ERIC is hosting a free webinar on India today (Mifid II compliant) 'Regime Change, Debt Restructuring & India: David Mulford in conversation with Russell Napier’. David Mulford is a former US Ambassador to India and Vice Chairman International of Credit Suisse. Starts at 4pm BST or 11am EST and will be
recorded. Let me know if you are interested or just sign up at ERI-C.com
HSI -139pts (-0.5%) 28,418 HSCEI -44pts (-0.4%) 10,722 T/O HK$101.2bn (+11.4% DoD)
Markets opened higher as pre market EU PMI data was strong and most individual PMI were up MoM even if slightly short of forecast. After the initially rally stocks now trading sideways.
Earnings is focus: Allianz and Commerzbank due
Stellantis strong after reporting Q1 revenues to 37 billion euros ($44.5 billion), but warned that the global semiconductor shortage could have a heavier impact on production in Q2
Deutsche Post DHL Group strong after raising its financial guidance after more than tripling its Q1 operating earnings
Rational strong in early trade after its earnings report
Vestas also strong after it reaffirmed its guidance despite reporting a first-quarter operating loss.
Virgin Money U.K.weak after Q1 results
Services Final PMI Apr 50.5 vs 49.6 Mar (F/cast was 50.3)
Composite Final PMI Apr 53.8 vs 53.2 Mar (F/cast was 53.7)
PPI Mar +1.1% MoM vs +0.5% Feb (F/cast was +0.9%)
PPI Mar +4.3% YoY vs +1.5% Feb (F/cast was +4.1%)
Services Final PMI Apr 49.9. vs 51.5 Mar (F/cast was 50.1)
Composite Final PMI Apr 55.8 vs 57.3 Mar (F/cast was 56)
Services Final PMI Apr 50.3 vs 48.2 Mar (F/cast was 50.4)
Composite Final PMI Apr 51.6 vs 50 Mar (F/cast was 51.7)
New Car Registrations Apr 3176.6% vs 11.5% Mar (F/cast was 100%)
Opened flat DOW +12pts S&P +0.05% and NDX -0.05% but worked higher through the day now DOW +97pts S&P +0.4% and NDX +0.5% With a rebound in Tech names and post earnings; Activision Blizzard rose +3% and Lyft +6% in premarket trading after better-than-expected earnings reports.
Total Vehicle Sales Apr 18.5m vs 17.7m Mar
ADP Employment Change, Services and Composite PMI, ISM New York, ISM Non Manufacturing Data (PMI, Prices, New Orders and Employment), EIA Oil Report
Earnings General Motors, Hilton Worldwide, Booking Holdings, Fox Corp., Uber Technologies, Etsy, PayPal, Allstate, Accolade, Cognizant Technology, MetLife, Marriott Vacations, CF Industries, Marathon Oil, CyberArk Software, Emerson Electric, Amerisourcebergen, BorgWarner, Zynga, Tanger Factory Outlet, Twilio
CHINA Markets closed re-opens Thursday
CHINA DATA No data
Pre market 28,428 -129pts vs -185pts ADR’s
After weak PMI data but rallied back to 28,650 in the first 30 minutes and then traded in tight range around Tuesday’s close and close flat at lunchtime. PM opened lower and initially sold down to 28,400 before trading sideways in a tight range around that level. Did briefly dip to 28,325 at 3pm but worked back to 28,400 with an uptick into the close.
E-commerce remains weak, with concerns over the tax issues. Chinese Financials seeing a rebound but also increased shorting. Banks generally +VE on Yellen’s comments with the hope of higher interest rates. Chinese Developers +VE on good sales numbers. Shippers still seeing good interest.
Singapore may review travel bubble due to its latest outbreak -VE CATHAY PAC. Sentiment cautious ahead of China re-opening with HK down over 2.5% since last Thursday. Yellen’s comments a concern but HK Developers remained firm and that despite concerns the new highly contagious virus variant has been found in Hong Kong.
