HSI +338pts (+1.1%) 31,085 HSCEI +193pts (+1.6%) 12,229 T/O HK$207.98bn (-2.4% DoD) No connect flows
Markets opened lower as investors react to US T10 but have worked back to flat. Retail names weak but resources continue to see interest. Earnings in focus with Kering weak after sales at its Gucci brand dropped by more than expected in the fourth quarter.
British American Tobacco shares weak despite beating profit estimates before the bell.
Rio Tinto rose after posting its best earnings since 2011
Sinch strong after announcing the $1.14 billion acquisition of U.S. communications firm Inteliquent.
UK inflation data surprised to the upside on high food prices and lower discounting of household goods.
New Car Registrations Jan -24% YoY vs -3.3% Dec (F/cast was -36%)
Construction Output Dec -2.3% YoY vs -0.6% Nov Revised (F/cast was -0.6%)
Inflation Rate Jan +0.7% YoY vs +0.6% Dec (F/cast was +0.4%)
Inflation Rate Jan -0.2% MoM vs +0.3% Dec (F/cast was -0.5%)
Core Inflation Rate Jan +1.4% YoY vs +1.4% Dec revised (F/cast was +1.2%)
Core Inflation Rate Jan -0.5% MoM vs +0.3% Dec (F/cast was -0.7%)
PPI Core Output Jan +0.3% MoM vs +0.1% Dec (F/cast was +0.1%)
PPI Core Output Jan +1.4% YoY vs +1.1% Dec (F/cast was +1.2%)
PPI Input Jan +0.7% MoM vs +1.2% Dec revised (Consensus was +0.5%)
PPI Input Jan +1.3% YoY vs +0.6% Dec revised (Consensus was +0.6%)
PPI Output Jan +0.4% MoM vs +0.2% Dec revised (F/cast was +0.2% )
PPI Output Jan -0.2% YoY vs -0.5% Dec revised (F/cast was -0.4%)
Retail Price Index Jan -0.3% MoM vs +0.6% Dec (F/cast was -0.6%)
Retail Price Index Jan +1.4% YoY vs +1.2% Dec (F/cast was +1%)
Currently Dow flat S&P -0.1% and NDX -0.2% Concerns that the rising T10 will see money rotate out of equities into bonds and that Tech will be under pressure.
Pre market moves also associated with Berkshire Hathaway’s recent filing showing it has built a stake in Verizon and Chevron.
Earnings due from Hilton, Owens Corning, Wingstop, Analog Devices and Nabors amongst others.
MBA Mortgage Applications and 30 year Mortgage Rate, Retail Sales, PPI, Core PPI, Redbook, Industrial Production, Capacity Utilisation, Manufacturing Production, NAHB Housing Market Index, Business Inventories, FOMC Minutes, API Crude Oil Stock Change.
CHINA Closed re-opens tomorrow Thursday 18 February
Pre market opened @ 30,636 -110pts (-0.4%) with weakness in Ecommerce except JD.COm on news its proposed to sell off its JD logistics.
Market worked better through the day breaking above yesterday’s close mid morning. It eased back a little late morning but then rallied into lunch. PM saw the market continue to work higher hitting the day high (31,168) around 3pm but then eased back slightly with a small bounce into the close.
Sentiment remains positive on the prospect of a global recovery as vaccinations roll out.
HONG KONG DATA Centre for Health Protection said there were 16 new COVID-19 cases in Hong Kong today; (vs 8 Tuesday) with 10 from unknown sources.
SHORT SELLING Wednesday 19.7% vs 15.1% Tuesday
Top Shorts: CKI (1038) 49%, Ping An (2318) 49%, CLP (2) 48%, Power Assets (6) 45%, Wharf REIC (1997) 44%, China Res Land (1109) 41%, Hang Lung Ppty (101) 38%, Bud Apac (1876) 37%, CCB (939) 34%, MTRC (66) 34%, Henderson land (12) 33%, Sands China (1928) 31%, SHKP (16) 31%, Hengan (1044) 30%, SinoBiopharm (1177) 29%, AIA (1299) 28%, Sunny Optical (2382) 27%, Hang Seng Bank (11) 27%, CSPC Pharma (1093) 26%, Bank of China (3988) 26%, Shenzhou (2313) 25%, CKH (1) 25%.
NEW HORIZON HEALTH (6606.HK) to debut tomorrow, opened at $58.4 in gray market, up 1.2 times against the listing price of $26.66, PhillipMart data showed. It last posted at $79, up 1.96 times, on volume of 180,000 shares.
