HSI -94pts (-2.6%) 29,298 HSCEI -44pts (-0.4%) 11,651 T/O HK$255.12bn (-2.5% DoD)
Markets open slightly lower. CAC and FTSE initially traded higher to flat/slightly positive but now drifting lower. DAX opened lower and traded sideways then lower. IMF’s improved forecast largely ignored and investors cautious ahead of earnings (Apple, Facebook and Tesla) plus the FOMC meeting.
Watch for an update from SAP
Consumer Confidence Feb -15.6 vs -7.5 Jan revised (F/cast was -7.1)
Consumer Confidence Jan 92 vs 95 Dec (F/cast was 94) Unemployment Benefit claims Dec +0.5k vs +36.6k Nov (F/cast was +25k)
Jobseekers Total Dec 3.5866m vs 3.5863m Nov (F/cast was 3.6113m)
Opened in Asia Dow +30pts, S&P +8pts (+0.3%) and NDX +93pts (+0.7%) after good Microsoft numbers. But have eased and currently DOW and S&P now negative and NDX +61pts
Data MBA Mortgage Applications & 30 yr Mortgage Rate, Durable Goods, EIA Oil Stocks report. FOMC Rate Decision and Press Conference.
Earnings: Facebook, Apple, Tesla, AT&T, Boeing, General Dynamics, Whirlpool, Norfolk Southern, Blackstone, Nasdaq, Anthem, Abbott Labs, Textron, Corning, Hess, VF Corp, Samsung, Teradyne, Canadian Pacific Railway, Raymond James, Levi Strauss
CHINA CSI 300 Closed +15pts (+0.3%) @ 5,528
CSI 300 opened lower with caution ahead of the industrial data and then briefly tested to 5,520 in early trades before selling down to 5,500 level. Around 10:15am the market saw a sharp rebound before working back to flat just before lunch. PM opened slightly higher at 5,520 level and has traded sideways for the first hour before selling down to 5,510 level before seeing a rally into the close.
Investors still wary over US/China relations and the covid outbreak in the run up to Chinese New Year.
The PBOC mounted the RMB180 billion seven-day reverse repos today with a bidding interest rate staying flat at 2.2%. There was RMB280 billion of reverse repos due today, hence the single-day net withdrawal amounted to RMB100 billion.
Sector wise: financials, cement, Petrochems and chemical stocks Firm but non-ferrous metals, coal, real estate, and power stocks were weak.
The IMF predicts China's economy is set to grow above 8% this year, it said in its latest World Economic Outlook.
Shanghai Comp +4pts (+0.1%) @ 3,573
Shenzhen Comp +61pts (+0.4%) @ 15,414
ChiNext Index +23pts (-0.7%) @ 3,281
CHINA DATA on the open
Industrial Profits (YTD) Dec +4.1% YoY vs 2.4% Nov (F/cast was +3.2%)
Chinese companies of industries above designate scale aggregated profits of RMB707.11 billion in December 2020, up 20.1% yearly, with the growth rate accelerating 4.6 ppts from November's, according to data from National Bureau of Statistics (NBS).
HSI Pre market opened @ 29,557 +165 pts vs +282pts ADR’s indicated a broad based rebound.
HSI initially ticked slightly higher as some recent shorts covered but then reversed and sold down to 29,190 level at 10:15 am before rebounding to around flat and trading sideways with a slight uptick going into lunch.
PM opened higher and traded sideways around 29,425 level before drifting lower in the last 90 minutes and then ticked 46pts lower in the closing auction.
Sentiment cautious on potential for more lock downs. Autos weak as a BYD Executive said he would reduce his stake by no more than 1m A shares but CNOOC rebounding; signs of more mainland support.
But caution ahead of FTSE Russell announcement on its global equity index series, in hope of further guidance from the U.S. Office of Foreign Assets Control, media reported.
HONG KONG DATA
In the morning the Rating and Valuation Department said
HK Dec Property Price Index Sags Almost 0.4%, Down for 3rd month to 379.3 last December. The reading inched up 0.03% on a year-on-year basis.
Centre for Health Protection said there were 60 new COVID-19 cases in Hong Kong today; (vs 64 Tuesday) 21 of unknown origin.
