Jan 15 HK/CHINA WRAP markets rally in the PM; HK +77pts, China close to flat

18 Jan

HSI +77pts (+0.3%) 28,574  HSCEI +21pts (+0.2%) 11,321  T/O HK$207.71bn (+22.3% DoD as more firms blacklisted and 5 IPO's)

EUROPE Open lower and trading sideways following Asia as Biden’s stimulus plan contained no real surprises and prompted a ’sell the news’ response. Covid resurgence in China with lockdowns there raising concerns about the global recovery. Petrochems weak.  French data in line but UK data was largely better than forecast.
Data out Friday
Balance of Trade Nov Euro 25.8b vs 30b Oct (F/cast was 25b)
Two day congress of the CDU starts Friday to select a successor to Merkel
Inflation Rate Final Dec 0% YoY vs +0.2% Nov (F/cast was 0%)
Inflation Rate Final Dec +0.2% MoM vs +0.2% Nov (F/cast was +0.2%)
Budget Balance Nov Euro -176.85b vs -159.85b (F/cast was -166b)
 Balance of Trade Nov GBP -5b vs -2.3b Oct revised (F/cast was -1.2b)
GDP Nov -8.9% YoY vs -6.8% Oct revised (F/cast was -12%)
GDP Nov -2.6% MoM vs -0.6% Oct revised (F/cast was -4.6%)
GDP 3 Month Average Nov +4.1% vs 10.5% Revised (F/cast was +2.9%)
Industrial Production Nov -4.7% YoY vs -5.8% Oct revised (F/cast was -4.4%)
Industrial Production Nov -0.1% MoM vs +1.1% Oct revised (F/cast was +0.3%)
Manufacturing Production Nov -3.8% YoY vs -6.1% Oct revised (F/cast was -5.6%)
Manufacturing Production Nov +0.7% MoM vs +1.6% Oct revised (F/cast was +0.5%)
Construction Output Nov -1.4% vs -2.2% revised (F/cast was -10%)
Goods Trade Balance Nov GBP -16.012b vs -13b Oct revised (F/cast was -10.2b)
Due later
NIESR Monthly GDP Tracker.
US Futures Opened in Asian time Dow +25pts  S&P and NDX +1% but sold down through the session and but bounced back as Europe opened Dow -116pts with S&P and NDX both still -VE

CHINA CSI 300 Closed -12pts (-0.2%) @ 5,458
CSI 300 opened flat and tested 5,500 in early trades as headline House Price Data was in-line but then sold down 5,450 and then traded sideways for most of the morning before selling down into lunch. PM opened lower but worked higher back to flat but sold down into the close. The PBoC’s decision to drain cash was a surprise comes as the leverage builds in bonds, which pushed interbank borrowing cost to an all-time low. Sentiment cautious ahead of the weekend as investors wait to see if more companies are black listed. Banks, Insureres, and Lithium Battery stocks top gainers. Semicons, F&B and Liquor names weak.Also concern about the rising covid cases and the treat that poses to the economic recovery.
Shanghai Comp +0.5pts (flat) @ 3,566
Shenzhen Comp -38pts (-0.3%) @ 15,032
ChiNext Index +1pts (flat) @ 3,099

Dec House Price Index Dec +3.8% vs +4% Nov (F/cast was +3.8%)
Slowest growth since Feb 2016; reflects Govt curbs on the sector trying to deleverage it asn reduce financial risk.
PBOC mounted a RMB500 billion one-year Medium-term Lending Facility (MLF) today with an unchanged bidding interest rate at 2.95%.
Among China's biggest cities, Guangzhou recorded the largest increase (5.2 percent vs 4.1 percent in November), followed by Chongqing (4.6 percent vs 4.7 percent), Shenzhen (4.1 percent vs 4.9 percent), Shanghai (4.2 percent vs 4.1 percent), Beijing (2.3 percent vs 24 percent), and Tianjin (1.1 percent vs 1.1 percent). On a monthly basis, new home prices edged up 0.1 percent in December, the same as in November, remaining the least since March
Could get FDI data after market
Monday we get NBS Press Conference, FAI data, GDP Growth Rate, Industrial Production, Retail Sales, Unemployment Rate and Industrial Capacity.

