Apr 15 HK/CHINA WRAP Markets weak ahead of key China data Friday and T/O fell again


15 Apr

HSI -108pts (-0.4%) 28,793 HSCEI -93pts (-0.9%) 10,906  T/O HK$124.5bn (-9.8% DoD) 

EUROPE 
Market opened slightly higher hitting new highs and traded sideways with caution ahead of earnings and US initial claims. German and French inflation numbers in line with estimates. Most sectors in the green with basic resources leading.
L’Oreal to announced after the close
Deliveroo very weak despite saying its orders more than doubled in the first quarter from the same period last year
ABB +VE after the Swedish-Swiss tech manufacturer beat first-quarter profit expectations,
AB InBev +VE after Barclays upgraded the stock to “overweight” and raised its price target.
Legal & General weak.
Shares of real estate companies with assets in Berlin rose across the board on Thursday after Germany’s Constitutional Court struck down a law putting a rent cap on apartments in the capital.
Data
Germany
Inflation Rate Final Mar +1.7% YoY vs +1.3% Feb (F/Cast was +1.7%)
Inflation Rate Final Mar +0.5% MoM vs +0.7% Feb (F/Cast was +0.5%)
France
Inflation Rate Final Mar +1.1% vs +0.6% Feb (F/Cast was +1.1%)
Inflation Rate Final Mar +0.6% vs 0% Feb (F/Cast was +0.6%)
Due later
UK BoE Credit Conditions

US Futures 
Opened in Asian time slightly higher Dow +50pts, S&P and NDX +0.2% but have risen to Dow +200pts S&P +0.7% and NDX +1%. On good retail sales numbers pre market and initial claims dropping to new lows.
Data due:
Retail Sales, NY Empire State Manufacturing Index, Philiadelphia Fed Manufacturing Index, Initial Claims, 4 week average Initial Claims, Continuing Claims, Industrial Production, Capacity Utilisation, Manufacturing Production, NAHB Housing Market Index, Business Inventories, EIA Natural Gas Report, Foreign Bond Investment, Net Long Term TIC Flows, Overall Net Capital Flows.
Earnings: Bank of America, Citigroup, UnitedHealth, PepsiCo, BlackRock, Alcoa, PPG Industries, U.S. Bancorp, Charles Schwab, Delta Air Lines, Rite Aid, Wipro, Taiwan Semiconductor, Truist Financial, SunTrust

CHINA 
CSI 300 closed -32pts (-0.6%) @ 4,949
CSI300 opened lower with concerns on further tightening by the PBOC and worries over bond defaults. The weakness saw the markets sell down to 4,900 through the morning. PM saw a rebound but still closed -32pts (-0.6%) @ 4,949 ahead of key data tomorrow on the open (GDP data, House Price Index, Industrial Production & Capacity Utilisation, Retail Sales and Unemployment)
Leaders Baby-concept and non-ferrous, medical beauty, shipbuilding, digital currency, and medical equipment.
Laggards Financials, large cap liquor, environmental protection, power, tourism and hotel.
Shanghai Comp -18pts (-0.5%) @ 3,399
Shenzhen Comp -58pts (-0.4%) @ 13,680
ChiNext Comp -15pts (-0.5%) @ 2,868
CHINA DATA No data