SHORT SELLING Wednesday 14.8% vs 13.5% Tuesday
Top Shorts: Wharf REIC (1997) 42%, Ping An (2318) 38%, Henderson Land (12) 38%, NWD (17) 36%, Hengan (1044) 31%, SinoBiopharm (1177) 30%, Hang Lung Property (101) 30%, Country Garden (2007) 26%. Note Hang Lung Property (101) earnings due tomorrow
AFTER MARKET NEWS
KUAISHOU-W (01024.HK) tracked margin subscription of almost $323.5 billion as at around 6 pm, according to local brokers' data. Based on the fundraising amount from public offering at approximately $1.05 billion, the IPO has been over-subscribed by over 307 times.
JOY CITY PPT (00207.HK) announced that the aggregate contracted sales of the Company, together with its subsidiaries, joint ventures and associates for the year ended 31 December 2020 amounted to approximately RMB20.122 billion (+67.3% YoY) with an aggregate contracted sales area of approximately 653,000 square meters.
Hong Kong is still weathering with various uncertainties this year, for example the policy stance of the new US administration, the change of China-US relation and the influence of Brexit, said Eddie Yue, Chief Executive at Hong Kong Monetary Authority. In face of the current situation, Yue said the Exchange Fund will maintain the high liquidity and defensiveness, such as by raising the cash and bond ratio.
PA GOODDOCTOR (01833.HK) announced that, on 27 January 2021, in line with the Company’s strategic upgrade, the “Ping An Good Doctor” APP was officially renamed as “Ping An Health.” Since the official release of the APP in 2015, the “Ping An Health” APP has accumulated 346 million registered users and over 67 million monthly active users
POWERLONG (01238.HK) announced that on 25 January, the Company issued the first tranche of the 2021 super short term commercial paper at the size of RMB440 million. The interest rate is 5.7% per annum. The commercial paper will be valid for 270 days.
MTR CORPORATION (00066.HK) announced that the tender for "THE SOUTHSIDE", the phase five property development project atop Wong Chuk Hang Station, was secured by KAYSON LIMITED, which was formed by NEW WORLD DEV (00017.HK), Empire Development Hong Kong (BVI) Limited, CSI PROPERTIES (00497.HK) and LAI SUN DEV (00488.HK).
Intel (INTC.US) will make another US$475 million investment into its Vietnam plant to enhance technologies and production of its 5G products and core processors.
Centa-Salesman Index (CSI) last printed at 59.62, up 2.54 pts from 57.08 in the previous week. The research department of Centaline Property, elaborated that the latest index kept ascending, nearing 62.59, the peak prior to the third wave of plague. Such level indicated that the front-line agents maintained the upbeat spirit.
The second-hand market continued to be vibrant, they added, forecasting the CSI to get close to 70 before Chinese New Year.
*CHINESE BANKS FIRM as PBOC says it will not exit “prematurely” from its supportive monetary policies while at the same time keeping debt risks under control, Governor Yi Gang said. Officials will remain mindful of risks, such as a rising macro leverage ratio and higher non- performing loans, he said. BOC (3988 HK +0.7%) ICBC (1398 HK +0.4%) CMB (3968 HK +0.8%).
*EDUCATION STRONG as online education programs are widely promoted in China for the winter holiday. KOOLEARN (1797 HK +7.8%) CH EAST EDU (667 HK +4.5%). CH EDU (839 HK-10%) following top-up share placement, raised up to HK$2.01b by selling 122m shs with a 8.2% discount.
*PETROCHEMS STRONG: CNOOC (883 HK +6%) as investors bargain-hunt for value on the day MSCI and FTSE Russell’s remove CNOOC from part of the index series, CH OILFIELD (2883 HK +6.6%) PETROCHINA (857 HK +2%) ANTON OIL (3337 HK +7.8%).
*E-COMMERCE/SOFTWARE MAKERS WEAK under pressure amid profit-taking after hitting recent record highs. TENCENT (700 HK -1.5%) MEITUAN (3690 HK -3.3%) KINGSOFT (3888 HK -2%) WEIMOB (2013 HK -4.4%).