AFTER MARKET NEWS
The Lands Department announced that the tender for a site, New Kowloon Inland Lot No. 6604 at Kai Tak Area 4E Site 2, Kai Tak, Kowloon, has been awarded to the highest tenderer, CK ASSET (01113.HK), at a premium of $10.28 billion, beating K. WAH INT'L (00173.HK) , Wheelock, SINO LAND (00083.HK) and SHK PPT (00016.HK). The price waste the upper end of market estimates. The floor price per square foot is $15,860.7, whilst the market had originally estimated that the price was between $13,000-16,000.
On 10 February, PRU (02378.HK) disposed on-market of 6.758 million ANGANG STEEL (00347.HK) shares, involving $20.7734 million, according to shareholding disclosures at the Stock Exchange. Upon completion, PRU's shareholdings in ANGANG STEEL were reduced from 9.13% to 8.65%.
CATHAY PAC AIR (00293.HK) announced that it had last month carried a total of 30,400 passengers, a decrease of 99% compared to January 2020 and 108,900 tonnes of cargo and mail, a decrease of 28.3% compared to January 2020. Aside from a few pockets of intra-Asia demand, overall demand remained very weak, said Group Chief Customer and Commercial Officer Ronald Lam. The flagship carrier carried an average of just 981 passengers per day in January, the first time this number has dipped below 1,000 since June last year, while load factor was the lowest on record at just 13.3%.
Staff members of eateries which are planning to revive nighttime dine-in services and premises which are poised to reopen must take COVID-19 tests by 24 February, said Under Secretary for Food & Health Chui Tak-yi. There is no hurry to complete the tests by tomorrow (18 February). A plenty of mobile specimen collection stations will be set up to meet extra testing requirements, he added. Apart from the 19 existing stations, 22 more mobile specimen collection stations were established today, with 11 built especially for the aforementioned staff.
NEXT DIGITAL (00282.HK) Founder Jimmy Lai Chee-ying, remanded at Stanley Prison, was arrested by Hong Kong Police last night (16 February) for allegedly committing crime of conspiracy to collude with foreign countries or forces to endanger national security and crime of conspiracy to assist criminals, local media cited sources. Lai was purportedly involved in assisting the illegal immigration of the pro-democracy activist Andy Li, one of the 12 Hongkongers fleeing to Taiwan.
CHINESE EST H (00127.HK) announced that Chan, Sze-wan has tendered her resignation as an Executive Director, the Chief Executive Officer and an Authorised Representative, and Chan, Hoi-wan, an Executive Director, has been appointed as the Chief Executive Officer and an Authorised Representative, both with effect from 17 February 2021.
A reason for the IPO fiasco of BABA-SW (09988.HK)'s Ant Group was Beijing's concern about Ant's complex ownership structure, WSJ citing over a dozen officials and government advisers. Powerful political families with potential threats to President Xi Jinping may have pocketed billions of US dollars from Ant's IPO, given their stakes in the firm via investment vehicles.
For instance, Boyu Capital, founded by former Chinese leader Jiang Zemin's grandson Jiang Zhicheng, holds Ant shares behind layers of investments.
Centa-Salesman Index (CSI) last stood at 66.32, up 4 pts from the previous week, said the research department of Centaline Property. The index has sustained the uptrend for eight weeks in a row and amassed 18.78 pts of growth.
*PETROCHEMS STRONG as Oil hold up at a 13-month high after freezing temperatures crippled the Texas power system and disrupted crude production. Nearly 5m people across the U.S were plunged into darkness as homes and businesses lost power. JUTAL OIL (3303 HK +68%) Positive profit alert expects increase in year net profit between 110m yuan to 160m yuan, representing an YoY increase of approximately 2386%-3517%. CNOOC (883 HK +4.5%) ANTON OIL (3337 HK +17%) SINOPEC (386 HK +5.3%).
*BASE METALS/RESOURCES STRONG on demand recovery bets. Copper climbed to the highest since 2012 and Tin extended a dramatic surge. JIANGXI COPPER (358 HK +3.7%) MAANSHAN IRON (323 HK +2.2%) ZIJIN (2899 HK +3.3%).
RARE EARTH names also remain strong amid possible export curbs by China; CHALCO (2600 HK +5.5%) CHINA RARE EARTH (769 HK +10.8%) MMG (1208 HK +1.6%).Interesting FT article on rare earths; China controls most of the refining because it has a higher tolerance of the pollution is causes.
