HSI +313pts (+1%) 30,633 HSCEI +16pts (+0.1%) 11,910 T/O HK$267.46bn (-11.6% DoD) Warrants were 6% or market T/O
Opened higher but trending lower following the cautious tone from Asia, especially on Tech. HSBC opened lower after earnings line but with no buybacks in the near future.
FTSE relatively out performing after PM Johnson outlined the plan to exit lockdowns.
Expect caution ahead of Powells testimony to the Senate Banking Committee, with investors looking for clues as to the Fed’s take on inflation. I except Powell to maintain the ‘watching the data’ approach.
Other earnings include Manchester United and IHG Hotels & Resorts
Due later Core Inflation Rate, Inflation
Unemployment Rate Dec 5.1% vs 5% Nov (F/cast was 5.2%)
Claimant Count Change Jan -20k vs -20.4k Dec revised (F/cast was +25k)
Average Earnings inc Bonus Dec +4.7% vs 3.6% Nov (F/cast was +4%)
Average Earnings ex Bonus Dec +4.1% vs 3.6% Nov (F/cast was +3.8%)
Employment Change Nov -114k vs -88k Oct (F/cast was -40k)
Labour Productivity prelim Q4 -4.5% QoQ vs +5.6% Q3 (F/cast was -2%)
Due later CBI Distributive Trades
Opened higher and worked higher in Asian time but sold off as Europe opened; now Dow -9pts, S&P and NDX slightly -VE. Inflation fears rising so Powells testimony to the Senate will be watched closely. Home Depot and Macy’s report pre market.
Data due Redbook, Case-Shiller Home Price, House Price Index, Consumer Confidence, Richmond Fed Manufacturing Index, API Crude Oil Index
Fed Chairman Powell semi-annual economic testimony Senate Banking Committee
Earnings Home Depot, Macy’s, Intuit, Thomson Reuters, Square, Toll Brothers, Jazz Pharmaceuticals, McAfee, Medtronic, Pioneer Natural Resources, Bank of Montreal
CHINA CSI 300 closed -18pts (-0.3%) @ 5,580
CSI 300 opened lower but rallied 100pts in the first 30 minutes after the House Price Index came out stronger MoM and the forecast. Market then traded eased back to flat and traded around there into lunch. PM the market opened her and tested to 5,640 but unable to hold and sold down to the day low of 5,541 before a bounce into the close.
The Economic Info Daily had a front-page report that China's economy is expected to grow 8% this year, whilst +VE it raises concerns that might mean more PBoC tightening. Rotation trading into cyclicals continued, steel and military also firm. Autos weak.
Shanghai Comp -6pts (-0.2%) @ 3,636
Shenzhen Comp -94pts (-0.6%) @ 15,243
ChiNext -26pts (-0.8%) @ 3,112
House Price Index Jan +3.9% vs +3.8% Dec (F/cast was +3.5%)
Pre markets opened @ 30,190 -130pts vs -226pts ADR’s.
With weakness in Ecommerce continuing but Petrochems and resources firm along with Financials, Property and Casinos.
Market initially dipped (probable margin call selling) before rallying back into the green on the China House Price Index data news of the vaccine rollout in Hong Kong.
It then worked higher through the morning to approach 30,800. PM opened higher at 30,948 after HSBC results were inline, dividend at upper end but no script and no buybacks.
Market sold back down to 30,750 the pre lunch level, bounced but drifted lower for the next hour to 30,600 level and then traded sideways into the close and tick down of 66pts in the closing auction.
HONG KONG DATA
Centre for Health Protection said there were 12 new COVID-19 cases in Hong Kong today; (vs 16 Monday) with 3 from unknown sources.Tomorrow we get GDP Growth Rate
SHORT SELLING Tuesday 12.8% vs 12.4% Monday
Top Shorts: Bud Apac (1876) 54% ahead of earnings tomorrow, Ping An (2318) 40%, SHKP (16) 35% (reports Thursday), Hengan (1044) 33%, China Res Land (1109) 28%, Sinopec (386) 25%, Hang Seng Bank (11) 24% reported at lunchtime.