ALIBABA (9988 HK+2.7%) on speculation Ant's IPO may soon be marching on after PBOC Govenor Yi Gang said Ant could resume its plans for a public offering once problems are resolved. Also Ant looking to sell US EyeVerify and Alibaba Bond still in the wings.
*TECH & COMPONENTS MIXED . SIM TECH (2000 HK +11%) said the group has decided to develop a technological industrial park in Huangjiang Town, the project to serve as the group's southern base in China and support its business in smart manufacturing, mobile phones and data communication products, and will also serve as a supply chain mgmt and logistics centre of the group. Chip makers slumped on profit-taking following recent sector-wide rally. HUA HONG (1347 HK -8%) FIT HON TENG (6088 HK -3.2%) ASM PAC (522 HK -1.5%)
SMIC (981 HK-2.3%).
*TELCOS FIRM CH MOBILE (941 HK +5%) and China Radio & TV signed a "5G Strategy” cooperation agreement, officially joint for construction and sharing of 700MHz 5G networks. CH UNICOM (762 HK +3.1%) CH TEL (728 HK +5%) CH TOWER (788 HK +4%).
*PHARMA MIXED A consortium led by SINOPHARM (1099 HK +5.3%) plans to take private CHINA TRADITONAL MED (570 HK +6.7%) private; trading of CH TCM was halted at 2:30pm.
BIOTECH names slumped amid delayed of final trial data of some China vaccines. CANSINO (6185 HK -9.5%) SINO BIOPH (1177 HK -2%) WUXI APP (2359 HK -7%) INNOVENT (1801 HK -3.6%) WUXI BIO (2269 HK -3.2%).
*LUXURY BRANDS FIRM after LVMH said sales of fashion and leather goods soared 18% on an organic basis in the fourth quarter, topping the 11% estimate. Full-year profit from recurring operations was 8.31 billion euros, which beat the 7.21b euro consensus.
L'OCCITANE (973 HK +24%) hit +29% intraday as margin guidance was sharply raised by the company, after disclosing its sales momentum continued to improve significantly in FY2021 Q3 with overall growth of 4.3% at constant rates. Online channels remained robust and grew 62.1% at constant rates in FY2021 Q3 amid tightened restrictive measures. SAMSONITE (1910 HK +3.5%) PRADA (1913 HK +3.6%).
*HEAVY MACHINERY STRONG WEICHAI POWER (2338 HK+5.4%) proposed non-public issuance of not more than 793,387,389 A-Shares and raising proceeds of not more than 13b yuan.
SANY HEAVY (631 HK +3.9%) and Sany Construction Technology entered into the Acquisition Agreement, pursuant to which Sany Heavy Equipment has conditionally agreed to purchase 70% equity interests of Sany Construction Tech, for RMB17,822,000 in cash.
Nikkei 225 opened higher and tested 28,755 in early trades but failed to break above then reversed and trended lower with support at 28,540 before a small bounce into lunch. PM opened higher after data in-line and market trading sideways 28,600/650. Closed +89pts (+0.3%) @ 28,635
Topix traded in a similar pattern but rallied into the close to end +12pts (+0.7%) @ 1,860
Data Lunchtime Leading Economic Index Nov 96.4 vs 94.3 Oct (F/cast was 96.6)Coincident Index Nov 89.0 vs 89.4 Oct (F/cast was 89.1
Kospi opened slightly higher and tested to 3,180 mid morning but failed to break above, sold down to 3,120 before bouncing back to flat. Then drifted lower to close -18pts (-0.6%) @ 3,123
Kosdaq opened higher and retested 1,000 level in early trades but unable to break above and sold down to 985 level before bouncing back to 998 but again failed to move higher and reversed back to 985 level. Then saw a small bounce before drifting lower to close -8pts (-0.8%) @ 986
Data Pre Market
Consumer Confidence Jan 95.4 vs 89.8 Dec (F/cast was 91)
LG Display reported the fourth-quarter operating profit at a three-year high KRW685 billion (roughly USD622 million), beyond the market estimate; helping sentiment.