*E-COMMERCE FIRM rebounded after yesterday's consolidation. JD.COM (9618 HK +6.4%) said it plans to spin off its JD Logistics Inc. shipping business in a listing in HK. TENCENT's (700 HK +1.8%) despite majority-held Finnish mobile game developer Supercell's FY revenue fell to EU1.3b fro EU1.39b in 2019. 2020 Ebitda fell to EU407m from EU517m a year ago. MEITUAN (3690 HK +2.8%) WEIMOB (2013 HK +10%) ALIBABA (9988 HK +1%).
*TECH & COMPONENTS FIRM on global recovery hopes, except HUA HONG SEMI (1347 HK -6%) after a 99m share block trade by seller NEC was crossed on the exchange at a 9.7% discount this morning. AAC TECH (2018 HK +7%) has received the green light from the HKEX to spin off its optical business, held through AAC Optics, and list it on the mainland stock market. After the spinoff, the group will focus on the remaining business, including acoustics, electromagnetic drives/precision mechanics and micro- electromechanical systems. FIT HON TENG (6088 HK +7.3%) TONGDA (698 HK +8.5%).
*HK PROPERTY WEAK after yesterday's strong rebound. CKA (1113 HK -1%) sold a 3,378-sq- ft penthouse at its Borrett Road project with a private swimming pool for HK$459.4m or HK$136,000 psf, hitting a new high among flats in Asia. HK FERRY and Empire Group released 56 units in the 6th price list of Skypoint Royale at the avg price of HK$15,886 psf after discounts, +5.7% from the first px list. SHKP (16 HK -0.8%) HANG LUNG (101 HK -2%).
*MACAU FIRM on recovery hopes as HK starts to ease social distancing measure. It is expected that mainland visitors numbers to Macau will improve following a weak start at the beginning of the LNY holidays. SANDS (1982 HK +6.6%) WYNN (1128 HK +3.6%) MELCO (200 HK +2.5%) MGM (2282 HK +5.1%).
*OTHER MOVERS: GOME (493 HK -14%) said its controlling holder Wong Kwong Yu's sentence served and is officially released. MECOM POWER & CONSTR (1183 HK +9.7%) said a subsidiary of the company has entered into a 5-year contract for undertaking an EV charging project in a residential property project in Huadu District in Guangzhou City.
Nikkei opened lower despite good premarket data with caution after closing at a 31 year high Tuesday. Market trended lower in the morning with support at 30,200 level. PM market opened higher but traded sideways around 30,300 and closed -176pts (-0.6%) @ 30,292
Topix traded in a similar patten seeing support at 1,955. Closed -4pts (-0.2%) @ 1,962
Toyota Motor and Nissan announced reducing production due to the weekend’s earthquake.
Tankan Index Feb 3 vs -1 Jan (F/cast was -1)
Balance of Trade Jan Yen -323.9b vs +749.6b Dec revised (F/cast was -430b)
Exports Jan +6.4% YoY vs +2% Dec (F/cast was +4.7%)
Imports Jan -9.5% vs -11.6% Dec (F/cast was -3%)
Machinery Orders Dec +5.2% MoM vs +1.5% Nov (F/cast was -4%)
Machinery Orders Dec +11.8% YoY vs -11.3% Nov (F/cast was -5%)
Foreigners and Institutions turned sellers today but the trading volumes were moderate. Talk was that foreigners were selling the futures as US T10 hit 1.3%
Kosdaq opened flat but sold down initially to 972 then saw choppy first hour before working steadily higher for the rest of the day to close +2pts (+0.2%) @ 980
Kospi opened flat but sold down initially to 3,140 in the first few minutes of trading but then trended lower to 3,120 level in the first hour. It then traded sideways for the rest of the day to close -30pts (-0.9%) @ 3,134
Market re-opened sharply higher and at 16,200 +400pts it then trended higher but hit resistance at 16,400, which it tested a couple of times before easing back to 16,300 before a small rally at the end to close +560pts (+3.5%) @ 16,362
TSMC urgently sent around 1,000 workers to its chip foundry at Southern Taiwan Science Park to meet strong order demand post-Spring Festival, reported United Daily News. The chipmaker aims to invest in 5-nm process expansion and 3-nm construction works. It is expected that the production capacity of 5nm chips will increase from the current 60,000-70,000 pieces per month to nearly 120,000 pieces after the Chinese New Year holiday.
