HSI -35pts (-0.1%) 29,927 HSCEI -60pts (-0.5%) 11,889 T/O HK$264.9bn (-11.8 DoD)
EUROPE Markets opened higher on optimism over the Biden administration taking over, but markets are drifting lower in early trades. Banks and Autos were leading. Caution ahead of the ECB meeting where no change to rates is expected but comments will be watched for further support. Also US initial claims still a concern.
Zur Rose Group trading higher after robust full-year results.
ECB Interest Rate Decision, Marginal Lending Rate, ECB Press Conference Consumer Confidence Flash.
No data due
Business Confidence Jan 98 vs 94 Dec revised (F/cast was 95)
Business Climate Indicator Jan 92 vs 91 Dec revised (F/cast was 88)
CBI Business Optimism and Industrial Trends Orders, BoE Credit Conditions Survey
Opened in Asian time Dow +14pts, S&P +0.04% and NDX +0.1% have ticked higher as Europe opened Dow +64pts, S&P and NDX +VE
Initial Claims, 4 week average Claims, Continuing Claims, Philidelphia Fed Manufacturing Index, Building Permits, Housing Starts, 10 year TIPS auction
CHINA CSI 300 Closed +89pts (+1.6%) @ 5,565
CSI 300 opened higher helped by good FDI data aftermarket Wednesday and hopes of better relations with the US under President Biden. Worked higher initial but then eased back before rallying into lunch at 5,574. PM has eased back slightly with a small up tick into the close. A share turnover exceeded 1tn Yuan as investors re-focus on-shore. ChiNext continues to see good interest with Rare Earth stocks strong after Beijing proposed a law to control supply.
Shanghai Comp +38pts (+1.1%) @ 3,621
Shenzhen Comp +297pts (+2%) @ 15,521
ChiNext Index +79pts (+2.5%) @ 3,284
CHINA DATA None
HSI Pre Market Pre Market opened @ 29,952 -11pts vs +78pts ADR’s
but then rallied above 30,000 as recent shorts covered. Sold down to 29,800 level before rebounding and then oscillated around 30,000 level with a burst to 30,135 mid morning before easing back. 30,000 level at lunch. PM opened higher currently but then sold down to 29,750 before working back to yesterday’s closing level in choppy trading but then ticked lower into the closing auction.
Traders cautious on Biden approach to China as he renounced China sanctioning Mike Pompeo and other and called on bipartisan Americans to condemn the move and said it was unhelpful.
Some Chinese Financials still weak, E Commerce mixed, Pharma names +VE
BYD COMPANY (01211.HK) +5% has completed the $29.8-billion financing through share placement.
HONG KONG DATA
Inflation Rate Dec -0.7% YoY vs -0.2% Nov (F/cast was -1.2%)
The sixth straight month of deflation amid subdued demand conditions. Downward pressure came from prices of electricity, gas and water (-30%); clothing and footwear (-5.9%); durable goods (-2.6%); transport (-2.1%) and miscellaneous services (-0.1%). On the other hand, prices increased for food, excluding meals bought away from home (2.2%), alcoholic drinks and tobacco (1.7%), miscellaneous goods (1.4%) and housing (0.3%). Meantime, cost was flat for meals bought away from home. Looking ahead, overall price pressures should remain very mild in the near term as global and local economic conditions are still challenging amid the continued threat of COVID-19, a Government spokesman said.
Centre for Health Protection said there were 70 new COVID-19 cases in Hong Kong today (vs Wednesday 77) 16 of unknown origin.
SHORT SELLING Thursday 18.1% vs 20.5% Wednesday
Top Shorts: Hengan (1044) 42%, Power Assets (6) 41%, WH Group (288) 32%, Bud Apac (1876) 32%, MTRC (66) 31%, Ping An (2318) 31%, Baba -SW (9988) 30%, Wharf REIC (1997) 28%, CSPC Pharma (1093) 28%, Country Garden (2007) 28%, Hang Seng Bank (11) 27%.
AFTER MARKET NEWS
Wheelock Properties' MONACO in Kai Tak tendered 13 flats this morning and received 31 tenders. With all of the 13 flats sold out, the company booked $257 million.
Fubon Bank (Hong Kong) Limited and HKT-SS (06823.HK) have signed a memorandum of understanding (MoU) to promote and foster the development of Fubon Bank’s digital banking services. Fubon Bank is planning to launch Fubon GO, a remote account opening mobile app which is developed by HKT and currently being run as a pilot trial under the Fintech Supervisory Sandbox of the Hong Kong Monetary Authority.
*E-COMMERCE MIXED ALIBABA (9988 HK -2.6%) and WEIMOB (2013 HK -4.7%) as ANT GROUP could face antitrust action under PBOC draft rules, a sign Jack Ma's reappearance on Wednesday doesn't signal the all-clear for his empire. TENCENT (700 HK +0.5%) could also be impacted by the new rules.