Earnings due Wednesday Back of East Asia (23), CP Pokphand (43), HKEX (388), Emperor Culture Group (491), Sunevision (1686), Budweiser Brewing (1876), IMAX (1970), Universal Health (2211), Netease (9999).
AFTER MARKET NEWS
SMARTONE TELE (00315.HK) interim results ended December 2020. Net profit amounted to HK$267 million, up 0.4% yearly. EPS equaled HK23.8 cents. Interim
DPS was HK14.5 cents, flattish yearly.
SJM HOLDINGS (00880.HK) annual results ended December 2020. Revenues declined 77.8% yearly to $7.507 billion. Loss was $3.025 billion, against $3.207 billion in a year ago's profit. LPS equaled 53.3 cents. No final dividend was declared, against 22 cents in 2019.
Trading in shares of CG SERVICES (06098.HK) and LANGUANGJUSTBON (02606.HK) were halted from today (23rd). CG SERVICES plans to acquire stakes in LANGUANGJUSTBON, Chinese media citing sources. In response, CG SERVICES Executive Director Li Changjiang said the trading halt was triggered by a material cooperation project, without revealing further information.
HANG SENG BANK (00011.HK) Louisa Cheang, Vice-Chairman and Chief Executive revealed at the results conference that the 2020’s dividend payout is actually in par with 2019's, subject to a slew of factors, including profitability, regulatory guidance and requirement, the company's future plan and market outlook. She conceded that 2020 is a weird year when no regular judgement could be made on a lot of matters. Welcoming Hong Kong's regulators have not asked banks to hold off dividend, the CEO said HANG SENG BANK is yet reminded by regulators of retaining capital to cope with deteriorating environment.
The Government announced that about 70,000 citizens have made online registrations so far as at 4 pm for the COVID-19 Vaccination Program. All quotas dated between 26 February and 11 March have been booked.
WATER OASIS GP (01161.HK) announced that it requires more time to provide additional information requested by the Auditors who also require more time in auditing the contract liabilities and the revenue as affected by the pandemic COVID-19. The Company needs additional time to publish the annual results ended September 2020. At the request of the Company, trading in its shares on the Stock Exchange has been suspended from 9:00
Hong Kong remained the least affordable housing market in the globe for the 11th year, highlighting the financial hub's income disparity, foreign media citing reports from Urban Reform Institute and Frontier Centre for Public Policy.
*PETROCHEMS FIRM supply concerns pushed oil price higher as freezing weather disrupted US production. But OPEC+ is set to add more than 1.3m barrels a day of supply in Q2 with Brent around $60-$65, ramping up further into the end of the year to
keep prices and balances in check. PETROCHINA (857 HK +3.9%) CNOOC (883 HK +2.4%) SINOPEC (386 HK +3.4%) ANTON OIL(3337 HK +4.7%).
*BANKS FIRM CHINESE BANKS continue to see interest on the back of China’s economic growth, and more stringent regulations on online lending meaning less competition for national banks. ICBC(1398 HK +3.1%) CCB (939 HK +2.4%) CMB (3968 HK +6%).HK BANKS held up after HSBC (5 HK +0.5%) but off earlier highs results inline and said it would resume paying a dividend and invest more heavily in Asia despite announcing a 34 per cent drop in annual profits after its global business was hit hard by the pandemic. BUT disappointment at no immediate buybacks and no script.HANG SENG (11 HK -0.7%) posted annual net profit -33% YoY to HK$16.6b, missed est. BEA (23 HK +2.9%) reports tomorrow STANCHART (2888 HK +2.2%) reports Thursday.
*INSURERS FIRM on recovery hopes as the economy grows and social distancing measures rolled back allowing agents to meet clients again. CH LIFE(2628 HK +1%) said January premium income rose 13.13% YoY to 218.9b yuan. CH TAIPING (966 HK +6%) NCI (1336 HK +1.6%) PING AN (2318 HK +2%) CPIC (2601 HK +3.9%).
*E-COMMERCE WEAK as investors question valuations of growth-focused stocks. The Fujian Provincial Higher People’s Court has agreed to hear a case filed by Douyin against TENCENT (700 HK-0.9%) over alleged unfair competition. BABA (9988 HK -1.2%) MEITUAN (3690 HK -1.8%) KUAISHOU (1024 HK -5.2%).
