Apr 1 HK/CHINA WRAP Markets rebound, HK re-opens Wednesday China open Friday


02 Apr

HSI +560pts (+2%) 28,939 HSCEI +245pts (+2.2%) 11,217 T/O HK$178.25bn (+8.7% DoD) 

EUROPE 
Markets opened lower but rallied on good PMI data, although German Retail Sales missed. Markets effectively trading sideways at present. Follows generally good data out of Asian although the Caixin Manufacturing PMI missed US Initial claims, 4 week average and continuing claims down WoW but higher than F/casts.
Germany closed Friday and Monday
France open Friday, closed Monday
UK closed Friday and Monday
Data
EUROZONE 
Manufacturing PMI Mar 62.5 vs 57.9 Feb (F/cast was 62.4)
GERMANY 
Retail Sales Feb +1.2% MoM vs -6.5% Jan revised (F/cast was +2.4%)
Retail Sales Feb +1.2% MoM vs -6.5% Jan revised (F/cast was +2.4%)
Manufacturing PMI Mar 66.6 vs 60.7 Feb (F/cast was 66.6)
FRANCE 
Manufacturing PMI Mar 59.3 vs 56.1 Feb (F/cast was 58.8)
New Car Registrations Mar 191.4% vs -20.9% Feb (F/cast was -6.3%)
UK 
Manufacturing PMI Mar 58.9 vs 55.1 Feb (F/cast was 57.9)

US Futures 
Opened flat Dow +18pts, S&P flat and NDX +0.1%.
Data
Challenger Job Cuts Mar 30.603k vs 34.531k Feb (F/cast was 30k)
Initial Claims 719k vs 658k prior (F/cast was 650k)
4 Week Average Claims 719k vs 729.5k prior (F/cast was 710k)
Continuing Claims 3.794m vs 3.84m prior(F/cast was 3.68m)
Due Manufacturing PMI, Construction Spending, ISM Manufacturing Data (PMI, New Orders, Prices and Employment), EIA Natural Gas Stocks, Baker Hughes Oil Rig Count, Total Vehicle Sales.
Earnings: CarMax
Markets closed Friday but Payrolls data will be released.

CHINA CSI 300 closed +62pts (+1.2%) @ 5,111
CSI 300 opened higher tick higher initially but then back to flat ahead of PMI data which missed estimates but markets worked higher as Japan, S Korea and Taiwan PMI’s beat forecasts. Market then worked higher to test 5,100 but unable to break out and drifted lower into lunch. PM opened flat 5,080 but saw some selling down to 5,070 before rallying for the rest of the session to close just off the day high.
Investors optimism helped by Biden’s infrastructure stimulus package. ChiNext Index outperformed rising 2.1%.
Gains lead by; medical concepts, steel, semiconductors and Hainan concepts
Laggards were carbon neutral concepts, digital currency and the Belt & Road related (after report about unfair China loan terms (see FT thoughts for details)..
China is open Friday but closed for Tomb Sweeping Day on Monday Apr 5th.

Shanghai Comp +24pts (+0.7%) @ 3,466
Shenzhen Comp +201pts (+1.5%) @ 13,980
ChiNext +57pts (+2.1%) @ 2,815

CHINA DATA 
Caixin Manufacturing PMI Mar 50.6 vs 50.9 Feb (F/cast was 51.2)
This was the lowest reading since April 2020, indicating the post-epidemic recovery faltered. Both output and new orders grew at softer rates while employment moved closer to stabilization. Meanwhile, the measure for stocks of purchased items remained in negative territory for the third straight month, and the measure for quantity of purchases plunged into a contraction. The gauge for suppliers’ delivery times increased, though it was still in negative territory. On the price front, inflationary pressures intensified, with both input costs and output charges rising at steeper rates. Meantime, export sales returned to growth as foreign demand improves amid an acceleration in global COVID-19 vaccinations. Finally, the level of positive sentiment was among the highest seen over the past seven years.

