May 4 HK/CHINA WRAP HK rebounds on light volume China re-opens tomorrow

04 May

HSI +200pts (+0.7%) 28,557 HSCEI +63pts (+0.5%) 10,766  T/O HK$90.79bn (-4.3% DoD but flat if you exclude yesterdays Fuyao Glass (HK$4.3bn) placement)

FTSE opened higher and trading sideways, CAC initially traded sideways around flat but now working better. DAX initially trended lower but now working back towards flat
Saudi Aramco’s Q1 profit beat estimates
Earnings due from Infineon, Deutsche Post DHL Group and Siemens Energy.
Dassault Aviation strong in early trade, after Egypt announced that it had placed an order for 30 Rafale fighter jets.
AMS strong on good Q1earnings report Pandora strong after reporting a surge in Q1 sales and hiking its FY guidance.
Orphan Biovitrum weak after the pharmaceutical group reported a 21% year-on-year fall in revenue for Q1
Data out
Budget Balance Mar €-60.07B vs -47.47B Feb (F/cast was -40B
Mortgage Approvals Mar 82.7k vs 87.4k Feb (F/cast was 90k)
Mortgage Lending Mar £11.8B vs +6.4B Feb revised (F/cast was +5.91B)
BoE Consumer Credit Mar £-0.5B vs -1.168B Feb revised (F/cast was -0.6B)
Manufacturing PMI Apr 60.9 vs 58.9 Mar (F/cast was 60.7)
Net Lending to Individuals Mar £11.3B vs +5.3B Feb revised (F/cast was +4.5B)
US Futures 
Opened flat in Asian time but have slipped but DOW recovered to flat, but weakness still in S&P -0.1% and NDX -0.4%
Pfizer higher in premarket trading after posting quarterly results that beat expectations and raising its 2021 guidance and says it is applying for full FDA approval of its covid vaccine at the end of May.
CVS Health shares strong after the pharmacy chain and insurance company also raised its guidance.
Data due tonight 
Balance of Trade, Exports, Imports, Redbook, ISM New York, Factory Orders, Factory Orders Ex. Transportation, IBD/TIPP Economist Optimism, API Crude Oil Stock Change.

Earnings ConocoPhillips, Martin Marietta Materials, Activision Blizzard, DuPont, KKR, T-Mobile, Akamai, Pioneer Natural Resources, Lattice Semiconductor, Denny’s, Hyatt Hotels, Host Hotels, PerkinElmer, Prudential Financial, Viavi, Caesars Entertainment, Thomson Reuters, Cummins, Vulcan Materials

CHINA Markets closed re-opens Wednesday

Pre market opened @ 28,438 +81pts vs + 137pts ADR’s
But sold down to test yesterday’s close on margin calls before working higher to 28,470 late morning before easing back slightly into lunch. Investors encouraged by yesterdays good GDP data and Powell’s comments overnight that the recovery remained patchy; suggesting no intention of easing stimulus. Eased back into lunch. PM traded higher then around 2pm piked to test 28,550 but failed; consolidated around 28,490 before working higher thistle testing 28,570 but failed eased back 28,530, dipped with 10 minutes to go but rebounded to 28,560 level going into the close.
Chinese Financials remain under pressure and E-commerce names are mixed. Petrochems and shipping remain firm.
Xingyi Glass +VE as Chairman buys shares.
Sentiment may not be so +VE in the morning as after market Retail Sales data missed and the CHP reported a case of the double mutant covid variant.
After Market
Retail Sales Mar +19.8% YoY vs +31.6% Feb revised (F/cast was +25%)
Easing from an historic high in the prior month. The latest reading reflected mainly a low base of comparison early last year amid the COVID-19 outbreak, with the analysis of the combined total sales for the first quarter being more appropriate. Considering the first three months of the year, retail sales advanced 7.2% over a year ago, underpinned by consumer durable goods (31.1%), mostly electrical goods & other consumer durable goods; clothing, footwear & allied products (24.3%), mainly driven by wearing apparel; and jewellery, watches, clocks & valuable gifts (13.6%). By contrast, sales decreased the most for supermarkets (12.4%). A government spokesman highlighted that local consumption sentiment saw some improvement after the gradual lifting of restrictions, while the near-term outlook remained challenging due to low numbers of inbound tourists
The Centre for Health Protection (CHP) reported 4 new covid cases (vs 2 Monday) 3 imported and 1 a Filipino domestic helper who was diagnosed with the double-mutant variant on Sunday (2 May). The case was temporarily listed as a possibly local case.

