Feb 18 HK /China Wrap Markets close lower, PBOC drains liquidity HK worries about inflation

18 Feb

HSI -490pts (-1.6%) 30,595  HSCEI -187pts (-1.5%) 12,042 T/O HK$282.68bn (+34.9% DoD) Connect flows resume

Markets opened slightly lower following the weakness is Asia and are trading sideways around flat. Investors watching earnings but with concerns about US inflation. Airbus, Credit Suisse, Barclays and Daimler all reported earnings.
Barclays weak despite reporting FY profit of £1.53 billion ($2.11 billion) for 2020, -38% YoY but beating f/casts
Credit Suisse weak; reported a net loss of 353 million Swiss francs ($392.8 million) for the fourth quarter of 2020 on the back of higher provisions.
Airbus weak; restored its business targets after generating cash in the final quarter of 2020, but posted a full-year operating loss of 510 million euros ($614.5 million), with core operating profit falling 75% as a result of the pandemic.
Other earnings from Air France KLM, Orange, Carrefour, Bouygues, Valeo and EDF, Moncler and Nestle.
Data due
EUROZONE Consumer Confidence Flash

US Futures Opened Dow +10pts, S&P and NDX flat but have ticked lower; Dow -60pts S&P and NDX but slightly -VE. Inflation concerns and caution ahead of tonights initial claims data.
Data due Import Prices, Export Prices, Initial Claims, 4 week average Claims, Continuing Claims, Housing Starts, Building Permits, Philadelphia Fed Manufacturing Index, EIA oil report, 30 year TIPS auction.
Earnings: Walmart, Applied Materials, Cabot Oil & Gas, Barrick Gold, Southern Co., Waste Management, Marriott, Dropbox, Trip Advisor, Consolidated Edison.

CHINA CSI 300 closed -39pts (-0.7%) @ 5,768
Market re-opened higher at 5,922 (vs 5,808 previous close) but then sold down through the session. Saw some support at 5,800 level but then sold down 5,750 going into lunch. Concerns as the PBoC drained a net 260bn Yuan in the morning. PM market traded sideways. Cyclicals (Non ferrous metals, coal and Oil) saw interest but weakness in Brewing and Medical.

Pre market opened @ 31,183 +98pts vs -50pts ADR’s but then sold down, initially seeing support at 30,840 level and trading sideways for 90minutes but then sold down to 30,605 before a small bounce into lunch. PM opened slightly higher but drifted lower through the session close at the day low. T/O showing a significant increase with Connect flows resuming.

HK Unemployment Rate Jan 7% vs 6.6% Dec (F/cast was +6.5%)
Census and Statistics Department, said the provisional estimate of the Hong Kong population was 7,474,200 at end-2020, representing a decrease of 46,500 or 0.6% from 7,520,800 at end-2019. The population decrease at end-2020 comprised a natural decrease (i.e. deaths surpassing births) and net outflow of Hong Kong residents (i.e. inflow less than outflow).
Census and Statistics Department (C&SD) released today the volume and price statistics of external merchandise trade for December 2020 
In December 2020, the volume of Hong Kong's total exports of goods +11.6% YoY and imports of goods +13.7% YoY
Comparing 2020 with 2019, the volume of Hong Kong's total exports of goods -0.8% and imports of goods -2.6%.
Centre for Health Protection said there were 8 new COVID-19 cases in Hong Kong today; (vs 16 Wednesday) with 3 from unknown sources.

SHORT SELLING Thursday 14.2% vs 19.7% Wednesday
Top Shorts:   Bud Apac (1876) 48%, Ping An (2318) 48%, CKI (1038) 47%, Power Assets (6) 45%,  Henderson land (12) 41%, Hang Lung Ppty  (101) 40%, Bank of China (3988) 32%, BankComm (3328) 30%, Hengan (1044) 27%, Sands China (1928) 26%, CCB (939) 25%.
NEW HORIZON HEALTH (6606.HK) on debut, settled the day at $84, up $57.34 or 2.15 times against the listing price $26.66, on volume of 66.31 million shares andturnover of $5.089 billion. Excluding the handling fees, a book gain of $28,670 was reported per board lot of 500 shares.
PANGAEA CONNECT (01473.HK), to be listed tomorrow, closed at $0.63 ingray market, up 12.5% or 7 cents against the listing price of $0.56, on
turnover of $39.7 million, PhillipMart data showed. Excluding handling fee, the book gain was $280 per board lot size of 4,000 shares.

