HONG KONG DATA
The Centre for Health Protection (CHP) reported 1 new imported covid case no cases from unknown sources (vs 2 Tuesday & 2 uncertain)
Earning due Thursday include: Boyaa Interactive (434), Lees Pharma (950), Lenovo (992),
Short Selling Wednesday 18.8% vs 16.8% Tuesday
Top Shorts Bank Comm (3328) 51%, Hengan (1044) 45%, Petrochina (857) 35%, AIA (1299) 33%, Ping An (2318) 32%, Shenzhou Int (2313) 29%, Bank of China (3988) 28%, Hang Seng Bank (11) 28%, Sands China (1928) 28%, Techtronics (669) 27%, CITIC (267) 27%, Mengniu Dairy (2319) 25%, HSBC (5) 25%, Bud Apac (1876) 25%.
AFTER MARKET NEWS
XIAOMI-W (01810.HK) unveiled the results announcement for the three months ended March 31, 2021. The adjusted net profit for the period was RMB6.069 billion on the non-IFRS measure, an increase of 163.8% year-over-year, topping street consensus. Profit for the period was RMB7.79 billion, up 2.6 times yearly, also topping market forecast.
CHINA GAS HOLD (00384.HK) announced today (26th) that it repurchased 1.8056 million shares through the Stock Exchange at a repurchase price of $28.4-28.7 per share, involving $51.6 million.
COUNTRY GARDEN (02007.HK) placed 98 million E-HOUSE ENT (02048.HK) shares at a price ranging from $8 to $8.18 per share, representing a discount of 11.5% to 13.4% from the closing price of the shares today (26th) of $9.24, raising up to $800 million, as Bloomberg quoted transaction documents.
NTES-S (09999.HK) announced that the Company intends to spin-off Cloud Village by way of a separate listing of the Cloud Village Shares on the Main Board COUNTRY GARDEN (02007.HK) +0.060 (+0.604%) Short selling $101.79M; Ratio 16.605% placed 98 million E-HOUSE ENT (02048.HK) +0.240 (+2.667%) Short selling $1.86M; Ratio 13.336% shares at a price ranging from $8 to $8.18 per share, representing a discount of 11.5% to 13.4% from the closing price of the shares today (26th) of $9.24, raising up to $800 million, as Bloomberg quoted transaction documents.of the Hong Kong Stock Exchange. The Company submitted a spin-off proposal to the Stock Exchange in relation to the Proposed Spin-off and the Stock Exchange has confirmed that the Company may proceed with the Proposed Spin-off. Cloud Village was incorporated in the Cayman Islands on 2 Feb 2016, and NetEase Cloud Music, the Company’s music streaming platform, has been operating on a stand-alone basis by Cloud Village since October 2016.
Spot USD/CNY closed at 6.3930, up 148 bps, setting a new high in nearly three years. As at 16:48, USD/CNY gained 144 bps in the night session. USD/CNH stood at 6.3892, up 220 bps.
ALI HEALTH (00241.HK) will continue to work with local medical institutions, being confident in shaping its "Medical Deer" (also known as "Dr. Deer") app into an internet hospital with rapid active user increment, said the group's management in a conference call. On another note, ALI HEALTH Chairman and CEO Zhu Shunyan saw ample room for internet hospital growth.
Japanese government wishes Taiwan Semiconductor Manufacturing Company Ltd. (TSM.US) and Sony Group Corporation (SONY) to invest JPY1 trillion (approximately USD9.2 billion) to build the very first 20 nanometer chip production factory in Japan, reported by the Nikkan Kogyo newspaper. The potential location for the chip plant is rumored to be in southwest Japan, near Sony's image sensor factory, the source suggested. The Japanese government, however, deemed the report to be false and provided no further explanation.
Raymond CH'IEN Kuo Fung, chairman of HANG SENG BANK (00011.HK) who is scheduled to retire, stated during the shareholder meeting that as the pandemic of COVID-19 subsides, there is possibility for economic rebound in Hong Kong. However, it may take a substantial period of time to return to the level prior to the pandemic. The acting CEO Margaret KWAN Wing Han expressed that as the low interest rate environment proves to be beneficial to the loan services, the company will endeavor to expand their loan balance to offset the negative effects induced by lowered interest margin.