HSI 
Pre market opened @ 28,873 -28pts vs -31pts ADR’s
ECommerce and financials were weak following the US. HSI sold down to 28,530 in the morning before a small bounce into lunch. PM worked back slowly and popped +35pts in the closing auction. T/O dropped ahead of important China data tomorrow on the open.
HONG KONG DATA 
The Centre for Health Protection reported 6 new covid cases (vs 5 cases Wednesday) 2 of unknown origin
Short Selling Thursday 17.7 vs 15% Wednesday
Top Shorts  Ali Health (241) 59%, Country Garden (2007) 48%, Hang Lung Property (101) 46%, Bud Apac (1876) 40%, Sino BioPharm (1177) 35%, ICBC (1398) 33%, Bank Of China (3988) 32%, Sands China (1928) 30%, Baba (9988) 30%, BankComm (3328) 30%, HSBC (5) 30%, Ping An (2318) 30%, Mengniu Dairy (2319) 28%, Henderson Land (12) 28%, CCB (939) 27%, Wuxi Bio (2269) 27%.
AFTER MARKET NEWS 
LUK FOOK HOLD (00590.HK) announced that due to the low base effect and the declined gold price in the last two months, the overall SSSG of the Group’s retail business in 4Q FY2021 recorded a turnaround from last quarter’s -29% to +30% YoY.
Fitch Ratings affirmed Hong Kong's Long-Term Foreign-Currency Issuer Default Rating (IDR) at AA- with a Stable Outlook, underpinned by robust track record of public financial management, strong external cushions and high per capita income.  The rating agency expected a 4.5% rebound for Hong Kong economy this year after two-year setback.
The Lands Department (LandsD) announced today (April 15) that it registered 15 lease modifications and four land exchanges in the Land Registry during the quarter ending March 2021, of which one was a modification of a technical nature involving nil premium. The above land transactions realized a total land premium of about $9.93 billion.
FUYAO GLASS (03606.HK) announced first quarter results ended March 2021. Net profit amounted to RMB855 million, up 85.9% yearly. EPS  equaled RMB0.34.
ByteDance is working to prepare for the listing of some underlying businesses, including Douyin, TouTiao, iXigua and other flagship domestic assets, in Hong Kong or the U.S., tech.qq learnt from insider sources. TikTok and such other overseas businesses will be part of ByteDance' other planned IPO , said insiders.
SA SA INT'L (00178.HK) announced that for the fourth quarter from 1 January to 31 March 2021, the Group’s retail and wholesale turnover. decreased by 3.4% year on year to HK$819 million, indicating a narrowing decline.   This was mainly due to the extremely low comparison base caused by the outbreak of COVID-19 pandemic in early 2020.
CHINA SOUTH AIR (01055.HK) announced that the passenger load factor was 74.96% in March, representing an increase of 16.71 percentage points. The cargo and mail load factor was 50.09%, representing a decrease of 19.47 percentage points.
HSBC HOLDINGS (00005.HK) announced that a meeting of a committee of the Board of Directors will be held on 27 April 2021 to consider the announcement of the Earnings Release for the First Quarter 2021.
XIAOMI-W (01810.HK)'s Xiaomi Technology Co., Ltd. applied for registration of multiple "Mi Car" trademarks in categories of transportation, machinery and equipment etc., as disclosed by open.tianyancha.com.  At the end of last month, XIAOMI-W had announced a foray into the smart EV sector.
Centa Valuation Index (Major Banks) (CVI) last stood at 82.03 this week, up 0.78 pts weekly.  The index stood firmly aloft 80 for four consecutive weeks, indicating bankers' active and rational stance on mortgage business. Home prices will likely struggle to edge up given the lack of excessive market excitement.