TAIWAN Taiex opened higher and tested up to 15,840 in early trades but lacked momentum and reversed and sold down to 15,640 level before trading sideways from late morning but the from 12:30 saw a rally to close +43pts (+0.3%) @ 15,702
After market the Taiwanese government said it has been in talks with the executives of four major domestic chipmakers, who had pledged the production of auto chips will be prioritized amid worldwide under-supply, said Economics Affairs Minister Wang Mei-hua.
CONNECT FLOWS (Northbound flows dropped significantly)
Northbound Rmb 52,020m Buy 26,626m vs 25,394m Sell
Southbound HK$ 35,217m Buy 13,366m vs 21,851m Sell
Northbound Rmb 69,548m Buy 34,786m vs 34,762m Sell
Southbound HK$ 43,034m Buy 13,995m vs 29,040m Sell
MEITUAN (03690.HK) -3.9%
BABA (09988.HK) +2.6%
TENCENT (00700.HK) -2.4%
AIA (01299.HK) -0.9%
HKEX (00388.HK) -0.8%
PING AN (02318.HK) -0.1%
CCB (00939.HK) unchanged
HSI & HSCEI Constituents on Move:
CNOOC (00883.HK) +6.1%
CHINA MOBILE (00941.HK) +5.3%
GEELY AUTO (00175.HK) -5.1%
JD HEALTH (06618.HK) -3.6%
CHINA TOWER (00788.HK) +3.5%
BUD APAC (01876.HK) +3.4%
WUXI BIO (02269.HK) -3.2%
SMIC (00981.HK) -3.2%
CHINA UNICOM (00762.HK) +3.1%
CPIC (02601.HK) +3%
HSMI & HSSI Constituents on Move:
L'OCCITANE (00973.HK) +24.6%, hitting new high
MOBVISTA (01860.HK) +17.3%, hitting new high
GRAND BAOXIN (01293.HK) +15%
CHINA ZHONGWANG (01333.HK) +12.3%
CHINA EDU GROUP (00839.HK) -10.5%
C-MER EYE (03309.HK) +10.5%
KOOLEARN (01797.HK) +10%
CMS (00867.HK) +7.2%, hitting new high
HANG LUNG GROUP (00010.HK) +4.9%, hitting new high
CHINA POWER (02380.HK) +2.3%, hitting new high
MARKET HOURS NEWS
Bytedance, the parent of Tiktok, announced closure of its Indian business in view of continued restrictions on its local services, cited Indian press.
Most adults in developed economies will likely have taken jabs of COVID-19 vaccines in mid-2022, according to a report from The Economist. Middle-income countries like China and India may have to wait until late 2022 or early 2023 for their large-scale vaccination. Poorer economies could start inoculation in 2024.
BYD COMPANY (01211.HK) plans to launch an independent NEV high-end brand in 2022, which will develop products on a brand-new platform and create a standalone dealer network, according to Chinese media. The first auto model is purportedly named "Dolphin", to be rolled out in 2023.
A Sinopharm-led consortium is planning to take private TRAD CHI MED (00570.HK) in a deal that will value the latter at least US$3.3 billion, foreign media citing people familiar with the matter. Trading in the shares of TRAD CHI MED has been halted at 2:27 p.m. today.
Internet platforms like Alibaba's Alipay, JD Finance and DiDi Finance had closed all buying entrances of their banking deposit products for existing users on the night of 25 January, reported Chinese media.
EVERGRANDE (03333.HK) announced the 6th price list for Emerald Bay Phase 2, offering 128 units measuring 222-372 sq.ft. The selling prices range $4.47-7.02 million. Meanwhile, the developer will unveil the latest sales arrangement of 254 flats, to be rolled out on a first-come-first-serve basis on 31 January.
ByteDance's revenue doubled up to US$35 billion last year despite the repercussion of US ban, Bloomberg reported. People with the knowledge of the matter said the company further nudged listing in Hong Kong since Joe Biden was elected as the US President. The related information first appeared on the FY2020 financial report of the company. The recent valuation on ByteDance whopped US$180 billion. The company also pursued to list partial business, such as Douyin, in Hong Kong. Yet, the company's spokesman declined to comment on the matter.
