HSI +261pts (+0.9%) 28,497 HSCEI +114pts (+1%) 11,299 T/O HK$207.71bn (+2.8% DoD )
Markets opened higher and worked higher for the first hour on the expectations of a large US stimulus announcement from Biden on Thursday and good Trade data from China.
Covid a concern but investors looking through the numbers on vaccination roll outs and good early trial data published in the New England Journal of Medicine showed Johnson & Johnson’s one-shot Covid vaccine is safe and appears to generate an immune response in both young and elderly volunteers.
Auto rebounding and most sectors in the green
EUROZONE ECB Monetary Policy Meeting Accounts.
FY GDP Growth 2020 -5% YoY vs +0.6% prior (F/cast was -5.4%)
Government Budget 2020 -4.8% YoY vs +1.55 prior (F/cast was -7%)
The first deficit since 2011 and the second-highest figure since German reunification. The reading came only after the record-high deficit in 1995.
Opened slightly higher in Asian time Dow +46pts, S&P +0.2% and NDX +0.1% and rose through the session; currently Dow +100pts but S&P eased back to flat and NDX to slightly -VE.
TSMC’s good results should give a boost to some of the tech names.
Data Initial Claims, 4 week average Claims, Continuing Claims, Export & Import Prices.
Earnings: BlackRock, First Republic, Taiwan Semiconductor, Delta Airlines
CHINA CSI 300 Closed -108pts (-1.9%) @ 5,470
CSI 300 opened lower after closing at a 13 year high Wednesday; with concerns over the covid outbreak and the potential impact on the recovery along with the poor vehicle data which endorsed those concerns and worsening US relations as US bans Xinjiang exports. Making for increased caution ahead of the trade data.
Markets sold down to 5,490 but then saw a bounce after the better than expected Trade Data back to 5,545 level, but tested there a couple of times before selling down into lunch. PM opened lower and traded sideways around the 5,500 level until 2:15pm when the market sold down to 5,460 level and then drifted higher into the close.
Some signs of rotation into Tech names as the US withdrew plans to ban Alibaba, Tencent and Baidu and the trade data showing continued good exports of work at home electronics.
Shanghai Comp -33pts (-0.9%) @ 3,566
Shenzhen Comp -295pts (-1.9%) @ 15,070
ChiNext Index -20pts (-0.7%) @ 3,105
Balance of Trade Dec $78.17b vs $75.4b Nov (F/cast was 65b)
Exports Dec 18.1% YoY vs +21.1% Nov (consensus was +15%)
Imports Dec +6.5% vs +4.5% Nov (Consensus was +5%)
Still largely driven by medical equipment and work from home electronics. Upside in part due to front loading ahead of Chinese New Year. The current covid outbreak should raise concerns about the strength of the recovery especially after yesterday’s mixed loan data.
House Price index due tomorrow
HSI Pre Market Opened at 28,408 +173pts vs -39pts ADR’s.
Market initially sold down to 28,300 (on news of more arrests but he national security police in dawn raids) before working better into lunch. PM opened flat and eased back before working higher to test 28,450 level but unable to break above and eased back to 28,410 level. Then worked higher for the rest of the afternoon and close just off the day high due to a 9pt downtick in the closing auction
E-Commerce names +VE on news that US will not blacklist them. Telcos +VE on news that the Tracker fund will resume purchases
HONG KONG DATA
Centre for Health Protection said there were 29 new COVID-19 cases in Hong Kong today (vs 42 Wednesday) plus over 30 initially confirmed cases.
SHORT SELLING Thursday 14.2% vs 11.1% Wednesday
Top Shorts: Ping An (2318) 41%, Anta (2020) 40%, Hang Seng Bank (11) 39%, WH Group (288) 32%, MTRC (66) 29%, Hengan (1044) 29%, CKI (1038) 28%, Bud APAC (1876) 27%,BankComm (3328) 26%, HK & China Gas (3) 26%, Geely Auto (175) 25%, Link REIT (823) 25%.
AFTER MARKET NEWS
INNOVENT BIO (01801.HK) proposed to place 52 million shares at $89.5-91 each to raise $4.654-4.732 billion, according to market sources. The placing price represented a discount of 4.8%-6.3% against the closing price ($95.55) as quoted today.
CM BANK (03968.HK) (600036.SH) released preliminary results for 2020. The net profit rose 4.82% yearly to RMB97.342 billion, with a basic EPS of RMB3.79. The operating revenue added 7.71% to RMB290.508 billion.
PING AN (02318.HK) announced that the accumulated gross premium incomes of the subsidiaries of the Company for the period from January 1, 2020 to December 31, 2020 increased 0.345% yearly to RMB797.34 billion.