No CONNECT FLOWS
PING AN (02318.HK) +2.9%
HKEX (00388.HK) +2.8%, hitting new high (reports earnings next week)
MEITUAN (03690.HK) +2.8%
TENCENT (00700.HK) +1.7%
CCB (00939.HK) +1.1%
BABA (09988.HK) +1.1%
AIA (01299.HK) +0.6%
HSI & HSCEI Constituents on Move:
CPIC (02601.HK) +7.9%, hitting new high
AAC TECH (02018.HK) +7.1%
JD (09618.HK) +6.4%, hitting new high
JD HEALTH (06618.HK) +5.8%
SINOPEC CORP (00386.HK) +5.3%, hitting new high
SANDS CHINA LTD (01928.HK) +4.9%
CNOOC (00883.HK) +4.5%
CHINA GAS HOLD (00384.HK) +3.9%
CHINA UNICOM (00762.HK) +3.5%
ALI HEALTH (00241.HK) +3.5%, hitting new high
CHINA MOBILE (00941.HK) +3.4%
HSMI & HSSI Constituents on Move:YEAHKA (09923.HK) +26.4%, hitting new high
TONGCHENG-ELONG (00780.HK) +15%, hitting new high
GOME RETAIL (00493.HK) -13.8%
MEITU (01357.HK) +13.5%, hitting new high
SUNCITY GROUP (01383.HK) +11.4%
NEXTEER (01316.HK) +10.4%
WEIMOB INC (02013.HK) +10.4%, hitting new high
E-HOUSE ENT (02048.HK) +10.3%
MULSANNE GROUP (01817.HK) -10.1%
MARKET HOURS NEWS
In China, local tour bookings ballooned over 660% year-on-year during Spring Festival in the Ox Year, as Chinese media cited data from BABA-SW (09988.HK)'s Fliggy. A hundred million Chinese people had stayed at hometown for Lunar New Year, according to BABA-SW's report.
JD Logistics is set to go public in the second quarter after having lodged a listing application at Main Board, IFR reported. The company may raise roughly US$4 billion, which may value it up to US$40 billion.
Manulife Hong Kong announced that its core earnings grew 10% year-on-year to HK$6.3 billion in 2020. The fourth-quarter core earnings burgeoned 10% annually to HK$1.8 billion. New business value hit HK$3.6 billion in 2020, down 14% from the previous year.
China is set to face repercussions for her human rights violation, warned U.S. President Biden, restating Washington will reassert her global role in upholding human rights.
Japanese Prime Minister Yoshihide Suga spoke with his British counterpart Boris Johnson on phone, confirming to enhance bilateral cooperation in the pandemic.The two exchanged views on China's maritime activities, agreeing to join hands in this regard.
Fast Retailing, the owner of Japanese casual clothing chain Uniqlo, reached JPY10.87 trillion (US$103 billion) in market capitalization, reported Nikkei. The group surpassed Zara's parent Inditex, who boasts a market cap of around EUR81.7 billion (US$99 billion), and had the highest market value in the global apparel industry.
India is ready to approve some investment proposals from China in the next few weeks given relaxed border tensions between the two neighboring countries, Reuters citing insiders. New Delhi will start giving greenlight to some new investment proposals, but will only clear industries not sensitive to national security, an Indian official said.
The number of users joining Alipay's red pocket greeting this year surged by almost 270%, whilst the online searching volume related to "red pocket" also rocketed 538%, according to Chinese New Year's data report released by Alipay's digital life platform.
KUAISHOU-W (01024.HK) recorded 456% more short videos regarding "staying at hometown for Spring Festival" on Lunar New Year's Eve (11 February) than on 1 February, according to Kuaishou Big Data Research Institute. Additionally, a total of 9.03 billion red envelopes had been collected on the platform on New Year's Eve.
OPEC+ oil producers will likely to relax restrictions on supply after April given pricing recovery, inside sources were quoted as saying by Reuters. However, any increase in output will be modest because producers are wary of new setbacks in the course of combat against pandemic, said the insiders.
Britain reported roughly 10,000 Covid cases on Tuesday, having discovered a new variant strain called "B.1.525". This mutant is similar to those found in South Africa. Clive Dix, interim chair of UK Vaccine Taskforce, expected all UK adults to have received two vaccine jabs as soon as August.
In Russia, online smartphone sales represented 35% of the total sales during 4Q20, according to the report of Counterpoint. Apple was among top three in the online market, whilst XIAOMI-W (01810.HK) overtook Samsung's championship in the market. By brands, XIAOMI-W ranked the first with 31% market share in 4Q20; Samsung's market share fell to 27%; and Apple swarmed into the top three for the first time with a market share of 15.5%.