HSI Pre Market Pre Market Opened @ 28,408 -91pts vs +21pts ADR’s
Xiaomi and CNOOC weak on news of being on US blacklist. But E Commerce names firm on not being on the list .Initially rallied back to flat but then sold back down to 28,400 before working higher to 28,294 late morning but then sold down into lunch 28,500. PM opened lower and tested down to 28,300 before bouncing but then worked higher to close just off the PM high. News of censorship of a HK pro democracy website also hurt sentiment HKBN (1310 -2.3%) it will be interesting to see the reaction of key shareholders which include TPG, Canada Pension Plan Investment Board and Capital Group.

YIDU TECH (02158.HK), on debut, concluded the day at $65.2, up $38.9 or almost 1.5 times against the listing price $26.3, on volume 113 million shares and turnover of $7.093 billion. Excluding the handling fees, a book gain of $3,890 was reported per board lot of 100 shares.
CHESHI (01490.HK), on debut, concluded the day at $1.5, up 27 cents or 22% against the listing price $1.23, on volume of 285 million shares and turnover of $479 million. Excluding the handling fees, a book gain of $1,080 was reported per board lot of 4,000 shares.
ROISERV (02146.HK), closed down $1.10 or -8.2% against the listing price 
STRAWBEAR ENT (02125.HK), closed up $4.92 or +83.7% against the listing price,
MODERN CHI MED (01643.HK), debut, closed up $0.08 or +6.8% against the listing price.

Centre for Health Protection said there were 38 new COVID-19 cases in Hong Kong today (vs 29 Thursday)  14 of unknown origin plus 40+ initially confirmed cases.
SHORT SELLING  Friday 15.2% vs 14.2% Thursday
Top Shorts: Henderson Land (12) 40%, Ping An (2318) 37%, Hengan (1044) 36%, Bud APAC (1876) 35%, hang Lung Ppty (101) 32%,  Hang Seng Bank (11) 32%, HK & China Gas (3) 31%, Wharf REIC (1997) 28%, MTRC (66) 28%,  BankComm (3328) 26%, CK Asset (1113) 25%.
SINOMAB BIO-B (03681.HK) announced that the first healthy subject has been successfully dosed in a Phase I clinical trial of SN1011, an innovative third generation Bruton’s tyrosine kinase (BTK) inhibitor, in Shanghai, China.
KINGDEE INT'L (00268.HK) PROFIT WARNING, expecting loss of RMB250 million to RMB350 million for the 12 months ended 31 December 2020 (12 months ended 31 December 2019: profit of approximately RMB370 million).
BYD COMPANY (01211.HK)  announced that it has recently received the Approval Regarding the Issuance of Overseas Listed Foreign Shares by BYD Company Limited from the CSRC, approving the Company to issue not more than 183 million additional overseas listed foreign shares with a par value of RMB1 each, all of which are ordinary shares.  The Company can complete the issuance in multiple tranches, and the interval between each tranche shall be not less than three months with an amount not less than 25% of the total approved quota for each tranche.
Shanghai Stock Exchange will include JD HEALTH (06618.HK) and HAIER SMARTHOME (06690.HK) in the Southbound Trading under the Shanghai-Hong Kong Stock Connect, with effect from the next Southbound Trading day.
GEELY AUTO (00175.HK) announced grant of 629 million share options to eligible grantees under the share option scheme at an exercise price of $32.7 per share.
CHINA SOUTH AIR (01055.HK) announced that in December 2020, passenger capacity (measured by available seat kilometres (ASK)) of the Group decreased by 23.89% YoY. In terms of cargo operations, in December 2020, cargo capacity (measured by available tonne kilometers (ATK) - Cargo and Mail) decreased by 0.46% YoY.
HKEX (00388.HK) announced the launch of two new stock futures contracts and two new stock option classes of WUXI BIO (02269.HK) and JD HEALTH (06618.HK)  on 25 January 2021.  The Commission Levy of the new stock futures contracts will be waived for the first 6 months upon the commencement of trading.
SINOPEC CORP (00386.HK) announced that the oil and gas production reached 459 million BOE last year, flattish year on year.CHINA TAIPING (00966.HK) announced that the gross premium income for the period from 1 January 2020 to 31 December 2020 aggregated RMB178.399 billion, up 3.48% yearly.
Feng Qingfeng, vice president of Geely Group and CEO of Group Lotus, stated that Lotus' plant in Wuhan will be completed and commence operation in 2022, upgrading the R&D, manufacturing and supply chain system in full swing and create diversified products. In the coming 3-5 years, Lotus will continue to improve the three-terminal online digital production service system - manufacturing, vehicles and users, and keep enriching the product matrix to meet diversified and personalized customization needs.
CCL last printed at 176.52, down 0.9% weekly. 
CCL Mass dipped 0.81% weekly to 179.01,
CCL (small-to-medium flats) sagged 0.85% weekly to 176.47.
The three key indices softened altogether after two weeks of rally. Second-hand home deals burgeoned significantly in January 2021, which had yet to be reflected in this week's reading, said the research department of Centaline Property.