SINOPEC SSC (01033.HK) announced that recently, Sinopec International Petroleum Services Corporation, a wholly-owned subsidiary of the Company, entered into a five-year contract with one-year extension option on 10 workover rigs services with Kuwait  Oil Company (KOC), which has a contract value of US$360 million.
Total visitor arrivals in Macau slipped 65.3% YoY to 90,600 throughout the 2020 Spring Festival Golden Week (February 11-17) according to provisional data from Macau Government Tourist Office. Of which, visitor arrivals from Mainland sagged 44.9% YoY to 82,200 in the period.
NEXT DIGITAL (00282.HK) Founder Jimmy Lai Chee-ying was rejected by the High Court for his re-appeal of bail, and hence remains remanded, local media reported.
PICC P&C (02328.HK) announced that the original insurance premium income for January 2021 reached RMB53.112 billion, up 1.2% yearly.
NCI (01336.HK) announced that the accumulated gross premium income of the Company for January 2021 was RMB34.63 billion, up 12.78% yearly.
"Commodities King" Jim Rogers told India's Economic Times that he has not seen full-fledged bubbles except in the bonds market.  Rogers is currently upbeat on stock markets in Japan and Russia, citing massive fund inflows. However, he is not buying American shares for their highest-ever position right now
MCC (01618.HK) announced that the value of newly signed contracts of the Company in January 2021 amounted to RMB103.59 billion, representing an increase of 129.7% from the same period of last year.
PICC GROUP (01339.HK)  announced that the aggregate premiums income for January 2021 ballooned 6.67% yearly to RMB97.985 billion.
HANG LUNG PPT (00101.HK)  told local press that Chinese central government has given green light to the group's acquisition of U.S. consulate dormitory, situated at Shouson Hill, and that the group is in talks with the seller about the transaction. Public disclosures will be made in due courses.
Centa Valuation Index (Major Banks) (CVI) last stood at 65.23 this week, up 5.86 pts from the previous week, said the research department of Centaline Property. The reading indicated that the second-hand property transactions were prosperous during Chinese New Year holiday, and that banks upheld optimism towards the market outlook by raising mortgage valuation.   If the CVI breaks through 70, the housing prices will pick up, Wong predicted.