HONG KONG DATA
Pre Market PMI Apr 50.3 vs 50.5 Mar (F/cast was 51)
The Centre for Health Protection (CHP) reported 6 new covid cases (vs 4 Tuesday) 3 local with the new mutant strain of the virus; 1 from an unknown source.
Short Selling Wednesday 15.2 vs 16.4% Tuesday
Top Shorts Bud Apac (1876) 47% (due to report today 5 May), Ali Health (241) 43%, Mengniu Dairy (2319) 43%, Sunny Optical (2382) 37%, Bank Of China (3988) 35%, Galaxy Ent (27) 35%, BoC HK (2388) 34%, BOCOM (3328) 34%, Country Garden (2007) 33%, HKEX (388) 33%, China Res Land (1109) 30%, SinoBioPharm (1177) 28%, NWD (17) 28%, HSBC (5) 25%, Hang Lung Property (101) 25%.
Former RTHK producer Bao Choy has filed an appeal against her conviction in connection with a documentary on the 2019 Yuen Long gang attack, and the filing of misleading information.
AFTER MARKET NEWS
RAZER (01337.HK) on 5 May, it repurchased at the Stock Exchange 4.5 million shares, involving roughly $12.4617 million.
TELECOM DIGIT (06033.HK) issued a positive profit alert. It is expected to record an increase of not less than 55% in the profit for the year ended 31 March 2021 as compared to HK$80.20 million for the year ended 31 March 2020. The expected increase is primarily due to cost savings in general expenses; and receipt of government grants in respect of COVID-19 related subsidies.
TRULY INT'L (00732.HK)announced that the unaudited net consolidated turnover of the Group was approximately HK$1.942 billion for April 2021, up 6.4% yearly; and its unaudited net accumulative consolidated turnover for the four months ended 30 April 2021 amounted to approximately HK$7.268 billion, up about 11.6% yearly.
Macao's Economic and Technological Development Bureau, Monetary Authority of Macao, and Social Welfare Bureau jointly announced that the consumer e-voucher scheme will be open for online application from Friday (7 May) until 10 December. Upon successful registration and verification, each person with a valid/ renewable Macao permanent/ non-permanent identity card will be given an initial sum of MOP5,000, plus MOP3,000 in additional discounts. The e-vouchers will be available as soon as 24 May.
Dairy Farm and CLPe Solutions announce their partnership to co-develop a solar panel system on the rooftop of the Wellcome Fresh Food Centre. Based on the estimated generation capacity and upon its completion in the second quarter of 2022, the solar panel system will become the largest in Hong Kong’s retail sector, under CLP Power’s Renewable Energy Feed-in Tariff (FiT) scheme.
Centa-Salesman Index (CSI) last stood at 71.23, up 0.91 pts from the previous week. CSI had been struggling around 70 for the 8th straight week, failing to surpass 80 in one breath, said the research department of Centaline Property. This indicated that front-line agents had stayed upbeat and optimistic over the long term without getting too excited. Home prices will continue to inch up slowly, they predicted.
*COMMODITIES STRONG after commodity prices rallied again overnight hitting the highest in almost a decade as the rebound in the world’s largest economies stokes demand for metals, food and energy both for immediate use rebuilding stock piles
OIL STRONG as API crude data after market in US saw an increased draw down PETROCHINA (857 HK +1.4%) CNOOC (883 HK +1.7%) CH OILFIELD (2883 HK +2.6%) oil rose to the highest since mid-March amid optimism that the resumption of economic activity in the US. and Europe will underpin demand. METALS Copper traded closer to $10,000 a ton in London. CHALCO (2600 HK +1.3%) JIANGXI COPPER (358 HK +1.7%) CH HONGQIAO (1378 HK +2.5%).