MARKET COMMENT 
*PETOCHEMS FIRM as Oil rose 4% overnight to its highest in a month as the IEA joined OPEC and the EIA in giving more optimistic forecasts for demand, citing improving outlooks for the U.S. and China. U.S. crude inventories fell by 5.89 million barrels last week to the lowest level since Feb. CNOOC (883 HK +1%) PETCH (857 HK +1%) ANTON (3337 HK +2%).
*CHINESE BANKS WEAK on tightening worries, as the PBOC rolls over the matured CNY 150 bn 1-year MLF, and CNY 10 bn 7-day repo and CNY 10 bn matured today, still with zero injection from the PBOC.  CCB (939 HK -1.2%) ICBC (1398 HK -1.6%) BOC (3988 HK -0.6%).
In HK, HSBC (5 HK -1.1%) is to move four of its top executives to Hong Kong from London, one more than had been previously announce and means almost all of HSBC’s global revenue will be run out of Hong Kong.
*E-COMMERCE WEAK on regulatory concerns after some Chinese Internet platform companies, including BAIDU (9888 HK-0.8%), JD (9618 HK-1.6%), KUAISHOU (1024 HK-7.7%) and BILIBILI (9626 HK -1.9%), pledged to avoid anti-competitive behaviors such as forcing vendors to use their platform exclusively.
News that Bytedance is planning for a HK IPO in 2H also weighted on the sector, especially on Kuaishou, because of their similarities.
TENCENT (700 HK -0.6%) is holding off on marketing a USD bond deal because Asia's credit markets have been disturbed by the plunge in China Huarong's bonds. (Good article in yesterday’s FT on the issue)
*TECH & COMPONENTS WEAK after  yesterday's rally related to APPLE’s upcoming new product launch.  
Chip makers traded mixed after TSMC reported profit +19% YoY; SMIC (981 HK -0.2%) HUA HON (1347 HK -2.4%) ASM (522 HK +1.4%).
XIAOMI (1810 HK +0.6%) continues to buys back shares; another 7.79m for HK$198.8m on April 14. Meanwhile, one of Xiaomi's non-executive director disposed in the market 32.9648m shares in total.
*HK PROPERTY MIXED  following recent rebound on the expansion of the vaccine program in HK. CK ASSET (1113 HK +2.2%) said its repurchase program was increased to 380 million shares, from 333 million, representing about 10% of the total issued shares. The offer price for the revised plan was unchanged at HK$51/shr.
MTRC (66 HK -0.3%) received at least six bids for its latest development offering
SHKP (16 HK -1.2%) NWD (17 HK +0.4%) SINO LAND (83 HK -0.9%) HENDERSON (12 HK -0.3%).
*SPORTWEAR MAKERS STRONG  after ANTA SPORTS (2020 HK +1%) said 1Q sales for Anta brand +40%-50% YoY, Fila brand sales +75%-80% YoY, and sales for other brands more than doubled.
LI NING (2331 HK +3.1%) POU SHENG (3813 HK +1.2%), but 361 DEGREES (1361 HK -4.6%) retreated from recent strong rally.
*MACAU WEAK as Macau moves step closer using the digital currency, as. the gambling hub seeks to better combat money laundering and tax evasion. SJM (880 HK -3%) GALAXY (27 HK -2.4%) MGM (2282 HK -2.8%).
*OTHER MOVERS: 
GOODBABY (1086 HK +2.6%) after PBOC published an article seeking to promote fertility and suggesting a lifting of birth restrictions.
SINOPHARM (1099 HK +6.3%) as demand on its vaccine is expected to increase, as more Astrazenca's vaccine are being paused due to rare blood clot cases.


Regional Markets
AUSTRALIA 
ASX200 opened lower and initially tested the support around 6,990 level but worked better from about 10:30am for the rest of the day on good employment data to close just off the day high +36pts (+0.5%) @ 7,058
Data
Consumer Inflation Expectations Apr +3.2% vs +4.1% Mar (F/cast was +4.2%)
Part time employment Mar +91.5k vs -0.4k Feb revised from -0.5k (F/cast was +10k)
Unemployment rate Mar 5.6% vs 5.8% Feb (F/cast was 5.8%)
Employment change Mar +70.7k vs 88.7K Feb (F/cast was +20k)
Full time employment change Mar -20.8k vs 89.1k Feb (F/cast was +10k)
Participation rate Mar 66.3% vs 66.1% Feb (F/cast was 66.3%)
JAPAN
Nikkei opened lower but spiked higher to 29,720 in early trades, consolidated and then tested to. 29,790 before easing back into lunch.  PM opened lower around yesterdays close and traded sideways to close+22pts (+0.1%) @ 29,643  
Topix traded in a similar pattern but above yesterday’s closing level. Closed +7pts (+0.4%) @ 1,959
Toshihiro Nikai, Secretary-General of Liberal Democratic Party of Japan, told TBS that cancelling Tokyo Olympics 2021 is one of the options. The government may have no choice but to cancel this global event if the pandemic goes more rampant, furthered Nikai. Comes as Tokyo reported 729 new cases
Data
Foreign Stock investment ¥640.9B vs ¥977.6B prior Foreign Bond investment ¥1714.4B vs ¥375.1B prior
Tomorrow we get the Tankan Index pre Market
S KOREA  
BoK left interest rate unchanged at 0.5% as expected
Kospi opened flat but rallied to test 3,205 around 10 am, it failed to break above and eased back to 3,185 around midday and then worked higher to retest 3,200 before easing slightly to close +12pts (+0.4%) @ 3,194
Kosdaq sold down initially to 1,008 before rebounding too 1,013 and then traded sideways to until around 2pm when it rallied to test yesterday’s closing level but failed to break above and closed -0.5pt (flat)@ 1,014
TAIWAN 
Opened lower but worked higher through the day and closed at the day high +210pts (+1.3%) @ 17,077
TSMC (TSM.US) reported that 1Q21 net profit +19.4% to TWD139.69 billion, beating TWD134.01 billion in consensus. TSMC forecast a record revenue for the second quarter, which hit US$13.05 billion in median estimate, above US$12.92 billion in the previous quarter.The firm raised its 2021E capex from US$25-28 billion to US$30 billion, up 74% year-on-year.
CONNECT FLOWS
Shanghai 
Northbound RMB 36,198m Sell 17,847m : 18,351m Buy
Southbound HK$ 10,537m Sell 5,867m : 4,670m Buy
Shenzhen 
Northbound RMB 41,362m Sell 21,408m : 19,954m Buy
Southbound HK$ 12,857m Sell 6,107m : 6,750m Buy

