June 2020 Market Wrap


June 30 HK WRAP HSI +126pts T/O -8.% , Shorts 17.5% MKT CLOSED WEDNESDAY

June 30 HK WRAP HSI +126pts T/O -8.% , Shorts 17.5%                 MKT CLOSED WEDNESDAY


HSI +126pts (+0.5%) 24,427  HSCEI +1pts (Unch) 9,759 T/O HK$122.49bn (-8% DoD)  


EUROPE opened slightly higher in the good China data but then sold off on covid-19 concerns, heeding the WHO warning that the pandemic was accelerating.

US Futures Opened +60pts in Asian time but eased back through the day and currently indicate -75pts.


INDEXES      

CSI 300 Closed +54pts (+1.3%) @ 4,164.  Markets opened higher after the improving China PMI data beat expectations. It then worked higher through the morning to 4,154 at lunch.  PM them saw an initial rally to the day high of 4,174 around 1:30pm before selling down to 4,144 where it found support.  From there it worked higher into the close but failed to regain the day highs.  Markets moving higher despite increased tensions with US, India and EU suggests that Team China is active in the market.

HSI Pre Market +167pts @ 24,627 vs +100pts ADR’s @ 24,401 lead by ecommerce names and local banks after better than expected China PMI data and prompted some shorts to cover pushing the HSI to the day high of 24,598 but unable to break out, the market reversed and sold down to the morning low 24,440 and then traded sideways into lunch.  PM saw initial selling down the day low 24,270 level, slightly below yesterday’s close, on news that China’s NPC had passed the HK national security law.  From there is worked slightly higher into the close but failed to regain the lunchtime level.  The details of the new law are due to be released tomorrow (July 1) which is a holiday in HK and many expect widespread protests against the new legislation.

AFTER MARKET 
The Government announced an extension to the social distancing measures for catering businesses, listed premises and public gatherings and continual inbound travel restrictions. The patronage ceiling on restaurants, bars and other premises will be relaxed from 50% to 80% of their normal seat numbers. Other rules and restrictions shall remain in place. Regarding the gathering ban, the maximum number of gathering participants in public premises is kept at 50, except for those granted with a waiver. The guidance, to last for 14 days, shall come into effect from 3 July 2020 till 16 July 2020.
Government announced that expenditure for the period April to May 2020 was HK$90.5 billion and revenue HK$45.8 billion, resulting in a cumulative year-to-date deficit of HK$44.7 billion.
HK Retail Sales data out May -32.8% improved MoM but missed f/cast
The Hong Kong Monetary Authority announced that the number of mortgage applications in May +38.4% MoM to 15,019.  Mortgage loans approved in May +26% MoM vs April to HK$41 billion.
 

Market and Pre Market News at bottom of page.


Short Selling HSI
Tuesday 17.5% vs 16.5% Monday

Top Shorts Wharf REIC (1997) 58%, Hang Seng Bank (11) 43%, CCB (939) 40%, Henderson Land (12) 39%, Hang Lug PPT (101) 32%, HK & China Gas (3) 31%, MTR (66 HK) 29%, CLP (2) 24%.


COMMENT 

*INSURERS STRONG China says it will allow two-way cross border purchases of wealth products with Hong Kong and Macau, deepening economic ties. Flows under Wealth Management Connect will be handled in a "closed-loop" through the bundling of designated remittance and investment accounts, and will be subject to quotas. CH LIFE (2628 HK +0.4%) CH TAIPING (966 HK +2.6%) NCI (1336 HK +0.8%).

*CHINESE BROKERS STRONG rebounding from yesterday's selloff on concern large commercial banks maybe granted brokerage licenses. HAITONG (6837 HK +2.3%) CITIC SEC (6030 HK +1.2%) GF (1776 HK +1%).

*HKEX (388 HK +3%) after 7 companies launched HK IPOs yesterday and a further eight test the waters today. Together, the 15 firms are looking to raise a total of ~HK$34b, making it the busiest week for the bourse so far this year.

*E-COMMERCE MIXED after India banned a number of Chinese apps on security fears. TENCENT (700 HK +2.4%) has partnered with CICC (3908 HK +0.8%) to establish a technological JV which was proposed last September. This is the first JV for the two firms after Tencent became a strategic investor of the investment bank in 2017 by buying a 4.95% stake. Meanwhile, sector continue to consolidate following recent volatility. ALIBABA (9988 HK unch) JD (9618 HK +0.3%) NTES (9999 HK -1.4%) MEITUAN (3690 HK +0.6%) NETDRAGON (777 HK -0.9%).

*TECH & COMPONENTS FIRM COWELL (1415 HK +47%) it revised higher its interim net profit forecast to be USD25m to USD30m, due to higher camera-modules sales and production yield. SEMICONDUCTOR makers in focus on STAR Board listing rumours; HUA HONG (1347 HK +2.1%) FIT HON TENG (6088 HK +4.5%) SMIC (981 HK +1.7%).

*HK PROPERTY MIXED following China passing of the national security law

NWD (17 HK +0.3%) announced the disposal of two non-core assets in HK, generating HK$3.6b in cash.

CK ASSET (1113 HK -1.2%) released another 143 flats in the fourth price list of Sea to Sky in Lohas Park at an average price of HK$17,295 psf after discounts.

SINO (83 HK +0.8%) SHKP (16 HK +0.7%) HYSAN (14 HK +1.2%) WHARF (4 HK -2.5%).

*LUXURY BRANDS FIRM after L'OCCITANE (973 HK +3.3%) reported FY net profit -1.6% YoY as virus hurt sales. Net profit for year ended March 31 fell to 116.3m euros, while net sales +15% to 1.64b euros at reported exchange rates.

SAMSONITE (1910 HK +0.6%) PRADA (1913 HK +1.5%).

*OTHER MOVERS:

TRAVEKSKY (696 HK -5.5%) PROFIT WARNING 1H profit could drop by 100% amid pandemic.

CHINESE TRADITIONAL MED Sector advanced as laggard, playing catch up amid increase demand on traditional med during the pandemic; TRAD CHI MED (570 HK +6.9%) TONG REN TANG (3613 HK +3.1%).CH GRAND PHARM (512 HK +3.8%).


CONNECT  FLOWS (No Northbound flows with HK closed Wednesday)

Shanghai Northbound

Southbound HK$14,596m Sell 6,536m : 8,060m Buy

Shenzhen

Northbound

Southbound HK$13,774m Sell 5,039m : 8,735m Buy


DATA 

CHINA data Manufacturing PMI Jun 50.9 vs 50.6 May (F/cast was 50.2)

Non Manufacturing PMI Jun 54.4 vs 53.6 May (F/cast was 52.1)

Manufacturing Better than expected a government lifted covid-19 restrictions

Output grew the most in three months (53.9 vs 53.2 in May)

Improving New orders (51.4 vs 50.9) and buying levels (51.8 vs 50.8) went up for the fourth month in a row and at a faster pace.

Export sales (42.6 vs 35.3) and employment shrank at softer rates (49.1 vs 49.4), with supplier's delivery time was unchanged (at 50.5). Prices data showed input cost advanced for the second month running and at a faster pace (56.8 vs 51.6), while selling prices rose following a fall in May (52.4 vs 48.7). Looking ahead, sentiment eased but remained solid (57.5 vs 57.9).

Non Manufacturing This marked the fourth consecutive month of growth in the service sector and the strongest since January.

New business expanded further (52.7 vs 52.6 in May), amid softer declines in both overseas sales (43.3 vs 41.3) and employment (48.7 vs 48.5). Meantime, suppliers' delivery time shortened (52.1 vs 52.9).

On the price front, input cost increased for the second time in four months (52.9 vs 52.0), while selling prices decreased the least since January (49.5 vs 48.6).

Finally, sentiment weakened but remained noticeably solid (60.3 vs 63.9).

China's services trade deficit May US$9.9 billion +9.1% MoM according to data from State Administration of Foreign Exchange.

China yesterday (29 June) confirmed 19 additional cases of coronavirus infection, among which eight were local transmission in Beijing and Shanghai, National Health Commission of the PRC reported.

HONG KONG 

Centre for Health Protection said there were no new local covid-19 cases today but it was investigating four additional confirmed cases

After Market RETAIL SALES May -33.9% YoY vs -37.5% Apr revised (F/cast was -30%)

The revised estimate of the value of total retail sales in April 2020 decreased by 36.1% compared with a year earlier. A government spokesman said that retail sales continued to fall sharply in May from a year earlier, as inbound tourism remained at a standstill and job and income conditions were weak. Nonetheless, the decline narrowed further from that in April thanks to the stabilised local epidemic situation and consequential easing of social distancing measures.


Active Heavyweights
HKEX (388.HK) +3.1% hits new high
TENCENT (700.HK) +2.6% 
ICBC (1398) -1.1%
CCB (939.HK) +0.6%
HSBC (5.HK) +0.4%
PING AN (2318.HK) -0.4%
AIA (1299.HK) -0.1%

HSI & HSCEI Constituents on the move
GALAXY ENT (27.HK) +3.8%
CHINA GAS HOLD (384.HK)-3.4%
PSBC (1658.HK) -3.1%

HSMI & HSSI Constituents on the move
VIVA BIOTECH (1873.HK) +15.7%, hits new high
LIFETECH SCI (1302.HK) +14.6%, hits new high
TCL ELECTRONICS (1070.HK) +13.8%
JXR (1951.HK) +12%
HUABAO INTL (336.HK) +10%
MICROPORT (853.HK) +7%, hits new high
KINGDEE INT'L (268.HK) +6%, hits new high

REGIONAL MARKETS 

JAPAN Opened higher Unemployment data was in-line but Industrial Production remained weak and missed forecasts. Markets trades sideways for most of the day and dipped at the end to close +1.3%

S KOREA Opened higher despite the weak pre market data. Kosdaq initially sold down into the red before rebounding back to its opening level but then dipped at the end to close +0.5%. Kospi trended higher all day before selling off to close +0.7%.

TAIWAN Opened higher and initially drifted lower but from mid morning worked higher. Closed +0.7%


NEWS
MARKET HOURS 

Wheelock Properties had yesterday uploaded sales brochures for KOKO HILLS, said Managing Director Ricky Wong.  Show flats will be available to the media as soon as tomorrow, while a price list will be issued this week the soonest.
Macao Government Tourism Office (MGTO) had formulated a "three-speed" tourism recovery plan, under which it will team up with BABA-SW (9988.HK)'s Alipay and Fliggy to lure residents from neighboring Mainland cities through live-streaming and prepaid travel packages.
People's Court of Nanshan District of Shenzhen has ruled for the plaintiff TENCENT (700.HK)'s suit to seize and freeze RMB16.2406 million worth of assets under Lao Gan Ma, Chinese media reported.  TENCENT said the Chinese chili sauce manufacturer has put advertisements worth tens of millions of RMB on the media but turned a blind eye to the money in arrears under the contract for a protracted term.
At lunchtime  TSUI WAH HLDG (1314.HK) annual results ended March 2020. Loss amounted to $317 million vs net profit of $4.741 million in the previous year. Basic LPS equaled 22.49 cents. No final dividend was declared, against last year's 1 cent.
Yang Zhao, head of BABA-SW (9988.HK)'s Taobao Live Operations, had allegedly received improper benefits (e.g. catering, accommodation and gifts) from multiple live-streamers during 2018 and 2019, as Chinese media cited the group's internal memo.  Hence, Zhao was dismissed over rule-breaking and would be ineligible for rehire.
At Lunch FAIRWOOD HOLD (52.HK) annual results ended March 2020. Net profit HK$60.867 million, -66.2% YoY, EPS equaled HK47.03 cents. Final DPS was HK50 cents. Full-year DPS was HK73 cents, equivalent to a payout ratio of 155%.
TENCENT (700.HK) Releasing some 40 game products and brands together with an interactive entertainment setup, Tencent Games has showcased its comprehensive business layout and understanding and pursuit of game diversity.
The published titles include PUBG Mobile, Craz3 Match, and Street Fighter: Duel.
Chinese General Administration of Customs has slammed a temporary ban against the meat import from three plants in Brazil due to concerns about the coronavirus pandemic, Reuters citing Brazilian Agriculture Ministry.
Rating and Valuation Department announced that private domestic price index printed at the six-month high 384.8 in May 2020, +1.9% MoM but -3% YoY. During the first five months of 2020, the index has grossed nearly 1.48% of growth.
The Government will at the beginning of next week disburse wage subsidy to the fourth batch of employers under the first tranche of Employment Support Scheme, involving 11,000 employers and 274,000 employees and a sum of $6.3 billion, said Chief Executive Carrie Lam. The Government will hopefully complete the review of filings for the first tranche of Employment Support Scheme by mid-July, while filings from 60,000 employers and 30,000 self-employed individuals are still pending handling at this moment, added Lam.
Construction of
The Londoner Macao is speeding up instead of slowing down given zero visitor arrival, Macao Daily quoting from SANDS CHINA LTD (01928.HK) President Wilfred Wong. The project will have phased openings in 2020 and 2021 as scheduled.  Wong suggested the 2H20 gaming outlook would depend heavily on the timing of visitor arrivals to Macao. He would be confident of the gaming sector if visitors are coming to the city. Otherwise, casino operators will be faced with tougher time.
The Kowloon Motor Bus (KMB) has decided to extend the interchange discount schemes with Hong Kong Tramways (HKT) and AMS Public Transport (AMS) for one year till 30 June 2021. All terms and conditions remain unchanged.
RUMOUR The "Hong Kong National Security Law" bill has been unanimously passed at the Standing Committee of the National People's Congress.
NEW WORLD DEV (17.HK) announced the disposal of two non-core assets in Hong Kong, generating HK$3.6 billion in cash.  The assets were a 45% interest in certain properties at Shun Tak Centre, Sheung Wan, together with EIGHT KWAI FONG, a serviced apartment located in Happy Valley.

PRE MARKET
FITCH In Global Economic Outlook
, predicted the global economic growth to slide 4.6% this year. The ratings agency moved up China's 2020E economic growth from 0.7% to 1.2%.

CHINA PMI DATA was out at 9am

WUXI BIO (2269.HK) said the Company and the Placing Agent entered into an agreement to place 45 million Primary Placing Shares at HK$137 per Share, representing a discount of 7.9% to the closing price of HK$148.7 per Share yesterday (June 29). The Company expected the net proceeds to be HK$6.123 billion.

China's rollout of the Hong Kong national security law will undermine the territory’s autonomy and heighten the risk of sensitive US technology being diverted to the People’s Liberation Army or China's Ministry of State Security, foreign media citing US Commerce Secretary Wilbur Ross' statement. The US Commerce Department is hence evaluating further actions to eliminate special treatments to Hong Kong. The US will halt exports of defense equipment and dual-use technologies to Hong Kong, said Secretary of State Mike Pompeo.

China Securities Regulatory Commission stated that it has approved the applications from SMIC and Earth-Panda for IPO registration on Sci-tech Innovation Board.

China's tourism deficit shrank to US$6.2 billion, logging a new low since the service trade statistics were reported in 2015, State Administration of Foreign Exchange reported. During the month, deficit from intellectual property right usage reached US$2.9 billion, logging 13-month high and accounting for 28.9% of the total, which surpassed logistics deficit to be the second largest source of service trade deficit.


Read More  

June 29 HK WRAP -250pts with T/O +38% and Shorts rising

June 29 HK WRAP -250pts  with T/O +38% and Shorts rising


HSI -249pts (-1%) 24,301  HSCEI -96pts (-1%) 9,758 T/O HK$133bn (+38.4%)  


EUROPE opened flat/lower but then trending higher in choppy trading

US Futures Opened -175pts as Asian trading started worked their way back to flat as Europe opened and currently indicating +150pts.


INDEXES      

CSI 300 Closed -29pts (-0.7%) @ 4,110.  Markets re-opened slightly lower after the two day holiday last week but then sold down as investors re-acted to rising number of covid-19 cases. They trended lower through the morning to the 4,100 level in choppy trading before a small bounce into lunch.  PM saw the choppy trading continue down to the day low 4,093 before a 100pt rally into the close.
Sentiment weak as China says it will retaliate and put visa restrictions on US citizens it believed to be meddling in HK matters.  Covid concerns remain,  The weekend Industrial profits number whilst showing signs of improvement was pre the recent covid-19 outbreak in China and the rising cases in the US.
HSI Pre Market +77pts @ 24,627 vs -183pts ADR’s @ 24,366  Despite weakness in ECommerce names but then the market sold down to the 24,331, slightly below where the ADR’s had indicated.  It then traded sideways fro the first hour before selling down 300pts into lunch.  PM saw an initial 110pts bounce, which was gradually sold down over the next 40 mins but then the market worked higher (+150pts) over the next 90 minutes before easing back into the close.  HSI ticked low in the closing auction.
Sentiment -VE as National Security Law could be imposed as soon as Wednesday but HK has still not been told the detail.  Snippets are  except that to release the detail might cause further unrest!  Not a good sign

AFTER MARKET 
SHIMAO GROUP (813.HK) announced that it had on 29 June 2020 submitted a listing application to the Stock Exchange for the proposed spin-off of its property management services, Shimao Services.
SUNCITY GROUP (1383.HK) announced that "HOIANA”, a JV between the Group and its investment partners, has officially opened for preview on 28 June. HOIANA is now ready to introduce some of its first operational facilities, such as the gaming facilities, the Golf Club, and the Hoiana Hotel & Suites managed by Rosewood Hotel Group.
The People's Bank of China announced that in order to facilitate cross-boundary investment for residents in the Greater Bay Area, the bank, together with Hong Kong Monetary Authority and Monetary Authority of Macao, has decided to switch on cross-boundary wealth management connect pilot scheme. The official launch time and implementation details will later be disclosed. Relevant regulators in Hong Kong, Macau and China will respectively adopt all necessary measures to build an effective mechanism under the cross-boundary wealth management connect scheme for the purpose of upholding investor interest and timely coping with illegal behavior and misconduct pursuant to their respective management principle.
HKEX (388.HK) announced that it will shorten the listing cycle of structured products to three trading days from five trading days.  Issuers will be able to list their structured products, such as Derivative Warrants (DW), Callable Bull/ Bear Contracts (CBBC) and Inline Warrants (IW), on the cash market for trading on the third trading day after their submission of term sheets. The new listing cycle will enhance market efficiency on product issuance, and help increase product choices for investors. Products launched on or after 13 July 2020 will use the new listing cycle.
REGINA MIRACLE (02199.HK) results for the year ended 31 March 2020. Net profit +2.7% yearly to $290 million with EPS of 23.7 cents. A final dividend of 4 cents was declared, against 4 cents over a year ago.
KANGJI MEDICAL (9997.HK) concluded the day at $27.6, up $13.72 or 99% vsthe listing price $13.88, on volume of nearly 127 mn shares and turnover of $3.308 bn. Excluding the handling fees, a book gain of $6,860 was reported per board lot of 500 shares.
HYGEIA HEALTH (6078.HK) concluded the day at $26, up $7.5  +40.5% against the listing price $18.5, on volume of 78.68 mn shares and turnover of $1.913 bn. Excluding the handling fees, a book gain of $1,500 was reported per board lot of 200 shares.
CICC (3908.HK) and TENCENT (700.HK) formed a joint venture, which is held 51% by the former with a registered capital of RMB500 million, reported Chinese media.  The JV is engaged in information technology consultation and other services.
 