*CHINESE BANKS FIRM as returns and earnings growth are seen as becoming more stable. CCB (939 HK+1.7%) ABC (1288 HK +1.7%) BOC (3988 HK +1%) ICBC (1398 HK +1%) CMB (3968 HK +2.5%).
*E-COMMERCE/INTERNET WEAK As regulator turns attention to lax tax payments.
ALIBABA's (9988 HK -2%) despite Fliggy recorded new highs in air ticket, hotel, guesthouse and car booking during the "May 1" holiday, where sightseeing ticket and hotel booking load respectively ballooned more than 420% and 200% yearly, Chinese media reported.
TENCENT (700 HK -1.5%) KUAISHOU (1024 HK -1.6%) JD.COM (9618 HK -4.7%) NTES (9999 HK -3.2%) MEITUAN (3690 HK -1.9%) BIDU (9888 HK -3.5%).
*TECH & COMPONENTS WEAK as COOLPAD (2369 HK -17%) sank on rights issue plan, raising HK$1b by placing up to 3.67b rights shares for HK$0.28 each. Chip makers weak after U.S. Commerce Secretary Gina Raimondo called for a major increase in U.S. chip production capacity to tackle shortages and wean off from over-dependence on Taiwan and China; she is looking to get TSMC and others to open factories in the US but it will take years so this is a knee jerk reaction. SMIC (981 HK -0.2%) ASM (522 HK -5.5%) HUA HONG (1347 HK -7.5%).
*CHINA PROPERTY FIRM following good sales data.
COUNTRY GARDEN (2007 HK +1.7%) April contracted sales +7.8% YoY to 52.82b yuan.
EVERGRANDE (3333 HK +0.8%) April contracted sales +4.5% YoY to 68.14b yuan.
CH AOYUAN (3883 HK +2.5%) April contracted sales +27% YoY to 11.05b yuan.
GEMDALE's (535 HK +1.9%) April contracted sales +206% to 9.52b yuan.
*MACAU CASINOS WEAK after SJM (880 HK -3.5%) said its net loss expanded 58.2% YoY to HK$647m in the first quarter. Total net revenue fell 28.8% to HK$2.47b. VIP gross gambling revenue was HK$485m, down 59.4% YoY; mass market gross gambling revenue was HK$2.05b, a drop of 21.3%, and slot machine gross gambling revenue was HK$116m, a drop of 17.3%. NOTE good article in FT about the fact that Pansy and Daisy are now running the company as expected to be less conservative than Stanley Ho was and the appointment of Frank McFadden as operating chief should mean a better outlook
MELCO (200 HK -2.2%) MGM (2282 HK -3.25) GALAXY (27 HK -2.6%) SANDS (1928 HK -4.3%).
*PHARMA WEAK despite FOSUN's (2196 HK-4.6%) BionTech maker Pfizer Group, raised its full-year views and upped its Covid-19 vaccine revenue forecast to about $26b, from previous guidance of $15b. The company has capacity to manufacture at least 3b doses in 2022. There are concerns of more fund-raising movies following WUXI BIO's (2269 HK -4%) placement last week. WUXI APPTECH (2359 HK -3.2%) INNOVENT (1801 HK -4.3%) PHARMARON (3759 HK -6.3%) CANSINO (6185 HK -3.8%).
Also concerns on whether Chinese vaccines will get WHO approval after news that they had not supplied data on the over 60’s and at risk groups.
*CONSUMPTION FIRM despite HK retail sales missing expectations, only rising 20% YoY in March vs +34% F/cast, but up now for two consecutive months thanks to an exceptionally low base of comparison last year. Key being the lack of tourist/mainland visitors.
SASA (178 HK +0.5%) CHOW TAI FOOK (1929 HK +0.5%) LIFESTYLE (1212 HK +1.6%).
L'OCCITANE INTL (973 HK +15.7%) announced that its Q4 to 31 March 2021 net sales were 361m euros, +12.5% YoY at a constant exchange rate. Net sales in Hong Kong -4% YoY to 15.82m euros.
