HSI +27pts (+0.1%) 29,151 HSCEI +96pts (+0.9%) 10,889 T/O HK$152.23bn (-11.9% DoD)
DAX opened lower and trading sideways in the red ahead of the inflation data. CAC opened higher but now trading around flat.
UK Market closed
Loans to Households Apr +3.8% YoY vs +3.3% Mar (F/cast was +3.3%)
Loans to Companies Apr +3.2% vs +5.3% Mar (F/cast was +5.1%)
M3 Money Supply Apr +9.2% vs 10.1% Mar (F/cast was +9.8%)
GERMANY due later
Inflation Rate Prelim May (April was +2% YoY (+0.7% MoM), (F/cast is 2.3% YoY (+0.2% MoM))
UK Market closed re-opens Tuesday
US Markets closed re-open Tuesday
CHINA CSI 300 closed +11pts (+0.2%) 5,332
CSI 300 opened lower as manufacturing PMI was weaker than F/cast and MoM. Market sold down to 5,282 before trending higher in choppy trading. At lunchtime was -23pts(-0.4%) @ 5,299.
PM opened higher but then tested down to 5,290 before working higher for the rest of the sesson to close at the day high.
The initial choppy trading suggests that Team China out in force to support the market.
The yuan remain firm despite a PBOC official saying the currency’s rapid appreciation against the USD probably would not last.
Leaders lithium batteries, military industry, rare earth permanent magnets, biological vaccines.
Laggard were tourism, appliances, and agriculture.
Shanghai Composite +15pts (+0.4%) @ 3,616
Shenzhen Composite +144pts (+1%) @ 14,997
ChiNext Index +72pts (+2.2%) @ 3,299
Manufacturing PMI May 51 vs 51.1 Apr (F/cast was 51.2)
Non Manufacturing PMI May 55.2 vs 54.9 Apr (F/cast was 54)
Manufacturing was the lowest reading since February, amid intense inflationary pressure and supply bottleneck. New orders grew the least in twelve months (51.3 vs 52.0 in April), export sales shrank for the first time since February (48.3 vs 54.0), while employment fell for the second month in a row and at a steeper rate (48.9 vs 49.6). Also, suppliers' delivery time lengthened (47.6 vs 48.7). On the cost front, input prices surged (72.8 vs 66.9), while selling prices went up sharply (60.6 vs 57.3). Meantime, both output (52.7 vs 52.2) and buying activity (51.9 vs 51.7) grew further. Looking ahead, sentiment weakened to a four-month low (58.2 vs 58.3).
China has accumulated 50 new local confirmed COVID-19 cases since the start of May and has consecutively reported new confirmed cases or patients without any symptoms for 18 days, involving several provinces as the virus begins to demonstrate a more rapid and threatening transmission rate, expressed China's National Health Commission during a press conference.
At a 31st May meeting, the Politburo of the Chinese Communist Party reviewed the decision on optimizing fertility policy to facilitate long-term and balanced population growth, reported Xinhuanet.com. It is stressed that the Government and party committees at all levels shall step up organization and planning, policy coordination as well as task rollout. Particularly, Beijing has to map out and implement the three-child policy and relevant economic and social support for policy measures according to the law.
Pre market opened @ 29,225 +102 pts vs +22pts ADR’s; Meituan was +4% after its results and E-commerce names seeing interest.
But market sold down to 28,980 in the opening minutes, bounced but then trended lower into lunch -147pts (-0.5%) 28,978. The China PMI was mixed and there remain concerns about the strengthening of the Rmb
PM saw the market initially trend lower to 28,910 at 1:50pm but then reversed and worked better to close at the day high; following the same move in China.
HONG KONG DATA
The Government announced today (May 31) its financial results for April 2021, the first month of the current financial year. Expenditure for the first month amounted to HK$48.6 billion and revenue HK$38 billion, resulting in a deficit of HK$10.6 billion.
A Government spokesperson said that the deficit in April was mainly due to the fact that some major types of revenue including salaries and profits taxes are mostly received towards the end of a financial year.