Auto chip shortage will possibly downsize nearly 1 million units of worldwide light vehicle production during the first quarter, as estimated by the data firm IHS Markit, which significantly upped its prior forecast, yet anticipated most volume to be recovered in the remainder of 2021.
Several European consumer groups accused TikTok of allegedly violating the EU's consumer laws and failing to safeguard children from hidden ads and inappropriate content. European consumer group BEUC said TikTok's terms of service were unclear, ambiguous and detrimental to users.
PRE MARKET HOURS NEWS
Dane Cheng, Executive Director of the Hong Kong Tourism Board (HKTB), said as the first round of the ‘Free Tour’ programme was popular among the public, the HKTB will launch a new round of activities when the social-distancing measures gradually relax. In addition to tours, the HKTB is planning to include the hotel sector in the new round, which will follow the model of the first round of activities to encourage local spending and generate a chain of consumption.
On another note, the HKTB reported the city's preliminary visitor arrivals of around 4,370 for January, down 99.9% year-on-year.
Huohua Siwei is seeking to go public in the U.S. this year, which will raise US$500 million, said foreign media. The Chinese K12 online educator, post seven rounds of funding to date, has TENCENT (00700.HK) and KUAISHOU-W (01024.HK) are among its investors.
MING YUAN CLOUD (00909.HK) announced that the Company will be included as constituent stocks of the MSCI China Index and the MSCI China All Shares Index, with effect as of the market close of February 26, 2021.
The Advisory Panel on COVID-19 Vaccines (Advisory Panel) convened a meeting yesterday (February 16) to review the supplementary data and information submitted by Sinovac Biotech on its COVID-19 vaccine. The Advisory Panel considers that the benefits of authorising the use of the COVID-19 vaccine by Sinovac for protecting against COVID-19 outweigh the risks. The Government welcomes the recommendation by the Advisory Panel on the authorisation application for the vaccine, said a spokesman, and the Secretary for Food and Health will consider the relevant recommendation and come to a decision on the authorisation of the vaccine for emergency use as soon as possible.Wallace Lau Chak-sing, Convenor of the Panel, said the overall protection rate of the vaccine for people aged 18-60 is 50.66%, and will rise to 62.3% if the second shot is received after 28 days.
Adidas has decided to officially strip its underperforming Reebok brand out within months as part of the five-year strategy, stated the firm's CEO Kasper Rorsted. He believed Reebok and Adidas will realize their growth potential in a better way after the divestment. The potential buyers of Reebok purportedly include ANTA SPORTS (02020.HK) and VF Corp, owner of Timderland and North Face.
Macau's Public Security Police Force reported passenger traffic of over 222,000 people across entry ports on the 5th day of Chinese New Year (16 February), reported Macau Radio. Of which, the city's tourist arrivals exceeded 14,000 that day.
The Office of the Government Chief Information Officer (OGCIO) reminded members of the public that they should beware of websites purporting to be that of the "LeaveHomeSafe" mobile app, with some even claiming to have rewritten the app for public downloading recently. The public should stay vigilant and not fall victim to these fraudulent websites. The spokesman for the OGCIO said that websites or mobile apps of doubtful origin may carry a computer virus or Trojan horse software that pose cyber security risks. Members of the public are strongly advised not to visit or download them.
The U.S. Transportation Department said the country's passenger airline traffic plunged 60.1% to 368 million passengers last year amid the pandemic, hitting the lowest level since 1984, reported Reuters.
GOME RETAIL (00493.HK) GOME FIN TECH (00628.HK) and LAJIN ENT (08172.HK) announced that the parole probation period of Wong Kwong Yu, the controlling shareholder of the Company, was completed on 16 February 2021 and Wong’s original sentence was served in full, and he was officially released.
As of 20:56 on 16 February, the Chinese film market has grossed over RMB7 billion in 2021 Lunar New Year box office (11-17 February), including pre-sale booking, according to a Chinese market researcher's real-time statistics.
JD-SW (09618.HK) announced proposed spin-off of JD Logistics for a separate listing on the Main Board. The Company has submitted a spin-off proposal to the Hong Kong Stock Exchange and the Hong Kong Stock Exchange has confirmed that the Company may proceed with the Proposed Spin-off.
ZA ONLINE (06060.HK) announced that the aggregate gross written premiums, prepared pursuant to the PRC Accounting Standards for Business Enterprises, for the period from January 1, 2021 to January 31, 2021 were approximately RMB1.786 billion, up 20.3% yearly.