*TELCOS WEAK following recent rallies. MWC Shanghai, the regional edition of the world’s biggest mobile industry trade show, started today. CH UNICOM (762 HK -1.8%) said that the aggregate number of 4G subscribers (including 5G subs) nearly hit 273m in Jan 2021, with a net addition of 2.74m subscribers. The net addition was 1.123m subscribers in Dec 2020. CH MOBILE (941 HK +0.4%) Chairman Yan Jie said 5G technology alone will shore the global GDP growth rate up by 7.4% over 2020-2035E, generating total economic output of US$13.1 trillion in the period. CH TEL (728 HK -0.7%).
*HK PROPERTY STRONG as the Govt talks of rolling back more social distancing measures and the city's Covid vaccine program kicks off. SHKP(16 HK +5%) HYSAN (14 HK +5.4%) NWD (17 HK +5.1%) CKA (1113 HK +4.9%) HENDERSON (12 HK +4.2%).
K WAH INTL (173 HK +4%) to launch four projects this year offering nearly 5,500 units.
*MACAU CASINOS STRONG as Macau opens quarantine-free travel from China starting today. GALAXY (27 HK +8.9%) MELCO (200 HK +6.3%) SANDS (1928 HK +7.5%). SJM (880 HK +7.9%) reported after market. Revenues -77.8% yearly to $7.507 billion. Loss was $3.025 billion, against $3.207 billion in a year ago's profit. LPS equaled 53.3 cents. No final dividend was declared, against 22 cents in 2019.
*PAPER MAKERS MIXED after earnings. NINE DRAGONS (2689 HK -12%) reported 1H net income +76% YoY to 4b yuan vs. 2.28b yuan. LEE&MAN (2314 HK -6.5%), CHENMING PAPER(1812 HK +9.6%).
*AIRLINES STRONG on air travel recovery hopes; as HK and Singapore discusss a travel bubble. AIR CHINA (753 HK +11.5%) CH EASTERN (670 HK +7.4%) CH SOUTHERN (1055 HK +14.7%).
*PHARMA STRONG as Chinese vaccine rollouts and distributions to other countries have been smooth. SINO BIOPHARM (1177 HK +12%) CANSINO (6185 HK +6.3%) FOSUN (2196 HK +3.1%). BEIJING TON REN TANG (3613 HK +15%) despite saying chairman under probe over suspected violations.
Closed for Emperors Birthday
Pre market Consumer Confidence reading beat expectations and covid cases below 400 for a second day but US inflation concerns outweighed the data with tech under pressure.
Kosdaq opened lower and initially sold down to 940 before working lower to find support around the 935 level. From there it bounced and traded sideways to close -18pts (-1.9%) at 937
Kospi opened lower and sold down initally to 3,035 level before rebounding and working better, late afternoon it peaked at 3,094 before easing back, to close -10pts (-0.3%) @ 3,070.