The Centre for Health Protection (CHP) reported 4 new covid cases. Additionally it was investigating a 35-year-old police officer in Wan Chai Division Police Station, who resided at Wai Mei House, Yau Mei Court, Yau Tong
Short Selling Monday 16.9% vs 15.3% Friday
Top Shorts Bank Comm (3328) 45%, Power Assets (6) 39%, Haidilao (6862) 36%, Bud Apac (1876) 36%, Henderson Land (12) 35%, Country Garden (2007) 33%, Mengniu Dairy (2319) 31%, HSBC (5) 30%, Sands China (1928) 30%, Ali Health (241) 27%, SHKP (16) 26%, CKI (1038) 25%, Sunny Optical (2382) 25%, CCB (939) 25%, Hengan (1044) 25%, Ping An (2318) 25%, AIA (1299) 25%, BoC (3988) 25%.
AFTER MARKET NEWS
MMG (01208.HK) intends to place 400 million shares at $4.12-4.26 per share, which is a discount of 6%-9.1% from the closing price of $4.53 as quoted on Monday (31st), raising up to $1.704 billion, as Bloomberg cited a sales document.
Didi Autonomous Driving is set to finish a series of financing worth over USD300 million, with GAC GROUP (02238.HK) investing USD200 million, reported LatePost. Sources stated that, after this series of financing, Didi Autonomous Driving's value will surpass that of Pony.ai.
BlackRock increased 21.21 million shares of PING AN (02318.HK) at $84.63 per share last Thursday (27 May), involving $1.795 billion, as disclosed by the Stock Exchange. The shareholding ratio hiked from 4.9% to 5.19%. It also purchased 2.8096 million shares of FUYAO GLASS (03606.HK) at an average price of $49.2302 each, involving $138 million as disclosed by HKEX.
BRILLIANCE CHI (01114.HK) announced that on 27th May, the Company received from the Stock Exchange the Resumption Guidance, which asked the Company to conduct an appropriate independent investigation into the Audit Issues, announce the investigation findings, assess and announce the impact on the Company’s business operation and financial position and take appropriate remedial actions. Trading in the shares of the Company has been suspended with effect from 31st March.
The People's Bank of China announced to heighten the forex reserve requirement ratio (RRR) for financial bodies from 5% to 7% starting 15 June, representing a 2-ppt increase in order to bolster financial institutions' forex liquidity management.
Spot USD/CNY closed at 6.3607, up 47 bps, setting a new high in more than three years. As at 16:50, USD/CNY added 8 bps in the night session. USD/CNH stood at 6.3659, down 74 bps.
The Hong Kong Monetary Authority (HKMA) announced that the total assets of the Exchange Fund amounted to HK$4.5384 trillion as at April 30, HK$2.7 billion higher than that at the end of March. Hong Kong dollar assets increased by HK$3.0 billion while foreign currency assets decreased by HK$300 million.
The rise in Hong Kong dollar assets was mainly due to the mark-to-market revaluation on Hong Kong equities. The decline in foreign currency assets was mainly due to a decrease in the month-end balances of unsettled purchase of securities and reduction in Fiscal Reserves placements, which were partly offset by the mark-to-market revaluation on foreign currency investments.
FuSure Reinsurance, whose substantial shareholder is TENCENT (00700.HK), has recently acquired the ordinary reinsurance license in Hong Kong, confirmed by sources quoted by Caixin. FuSure, as a professional reinsurance company specializing in specific business, has been added to the register of authorized insurers by the Hong Kong Insurance Authority.
Market opened higher and broke above 7,200 for the first time but without conviciton and after an hour was flat and then drifted lower through the afternoon to closed -18pts (-0.3%) @ 7,162 Ending May with a small gain.
Banks reversed course and became a drag on the market. Leaders are retail and healthcare stocks. Gold miners +VE but Energy weak ahead of the OPEC meeting this week and Iron Ore mixed.
Domino’s +4% but Nuix -17% after weak guidence.