Short Selling Tuesday 16.4% vs 19.8%  Monday 
Top Shorts
BOCOM (3328) 63%,  Bud Apac (1876) 49% (reports 5 May), Mengniu Dairy (2319) 47%, CK Asset (1113) 34%, Bank Of China (3988) 34%, Wharf REIC (1997) 34%, Sunny Optical (2382) 33%,  HKEX (388) 30%, Country Garden (2007) 26%, HSBC (5) 25%.

CMGE (00302.HK) Vice Chairman Hendrick Sin mentioned at a conference call the firm's earlier share placement to BILIBILI-SW (09626.HK) and two other investors, stressing Bilibili has been the firm's cornerstone investor since the latter's listing. Sin emphasized CMGE's collaboration with Bilibili and their thorough integration in the gaming space.  He believed CMGE can transform and monetize its IPs through Bilibili's platform, which is home to a spectrum of comics, cartoons and original works. Equally, the Company will keep looking for partnership and M&A opportunities.
The Hong Kong Monetary Authority (HKMA) today released a guideline on the Green and Sustainable Finance Grant Scheme (GSF Grant Scheme). The GSF Grant Scheme will provide subsidy for eligible bond issuers and loan borrowers to cover their expenses on bond issuance and external review services. It will commence on 10 May 2021 and last for three years.
As to the travel bubble with Singapore, Hong Kong has cautious mechanism in place to pay close heed to the epidemic trend of both places, said Edward Yau, Secretary for Commerce and Economic Development.   As of today (4 May), the average Covid diagnoses were still low in Hong Kong and Singapore in the last seven days, while there will be additional precautions, for example, tourists should prove they have not departed their hometown in 14 days.
Raymond Kwok, Chairman of SHK PPT (00016.HK) and SMARTONE TELE (00315.HK), said 5G investment will not only be conducive to business development, but will also foster the integration of Hong Kong and Greater Bay Area, as well as the partnership of startups between the regions.   Equally, Kwok anticipated to woo more app innovation talents by setting up the 5G Lab. Hong Kong is among the world-class tier, only behind Mainland China and South Korea, in terms of 5G development, said SMARTONE TELE (00315.HK) Deputy Chairman Allen Fung.  The group has fundamentally completed its 5G network infrastructure, disclosed Fung, and 5G network is also made available in the 4G-covered areas. In future, the company will strengthen the immature areas.
SJM HOLDINGS (00880.HK) announced the results for the first quarter ended 31 March 2021. Loss was HK$647 million, an increased loss of 58.2% on a yearly basis.
COUNTRY GARDEN (02007.HK) announced that the Company and its subsidiaries, together with its joint ventures and associates, achieved contracted sales attributable to the shareholders of the Company in April 2021 of approximately RMB52.82 billion, up 7.8% yearly.
CHINA AOYUAN (03883.HK) announced that it had in April 2021 achieved unaudited property contracted sales of approximately RMB11.05 billion, representing a year-on-year increase of 27%.
GEMDALE PPT (00535.HK) announced that the Group’s aggregate contracted sales for April 2021 amounted to approximately RMB9.519 billion, up 206% YoY, with an aggregate contracted sales area of approximately 402,700 square meters.
EVERGRANDE (03333.HK) announced that it had in April 2021 achieved contracted sales of properties of RMB68.14 billion, representing an increase of 4.5% from the same period last year.
Upify, SINO-OCEAN GP (03377.HK)'s residential project in Yin Chong Street, Mong Kok, will roll out the first log of 45 units this Saturday (8 May).  The flats, measuring 172-318 sq.ft. each, will be priced at around $3.978-7.344 million upon discount.