BONJOUR (653 HK +58.5%) rocketed on the news that its subsidiary Bonjour Technology Services Limited has entered into a non-binding MOU with Huawei in relation to the application of retail technology innovation to support the business transformation and sustainable development of the group, and the cooperation in the co-branding marketing between the Group and Huawei.
Opened flat as pre market data was mixed but worked higher in strong Building Permits. Hit resistance at 7,120 but continued to test there for a few hours before drifting lower to close +28pts (+0.4%) @ 7,096
Data pre market
Construction Index Apr 59.1 vs 61.8 Mar (F/cast 61.6)
Services PMI Apr 58.8 vs 55.5 Mar (F/cast was 58.6)
Composite PMI Apr 58.9 vs 55.5 Mar (F/cast was 58.8)
After the open
Building Permits Mar +17.4% vs 20.1% (F/cast was +2%)
RBA Chart Pack released.
Markets closed Children’s Day re-opens Thursday
Markets closed Children’s Day re-opens Thursday
Opened higher, after the Government called for calm after three days of consolidation; so cannot rule out government firms acting to stabilise the market. It initially tested down to 16,860 but the rebounded and trading in a range 16,950/17,050 through the session until 12.30pm when it sold down 180pts with a small bounce at the end to close -90pts (-0.5%) @ 16,843
The sell off on news that the US Govt was putting pressure on TSMC and others to open factories in the US and prioritise US demand.
After Market Data
Foreign Exchange Reserves Apr $541.11b vs $539.04b Mar (F/cast was $546b)
CONNECT FLOWS (no trading)
BABA (09988.HK) -2.3%
TENCENT (00700.HK) -1.8%
CCB (00939.HK) +1.7%
MEITUAN (03690.HK) -1.6%
AIA (01299.HK) -0.9%
PING AN (02318.HK) -0.1%
HSI & HSCEI Constituents on Move:
HAIDILAO (06862.HK) -6.1%
HANSOH PHARMA (03692.HK) -4.6%
SANDS CHINA LTD (01928.HK) -4.3%
WUXI BIO (02269.HK) -4.1%
BIDU-SW (09888.HK) -3.5%
HANG SENG BANK (00011.HK) +3.4%, hitting new high
BANKCOMM (03328.HK) +3.3%
NTES (09999.HK) -3.1%
SUNNY OPTICAL (02382.HK) -3%
CKI HOLDINGS (01038.HK) +2.9%, hitting new high
ENN ENERGY (02688.HK) +1%, hitting new high
HSMI & HSSI Constituents on Move:CHINA ZHONGWANG (01333.HK) +16%
TIANGONG INT'L (00826.HK) -13.9%
LIFETECH SCI (01302.HK) -10.1%
COSCO SHIP HOLD (01919.HK) +4.9%, hitting new high
CHINAHONGQIAO (01378.HK) +2.4%, hitting new high
MARKET HOURS NEWS.
As there is voice among community that the upcoming e-voucher, if distributed in too many phases, will affect consumption flexibility, Christopher Hui, Secretary for Financial Services and the Treasury, underscored that the authority is listening to different opinions and discussing with the related Stored Value Facility (SVF) operators. He viewed that the distribution phases can be fine-tuned and the application scopes will cover as many industries as possible.
The U.S. goods trade surplus with Hong Kong surged 1.53 times MoM to US$2.928 billion in March 2021, the greatest monthly figure since Covid outbreak a year ago, latest data from U.S. Bureau of Economic Analysis showed.
HKEX (00388.HK) intends to toughen up the pre-listing net profit requirement on Main Board to at least HK$80 million in combined profits in the three years from the current requirement of HK$50 million, South China Morning Post cited sources. The SFC is expected to make an announcement after the approval. The Stock Exchange had earlier lifted the net profit requirement to HK$125 million, yet faced backlash across sectors, report said.