Private Sector Credit Apr +1.3% YoY vs +0.4% Mar (F/cast was +2.3%)
Private Sector Credit Apr +0.2% MoM vs +0.4% Mar revised (F/cast was +0.3%).
Tomorrow we get the RBA interest rate decision.
Nikkei opened lower on disappointing pre market data. Market trended lower morning low was 28,910. PM opened lower and trading sideways to close -289pts (-1%) @ 28,860
Topix similar trading pattern currently -24pts (-1.3%) @ 1,922
Data pre market
Industrial Production Prelim Apr +2.5% MoM vs +1.7% March revised from +2.2% (F/cast was +3.5% )
Industrial Production Prelim Apr +15.4% YoY vs +3.4% March (F/cast was +12%)
Retail Sales Apr +12% YoY vs +5.2% March (F/cast was +12.3%)
Retail Sales Apr -4.5% MoM vs +1.2% March (F/cast was +1.5%)
Out at lunch
Consumer Confidence May 34.1 vs 34.7 Apr (F/cast was 34)
Housing Starts Apr +7.1% YoY vs +1.5% Mar (F/cast was +3%)
Construction Orders Apr +3.3% YoY vs +12.5% Mar (F/cast was 15%)
Kospi opened +22pts higher after mixed pre market data and some inflation concerns after the US PCE report Friday. Market initially sold down and has effectively traded sideways around flat until 2pm after which it traded better to close at the day high +15pt (+0.5) @ 3,204
Kosdaq opened higher and worked better but hit resitance at 983 and then sold down to 980 and traded sideways for 90 minutes but then worked slightly better to close +4pts (+0.4%) @ 982
Construction Output Apr -1.8% YoY vs -5.7% March (F/cast was +2%)
Industrial Production Apr +12.4% YoY vs +4.4% March revised from +4.7% (F/cast was +12%)
Industrial Production Apr -1.6% MoM vs -0.9% March revised from -0.8% ( F/cast was +0.2%)
Manufacturing Production Apr +13% vs +4.5% March (F/cast was +15%)
Retail Sales Apr +8.6% YoY vs +10.9% March (F/cast was +8.1% YoY)
Retail Sales Apr +2.3% MoM vs +2.3% March (F/cast was +1.2%).
Taiex opened higher and traded higher but hit resistance at 17,100 which it tested a number of times before selling down after midday to 16,940 before rebounding to close +198pts (+1.2%) @ 17,068
Heavy rain +VE for Tech names who were facing water rationing +VE
CECC said the coivd outbreak easing as the Rt number dropped from 15 to 1.2. It reported 351 new cases (347 domestic and 4 imported).
Hon Hai confirmed Monday it has recently been "in contact" with Formosa Plastics Group (FPG); media speculation suggests is linked to the company's recent heavy investment in electric vehicle development.
After market TSMC will spend JPY37 billion to set up a research and development center in Japan, and is expected to officially start research and development next year. The Ministry of Economy, Trade and Industry of Japan officially decided today to aid half of funding to its plan to establish a research and development center.
CONNECT FLOWS (significantly down from Friday)
Northbound Rmb 46,609m Sell 22,646m vs 23,963m Buy
Southbound HK$ 18,095m Sell 9,450m vs 8,644m Buy
Northbound Rmb 58,589m Sell 27,347m vs 31,242m Buy
Southbound HK$ 22,149m Sell 11,146m vs 11,004m Buy
MEITUAN (03690.HK) +10.9%
AIA (01299.HK) -3.9%
TENCENT (00700.HK) +2.9%
HKEX (00388.HK) +1.8%
BABA (09988.HK) +1.7%
PING AN (02318.HK) -0.5%
CCB (00939.HK) -0.3%
HSI & HSCEI Constituents on Move:
WUXI BIO (02269.HK) +5.4%
CSPC PHARMA (01093.HK) +4.5%, hitting new high
NTES (09999.HK) +4.2%
EVERGRANDE (03333.HK) -3.8%
WHARF REIC (01997.HK) -3.2%
GALAXY ENT (00027.HK) -3.2%
JD (09618.HK) +3.1%
KUAISHOU-W (01024.HK) -3%
HSMI & HSSI Constituents on Move:
PER ENERGY (02798.HK) -37.3%
SH ELECTRIC (02727.HK) -17.8%
JXR (01951.HK) +17.5%
OCUMENSION-B (01477.HK) +13.6%
GANFENGLITHIUM (01772.HK) +11.9%
GENSCRIPT BIO (01548.HK) +11.3%, hitting new high
SIHUAN PHARM (00460.HK) +10.8%, hitting new high
HBM HOLDINGS-B (02142.HK) +10.8%
HYGEIA HEALTH (06078.HK) +10.5%, hitting new high
AKESO (09926.HK) +7.9%, hitting new high
MARKET HOURS NEWS.