FSE SERVICES (00331.HK) announced that the stock short name of the Company for trading in the Ordinary Shares on the Stock Exchange will be changed from ‘‘FSE SERVICES’’ to ‘‘FSE LIFESTYLE’’ with effect from 9:00 a.m. on 7 May 2021. The stock code of the Company will remain unchanged as ‘‘331’’.
*COMMODITIES/RESOURCES STRONG  PETROCHINA (857 HK +3.5%) SINOPEC (386 HK +3.8%) CH OILFIELD (2883 HK +3.4%) as overnight crude oil held close to US$67 a barrel as optimism over a strong demand rebound in countries including the U.S. and China balanced concern about a surge in India's Covid infections and higher OPEC+ oil supply.
BASE METALS STRONG as price hikes due to inflation and output cuts on the basis on the back of  emissions control.   ANGANG (347 HK +5.7%), MAANSHAN IRON (323 HK+5.5%) JIANGXI COPPER (358 HK +7%) CHALCO (2600 HK +9.3%) ZIJIN (2899 HK +12.6%).
*E-COMMERCE/INTERNET WEAK on regulatory uncertainties. Fidelity halved its valuation estimate for ALIBABA's (9988 HK) Ant Group following the regulatory crackdown on the fintech giant. It lowered the implied valuation to about $144b at the end of February, compared with a $295b value assigned to the firm in August. BIDU (9888 HK -1.5%) TENCENT (700 HK -0.4%) MEITUAN (3690 HK -0.5%) WEIMOB (2013 HK -0.9%) NTES (9999 HK -0.9%).
*AUTOS FIRM after several Chinese EV companies reported sales data in April, although the pace of growth has slowdown on a monthly basis. LI AUTO's delivery +111% YoY vs +239% in March, XPENG's delivery +285% YoY vs +384% in March, NIO's delivery in April was 7102 units vs 7,257 in March. Germany Air-Taxi Volocopter has agreed to form a joint venture with shareholder GEELY (175 HK  +1.2%). It says Geely will be their operating partner, doing sales and operations with Volocopter in  China. Volocopter aims to marry its electrical vertical take-off landing technology with Geely’s mass production capabilities.
GREAT WALL (2333 HK +3.4%) GAC (2238 HK +1.7%) BYD (1211 HK +1.7%) DONGFENG (489 HK +1%).
*HK PROPERTY FIRM on good demand seen at recently launched new projects. A high-level, four-bedroom apartment in residential project South Land at Wong Chuk Hang station on the South Island line was reportedly sold for HK$66m, equivalent to HK$54,187 ($6,977) per sq. foot, setting a record for the residential project as well as a record at a site on a railway station on Hong Kong Island. Also CK ASSET (1113 HK +1.9%) sold a standard duplex under "21 BORRETT ROAD" phase 1, together with two parking spaces, by way of tender for a consideration of $250 million, or roughly $84,890/sq. ft., according to the register.  HENDERSON LAND (12 HK +1%)  SINO LAND (83 HK +1%) WHARF(4 HK +3.8%).
*CHINA PROPERTY FIRM as developers start to release April sales data. KAISA GROUP (1638 HK +1.2%) April contracted  sales +74% YoY to 11.36b yuan. MODERN LAND (1107 HK +1.2%) April contracted sales +81% YoY to 3.63b yuan. SUNAC (1918 HK +1.5%) R&F (2777 HK +1.1%).
*HOME APPLIANCES FIRM following the report that China's home appliance sector recorded a 76.5% YoY growth in profit in Q1 to 20.12b yuan, data from the Ministry of Industry and Information Technology showed. GOME (493 HK +1.65) HISENSE (921 HK +1.7%) TCL (1070 HK +2.7%). SKYWORTH (751 HK unch) apologised after its TVs were found to be collecting data and sending to a Beijing analytics company.
*PAPER MAKERS STRONG  speculation of higher paper prices on the back of economic recovery. LEE & MAN (2314 HK +0.3%) NINE DRAGON (2689 HK +3.4%) CHENMING (1812 HK +9.4%).
*PHARMA/MEDICAL MIXED  after  recent gains on the back of India's Covid crisis.FOSUN's (2196 HK unch) CANSINO (6185 HK -0.5%) SINOPHARM(1099 HK -4.3%) waiting to hear if it has WHO approval; possibly this week. WUXI APPTEC  (2359 HK -3%) UNITED LAB (3933 HK +2.2%) CSPC (1093 HK +1.4%). KINTOR (9939 HK-6%) slumped after LEGENG HLD (3396 HK) has reportedly sold around 880,000 shs in Kintor.