China Banking and Insurance Regulatory Commission (CBIRC) has asked banks to stop offering investment goods tied to commodity futures to mom-and-pop players, aiming to shrink losses amid bumpy commodity prices, Reuters citing insiders. The watchdog hopes to prevent incidents like BANK OF CHINA (03988.HK)'s "Yuan You Bao" saga, the people added.
*COMMODITIES WEAK CH OILFIELD (2883 HK -2.9%) PETROCHINA (857 HK -0.9%) as Oil priced eased as investors weighed the prospects of Iranian supply coming on line vs the expected rebound in demand.
MATERIALS MIXED. CBRC has asked lenders to stop selling investment products linked to commodity futures to
individual investors, according to news. ANGANG (347 HK -3.7%) MAANSHAN (323 HK -1%) CHALCO (2600 HK -1.8%)
BUT CH RARE EARTH (769 HK +5.3%) and ZHAOJIN (1818 HK +2.6%) as GOLD hit $1,900.03, near its 4 month high.
*E-COMMERCE MIXED. CK HUTCH (1 HK +1.6%) has further reduced its stake in AlipayHK, a joint venture established with ALIBABA's (9988 HK +0.5%) Ant Group, to less than 20%, local media reported. CKH had reduced its shareholding in AlipayHK to 39.7% from 50% in September last year.
ALI HEALTH (241 HK -5.7%) reported FY net income 342.7m yuan vs loss 6.59m yuan, missed est.
KINGSOFT (3888 HK -4.3%) net profit skyrocketed 17.6x YoY to 117m yuan, but its net profit -47% QoQ Outperformers in the sectors are CH LIT (772 HK +3.9%) BILIBILI (9626 HK +2.1%) TENCENT (700 HK +1.3%).
*TECH & COMPONENTS FIRM as the U.S. District Court for the District of Columbia issued a final order vacating the U.S. Department of Defense’s designation of XIAOMI (1810 HK +1.4%) as a Communist Chinese Military company. XIAOMI reported earnings after market
ZTE (763 HK +0.3%) SMIC (981 HK +0.4%).
BYDE (285 HK +12%) on a rumour that the company's e-cigarette biz has completed the patent layout and the production line has entered trial production; BYDE denied to comment. But SMOORE (6969 HK -17%) an e-cigarette maker, after the National Health Commission and the WHO issued a report saying that e-cigarettes are not safe.
*CHINESE DEVELOPERS STRONG as market sees a strong yuan can ease the debt pressure of firms with heavy foreign-currency borrowings. TIMES CH (1233 HK +4.8%) CIFI (884 HK +2.5%) EVERGRANDE (3333 HK +3.25).
NWD (17 HK +2.8%) to reveal the price list of The Pavilia Farm III atop Tai Wai MTR station this week, with the expectation to surpass the $30,000 per square foot record achieved in the sales of the one-bedroom units of the first two phases.
XINYI GLASS (868 HK +5.7%) jumped on the news its CEO
had spent more than HK$9.58m to increase his holdings in the company by 344,000 shs.
Indonesia, Singapore and Thailand are closed for a holiday on Wednesday.
Market opened lower to 7,090 in early trades but worked back flat before rallying to 7,136 around noon . But after lunch it has trended back to flat and then dipped lower to close -23pts (-0.3%) @ 7,093 ending a 4 day up streak. Metals & Mining closed -VE as iron ore prices drop but Gold moved higher. Oil names closed lower. But Banks still +VE Commonwealth Bank shares hitting$100, ALS strong on good results and good interest in Tech.
Leading Index Apr +0.2% MoM vs +0.5% Mar (F/cast was +0.2%)
Construction Work Done Q1 +2.4% QoQ vs -0.9% Q4 (F/cast was +1%)
Nikkei opened lower @ 28,400 but worked higher to flat in the opening trades before spiking to 28,710 @ 9:45am after a speech by BoJ’s Suzuki but unable to hold and trended back to flat just before lunch. Lunchtime data was short of forecasts but still an improvement MoM. PM opened higher and traded sideways 28,640/670 to closed +88pts (+0.3%) @ 28,642. Sentiment helped by news the Govt is considering another cash handout program of up to 100,000 yen each for needy households.