Sophia Chan, Secretary for Food and Health, said in a press conference that with an insufficient vaccination rate, directly loosening on social distancing might lead to the rebound of the COVID-19. She continued that the government will, therefore, further ease up the social distancing measures based on the vaccine bubble program, such as lifting the maximum number of gathering or adjusting latest operating hours depending on respective circumstances. She also stated that as people who are not vaccinated have a higher chance of contracting the virus, they may face even harsher restrictions should there be a fifth wave of outbreak, in order to contain the pandemic.
Owing to the collective effort made by the people, the fourth wave of COVID-19 pandemic in Hong Kong has basically ended, said Chief Executive Carrie Lam in a press conference. She stressed that vaccination is essential to the control of the pandemic and will promptly initiate the vaccination campaign.
The Chief Executive added that as a token of gratitude and encouragement, the government and different sectors of the society will be offering various incentives for those who receive vaccination, including reward program and "vaccination leave" for civil servants.
Shenzhen National Development and Reform Commission (NDRC) published the 2021 major project plan, with 536 projects being picked, spanning from transportation, energy, industry, education, medical care, urban renewal, cultural facilities and so on. The total investment amount exceeded RMB2.8 trillion.
Xi'an BYD Semiconductor Co., Ltd. was established on 27 May with a registered capital of RMB1 million, as Shanghai Securities News learnt from tianyancha.com. The legal representative, chairman and general manager are Chen Gang. The company is a wholly-owned subsidiary of BYD Semiconductor Company Limited. Xi'an BYD is engaged in integrated circuit chip and product manufacturing; integrated circuit chip design and services, display device sales, integrated circuit chip and product sales, and more, tianyancha.com showed.
PERFECT SHAPE (01830.HK) announced that, with the trend of female suffering from gynecological diseases and huge demand for gynaecological health screening service, the Group will open its largest flagship service center in the Greater Bay Area located at Sha Tin to adopt “Medical+Beauty” operational model in September.
WUXI BIO (02269.HK), just 15 months after announcing a collaboration with Vir Biotechnology, Inc. (Vir) to develop antibodies to treat COVID-19, congratulates the Emergency Use Authorization (EUA) of sotrovimab for the treatment of COVID-19. Chris Chen, CEO of WUXI BIO, commented that they are thrilled to hear this great news and to witness this milestone in the fight against the coronavirus pandemic. Achieving FDA Emergency Use Approval for this COVID-19 antibody in such a short time is a remarkable achievement.
The JD-SW (09618.HK)-backed China's second hand platform Aihuishou has submitted application for listing to the U.S. Securities and Exchange Commission, the proceeds raised from which will be used to improve technical capability, product diversity and to expand stores network and distribution channels, reported IFR under Reuters.
CHINA HUARONG (02799.HK) has successfully acquired the necessary funds to repay its USD900 million bond due 3 June ; and such payment would be the largest one since the company's financial crisis began to be more apparent 2 months ago, reported sources quoted by Bloomberg News. The sources also stated that one of the onshore units of the company has paid a RMB500 million bond that matured last Sunday (30th), reflecting the company's ability to access near-term liquidity.
HKMA is reported to address banks through HKAB, suggesting them to offer 2-day paid vaccination leave for the employees who have finished vaccination, reported Apple Daily. HKMA hopes banks would assist in promoting vaccination by not treating the vaccination leave as sick leave.