BAIDU is reportedly planning to file for its HK secondary listing after CNY, which could raise at least HK$27.3b. JD (9618 HK +1.8%) NTES (9999 HK +3.6%) MEITUAN (3690 HK +0.7%).
*CHIP MAKERS STRONG due to a supply shortage and rising demand. FIT HON TENG (6088 HK +1.4%) HUA HONG SEMI (1347 HK +8.5%) ASM PACIFIC (522 HK +5%).
*TELCOS WEAK despite applying to have US delisting reviewed and the release of user numbers. CH UNICOM (762 HK -2%) and CH MOBILE (941 HK -0.3%) CH TEL (728 HK-1.7%).
*HK PROPERTY FIRM as demand for primary homes remain strong. Wheelock Properties has received 2,270 checks for 120 flats on offer at its Monaco development in Kai Tak, making the batch 18 times oversubscribed. The 120 units go on sale today, at an average price of HK$24,216 psf after discounts. It also sold 13 units by tender having received 25 tenders. CK ASSET (1113 HK +1%) SHKP (16 HK +0.3%) HENDERSON (12 HK +0.6%) HANG LUNG PT (101 HK +2.6%).
*CHINA PROPERTY WEAK on concerns about credit for the sector. SUNAC REAL ESTATE GROUP sold 1.58b yuan of notes, vs its planned offering of as much as 3b yuan, according to a company statement. CH SUNAC (1918 HK -1.8%) TIMES CHINA (1233 HK -1.2%) JINMAO (817 HK -6.1%) SHIMAO (813 HK -3%).
PROPERTY MANAGERS also fell on profit-taking. SHIMAO SERV (873 HK -2.5%) A-LIVING SERV (3319 HK -4%) CG SERVICES (6098 HK -3.3%) as EVERG SERVICES (06666.HK +0.7%) seeks to ramp up its 2021 profits by at least 50%, striving to be China's biggest property manager in terms of GFA under management,
*AUTOS WEAK as BYD's (1211 HK +1.8%) completed a HK$29.9b upsized share placement, selling 133m new H-shs at HK$225 apiece, at ~8.5% discount to last closing price of HK$244. GREAT WALL (2333 HK -5.4%) GEELY (175 HK -1.5%) GAC (2238 HK -2.8%).
*MATERIALS/RESOURCES FIRM . CH RARE EARTH (769 HK +68%) soared on demand speculation and rising rare earth price as China proposes new law to control the supply. I wrote about the proposed bill that was introduced last Friday, A share names started to react yesterday and today the focus switched to HK.
Top aluminum smelters CHALCO (2600 HK +5.7%) and parent of CH HONGQIAO (1378 HK +5.9% made the forecast in a joint proposal that the industry target peak aluminum, alumina capacity and output within five years amid the country’s goal to reach carbon neutrality by 2060. Also worth noting Alcoa reported in the US after hours Wednesday and beat.
KOOLEARN (1797 HK +3.2%) saw support after Beijing’s govt said on Wed that all offline tutoring and activities provided by after-school training institutions will be suspended.
CRRC TIMES (3898 HK -7%) plunged following broker's downgrade as 2021 government spending outlook for railway projects looks to be capped.
Nikkei 225 opened higher and has traded sideways effectively in the range 28,700/800 Closed +234pts (+0.8%) @ 28,757
Topix Opened higher and worked higher first to 1,867 then eased back before pushing to test 1,870 but failed to break above and trended lower to 1,860 at lunch. After lunch trading sideways 1,860/1,865; closed +11pts (+0.6%) @ 1,861
BoJ Rate Decision unchanged at -0.1%
Balance of Trade Dec Yen 751b vs 366.8b Nov (F/cast was 800b)
Exports Dec +2% YoY vs -4.2% Nov (Consensus was +2.4%)
Imports Dec -11.6% YoY vs -11.1% Nov (Consensus was -14%)
Stock investment by foreigners Yen 169.9b vs 512.5b prior revised
Bond investment by foreigners Yen 272.4b vs 736.2b prior revised
Pre market PPI beat forecastKospi opened higher at 3,123 and rallied to 3,146 then traded sideways in that range until around 1:30pm when it pushed higher to test 3,150 but failed to break out. Then in the last 10 minutes pushed higher to close +46pts (+1.5%) @ 3,161Kosdaq opened higher traded up to 985 in early choppy trading but then sold down to 975 before rebounding. Then traded sideways in the range 978/980; with a rally from 978 in the last few minutes of trading to close +4pts (+0.4%) @ 981.