HSI Pre market opened @ 28,595 +216pts vs +117pts ADR’s with Ecommerce names strong along with Tech.
Sentiment helped by the Biden infrastructure stimulus plan expected to be good for the global economy, easing fears of further Archegos linked selling. Market worked slightly higher through the morning in choppy trading with resistance at 28,700 which was tested a couple of times. PM opened at 28,725 but sold down until 1:30 and from there the market traded higher to close at the day high. Some resistance at 28,800 but other wise a steady path higher. Afternoon sentiment helped by HK administration saying the Biotech vaccine program would resume next week. I also think Team China active to counter the US HK Policy Act report, which said HK did not warrant special status as it was under Beijing’s control.
No Northbound trading as HK closed Friday, Monday and Tuesday Easter and Grave Sweeping.
HONG KONG DATA 
The Centre for Health Protection reported 13 new covid cases (vs 6 cases Wednesday) 2 from unknown origin.
Short Selling Thursday  vs14.5% Wednesday
Top Shorts  Bud Apac (1876) 38%,  Ali Health (241) 33%, Country Garden (2007) 32%, Sands China (1928) 31%,Ping An (2318) 29%, BankComm (3328) 27%, HKEX (388) 26%, HSBC (5) 25%, ICBC (1398) 25%.

AFTER MARKET NEWS
 The Eastern Magistrates’ Court today issued  warrant to arrest Zeng Lingxi after she failed to appear in Court to answer two charges of obstructing the Securities and Futures Commission’s (SFC) search operation in May 2020. The SFC’s search operation related to an investigation of a suspected social media ramp-and-dump scam involving manipulation of the shares of a Hong Kong-listed company. Zeng, an alleged member of a syndicate suspected of operating social media ramp-and-dump scams, is summoned for obstructing employees of the SFC in the execution of a search warrant and in exercising the powers under the Securities and Futures Ordinance during the search operation.  The Court was being told that Zeng had not returned to Hong Kong since her departure on 15 November 2020.
COUNTRY GARDEN (02007.HK) announced that it had achieved contracted sales attributable to the shareholders of approximately RMB52.69 billion, up 12% yearly, in March 2021.
R&F PROPERTIES (02777.HK) announced total contracted sales at the end of March 2021 were approximately RMB30.55 billion, representing a year-on-year increase of 68%.
The Development Bureau announced that it has executed a land grant at nominal premium to Ma Wan Park Limited (MWPL), a wholly owned subsidiary of SHK PPT (00016.HK), for the development and operation of Ma Wan Park (MWP) without commercial gain. To ensure timely delivery of MWP Phase 2 and good governance of the entire MWP, the Government has also entered into a Supplemental Agreement (SA) and a Management Agreement (MA) with SHK.
Centa-City Leading Index (CCL) last printed at 180.33, down 0.33% weekly. 
CCL Mass came in at 182.48, down 0.55% weekly.
CCL (small-to-medium units) last reported at 180.50, down 0.34% weekly.
CCL (large units) last tracked 179.48, down 0.30% weekly.
The research department of Centaline Property, expected second-hand home deals to stay vibrant as backed by users, seeing property prices to keep shooting up. CCL is set to attempt 190, likely hitting the goal around mid-2021.