*PETROCHEMS WEAK after the U.S. announced Thursday that it’s blacklisting CNOOC (883 HK-1.1%) after years of involvement in offshore drilling in disputed South China Sea, It denies CHOOC from access to U.S. technologies without specific permission. PETROCHINA (857 HK -0.4%) CH OILFIELD (2883 HK -3.7%) SINOPEC (386 HK -0.5%).
*TECH & COMPONENTS WEAK after XIAOMI (1810 HK -10%) was one of nine firms added to the Defense Department’s list of Chinese military companies. Under an executive order Donald Trump signed in November, U.S. investors will have to unwind stakes in any company on the Defense Department list by next November. ZTE (763 HK -3.6%) AAC TECH (2018 HK -3%) TONGDA (698 HK -6%) BYDE (285 HK -5.4%).
*E-COMMERCE MIXED following recent rebound amid attractive valuation and after ALIBABA (9988 HK +2.5%) and TENCENT (700 HK +2.5%) were not blacklisted. TENCENT-backed online discount platform vip.com is being investigated by China's market regulator over alleged unfair market competition. The State Administration for Market Regulation's inquiry was based on tip-offs, Xinhua News reported.
WEIMOB (2013 HK +4%) MEITUAN (3690 HK -1.6%) JD (9618 HK -1%) JD HEALTH (6618 HK -2%).
*CHINESE BANKS FIRM as POSTAL SAVINGS BANK (1658 HK +9%) on the news Himalaya Capital, controlled by legendary investor Li Lu, bought 13.262m H-shs of the bank. CMB (3968 HK +5.7%) upgraded by brokers after its net profit grew by 4.82% to 97.34b yuan for 2020. CCB (939 HK +2%) ICBC (1398 HK +2.4%).
*PHARMA MIXED Preliminary results of a Russian trial of CANSINO'S (6185 HK +1.9%) Covid-19 vaccine show 92.5% of recipients developed high antibody levels, news reported. INNOVENT BIO (1801 HK -5%) placing shares with a 4.9% discount at HK$90.90/shr, sold 52m shs to raise approx US$610m.
*CHINA PROPERTY FIRM as NBS data shows 42 out of 70 major cities has newly built house price climb up 3.9% YoY, vs 36 in Nov; but still the slowest growth since Feb 2016; reflects Govt curbs on the sector trying to deleverage it and reduce financial risk.
CH EVERGRANDE (3333 HK -0.8%) bought ~93.1m EVERGRANDE PROP SERV (6666 HK +10%) shares on exchange at avg HK$9.8928 apiece on Jan. 8.
CIFI (884 HK +2%) TIMES CHINA (1233 HK +1.3%) CH JINMAO (817 HK +0.8%).
*AUTO WEAK, except GAC (2338 HK +20%) after it surged on disclosing its plans to put an EV with 11,000-km range into mass production by the year end.  
Others GEELY (175 HK -4.8%) BYD (1211 HK -1.3%) GREAT WALL (2333 HK -3.7%).
MAN WAH (1999 HK -5.9%) placing shares at 8% discount to last close. The placement will raise HK$2.38b by selling 150m shs at HK$17.22 apiece.
JOHNSON ELECTRIC (179 HK +13.8%) reported 3Q revenue beat and sales climbed 15% YoY, saw a number of broker upgrades.