Market and Pre Market News at bottom of page.


Short Selling HSI 
Monday 16.5% vs 14.7% Friday

Top Shorts Hang Seng Bank (11) 57%, Galaxy Ent (27) 40%, Henderson Land (12) 36%, Hengan (1044) 36%, Sino Land (83) 34%, MTR (66 HK) 34%, CLP (2) 32%, Wharf REIC (1997) 32%, Sunny Optical (2382) 31%, Petrochina (857) 31%, China Shenhua (1088) 30%, Sands China (1928) 30%, Hang Lug PPT (101) 29%, China Unicom (762) 26%, HK & ChinaGas (3) 25%, Mengniu Dairy (2319) 25%.

COMMENT

*CHINESE BANKS MIXED. PBOC to implement new monetary tools to make sure liquidity reaches the real economy. The central bank said it will increase the proportion of smaller company, credit and manufacturing loans, and continue to lower lending rates. CCB (939 HK +1%) BOC (3988 HK -0.7%) CMB (3968 HK +0.7%) ABC (1288 HK -1.2%).

*CHINA BROKERS WEAK on the news that China plans to offer brokerage licenses to commercial banks, as the country is trying to foster big-sized brokerages amid the opening up of its finance market to global firms, as well as promote an international expansion of its brokerage industry. HAITONG (6837 HK -4.4%) CITIC SEC (6030 H K-4.7%) HUATAI SEC (6886 HK -3.5%) CGS (6881 HK -4.4%) GF SEC (1776 HK -3.3%).

*AUTO MAKERS WEAK China's May auto imports and exports -10% MoM said CAAM. Import and export volume totalled US$8.33b last month, -36.9% YoY. Imports -47.2% YoY to US$3.78b, Export -24.6% YoY to US$4.55b. GAC (2238 HK-5.6%) GEELY (175 HK-2.8%) DONGFENG (489 HK-4.7%).

*PHARMA/MED MIXED rotation from recent flyers to those with more certain prospects. CANSINO (6185 HK +0.6%) coronavirus vaccine gets China military drug approval. It is reported that its recombinant novel coronavirus vaccine received military specially-needed drug approval for one year on June 25.

SINOPHARM (1099 HK +0.7%) says 2nd Covid vaccine found to be safe in testing. 3SBIO's (1530 HK -0.3%) Sunshine Guojian gets FDA clinical drug trial approval for anti-IL-4RA monoclonal antibody.

*IPOs HYGEIA HEALTHCARE (6078 HK +40%) KANGJI MED (9997 HK +99%) on debut.

*E-COMMERCE WEAK on concern of rising completion

ALIBABA (9988 HK -2.4%) successfully published another Sango-based CCG named Sango Fantasy World.

TENCENT (700 HK +0.2%) is testing twitch-line game-streaming service in the US. It held its annual game conference on 27 June and disclosed major updates for nine of its existing game titles. It also displayed over 50 games in its pipeline.

MEITUAN (3690 HK -2%) JD.COM (9618 HK -2%) NETDRAGON (777 HK -3.9%).

*TECH & COMPONENTS WEAK on concerns over deteriorating China/US relations. SMIC (981 HK -7%) and HUA HONG (1347 HK -5.3%) after recent rally on STAR Board listing news.

AAC (2018 HK -2.1%) SUNNY (2382 HK -2.3%) TONGDA (698 HK -6.2%) as China retaliates on US visa restrictions on some Chinese officials, announced imposing visa restrictions on some US individuals who are linked with HK troubling making.

*HK PROPERTY WEAK ahead details on the national security law on HK.

CK ASSET (1113 HK -1.5%) has released 238 flats in the third price list of Sea to Sky in Lohas Park at an average HK$16,599 psf after discounts and 4.9% higher than the first price list, after selling nearly all 462 flats offered in the first two batches.

HYSAN DEVELOPMENT (14 HK -1.8%) warns it may record loss for the 6 months through June.

SHKP (16 HK -1.7%) NWD (2909 HK -3.9%) HENDERSON LD (12 HK -1.4%).

*HK RETAILERS MIXED. LUK FOOK (590 HK +3.8%) rebound on speculation the worst may be over, after it reported net profit -42% YoY for the year ended March 31 to HK$866m, as the Sino-US trade tensions, social unrest in Hong Kong and the coronavirus pandemic weighed on sales in HK and Macau.

CHOW TAI FOOK (1929 HK -1%) SASA INTL (178 HK -3.2%) BONJOUR (653 HK +3.6%) GIORDANO (709 HK -3%) I.T. (999 HK -1.7%).

*GAS PROVIDERS WEAK brokers downgraded CHINA GAS (384 HK -8.6%), after it reported net profit +12% YoY for the year ended March 31 to HK$9.19b.ENN ENERGY (2688 HK -1.4%) CR GAS (1193 HK -3.5%).

*OTHER MOVERS: 

FLAT GLASS (6865 HK +9.2%) hopes of increasing demand, after the total size of 2020 state subsides for solar power generation were greater than expected.

COSCO SHIP ENERGY (1138 HK -8%) as crude oil in floating storage remains 289% higher than a year ago.

SHANDONG WEIGAO (1066 HK +6.9%) rallied following posting a 60m shares block trades at HK$15.07, a discount of 6.9% from today's open


CONNECT  FLOWS 

Shanghai

Northbound RMB34,799m Sell 18,131m : 16,688m Buy

Southbound HK$18,606m Sell 9,444m : 9,162m Buy

Shenzhen

Northbound RMB47,42m Sell 23,702m : 23,719m Buy

Southbound HK$15,322m Sell 7,236m : 8,087m Buy


DATA 

CHINA No data but out Sunday

Industrial Profits (YTD) May -19.3% vs -27.4% Apr F/cast was -22%.

Better than forecast +VE; an improving trend +VE, and follows the trend seen in the Industrial Production Data. BUT partly due to a fall in purchase prices and with the recent resurgence of covid-19 cases in June PLUS the fact that the recent Retail Sales data was -VE, so the upside of this data is limited.


HONG KONG 

Centre for Health Protection said there were no new local covid-19 cases today but it was investigating four additional confirmed casesAfter Market Total Exports Value May -7.4% YoY vs -3.7% YoY in April 2020 to $317.6 bn,. (F/cast was -5.5%)Average wage rate for all the selected industry sections surveyed, March +2.2% YoY in nominal terms.

About 56% of the companies reported increase YoY in average wage rates 39% of the companies recorded decrease in average wage rates YoYThe remaining 5% reported virtually no change in average wage rates.

After discounting the changes in consumer prices as measured by the Consumer Price Index (A), the overall average wage rate for all the selected industry sections surveyed decreased by 0.3% YoY in real terms.

A Government spokesman noted that overall wages continued to increase in nominal terms in March 2020 over a year earlier, but the rate of increase decelerated further to the slowest in close to a decade as the threat of COVID-19 seriously disrupted a wide range of economic activities. After discounting for inflation, overall wages declined slightly in real terms over a year earlier.


Active Heavyweights
AIA (1299.HK) -2.3%
HSBC (5.HK) -1.8%
CCB (939.HK) +1%
PING AN (2318.HK) -0.7%
ICBC (1398) -0.2%
TENCENT (700.HK) +0.2% 
HKEX (388.HK) +0.2%

HSI & HSCEI Constituents on the move
CHINA GAS HOLD (384.HK) -9%
PICC P&C (2328.HK) -5.5%
CITIC SEC (6030.HK) -4.7%
SWIRE PACIFIC A (19.HK) -4.7%
CSPC PHARMA (1093.HK) -3.9%

HSMI & HSSI Constituents on the move
STELLA HOLDINGS (1836.HK) -11.2%
TIANNENG POWER (819.HK) +7.9%, hits new high
WEIGAO GROUP (1066.HK) +6.9%, hits new high
XINYI SOLAR (968.HK) +5.2%, hits new high
CHINA VAST (6166.HK) +1.5%, hits new high
YIHAI INTL (1579.HK) +1.4%, hits new high


REGIONAL MARKETS 

JAPAN Opened lower and sold down before rebounding but dropped again after lunch and traded sideways before a final dip at the end to close -2.3%

S KOREA Opened lower Kospi then worked higher for the first 90 minutes before reversing. Kosdaq trading sideways for the first 90 minutes but then sold down. Both traded sideways in the PM to close Kosdaq -2.1%, Kospi +1.9%

TAIWAN Opened lower and drifted lower in the morning but then traded sideways to close -1%


NEWS
MARKET HOURS 

Wheelock Properties has obtained the pre-sales consent for the phase 1 development of its Lam Tin residential project, "KOKO HILLS", said Managing Director Ricky Wong. The sales brochures will be made available within 24 hours, he added.
BABA-SW (9988.HK) today (29 June) sealed a cooperation deal with Galanz, a Chinese electronic home appliance brand, pursuant to which both sides will

strike comprehensive digital cooperation in product innovation, new product R&D, IoT application and other fields. The partnership with Galanz is one of the initiatives to boost new consumption, tap new markets, and accelerate digital upgrade of the home appliance industry, said BABA-SW.

HK National Security Law Voting Draft Submitted to NPC Meeting for ReviewLi Fei, Chairperson of National People's Congress Constitution and Law Committee, had reported his opinions on revising a draft law on safeguarding national security in HKSAR at the meeting of 13th NPC Standing Committee, reported Xinhua. Following, the Chairman of NPC Standing Committee decided to submit the voting draft of the bill for review at the NPC meeting.
Some red-chip companies have keen interest in the ChiNext, anticipating the board to be one of the top-picks for their comeback to the A-share market, reported Shanghai Securities News. Red-chip enterprises mulling over ChiNext listing should be high-tech and strategic emerging players aligning with national strategy, keeping abreast of core technology, and having a high degree of market recognition, according to an official notice. Shenzhen Stock Exchange has also made six major arrangements targeting ChiNext IPO and trading of red-chip firms.
The Government announced that since last Friday (June 26), the Employment Support Scheme (ESS) Secretariat has commenced the disbursement of wage subsidies to the third batch of 30,016 successful employer applicants, with subsidies totalling around $7.7 billion and total committed headcount of paid employees about 335,000.
Financial Secretary Paul Chan wrote on his blog that Hong Kong National Security Law helps the city restore social order and public security, while a stable environment is salubrious to business, investment and livelihood. Chan quoted from industry players that there has been no significant capital outflux from the financial hub as yet, as various findings indicated an ongoing capital influx thereto, leaving the market ample in liquidity.

PRE MARKET

XIAOMI-W (1810.HK) posted a car silhouette poster titled "Make a car? We are serious!" on Weibo earlier, sparking concerns over the firm setting foot icarmaking. However, XIAOMI-W clarified it had no intention to build vehicles; instead, it is going to launch a smart remote control car model.

KINTOR PHARMA-B (9939.HK) announced that Suzhou Kintor Pharmaceutical, a wholly-owned subsidiary of the Company, and JD Healthcare entered into a framework agreement pursuant to which the parties will embark on in-depth collaboration in respect of the sales and marketing of Pyrilutamide (KX-826) on the online pharmaceutical retail platform JD Pharmacy operated by JD Healthcare.

Indian Confederation of All India Traders (CAIT) Secretary General Praveen Khandelwal reprimanded Manu Kumar Jain, Managing Director of XIAOMI-W (1810.HK) India, for hurting the sentiments of millions of Indians and dishonoring the sacrifice of Indian soldiers by stating that the boycott China sentiment only exists on social media and that XIAOMI-W's local business has not been affected.

ORIENTAL WATCH (398.HK) annual result ended 31 March 2020. The net profit amounted to HK$100 million, down 27.4% yearly. EPS was HK17.59 cents.DPS totaled HK13 cents (against HK21.5 cents a year ago), including final DPS of HK8 cents and special DPS of HK5 cents.

CANSINOBIO-B (6185.HK) announced that, the Recombinant Novel Coronavirus Vaccine (Adenovirus Type 5 Vector) (Ad5-nCoV), a vaccine jointly developed by the Company and Beijing Institute of Biotechnology, Academy of Military Medical Sciences, had received Military Specially-needed Drug Approval with a valid period for one year from Health Bureau of the Logistics Support Department of the Central Military Commission on June 25, 2020.

US Commerce Secretary Wilbur Ross said the country is recovering from the pandemic with some little interruptions. He suggested the economic revival may be pushed back from the third quarter to the fourth quarter, and it is crucial for the recovery to be driven by consumer spending.

PRC Warns of US that its actions may jeopardized 1st Phase Trade Deal if the US outs pressure on China over affairs China considers to be off limits including matters concerning Hong Kong, Taiwan, etc., reported WSJ. Yang Jiechi, Director of the Office of the Central Commission for Foreign Affairs, had listed such issues during his meeting with US Secretary of State Mike Pompeo, according to the report.

KING FOOK HOLD (280.HK)  +0.005 (+1.852%)   announced the results for the year ended 31 March 2020. Net profit grew 6.4 times yearly to $5.692 million with EPS of 0.62 cents. A final dividend of 0.2 cents was declared.

Read More  

June 26 HK WRAP HSI -232pts on light T/O and Shorts dropped to 14.7%

June 26  HK WRAP HSI -232pts on light T/O and Shorts dropped to 14.7%


HSI -232pts (-0.9%) 24,550  HSCEI -84pts (-0.8%) 9,853 T/O HK$96.11bn (-16.7%)  


EUROPE opened higher despite the US bank stress test results, rising covid cases and the IMF warning.

US Futures back to flat having been -175pts earlier after the US Bank stress tests and news of share buyback being banned and dividend payments at current levels. Also poor results from Nike!


INDEXES      

CSI 300 closed re-opens on Monday 

HSI Pre Market -83pts @ 24,697 vs -159pts ADR’s @ 24,622  with weakness in the e-commerce names however the wider market initially rallied to the day high of 24,757  but lacked momentum to recover Wednesday’s closing level. T/O light with China closed until Monday and some HK investors taking a long weekend. News of poor results after US markets closed from Nike also weighing on investors minds ahead of the next US earnings season.  Plus news that the US Govt has prepared a list of Chinese companies under the control of the PLA for possible sanctions a concern. AND restrictions on US Banks doing business with those the US thinks responsible for the imposition of the National Security Law on Hong Kong (wonder who Carrie Lam banks with?) THE NPC will vote on Sunday regarding the law, the details of which have not been released for fear ti would cause unrest in Hong Kong which did not help sentiment.   ALSO a increase in local covid-19 cases locally and in the US.

AFTER MARKET 
CKH HOLDINGS (1.HK) stated that Vodafone Hutchison Australia (VHA) has welcomed the announcement that the Supreme Court of New South Wales today made orders approving the scheme of arrangement between VHA and TPG Telecom (TPG). The Scheme is to be implemented on 13 July 2020.
LUK FOOK HOLD (590.HK) annual results ended March 2020. Revenue -29.2% yearly to HK$11.234 billion. Net profit HK$866 million, -42% yearly. Basic EPS equaled HK$1.48. Final DPS was HK$0.5, vs HK$0.6 a year ago. Full-year DPS was HK$1 vs HK$1.15 in the previous year.
Christine Lagarde: World Probably Passes Worst Days of Coronavirus Crisis The world should have sailed past the worst of the coronavirus crisis, said European Central Bank President Christine Lagarde, who predicted economic recovery to be "incomplete" and probably "transformational”.  I think a bold statement considering how little we know about covid-19.
Michael Wong: To Sell announced the Land Sale Programme for the second quarter of Year 2020/21, when the Government plans to sell two commercial sites situated in New Central Harbourfront and Tung Chung, measuring 267,000 sq.m. in total. In particular, the 150,000-sq.m. New Central Harbourfront site is to be developed as a landmark, which will provide large-scale public open space and landscaped decks on top of offices and commercial facilities, and be sold in a "two-envelope" tendering approach. Land disposal income is not the only concern for the Government when it comes to strategic commercial sites, furthered Wong.
Also he announced Sai Kung, Tai Po Residential Sites by Tender in 2Q of 2020/21, Involving 160 Units.  MTR to Sell Lohas Park Phase 13 by Tender in 2Q of 2020/21, Involving 2,550 Units
CHINA GAS HOLD (384.HK) annual results ended March 2020. Net profit HK$9.188 bn, +11.7% yearly. EPS was HK$1.76. Final DPS was HK40 cents. Full-year DPS was HK50 cents, up 13.6% yearly.
HKMA: Retail Banks' 1Q Pre-tax OP Slips 7.7% YoY; No Notable Fund Outflow from Banking System. The aggregate pre-tax operating profit of retail banks declined by 7.7% year-on-year in the first quarter of 2020, according to Hong Kong Monetary Authority's quarterly report. Total deposits remained stable in the first quarter. Among the total, both Hong Kong dollar deposits and US dollar deposits only edged down by 0.1%. Fluctuations during the period were within normal ranges, and there was no noticeable outflow of funds from the banking system.

HYGEIA HEALTH (6078.HK), to be listed next Monday, opened at $22 in

gray market, up 19% against the listing price of $18.5, and last traded at $23.55, up 27% against the listing price, on volume of 560,000 shares, PhillipMart data showed.

KANGJI MEDICAL (9997.HK), to be listed next Monday, opened at $24 in gray market, up about 73% against the listing price of $13.88, and last traded at $24.4, up nearly 76% against the listing price, on volume of 3.12 million shares, PhillipMart data showed.

Centa-City Leading Index (CCL) last printed at 181.12, a 30-week high, up 0.21% weekly. 

CCL Mass rose 0.13% weekly to 184.96. 
CCL (small-and-medium units) climbed 0.13% weekly to 182.33. 
CCL (large units) lifted 0.65% weekly to 174.73.
The four major CCL indices rallied for two weeks to set new highs,
 

Market and Pre Market News at bottom of page.

Short Selling HSI Friday 14.7% vs 17.5% Wednesday

Top Shorts Hang Seng Bank (11) 44%, MTR (66 HK) 34%, Wharf REIC (1997) 31%, Mengniu Dairy (2319) 27%, China Shenhua (1088) 245, Shenzhou Int (2313) 24%, Country Garden (2007) 24%.


COMMENT 

*PETROCHEMS WEAK Despite a rally in oil overnight, WTI +2.9% BRENT +3% after Russia slashed its crude exports, but sector traded under pressure on concern of slowing demand in China as the nation's economic growth remained depressed. CNOOC (883 HK -1.3%) CH OILFIELD (2883 HK -2.6%) PETROCHINA (857 HK -1.9%) SINOPEC (386 HK -1.2%).

*TELCOS WEAK After US disclosed a list of firms allegedly backed by the Chinese military, opening up the businesses to possible sanctions. CH TEL (728 HK -3.5%) CH MOBILE (941 HK -2.6%) CH UNICOM (762 HK -2.5%).