Active Heavyweights
BABA (09988.HK) -1.7%
CCB (00939.HK) -1.2%
PING AN (02318.HK) -1%
AIA (01299.HK) +1%
TENCENT (00700.HK) -0.6%
HKEX (00388.HK) +0.4%
MEITUAN (03690.HK) -0.4%
HSI & HSCEI Constituents on Move:
KUAISHOU-W (01024.HK) -7.8%
NTES (09999.HK) -3.1%
HSMI & HSSI Constituents on Move:
SINOPHARM (01099.HK) +6.3%, hitting new high
SHIMAO SERVICES (00873.HK) +2.7%, hitting new high

MARKET HOURS NEWS.
US-China trade grew rapidly in 1Q21, when China' exports to US rose 62.7% yearly, and imports up 57.9%, said Chinese Ministry of Commerce Spokesperson Gao Feng. Regarding the recent antitrust penalty slammed on Alibaba, Gao stated that Beijing attaches equal emphasis onto development and scrutiny of the e-commerce industry.
Three funds under Cathie Wood's ARK bought a combined 749,000 shares of Coinbase (COIN.US) on its US market debut. Based on Wednesday's closing price, their stake is worth US$246 million.
Malina Ngai, Group COO of A.S. Watson Group & CEO of A.S. Watson (Asia & Europe), said the group will focus on the Offline plus Online (O+O) model, which is the new standard for retail, as its development strategy.  She believed retail is not dead. Physical stores will continue to play a significant role in creating unique O+O experience. With over 16,000 physical stores and 100 eCommerce platforms in 27 markets in Asia and Europe, physical and online stores is the perfect leverage for the A.S. Watson O+O model. The group plans to open 1,000 new stores this year, Ngai added.
Seeing "videolization" as a huge flurry of the internet sector, BILIBILI-SW (09626.HK)  Chairman Chen Rui anticipated China's online video user base to surmount 1.2 billion in the next three to five years.  China recorded 927 million online video users as of end-2020, according to data from China Internet Network Information Center.
Polestar, a Swedish electric car maker controlled by Zhejiang Geely and its Volvo Cars, has raised US$550 million in external funding, led by Chengxing Equity Investment Fund Partnership and Zibo. The company said that the proceeds will be used to speed up product development and production, and it will also launch new car models in the next few years. The automaker is discussing for additional financing with other investors.
HKMA CEO Eddie Yue said the authority firmly defended the linked exchange rate system despite social unrest last two years, global financial market choppiness amid the pandemic, and dismay about sanctions. Total fund inflows into the Hong Kong dollar reached USD50 billion over the past year or so, reflecting a safe and effective operation of Hong Kong's payment system and manifesting the HKD/USD peg's capability.
BABA-SW (09988.HK) founder Jack Ma appeared Wednesday at the Russian Geographical Society board meeting, led by Russian President Vladimir Putin, Sputnik reported. Yet the Chinese billionaire did not join the two-hour conversation.reported.
MTR CORPORATION (00066.HK)'s Wong Chuk Hang Station Phase 6 "the Southside" has received at least six tenders from CK ASSET (01113.HK), HENDERSON LAND (00012.HK), K. WAH INT'L (00173.HK) and Wheelock Properties, before the tender closed at 14:00, according to on-site witness. These companies submitted tenders on a sole basis. SHK PPT (00016.HK), on the other hand, replied that it was also among the suitors. KERRY PPT (00683.HK) and SINO LAND (00083.HK) proposed an alliance.
The Government will enlarge the coronavirus vaccination program to cover residents aged 16-29, local media learnt from market sources. Patrick Nip, Secretary for the Civil Service, and Sophia Chan, Secretary for Food and Health, will brief the press at 15:15.