PPI Dec +0.7% MoM vs 0.0% Nov (F/cast was -0.1%)
PPI Dec +0.1% YoY vs -0.3% Nov (F/cast was -0.7%)
Opened lower despite yesterday’s good Export data but worked higher through the morning to test 16,200 but failed to break above and eased back to 16,032 before working higher again and retesting 16,200 a couple of times before Closing +348pts (+2.2%) @ 16,154
Northbound Rmb 57,633m Buy 27,403m vs 30,230m Sell
Southbound HK$ 38,797m Buy 15,735m vs 23,063m Sell
Northbound Rmb 74,737m Buy 35,943m vs 38,794m Sell
Southbound HK$ 43,765m Buy 17,415m vs 26,350m Sell
BABA (09988.HK) -2.4%
HKEX (00388.HK) +1.6%
AIA (01299.HK) -1.3%
MEITUAN (03690.HK) +0.9%, hitting new high
PING AN (02318.HK) -0.7%
TENCENT (00700.HK) +0.4%, hitting new high
CCB (00939.HK) -0.2%
HSI & HSCEI Constituents on Move:
SMIC (00981.HK) -5.1%
PSBC (01658.HK) +4.4%
SINO BIOPHARM (01177.HK) +4%
NTES (09999.HK) +3.8%
JD HEALTH (06618.HK) -3.2%
XIAOMI (01810.HK) -3.1%
JD (09618.HK) +1.6%, hitting new high
HSMI & HSSI Constituents on Move:
SIHUAN PHARM (00460.HK) +063.6%, hitting new high
CHINA FOODS (00506.HK) + 25%, hitting new high
TIANGONG INT'L (00826.HK) +23.7%, hitting new high
CHINA RISUN GP (01907.HK) +16.7%, hitting new high
MMG (01208.HK) +13.1%
CTIHK (06055.HK) +12.8%
MARKET HOURS NEWS
Hong Kong Government is mulling plans to mount a two-week hotel quarantine order on all arriving aircrews if they stay in the city for more than two hours, South China Morning Post learnt from three sources familiar with the plan, as the coronavirus pandemic rages on. That would likely see less flights to HK -VE
In response to online rumours that Jack Ma had gratuitously transferred 10% shareholding in BABA-SW (09988.HK) to Zhejiang's Department of Finance, Ant Group told China Business Network that the news is untrue.
XIAOMI-W (01810.HK) said the 5G chip released by MediaTek yesterday employs TSMC's super core using new 6nm process and the highest frequency of 3.0GHz A78. The company's brand Redmi will equip with the chip for the first time globally. Redmi will launch its first flagship game smartphone under the plan to scout e-sports field in 2021, disclosed Redmi Brand General Manager Lu Weibing.
SANDS CHINA LTD (01928.HK) announced to award a discretionary allowance equivalent to one month's salary to over 26,000 eligible full-time employees on 8 February, capped at MOP45,000, reported Radio Macau.
BYD COMPANY (01211.HK) has completed the $29.8-billion financing through share placement, marking the biggest stock financing project of Asian auto industry in the past decade, also the largest-ever non-financial new share placing in Hong Kong, said Board Secretary and Company Secretary Li Qian. According to Chinese media, the deal lured more than 200 institutional investors who are global long-term and sovereign funds. It will beef up the company's capital strength, provide strong financial support for the promotion of the development of automotive electrification, intelligence and power batteries, and help the company further cement its leading position in the industry.
Hong Kong is set to approve the use of Covid-19 vaccine co-developed by FOSUN PHARMA (02196.HK) and BioNTech this week, having picked a Kwai Chung warehouse for storage, SCMP citing sources. Food and Health Bureau will give greenlight to the vaccine use, paving the way for the first wave of 1 million vaccinations after Chinese New Year.
China Youran Dairy plans to go public in Hong Kong during the first quarter this year to raise US$500 million, IFR reported. It seeks to have listing hearing as soon as next month, it was expected.
Huawei topped the Hurun Most Valuable China Brands 2020 chart in the digital sector, with brand value slipping 28% to RMB90 billion. It was followed by XIAOMI-W (01810.HK), whose brand value elevated 111% to RMB89.5 billion.
CG SERVICES (06098.HK) remains focused on the development in the Greater Bay Area, primarily in Shenzhen, Guangzhou and Foshan, CFO Huang Peng told Chinese press. In the future, the group will stay oriented to urban services and property management, furthered Huang.
AlipayHK announced that starting from Saturday, the reach of "EasyGo", already covering designated green minibuses, Long Win buses, New World First Buses and Citybuses, will be extended further to all MTR CORPORATION (00066.HK) heavy rail stations (except Airport Express).
Oxford scientists are gearing up to rapidly make new versions of a COVID-19 vaccine co-developed with AstraZeneca to fight variants emerging in Britain, South Africa and Brazil, reported The Telegraph. An Oxford spokesman told Reuters the university is carefully reviewing mutants' impact on vaccine immunity, and whether a rapid vaccine adjustment should be necessary.