*E-COMMERCE WEAK consolidation after recent gains. TENCENT (700 HK -1.2%) despite it and Pokemon announcing a jointly-developed new game for smartphones and Nintendo's Switch console. Pokemon Unite, created partly by Tencent's Timi Studios, allows players to compete in five-versus-five battles, using the powers and attacks of Pokemon creatures, pending release date.

ALIBABA (9988 HK -3%) News that Softbank’s Son left the board was by mutual agreement as Jack Ma left Softbank’s board. Softbank is still entitled to nominate a member to Alibaba’s board

MEITUAN (3690 HK -2.6%) JD (9618 HK -0.3%).

PA GOOD DOC (1833 HK +3.6%) Haitong Sec. initiated with an "outperform".

*TECH & COMPONENTS MIXED as APPLE closed 14 stores in Florida due to rising covid-19 cases, bringing the number shut to 32 after recently reopening

AAC (2018 HK -1.3%) TONGA (698 HK -3%) TRULY (732 HK -4.7%)

SUNNY (2382 HK +5.4%) jumped after a broker's upgrade.

Selective semiconductor names continued to see support on STAR Board listing speculation. HUA HONG (1347 HK +5.7%) SMIC (981 HK +3.3%).

COWELL (1415 HK +5.3%) Annoucned +VE profit alert, expects a significant improvement in the group's profit for the six months ending 30 Jun 2020 vs the same period in 2019.

*HK PROPERTY WEAK concerns over impact of the national security law on HK is raising concerns on the city's autonomy for some investors. Plus HSBC raised its Hibor mortgage rate and reduced the cash back offer on concerns for the outlook for Hong Kong Property BUT subscriptions for the first batch of Sea To Sky flats ends today and were 25.3 times oversubscribed as of yesterday, with more than 11,700 checks submitted. Which shows the strength of local resident demand and some mainland Chinese demand. CK ASSET (1113 HK -0.7%) will launch sales of another batch of 462 units at Sea To Sky tomorrow, at an average of HK$16,275 psf.

LKS Foundation bought 1.33m CK ASSET (1113 HK) shares June 18-23, avg price from HK$46.9328-HK$47.2822/shr.

HENDERSON (12 HK -1.1%) SHKP (16 HK -0.4%).

*CHINA PROPERTY MIXED focus on developers that have spin-off plans.

KWG's (1813 +11%) property management arm KWG Living has filed an IPO application in the HKEX to raise more than US$200m.

AGILE GROUP (3383 HK +4%) plans to spin off A-City Group, which provides ecological landscaping and interior decoration in HK.

BUT POLY PROP (119 HK -2%) despite expecting to record a 75%-85% YoY decrease in interim net profit ending 30 June 2020.

*SPORTSWEAR MAKERS WEAK after NIKE reported its Q4 loss per share of 51 cents after US markets closed which was substantially worse than the consensus for profit of 10 cents. The company said results "were significantly impacted" by store closures, and shipments to wholesalers fell by half.

XTEP (1368 HK -1.9%) LI NING (2331 HK -1.2%) ANTA SPORTS (2020 HK -1.2%) POU SHENG (3813 HK -1.7%). I think you will see more US companies reporting significantly lower than expected in the forthcoming earnings -VE for sentiment

*HK RETAILERS WEAK as Victoria's Secret shut HK flagship store yesterday, seven years ahead of its 10-year lease’s expiration in August 2027. It may cost the brand about HK$600m to terminate the lease early. ALSO -VE implications for HK Property Investors like Hysan (14 HK +0.8%) in my view.

CHOW TAI FOOK (1929 HK -1.3%) GIORDANO (709 HK -6.3%) I.T. (999 HK -2.5%) LIFESTYLE (1212 HK -2.7%).

* OTHER MOVERS:

TIANNENG POWER (819 HK +20.4%) renewed hopes for spinoff, after the company gave an update on the planned listing of its batteries operation on Shanghai’s Star Board.

TRAIN/RAILWAY companies CRRC (1766 HK -2.5%) and CH RAIL CONS (1186 HK -2.6%) on possible sanctions by the US for company’s controlled by the Chinese military.

CONNECT  FLOWS (No flows with China on holiday resumes on Monday)    

DATA 

CHINA No data but confirmed 13 additional COVID-19 cases yesterday (25 June), including two imported cases (all in Shanghai) and 11 local infections (all in Beijing), National Health Commission reported.

HONG KONG Centre for Health Protection said there were 3 new local covid-19 cases today. It also announced earlier that there were 14 new cases yesterday. -VE for sentiment.


Active Heavyweights
AIA (1299.HK) +0.9%
TENCENT (700.HK) -1.3% 
ICBC (1398) -1.4%
PING AN (2318.HK) +0.1%
CCB (939.HK) -0.6%
HKEX (388.HK) -0.7

HSI & HSCEI Constituents on the move
SUNNY OPTICAL (2382.HK) +5.4%
CSPC PHARMA (1093.HK) +4.9%
CHINA TELECOM (728.HK) +3.5%

HSMI & HSSI Constituents on the move
TIANNENG POWER (819.HK) +20.5%, hits new high
KWG GROUP (1813.HK) +10.8%, hits new high
ZA ONLINE (06060.HK) +8.9%, hits new high
HUA HONG SEMI (01347.HK) +5.7%, hits new high
VPOWER GROUP (01608.HK) +5.4%, hits new high

REGIONAL MARKETS  

JAPAN Opened higher and traded slightly higher through the day. Tokyo Core CPI was in-line although CPI missed. Close +1.13%

S KOREA Markets opened higher but Kosdaq sold off initial and then worked its way back into the green but sold down to close +0.03% The Kospi initially sold down but not as much and then worked higher into lunch before trading sideways to close +1.1%

Taiwan Market closed


NEWS
MARKET HOURS 

Transport Department announced that the "Central-Hung Hom" ferry service will commence operation from June 28. The first sailing will depart from Hung Hom at 7.30am. The adult fare is $9 per trip. The ferry operator will provide fare concessions for children, the elderly and persons with disabilities as well as monthly ticket concessions. 
BABA-SW (9988.HK)'s Lazada announced that the co-founder cum CEO Pierre Poignant is stepping down, to be replaced by Chun Li, Co-president and Head of Indonesia operations. The Southeast Asian e-commerce platform is looking at possible re-branding or shutdown of LazMall, said insiders.
Bank of Japan is ready to ramp up its stimulus measures as a second spike of coronavirus pandemic may “considerably” hurt the Japanese economy, said Governor Haruhiko Kuroda. While there is no immediate need for interest rate cuts, the bank may instead focus on corporate funding strain relaxation and market stabilization by means of facility tools and bond purchase, added Kuroda.
HSBC HOLDINGS (5.HK), STANCHART (2888.HK) and other lenders have a slim chance of recouping repayable loans from Hin Leong, who has only US$257 million in assets but US$3.5 billion in liabilities, foreign media citing the court filings in Singapore.
XIAOMI-W (01810.HK) Anti-China sentiment in India has no material impact yet, while the firm's product and R&D teams are based in the country, Xiaomi India's Managing Director Manu Kumar Jain told CNBC. He added its seven Indian plants are seeing a shortage of manpower in manufacturing, warehousing and delivery under India's shutdown measures,
HSBC has revised its HIBOR-based mortgage rate higher, taking the rate to H+1.5% for property worth below $6 million, and to H+1.45% for property worth $6 million to $20 million, local media reported. The cash rebates were also reduced from 0.5% to 0.2%.
Geely announced that Volvo has entered into a global strategic partnership with Alphabet's Waymo. Waymo will become the exclusive autonomous driving technology partner of Volvo, Polestar and Lynk & Co.
NTES-S (9999.HK) entered into a strategic partnership agreement with Kweichow Moutai Group to collaborate in brand marketing, cultural communication and big data by leveraging their own edges.
TENCENT (700.HK)'s TiMi Studios has teamed up with Nintendo to launch Pokemon Unite, a free multiplayer online battle arena game similar to Honor of Kings, the flagship title of TENCENT. Pokemon Unite will arrive on both mobile platforms and Nintendo Switch.
GALAXY ENT (27 HK) hotelier arm of  clarified via Facebook that unusual room rates were noted at a third-party online booking platform, which came in different with the price levels provided by the group due to technical glitches. Came as Macao netizens circulated at social media that they were asked to check out from Galaxy Hotel despite successful check-in after reserving a hotel room at around MOP10 a night, while some others reflected that they had made room booking at similar price levels.
Shenzhen Municipal People's Government and XIAOMI-W (1810.HK) yesterday (25 June) signed an economic development and cooperation deal for the latter's headquarters, reported Shenzhen Press Group. XIAOMI-W is set to build its international headquarters in Shenzhen, while planning to invest RMB7.76 billion in the project.
Canadian Prime Minister Justin Trudeau stated he would not set Huawei Deputy Chairwoman Sabrina Meng Wanzhou free in exchange for the release of the two detained Canadians in China.  The Prime Minister said the "prisoner swap" will set a bad precedent that could imperil Canada. China has admitted the direct link between the arrest of Michael Kovrig and Michael Spavor and Canada's detaining of Meng, Trudeau added. 
Beijing will unveil details of the cross-boundary wealth management connect scheme for the Greater Bay Area as early as next Monday (29 June), in a bid to support Hong Kong and accentuate the city's sturdy position, reported Hong Kong Economic Journal. The south-bound and north-bound quotas for the scheme will be RMB150 billion each, according to sources.
FOSUN PHARMA (2196.HK) Fosun Pharmaceutical Industrial, a subsidiary of the Company, has received the Acceptance Notice regarding its licensed RT002 for the treatment of moderate to severe glabellar (frown) lines. The clinical trial, registration and review of the drug were accepted by the National Medical Products Administration.
Sino Group stated that Tmtplaza, Olympian City, Citywalk, China Hong Kong City and Gold Coast Piazza will from 13 July to 4 October launch the "S+ REWARDS Lucky Draw". Over 30,000 prizes and nearly $2 million of shopping and dining coupons will be available, involving more than $3 million. Along with muted coronavirus situation and class resumption, there has been a rallying patronage in its shopping malls, said the group.
Indian is finishing its draft onat least 370 products to ensure items which can be manufactured locally are not imported, while Indian Government internally plans to impose higher tariffs on furniture, air conditioner compressors and auto parts to push for domestic production and reduced use of Chinese goods, Bloomberg citing inside sources. India has suspended the clearance of made-in-China products of US enterprises at her ports and airports, as Reuters quoted from sources. -VE for China 

PRE MARKET

HYGEIA HEALTH (6078.HK), to be listed next Monday, was priced at $18.5, the upper limit of the offer price range $17-18.5. Roughly 607.56 times of over-subscription was recorded in the public offering. One-lot (200 shares) success rate was 8.8%.

KANGJI MEDICAL (9997.HK), to be listed next Monday, was priced at $13.88, the upper limit of the offer price range $12.36-13.88. 988.22 times of over-subscription was recorded in the public offering. One-lot (500 shares) success rate was 9% only.

XIAOMI-W (1810.HK) in response to Indian residents launching a boycott against Chinese goods as the border disputes between the two nations rendered their relationship in tension has subsequently put up "Made in India" banners outside its branches in India in attempt to counter the boycott China campaign, Indian press reported.  I think it will be interesting to see if it’s the Chinese ownership or the place of manufacture that works.  I suspect that its the ownership that matters as the Indian nationalist have been seeking to damage Chinese interests.

HK Government spokesman said yesterday that the Employment Support Scheme (ESS) received a total of 259,900 applications for the one-off lump-sum subsidy of $7,500 for self-employed persons (SEPs) during the application period.  Of these, about 140,000 applications have not been approved due to ineligibility. The ESS Secretariat or the processing agent are sending notifications to these applicants.

TENCENT (700.HK) is set to acquire the content, technology and resources of iflix, a Kuala Lumpur-based streaming platform, to extend its reach into the region, Bloomberg citing insiders. The purchase does not cover iflix's debts

The US Senate unanimously approved the "Hong Kong Autonomy Act", which could sanction individuals or companies undermining the territory's autonomy. The bill will be submitted to the US House of Representatives for review and hence be signed into law by President Donald Trump. The act would require US Secretary of State Mike Pompeo to submit a report to the Congress 90 days within legislation and once a year in the future.

GOME RETAIL (493.HK) said regarding the increase in the price and trading volume of the shares of the Company on 24 June and media articles reported that Wong Kwong Yu, the controlling shareholder of the Company, has been released from prison; it noted from the information released by the Beijing High People’s Court on its official Wechat public account “Beijing Law Network” that the Beijing First Intermediate People’s Court has ruled to release Wong on parole, with the parole probation period from the date of parole to 16 February 2021.

NATIONAL ELEC H (213.HK) results for the year ended 31 March 2020. Net profit -45.5% yearly to $121 million with EPS of 12 cents. A final dividend of 3 cents was declared.

MONGOLIA ENERGY (276.HK) annual results ended March 2020. Revenue was $1.125 billion, +44.8% yearly. Net profit amounted to $1.442 billion, vs $44.425 million in loss in the previous year. EPS equaled $7.66. No final dividend was declared.

BEST MART 360 (2360.HK) FY results to 31 March 2020. Net profit -79.7% YoY to  $12.1 million with EPS of 1.2 cents. No final dividend was declared, against a dividend of 6 cents a year ago.

GEELY AUTO (175.HK) announced a preliminary proposal for the possible issue of RMB Shares and listing on the Sci-Tech Board, involving not more than 1.731 billion RMB Shares.

CHUANG'S CHINA (298.HK) announced the results for the year ended 31 March 2020. The loss was $192 million vs the net profit of $168 million from a year ago. LPS was 8.19 cents. No final dividend was declared.

Read More  

June 24 HK WRAP HSI -125pts HK Closed Thursday China Closed Thurs & Friday

June 24 HK WRAP HSI -125pts HK Closed Thursday  China Closed Thurs & Friday


HSI -125pts (-0.5%) 24,782  HSCEI -57pts (-0l6%) 9,937 T/O HK$115.42bn (-3.4%)  

Europe opened lower and sold down with concerns over surging covid-19 cases worries investors

US Expect a flat open; Futures opened -35pts but initially traded higher but sold down later, currently Dow futures -250pts, with S&P and NDX weaker too


INDEXES      

CSI 300 closed +17pts (+0.4%) @ 4,139 Market opened higher and initial spiked to the day high of 4,145 which it tested a couple of times but unable to break out and sold down to 4,126 it then traded sideways in choppy trading into lunch.  PM saw some initial selling to the day low (4,123) before trending higher tot he day high 4,145 about 10 minutes before the close, before selling down slightly into the close. 
Tech names seeing interest with the ChiNext nearing 2,400 the highest since 2016
China closed for Tuen Ng Festival on Thursday and Friday.

HSI Pre Market +127pts @ 25,034 vs -60pts ADR’s @ 24, 847 opened above 25,000 lead by E Commerce names Tencent , Alibaba etc and initial tested slightly higher to the day high of 25,071 but selling down and consolidating around yesterdays closing price in the morning session.  PM saw the market initially sell down to 24,855 before rebounding to 24,950 but then trended lower into the close with caution ahead of tomorrows Tuen Ng Festival (Dragon Boat Day), markets re-open Friday 

AFTER MARKET 
SUCCESS DRAGON (1182.HK) expected to record the loss in the range of HK$11mn to HK$14mn for the year ended 31 March 2020 as compared with the loss of HK$38.898mn for the year ended 31 March 2019.
As USD/ HKD re-hit the Strong-side Convertibility Undertaking, the HKMA undertook US$510 million of selling orders during Hong Kong trading hours to inject HK$3.953 billion. The balance of the banking system of Hong Kong is expected to increase to HK$131.609 billion next Monday (29 June). 
YTO EXP INTL (6123.HK) POSITIVE  PROFIT alert The Group was expected to record an increase in the revenue and a substantial increase in the net profit for the six months ending 30 June 2020 as compared with the corresponding period in 2019, based on the preliminary review by the Company’s management on the unaudited consolidated management accounts of the Group for the five months ended 31 May 2020 and other information currently available to the Board. 
Li Ka-shing and Victor T K Li acquired shares of CK ASSET (01113.HK) further by a wholly-owned subsidiary of Li Ka Shing (Global) Foundation. They acquired a total of 1.3295 million shares in CK Asset at the average price of HK$47.25, HK$47.1437, HK$47.2822 and HK$46.9328 per share on 18 June, 19 June, 22 June and 23 June 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset increased from 35.17% to 35.2%, and from 35.23% to 35.27%.
COWELL (1415.HK) POSITIVE PROFIT alert The Company expected to record a significant improvement in the Group’s profit for the six months ending June 30, 2020 as compared with the same period in 2019. The significant improvement in profit was primarily attributable to the increase in camera module sales; improved production yield; and efficient cost management.
TAI CHEUNG HOLD (88.HK) announced annual results ended March 2020. Net profit amounted to HK$125 million, down 46.2% yearly. EPS equaled HK$0.2. Final DPS was HK$0.12, as compared with HK$0.23 in the year-ago period.
Google stated that it is considering alternative destination to Hong Kong after the US Department of Justice has suggested Federal Communications Commission ban its application to link Pacific Light Cable Network with Hong Kong out of national security  concerns
CATHAY PAC AIR (293.HK) said around 80% of its employees have so far expressed willingness to partake in the new round of voluntary furlough arrangement.  The second round of furlough application will expire on 28 June.
Centa-Salesman Index (CSI) last printed at 60.48, +1.35 pts  WoW.  For almost five weeks, CSI lingered within a narrow range around 60 with the peak and trough at 60.48 and 57.9. The index has been maintaining at the upper end of the critical point of 55. In near term, they forecast the CSI to hover around 60 continuously and amass upswing momentum, which foretold an ongoing uptrend of housing prices. 
 

Market and Pre Market News at bottom of page.


Short Selling HSI Wedneday 17.5% vs 21% Tuesday

Top Shorts Wharf REIC (1997) 42%, MTR (66 HK) 38%, Hang Lung PPT (101) 38%, Hang Seng Bank (11) 38%, PetroChina (857) 36%, Bank of China (3988) 33%, AIA (1299) 33%, Mengniu Dairy (2319) 31%, Ping An (2318) 30%, CCB (939) 28%, Country Garden (2007) 28%, CLP (2) 26%, China Unicom (762) 26%.