Topix Traded in a similar pattern, morning high was 1,926 PM traded mainly in a tight range but tested to1,925 in the closing minutes before ticking lower to close +1pts (+0.06%) @ 1,921
Sony Japan stated that they intend to dispose JPY2 trillion (USD18.39 billion) on strategic investment in the coming three years, including boosting the numbers of users of their gaming and entertainment services, Reuters reported.
Leading Economic Index Final Mar 102.5 vs 98.9 Feb (F/cast was 103.2)
Coincident Index Final Mar 93.0 vs 89.9 Feb (F/cast was 93.1)
Out pre marketBusiness Confidence May 96 vs 96 Apr (F/cast was 98)
Kospi opened slightly higher and worked better to 3,184 in the first hour but then saw selling pressure from around 10:40am and sold down to 3,165 initially before drifting rebounding to flat and but again sold down around 12:30pm to 3,160; worked back to flat and then dipped to close -3pts (-0.1%) @ 3,168
Kosdaq Opened higher and worked up to 967 by 10am then trended lower to 964 in the next hour and then traded 967/965 before easing lower to close +4pts (+0.4%) @ 966
BoK rate decision in the morning
Taiex opened higher and tested 16,700 but then reversed to Tuesday’s closing level bounced before selling down to 16,523 but rebounded and then traded around flat with a small rally ahead of the close to finish +48pts (+0.3%) @ 16,644
CONNECT FLOWS (Lower vs Wednesday)
Northbound Rmb 49,832m Sell 21,427m vs 28,405m Buy
Southbound HK$ 18,716m Sell 9,381m vs 9,335m Buy
Northbound Rmb 52,923m Sell 25,399m vs 27,524m Buy
Southbound HK$ 21,260m Sell 10,199m vs 11,061m Buy
HKEX (00388.HK) +1.7%
TENCENT (00700.HK) +1.3%
MEITUAN (03690.HK) +1.1%
PING AN (02318.HK) +1.1%
CCB (00939.HK) +1%
AIA (01299.HK) +0.6%
BABA (09988.HK) +0.5%
HSI & HSCEI Constituents on Move:
ALI HEALTH (00241.HK) -5.7%
HAIDILAO (06862.HK) +4.8%
GALAXY ENT (00027.HK) +4.2%
CHINA FEIHE (06186.HK) -4.1%
SANDS CHINA LTD (01928.HK) +3.8%
EVERGRANDE (03333.HK) +3.2%
CM BANK (03968.HK) +1.6%, hitting new high
HENDERSON LAND (00012.HK) +1.5%, hitting new high
HK & CHINA GAS (00003.HK) +1.5%, hitting new high
SHENZHOU INTL (02313.HK) +1%, hitting new high
BANKCOMM (03328.HK) +0.6%, hitting new high
HSMI & HSSI Constituents on Move:
BYD ELECTRONIC (00285.HK) +11.7%
TONGRENTANGCM (03613.HK) +11.3%, hitting new high
OCUMENSION-B (01477.HK) +10.8%
SIMCERE PHARMA (02096.HK) +10%
MARKET HOURS NEWS.
MTR CORPORATION (00066.HK)'s Tuen Ma Line is hopefully coming to full service next month the quickest, earlier than the targeted third quarter, HK01 cited sources. Tuen Ma Line sees a greater chance of full operation in the last week of June, people with the knowledge of the matter forecast further.
BABA-SW (09988.HK)-backed Ele.me announces to open up the online registration green passage for dining businesses, by which diners can complete the online and manual review to join the platform within an hour.
Data For the newly registered delivery diners, Ele.me will dispose 1 billion worth of discount rate and 500 million worth of traffic support.
China pledged to import at least US$200 billion more American goods and services next two years as compared with the 2017 level, according to the bilateral first-phase trade deal sealed in early 2020. China will have to purchase US$64.5 billion of American goods in 4M21 so as to meet the target, estimated U.S. PIIE senior fellow Chad P. Bown. However, the institute cited Chinese Customs data to show that Beijing had only reached 73% of its goal as of April.