Consumer Confidence Feb 97.4 vs 95.4 Jan (F/cast was 93)
Tomorrow we get Business Confidence
Opened lower following the US and tested to 16,250 in early trades before working higher to test yesterday’s closing level as consumer confidence data beat forecasts but failed to hold above and eased back to 16,350 before then working higher to close at the day high +33pts (+0.2%) @ 16,443
Consumer Confidence Feb 71.98 vs 70.9 Jan (F/cast was 71)
Tomorrow we get Industrial Production, Retail Sales, M2 Money Supply
CONNECT FLOWS (significant decrease in flows)
Northbound RMB 66,952m Sell 32,378m : 34,574m Buy
Southbound HK$ 33,641m Sell 15,553m : 18,088m Buy
Northbound RMB 74,489m Sell 38,017m : 36,472m Buy
Southbound HK$ 38,248m Sell 16,511m : 21,737m Buy
AIA (01299.HK) +4.8%
CCB (00939.HK) +2.1%
PING AN (02318.HK) +2.1%
MEITUAN (03690.HK) -1.8%
BABA (09988.HK) -1.2%
TENCENT (00700.HK) -0.9%
HKEX (00388.HK) -0.8%
HSI & HSCEI Constituents on Move:
SINO BIOPHARM (01177.HK) +12%
GALAXY ENT (00027.HK) +8.9%, hitting new high
SANDS CHINA LTD (01928.HK) +7.5%
CM BANK (03968.HK) +5.5%
NEW WORLD DEV (00017.HK) +5.2%
SHK PPT (00016.HK) +5.1%, hitting new high
CK ASSET (01113.HK) +4.9%
PSBC (01658.HK) +4.3%
HENDERSON LAND (00012.HK) +4.3%
CONCH CEMENT (00914.HK) -4.1%
ENN ENERGY (02688.HK) -3.9%
CPIC (02601.HK) +3.9%, hitting new highTECHTRONIC IND (00669.HK) +3.6%
BOC HONG KONG (02388.HK) +3.5%
SINOPEC CORP (00386.HK) +3.4%, hitting new high
CNOOC (00883.HK) +3.4%
PETROCHINA (00857.HK) +3.2%
XIAOMI (01810.HK) -3.1%
CKH HOLDINGS (00001.HK) +3%
MTR CORPORATION (00066.HK) +2.8%, hitting new high
HSMI & HSSI Constituents on Move:ZHUGUANG HOLD (01176.HK) +18.8%, hitting new high
TONGRENTANGCM (03613.HK) +14.8%
CHINA SOUTH AIR (01055.HK) +14.7%, hitting new high
MAOYAN ENT (01896.HK) +13.4%
ND PAPER (02689.HK) -12.5%
MEITU (01357.HK) -12.1%
TONG REN TANG (01666.HK) +11.8%
AIR CHINA (00753.HK) +11.5%, hitting new high
CHINA RISUN GP (01907.HK) -10.4%
MARKET HOURS NEWS
Fitch Ratings has placed S.F. Holding's "A-" Long-Term Issuer Default Rating (IDR) and senior unsecured rating on Rating Watch Negative following its proposed acquisition of KERRY LOG NET(00636.HK). The ratings agency said it will resolve S.F.'s Rating Watch Negative upon clarity about its financial position at or prior to the completion of the proposed acquisition.
The 5G technology alone will shore the global GDP growth rate up by 7.4% over 2020-2035E, generating total economic output of US$13.1 trillion in the period, CHINA MOBILE (00941.HK) Chairman Yang Jie was quoted as saying by The Paper.
Ricacorp Properties CEO Willy Liu projected a 10% price uptick in small-to-medium flats for 2021, along with an over 10% rally in luxury home prices. The company will continue to expand its branch network and manpower by strengthening resources inputs in digitalization. Ten more branches will be opened this year with a sharp headcount growth from 2,500 to 3,000, he assumed.
FWD plans to go public in Singapore or merge with a US-listed SPAC in order to maintain its dual-class share structure, reported IFR. FWD had reportedly aimed for a Hong Kong IPO by mid-2021 to fetch US$3 billion. However, the insurer does not qualify for listing in the city, as the Stock Exchange only allows innovation companies to go public through a weighted voting right (WVR) share structure.
After negotiations with the Australian government, Facebook is set to restore news pages for local users in the coming days, reported foreign media. Facebook stated it is satisfied with Canberra's agreement to a number of changes following further discussions.
HSBC HOLDINGS (00005.HK) FY20 results Adjusted profit before tax dropped 45.1% yearly to US$12.149 billion. Reported profit before tax -34.2% YoY to US$8.777 billion, in line with consensus (US$7.789-9.979 billion), Dividend declaration of US$0.15 per share, as compared with US$0.09-0.21 in broker forecast, with no scrip alternative. The bank will consider share buy-backs, over time and not in the near term, where no immediate opportunity for capital redeployment exists.
The first 1 million Fosun-BioNtech vaccine shots are scheduled to arrive in Hong Kong as soon as 25 February, said market rumors.
Overnight HIBOR last posted at 0.03667%, down for 7 days, logging a 1-month low, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.12304%.