As the technicalities of the proposed vaccination leave still require further discussion, the date to implement said measure is yet to be decided.
TENCENT (00700.HK) announced that the company's Tencent Cloud and Kaifeng Municipal Bureau of Culture, Radio, Film and Tourism stroke a cooperation, by which they will switch on the construction of an open platform and digital cultural tourism project featuring cloud sharing.
XIAOMI-W (01810.HK) announces the launch of its 200W wired charging, compatible for 4000mAh batteries, which requires only 3 minutes to charge the battery to 50% and 8 minutes to 100%, stated by Lei Jun, the chairman. The company also launched its first 120W wired charging which takes 15 minutes to fully charge the battery.
While the global economic outlook is still under shadow,
inflation is the biggest headache for the financial market, said HSBC HOLDINGS (00005.HK) Chairman Mark Tucker at the shareholder meeting. With the world unfolding vaccination programs, paired with enormous fiscal supports from the governments, the global
GDP is projected to grow 5.5% this year. CEO Noel Quinn revealed separately that the group has adopted a new policy for future dividend distribution, aiming at sustainable dividend and return to shareholders, while allowing the management to make flexible reinvestment in mid-term expansion.
Ali Cloud forms strategic alliance with Changshu Rural Commercial Bank in hope to introduce cloud computing and distributed technological architecture into the core sector of financial business and ultimately to accelerate the process of digitalization of the industry.
Jessica Liu, President of BABA-SW (09988.HK)'s Southeast Asian e-commerce platform Lazada Group, announced to step down to devote more time to her family, Chinese media reported.
Octopus Cards Limited expressed that should the citizens choose to collect their electronic consumption vouchers using their Octopus cards, they would be able to obtain their vouchers in the same way as they currently receive their transport subsidy. It also reminds the citizens of remembering collecting their vouchers before the expiry date. The company also stated that, since the announcement of the consumption vouchers scheme in April, there have been more than 2,000 small-scaled merchants applying for the business octopus application, which is doubled from March's.
Hong Kong's role of international financial center remains solid and there is no concern over Hong Kong losing this position, commented Christopher Hui, the Secretary for Financial Services and the Treasury, during a RTHK program. He added that Hong Kong continues to display robust performance in both financial sector and the stock market, with the former recording an inflow of over USD50 billion since the second quarter of last year and the latter recording a transaction volume of over HKD220 billion and 90% year-over-year increase.
SF Holding (002352.SZ) announced that it plans to spin off its holding subsidiary, Tongcheng Industry, for listing on the
Main Board of the Stock Exchange of Hong Kong. The company intends to partly offer an acquisition of 51.8% equity interest of KERRY LOG NET (00636.HK). The total value per share will include part of the offer price per share of $18.8 and special
dividend per share for the sale of warehouses of $7.28, aggregating $26.08 per share.
China Foreign Exchange Trade Center announced, on 31 May, the central parities in the interbank forex market of transaction currencies, including the dollar against CNY, are as follows: USD/CNY = 6.3682, up 176 bps from the central parity of the last trading day and hitting a new high since mid-May 2018.
PRE MARKET HOURS NEWS
Swiss Re Ltd sold 77.8578 million shares of NCI (01336.HK) on market at an average price of $29.2 per share last Monday (24th), which amounts to 7.53% of NCI's issued shares, cashing in $2.273 billion, according to HKEX disclosure. After the sale, Swiss Re Ltd no longer holds any NCI's shares.
BYD COMPANY (01211.HK) announced that the Company Director Xia Zuoquan intends to reduce his holdings of no more than 12 million A shares of the company, accounting for no more than 12.69% of the total shares as held by him, and no more than 0.42% of the company's total share capital. Xia's reduction of company shares was mainly for personal capital purpose, and will no longer reduce company shares within three years from the date of completion of this reduction.
The Federal Reserve has addressed Deutsche Bank AG regarding their insufficient anti-money-laundering control and has warned the latter of the possibility of being fined, reported sources quoted by The Wall Street Journal. Deutsche Bank AG has already put in vast amount of resources to deal with suspicious transactions while the Fed deemed it to be ineffective and said that the bank needs to address certain anti-money-laundering issues promptly.