COMMENT 

*PETROCHEMS WEAK as oil slipped overnight from a three-month high. API data showed U.S. crude inventories rose 1.75m barrels last week, signaling the market has yet to clear a massive supply glut. Oil/energy demand in China is also being questioned as the China's economy contracted YoY in 2Q, which could signal the start of a recession. CHINA OILFIELD (2283 HK -1.9%) CNOOC (883 HK -2%) ANTON OIL (3337 HK -2.1%).
*E-COMMERCE FIRM led higher by newly-listed stocks amid speculation of Stock Connect and indexes inclusion. ALIBABA (9988 HK +1.3%) JD.COM (9618 HK +2.1%) NETEASE (9999 HK +2.9%) are likely to be included in China-HK stock link programs.TENCENT (700 HK -1.3%) but hit a new intraday high HK$505 in early trading.
*TECH & COMPONENTS STRONG; XIAOMI (1810 HK +9%) on approval of share buyback plan. Sector also strong on speculation of  demand increase for Chinese-made components if India restricts imports of Chinese parts for smartphones amid a border clash between the two nations. AAC (2018 HK +5.1%) SUNNY (2382 HK +2.7%) TONGDA (698 HK +13.6%) HUA HONG (1347 HK +4.6%) TRULY (732 HK +13%).
*HK PROPERTY WEAK uncertainties linked to the national security law. MTRC (66 HK -0.7%) plans to open tenders for Lohas Park phase 13 in the third quarter, offering 2,550 units, as well as phase five and six of Wong Chuk Hang project early next year, which encompasses 1,800 units. SHKP (16 HK -1.6%) HENDERSON (12 HK -0.8%) NWD (2909 HK -2%) SINO LAND (83 HK -1.1%).
*PHARM/MEDICAL FIRM on vaccine speculation as Covid-19 cases increased in  some countries. CANSINO (6185 HK +13%) SINO BIOPHARM (1099 HK +2%) ASCENTAGE (6855 HK +6.8%) INNOVENT (1810 HK +11%). CSPC PHARM's (1093 HK +2.5%) Bortezomib gets drug registration approval. CK LIFE's (775 HK +16%) cancer vaccine Polynoma gets FDA fast tract designation for Seviprotiut-L. CSTONE (2616 HK +13%) released preclinical data on its cancer drugs.
MED DEVICES such as MICROPORT (853 HK +15%) and VENUS MEDTECH (2500 HK +8%) also rallied.
*OTHER MOVERS:
BOSIDENG (3998 HK +3.7%) net profit for the year ended March 31 +22.6% YoY to 1.203b yuan.
CAR INC (699 HK +3.5%) holder UCAR sold 7m shares from May 12 to June 22, represents about 0.33% of the company's total issued share capital.
GOME (493 HK +16%) and GOME FIN TECH (628 HK +32%) on the news that chairman Wang has been released from prison and the companies to make an announcement later.

CONNECT

FLOWS (Southbound closed due to HK holiday Thursday & China holiday Thursday & Friday)

Shanghai

Northbound RMB 30,741m Sell 14,522m : 16,219m Buy

Southbound HK$

Shenzhen

Northbound RMB 47,924m Sell 23,883m : 24,041m Buy

Southbound HK$


DATA
CHINA No data
HONG KONG 

Centre for Health Protection said there were 2 new local covid-19 cases today.


Active Heavyweights
ICBC (1398) -1.4%
TENCENT (700.HK) -1.3% 
AIA (1299.HK) +0.9%
HKEX (388.HK) -0.7
CCB (939.HK) -0.6%
PING AN (2318.HK) +0.1%

HSI & HSCEI Constituents on the move
AAC TECH (2018.HK) +5.4%
BYD COMPANY (1211.HK) +1%, hits new high

HSMI & HSSI Constituents on the move
GOME RETAIL (493.HK) +17.4%, hits new high
MICROPORT (853.HK) +14.8%, hits new high
TONGDA GROUP (698.HK) +12.5%
TRULY INT'L (732.HK) +11.8%
FIRST CAP GP (1269.HK) +10.4%
ZHOU HEI YA (1458.HK) +8%, hits new high
HUA HONG SEMI (1347.HK) +4.6%, hits new high

REGIONAL MARKETS 

Japan opened slight higher but has traded sideways around yesterdays closing level. Closed -0.1%

S Korea Opened higher and worked higher for most of the session but looks to be running out of steam. Kosdaq dipped lower in the afternoon but rebounded Closed +0.8%

Kospi Continued sideways in the PM Closed +1.4%

Taiwan Opened higher but has drifted lower through the day but still in the green. Closed +0.4%  Market Closed Thursday for Tuen Ng Festival (Dragon Boat Day), re-opens Friday


NEWS
MARKET HOURS 

XIAOMI-W (1810.HK)'s India Managing Director Manu Jain told local press that the company is facing a backlash on social media, but shareholders do not need to attach too much worry.  All its smartphones and most of its smart TVs are locally made and 65% of their components are locally sourced, added Jain.
HSBC HOLDINGS (5.HK) Chairman Mark Tucker said at the conference call of International Business Leaders' Advisory Council for the Mayor of Shanghai (IBLAC)  That in the last few decades, Shanghai reaped enormous growth from stunning target development on the ride of the city's open-mindedness, unwavering marketization commitment, tremendous infrastructure investment, as well as close cooperation among business institutions, Meanwhile, Shanghai's new initiatives in promoting foreign investment will entail higher business potential to multinational corporations (MNCs). The Chairman furthered HSBC will invest more in mainland businesses, including polishing itself into a pioneering forex financial institutions in wealth management and insurance services, while supporting the future development of Shanghai.
Xinhua Commentary: Opposition Camp Shows Conspiracy by Defaming HK National Security Law. After the Standing Committee of the National People's Congress had last week vetted Hong Kong National Security Law bill and taken a huge step forward on legislation, Hong Kong opposition camp as expected distorted and defamed the law publicly, which clearly displayed their anti-China political attempt by creating chaos in Hong Kong, said Xinhua News Agency in an editorial.   As Beijing has repeated again and again, Hong Kong National Security Law is enacted to combat illegal behavior of secession, treason, terrorism and collusion with foreign powers, said the Chinese press. The authority aims at precisely crumbling these four kinds of actions that pose the most severe threat to the national security by legal means.
GOME RETAIL (493.HK) Rallying as its founder has purportedly been discharged from the jail. Huang Guangyu has recently been released from the prison, Beijing Business Today citing insiders, and the Chinese appliance retailer had in an executive meeting last night disclosed relevant news.
SFC in its Annual Report 2019-20,wrote that total income for the year ended March 2020 approximated $1.591 billion, -10% from last year.  Owing to the decrease in income, a deficit of $375 million was recorded for the year.
TENCENT (700.HK)'s Timi Studios was one of the mobile game developers of "Call of Duty: Mobile” which has recorded more than 250 million downloads across the globe, with nearly 45 million downloads from the U.S.
The local governments of Hong Kong, Macau and Guangdong ponder to roll out a pilot scheme for mutual recognition of COVID-19 testings and mutual quarantine waiver, revealed Sophia Chan, Secretary for Food and Health. Also, the three governments mull to loosen curbs on the cross-border footfall among the three cities on a limited basis. 
HK e-Commerce Mkt Value May Cross US$25B by 2023: that’s +40% growth on the ride of increased momentum of consumers in using bank transfers and e-wallets,Survey by FIS finds 
XIAOMI-W (1810.HK)  announced that all ordinary resolutions proposed at the AGM held on June 23, were duly passed, including a general mandate to repurchase the Company’s shares not exceeding 10% of the total number of issued shares.  Redmi made an official announcement that the pre-sale of its entry phone Redmi 9 has started at 10 am today, mainland media reported. The price for each Redmi 9 is set from RMB799.  XIAOMI-W Founder Lei Jun said on his personal Weibo that the entry phone has already equipped the function of Snapdragon 835 as technology moves speedily ahead. 
LENOVO GROUP (992.HK) Chairman Yang Yuanqing delivered a thematic speech at the 4th World Intelligence Congress, Tencent Tech reported. He said the intelligent sector should propel consumption growth through forceful development in smart economy which is driven by digitalized and intelligent technology. At the occasion, the group also demonstrated a series of real-life scenarios in smart solutions, ranging from smart cities and smart administration to smart medical and smart education. 
IDC: China 1Q20 Wearable Device Shipment Sinks 11.3%; Smart wearable device shipment -33.3% yearly to 2.76 million units. In terms of market share, Huawei ranked the topped, with shipment +18.8% to 4.282 million units, followed by XIAOMI-W (1810.HK) with shipment down by 0.6% to 4.144 million units.
TENCENT (700.HK) COO Mark Ren delivered a speech titled "New Era of Intelligence: Machinery, Industrial Development and Governance" at the 4th World Intelligence Congress, Tencent Tech reported. In Ren's view, China has not had purely traditional industry after the coronavirus epidemic as each sector has its own digitalization progress more or less. Such change requires every party to make devotion to new infrastructure, and expedite the internet development. As to 5G technology, Ren opined the content consumption habit of internet users has shifted to video platform increasingly. He also envisioned abundant opportunities in 5G era despite immense uncertainties. In arena of digital contents, the company has the confidence of running marathon and is poised to make long-term devotion.
CATHAY PAC AIR (293.HK)  Chairman Patrick Healy said at the shareholders' meeting yesterday (23 June) that he is confident of tiding the company over rough seas through its capital restructuring plan, and hopeful of assisting the airline to overcome challenges.  Yet he refused to respond as to whether there will be further cost control measures on the company, such as layoff. 
BANK OF CHINA (3988.HK) had Euro 80m and ABC (1288.HK)  Euro 55m exposure to a Euro 1.75bn revolving credit facility to Wirecard along with13 other banks.  BANK OF CHINA has tapped an external legal team to look at how to minimize its loss. -VE
Moody's downgraded the ratings outlooks on EVERGRANDE (3333.HK)  , Hengda Real Estate and relevant subsidiaries to "Negative" from "Stable”.  The downgrade was attributable to concerns whether the group can materially reduce their high level of short-term debt over the next 12-18 months.
Legislative Affairs Committee of the NPC Standing Committee held 12 seminars in Hong Kong with Hong Kong and Macau Affairs Office of the State Council and the Liaison Office of the Central People's Government in the HKSAR, pooling opinions in regards of the legislation of National Security Law in Hong Kong.  The responsible person of the central government said it is essential for China to reserve the exercise of jurisdiction right in some severe criminal cases that endanger national security under specific condition, so as to ensure the effective implementation of laws in Hong Kong.
Note that they didn't tell Carrie Lam about their intentions... a sign of things to come.
ESPRIT HOLDINGS (330.HK) said that Raymond OR Ching Fai was re-designated from Executive Chairman of the Board and Executive Director of the Company to Non-executive Chairman of the Board and Non-executive Director of the Company effective from 24 June 2020.

PRE MARKET

The European Union is considering suggesting its members ban Americans from entry due to a surging number of confirmed coronavirus cases in America, New York Times citing EU officials.

Tencent's e-sports division manager, Hou Miao, made his appearance at the press conference of an international e-sports/ cultural and creative event in Hainan Province He said Tencent will introduce e-sports and cultural and creative activities aggressively in future and promote the global impact of e-sports and integrate development of cultural and creative strategy consistently, as the tech giant is eyeing on the development potential of tourism and trade at the international window of Hainan.

Three major Chinese telecom carriers have switched on summer promotion, bringing down their 5G plans to below RMB100, Shanghai Securities News reported. In particular, the cheapest 5G plan of China Mobile is priced at RMB69 after discounts.

China yesterday confirmed 12 additional cases of coronavirus infection, National Health Commission of the PRC reported.  Beijing reported seven cases of local contraction.

Sinopharm's CNBG announced that its self-developed COVID-19 vaccine is set to undergo phase three research in UAE, marking an official onset of the world's first international clinical trial for the virus vaccine.

As HKD re-hit the Strong-side Convertibility Undertaking, the HKMA undertook US$147 mn selling orders during New York trading hours to inject HK$1.139 bn in the market.  The balance of the banking system will increase to HK$127.657 bn on Friday (26 June). GREENTOWN SER (2869.HK) said it acquired a total of 122.6 million shares of ZHONG AO HOME (1538.HK) from Central Oscar and Decision Holdings for a cash consideration of $221 million. Upon completion, the company holds 159 million shares of ZHONG AO HOME in aggregate, representing 18.67% of its share capital.

EMPEROR INT'L (163.HK) annual results ended March 2020. Loss amounted to $3.644 bn, against $3.136 billion in profit in the previous year. LPS equaled 99 cents. Final DPS was 3.5 cents. Full-year DPS was 7 cents. During the year, underlying profit was $842 million, -43.7%.



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June 23 HK Wrap HSI +400pts but T/O flat with Southbound Connect closed

June 23 HK Wrap HSI +400pts but T/O flat with Southbound Connect closed


HSI +396pts (+1.6%) 24,907  HSCEI +115pts (+1.2%) 9,994 T/O HK$119.44bn (unch)  

Europe Markets opened higher and current;y working higher

US DOW futures choppy; opened and rose to +120pts sold down on Navarro’s remarks but then rallied back and now looking to open +200pts


INDEXES      

CSI 300 closed +20pts (+0.5%) @ 4,122 Market opened lower but after an initial uptick sold down on the Peter Navarro commented before rebounding and working higher to 4,116 at lunch.  PM saw an initial uptick but then sold down to 4,105 before working higher for the last hour to the day high 4,125 but then ticked lower into the close.  Sentiment remains cautious on the US/China relations and also on the economy as China’s Beige Book showed the economy contracted in the 3 months to June.
HSI Pre Market +30pts @ 24,541 vs +84pts ADR’s @ 24, 595 with HKEX and Tencent hitting a new highs, other Dotcom +VE except WeiMob -2% after Monday’s court case. Other bluechips mixed. Saw some initial selling down to 24,185 after remarks by Peter Navarro which suggested the US/China trade deal were mis interpreted but once clarified the market rallied higher to the 24,750 level and then traded sideway into lunch.  PM saw the market continue to trade sideways until the last hour when it worked higher to close at the day high.  T/O remains relatively light as investors watch to see how events over the New Security Law unfold and partly due to the closure of Southbound Connect flows ahead fo Thursday’s holiday.  Carrie Lam today said she would not select judges to preside over cases brought under the city’s new security law, an apparent attempt to assuage concerns about the controversial legislation.

AFTER MARKET 
TSE SUI LUEN (417.HK) Deputy Chairman, Chief Strategy Officer and CFO Ng Yi Kum, Estella revealed that the company has around one-third of shops that require rent renewal every year, contingent on different landlords. This year, most shops of the retailer have been granted about 20% rental cut.  Chairman and CEO Yau On Yee, Annie said the company will definitely consider any rent renewals with caution upon their expiry, taking into account of rental cost, shop requirement and so on. The CEO said only if there is a break-even will the company mull to reserve the shop.
China's Office of the Central Cyberspace Affairs Commission has recently mounted a thorough investigation on the contents of 31 key network live broadcast platforms in China, in conjunction with related departments, with a bid to deepen the ratification and regulation on such platforms.  Upon probe, ten network live broadcast platforms were found spreading indecent contents and failing to perform corporate responsibility. Such platforms included Huya's live broadcast, TENCENT (700.HK)'s Douyu live stream, B Station's Bilibili, INKE (03700.HK)'s live broadcast, ByteDance’s Xigua and NTES-S (09999.HK)'s CC Live. 
HSBC customers prefer diversified investment in wake of epidemic, pointed out Sami Abouzahr, Head of Customer Wealth, Retail Banking and Wealth Management, Hong Kong on a call. While some customers shifted their assets to the US stock market upon earlier uptrend, others redirected theirs to conservative asset types. As to the legislation of national security law in Hong Kong, Greg Hingston, Head of Retail Banking and Wealth Management, Hong Kong at HSBC, said there has not been obvious capital outflow so far, although some clients converted their currencies in hand inconsistently. 
Lee Hsien Loong, Prime Minister of Singapore, delivered a national speech today (23 June), suggesting President Halimah Yacob to dissolve the Parliament, and issue the Writ of Election for General Election 2020. The country confirmed to have the Election during the pandemic and the Polling Day on 10 July.  The PM said the alternative is await the COVID-19 pandemic, yet the government has no assurance that the pandemic will be over before this Government’s term must end next April.
Joerg Wuttke, the president of European Union Chamber of Commerce in China, voiced his concern about whether the EU-China investment agreement will be wrapped up within this year.  Expressing disappointment on the failed joint communique at the EU-China meeting, Wuttke was worried about China is drifting itself toward isolation. 
Hurun Research in the latest report about fortune changes in worldwide entrepreneurs after four months of coronavirus crisis, wrote that the fortunes of top ten entrepreneurs slid only 2% during February-May 2020. During the plague, the biggest winners went to online retailers, pharmaceutical firms and appliance retailers. In particular, Amazon's founder Jeff Bezos remained at the top spot among global billionaires, his wealth expanding from RMB150 billion to RMB1.1 trillion over the past four months. TENCENT (700.HK)'s founder Pony Ma (RMB320 billion) remained the richest in China and ranked the 22nd in world.
While Hong Kong public housing is subject to a 9.66% rental hike this year based on prevailing mechanism, Housing Authority (HA) is pondering over whether any alleviation can be implemented, sources said. 
PING AN (2318.HK) 's Lufax Holding announced that Lufax International (Hong Kong) has received an approval from the SFC and obtained Type 1 License. Meanwhile, the fintech firm announced that its online wealth management platform for Hong Kong residents expects to launch an app in August.
 

Market and Pre Market News at bottom of page.


Short Selling HSI 
Tuesday 21% vs 20.2% Monday

Top Shorts MTR (66 HK) 52%, Wharf REIC (1997) 43%, Hang Seng Bank (11) 35%, Ping An (2318) 34%, Bank of China (3988) 32%, China Unicom (762) 30%, PetroChina (857) 30%, AIA (1299) 28%, Want Want (151) 27%, Hang Lung PPT (101) 26%, CSPC Pharma (1093) 26%, CCB (939) 25%, Tencent (700) 25%.


COMMENT 

*E COMMERCE STRONG with TENCENT (700 HK +4.8%) ahead of its annual conference scheduled on June 27th, in which the cloud games are expected to be in focus.
ALIBABA (9988 HK +2.9%) JD.COM (9618 HK +1.3%) MEITUAN (3690 HK +3.2%).
WEIMOB (2013 HK +4%) rebound after being -11.8% yesterday on news that the company has been hit with complaints from merchants impacted by the service outage accident in February over its 150m-yuan compensation plan.
*TECH & COMPONETS STRONG with semiconductor makers in focus.
SMIC (981 HK +9%) as it filed for STAR Board listing today. Other semi names also traded strong on STAR Board listing speculations. HUA HONG (1347 HK +8.7%) FIT HON TENG (6088 HK +2%).
ZTE (763 HK -4.5%) as top shareholder Zhongxingxin sold 20.4m A-shares Monday at an average 39.44 each, raising 803m yuan.
*TELCOS FIRM on the latest data release.
CH UNICOM (762 HK +1.4%) May subscribers totalled 308.745m a net loss of 540k users.
CH MOBILE (941 HK +0.7%) added 252,00 mobile customers in May vs 432,000 net adds in April.
CH TEL (728 HK +1.3%) added 2.68m subscribers in May vs 1.97m in April.
*OTHER MOVERS: 
UNITED LAB's (3933 HK -7.3%) controlling shareholders sold 108m shs at HK$7.24 each, a discount of 6% to the last closing price of HK$7.70.
MICROPORT (853 HK +5.3%) sold 66m new shres at HK$23.50 a piece, ~3.5% discount to last closing price of HK$24.35, raising HK$1.54b.
SHANDONG WEIGAO (1066 HK +5%) controlling shareholder Weigao Holding Co. Ltd. entered agreement to sell 60m H shares at HK$15.07 each, ~1.5% discount to last closing price of HK$15.30.
COSCO SHIP ENERGY (1138 HK -4.6%) as the amount of crude oil held around the world on tankers that have been stationary for at least 7 days rose to 200.26m bbl recently.