MIIT Vice Minister Liu Liehong revealed at the MWC conference in Shanghai that China has invested so far more than RMB260 billion in 5G network construction and will continue to reinforce policy guidance in future to foster the R&D, construction and application of 5G networks.
Thailand Food and Drug Administration (FDA) granted the emergency use authorization to Sinovac Biotech (SVA.US)'s COVID-19 vaccine. The country is set to receive 200,000 of the two million vaccine shots in the coming days, which will be primarily given to healthcare workers.
Chief Executive Carrie Lam said the COVID-19 Vaccination Programme has started receiving bookings today (February 23), citing 42,000 appointments for inoculation as of 9am. The 18 general out-patient clinics under the Hospital Authority are fully booked. Lam found the figure encouraging.
PRE MARKET HOURS NEWS
CHINA TELECOM (00728.HK) announced that the Company recorded nearly 353 million mobile subscribers in January 2021, with a net increase of 1.53 million users. Of which, 5G package subscribers net added by 10.67 million to a total of 97.17 million users that month, faster than a net rise of 7.02 million users in December 2020.
CG SERVICES (06098.HK) Trading in shares of has been halted from this morning, pending the release of an announcement containing inside information in relation to a potential notifiable transaction of the Company.
Macau Novel Coronavirus Response and Coordination Center announced revocation of the quarantine order on inbound passengers from Hebei's Shijiazhuang and Heilongjiang's Suihua, effective today, for the updates in the pandemic situation of the two provinces. In another word, all Chinese visitors will be subject to neither medical observation nor self-health-check upon arrival in the gambling hub.
LANGUANGJUSTBON (02606.HK) announced that trading in its shares was halted from this morning pending the release of an announcement under the Hong Kong Code on Takeovers and Mergers, the contents of which would constitute inside information.
India is set to approve 45 investment projects from China, comprising investment of GREATWALL MOTOR (02333.HK) and SAIC Motor Corp since the military tension between the two countries has tapered off, Reuters cited people familiar with the matter. Roughly 150 investment projects from China were stuck in the pipeline, as a result of reprisal of India. Investment by Japanese and the U.S. companies through Hong Kong was also stagnated.
Information from Macau Statistics and Census Service (DSEC) indicated that per-capita spending of visitors increased by 77.3% year-on-year to MOP3,129 in the fourth quarter of 2020; yet, total spending of visitors (excluding gaming expenses) decreased by 63.8% to MOP5.88 billion on account of a 79.6% decline in the number of visitor arrivals (1.878 million). Total spending of overnight visitors (MOP5.24 billion) and same-day visitors (MOP636 million) dropped by 58.3% and 82.7% year-on-year respectively. For the whole year of 2020, total spending of visitors fell by 81.4% year-on-year to MOP11.94 billion as the number of visitor arrivals shrank by 85.0%. Total spending of overnight visitors and same-day visitors amounted to MOP9.79 billion and MOP2.15 billion respectively, representing decline of 80.4% and 84.8% year-on-year.
HOPE EDU (01765.HK) announced proposed issue of US$350 million aggregate principal amount of zero coupon convertible bonds due 2026 by its subsidiary. The company also announced planned top-up placing of 680 million shares at $2.8 each, representing 9.68% discount to the closing price yesterday. According to the company, the estimated net proceeds from the issuance of convertible bonds will be approximately US$347 million (approximately HK$2.71 billion), while the net proceeds from the placement will be HK$1.888 billion
BANKCOMM (03328.HK) announced that BoCom Wealth Management, a wholly-owned subsidiary of the Bank, obtained the Approval from China Banking and Insurance Regulatory Commission, approving Schroder Investment Management and BoCom Wealth Management to establish Schroder BoCom Wealth Management in Shanghai by way of joint venture, in which the capital contribution proportion of Schroder Investment Management and BoCom Wealth Management are 51% and 49% respectively.
CST GROUP-NEW (00985.HK) announced that it had on 22 February disposed an aggregate of 5.739 million CHINA SHENHUA (01088.HK) shares on the open market. As a result of the Disposal, the Board considers the Group will realize a book gain of approximately HK$15.60 million.