Regional Markets 
ASX 200 Opened higher but trended slightly lower on weak Trade Data but worked better at the RBA left rates unchanged but raised its FY21 estimates. Saw resistance at 7,070 and eased back to around the 7,060 level to trade sideways and closed +39pts (+0.6%) @ 7,068
Balance of Trade Mar A$5.574b vs 7.595b Feb (F/cast was 7b)
Home Loans Mar +3.3% vs -1.8% Feb (F/cast was -1.1%)
Imports Mar +4% vs +4.7% Feb revsed (F/cast was 6%)
Exports Mar -2% vs -1.3% Feb revised (F/cast was +2%)
Investment Lending for Homes Mar +12.7% vs +4.5% Feb
RBA Interest Rate Decision unchanged
Market closed re-opens Thursday
Kospi Market opened higher but sold down initially on slightly stronger inflation data but then bounced back to flat before trending lower to 3,110 around midday but then worked better to end on the day high +20pts (+0.6%) @ 3,147
Kosdaq slightly weaker open, tested yesterday’s closing level before selling down to test 950, bounced but resistance at 960, trended lower to 945 which was tested a couple of times but held and then worked better; closed around the day high +5pts (+0.6%) @ 967
Data pre market
Inflation rate Apr +2.3% YoY vs +1.5% Mar (F/cast was +2.3%)
Inflation rate Apr +0.2% MoM vs +0.1% Mar (F/cast was +0.1%)
Market will be closed tomorrow for Children’s Day. Covid cases rose above 500 todays slight -VE
Opened flat an initial uptick but then trended lower hitting 16,650 around 10:45am and found support and worked better to but saw resistance approaching 17,000 and traded sideways to close -288pts (-1.7%) @ 16,934
Down for a third day despite good local data and earnings.After market TSMC a rumour circulated that it  plans to build five fabs in Arizona upon Washington's request, adding its local plants to six in total, Reuters citing insiders. However, the Taiwanese company did not specify the investment size and planned capacity.

CONNECT FLOWS (no trading)

Active Heavyweights
AIA (01299.HK) +1.7%
CCB (00939.HK) -0.8%
PING AN (02318.HK) -0.8%
BABA (09988.HK) +0.6%
MEITUAN (03690.HK) -0.5%
TENCENT (00700.HK) -0.4%

HSI & HSCEI Constituents on Move:
SINOPEC CORP (00386.HK) +4.1%
PETROCHINA (00857.HK) + 3.5%
ENN ENERGY (02688.HK) +3.3%, hitting new high
ANTA SPORTS (02020.HK) +3.1%

HSMI & HSSI Constituents on Move:ZIJIN MINING (02899.HK)  +12.6%
CHALCO (02600.HK) +9.1%, hitting new high
CHINAHONGQIAO (01378.HK) +9%, hitting new high
SANY INT'L (00631.HK) +7.2%, hitting new high
COSCO SHIP HOLD (01919.HK) +6.5%, hitting new high