*PETROCHEMS WEAK despite US API data showing a larger than expected drop in US inventories and oil extended rise above $61 a barrel as Texas is hit with artic weather causing historic power outages across the central US and pushed  crude output in the country to plunge by a third. U.S. production has plunged by 4m barrels per day as temperatures drop low enough to freeze oil and gas liquids at the well head, slashing Permian Basin output by up to 80%. CNOOC (883 HK +1.7%) CH OILFIELD  (2883 HK -5%) ANTON (3337 HK -8.8%) PETROCHINA (857 HK -1.4%),
*CHINESE BANKS WEAK on liquidity concerns, as the PBOC drains net 260b yuan via monetary tools today. CCB (939 HK -2.5%) ICBC (1398 HK -1.6%) CMB (3968 HK -3.7%) ABC (1288 HK -1.7%) CITIC BANK (998 HK -2.6%).
*CHINA PROPERTY MIXED with pressure on news that China's banking  regulator has issued new rules requiring banks to tighten the review process before issuing personal and housing loans. Trying to preventing personal loan funds from being channeled into the property market, the CBIRC said. SUNAC (1918 HK -1%)  TIMES CH (1233 HK -1.1%) CIFI (884 HK -1.7%) EVERGRANDE (3333 HK -2%).
*TECH & COMPONENTS WEAK on inflation worries and news Warren Buffett's Berkshire Hathaway had reduced its stake in APPLE in Q4 from 944.3m to 887.1m shares, accounting for 5.3% of the issued shares. AAC (2018 HK -5.3%) SUNNY OPT (2382 HK -2.9%) HUA HONG (1347 HK -5.5%) TRULY (732 HK -6%).
*E-COMMERCE PLATFORMS WEAK on inflation concerns.  Also FT report about the roll out of a digital RMB which is likely to hurt ANT and Tencent. MING YUAN CLOUDS (909 HK -1.7%) despite news its to be included on MSCI China Index and MSCI China All Shares Index, to take effect after Feb 26.  MEITUAN (3690 HK -5.2%) NTES (9999 HK -3%) WEIMOB (2013 HK -8.2%) ALIBABA (9988 HK -2.5%).
*HK PROPERTY MIXED  LANDLORDS +VE as traffic at shopping malls and shops is expected to rise as HK starts to ease some social distancing rules today. HYSAN DEV  (14 HK +1.5%)  SINO LAND (83 HK +1.7%) CK ASSET (1113 HK +0.12%). After it won the tender for a site in Kai Tak, Kowloon, on a 50-year land grant with a ~HK$10.3b offer.  Knight Frank previously estimated the price to be HK$8.4b-HK$9.7b. CH ESTATE HOLDINGS (127 HK +8.3%) named Kimbee Chan Hoi-wan, wife of billionaire Joseph Lau Luen-hung, as the chief executive and an authorised representative with effect from February 27.
*PHARMA/MEDICAL MIXED  CANSINO (6185 HK -9.4%) expects losses to more than double in 2020 to 400m to 430m yuan. Chinese home colon cancer screening test gear maker.LUYE PHARM (2186 HK +0.7%) and Towa Pharm enter strategic collaboration to develop and commercialize Rivastigmine Multi-Day Transdermal Patch in Japan for Alzheimer's treatment.
*PAPER MAKERS STRONG on earnings speculations, after China's paper-making sector reported a 21.2% YoY growth in profit in 2020 to 82.67b yuan. LEE&MAN (2314 HK +10.3%) CHENMING (1912 HK +19.5%) NINE DRAGON (2689 HK +0.8%).
*SPORTSWEAR WEAK after mainland China reported  weaker-than-expected +4.9%  Lunar New Year holiday retail sales. LI NING (2331 HK -2.1%) ANTA (2020 HK -2.7%) CHINA DONGXIANG (3818 HK -4.4%) XTEP (1368 HK -1.4%).

Regional Markets
Nikkei 225 opened slightly higher and initially rallied to 30,560 but then sold back down to the opening level in the space of 25minutes. It then traded sideways into lunch. PM opened lower sank to 30,140 but then trended sideways to close -56pts (-0.2%) @ 30,236
Topix similar open and closed -20pts (-1%) @ 1,942
Pre Market Data
Foreigners Bond Investment Yen 477.1b vs 1027.5b prior
Foreigners Stock Investment Yen 330.1b vs 462.5b prior
Tomorrow pre market we get inflation data.
US Inflation concerns continue to impact sentiment, Tech saw weakness.
Kosdaq opened flat and was trading sideways (982/975) until around 12.30pm when it sold down to 969 level. Then ticked back to 971 and traded sideways to close -12pts (-1.3%) @ 967
Kospi opened slightly lower but followed a similar patter selling down to 3,090 level before a bounce and traded sideways to close -47pts (-1.5%) @ 3,087
Foreign currency deposits at banks in South Korea fell in January on a decline in corporate holdings of the US dollar deposits, central bank data showed Thursday as companies repaid their US dollar-denominated debts last month, the BOK said..
Tomorrow pre market we get PPI data
Opened flat and traded sideways until about 10:30 when the market rallied to test 16,500 but unable to break out an consolidated back to the opening level, before working higher again to close +62pts (+0.4%) @ 16,425
Northbound RMB 80,905m Sell 39,116m : 41,788m Buy
Southbound HK$43,093m Sell 20,212m : 22,881m Buy
Northbound RMB 90,111m Sell 43,854m : 46,256m Buy
Southbound HK$ 51,725m Sell 20,094m : 31,631m Buy