Regional Markets
Opened higher buoyed by news of the Biden stimulus programme but trended lower through the day. In the morning it saw support at 28,600 but continued selling in the PM saw good support at 28,500 which thought tested a number of times has held. Closed -179pts (-0.6%) @ 28,520
Topix followed a similar trading pattern currently -17pts (-0.9%) @ 1,857
Foreign Bond Investment Yen 580.8b vs -85.5b prior
Foreign Stock Investment Yen 730.7b vs -291.6b
Tertiary Industry Index Nov -0.7% MoM vs +1% Oct (F/cast was +0.5%).
BoK kept interest rate unchanged at 0.5% as expected
Kospi opened higher and rallied to 3,180 in early trades but then trended lower to 3,095 level around 11am and then traded sideways to close -64pts (-2%) @ 3,085
Kosdaq followed a similar trading pattern sold down to 965 level and traded sideways to close -15pts (-1.6%) @ 964.
Opened higher around 16,000 level after TSMC’s (Closed +1.5% off initial high) good results but market and TSMC trended lower, Taiex initial support around 15,800 nt around 11:30am sold don to 15,615 level bounced but eased lower to close -91pts (-0.6%) @ 15,616.

CONNECT FLOWS (Significantly higher DoD especially southbound)
Northbound Rmb 70,910m Buy 35,625m vs 35,286m Sell
Southbound HK$ 37,965m Buy 15,635m vs 22,330m Sell
Northbound Rmb 77,624m Buy 38,241m vs 39,382m Sell
Southbound HK$ 33,027m Buy 13,144m vs 19,883m Sell

Active Heavyweights
AIA (01299.HK) +3.7%, hitting new high
PING AN (02318.HK) +3.5%, hitting new high
BABA (09988.HK) +2.6%
TENCENT (00700.HK) +2.5%, hitting new high
CCB (00939.HK) +1.8%
MEITUAN (03690.HK) -1.8%
HKEX (00388.HK) +0.1%

HSI & HSCEI Constituents on Move:
XIAOMI (01810.HK) -10.3%
PSBC (01658.HK) +10%
CM BANK (03968.HK) +6.6%, hitting new high
GEELY AUTO (00175.HK) - 4.9%
CPIC (02601.HK) +4.6%, hitting new high

HSMI & HSSI Constituents on Move:
GAC GROUP (02238.HK) +19.5%
JOHNSON ELEC H (00179.HK) +13.8%, hitting new high
FIH (02038.HK) -13.5%
FIT HON TENG (06088.HK) -10.4%
ARCHOSAUR GAMES (09990.HK) +10.1%