Hong Kong has seen a significant rebound in its position in ECA International's liveability rankings, as the impact of the Covid-19 pandemic on the city was offset by the fall in socio-political tensions and crime rates, according to ECA's latest report. Hong Kong is now the 58th most liveable location, a rise of 35 places from last year. Singapore has retained its place as the most liveable location for Asian expats, continuing a trend which stretches back to 2005.
David Brown, Asia Pacific Deals Leader at PwC Hong Kong, expected China will keep focusing its M&A activities on the domestic field, underpinned by SOE reform, dual circulation, industrial upgrading and other political initiatives. Quite a number of companies will review their operating model and strategy, in need of funds for business reallocation, he added.
Xinhua Article: Alert of Over-the-top NEV Sector Hype. The new energy vehicle sector has been flourishing in recent years, a pivotal driver for economic increment, according to Xinhua’s. However, it urged people to attach significant attention to the incessant market exaggeration, false advertising and safety incidents, thus reminding them to stay alert of the over-the-top speculation in the NEV industry.
JUNSHI BIO (01877.HK) sold down to $72 before seeing a small rebound after local media reported that its shareholder Wang Shujun had disposed of roughly 9.5 million shares and cashed in over $780 million. JUNSHI BIO noted that certain media reports stated that the Company proposes to issue 9.5 million new H shares; the Company clarified that it has not yet been in discussions with any third party, nor has any agreement or arrangement been reached, for allotment or placement of new shares. Shares ended -12%
As of 26 January, Chinese nationals have been vaccinated with 22.767 million doses, said National Health Commission.
China Keda Education yesterday filed for listing, according to the website of the Stock Exchange, with Macquarie as its sole sponsor.
Ant Group plans to sell EyeVerify, a US-based biometric security firm, in the first half of year, reported Financial Times. Ant is in talks with multiple US potential buyers. It will be interesting to see if Beijing puts any restrictions on the sale.
U.S. Agriculture Department announced that Chinese buyers procured 1.36 million tonnes of U.S. corn, the largest booking since last July.
CARDIOFLOW-B (02160.HK), spun off from BC TECH GROUP (00863.HK) will close international placing subscription at 17:00 Thursday, a day ahead of schedule, after harvesting overwhelming responses, IFR reported.
The Government announced the successful offering of US$2.5 billion of green bonds under the Government Green Bond Programme. The offering comprises three tranches of US$1 bn 5-year, US$1 bn 10-year and US$500 mn 30-year green bonds, which will build a comprehensive benchmark curve for potential issuers in Hong Kong and the region. The 30-year tranche is also the first 30-year green bond to be issued by an Asian government, and the longest tenor to be issued by the HKSAR Government. The Green Bonds saw strong demand from global investors, with the 5-year and the 10-year tranche each attracting orders more than 5 times their respective issuance sizes, and the 30-year tranche attracting orders more than 7 times its issuance size.
ANTON OILFIELD (03337.HK) issued the strategic guideline for 2021. In the domestic market, the Group will cooperate with the “14th Five-Year Plan” to focus on the domestic market of natural gas development. In the market of Iraq, the Group will pay close attention to the recovery of oil and gas development after the epidemic and continue to actively seek cooperation opportunities with more international oil companies.
The PBOC mounted the RMB180 billion seven-day reverse repos today with a bidding interest rate staying flat at 2.2%. There was RMB280 billion of reverse repos due today, hence the single-day net withdrawal amounted to RMB100 billion.
PRE MARKET NEWS
BYD COMPANY (01211.HK) announced that it received a notice from Li Ke, a senior executive of the company, saying he intended to reduce his stake by no more than 1 million A shares in BYD Company Ltd., representing no more than 8.39% of the total number of A shares as held by him.
Faraday Future, an EV maker founded by Jia Yueting, is seeking a fresh domestic funding round, Chinese citing insiders. While Zhejiang Geely Holding Group sets out its investment intention, Faraday Future's shareholder EVERGRANDE (03333.HK) has partaken in the financing talks as well. Faraday Future is said to be considering a backdoor listing, where Geely weighs over investing US$30-40 million in the former. Announcement will be made as soon as next week.