MARKET COMMENT 
*E-COMMERCE FIRM concern of further selling from Archegos eased.JD.COM (9618 HK +4.3%) will transfer the JD Cloud & AI business and certain assets valued at about 15.7b yuan, to JD Digits, in exchange for issuance of shares.
MEITUAN (3690 HK +9.2%) NTES (9999 HK +4.9%).
XD (2400 HK +20%) surged after it announced ALIBABA's (9988 HK +2.6%) Taobao China Holding Limited and BILIBILI (9626 HK +4.8%) will be buyers of its 26.3m shares to be placed at HK$42.38 apiece.
TENCENT (700 HK+6.5%) backed fintech Linklogics Inc raised HK$7.96b after pricing its HK IPO at HK$17.58/shr.
*TECH & COMPONENTS FIRM, led higher by semiconductor makers SMIC (981 HK +4.5%) HUA HONG (1347 HK +8%) FIT HON TENG (6088 HK +2.5%).BYDE (285 HK +12%) having been sold down after recent results.
XIAOMI (1810 HK +2.1%) bought back 19.3m shs for HK$498.9m yesterday had announced a $1.3b buyback plan earlier this month.
*CHINA PROPERTY WEAK on earnings results. CH VANKE (2202 HK -5%) reported  FY net income +6.8% YoY to 41.5b., aims to further deleverage to meet Beijing's "three red lines" policy in Q1.
ROSHINE CHINA (3301 HK -1%) net profit for 2020 -23% YoY to 2.43b yuan.
EVERGRANDE (3333 HK -3.6%) net profit more than halved to 8.08b yuan YoY in 2020 but is reducing debt and did repay its bond earlier this year.
*HK PROPERTY WEAK after CY Leung echo’s Michael Cheung comments to the FT recently that housing is the next big target on the govt's agenda. SHKP (16 HK -0.34%) CKA (1113 HK -0.2%) KERRY (683 HK -1%).
REGAL HOTELS INTL (78 HK +2.3%) opened the price list for the first 50 units of The Queens in Sai Ying Pun with an average price of HK$30,299 psf. That is nearly 10% more expensive than HENDERSON LAND's (12 HK -0.7%) Two Artlane also in Sai Ying Pun which was launched last Sept.
*MACAU CASINOS FIRM  reported March GGR +58% YoY to 23.6b yuan, although it missed the avg market estimate of a 71% increase.  MELCO (200 HK +1%) SJM (880 HK +3%) GALAXY (27 HK +2%) SANDS (1928 HK +1.4%).
*AUTO  STRONG on prospects for EVs as the global demand shifts from gas-engine cars
EVERGRANDE EV (708 HK +6.4%) is set to start trial production in Q4 and Chairman Hui said the firm will achieve mass deliveries next year. The aim is to produce 1m vehicles in 2025 and 5m in 2035, as it has launched a total of nine models so far, he said.
BYD (1211 HK +8%) after being awarded a bus contract in the UK.
GEELY (175 HK +3.9%) GREAT WALL (2333 HK +10.7%).
*APPLIANCES STRONG after JS GLOBAL (1691 HK +20%) reported 2020 net profit surged 372% YoY to US$402m.
GOME (493 HK +4.8%) HISENSE (921 HK +7.4%) TCL (1070 HK +3.6%).
*OTHER MOVERS: 
SCHOLAR EDU (1769 HK +8.3%) FY net profit dropped 48% YoY to 48.94m yuan, while revenue rose 5.3% YoY to 749m yuan, beating estimates
XINTE ENERGY (1799 HK +11.5%) reported a 73% YoY jump in annual profit to 695m yuan.