At a Legislative Council committee meeting, MTR CORPORATION (00066.HK) stated that the Shatin to Central Link has been 96% completed as of November 2020, where the construction from Hung Hom to Admiralty Station is over 90% done.  While the new signal system is expected to commission this quarter, the railway operator disclosed that the target to put East Rail Line (cross-harbor section) into service involves overwhelming challenges. Work coordination will be done flexibly with higher manpower investment to re-evaluate the impact therefrom after the new signal system is switched on.  The Tuen Ma Line, of which the construction is running smoothly, may begin services in 3Q21.
JD-SW (09618.HK) announced that "Lunar New Year" sales promotion will be held from January 20 to February 18. During the event, subsidies and coupons in an amount of RMB10 billion will be showered.
Ant Group has established a rectification working group, while seizing the time to formulate a relevant schedule, revealed Chen Yulu, Deputy Governor of People's Bank of China.  Ant will maintain business continuity and normal business operation, thus ensuring the quality of public financial services, added Chen.
XIAOMI-W (01810.HK) noted that the Department of Defense of the United States added the Company to the relevant entity list. The Company reiterates that it provides products and services for civilian and commercial use. The Company confirms that it is not owned, controlled or affiliated with the Chinese military, and is not a “Communist Chinese Military Company” defined under the NDAA. The Company will take appropriate course of actions to protect the interests of the Company and its shareholders.
Based on the Phase III clinical trial analysis, Sinopharm's inactivated COVID-19 vaccine can produce antibodies ten days after the first inoculation, revealed Chairman Yang Xiaoming. The vaccine will offer a protection of at least six months, he added.
The Government announced that in view of the COVID-19 pandemic, the 2021 Lunar New Year Fireworks Display and Lantern Carnivals have been cancelled.The Hong Kong Tourism Board (HKTB) announced that the provisional total number of visitor arrivals in 2020 was approximately 3.57 million, a 93.6% drop from 2019.
Snapping a decline recorded in 2019, worldwide semiconductor revenue rebounded 7.3% to US$449.8 billion in 2020, Gartner wrote in a report.
The Trump administration labeled China as foreign adversary, along with Iran, Russia, Cuba and North Korea to align with American telecom supply chain policy, which will take effect 60 days after publication.
"Chinese Warren Buffett" Li Lu, through Himalaya Capital, boosted 13.262 million PSBC (01658.HK)  shares on 18 December 2020, involving around $56.0664 million.   PSBC surged 16.08% to $5.56 after rallying over 17%, being the best-performing HSCEI constituent.
Petrovax Pharm, the Russian partner of CANSINOBIO-B (06185.HK)'s Covid-19 vaccine, hopes local authorities would register the vaccine as soon as possible, possibly marking the first inoculation approval outside of China, reported Bloomberg.  Petrovax is owned by Vladimir Potanin, the richest man in Russia.
The market rumored that MAN WAH HLDGS (01999.HK)  has recorded five-time over-subscription after the company had announced this morning share placement at an 8% discount.

People's Bank of China (PBOC) mounted a RMB500 billion one-year Medium-term Lending Facility (MLF) today with an unchanged bidding interest rate at 2.95%.
In regards to Reuter's earlier report that BABA-SW (09988.HK) plans to issue bonds in a size of up to US$8 billion this month, Bloomberg reported that the market is beginning to question whether the group can pull off the plan as prospective investors have not yet received relevant marketing memorandums, along with the co-founder Jack Ma out of sight and the Trump administration’s crackdown on Chinese tech firms.  The Chinese e-commerce magnate remained yet to comment thereon.
INNOVENT BIO (01801.HK) announced planned placement of 52 million shares at $90.9 each, representing a 4.87% discount to the closing price yesterday.  The expected net proceeds aggregate $4.671 billion.
MAN WAH HLDGS (01999.HK) announced planned placement of 150 million shares at $15.85 each, representing an 8% discount to the closing price yesterday.  The expected net proceeds approximate $2.363 billion.
Geely's Lotus Cars announced the MOU with Groupe Renault regarding cooperation and research in multiple fields, including the R&D of electric sports cars with Renault's Alpine, reported Beijing Business Today.
To facilitate Guangdong-Hong Kong-Macao mutual market access and boost efficiency of financial resource allocation, PBoC's Guangzhou branch is proactively
gearing up for Wealth Management Connect in Greater Bay Area, China Business Network learnt from the bank.  
Basically completing the operational and technical advance works, the branch will watch for its chance to launch the Connect based on epidemic situations.
LUK FOOK HOLD (00590.HK) announced that Q3 ending December 2020, the overall SSSG grew to -29% from -55% in the previous quarter.   With a relatively effective pandemic control of COVID-19 in the Mainland market, its same store sales turned from a decline to an increase during the quarter and the SSSG of self-operated shops was 4%.

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