CONNECT  FLOWS (Southbound closed due to HK holiday Thursday)

Shanghai

Northbound RMB 33,590m Sell 15,921m : 17,669m Buy

Southbound HK$

Shenzhen

Northbound RMB 49,351m Sell 25,173m : 24,178m Buy

Southbound HK$


DATA 

CHINA had yesterday (22 June) confirmed 22 additional cases of coronavirus infection, with 13 from Beijing, National Health Commission of the PRC reported.

HONG KONG Centre for Health Protection said that it was investigating 16 new local covid-19 cases today.


Active Heavyweights
TENCENT (700.HK) +4.9% hits a new high
HKEX (388.HK) +2.7% hit new high
AIA (1299.HK) +2.5%
HSBC (5.HK) +2%
CCB (939.HK) +1%
ICBC (1398) +0.4%
PING AN (2318.HK) +0.3%

HSI & HSCEI Constituents on the move
SINO BIOPHARM (1177.HK) +3.7%, hits new high
CITIC (267.HK) +3%
WANT WANT CHINA (151.HK) +3%

HSMI & HSSI Constituents on the move
YIXIN (2858.HK) +14.2%
SMIC (981.HK) +9.3%, hits new high
HUA HONG SEMI (1347.HK) +8.7%, hits new high

REGIONAL MARKETS 

JAPAN opened higher sold down on Peter Navarro’s comments, but rebounded to previous level after but sold off slightly into the close; Finished +0.5%.

S KOREA Markets opened higher, again sold down on Navarro’s remarks rebounded and traded sideways before a sell down into the close; Kosdaq close +0.2%, Kospi +0.2%

TAIWAN Opened higher, sold down on the Navarro comments and then traded sideways Closed +0.3%


NEWS
MARKET HOURS 

TOP SPRING (3688.HK) and Chun Wo Development have name their jointly developed Kowloon luxury residential project as "128 Waterloo," which will provide 110 units. The standard 1-4 room flats carry salable area from 300 to over 1,200 sq. ft., with twin-room flats accounting for 50% of the total supply.
People's Bank of China today successfully issued 6-month RMB10 billion central bank notes, with an interest rate of 2.21%, in Hong Kong.
Lunchtime TSE SUI LUEN (417.HK) annual results ended March 2020. Loss of $89.67mn vs  $54.161mn profit in the previous year. LPS equaled 36 cents. No final dividend was declared.
WANT WANT CHINA (151.HK) Chairman Tsai Eng-meng bought 6 million and 6,000 shares of the company successively last Wednesday (17 June) and Friday (19 June), involving over $36.54 million, as disclosed by the Stock Exchange. His shareholding in the company hiked to 50.78% from 50.73%. 
Ernst & Young issued a report, forecasting Hong Kong's stock market to hail 59 IPOs in 1H20, -20% YoY. The fundraising may reach $87 billion, +21%. The comeback of the two large Chinese-concept stocks, JD-SW (9618.HK) and NTES-S (9999.HK); due in $54.3 billion in aggregate in Hong Kong, representing 62% of the total fundraising amount in 1H20. During the period, there will be almost 60% IPOs from China, fetching 96% of total fundraising.  +VE for HKEX (388 HK)
MI MING MART (8473.HK) announced annual results ended March 2020. Net profit amounted to $15.852 million, down 42.6% yearly.  EPS was1.42 cents.
The Hong Kong Housing Authority (HA) announced one month's rent payment for its public housing tenants. Tenants (including licencees) who live in its public rental units and pay normal rent or reduced rent under the Rent Assistance Scheme (RAS) will not be required to pay rent for the month of July 2020.  The measure is not applicable to tenants who are required to pay additional rent. About 760,000 HA tenants will benefit from the measure.
White House Trade Adviser Peter Navarro told Fox News that President Donald Trump has decided to terminate the trade deal with China as his intelligence team is growing increasingly confident that novel coronavirus pandemic originated from a laboratory in Wuhan. Following Navarro's remark, US stock futures expanded the loss. Dow Jones Industrial Average futures slid 1.6% or 405 pts; Standard & Poor's 500 Index futures and Nasdaq Composite Index futures slipped 1.4% and 1.3%.  The statement was clarified about an hour later and futures rebounded but by then  Asian stocks had already sold down.
The Chinese central government is weighing an innovative way to solve the last-standing housing problem of Hong Kong people, local newspaper HK01 cited a senior pro-establishment individual.  A reclamation is suggested to be carried out at South of Lantau Island, near Guishan Island of Zhuhai City. The reclaim land will then be leased to Hong Kong to build houses, including massive scale of public homes for grass-root families.   According to measurement, shallow water area can provide at least 1,000 hectares of land; if 20% of the land is used for residential purpose, 160,000-200,000 flats can be supplied. 
Fitch says Hong Kong's rating may be impacted if foreign and domestic investors have their confidence shaken towards the city's business environment in medium term after the effectiveness of HKSAR National Security Law, said Andrew Fennell, senior director of APAC sovereigns at Fitch Ratings.  That said, Fennell opined it is now still premature to comment on any downgrade on the city while different parties are still expressing their opinions about the bill.  The rating of the former British colony is now only a notch higher than China following two downgrades since last September, reflecting it is being integrated into Chinese system incrementally.   Which refutes what Carrie Lam was saying yesterday that the new law was required to improve Hong Kong’s business position.

PRE MARKET

Moody's latest report predicts G20 to deliver 4.6% economic contraction this year, followed by 5.2% growth for the next. The ratings agency predicted China to grow 1% in 2020, the only G20 country to post growth, and 7.1% in 2021.

Worldwide Developers Conference (WWDC) on-line; Apple announced a series of system updates to iOS 14 and macOS Big Sur and new functions to watchOS 7.  The US tech giant is ending a nearly 15-year reliance on Intel chips by switching to its self-developed Apple Silicon as Mac processors.

Shenzhen Stock Exchange issued application acceptance notices to 33 enterprises under the trial registration system of ChiNext through the listing review business system. The related documents, such as IPO prospectus, were disclosed concurrently on the public website of listing review information board.

CPIC (2601.HK) (601601.SH) announced that Global Depository Receipts (GDRs) issued by it have been listed on the London Stock Exchange on 22 June (London time) with trading symbol "CPIC".

Ministry of Industry and Information Technology (MIIT) has recently issued a notice on the management of network data security in the telecommunications and internet industries for 2020. In which, the authority tabled to deepen the governance of network data security, conduct network security assessment and so on. 14 Chinese units, including China Mobile, China Telecom, China Unicom, Alibaba, Tencent, Didi Chuxing, ByteDance, Xiaomi and China Academy of Information and Communications Technology (CAICT), sent responsible persons to exchange opinions, and introduced their concerns on the notice.

Chinese State Council outlined supports on exporters to shift to domestic sales by helping them expand the domestic markets. Besides, the guidance also encouraged foreign traders to leverage on online sales, live stream sales and other new business models.

Sci-tech Innovation Board in Shanghai proposed Semiconductor Manufacturing International Corporation (SMIC) to submit a listing registration, Shanghai Stock Exchange said. The financing amount is RMB20 billion.

Chinese President Xi Jinping, At a video conference held yesterday with Arabianpolitical parties, stated his willingness to foster cooperation with Arab and the rest of the world in order to help the World Health Organization give full play to its leading role. In face of new challenges hurdles arising from the coronavirus pandemic, China will go on deepening strategic communication and sharing administrative experience with Arabian political parties on the basis of shared respect and mutual learning, furthered Xi.

HKET HOLDINGS (423.HK) annual results ended March 2020. Net profit amounted to $10.57 million, down 85.2% yearly EPS 2.45 cents Final DPS 5 cents vs 6.5 cents the previous year

NEXT DIGITAL (282.HK) annual results ended March 2020. Loss deepened to $415 million from $338 million in the previous year. LPS equaled 15.8 cents. No final dividend was declared.

CHINA RES LAND (1109.HK) announced a connected transaction that it will acquire all interest in the projects of superstructure of line 4 of the Shenyang Metro, Chaoyang District, Beijing, Yinzhou District, Ningbo and Longgang District, Shenzhen from its controlling shareholder CRH at a total consideration of RMB2.557 bn (HKD2.796 bn).


Feedback adn Comment Welcome


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June 22 HK WRAP HSI -132pts, T/O light and Shorts rise to 20%

June 22 HK WRAP HSI -132pts, T/O light and Shorts rise to 20%


HSI -132pts (-0.5%) 24,511  HSCEI -96pts (-1%) 9,879 T/O HK$119bn (-21% DoD due to FSTE reweight On Friday's close).  


Europe Markets opened lower but initially trended higher but currently seem to be stalling.

US DOW futures choppy; opened (-230pts) but worked higher before easing back and then moving higher again; currently +150pts; S&P and NDX also indicating higher. We get Existing Home Sales but people will be watching the Covid cases and any comments from the White House over HK.


INDEXES      

CSI 300 closed +3pts (+0.1%) @ 4,102 Market opened lower but worked higher despite the Loan rates being left unchanged when most had expected them to be cut.  It would appear China feels the need to protect the currency rather than ease them to help the economy.  It worked to the day high (4,127) around 10:30am before trending lower in choppy trading into lunch 4,116.  Pm saw initial selling to the day low around 2pm (4,089) before working higher into the close. 
SHCOMP was weak but the ChiNext remained strong on the hopes of restructuring. 
Investors seem to be more focused on the hope of improving US relations following the meeting in Hawaii with Pompeo and the commitment to buying more US Farm goods than on the potential fall out from the National Security Law to be imposed on Hong Kong.
Tension with India seems to have eased as Modi said Chinese troops are not occupying Indian territory after the clash.

HSI Pre Market -115pts @ 24,528 vs -313pts ADR’s @ 24,330 opened lower with ZTE -8% after clarifying it had no chip production capacity.  Xiaomi was -1%, Tencent flat and NTES, BABA & MEITUAN up small. Market tested higher despite China leaving the Prime Loan rates unchanged but hit resistance at 24,600 and sold down with support 24,480.  Not then trended higher to the day high of 24,630 around 10:40am.  Ot then sold down again before drifting back to 24,565 at lunchtime.  PM saw initial selling for an hour; down to the day low 24,390. After which is worked slowly higher into the close.  
There was little reported about the new National Security Law and quite a number of broker upgrades.  T/O was low as there were a number of 'late trades' pre market after Friday’s re-weight.  I think a number of investors and protestors have been caught by surprise at the speed with which China has pushed the new National Security Law.  Investors will wait to see if there is a substantive reaction from the US. Key is how Trump want to play this going into the election.  Go easy and play up the trade deal or go hard and show he is tough on China.  Biden will be watching closely and the Bolton book is unlikely to help.  On that, an interesting point; by saying that Bolton has released classified material Trump is substantiating the content of the book; because if an event  did not happen it could not be classified…makes you think.
It will be interesting to see whether the protests will resurge.  The very hot weather and the draining effect of covid could have sapped their enthusiasm but I would remain wary at this stage July 1 is likely to be eventful. 

IPO LITIAN PICTURES (9958.HK) closed at $1.59  -38% against the listing price of $2.56, on volume of 32.27mm shares and turnover of HK$64.04m

AFTER MARKET 
Standard Chartered announced the launch with Hong Kong Trade Development Council (HKTDC) of the “Standard Chartered GBA Business Confidence Index”, the first forward-looking quarterly survey in the market that looks at the business sentiment and synergistic effects across cities and industries in the Guangdong-Hong Kong-Macao Greater Bay Area, to provide the latest business intelligence for those who are keen to grow their presence in the Greater Bay Area.
Moodys said the coronavirus crisis will drive up the government debt/GDP ratios by around 19 percentage points in America, Japan, Italy, Britain and ten other richest countries, nearly twice as much as that in 2009's Financial Tsunami, according to a report by Moody’s. Compared with the financial crisis in 2009, the rise in debt burdens will turn out more immediate and pervasive, reflecting the acuteness and breadth of the pandemic-inflicted shock.
RAZER (1337.HK) said that Tinder, a dating app, debuted on the company's Razer Gold, a virtual points platform.  Users can upgrade their Tinder accounts to Tinder Plus and Tinder Gold by making consumption on Razer Gold to enjoy a basket of advanced functions and increase matching success rate. 
MTR CORPORATION (66.HK) stated, it had earlier announced a new series of relief measures, including a substantial increase of the current “3.3% Rebate for Every Octopus Trip” to “20% Rebate for Every Octopus Trip”, and a price reduction for Frequent User Tickets for six months. The “20% Rebate for Every Octopus Trip” will take effect on 1 July 2020 and last until 1 January  Combining this new offer together with the existing “Early Bird Discount”, adult Octopus users can enjoy fare discounts of as much as about 55%. Frequent MTR travelers will also enjoy a $100 reduction for every purchase of “Monthly Pass Extra” and “MTR City Saver” for use from July to December 2020. Passengers may purchase “Monthly Pass Extra” for July at the discounted price starting from 24 June.2021.
China Securities Index Co., Ltd. announced that it will launch the CSI Shanghai-Hong Kong-Shenzhen Leading Technology Index on 16 July to enrich the index system and provide investors with the latest analysis tools and investment subjects. 

HKMA Chief Executive Eddie Yue wrote on inSight that as the COVID-19 situation eases, local economic activities are showing signs of picking up. Nevertheless, economic recovery will take time and many small and medium-sized enterprises (SMEs) are still in dire straits.  It is therefore crucial to continue to support SMEs, enabling them to carry on their business and, by so doing, protect the jobs of employees. Among the various support initiatives, the SME Financing Guarantee Scheme operated by the HKMC Insurance Limited (HKMCI) on behalf of the Government is playing an indispensable role. SMEs form an important pillar and driving force supporting the economic development of Hong Kong. The authority will continue to closely monitor market developments and provide timely support to help SMEs overcome the difficulties ahead, furthered Yue.


Market and Pre Market News at bottom of page.
Short Selling HSI 
Monday 20.2% vs 18.7% Friday

Top Shorts Henderson Land (12) 49%, Wharf REIC (1997) 39%, MTR (66 HK) 36%, Hang Seng Bank (11) 35%, Mengniu Dairy (2319) 34%, Country Garden (2007) 31%, Sands China (1928) 30%, Sunny Optical (2382) 30%, CCB (939) 28%, China Overseas (688) 28%, SHKP (16) 25%, Galaxy (27) 25%.


COMMENT 

*PETROCHEMS WEAK despite oil rising as US drillers idled another 10 rigs and Saudi Arabia said OPEC+ is on the right track to rebalancing the global market. BUT concerns that a second-wave of covid-19  may occur in some countries may impact oil demand which hurt sentiment. CNOOC (883 HK -0.8%) PETROCHINA (857 HK -1.4%) SINOPEC (386 HK -0.9%).
*CHINESE FINANCIALS MIXED. CHINA BANKS WEAK after China kept the 1 an 5 year loan rates unchanged. CCB (939 HK -1.3%) ICBC (1398 HK -0.5%) CMB (3968 HK -1.6%). BROKERAGES STRONG as the Shanghai Stock Exchange said it will revise the compilation rules for its benchmark measure from July 22. CITIC SEC (6030 HK +2%) CGS (6881 HK +4%) HAITONG SEC (6837 HK +1.7%) HUATAI SEC (6886 HK +2.4%).
*E-COMMERCE PLATFORMS WEAK  despite Hang Seng Indexes saying that said JD.COM (9618 HK -2.2%) will be added to the Hang Seng Composite Index, Hang Seng Internet & IT Index and other sub-indexes from July 6; ALIBABA (9988 HK -2.8%) NETEASE (9999 HK +0.4%). GAMING PLATFORMS FIRM after Nintendo said it is retreating from the $77 billion mobile gaming arena to focus on its own platform after disappointing results from its mobile efforts. NETDRAGON (777 HK +0.4%)  TENCENT (700 HK +3%) RAZOR (1337 HK +5%).
*EDUCATION PROVIDERS MIXED selective interest on M&A speculations. CHINA MAPLE LEAF (1317 HK +11.4%) said it is close to acquiring Singapore Canadian International School one of the largest international schools in Singapore, in a deal valued at about US$500m.  VIRSCEND EDU (1565 HK +13.8%), JH EDU (1935 HK +10%).
*TECH & COMPONENTS MIXED  Huawei Tech expecting to receive planning permission this week to construct a GBP 400mn R&D centre near Cambridge UK,  Also FT article about dominating the Russian 5G area which could lead to more emerging market business. AAC TECH (2018 HK +2%) SUNNY OPTICAL (2382 HK +1.5%) BYDE (285 HK +3.2%). SMIC (981 HK +5.7%) got approval from Shanghai Stock Exchange to list on its STAR board for high-technology companies, in which SMIC plans to raise 20b yuan. ZTE (763 HK -7%) clarified that media misread the report about scale production of 7nm chips and import for 5nm chips. ZTE focuses on chip design and it does not have the ability for chip production.
*HK PROPERTY WEAK  in reaction to the announced outlines of the national security law for HK and that Beijing plans to establish a “national security bureau” in Hong Kong with Chinese authorities having jurisdiction on national security crimes in the city. CK ASSET (1113 HK -1.1%) despite seeing 13x over subscription for its first release of units at Sea to Sky and yesterday releasing another 285 flats under the second price list at an average price of HK$16,531 psf after discounts, +4.47% than the first price list. HENDERSON (12 HK -1.9%) SHKP (16 HK -1.7%).
*AUTOS WEAK  despite CAAM revising up it's projection for this year's China car sales to only drop 10-20% YoY, (was previously down 15-25%). GWM (2333 HK -0.2%) said it has agreed to sell 100% of the equity interest in its leasing business Chongqing Chuangban to Chongqing Lingkan at a consideration of 656.65m yuan.
GEELY AUTO (175 HK-1.9%) said it has no intention to participate in bidding for Mahindra’s stake in the South Korean auto brand Ssangyong.
DONGFENG (489 HK +2.1%) GAC (2238 HK -2.9%).
*AIRLINES WEAK as US officials rejected the additional flights proposed by Chinese airlines but said they would reconsider if the Beijing govt adjusts its policies affecting  American passenger carriers. CEA (670 HK -3%) CSA (1055 HK -3.8%) AIR  CHINA (753 HK -2.2%).
*OTHER MOVERS:
AIA (1299 HK +1.8%) is among the index top gainers after China approves its Shanghai branch becoming a subsidiary, paving the way for expansion in China.