Regional Markets
AUSTRALIA 
Pre Market data was mixed , ASX 200 initially rallied but then retrenched to flat before working better to close at the day high in choppy morning trading. Had eased back mid afternoon but rallied at the end to close +38pts (+0.6%) @ 6,829Markets will be closed Friday and Monday for Easter
Data 
Manufacturing Index Mar 59.9 vs 58.8 Feb (F/cast was 58)
Manufacturing PMI Mar 56.8 vs 56.9 Feb (F/cast was 57)
Later came  Balance of Trade Feb A$7.529b vs 9.61b Jan (F/cast was 9b)
Imports Feb +5% MoM vs -2% Jan (F/cast was -1%)
Exports Feb -1% MoM vs +6% Jan (F/cast was -3%)
Home Loans Feb -1.8% MoM vs +10.9% Jan (F/cast was +8%)
Retail Sales Feb -0.8% vs +0.3% Jan (F/cast was -1.1%)
JAPAN 
Tankan data released just before the open was better than F/cast
Nikkei 225 opened higher and worked higher to test 29,600 mid morning but then eased back into lunch at 29,500 level. PM opened lower 29,350 and traded sideways slightly better to close +210pts (+0.7%) @ 29 388
Topix opened higher but trended slight lower though the morning in choppy trading. PM opened lower and traded sideways to close +4pts (+0.2%) @ 1,958
Data
Tankan Survey
Large Manufacturers Index Q1 +5 vs -10 Q4 (F/cast was -2)
Large All Industry Capex Q1 +3% vs -1.2% Q4 (F/cast was +1.5%)
Non Manufacturing Outlook Q1 -1 vs -6 Q4 (F/cast was 0)
Large Manufacturing Outlook Q1 +4 vs -8 Q4 (F/cast was +4)
Large Non Manufacturing Outlook Q1 -1 vs -5 Q4 (F/cast was -6)
Small Manufacturers Index Q1 -13 vs -27 Q4 (F/cast was -22)
Foreigner Stock Investment Y200.7b vs 554.4 b prior revised
Foreigner Bond Investment Y -852.4b vs -79b prior revised
Manufacturing PMI Mar 52.7 vs 51.4 Fed (F/cast was 52)
10 year JGB Auction 01.123% vs 0.131% prior
Markets will be open Friday
S KOREA  
Pre market traded data was mixed but PMI out a little later was better. Investors encouraged by Biden’s Infrastructure stimulus plan with less concern about inflation. Tech and Auto’s lead.
Kosdaq opened slightly higher but dipped initially before working better through the session to close +10pts (+1%) @ 966
Kospi opened higher and tested 3,090 in early trades, then eased back and traded sideways for the rest of the session to close +26pts (+0.9%) @ 3,087.
Markets will be open Friday
Data
Balance of Trade March $4.17b vs $2.71b Feb revise (F/cast was 5.7b)
Exports March +16.6% MoM vs +9.5% Feb (consensus is +16.2%)
Imports March +18.8% vs14.1% Feb revised from +13.9% (consensus is +17.5%)
Manufacturing PMI Mar 55.3 vs 55.3 Feb (F/cast was 54)
TAIWAN 
Opened higher as PMI data beat and after US recovery, effectively trading sideways to close +140pts (+0.9%) @ 16,571
Data
Manufacturing PMI Mar 60.8 vs 60.4 Feb (F/cast was 60)
Market will be open Friday but closed Monday

CONNECT FLOWS  
No northbound flow as HK closed until Wednesday 7 April
Shanghai 
Southbound HK$ 19,396m Sell 9,454m : 9,941m Buy
Shenzhen 
Southbound HK$ 21,552m Sell 8,995m : 12,557m Buy

Active Heavyweights
MEITUAN (03690.HK) +9.3%
TENCENT (00700.HK) +7.2%
BABA (09988.HK) +2.5%
HKEX (00388.HK) +2.4%
PING AN (02318.HK) +1.2%
AIA (01299.HK) +0.6%
CCB (00939.HK) -0.3%
HSI & HSCEI Constituents on Move:
WUXI BIO (02269.HK) +8%
WH GROUP (00288.HK) +6.3%
KUAISHOU-W (01024.HK) +5.6%
ALI HEALTH (00241.HK) +5.2%
SMIC (00981.HK) +4.9%
NTES (09999.HK) +4.7%
JD (09618.HK) +4.4%
CPIC (02601.HK) +3.9%
GEELY AUTO (00175.HK) +3.9%
PSBC (01658.HK) -3.6%
NONGFU SPRING (09633.HK) +3.6%
EVERGRANDE (03333.HK) -3.2%
SUNNY OPTICAL (02382.HK) +3.2%
HSMI & HSSI Constituents on Move:
XD INC (02400.HK) +22.3%
JS GLOBAL LIFE (01691.HK) +19.7%, hitting new high
YADEA (01585.HK) +12.7%
COSCO SHIP PORT (01199.HK) +12.2%
BYD ELECTRONIC (00285.HK) +12.1%
JW THERAP-B (02126.HK) +11.5%
YEAHKA (09923.HK) +11.1%
VESYNC (02148.HK) +11%
MICROPORT (00853.HK) +10.7%
GREATWALL MOTOR (02333.HK) +10.7%
REMEGEN-B (09995.HK) +10.4%
EVEREST MED-B (01952.HK) +10.1%
CHINA LESSO (02128.HK) +9.1%, hitting new high
KINGBOARD HLDG (00148.HK) +3.8%, hitting new high
STELLA HOLDINGS (01836.HK) +3.6%, hitting new high