Active Heavyweights
MEITUAN (03690.HK) -5.2%
AIA (01299.HK) -4%
BABA (09988.HK) -2.5%
TENCENT (00700.HK) -1.3%
HKEX (00388.HK) +0.4%
PING AN (02318.HK) +0.1%

HSI & HSCEI Constituents on Move:
HAIDILAO (06862.HK) -9.4%
AAC TECH (02018.HK) -5.8%
WHARF REIC (01997.HK) -5.3%
WUXI BIO (02269.HK) -5.1%
CPIC (02601.HK) -4.2%
CHINA FEIHE (06186.HK) -4%
CM BANK (03968.HK) -3.6%
NTES (09999.HK) -3.1%

HSMI & HSSI Constituents on Move:C
MBC CAPITAL (01141.HK) +29.7%
KASEN (00496.HK) -20%
TEXHONG TEXTILE (02678.HK) +19.3%, hitting new high
GRAND BAOXIN (01293.HK) -18.8%
XD INC (02400.HK) -16.3%
GOME RETAIL (00493.HK) -14.4%
GCL-POLY ENERGY (03800.HK) -13.6%
NETDRAGON (00777.HK) +13.2%
YEAHKA (09923.HK) -11.3%
LEE & MAN PAPER (02314.HK) +10.3%, hitting new high
ZA ONLINE (06060.HK) -10.2%
CGN NEW ENERGY (01811.HK) +7.8%, hitting new highSUNEVISION (01686.HK) +7.8%, hitting new high
PACIFIC BASIN (02343.HK) +6.1%, hitting new high

Wheelock Properties (Hong Kong) Limited (WPL) due to a technical problem it is unable to unveil the first price list of its Kai Tak project "GRANDE MONACO" at the press conference, said Ricky Wong, Managing Director of WPL, who promised to reveal in the next few days.  The price list should cover more than 20% of flats, involving 68 units, measuring saleable area of 351-961 sq.ft., Wong furthered.
Nanjing Huya Information Technology Co., Ltd. underwent business changes on 10 February by adding Shenzhen Tencent Industry Venture Capital Co., Ltd. to the list of shareholders, reported Chinese media.  Meanwhile, Nanjing Huya's registered capital increased by 14.81% to RMB5.9305 million.
A million doses of Sinovac's coronavirus vaccine will arrive in Hong Kong tomorrow, said Patrick Nip Tak-kuen, Secretary for the Civil Service. Online booking will be available for citizens starting next Tuesday (23rd), while inoculation will begin next Friday (26th). Vaccination will be prioritized for five specific groups of persons, including members at medical facilities and those fighting the epidemic.
NEW WORLD DEV (00017.HK) announced that it will hold a major recruitment in mid-March, where almost 1,000 jobs will be created, including new posts created for the post-pandemic new normal. The event will be held on 13 March at K11 ATELIER King's Road, Quarry Bay.
Waterdrop is working on a plan to go public in the U.S. next three months, which may value it up to US$10 billion, Chinese media learnt from insiders. The Chinese online insurer had raised over US$230 million in series D financing, led by Swiss Re and TENCENT (00700.HK) last August, said the report.
China Film Administration announced that from 11 February 2021 to 17 February 2021, the Chinese film market has grossed RMB7.822 billion in Lunar New Year box office, up 32.47% yearly to a new record high.
Geoffrey Lo, General Manager of Property Development Department & Sales Department at Nan Fung, disclosed that the group has year to date amassed sales of 514 flats, cashing in over $5.5 billion, representing a satisfying result.  At the press conference, Lo said the LP10 project has sold 495 units in the first three rounds, accounting for over 55% of the total number of units. The company pocketed approximately $5 billion from the sales.
CHAMPION REIT (02778.HK) announced that for the year ended 31 December 2020, distributable income amounted to $1.554 billion, down 5.7% yearly. Final distribution per unit was 12.75 cents.
TENCENT (00700.HK)'s Honor of Kings amassed US$267 million in player spending in January 2021, +22% YoY to top the global chart, reported Sensor Tower. TENCENT's PUBG Mobile was ranked second, with gross revenue rising 26% YoY to US$259 million.
During Chinese New Year holiday, Alipay's wealth management platform registered live viewer surge of more than 10 times yearly, Chinese media quoted the platform data.  Tier 1 and 2 cities in China tracked most live viewers during the holiday, where Shanghai, Beijing, Guangzhou and Shenzhen ranked the top four.
Genshin Impact, a game developed by miHoYo, yielded overseas revenue of US$114 million, running the top spot among Chinese mobile games in terms of overseas revenue for the fourth month, Sensor Tower's data revealed.  TENCENT (00700.HK)'s PUBG Mobile also reaped more than US$100 million overseas revenue, up 34% yearly, ranking the second position.
Keith Gill, a voice pushing the short squeeze of GameStop, is facing a class action for disguising himself as an amateur investor and artificially inflating stock price to take profit. Gill, also known as "Roaring Kitty", is indeed a licensed securities professional who allegedly manipulated the market for profits and breached securities laws.
Macau registered over 10,000 tourist arrivals between the 1st to 5th day of Chinese New Year, Macao Daily News reported. Tourism Office Director Maria Helena de Senna Fernandes attributed the lukewarm and slight-miss footfall in Macau to Chinese government's encouragement of staycation. She said the authority will continue to strive for resumption of online visa approval and travel tours from China.