There were 62 residential transactions involving Buyer's Stamp Duty (BSD) in March 2021, up 4 cases or 6.9% monthly to a 4-month high, Inland Revenue Department's Stamp Office announced. The taxation amounted to $268.3 million, up 2.5 times monthly to a 4-month peak.  There were 291 home deals involving Ad Valorem Stamp Duty (AVD), up 68 cases or 30% monthly to a 4-month peak. The taxation amounted to $707.5 million, up 86.3% monthly to a 4-month high.
TENCENT (00700.HK) plans to raise up to US$4 billion in a bond issue scheduled today, Reuters learnt from sources with direct knowledge of the matter.  The Chinese tech firm intends to use the proceeds for general corporate purposes.
SINOPEC CORP (00386.HK) forged a strategic cooperation agreement with NIO (NIO.US), whereby more battery exchange stations for NIO will be set up at SINOPEC CORP's gas stations in future.   Zhang Yuzhuo, Chairman of Sinopec, said the company plans to build 5,000 battery charging/ changing stations by 2025.
Overnight HIBOR last posted at 0.03467%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.10357%, down for 6 days, marking a 1-month low.
Yango (000671.SZ) announced that the board of directors has given green light to the proposed spin-off of a property management subsidiary  for listing in Hong Kong.
Macau's gaming junkets worry that the digital RMB will squash the industry once it is introduced to the casinos, Bloomberg reported. Prior to this, the Macau government had approached casino operators in regards to the relevant regulations.  The city's Chief Executive Ho Iat Seng said the government is studying the feasibility of digital currency, hoping to improve money-laundering crime effectively.
JD-SW (09618.HK) announced that its JD LUXURY tailor-made a distinctive cooperation module for Louis Vuitton, under which users will be able to connect to the Mini Program of LV through the JD APP, enjoying exclusive consumption experience in shopping authentic products.
Tencent Music Entertainment Group (TME.US) appointed Cussion Pang as executive chairman, and Ross Liang as chief executive officer and a board member.  Ross Liang had served as TENCENT (00700.HK)'s vice president, taking the helm of social media platforms like QQ and Qzone.
TENCENT (00700.HK)'s Platform and Content Group (PCG) announced a fresh round of organizational and employee adjustment, marking the unit's biggest overhaul since its inception in 2018, reported Chinese media.  The group's Tencent Video, Weishi and YingYongBao will be consolidated into an online video business group.
BABA-SW (09988.HK) is renewing its US$5.15-billion revolving credit due 2022, and having negotiation with banks, Bloomberg cited people with the knowledge of the matter.  The company reportedly intends to cut the loan rate from LIBOR + 95 bps to LIBOR + 80 bps, and extend the related loan for five years. The tech giant has not yet made any comment on the report.
The PBoC today started RMB150-billion MLF and RMB10-billion reverse repurchase operations, with respective interest rates at 2.95% and 2.2% unchanged.
PRE MARKET HOURS NEWS 
China's State Administration for Market Regulation (SAMR) disclosed the second batch of Commitment to Operate in Compliance with Laws and Regulations made by the internet companies to the society. Such companies included TENCENT (00700.HK), TRIP.COM-S (09961.HK)(TCOM.US), Didi, KUAISHOU-W (01024.HK), MissFresh, BILIBILI-SW (09626.HK)  -15.500 (-1.898%) (BILI.US), BABA-SW (09988.HK) (BABA.US)'s Fresh Hema, and some other firms.
National Integrated Circuit Industry Investment Fund reduced 45 million shares of SMIC (00981.HK) on 9 April, cashing in $1.177 billion, as revealed by the Stock Exchange.