TENCENT (00700.HK)'s Tencent Cloud announced that it had clinched a memorandum of cooperation with the University of Edinburgh, whereby the research and teaching of the University will be supported by cloud products and technologies of Tencent Cloud so that the technological development and talent training of the academy can be cemented.
On the final day of the May Day holiday of China, there were 4,856 inbound tourists as at 11:00 am today (5 May), as Radio Macau cited Macao Public Security Police.
Overnight HIBOR last posted at 0.0375%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.07929%, marking a 1-month low.
The global PC market (including tablets) shipments surged 53.1% year on year to 122 million units in 1Q21, as the latest data from Canalys showed. Accounting PC and tablets, LENOVO GROUP (00992.HK) maintained its lead by shipping 24.044 million units and posting annual growth of 66.5%. Apple came second with 22.061 million shipments.
The Japanese government is weighing an extension of the State of Emergency in Tokyo and other regions, reported Yomiuri Shimbun. The State of Emergency in Tokyo, Osaka, Kyoto and Hyogo prefectures was slated to expire on 11 May.
TikTok was the world's most installed non-gaming app in April with over 59 million downloads, reported Sensor Tower. 13% of the installs came from Brazil, while 12% stemmed from Douyin, the Chinese version of the short-video app.
Singapore and Hong Kong will keep in touch to review and assess any potential changes in their air travel bubble scheme after Covid resurgence in the former region, said Singapore's Multi-ministry Taskforce Co-chair Lawrence Wong.
S&P Dow Jones Indices announced the launch of its new series of digital asset benchmarks, including the S&P Bitcoin Index, the S&P Ethereum Index, and the S&P Cryptocurrency MegaCap Index.
PRE MARKET HOURS NEWS
CLP HOLDINGS (00002.HK) announced that its subsidiary EnergyAustralia has reached an agreement with the Government of New South Wales to build Australia’s first net zero emissions hydrogen and gas capable power plant through expanding its existing Tallawarra power station, helping to provide reliable and affordable cleaner electricity supply.
Macau recorded more than 45,000 outbound travelers on 4 May, the fourth day of the May Day Golden Week, Radio Macau citing Public Security Police Force.
HSBC HOLDINGS (00005.HK) may pay over a billion euros (over HK$9.3 billion) to Cerberus to sell its French retail banking business, reported Les Echos. The American fund will take over 230 retail banks and 4,000 employees of HSBC in France.
TIANGONG INT'L (00826.HK) announced that it planned to place up to 200 million shares by top-up transaction at $4.22 per share, representing a 13.52% discount to the closing price as quoted yesterday. The net proceeds from the placing will be $834 million, the company predicted.
GCL-POLY ENERGY (03800.HK)announced that on 30 April, the Company received the resumption guidance from the Stock Exchange. The Company shall conduct an appropriate independent investigation into the various concerns raised by the Auditors in the Audit Letter (including the validity of the prepayment made for the purposes of the EPC Contract; and the information disclosed by the Company’s management to the Auditors), to assess the impact on the Company’s business operation and financial position. Trading in shares in the Company was suspended from 1 April and will remain suspended until further notice.
The online transaction amount through UnionPay increased 5.5% yearly to RMB754.3 billion on 1-2 May (first two days of May Day holiday), as revealed by the latest data of China UnionPay.
COOLPAD GROUP (02369.HK) announced the proposed issue of not more than 3.672 billion Rights Shares at a subscription price of HK$0.28 per share (i.e. a discount of 41.05% to the closing price on the Last Trading Day) on the basis of one (1) Rights Share for every two (2) existing Shares. The estimated net proceeds will be HK$981 million to HK$1.001 billion.
BONJOUR HOLD (00653.HK) announced that the Company entered into a non-binding Memorandum of Understanding with Huawei, in relation to the application of retail technology innovation to support the business transformation and sustainable development of the Group, and the cooperation in the co-branding marketing between the Group and HUAWEI.