The Bank of England will mount stress tests on large banks, including HSBC HOLDINGS (00005.HK) and Barclays, this year to ensure they can keep supporting the economy during the pandemic, Reuters reported. The British central bank will also look at how banks can return to more normal dividend levels.
BABA-SW (09988.HK)'s Alibaba.com announced the official launch of Excellent Business Overseas Alliance Program for Henan Machinery Industry. Pursuant to the Program, Alibaba.com will support 1,000 small-and-medium-sized machinery companies of Henan to improve their overseas after-sales service capabilities, and foster 1,000 high-quality Henan machinery merchants with global competitiveness.
International Olympic Committee has decided not to annul the Tokyo Games and Paralympic Games, said a member Dick Pound, who added the event may be conducted without spectators.
EVERG SERVICES (06666.HK) seeks to ramp up its 2021 profits by at least 50%, striving to be China's biggest property manager in terms of GFA under management, Reuters citing insiders. To do so, EVERG SERVICES has to generate RMB975 million of earnings in each quarter this year.
Apple is set to make major upgrades to lenses in its planned launch of new iPhone models during the second half of this year, Taiwanese media learnt from industry sources. iPhone 12S will not have fundamental changes in specification, but will see improvement in lenses, according to street rumors.
Twitter locked the official account of Chinese Embassy in U.S. after it defended Beijing's forced sterilization policy targeting minority Uighur women in the western region of Xinjiang. The tweet, initially posted on 7 January, claimed that Uighur women were no longer "baby-making machines". It was removed by the social networking site 24 hours later.
PRE MARKET NEWS
NC HOTEL (01158.HK) announced that on 18 January 2021 (after trading hours), the Board received a letter from the Offeror that, subject to the satisfaction of the Pre-Condition, voluntary conditional offers will be made by the Offeror for the H Shares and the Domestic Shares other than those owned, controlled or agreed to be acquired by the Offeror and the Offeror Concert Parties who have undertaken not to accept the Offers in accordance with the Takeovers Code which, if implemented, will result in the Delisting. Theoffer price. would be $18.15 per H share, a premium of approximately 24.7% over $14.56, which is the closing price per H Share as quoted on the Stock Exchange on the Last Trading Date.
China confirmed 144 additional COVID-19 cases yesterday (20th), including 126 local infections, reported by National Health Commission.
GALAXY ENT (00027.HK) will, on 10 February, award a one-off special bonus equivalent to one month's basic salary and guaranteed tips (if applicable) to staff members at senior manager level or below, benefiting about 98% of the headcount. Eligible team members joining the group between 2 January 2020 and 3 October 2020 will receive the one-off special bonus on a pro-rata basis.
HSBC HOLDINGS (00005.HK) plans to lay off up to 340 managers in Britain, while hundreds more junior staff will be relocated as part of its UK branch network shake-up, Reuters citing people familiar with the matter.
CHINA TELECOM (00728.HK) announced that in relation to the announcement dated 7 January by the NYSE that NYSE Regulation determined to re-commence delisting proceedings of the U.S. ADSs, the Company had on 20 January (U.S. Eastern standard time) filed with the NYSE a written request for a review of the Determination by a Committee of the Board of Directors of the NYSE. According to the NYSE Listed Company Manual, the review will be scheduled at least 25 business days from the date the request for review is filed.
BYD COMPANY (01211.HK) announced the planned placement of 133 million H shares at $225 each, representing a discount of 7.8% to the closing price of H Share as quoted on the Stock Exchange on 20 January 2021. The aggregate net proceeds from the Placing are expected to be approximately $29.801 billion.
CHINA MOBILE (00941.HK) announced that in relation to the announcement dated 7 January 2021 by the NYSE that NYSE Regulation determined to re-commence delisting proceedings of the ADSs of CHINA MOBILE, the Company filed with the NYSE a written request for a review of the Determination by a Committee of the Board of Directors of the NYSE on 20 January 2021 (US Eastern standard time).
Ministry of Agriculture and Rural Affairs of the PRC said it nailed a strategic cooperation framework agreement in Beijing with CHINA TOWER (00788.HK), whereby both sides will jointly propel construction of digital village and smart agriculture based on overall deployment of rural revitalization strategy and digital rural strategy.
CHINA RAILWAY (00390.HK) announced that the value of new contracts for the year ended December 2020 amounted to RMB2.61 trillion, up 20.4% yearly.
S HARBOURHOLD (01663.HK) announced that the company's chairman and substantial shareholder, Wong Lam Ping, acquired an aggregate of 1.162 million ordinary shares of the Company in the open market at an average price of HK$0.153 per share on 20 January 2021.