CONNECT  FLOWS

Shanghai

Northbound RMB 33,827m Sell 16,276m : 17,551m Buy

Southbound HK$ 13,886m Sell 6,987m : 6,900m Buy

Shenzhen

Northbound RMB 50,918m Sell 25,006m : 25,912m Buy

Southbound HK$ 12,957m Sell 6,046m : 6,911m Buy


DATA CHINA 

Loan Prime Rate 1yr 3.85 unchanged (F/cast was a cut to 3.7%)

5 yr 4.65% unchanged (F/cast was a cut to 4.5%).


HONG KONG 

After Market

Current Account Q1 HK$-9bn vs +41.7b prior (revised (F/cast was +15bn

Inflation Rate May +1.5% YoY vs +1.9% Apr (F/cast was 2%)


Current Account The secondary income gap widened to HKD 7.0 billion from HKD 5.11 billion in Q1 2019 and the primary income surplus narrowed sharply to HKD 16.0 billion from HKD 61.02 billion. Also, the services surplus fell to HKD 32.15 billion from HKD 49.49 billion while the goods deficit dropped to HKD 50.18 billion from HKD 71.93 billion.

Inflation Prices slowed for food (4.8% vs 6% in April), namely pork and fresh vegetables;

Housing (1.6% vs 1.8%), in particular private housing rentals; Miscellaneous goods (2.9% vs 3.5%); and miscellaneous services (0.7% vs 0.9%).

Additionally, cost declined further for electricity, gas & water (-19.4% vs -18.8%); and clothing & footwear (-5.4% vs -4.4%).

In contrast, prices rose at a faster pace for transport (0.6% vs 0.1%) while cost of durable goods fell less (-2.8% vs -3.1%).

On a monthly basis, consumer prices went down 0.4 percent, after a 0.3 percent increase in the prior month.

Census and Statistics Department (C&SD) said March total employment in the private sector surveyed -3.8% YoY or 110,000 persons. The total number of vacancies was 42,300, -47% YoY or 37,300.

Centre for Health Protection said that there were No new local covid-19 cases today.

On Sunday there were 3 new imported cases.


Active Heavyweights
HKEX (388.HK) +3.7% hit new high
TENCENT (700.HK) +3% hits a new high
AIA (1299.HK) +1.8%
HSBC (5.HK) -1.7%
CCB (939.HK) -1%
ICBC (1398) -0.7%
PING AN (2318.HK) -0.4%

HSI & HSCEI Constituents on the move
SINOPHARM (1099.HK) -3.9%
GALAXY ENT (27.HK) -3.7%
SINO LAND (83.HK) -3.5%
CHINA VANKE (2202.HK) -3.3%
WANT WANT CHINA (151.HK) -3.2%
TECHTRONIC IND (669.HK) -3.1%

HSMI & HSSI Constituents on the move
FIT HON TENG (6088.HK) +12.8%
WEIMOB INC (2013.HK) -11.8%
HUIFU PAYMENT (1806.HK) -11.1%
SMIC (981.HK) +5.7%, hits new high
KINGSOFT (3888.HK) +5.1%, hits new high
VINDA INT'L (3331.HK) +2.8%, hits new high

REGIONAL MARKETS  

JAPAN opened lower in the red but worked higher until mid afternoon when it eased lower into the close; Finished -0.2%.  

S KOREA Markets opened mixed; Kosdaq in flat, worked higher for most of the session but sold down at the end top close +1.3%, Kospi opened in the red about worked back to flat but unable to break above and sold off into the close to finish -0.7%

TAIWAN Opened slightly higher, after and initial uptick it eased back to flat and traded traded sideways for the rest of the day. Closed +0.2%%


NEWS
MARKET HOURS 

Taobao announced that it is officially setting foot in the education sector by launching "100 Million New Student Program” Leveraging on its 800 million active users and capabilities in live streaming, marketing and mobile apps, the Chinese e-commerce platform will in the next three years help more than 1,000 education institutes and learning establishments win over 100,000 new students each.
Archosaur Games, a Chinese online game operator with TENCENT (700.HK) as the substantial shareholder, has kick-started an international roadshow, and is expected to have public offering in Hong Kong at end-June, or not early July, mainland media cited source The company will fetch around US$200 million fund from the IPO, according to earlier sources.
WEIMOB INC (2013.HK) was under pressure this morning, -12.6% to $8.57. The company was sued for deleting database, and trialed today (22 June) at a Shanghai court.  Stock closed -11.8%
European Commission President Ursula von der Leyen and European Council President Charles Michel will have a video conference today with Chinese Premier Li Keqiang and President Xi Jinping as they try to cool their tensions. No issue of joint statement was expected following the summit.
EVERGRANDE (3333.HK) announced that it had on 19 June repurchased 16.865 million shares through the Stock Exchange, involving $342 million.
Hong Kong's housing market saw 68 first-hand transactions + 36% WoW. Among which, OCEAN MARINI by Wheelock Properties, sold 22 flats. 

PRE MARKET

Trump said the coronavirus outbreak in the US is coming to an end, as he lashed out at China for spreading the virus across the world by stalling on pandemic handling. Trump added his optimistic forecast that the latest unemployment and retail figures implied potential fierce economic rebound.

CHINA MOBILE (941.HK) May data the number of 4G customers reached 757.5 mn, with a net addition of 3.809 mn (Apr: +1.772 mn);  5G hit 55.609 mn, with a net increment of 11.864 mn.

AIA China Banking and Insurance Regulatory Commission said that AIA was allowed to revamp its Shanghai subsidiary into its wholly-owned life insurance arm, to be chaired by Lee Yuan Siong and as the first wholly foreign-owned life insurer in China.

CH BAOFENG INTL (3966.HK) East Step International, held by a controlling shareholder and as the offeror, has proposed privatization at an offer price of $2.6 per share, circa 27.5% in premium to the closing price before share trading suspension. The company has made an application to resume trading in its shares today (22 June).

US President Trump told Axios that the imposition of stiffer sanctions against Chinese officials involved in the crackdown of Uighur Muslim minority was held off to shun latent impacts on trade talks with China.

Sunday

GOLDEN PONDER (1783.HK) Annual Results Announcement For the Year Ended 31 March 2020. Loss was HK$2.05 million versus profit of HK$16.82 million for the year prior. LPS was HK0.26 cents. The board recommended the payment of a final dividend of HK1 cent per share for the year.

CHINA LNG (931.HK)  issued profit warning. The Group is expected to record an increase in loss for the year ended 31 March 2020 as compared to the fifteen months ended 31 March 2019.

Read More  

18 June HK WRAP HSI -17pts JD-SW closed +3.5%. Beijing says everything under control

18 June HK WRAP  HSI -17pts  JD-SW closed +3.5%.  Beijing says everything under control


HSI -17pts (-0.1%) 24,465  HSCEI +7pts (+0.1%) 9,917 T/O HK$121.6bn (+16.7% DoD but taking excluding the JD-SW debut T/O was only +9%).   

Warrants were 8.46% of the market turnover (vs 8.41% Wednesday)


Europe Markets opened weaker but rallied but then revised and are trending lower. Expect caution ahead of the BoE rate decision.

US Futures Opened -120pts are trended lower to -385pts mid morning but recovered and now indicate a flat open.


INDEXES      

CSI 300 closed +27pts (+0.7%) @ 4,044 Market opened lower but worked higher for the first 30 minutes to test yesterday’s closing level which it did several times for the next hour and then around 11am rallied through, and at lunchtime was 4,036.  On news of credit easing plans and more financing opening policies at the LJZ Forum in Shanghai.  PM saw the market initially rally but then sell down on weak FDI data but then bounce back into the close.

HSI Pre Market -95pts @ 24,386 vs -125 pts ADR’s @ 24,356 with Dotcom names strong on the debut of JS-SW(9618 HK) +5.8%.  Geely +7% on news of possible listing on the Sci-Tech board.  Market initial sold off (maybe some margin calls) to the day low (24,122) but then rebounded 120pts and traded sideways around the 24,250 level for an hour. Then another wave of selling (again I think margin calls) but a strong rally of 250pts into lunch.  PM saw an initial tick up but then selling for the next hour and gave up 100pts before rallying back as China closed.  Then traded sideways around the 24,410 level into the close.  Ticked up 50pts in the closing auction. 
UBS hiked Techtronics (669 HK) Target Price to HK$91.00 today

IPO JD-SW (9618.HK) closed at $234, up $8  or +3.5% vs listing price of $226, on volume of 29.789 million shares and turnover of $7 billion. Excluding the handling fees, a book gain of $400 was reported per board lot of 50 shares.
AFTER MARKET 
KANGJI MEDICAL (9997.HK), to close its IPO at noon tomorrow, registered over $101.8 billion of margin granted by 14 brokers in three days as at around 6 pm today.
BABA-SW (9988.HK) said that Tmall's overall turnover had ballooned 100% YoY in  the first hour of 18 June, the day of "618 Shopping Festival".
Hong Kong Airlines was asking Hong Kong Government for a bailout plan after the latter had earlier offered to rescue CATHAY PAC AIR (293.HK) South China Morning Post reported.
PRU (2378.HK) reached agreement with Athene Holding, a leading retirement services company, for its subsidiary Athene Life Re Ltd to invest US$500mn in Prudential’s US business in return for an 11.1% economic interest with  voting interest is 9.9%.  Athene’s investment will be deployed in Jackson, strengthening its capital base.  Athene Life Re Ltd has also fully reinsured a US$27.6 bn in-force portfolio of Jackson’s US fixed and fixed indexed annuity liabilities under a long-term arrangement.
Citibank announced the launch of Citi HKTVmall Card which entitles cardholders to a 7% rebate when shopping on HKTVmall. The team-up enables HKTVmall users to apply for the credit card and make purchases and payment with reward points via the HKTVmall app
PACIFIC TEXTILES (1382.HK)  announced annual results ended March 2020. Net profit HK$743mn, -13.7% YoY with EPS of HK$0.51. Final DPS was HK18 cents, as compared with HK25 cents last year.
SA SA INT'L (178.HK) stated that month-on-month sales recovery was recorded upon growing footfall as a result of the eased gathering ban. With 99% of it's Hong Kong T/O was contributed by local customers in June, after a raft of promotions to lure local buyers. They witnessed a faster recovery in Mainland business. Despite closing ten stores amid the plague, SA SA INT'L had opened four to five stores over the past two months, while expecting to see at least ten shop openings this year. He also stressed the upbeat view on the Mainland market for the second half of year, especially online business.  Among the 37 HK outlets up for lease renewal this year, the cosmetic chain has renewed lease for six on a long term basis, with rent trim averaging 40%; and for another seven, leases are on a 3-6 month basis, with rent trim over 50%.  They estimate to shut down no fewer than ten outlets this year as he does not see resurgent business volume in the tourist spots in the near future as political events and the epidemic in Hong Kong have reshaped consumers' outdoor shopping patterns.  It decided not to distribute final dividend this year for the first time. They hoped minority shareholders will understand the firm's intention to keep cash on hand under the current environment. They pledged to resume payout when the business takes a turn for the better.
Meeting with six local major catering associations today (18 June), Financial Secretary Paul Chan said the industry will offer discounts and promotions to stimulate local consumption. The catering industry will launch discount dinner offers from 15 July, with 30% off dinners for July and 20% off meals for August, revealed LegCo's catering representative Tommy Cheung, who expected thousands of eateries to partake in the program. The list of participating restaurants will be unveiled on website in early July.
Hong Kong Jockey Club stated that taking note of recent improvements in the COVID situation, it has decided to re-open its Off-Course Betting Branches (OCBBs) on non-racedays from 22 June to the end of the current racing season to provide betting services for races and customer services.  Betting services for football will not be available at OCBBs, and the Mark Six lottery will remain suspended
I-CABLE COMM (1097.HK) For the first time in 7 years recorded positive cash flow in 3-4 months in a row, meaning that the group has stopped "bleeding" in cash although depreciation is yet to be priced in, said Chairman David Chiu. The TV platform has recently reported a surging number of subscribers, 40% rise in advertising revenue for its free TV channel and over 500,000 installs for its OTT app. Chiu voiced his delight with the high click rate of their app and Facebook page.  While I-CABLE COMM has recently strategically teamed up with CHINA MOBILE (941.HK), the chairman disclosed that they are not considering investment plans from the telecom carrier, but there are many other possibilities.
LH GROUP (1978.HK)  Chairman Simon Wong disclosed that the industry performance is dependent on the number of infection cases, rather than HSI, and that the group has recovered 70-80% of its business. During the hardest time in March, the eatery chain had closed all its hotpot restaurants for roughly three weeks, added Wong. However, no severance was done while they do not hope to cut costs by means of job cuts in the future. The chairman disclosed that the group will slow down on expansion plans. Some leases have been nailed down for new restaurant opening in 2H20, following none in 1H20.
Centa Valuation Index (Major Banks) (CVI) last printed at 75.52, -6.51 pts WoW.  The index plunged from 90 to 75 in three straight weeks amid the re-emergence of social movements. The steeper slide this week meant banks were turning less proactive on mortgages. -VE

Market and Pre Market News at bottom of page.


Short Selling HSI
Thursday 26% vs 21.2% Wednesday

Top Shorts Wharf REIC (1997) 61%, Hang Lung PPY (101) 52%, Hang Seng Bank (11) 49%, HSBC (5) 48%, Mengniu Dairy (2319) 48%, Want Want (151) 45%, NWD (17) 39%, ICBC (1398) 38%, Bank of China (3988) 36%, MTRC (66) 35%, Shenzhou (2313) 34%, CCB (939) 31%, AIA (1299) 30%, Ping An (2318) 30%, CK Asset (1113) 29%, Sunny Optical (2382) 29%, Henderson Land (12) 29%, BankComm (3328) 27%.


COMMENT 

*RESOURCES STRONG after the state planner said it would cap capacity at coal miners and steel smelting firms. ANGANG (347 HK +6.8%) MAANSHAN (323 HK +8.4%) YZC (1171 HK +2.2%)  CH COAL (1898 HK +2.1%). HENHUA (1088 HK +2.9%) reported coal sales volume for May -10.1% to 37.2m tons; May coal production volume falls 0.4% to 24.7m tons.Slight -VE for BHO and Rio
*CHINA BANKS WEAK but off initial lows after China’s financial regulator asked banks to keep profit growth below 10% this year. Regulators urge financial institutions to sacrifice 1.5t yuan in profits this year to support enterprises by offering lower lending rates, deferring loan repayments and cutting fees. ICBC (1398 HK -0.2%) BOC (3988 HK -0.7%) CCB (939 HK -0.6%) CMB (3968 HK -1.2%).
*DOTCOMS FIRM with focus on JD.COM (9618 HK) debut, stock closed 3.5% above  its IPO price HK$226 but off the initial highs.  
ALIBABA (9988 HK) and JD are expected to release final results of sales data for the "618" shopping festival which begin in June.
RAZER (1337 HK +5.3%) repurchased 1m shs on June 17 between HK$1.31-1.32/shr. TENCENT (700 HK +1.6%) NETDRAGON (777 HK +2%).
CH LIT (772 HK +7.5%) jumped again amid positive outlook that improved contract terms would attract quality writers to the platform.
*HK PROPERTY FIRM one-month HIBOR fell for the 15th consecutive trading day to 0.49714%, the lowest in three years and the longest decline for more than a year.
Li Ka Shing Foundation continued buying; it bought 1.66m shs CK ASSET (1113 HK -0.4%) between June 11-15, with avg px HK45.2807 HK$46.4676.
HENDERSON (12 HK +0.5%) SHKP (16 HK +0.7%).
*AUTOS FIRM as GEELY (175 HK +5.9%), board  approved a preliminary  proposal for a listing on the STAR Board in Shanghai. BYD (1211 HK +4.8%) said it established a new company in Shenzhen, business scope involves drones and VR glasses.GAC GROUP (2238 HK +1.4%) GREATWALL (2333 HK +1%).
*SPORTWEAR MAKERS MIXED optimism on a strong recovery but off-set by the new covid-19 cases in Beijing. CH DONGXIANG (3818 HK -1.5%) net profit  -14.7% to 366.33m yuan for the year ended March. LI NING (2331 HK +3.7%) ANTA SPORTS (2020 HK +2%) XTEP (1368 HK -2.2%).
*TECH & COMPONENTS STRONG  ZTE (763 HK+22%) as stock surged on importing 5nm chips technology, showcased ZTE’s R&D capabilities in high-end chip design.  Sector also traded strong amid speculation China-US tension may ease following Pompeo and Yan's meeting in Hawaii. XIAOMI (1810 HK +1.3%) AAC (2018 HK +2%) TONGDA (698 HK +3.5%) HUA HONG (1357 HK +7.3%).
*SHIPPING COMPANIES FIRM as Baltic Dry Index indicating freight rates surged by record 18% on Wed. SITC (1308 HK +5%) COSCO SHIP (1919 HK +3%) PACIFIC BASIN (2342 HK +3.6%).
*OTHER MOVERS:
SKYWORTH (751 HK +10.8%) seeks to buy as many as 392.8m shares at HK$2.8 each. The company said the potential HK$1.1b cost of the buyback would be “funded by internal resources”.
SUN ART RETAIL (6808 HK +9.3%) on Beijng lockdown and closure of local food markets; seen as to boost sales in supermarkets and online channels.
ASCENTAGE (6855 HK +11.1%) continue to be strong amid drug development.

CONNECT  FLOWS

Shanghai

Northbound RMB 29,125m Sell 13,057m : 16,068m Buy

Southbound HK$ 9,696m Sell 4,176m : 5,520m Buy

Shenzhen

Northbound RMB 48,204m Sell 23,129m : 25,074m Buy

Southbound HK$ 10,525m Sell 4,744m : 5,781m Buy


DATA 

CHINA FDI (YTD) May -3.8% vs -6.1% (F/cast was -2%)

China’s CDC’s chief epidemiologist, Wu Zunyou, said at a news conference Thursday that a coronavirus outbreak in Beijing, which saw 21 new cases confirmed on Wednesday and 31 the day before, was now under control.

HONG KONG 

No macro data

Centre for Health Protection said that there were no new covid-19 cases today


Active Heavyweights
TENCENT (700.HK) +1.6% hits a new high
HSBC HOLDINGS (5.HK) -1.6%
HKEX (388.HK) +0.8%
CCB (939.HK) -0.6%
PING AN (2318.HK) -0.6%
ICBC (1398) -0.2%
AIA (1299.HK) +0.1%

HSI & HSCEI Constituents on the move
GEELY AUTO (175.HK) +5.9%
CSPC PHARMA (1093.HK) +5.4%
BYD COMPANY (1211.HK) +4.8%, hits new high

HSMI & HSSI Constituents on the move
ZTE (763.HK) +22%
CHINA AOYUAN (3883.HK) +10.9%
SKYWORTH (751.HK) +10.8%
CHINA LIT (772.HK) +7.5%, hits new high
SMIC (981.HK) +6.9%, hits new high
MAN WAH HLDGS (1999.HK) +4.6%, hits new high

REGIONAL MARKETS  

JAPAN opened lower and trended lower in the morning but rebounded from the day lows and then traded sideways slightly below yesterday’s closing level. Closed -0.45%

S KOREA Kosdaq opened slightly +VE tested yesterday’s closing price before trending higher but then rolled over and trading sideways around flat for most of the day. Closed +0.3%.  Kospi opened lower, sold down, bounced to test yesterday closing level but failed to break above despite testing it a number of times; Closed  -0.4%

TAIWAN opened higher but moved lower, traded sideways around yesterday’s level to close +0.1%.