There were 27 newly confirmed COVID-19 cases in China yesterday (30th), with 7 of them being imported cases (3 in Guangdong; 2 in Shanghai; 1 in Fujian; 1 in Henan) and all 20 local cases being recorded in Guangdong, reported China's National Health Commission. There was no newly added deaths or suspected cases.
LENOVO GROUP (00992.HK) CFO Wong Wai Ming anticipated at a phone interview the above-peer cloud service growth for the fiscal year. With faster profit and demand increment amid global intelligentization, he aimed for the group's breakeven in the third or fourth quarter. Wong was confident that digital demand would be swelling up gradually, seeing a sustainable growth as many firms and institutions have been looking for digital transformation post-pandemic.
Zhong Nanshan, an academician of the Chinese Academy of Engineering, expressed during the 10th National Committee of CAST meeting, that despite the fact that there are already over 600 million doses of vaccination for COVID-19, the total vaccination rate of 40% remains unsatisfactory, reported Xinhua News Agency. The Chinese government will, for the health and safety of its people, speed up the vaccination process and aim to reach a vaccination rate higher than 80% within this year.
Sheng Songcheng, former head of the Financial Survey and Statistics Department at the People's Bank of China, suggested the rapid RMB appreciation against the US dollar could have overshot, as quoted by Xinhua. Such appreciation will be unsustainable and inconsistent with both domestic and foreign economic and financial situations, Sheng furthered.
SH ELECTRIC (02727.HK) (601727.SH) announced that the receivables of Shanghai Electric Communication Technology (SECT), which is a subsidiary held as to 40% by the Company, were generally overdue with risks of not being able to recover a significant amount of its receivables. In such extreme circumstances, the Company would suffer a loss in the total amount of approximately RMB8.3 billion.
HKEX (00388.HK) is to waive the trading tariff of $0.5 and the minimum stock settlement fee per transaction of fixed income and money market ETFs commencing today. Having talked with market issuers, HKEX anticipates their launch of fixed income and money market ETF products with lower threshold in the long run, so as to allow retail investors' entry to the market, says Head of Exchange Traded Products Brian Roberts in an interview. The transaction peak of ETFs in 2015 was mainly manifested by sharp fluctuation of China bourses, being an abnormal case for the market. He furthered that the growth of themed-ETF products on the market can lure investors, confident of the ETF transaction
volume keeping the recent-two-year growth momentum.
The People's Government of Guangzhou Municipality released a notice on stepping up the administration of vehicles and people exiting the province. It is stipulated that starting 22:00 on May 31st, travelers leaving Guangzhou through airports, railway and highway passenger stations (excluding foreign transit passengers) must present their green health codes and negative nucleic acid test results within 72 hours.
CARNIVAL GROUP (00996.HK) announced the audited results for the year ended 31 December 2020. The loss narrowed to $2.848 billion with LPS of $3.01. No dividend was declared. The Company has applied for resumption of trading in the shares with effect from Monday, 31 May 2021.
LEE KEE (00637.HK) announced the results for the year ended 31st March 2021. Net profit was $16.88 million, against the loss of $128 million from a year ago. EPS was 2.04 cents. Final dividend amounted to 1 cent.
TIANLI EDU (01773.HK) announced that during the period from 26 May to 28 May, Luo Shi, the chairman and chief executive officer of the Company, purchased a total of 1.7 million shares of the Company at an average price of HK$4.41 per Share on open market.
WATER OASIS GP (01161.HK) announced the results for the six months ended 31st March, 2021. Net profit increased by 34% yearly to $58.98 million with EPS of 8.7 cents.
An interim dividend of 5.5 cents was declared, against 6 cents in a year ago.
INFINITY DEV (00640.HK) announced the results for the six months ended 31 March 2021. Net profit increased by 60.5% yearly to $29.76 million with EPS of 5.28 cents. An interim dividend of 2.7 cents was declared.