MARKET HOURS NEWS.
Patrick Nip, Secretary for the Civil Service, announced that the Comirnaty vaccination program will be resumed on 5 April, while the first batch (300,000 jabs) is arriving from Germany as soon as tomorrow.  Those who had made booking for Comirnaty vaccination, previously scheduled next Monday or beyond, are not required to renew their booking, furthered Nip. People who had received their first Comirnaty shot would be arranged to have their second next Monday to Saturday.
Hang Seng Indexes Company announced that it will announce the results of the 2021Q1 review of the Hang Seng Family of Indexes on 21 May 2021 (Friday). The constituent changes will be made to the Hang Seng Family of Indexes with effect from 7 June 2021 (Monday).
Launched in September 2019, BABA-SW (09988.HK)'s Three Kingdoms Tactics has garnered over US$1.2 billion in aggregate player spending, Sensor Tower wrote in a report.
Gaming Inspection and Coordination Bureau (DICJ) announced that Macau's GGR in March gained 58% YoY or 13.6% MoM to MOP8.306 billion, slightly beating Citigroup's earlier forecast of MOP8 billion.
CSPC PHARMA (01093.HK) announced that the “Amphotericin B Cholesteryl Sulfate Complex For Injection (50mg)” developed by a subsidiary of the Company, has obtained drug registration approval granted by the National Medical Products Administration of the People’s Republic of China, being the first-to-market generic of this product type in China. Amphotericin B is a type of polyene antibiotic, and is one of the most effective drugs with the broadest antimicrobial spectrum for prevention and treatment of invasive fungal infections.
XIAOMI-W (01810.HK) announced the opening of the 5000th Mi Home in Shenyang on 3 April.The People's Bank of China has recently teamed up with Hong Kong Monetary Authority and conducted technical tests on the cross-border use of digital renminbi, said Wang Xin, director of the PBOC's Research Bureau.
Shenzhen Municipal People’s Government and the PBOC's Shenzhen Sub-branch instructed the Luohu District People’s Government to cooperate with BANK OF CHINA (03988.HK) and BOC HONG KONG (02388.HK) for the trial of digital RMB usage by Hong Kong residents in mainland China, reported Chinese media.
At China Mobile Hong Kong's news conference, CEO Sean Lee announced a new 5G plan. A 10GB monthly package is priced as low as $168. The company has teamed up with different real estate developers on smart buildings and towers, disclosed Lee.
For 2M21, China's dotcoms above designated scale manifested a total operating profit of RMB15.17 billion, up 17.3% yearly, with the growth rate stretching the uptrend since 2H20, according to the data from Ministry of Industry and Information Technology (MIIT).
TSMC (TSM.US) plans to make an US$100-billion investment in the coming three years in boosting its chip production capacity, and underpinning the production and R&D of advanced semiconductor technology, Bloomberg reported. It is expected that the construction of overseas wafer fabs will be expedited.
XD INC (02400.HK) announced proposed issue of US$280 million 1.25% convertible bonds due 2026. The company also announced a plan to place 22.66 million and 3.658 million shares to BILIBILI-SW (09626.HK) and BABA-SW (09988.HK)'s Taobao China at a placing price of $42.38 per share, representing a 9.83% discount to the closing price yesterday.
The Office of the U.S. Trade Representative (USTR) vowed in its annual report to keep battling significant trade barriers hurting American firms and farmers, while picking out China as the "world’s leading offender" in generating overcapacities in multiple industries.
Goldman Sachs plans to begin offering investment tools in bitcoin and such other digital assets from the second quarter, said Mary Rich, the new global head of digital assets for the bank’s private wealth management division.