NEWS
MARKET HOURS 

India's Department of Telecommunications will ask state-owned Bharat Sanchar Nigam Ltd (BSNL) to shun away from Chinese telecom gear in 4G upgradation, Indian media citing insiders. India admitted at least 20 soldiers were killed in a face-off with Chinese troops, stirring anti-China sentiment in the country with protesters and some trade groups calling for a boycott of Chinese goods.
The bill of HKSAR National Security Law has been floated at the National People's Congress meeting held today. The bill clarified the definition and criminal responsibilities for secession, subversion of state power, terrorism and collusion with foreign forces, aiming at preventing, prohibiting and punishing such illegal behaviour in the territory.
HKEX (388.HK) plans to launch Sustainable and Green Exchange "STAGE".  This pioneering new information platform is the first-of-its kind in Asia, and will act as a central hub for data and information on sustainable and green finance investments in the region.
CK ASSET (1113.HK)  first price list for SEA TO SKY, involving a total of 285 units mainly in Tower 1 and Tower 2. Based on up to 22% discount, the flats, with salable area of 434-1,077 sq. ft., are priced at $6.428-18.176 million.  Under the Stage Payment Plan, offered by the developer, homebuyers are entitled to a 19% discount at most.  
CEO (Residential) of Asia Pacific at Centaline expects it to ‘lure enthusiastic subscription and challenge the position of "subscription king" of the year,’  But he is an agent and may be talking up his own book.
At lunchtime FUJIKON IND (927.HK) annual results ended March 2020. Net profit  $28.991mn, -28.4% YoY EPS of 6.8 cents. Final DPS was 3 cents, against 5 cents in the corresponding period of the previous year.
Also SA SA INT'L (178.HK)  Annual Results year ended 31 March 2020. The Group’s Turnover for the continuing operations -29.9% YoY to HK$5.717 billion. Loss for the year was HK$516mn, vs  profit of HK$47mn recorded in the same period last year. No final dividend was declared. 
The PBoC Governor Yi Gang said Chinese macro economy has been recovering since 2Q20, expecting FY20 new loans and aggregate financing to real economy (flow) to approximate RMB20 trillion and exceed RMB30 trillion respectively.
XIAOMI-W (1810.HK) said that its 618 platform registered over RMB1 billion of payment as of 10:29 am today.
MoFA: PRC Strives to Forge Non-Conflicting, Non-Confronting Relation with US 
During the meeting with US Sec State Pompeo in Hawaii, Chinese politburo member Yang Jiechi had articulated China's essential attitude towards Sino-US relations and stance towards sensitive issues involving Taiwan, Hong Kong and Xinjiang, according to Chinese Foreign Ministry Spokesman Zhao Lijian. Beijing strives to make concerted efforts with Washington to forge a non-conflicting and non-confrontational relationship on the basis of mutual respect and win-win cooperation, Zhao added.  He also said that Yang Jiechi pointed out that Hong Kong affairs, ranging from law enactment to enforcement mechanism about national security law, fall within China's internal affair and that China is adamant on the legislation. Beijing called on Washington to show respect to her sovereign authority and look at Hong Kong National Security Law legislation on a level and unbiased basis, thus putting an end to any form of intervention in Hong Kong affairs.
TENCENT's Brawl Stars Logs 4.8M Installs in 1st Week of Launch in CN, Generates US$17.5M Revenue says Sensor Tower The game, developed by TENCENT's Supercell, recorded US$28.8 million in revenue and logged 6.7 million installs worldwide during the period.
Overnight HIBOR last posted at 0.10155%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.43506%, down for 15 days, marking a 1-month low.
The US allows Huawei to discuss 5G standard with US enterprises, as Commerce Secretary Wilbur Ross clarified at an interview with Fox Business Network. However, Washington opposes the use of Huawei technology in 5G networks due to lingering concerns about latent spying threats, added Ross.
Canalys reports during the first quarter of 2020, worldwide smartwatch shipments reached 14.3 million, up 12% yearly. The biggest share went to Apple.  It anticipated China to be the key smartwatch growth driver in 2020, riding on resurgent economy and a greater push from local players.
ZTE (763.HK) mentioned its chip design and development capabilities on an interactive platform yesterday, adding the 7nm chips are under mass production and being utilized in global 5G networks, reported Chinese media. The firm is also importing the 5nm process technology.
JD-SW (9618.HK) said that its 6.18 Shopping Festival has grossed more than RMB228.46 billion of orders so far.
Hong Kong banks are set to meet with Secretary for Financial Services and the Treasury Christopher Hui next Tuesday (23 June) to express their anticipations and concerns about "Wealth Management Connect Scheme", as they hope Hui to report their thoughts to Beijing, HK Economic Journal reported. Bankers are concerned about the actual operation of the scheme, roughly 20 local, Chinese and foreign banks engaged in retail banking businesses in the local market have been invited to join the discussion.
LINK REIT (823.HK) announced that the Manager is proposing to amend the scope of permitted investments under Link’s Investment Policy. The Manager considers that the exclusion of certain asset classes from Link’s investment portfolio even if they are income-producing; and have the potential for long-term income and capital growth, overly limits the range of global real estate market opportunities which the Manager may otherwise pursue in delivery of Link’s strategy to maintain a large and diversified portfolio of real estate assets for long-term growth. Accordingly, in continuation of the execution of Link’s strategy and for the reasons set out in the section headed “2. REASONS FOR, AND EXPECTED BENEFITS OF, THE AMENDED SCOPE OF PERMITTED INVESTMENTS”, the Manager proposes to allow investments in all real  estate classes by removing the restriction on investments in the Currently Excluded Properties.
ICBC (1398.HK), ABC (1288.HK), BANK OF CHINA (3988.HK) and CCB (939.HK) had on 15 June taken the initiative to revise down 3- and 5-year large-denomination deposit certificate rates, bringing them down to 1.45x of the benchmark deposit interest rates as compared with 1.5x in the past, Shanghai Securities News reported.

PRE MARKET
Beijing confirmed 21 new local COVID-19 
infections and three probable cases yesterday (17 June), announced by Beijing Municipal Health Commission.

Hubei Health Commission reported two more COVID-19 cases in the province. Both patients are operators of the Xinfadi wholesale market.

Macao will reclaim tourism scale and model as it used to be not until 2023, as Maria Helena de Senna Fernandes, Director of Macao Government Tourism Office, told Macao Daily. A schedule is yet to be nailed down over the consolidation of the office into Secretariat for Economy and Finance. With inbound travel restriction likely to persist in a near future, residents may be exposed to hindrance to a certain extent when it comes to travel, furthered the director, disclosing that the government may join forces with hotels and resorts to roll out discounts and offers in August.

STANCHART (2888.HK) intent to issue US$1bn Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities next Friday (26 June). The Initial Fixed Interest Rate for the first six years is 6%. The net proceeds from the issuance, expected to be US$990mn, will be used for general business purposes and to strengthen further the regulatory capital base.

MENGNIU DAIRY (2319.HK) announced the issuance of exchangeable bonds exchangeable into shares of CH MODERN D (1117.HK) in the aggregate principal amount of US$100 million. The bonds will be mature in three years at the rate of 1.5% per annum. Assuming the bonds are fully exchanged into CH MODERN D shares at the exchange price of HK$1.2625, the bonds will be exchangeable into 614 million shares, representing 9.58% of the issued share capital of CH MODERN D.

GEELY AUTO (175.HK) a proposal for the possible issue of RMB Shares and listing on the Science and Technology Innovation Board of the Shanghai Stock Exchange. The proceeds of the Proposed Issue are intended to be used for business development and general working capital.

GOLDEN MEDITECH (801.HK)  that Kam Yuen, a founder and controlling shareholder of the company, proposed privatization of the company by way of a scheme of arrangement at $0.88 per Disinterested Scheme Share, involving about $425mn. Upon the Scheme becoming effective, it is anticipated that listing of the Shares on the Stock Exchange will be withdrawn. The company applied for a trading resumption with effect from this morning

SKYWORTH GROUP (751.HK) proposed a conditional cash offer to buy-back up to392.8 million shares, representing 12.83% of the issued Shares at the price of HK$2.8 per Share, a premium of 32.08% over the closing price as quoted on the Stock Exchange on the Last Half Trading Day. The consideration for the Offer amounted to up to about HK$1.1 billion.  The business & management of the Group will remain unchanged and the Company’s listing on the Stock Exchange will be maintained upon completion of the Offer. The company applied for a trading resumption with effect from this morning

REALORD GROUP (01196.HK) the offer price is adjusted upwards to the Final Offer Price of HK$0.3935 per SINCERE (244.HK) Share based on the amount of the February 2020 NAV

HKR INT'L (480.HK) Final Results Year Ended 31 March 2020. Net profit -26.4% YoY to $1.625 bn. The basic EPS was HK109.4 cents.  The Board recommended the a final dividend of HK7 cents per share. The proposed final dividend together with the interim dividend of HK5 cents per share for the six months ended 30 September 2019 makes up a total dividend of HK12 cents per share for the year ended 31 March 2020.


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HK WRAP 17 June HSI +137pts but T/O drops for a third day

HK WRAP 17 June HSI +137pts but T/O drops for a third day


HSI +137pts (+0.6%) 24,481  HSCEI +42pts (+04%) 9,909 T/O HK$104.24bn (-9.1% DoD).   Warrants were 8.41% of the market turnover

Europe Markets opened slightly higher, rallied and eased back now moving higher again.

US futures indicating higher +188pts after earlier weakness Expiry on Friday.


INDEXES      

CSI 300 closed +3pts (+0.1%) @ 4,018 Market opened lower on news of the covid-19 outbreak continuing in Beijing, rising India/China tensions and concerns over North/South Korea. It ticked lower initially but then rallied to the morning high of 4,016 which it tested a couple of times before selling down, in steps, to the day low of 3,992.  Then it rebounded into lunch at 4,007. PM saw initial selling back to 4,000 level which it tested several times before a final rally to the day high of 4,019.  It then ticked lower into the close.
Investors will be watching for any new of todays meeting between US Sec State Pompeo and Yan’s in Hawaii.

HSI Pre Market +19pts @ 24,363 vs -60 pts ADR’s @ 24,284 with weakness in Financials but buying the major Dotcom names.  It then ticked initial lower before rebounding strongly, 200pts toi the morning high of 24,450 before revising and selling back down  250 pts to the day low 24,196. Then it rallied back to Tuesday’s closing level and traded sideways into lunch. PM saw an initial  tick higher but then sold down 100pts to the afternoon low of 24,243 before reversing and working higher for the rest of the day. First rebound to around 24,420 level and then a final rally around 3.30pm to 24,532 after which it drifted lower into the close and ticked lower in the closing auction. Turnover dropped for a third consecutive day.   Pharma and Tech in focus except Xiaomi with its India operations was -3.1%
AFTER MARKET 
RAZER (1337.HK) repurchased 1 million shares on the Stock Exchange with $1.315mn on 17 June at $1.31-1.32 per share. Year to date, the company has bought back 2.63mn shares, representing about 0.0299% of the issued shares. 
As USD/ HKD triggered the Strong-side Convertibility Undertaking at 7.75 again, the HKMA undertook US$100 million of selling orders during Hong Kong trading hours and injected HK$775 million into the market. The balance of the banking system of Hong Kong will increase to HK$126.537 billion on 19 June. 
JD-SW (9618.HK) and Kuaishou joined hands to treat users to a shopping spree, recording live-streaming sales value of RMB1.42bn yesterday, reported Chinese media. Particularly, Kitty Zhang Yuqi prompted sales of RMB223mn worth of goods in her live broadcast, which had reached 25 million views. 
Li Ka-shing and Victor T K Li acquired further the shares of CK ASSET (1113.HK) by a wholly-owned subsidiary of Li Ka Shing (Global) Foundation. They acquired a total of 1.6565 million in CK Asset at the average price of HK$46.4676, HK$45.2807 and HK$45.9537 per share on 11 June, 12 June and 15 June 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset increased from 35.12% to 35.17% and from 35.19% to 35.23%.
CHINA SHENHUA (1088.HK) said  commercial coal production in May totalled 24.70mn tonnes, -0.4% YoY;  sales amounted to 37.20mn tonnes, -10.1% YoY
Beijing Center for Disease Prevention and Control, said COVID-19 infections are still on the rise in the capital, reported Beijing Daily.  As the biggest agricultural by-product trading market, Beijing has an extensive logistics network and a high population density, thus facing grave risk of COVID-19 outspread and difficulty in plague control. They did not rule out the possibility that infections will keep ballooning in Beijing for a period of time.
Reuters earlier cited insiders that TENCENT (700.HK)  would like to acquire iQIYI stakes from Baidu, the substantial shareholder of iQIYI. Baidu clarified on social media that iQIYI is an integral part of the company's ecological strategy. Backing iQIYI's development just as always, Baidu made a call for dismissing wild guesses.
HANG LUNG PPT (101.HK) said  that it is joining forces with Mastercard to launch the year-long "ONLife" campaign, bringing a series of e-privileges to patrons that cover shopping, dining, learning and traveling.
Chinese financial watchdog has told banks to control their profit growth below 10% this year as they want the lenders to support the economy amid the steepest slide over four decades, as Bloomberg learnt from insider sources. Beijing will urge banks to extend more loans at lower rates and boost provision for credit losses over the altar of their earnings, said the report.
ByteDance, owner of TikTok, recorded revenue of around RMB40bn for Q1 +130% plus YoY, Reuters citing insiders. ByteDance fixed its 2020E revenue target at RMB200 bn, roughly half of TENCENT (700.HK)’s 2019 revenue of RMB377 billion, according to sources.
JD-SW (9618.HK), to be listed tomorrow, opened at $236.2 in gray,  +4.5% against the listing price of $226, and last traded at $238.8, +5.7% on volume of 150,000 shares, PhillipMart data showed.

Centa-Salesman Index (CSI) last posted at 59.13, -0.25 pts weekly. The market sentiment did not deteriorate further despite a latent second wave of local coronavirus outbreak, unfinished social movements and employment rate upsurge. Frontline agents remained upbeat on the property market.  CSI lingering around 60 for four weeks hinted at ongoing home price uptick.


Market and Pre Market News at bottom of page.


Short Selling HSI Wednesday 21.2% vs 21.6% Tuesday

Top Shorts Wharf REIC (1997) 56%, Bank of China (3988) 45%, Hang Seng Bank (11) 38%, Link REIT (823) 35%, China Res land (1109) 34%, HSBC (5) 31%, Country Garden (2007) 31%, Want Want (151) 31%, Hang Lung PPY (101) 29%, CK Asset (1113) 28%, MTRC (66) 28%, ICBC (1398) 27%, AIA (1299) 25%, CCB (939) 25%, Sunny Optical (2382) 25%


COMMENT 

*PETRO FIRM on expectations that supply will decrease after report of supply-cut compliance by Iraq, Nigeria and Angola, in which they have been identified by peers as failing to bring production down to target levels in May and an encouraging IEA report overnight. PETROCHINA (857 HK +1.5%) CNOOC (883 HK +0.2%) CH OILFIELD (2883 HK +1.6%).

*E-COMMERCE FIRM on strong sales recorded for the 618 shopping festival and ahead of JD.COM HK IPO to debut tomorrow with its HKPO recorded 179x subscribed. TENCENT (700 HK +0.4%) is reportedly aiming to become the biggest shareholder in video streaming rival iQIYI. Tencent has approached Baidu, which owns 56.2% of iQIYI, to buy a stake of as-yet-undetermined size, news said. Although after market Baidu said iQIYI is an integral part of the company and dismissed the rumours.

ALIBABA (9988 HK +2.1%) MEITUAN (3690 HK +0.2%)

CH LIT (772 HK+8%) after news reported that a large number of well-known online writers returned to the platform, as improved contracts for writers have been introduced.

*TECH & COMPONENTS MIXED with selective profit-taking after yesterday rally as investors work through the implications of the US amendments to the Huawei Bill. HUA HONG (1347 HK +3.3%) BYDE (285 HK +1.3%) SMIC (981 HK +1.6%) TONGDA (698 HK -4.4%) TRULY (732 HK -2.6%).

*HK PROPERTY FIRM as the one-month HIBOR. which is linked to the mortgage rate, fell for the 14th day straight; to 0.51863% yesterday.

SHKP (16 HK+1.6%) to launch this month the first phase of project Regency Bay in Tuen Mum, which offers 263 units.

CKA (1113 HK +1.3%) ready to release Sea to Sky and open the show flat.

HENDERSON (12 HK+1.5%) SINO (83 HK+1.6%).

*US EXPORTERS MIXED after strong US retail sales (the biggest increases were clothing, furniture and sports/leisure goods. Then was Electronic/ Applicances, Auto, F&B, Miscellaneous and gas stations) TECHTRONIC (669 HK +2.4%) VTECH (303 HK +2.6%) MAN WAH (1999 HK -0.6%) WH GROUP (288 HK -0.3%).

*AIRLINES WEAK as Beijing canceled 40% of outbound flights today on concern about new infections, after the capital lifted its emergency response to level two. CH EASTERN (670 HK -1.7%) AIR CHINA (753 HK -0.4%) CH SOUTHERN (1055 HK -1.1%).

*PHARMA MAKERS STRONG on vaccine speculation.

SINOPHARM (1099 HK +9.2%), after a Covid-19 vaccine candidate that is under development by Sinopharm’s subsidiary in Wuhan has shown no serious adverse reactions during phase I/II clinical trials.

CMS's (867 HK+10%) backed Tibet Rhodiola Pharm is investing in Stemirna Therapeutics to get global exclusive rights to develop, produce, commercialize Covid-19 vaccines.

SSY GROUP (2005 HK +2.9%) SIHUAN (460 HK +7.2%) ASCENTAGE (6855 HK +2.4%) SINO BIOPHARM (1177 HK +4.7%).

*OTHER 

GCL-POLY ENERGY (3800 HK -8.6%) is selling shares at HK$0.203 each to raise proceeds of HK$260m in an accelerated placement. Selling price a 17% discount to the Tuesday's closing price.

KOOLEARN TECH (1797 HK +10.2%) as online education demand is likely to increase following the latest enhanced Covid-19 response measures taken in Beijing, including shutting down of schools.


CONNECT FLOWS

Shanghai

Northbound RMB 26,352m Sell 13,548m : 12,803m Buy

Southbound HK$ 8,937m Sell 3,836m : 5,102m Buy

Shenzhen

Northbound RMB 44,713m Sell 23,345m : 21,368m Buy

Southbound HK$ 8,807m Sell 3,826m : 4,981m Buy


DATA 

CHINA no macro data.