ASIA COMM HOLD (00104.HK) announced that Time City, a wholly-owned subsidiary of the Company, entered into the Lease Surrender Agreement with the Landlord in respect of the surrender of Shops No. 1, 2 and 3 on the Ground Floor of Manley House, No. 86-98 Canton Road, Tsim Sha Tsui. The Group is currently operating a retail store at the Premises, selling third-party top-branded luxury timepieces.
YIDU TECH (02158.HK), whose shares will be listed tomorrow, opened at $50 in gray market, up 90% against the listing price of $26.3 and closed at $58.25 in grey market, up 1.21 times or $31.95 against the listing price $26.3, on volume of 5.82 million shares and turnover of $341 million, PhillipMart data showed.
ROISERV (02146.HK), whose shares will be listed tomorrow, opened at $13.5 in gray market, up 0.3% against the listing price of $13.46, and last stood at $13.06, down 3%, on volume of 28,000 shares, PhillipMart data showed.
STRAWBEAR ENT (02125.HK), whose shares will be listed tomorrow, opened at $6.3 in gray market, up 7.1% against the listing price of $5.88, and last stood at $5.7, down 3% against the listing price, on volume of 490,000 shares, PhillipMart data showed.
MODERN CHI MED (01643.HK), whose shares will be listed tomorrow, opened at $1.2 in gray market, up 1.7% against the listing price of $1.18, and last stood at $1.08, down 8.5%, on volume of 130,000 shares, PhillipMart data showed.
CHESHI (01490.HK), whose shares will be listed tomorrow, opened at $2 in gray market, up nearly 63% against the listing price of $1.23, and closed at $1.73 in grey market, up 40.65% or $0.5 against the listing price $1.23, on volume of 38.1 million shares and turnover of $69.5 million, PhillipMart data showed. Excluding the handling fee, the book gain is $2,000 per board lot size of 4,000 shares.
Centa Valuation Index (Major Banks) (CVI) last printed at 35.55, up 0.78 pts from the previous week and ending the two-week decline, said the research department of Centaline Property. Since the 4th Covid outbreak, CVI had breached below 40 and hovered around 35 for the 6th straight week, waiting for a rebound. If the index manages to surpass 40, it will be nearing 50 in the short run and foretelling a home market uptick.
*CHINESE BANKS WEAK as China has been slow to announce plans on special local bond sales this year, another sign that debt is a concern to Beijing. Unlike in the past two years, Beijing so far, has given no indication of how much local governments can borrow from the bond market in 202, that could also reflect the recent defaults and local Govt practices. ICBC (1398 HK -0.4%) CCB (939 HK -0.2%) ABC (1288 HK -0.3%) BOC (3988 HK -0.4%) CMB (3968 HK -0.4%).
*E-COMMERCE STRONG ALIBABA (9988 HK +5%), TENCENT (700 HK +5.3%), and BAIDU as US withdraws plans to subject them to an investment ban. The Chinese tech companies had been among a dozen firms the US Defense Department had considered including on a sanction list. While nine other Chinese companies will be added on Thursday, prompting a ban on American investment. JD (9618 HK +2%) NTES (9999 HK +0.5%) MEITUAN (3690 HK +5.5%).
*AUTO MAKERS WEAK after poor December sales data and increasing competition on new energy vehicles; as SAIC and ALIBABA unveiled their first two electric models Wednesday. They included one sport utility vehicle and one sedan. Cars with battery life that can enable travel range of up to 1,000 km on single charge.
BYD (1211 HK -4%) GREAT WALL (2333 HK -7%) DONGFENG (489 HK -3.5%).
FOXCONN is joining forces with Zhejiang Geely Holding, parent of GEELY AUTO (175 HK +1%), to provide production and consulting services to global automotive enterprises.
*SPORTWEAR WEAK as ANTA SPORTS (2020 HK-0.15%) sales data showed low single-digit growth on Anta branded products for the quarter. 4Q retail sales of FILA branded products +25%-30% YoY; Full-year Anta branded products mid single-digit decline on year; Full-year FILA branded products mid double-digit growth on year.
LI NING (2331 HK -0.9%) XTEP (1368 HK -1%).
CH DONGXIANG (3818 HK +8%) bucked the trend after its Chairman bought 4.4m shs of the company Jan 5-7.