CHINA YOUZAN (08083.HK) announced that Guan Guisen resigned as the chairman due to an alleged criminal offence in a company he owns.
iQIYI (IQ.US) announced Q4 loss attributable to shareholders narrowed 38% YoY to RMB1.549 billion. Diluted LPS equaled RMB2.1, equivalent to US32 cents, beating consensus of US36 cents in LPS.  iQIYI recorded 102 million subscribers in Q4 2020, down 5.2 million subscribers YoY.
Aviation industry workers will possibly be among the first groups to be vaccinated a week after first batch of Sinovac jabs arrive in Hong Kong, slated for Friday the earliest, South China Morning Post learnt from an inside source.
WANT WANT CHINA (00151.HK) announced that it had on 17 February repurchased on-market 500,000 shares, involving $2.914 million.
Hillhouse Capital participated in the fresh round of private placement of shares in BYD COMPANY (01211.HK) with US$200 million, as Chinese media cited sources.  It was known that Hillhouse Capital intended to make bigger investment in the placement, yet BYD COMPANY did not respond positively. And hence, the final amount was nailed at US$200 million. BYD COMPANY refused to comment on the news.
BYD COMPANY (01211.HK) announced that it has secured an electric bus order from Romania again. It will provide 20 pure-electric buses to the city of Constanta on the Black Sea coast. Upon delivery, the vehicles will be the first-ever electric buses in the Romanian city.
BlackRock has started to “dabble a bit” in the cryptocurrency, Reuters citing its chief of global fixed income, Rick Rieder.
Macau's Public Security Police Force reported passenger traffic of over 234,000 people across entry ports on the 6th day of Chinese New Year (17 February), reported Macau Radio.  Of which, the city's tourist arrivals exceeded 13,000 that day.
As of 17:00 on 17 February, the Chinese film market has grossed RMB7.544 billion in 2021 Lunar New Year box office, setting a new high since 2019's RMB5.905 billion, Xinhua News Agency citing preliminary official statistics.
Dai Houliang, Chairman of PetroChina and Secretary of the Party Leadership Group, said the 2021 oil prices would be overall steadier than a year ago, ruling out the possibility of negative crude prices, cited CCTV finance. He expected oil prices to be operating in low or middle range.

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