Two asset-backed securitization (ABS) projects under Ant Group's Huabei (Ant Check Later) and Jiebei have recently been terminated, as Chinese watchdog found Ant's rectification and deleveraging progress rather slow, Bloomberg citing people familiar with the matter.
The group has no immediate comments.
Douyin announces to upgrade the protection for adolescents, saying any users logging in with their legal names who are 14 years old or younger will be directed to the adolescent mode and not be able to log out after entry. Said measure will be implemented from June and is considered to be the strictest to protect minors among the video platforms in China. Douyin adds that it intends to enhance the protection shield for real-name users aged from 14 to 18 in terms of suggested content, social media and search results, such as forbidding them to reveal their personal information other than profile pictures and nicknames to strangers.
JD-SW (09618.HK) (JD.US) announces that, during the 618 shopping festival, they will collaborate with more than 3 million offline stores and boost shopping in brick-and-mortar shops through investing specific resources. The project is expected to attract more than 250 million customers to get a taste of the new shopping experience in store. JD-SW states that they will invest special resources worth more than RMB500 million to help shopping malls, supermarkets, movie theatres and theme parks, etc. integrate into the offline business structure of JD-SW.
XINYI GLASS (00868.HK) CEO and Executive Director Tung Ching Sai purchased 344,000 shares of the Group on May 24, involving around $9.5809 million.Airstar Bank announced that its corporate banking services for SMEs have entered the pilot launch through the Fintech Supervisory Sandbox administered by the Hong Kong Monetary Authority, inviting enterprises in various scales to apply for the services. At this stage, the pilot trial aims for greater participation to include SMEs from different sectors, allowing them to experience and enjoy the hassle-free and convenient banking services.
The pilot trial now is open to 100 SMEs. Those who are interested to participate in the regulatory sandbox can experience the bank's services by registering online at Airstar Bank Corporate Banking SME Service website as trial users. SMEs customers can enjoy account opening experience with high savings deposit rates: the applicants and connected parties who are holding a Personal Banking Account at Airstar Bank can open a “Streamlined Corporate Account” via remote on-boarding service.
The government hoped to inform the cruisers about the conditions on resumption of "Cruises to Nowhere" as early as possible since such companies need time to prepare for the relaunch of the pleasure activity, said Edward Yau, Secretary for Commerce and Economic Development, at the press conference. He projected the cruisers to revive "Cruises to Nowhere" in July the soonest. As to specific precaution measures, all crew members should be dosed with the Covid vaccine recognized by the health authority prior to the cruise sailing, whereas passengers should also complete inoculation before their trip. Participants on the cruise could be exempted from vaccination providing medical proof. What's more, passengers must show a negative nucleic acid test result within 48 hours before boarding, and use "LeaveHomeSafe" app or follow the shipping company’s social distancing and case tracking protocol, and maintain social distancing.
The trial operation for Tuen Ma Line is moving along smoothly, said MTR CORPORATION (00066.HK) Chairman Rex Auyeung at the press conference, who voiced the company's hope that the railway line could come to service as soon as possible, subject to the government's greenlight. He also said during the shareholder meeting that the pandemic has posed grave influence on various businesses of the MTR CORPORATION, and as such the company has tried to alleviate customers' burden through adjusting train service frequency and lowering train fares. The chairman stated the goal for MTR CORPORATION in the future is to strengthen and develop different aspects of the company's businesses, including core business in Hong Kong, oversea businesses as well as innovative technology, viewing challenges are mounting.
Rumor has it that Li Auto Inc. (LI.US) is planning a Hong Kong secondary listing in 2021. In response, Li Auto Founder, Chairman and CEO Li Xiang told Chinese media that the more money the better, citing abundant funds among both new and traditional players (including the "Big Three", namely Tesla (TSLA.US), XIAOMI-W (01810.HK) and BIDU-SW (09888.HK) (BIDU.US)). Thus, Li Auto would not mind securing capital reserve by any sort of means, including secondary market financing, bank loans and bond issuance
GREATWALL MOTOR (02333.HK) announced that on 25 May 2021, the Board considered and approved the relevant resolution in relation to proposed adoption of the 2021 Restricted A Share Incentive Scheme. The Incentive Scheme shall become effective upon consideration and approval of the general meeting and the Class Meetings of the Company. The Company intends to grant 43.184 million Restricted Shares to the Participants, representing 0.469% of the total number of Shares of the Company as at the date of the announcement of the draft of the Incentive Scheme.