*SHIPPING MIXED following the recent rally. The container shortage across the world is reportedly getting worse with shipping prices increasing nearly ninefold on Australia routes and fivefold on European sectors. Since last month, prices on Southeast Asia routes have increased fourfold, reaching more than US$1,000 (HK$7,754). COSCO SHIP DEV (2866 HK +11%) COSCO SHIP (1919 HK -9%) OOIL (316 HK -2.2%) SINGAMAS (716 HK +3.4%).
*SOLAR MIXED GCL-POLY (3800 HK +16%) agreed to sell as many as 3.9b new shares at HK$1.08 apiece in share placement, raising HK$4.21b. Placement price represents ~12% discount to last close of HK$1.23, and represents ~15.6% of enlarged issued share capital. XINYI SOLAR (968 HK -7%) on speculation solar parts could see a price war as solar wafer maker possibly to push down wafer price in 2Q.
SMIC (981 HK +7%) after peer chipmaker TSMC's net income and operating profit beat expectations.
CH MACHINERY (1829 HK +37%) sored after company anounced a deal whereby it will be acquired at a 45% premium to its last trading price.
Nikkei opened flat in line with the futures and worked higher though the morning to 28,800 level. Pre market data was better than expected. After lunch the market was further boosted by the good China trade data. The market tested 29,00 around 2pm but failed an quickly sold down to 28,600 before a small bounce to close +242pts (+0.9%) @ 28,698
Topix traded in a similar pattern Closed +9pts (+0.5%) 1,873.
Machinery Orders Nov -11.3% YoY vs +2.8% Oct (F/cast was -16%)
Machinery Orders Nov +1.5% MoM vs +17.1% Oct (F/cast was -7%)
PPI Dec -2% YoY vs -2.2% Nov (F/cast was -2.1%)
PPI Dec +0.5% MoM vs 0% Nov (F/cast was +0.3%)
Kospi opened flat and traded sideways around flat (3,128/3,159) Closed +2pts (flat) @ 3,150
Kosdaq opened flat but trended lower to 974 by mid morning. It then saw a bounce but basically traded sideways for most of the session with a rally at the end to close +1pt (+0.1%) @ 980
Export Prices Dec -5.4% YoY vs -4.6% Nov (revised from -4.9%)
Import Prices Dec -10.2% YoY vs -10.3% Nov (revised from -10.6%)
BoK interest rate decision Friday.
Opened lower but initially rallied back to 15,730 but hit resistance and sold down to 15,620 level before working slowly higher through the session to 15,750 around 12:30pm but then sold down to 15,700 and traded sideways to close -63pts (-0.4%) @ 15,707.
After market TSMC released another set of record results +VE for Tech
Northbound Rmb 66,400m Buy 32,127m vs 34,273m Sell
Southbound HK$ 28,780m Buy 9,655m vs 19,126m Sell
Northbound Rmb 78,048m Buy 37,544m vs 40,504m Sell
Southbound HK$ 25,947m Buy 10,392m vs 15,555m Sell
MEITUAN (03690.HK) +5.7%
TENCENT (00700.HK) +5.6%
BABA (09988.HK) +5%
PING AN (02318.HK) -1.4%
HKEX (00388.HK) +1%
AIA (01299.HK) -1%
CCB (00939.HK) -0.7%
HSI & HSCEI Constituents on Move:
SMIC (00981.HK) +7.4%
CNOOC (00883.HK) +6.2%
WUXI BIO (02269.HK) +6.1%
TECHTRONIC IND (00669.HK) -5.7%
GALAXY ENT (00027.HK) -3.1%
HANSOH PHARMA (03692.HK) +0.6%, hitting new high
HSMI & HSSI Constituents on Move:
FIH (02038.HK) +21.3%
GCL-POLY ENERGY (03800.HK) +15.4%
BEIGENE (06160.HK) +10.6%, hitting new high
AKESO (09926.HK) +8.3%, hitting new high
WEIMOB INC (02013.HK) +7.8%, hitting new high
ND PAPER (02689.HK) +5.9%, hitting new high
MARKET HOURS NEWS
TSMC reported 4Q20 net income up by 23% to a new record TWD142.77 billion, beating the consensus and marking new high. During the period, gross margin was 54.0%; operating margin was 43.5%; net profit margin. was 39.5%. It also plans to ramp up its productivity in China, Cailian Press reported citing Chairman Mark Liu. +VE cross read to SMIC
Guangdong's communication authority has ordered rectification or suspension on 209 mobile apps in November-December 2020, China Economic Net reported. In particular, seven mobile apps of Tencent were named in categories of tools and games.
The government will cancel the firework display on the second day of Chinese New Year, local media cited sources.