The Land Registry today announced that the number of sale and purchase agreements for all building units received for registration in April was 9,150 (+0.9% MoM and +88% YoY).  During the month, the total consideration for sale and purchase agreements was $85.1 billion (+9.1% MoM and +122.0% YoY).
After Neway had in early-April announced unpaid leave arrangements on its employees, the karaoke lounge operator's affiliate Neway Music Limited has recently received a winding-up petition filed by Hong Kong Karaoke Licensing Alliance. A hearing was scheduled on 28 July before the High Court.
India reported 357,200 Covid-19 cases over the past 24 hours, taking the tally to around 20.2828 million, according to local health ministry's latest data.  Britain and India announced their private-sector investment partnership worth GBP1 billion, comprising GBP240 million from Serum Institute of India for vaccine development and sales business.
BABA-SW (09988.HK)'s Fliggy recorded new highs in air ticket, hotel, guesthouse and car booking volume during the "May 1" holiday, where sightseeing ticket and hotel booking load respectively ballooned more than 420% and 200% yearly, Chinese media reported.
Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS), expected about 6,500 new positions to be created in the local financial sector this year, with roughly half of them in each of the tech and consumer banking segments.
Overnight HIBOR last posted at 0.03723%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.08089%, marking a 1-month low.
Ethereum extended the winning streak and logged a new high on immediate market in Asian morning session. The cryptocurrency peaked at US$3,457.64, up 17%. It last printed at US$3,229.
XINYI GLASS (00868.HK) announced that Chairman and Executive Director Lee Yin Yee had purchased 168,000 shares on April 30, involving $4.5326 million.
Chief Executive Carrie Lam said the epidemic is overall holding steady in Hong Kong, hoping the situation will remain intact until zero local infection is achieved.  Regarding opinions expressed by different community sectors, Lam will ask the Labour and Welfare Bureau (LWB) to review whether foreign domestic helpers (FDHs) need to get vaccinated when renewing their employment visas.
Intel Corp announced to upgrade a chip factory in Rio Rancho, New Mexico using US$3.5 billion, which will create 700 new jobs in the coming three years.  The firm will also add a thousand contingent construction jobs, with works beginning this year.
Foreign net capital influx to emerging market equity and debt portfolios improved to US$45.5 billion in April as currency choppiness ebbed, hitting the highest monthly level since January, Reuters citing data from Institute of International Finance (IIF).  China accounted for 95% of the net inflow to equities, representing US$13.5 billion of the US$14.2 billion total.
Bravo Transport, the new owner of Citybus and New World First Bus (NWFB), is exploring a merger between these two arms given heavy losses despite a fare hike, reported SCMP.  However, any proposed merger will only be likely in 2023 at the earliest, bound by the three government franchises, a staff union said.
China had delivered 1Q21 social consumer retail turnover up 33.9% yearly to RMB10.52 trillion, the People's Daily citing Ministry of Commerce.  The Chinese authority foretold the consumer market to display fierce recovery on an ongoing basis.
The Government announced that as of 20:00 yesterday, about 1.5295 million doses of COVID-19 vaccines have been administered for members of the public.   Among them, about 971,900 persons have received their first dose.
The Centre for Health Protection (CHP) was following up on an imported Covid infection with a preliminary test result concerning the N501Y double-mutant strain.   The patient, a 28-year-old housewife living in Beauty Mansion, Kimberley Road, Tsim Sha Tsui, had already completed the compulsory quarantine after returning from India. Therefore, roughly 40 residents of the whole building must each undergo a 21-day mandatory quarantine, according to CHP.
U.S. Federal Reserve Chair Jerome Powell said, despite the real progress in American economic revitalization, the gains have been unbalanced among lower-income groups and monitories, foreign media reported.  Nearly 20% of workers in the lowest-income rung remained unemployed, compared with only 6% for the highest-paid group.
Macau hoteliers reported an occupancy rate as high as 80-90% during May Day's holiday of China, in alignment with assumption, Macao Daily News quoted Macau Hoteliers & Innkeepers Association's President Cheung Kin Chung. Following the holiday, the hoteliers are confident of maintaining the occupancy above 50% and even hailing progressive uptick, the President said.
On 3 May, Macau recorded more than 34,000 inbound travelers, Radio Macau citing Public Security Police Force.
Fidelity, one of the investors of Ant Group, halved the latter's valuation to US$144 billion due to swelling scrutiny pressure on the tech giant from Chinese authority, Wall Street Journal cited the regulatory filings. Fidelity had initially invested in Ant in June 2018 when the valuation hit US$150 billion.  In addition to Fidelity, BlackRock and T. Rowe Price also invested US$200-500 million in Ant.
PKU RESOURCES (00618.HK) announced that the Company received a notification letter from the administrator of Peking University Founder Group Company Limited on 30 April, which stated that Zhuhai Huafa Group Co., Ltd., Pingan Group and Shenzhen Shenchao Science and Technology Investment have entered into a restructuring investment agreement with Five Companies including Peking Founder on 30 April 2021. Based on the Restructuring Investment Agreement and related documents, the administrator of Peking University Founder Group Company Limited has formulated the draft restructuring proposal and submitted it to the Court for consideration.
CENTRAL CHINA (00832.HK) announced declaration of conditional special interim dividends in relation to the proposed spin-off of CCMGT for Main Board listing, satisfying the payment of such dividend by effecting the Distribution, and also a preferential application for CCMGT Shares under the Preferential Offering.
KAISA GROUP (01638.HK)  announced that the Group recorded contracted sales of RMB11.335 billion in April, representing a year-on-year increase of 74.1%.   Contracted gross floor area amounted to 700,180 sq.m. representing a year-on-year increase of 61.9%.

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