China Foreign Exchange Trade System announced today (26 May) that the central parity of USD/ RMB gained 184 bps from the last trading day to 6.4099, hitting a new high since mid-June 2018.
PRE MARKET HOURS NEWS
As the Hong Kong government had earlier announced a 30% raise on the share stamp duty to 0.13%, Christopher Hui, Secretary for Financial Services and the Treasury, said in a industry meeting that they understand the securities industry to be highly competitive with an increasing cost, reported by a local media. Mr. Hui added that revenue from the increased stamp duty will be utilized to foster the development of the industry, such as subsidizing the Green Bond project.
EASYHOME (000785.SZ) announced that Tangping Shejijia is held as to 40% by the Company's wholly-owned subsidiary and 60% by Alibaba.com Limited. Both sides intend to increase Tangping's registered capital from RMB1.233 billion to RMB1.489 billion. Alibaba.com Limited, EASYHOME or their related parties will set up an overseas company as Tangping's financing platform abroad.
China Banking and Insurance Regulatory Commission (CBIRC) unveiled insurers' operation status for April. The aggregate premiums income of the insurance sector hit RMB2.12 trillion, where RMB396 billion was attributable to the property insurance segment.
AAC TECH (02018.HK) proposes to issue USD300 million notes at the rate of 2.625% per annum due 2026 and USD350 million notes at the rate of 3.75% per annum due 2031. The net proceeds from the proposed notes issue will be approximately USD643 million. The Company intends to use such proceeds for refinancing and general corporate purposes.
Ministry of Industry and Information Technology (MIIT) stated that the fluctuating price of steel is causing graver influence on the lower-reaches industry, and that the surging steel price is also not in line with the basic factors and the government policies. The authority demands the industry to conduct procedures and evaluations for capacity replacement properly.
The Inner Mongolia Development and Reform Commission published a notice seeking opinions on the eight measures to crack down on and reprimand virtual currency mining. Accordingly, telcos, internet firms and other entities engaged in crypto mining will have their value-added telecom business licenses revoked and be held responsible under the PRC Telecommunications Regulations.
China issued RMB339.9 billion worth of new local government bonds in April 2021, along with RMB435.9 billion of refinancing bonds, Securities Times citing data from Ministry of Finance. Experts saw faster local bond issuance which was gradually returning to a normal pace, quoted by the paper.
XIAOMI-W (01810.HK) announces that on May 25, 2021 at 4:09 pm (Eastern Standard Time), the U.S. District Court for the District of Columbia issued a final order vacating the U.S. Department of Defense’s designation of the Company as a “Communist Chinese Military Company” (“CCMC”). In vacating the designation, the court formally lifted all restrictions on U.S. persons’ ability to purchase or hold securities of the Company.China issued RMB339.9 billion worth of new local government bonds in April 2021, along with RMB435.9 billion of refinancing bonds, Securities Times citing data from Ministry of Finance.
Experts saw faster local bond issuance which was gradually returning to a normal pace, quoted by the paper.
ALI HEALTH (00241.HK) announced financial results for the year ended March 31, 2021. The Group reported revenue and gross profit of RMB15.518 billion and RMB3.617 billion, representing a year-on-year growth of 61.7% and 62.1%, respectively. The Group swung into net profit of RMB349 million from loss of RMB6.59 million in the previous year. EPS equaled 2.63 fen. No final dividend was declared.
EMPEROR E HOTEL (00296.HK) announces that they have resolved to declare the payment of Emperor E Hotel Special Dividend of HKD5 cents per share which shall be made on 25 June 2021 (Friday) to the shareholders whose names appear on the register of members of the Company on 10 June 2021(Thursday).