CBRE released the market review and outlook for Hong Kong’s economy and real estate market in Q4 2020 and 2020. Full-year net absorption for the Grade A Office market registered -2.2 million sq. ft., the largest decline on record. Overall vacancy continued to climb to 9.9% in Q4 2020, the highest since Q2 2009. Tsim Sha Tsui saw the largest jump in vacancy rate through the year, climbing 4.6-ppt to 9.2% at end-December. Greater Central ended the year at 7.3%, up from 3.4% from a year earlier.
BABA-SW (09988.HK)'s Alibaba.com announced that FY20 turnover rose 101% yearly in USD terms, where November's turnover increased 145%.
FAST RETAIL-DRS (06288.HK) Trading in the shares has been halted with effect from 1:00 p.m. today, January 14, 2021, pending the release of the first quarterly results announcement of the Company. The results came out around 2pm Q1 (ended November 2020), consolidated revenue amounted to JPY619.7 billion, -0.6% yearly; operating profit aggregated JPY113.0 billion, +23.3%. Both figures beat the estimates. Stock to resume trading Friday.
Link Asset Management Limited (Link), the manager of LINK REIT (00823.HK), announced that Link converted two five-year loans totaling GBP200 million signed with BNP Paribas and DBS Bank (DBS) respectively in August last year to sustainability-linked loans. This marks Link REIT’s first sustainability-linked loan denominated in the Pound Sterling.
Bilibili (BILI.US)'s Shanghai Magic Electric Information Technology Co., Ltd. has become the biggest shareholder of Shanghai Huijie Culture Communication Co., Ltd., an affiliate of Haoliners Animation League, with shareholding hiked to 100%, as Chinese media quoted data of a corporate equity structure platform. Haoliners Animation League had been previously invested by TENCENT (00700.HK) Overnight HIBOR last posted at 0.05161%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.11714%, marking a 1-month low.
About 48,000 mobile games were pulled from China's App Store in December 2020, as watchdog required all titles to obtain a license before launch to ensure the game content complied with local rules, reported Sensor Tower. Fruit Ninja, Asphalt 8 and Hay Day were among the removed games last year.
U.S. President-elect Joe Biden is set to unveil a coronavirus relief package, in an amount as high as US$2 trillion, on Thursday night (local time), CNN learnt from people briefed on the deliberations.
Vipshop (VIPS.US) stated that it has received a formal notice from Chinese State Administration for Market Regulation (SAMR) and that it will actively cooperate with the authority in its investigation, after the SAMR had launched a competition investigation into the online retail platform according to reports.
S&P Dow Jones Indices stated it will remove CNOOC securities from "impacted indices on or before February 1" due to U.S. sanctions.
Beijing is pondering over a ban against BNO passport holders in Hong Kong from public office, a plan likely to be raised at the coming meeting of Chinese National People’s Congress Standing Committee, South China Morning Post learnt from insiders.
PRE MARKET NEWS
GAC Toyota Motor has resumed production after a temporary output halt under parts supply issues, as Toyota Motor's China arm told Chinese press.
The World Health Organization (WHO) said the second year of coronavirus pandemic may be more severe as higher infectious variants are circulating in the northern hemisphere. Mike Ryan, the WHO’s top emergencies official, said countries in the northern hemisphere, including Europe and North America, saw sort of perfect storm of the season, where people went inside amid coldness and increased social mixing. Such combination of factors stimulated transmission in many countries.
At an event of Chinese General Chamber of Commerce (CGCC), Financial Secretary Paul Chan said vaccine launches bring hope to pandemic control this year after global widespread last year. Having said that, Chan expected Hong Kong's economy to still weather with bigger headwinds in the first half of the year, where the fourth spike of plague will put labor market under heavier pressure. He said silver lining may not come until the latter half. For China, the economy was foreseen to deliver vibrant growth, being the strongest backup for Hong Kong's economy.
BABA-SW (09988.HK) founder Jack Ma is lying low but ready to meet with Chinese regulators any minute, UK media WIRED citing insiders close to him. Ma is purportedly in Hangzhou, where the e-commerce giant was founded. The newspaper did not expect to see Ma before regulators have made a final verdict on BABA-SW and Ant Group. That is inline with the FT report yesterday.
China confirmed 138 additional COVID-19 cases yesterday (13th), including 124 local infections (81 cases in Hebei and 43 cases in Heilongjiang), reported by National Health Commission.
GCL-POLY ENERGY (03800.HK) announced planned placement of 3.9 billion shares, representing 15.57% of the Company’s issued share capital as enlarged by the Placing, at a placing price of $1.08 per share, representing a 12.2% discount to the closing price yesterday. The expected net proceeds of the Placing approximate HK$4.148 billion.