The US Federal Reserve will possibly scale back its bond purchase before pondering over any interest rate hike, Chairman Jerome Powell told foreign press.  While the central bank will only think about rate hikes after. inflation sustainably reaches 2% and the labor-market recovery is complete, Powell opined the combination is unlikely to happen before 2022.Cryptocurrencies are yet to reach the status of payment mechanisms, as they are "vehicles for speculation,” Fed Chairman Jerome Powell told foreign press.   Comparing crypto to gold, the central bank leader said the market gave gold "a special value that it doesn’t have as an industrial metal."
FAW-Volkswagen Audi will slash production of A4L, A6L, Q5L and other auto models by 30% in April amid chip shortage, likely bringing the output cut up above 20,000 units, Shanghai Securities News citing sources. The carmaker has yet to comment on the rumors.
However, Audi's sales manager has reportedly been notified to rationalize orders and adjust inventory structure against chip shortage.
Macao Government Tourism Office announced that the project titled “Stay, Dine and See Macao” is rolled out from April to December 2021.   Starting from 10:00 today, interested residents can sign up at travel agencies under the umbrella of the project which not only covers a range of local tours but also introduces experience of local hotels. Every permanent and non-permanent resident of the Macao Special Administrative Region is entitled to a one-time subsidy for each of both categories – local tour and hotel staycation.  The “Stay, Dine and See Macao” project will run local tours between 25 April and 31 December. Tours will be available on weekends and public holidays. Every Macao resident is granted one MOP200 subsidy for hotel staycation. The cost of each hotel room can be subsidized for a maximal quota of two residents, i.e. MOP400.
The PBoC wrote in an article that Beijing shall fully loosen her grip on the maternity policies to timely encourage a higher childbirth willingness, or she will repeat other developed countries' mistake by overlooking the importance of maternity policies to demographic transition.  Not only should China optimize her maternity policies, she should also brush up her pensionary regime, said the central bank.
New-Type National (Shenzhen-Qianhai) Internet Exchange Center held the opening ceremony in Qianhai yesterday (14 April), reported Yangcheng Evening News.  The Center entered into agreements of intent with ten companies including Shenzhen Smart City Technology Development Group, TENCENT (00700.HK) and DR.PENG (600804.SH), making them the first batch of users of the Center.
On 8 April, China's NSSF disposed on-market of 77.60 million BANK OF CHINA (03988.HK) shares at an average price of $2.95 per share, according to shareholding disclosures at the Stock Exchange. Subsequently, the fund's shareholding in the bank decreased from 7.03% to 6.93%.
CK ASSET (01113.HK) announced that the Maximum Number of Shares to be bought back under the Share Buy-back Offer will be increased from 333 million Shares to 380 million Shares, representing 10.29% of the total share capital.  The Revised Share Buy-back Offer, if accepted in full, will involve HK$19.38 billion to be funded by cash resources of the Group.
XIAOMI-W (01810.HK) disclosed that on 14 April, it had repurchased at the Stock Exchange of 7.79 million shares, involving roughly $199 million.
CPIC (02601.HK) announced that the accumulated primary insurance premiums of China Pacific Life Insurance and China Pacific Property Insurance, both of which are the subsidiaries of the Company, for the first three months of 2021 amounted to RMB95.417 billion and RMB43.292 billion, respectively up 3.9% and 11.9% from the same period of 2020.
PING AN (02318.HK) announced that the accumulated gross premium incomes of the four subsidiaries of the Company for the first three months of 2021 totaled RMB243.775 billion, down 5.5% year-on-year.

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