The U.S. Securities and Exchange Commission (SEC) has set about a preliminary probe into Archegos Capital's founder Bill Hwang, which is a routine procedure, Bloomberg citing a person familiar with the matter.
PRE MARKET HOURS NEWS 
The Suez Canal Authority is investigating into the reason and accountability behind the wedging of Evergreen's container chip "Ever Given", ranging from payable insurance to latent damages claims.  Suez Canal Authority Chairman Osama Rabie foresaw damage from the blockage and expenses incurred by dredging to cost over US$1 billion.
RUNDONG AUTO (01365.HK)'s trading in the shares was suspended this morning.  The company had announced earlier that share trading would be suspended from Thursday for a delay in publication of FY20 annual results.
GCL-POLY ENERGY (03800.HK) and GCL NEWENERGY (00451.HK)'s share trading was halted from this morning. The companies announced a delay in publication of FY20 annual results and postponement of the Board Meeting to today.
GCL-POLY ENERGY (03800.HK) and GCL NEWENERGY (00451.HK) announced that Henan GCL New Energy and Suzhou GCL New Energy, being indirect subsidiaries of the companies, and Three Gorges Asset Management entered into the First Phase Share Purchase Agreements. Pursuant to which, Henan GCL New Energy and Suzhou GCL New Energy agreed to sell the entire equity interest in each of Kaifeng Huaxin, Sanmenxia GCL, Queshan Zhuiri and Shang Shui GCL and 50% equity interest in each of Nanzhao Xin Li and Taiqian GCL to Three Gorges Asset Management.  The net proceeds from disposal will likely amount to RMB928 million.
ZHENGTONG AUTO (01728.HK) announced annual results ended December 2020. Loss hit RMB8.579 billion, against RMB664 million in a year ago's profit. LPS equaled RMB3.348. No dividend was declared.
LANDING INTL (00582.HK) announced annual results ended December 2020. Loss narrowed from HK$2.133 billion in the previous year to HK$2.115 billion. LPS equaled HK63.28 cents. No dividend was declared
ESPRIT HOLDINGS (00330.HK) announced interim result ended December 2020. The loss narrowed from HK$3.992 billion in the corresponding period of previous year to HK$414 million. LPS was HK$0.46. No interim dividend was declared.
The International Standard for Recommended Practice for E-Invoice Business Using Blockchain Technology, guided and facilitated by Shenzhen Tax Service of State Taxation Administration and TENCENT (00700.HK) was officially approved for release by IEEE Standards Association (IEEE SA). This is the world's first international standard for e-invoice application based on blockchain technology.
The first round of video conference was held during 25-31 March, following the upgrade of the China-Singapore Free Trade Agreement (CSFTA), announced China's Ministry of Commerce.  Both sides had thorough negotiations surrounding cross-border service trade, investment, telecommunications and other fields, while exchanging views on issues regarding service trade and investment liberalization.
HARMONY AUTO (03836.HK) announced annual result ended December 2020. The net profit amounted to RMB411 million, down 20% yearly. EPS was 27 fen. A final dividend of HK7.9 cents was declared, against HK7.5 cents in a year-ago period.
PING AN SEC GP announced FY20 annual results that loss narrowed to $703 million from $993 million a year ago. LPS equaled 13.61 cents.
MELCO INT'L DEV (00200.HK) announced results for the year ended 31 December 2020. Loss attributable to owners of the company reached $6.34 billion, against $690 million in a year ago's profit. LPS equaled $4.19. No final dividend was declared.
CSC (06066.HK)  announced annual result ended December 2020 based on Chinese accounting standards. The net profit amounted to RMB9.509 billion, up 72.9% yearly.  EPS was RMB1.2. A dividend of RMB3.75 for every 10 shares was declared.

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