FTSE Russell said it is weighing whether to eliminate five more Chinese companies from its indexes since the US Securities Industry and Financial Markets Association (SIFMA) updated the list of companies American investors are banned from holding. The five Chinese companies are CGN POWER (01816.HK), CNNP (601985.SH), CSICL (601989.SH), INSPUR INT'L (00596.HK) and SINOCHEM INTERNATIONAL (600500.SH)
In view of overseas cities' efforts in wooing Chinese gamblers, Chinese Ministry of Culture and Tourism will soon unveil the second blacklist of tourist destination, said Chinese media. On the other hand, Macau, as the only legal gambling city in China, remains attractive to Chinese tourists, Macau casinos told Macau Daily.
The COVID-19 vaccine co-developed by FOSUN PHARMA (02196.HK) and BioNTech was recognized by the HKSAR government for emergency use in Hong Kong. The first batch of vaccine was expected to arrive Hong Kong from Germany in late February. FOSUN PHARMA said the vaccine will be transported to Hong Kong from Germany in 48 hours after production in Germany.
ENTERPRISE DEV (01808.HK) announced that the Group had yesterday disposed 2 million CNE TECH CORP (00611.HK) Shares at the price ranging from HK$0.66 to HK$0.7 per Share on the open market for a cash consideration of approximately HK$1.3408 million.
HSBC HOLDINGS (00005.HK) CEO Noel Quinn defended the bank's move to freeze accounts of some Hong Kong pro-democracy lawmakers at a hearing of the British parliament's Foreign Affairs Committee. Quinn insisted HSBC shall comply with local laws under the request of Hong Kong police, stressing the bank will not quit the Hong Kong market.
FTSE Russell will wait until Wednesday to determine possible revisions of its global equity index series, in hope of further guidance from the U.S. Office of Foreign Assets Control, foreign media reported.
Gina Raimondo, the nominee of U.S. Secretary of Commerce, vowed at the Senate testimony to protect domestic telecommunications networks from Chinese companies, but she refused to commit to keeping Huawei Technologies on the economic blacklist. Asked by Senator Ted Cruz whether she will retain Huawei on the blacklist, Raimondo responded she would review policies consult with lawmakers, industry and allies and make assessments as to what is the best for the national and economic security.
VINDA INT'L (03331.HK) announced annual results ended December 2020. Total revenue rose 2.7% yearly to $16.512 billion. Net profit grew 64.7% yearly to $1.874 billion. EPS equaled $1.565. Final DPS was 37 cents, as compared with 21 cents in the corresponding period of the previous year. During the midday press call they said the recent downfall of commodity prices shored up the gross margin, whilst the group's cost saving initiatives also worked well, said CEO Li Jielin who voiced confidence in the future development, the CEO furthered the RMB appreciation was also salubrious to the group.
The International Monetary Fund (IMF) lifted its 2021 global economic growth forecast by 0.3 ppts to 5.5%, given economic revival driven by Covid vaccine launch. IMF forecast China’s economic growth at 8.1% this year and 5.6% next year.CHINA EDU GROUP (00839.HK) announced that it proposed to place 122 million shares by top-up placing at $16.6 per share, being a discount of 8.19% to the closing price as quoted on the Stock Exchange on 26 January 2021.
SANDS CHINA LTD (01928.HK) announced the appointment of Robert Glen Goldstein, an Executive Director of the Company, as the Chairman of the Board, the Chief Executive Officer and the Chairman of the Nomination Committee of the Company, with effect from January 27, 2021.
In 2020, China's bond market issued a total of RMB57.3 trillion of various kinds of bonds, an increase of 26.5% over the previous year, as the PBOC revealed the operation condition of financial market.
EB SECURITIES (06178.HK) Positive Profit Alert Based on PRC Accounting Standards, the net profit for 2020 may amount to RMB2.415 billion, representing an increase of 325.2% yearly. EPS equaled 52 fen.
TRAVEL EXPERT (01235.HK) announced that it had on 26 January disposed on the open market a total of 10,000 HKEX (00388.HK) shares at an aggregate consideration of $5.3 million. As a result of the Disposals, the Group recognized a gain of $1.2 million. After the sale, the group no longer holds any shares of HKEX.