China confirmed 44 additional COVID-19 cases yesterday (16 June), including 11 imported cases and 33 local infections (31 in Beijing, 1 in Hebei, and 1 in Zhejiang), National Health Commission announced.At a coronavirus crisis press conference, Beijing Center for Disease Control and Prevention stated that 27 new cases had on Monday (15 June) been confirmed citywide. The taskforce has thus revised up the public hygiene emergency alarm to Level 2 from Level 3 with immediate effect. The plague was caused by interpersonal contraction and contamination according to preliminary findings. While all inbound passengers to the Chinese capital shall be subject to concentrated observation and nucleic acid tests, mid-to-high risk residents and individuals related to Xinfadi market are prohibited from departure, said the local government. All primary and secondary schools shall suspend campus teaching from today (17 June).

HONG KONG 

Data no macro data

Centre for Health Protection said that as of 4pm today there were no new covid-19 cases


Active Heavyweights
AIA (1299.HK) +1.8%
HSBC HOLDINGS (5.HK) +0.8%
HKEX (388.HK) -0.7%
TENCENT (700.HK) +0.4%
CCB (939.HK) -0.2%
PING AN (2318.HK) unch

HSI & HSCEI Constituents on the move
SINOPHARM (1099.HK) +9.2%
SINO BIOPHARM (1177.HK) +4.7%, hits new high
LONGFOR (960.HK) +3%

HSMI & HSSI Constituents on the move
LIFETECH SCI (1302.HK) +13.8%, hits new high
KOOLEARN (1797.HK) +10.2%
CMS (867.HK) +10.1%
ZHOU HEI YA (1458.HK) +7.7%, hits new high
UNITED LAB (3933.HK) +4.9%, hits new high
LIVZON PHARMA (1513.HK) +3.4%, hits new high

REGIONAL MARKETS  

Japan Sold down but then rebounded and have basically traded sideways but unable to rally to yesterday’s closing level. Closed -0.56%

S Korea Rebounded from a weak start and again traded sideways in a helta skelter fashion. Kosdaq closed flat  Kospi +0.1%%  

Taiwan opened higher and traded sideways around yesterday’s closing level  Closed +0.2%


NEWS
MARKET HOURS 

Yum China, the operator of KFC, Pizza Hut and Taco Bel in China, will be in talks with investment banks for its secondary listing in Hong Kong, the Financial Times citing insiders.
Tencent Game is to upgrade protection measures for minors from today (17 June), according to its announcement on Weibo. Tencent Game noted some minors are faking their parents' identities to evade gaming regulation. In this regard, it will expand the adoption of facial recognition to screen out allegedly underage users on the basis of limited gaming time and in-game purchases as well as gaming curfew. 
Huawei has scaled down its output plan in response to the tougher export ban slammed by the US, the Nikkei citing insiders. Some suppliers disclosed the Chinese tech giant told them to shrink their order volume by 20% during the third quarter, possibly followed by a deeper trim in the next quarter.
HSBC (5.HK) is reviving the massive layoff program it had shelved for the coronavirus crisis, under which 35,000 positions will be axed over the medium term, according to an internal memo seen by Reuters. The London-based lender has to resume the plan amid profit fall and forecasts pointing to a challenging economic outlook, said Chief Executive Noel Quinn.
SKYWORTH GROUP (751.HK) trading halted with effect from this afternoon pending the release of an announcement containing inside information of the Company and pursuant to the Codes on Takeovers and Mergers and Share Buy-backs. Last traded at $2.12, up 3.9%, midday.
CHINA DONGXIANG (3818.HK) annual result ended 31 March 2020. The net profit RMB366 million, -14.7% yearly. EPS RMB6.25 cent. A final dividend of RMB0.91 cent and a final special dividend of RMB1.84 cent were declared. 
TENCENT (700.HK)'s Tencent Cloud announced its partnership with multiple Japanese giants, such as Mynet, DDM, Bushiroad and Gurunavi. By team-up ranging from games and live-streaming to e-commerce and manufacturing, Tencent Cloud expected to deliver three to five times higher revenue growth in the Japanese market this year. 
Overnight HIBOR last posted at 0.11929%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.49714%, down for 14 days, marking a 1-month low.
XIAOMI-W (1810.HK)'s Redmi K30 Pro and Mi 10 were the top-two models in JD-SW (09618.HK)'s 5G handset sales chart during 618 Shopping Festival, revealed XIAOMI-W Vice President Lu Weibing. As of 15:00 on 16 June, the sales volume of Xiaomi Air-Conditioner exceeded 20,000 sets across all platforms.
HKD strengthened this morning, as such HKMA injected $2.232 billion to the market, leading the spot USD T/T rate to 7.7503.  The balance of the banking system is expected to be $125.762 billion this Friday
The US Federal Reserve is still capable of buying additional assets with sufficient "dry powder", Dallas Fed President Robert Kaplan told Bloomberg. The Fed had trimmed interest rates to zero on tight liquidity under the pandemic, while making bond purchases to keep financial conditions easy and pushing forward lending programs.
Cheong Wa Dae (South Korean Blue House) condemned Kim Yo-jong, the first vice department director of the Workers' Party of Korea, for her rude and senseless criticism of President Moon Jae-in's speech on the 20th Anniversary of June 15 North-South Joint Declaration, reported Yonhap.  On another note, South Korea's defense ministry claimed that North Korea will pay the price for taking military action.
AIR CHINA (753.HK) and CHINA SOUTH AIR ( 1055.HK) will waive the refund charges for flights scheduled for departure between 16 June and 30 June.
The Transport Department  said today (June 17) that over $1.2 billion of the subsidy under the two rounds of the Anti-epidemic Fund has been disbursed to the transport trades, and the subsidy to taxi or red minibus (RMB) drivers under the second round of the Fund is open for application starting from today until September 30.
Canada is exerting pressures on Telus to remove Huawei gear from its 4G infrastructure in the capital region, for which the telecom carrier has reached an understanding of voluntary commitment with the government, the Globe and Mail reported
Admiral Investment Chief Investment Officer Victor Yeung, after a radio program, spoke of the bleaker retail market recently. As Hong Kong's REITs are principally engaged in livelihood-oriented malls, they shall see limited impact unless the epidemic drags on. In addition to REITs, there are a larger variety of trusts overseas which focus on data centers, towers, logistics, etc. Yeung regarded this as the direction of future development to offer investors more options other than traditional yield stocks.
BOC HONG KONG (2388.HK) said that qualified clients registered via the bank for "Cash Payout Scheme" from 21 June to 30 September and receiving $10,000 on or before 20 October will automatically sign up a lucky draw. In the first round, there will be vouchers worth as high as $100,000 (1 prize), $50,000 (1 prize), $30,000 (1 prize) and $10,000 (12 prizes).
Sinopharm's China National Biotec Group announced that it has completed two injections of an inactivated COVID-19 vaccine on 1,120 participants under the phase I/II clinical study so far.  Results showed a 100% seroconversion rate for subjects receiving two injections of neutralizing antibodies at middle dosing strength under a 28-day schedule. The vaccine is expected to hit the shelves as early as late 2020 or early 2021, reported China Securities Journal.
The PBOC announced that it will tender the sixth tranche of central bank bill for 2020 through the bond tender platform of the Central Moneymarkets Unit (CMU) of Hong Kong Monetary Authority (HKMA) next Tuesday (23 June).  The issuance amount is RMB10 billion for a term of six months with a fixed interest rate. 
HKGCC Chairman Peter Wong mentioned about the US-China trade tensions during his interview with THE BULLETIN. JUNE 2020 of HKGCC. In his opinion, there will not be clear picture until the US Presidential Election in November with so many mixed market signals nowadays. Yet, people will adopt to the environment changes, as evidenced by the adaptability of enterprises amid epidemic.  Looking ahead, businesses should be able to tap any uncharted markets if the trade tie between China and the US is constrained further. Digitalization will play more pivotal role given such backdrop. At present, new markets can be scouted without the need to visit the clients in person. Any partnership can be nailed even from a distance afar. 

PRE MARKET

Airport Authority Hong Kong (AAHK) tables to extend the issuance of $5 billion retail bond for the three-runway system (3RS) of Hong Kong International Airport until 2020/21 in wake of epidemic impact, according to the filing of AAHK at the Legislative Council.

Zhengzhou Municipal Government had held a seminar yesterday (16 June) with BABA-SW (9988.HK) for Digital Zhengzhou Industrial Ecology for 2020, and entered into a strategic cooperation agreement on deepened digital city construction, according to Chinese media.  Pursuant to which, BABA-SW will facilitate the digitalization of Zhengzhou Municipal Government in terms of governance, industrial economy and social life, harnessing its merits of cloud computing, big data, AI, IoT and so on.

Hong Kong was knocked down by Denmark, Switzerland and the Netherlands and ranked fifth globally in the latest World Competitiveness Yearbook (WCY) 2020 published by the International Institute for Management Development (IMD), down from second last year. Singapore remained at the top spot. Hong Kong was rank first globally in "Business legislation", "Legal and regulatory framework" and "Exchange rate stability", said a Government spokesperson. It is thus critical, essential and urgent to legislate for the national security law, which is conducive to business and investment, thereby safeguarding the prosperity and stability of Hong Kong.  

Funny if Hong Kong is already viewed as number one with regards to legal why we need the new national Security Law?

In response to the SFC's accusation of high concentration of shareholding, SUNSHINE 100 (2608.HK) confirmed that not less than 25% of the issued Shares were held in public hands and that it has maintained a sufficient public float as required under the Listing Rules, based on the information available and  to the best knowledge of the directors of the Company after making all reasonable inquiries.

Canadian gold miner Barrick Gold dumped a partial stake in SD GOLD (1787.HK) (i.e. 79.3 million shares) at HK$20.5 each, cashing in HK$1.626 billion (US$210 million), reported Reuters.

Following the destruction of Inter-Korean Liaison Office, North Korea announced today the deployment of military force in Mount Kumgang, Kaesong and sentry posts at non-military zones, KBS World Radio reported. Pyongyang is meanwhile reinforcing the armed force of frontline artillery soldiers along the southwest coast and moving up the frontline military alert level to "Level 1”. In a speech yesterday, Kim Yo Jong, the first vice department director of the Workers' Party of Korea, lashed out at South Korean President Moon Jae-in for his speech delivered at the Blue House on 15 June and his speech for the 20th-anniversary of June 15th North–South Joint Declaration, saying his talks nonsense and groundless remarks, cited Yonhap News Agency. She also accused Seoul of her silent consent to the anti-North Korea propaganda launched by North Korean refugees.

JD-SW (9618.HK) recorded 177.9 times of over-subscription in the public offering. One-lot (50 shares) success rate was 10% only. 10.35 times of over-subscription was recorded in its international placing. The Chinese e-commerce giant, to be listed tomorrow (18 June), was priced at $226.

As HKD re-hit the Strong-side Convertibility Undertaking during New York trading hours, the HKMA undertook US$288 million  selling orders to inject HK$2.232 billion in the market. The balance of the banking system will increase to HK$125.758 billion tomorrow (18 June).

CPIC (2601.HK) determined the final price of the GDR issuance on the London Stock Exchange at USD17.6 per GDR, i.e. the lower end of the initial price range. This involves the issue of 102 million GDRs to raise around USD1.811 billion in total.

GENSCRIPT BIO (1548.HK) said that Executive Director Wang Ye had on 16 June exercised share options to subscribe for 15 mn shares and transferred the shares to Infini Capital at HK$14.16 per share, which in aggregate amounted to HK$212 million.



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June 16 HK WRAP HSI +541pts after mkt Indian/China clash dead on both sides

June 16 HK WRAP HSI +541pts  after mkt Indian/China clash dead on both sides


HSI +567pts (+2.4%) 24,344  HSCEI +212pts (+2.2%) 9,868 T/O HK$114.62bn (-10.5% DoD).


Europe Markets opened higher; DAX saw an early set off but has rallied back and trending higher, CAC opened higher and tick higher but then saw some selling, now rebounding. FTSE opened higher rallied and then traded sideways.

US futures  indicating +450pts (off the earlier +500pts) with S&P and NDX also indicating higher on news Trump is planning US$1th infrastructure building plan. Some easing on news of N Korea blowing up the inter Korean liaison building. I would expect some more weakness of the border clash between China and India with deaths on both sides.


INDEXES      

CSI 300 closed  +60pts (+1.5%) @ 4,015 Market opened higher following the US rebound on news that the Fed would buy individual corporate debt +VE for Exporters and news the US Sec State Pompeo will meet Yan Jiechi in Hawaii helped sentiment.  Although concerns about more covid-19 outbreaks overhangs the market. Essentially after the higher open the market traded sideways in the morning.  PM saw the market work slightly higher, with improved sentiment on news that Trump was proposing a US$1tn infrastructure programme although it will probably have difficulty getting passed.  Reuters reported that PBoC was going to start auctions for the 1t yuan of special sovereign bonds this week which could raise liquidity issues.

HSI Pre Market +541pts @ 24,318 vs+298 pts ADR’s @ 24,074 and ticked higher in initial trading as recent shorts squeezed. Then traded sideways around the 24,400 level.  Around 10am some margin call selling after yesterday’s sell off and but later bounced back as US futures rallied on reports of Trump’s proposed US$1tn infrastructure programme. But upside limited and market continue to trade sideways round the 24,450 level.  That continued into the PM session until around 2:30pm when the market eased lower on reports that N Korea had blown up the inter-Korean office; which South Korean later confirmed. HSI ticked lower in the closing auction.  Turnover -10% for a second day which I think illustrates increased investor caution.

After market  news 


AFTER MARKET 
GCL-POLY ENERGY (3800.HK) is placing 1.3 billion new shares, representing 6.15% of the enlarged share capital of the company, according to market sources. The placing prices reportedly range $0.203-0.208 per share, a 15.1-17.1% discount against the closing price of $0.245 today. The company plans to raise $264-270.4 million.
INDIA/CHINA  Border Clash: Loss of Life on Both Sides Three Indian soldiers were killed in a violent clash with the Chinese military along the countries' shared border in the Himalayas on Monday (15 June), foreign media citing a statement from the Indian army.   Chinese media Global Times yet said the face-off had killed five Chinese People's Liberation Army soldiers and wounded eleven.

There was loss of lives on both sides according to the Indian army statement, including one Indian officer and two Indian soldiers.

CLP HOLDINGS (2.HK)'s Castle Peak Power Company Limited (CAPCO) announced that it has successfully priced the issuance, through its wholly-owned subsidiary Castle Peak Power Finance Company Limited, of a US$350 million Energy Transition Bond (the Bond) under the Climate Action Finance Framework (CAFF) of its parent company CLP Holdings Limited (CLP). The transaction was well-supported by institutional investors, with a coupon of 2.2%, recognising the growing importance of energy transition bonds to enable meaningful action on climate change in Asia.
RAZER (1337.HK) its founder Min-Liang Tan will promote goods on BABA-SW (09988.HK)'s Tmall platform via live broadcast on 18 June. On the listing day (11 June), NTES-S (9999.HK)   CEO William Ding had made a debut on Kuaishou's live-streaming platform, setting the trend for senior management to go live for good recommendations recently.
TENCENT (700.HK)  is interested in becoming iQIYI's largest shareholder for cost saving and less market competition, Reuters citing insiders. The giant strives to have a bite of the fast-growing mobile video market during the quarantine period. TENCENT would like to acquire iQIYI shares from Baidu, which owns 56.2% of the online video platform, according to the report.
NTES-S (9999.HK) announced the debut of "Sound Street”, a tailor-made karaoke app for youngsters. The firm expected to invest RMB200 million of funds and resources in the app, where a hundred of music stars will be born in three years.
HK Administration said the upper limit of gathering participants in public premises is to be relaxed to 50, effective 00:00 on 19 June, as the Government hopes to reboot economic and social activities as much as possible. The Executive Council has meanwhile decided to stretch the gathering ban waiver to catering premises, so that people from all walks of life may hold different banquets or weddings, also with effect from 00:00 on 19 June, added Chan.

While caterers are set for a waiver in terms of patron entry, they still need to set their tables 1.5 m apart or with partitions in between as stipulated in the guidelines and restrictions under Prevention and Control of Disease.Market and Pre Market News at bottom of page.


Short Selling HSI Tuesday 21.6% vs 21.4% Monday

Top Shorts Wharf REIC (1997) 51%, MTRC (66) 38%, CCB (939) 38%, ICBC (1398) 35%, China Res land (1109) 34%, Mengniu Dairy (2319) 33%, Want Want (151) 31%, Sands China (1928) 31%, Hang Seng Bank (11) 31%, Bank of China (3988) 29%, Country Garden (2007) 29%, NWD (17) 28%, Ping An (2318) 28%, Hengan (1044) 27%, Galaxy (27) 26%, CNOOC (883) 25%.


COMMENT 

*EXPORTERS STRONG on short covering and stimulus hopes as both the FED’s new corporate bond purchases and Trumps's potential US$1t infrastructure fund should improve the outlook for the US economy. VTECH (303 HK +2.6%) TECHTRONIC (669 HK +6%) MAN WAH (1999 HK +4.2%) MINTH (425 HK +3%).

*PETROCHEMS STRONG as overnight WTI +2.2% BRENT +2.7% on signs of improving demand as long as there isn’t a second name of covid-19 and OPEC+ maintaining agreed production. The OPEC+ deal will bring prices back to "normal" within a year or two as cuts approaching 10 million barrels a day drain excess from the market, UAE Oil Minister said. Iraq has told some refiners that it will make deep cuts to their supplies for July, according to news. Although worth noting that last week Iran delivered oil to Venezuela. The outlook is improving but by no means certain. CNOOC (883 HK +4.6%) CH OIFIELD (2883 HK +4%) PETROCHINA (386 HK +5.8%).

*ECOMMERCE FIRM. Sector in focus with more possible lock-downs in China after new covid-19 cases and ahead of 618 shopping festival Plus the listing of JD.COM this week. TENCENT (700 HK +3.5%) despite chairman Pony Ma selling a total of 9.65m shares in the market between June 9-12, average price HK$433.41 to HK$450.27. Also news its signed cooperation agreements with State Grid for digital infrastructure construction. ALIBABA (9988 HK +3.3%), MEITUAN (3690 HK +7.8%) NETEASE (9999 HK +3.8%).

*HK PROPERTY INVESTORS STRONG Market seemingly unfazed by SWIRE PROP (1972 HK +1.6%)’s profit warning as it expects a loss of HK$2.6b on revaluation of investment properties excluding deferred tax, compared with HK$3.6b profit year earlier. HYSAN (14 HK +2.1%), WHARF REIC (1997 +5.3), HANG LUNG (101 HK +3.5%)

*HK PROPERTY DEVELOPERS STRONG with HIBOR rate staying low and expected to do so for some time +VE, CK ASSET (1113 HK +2.7%) will open a show flat of Sea To Sky in Lohas Park today offering 1,422 units. SHKP (16 HK +1.7%) plans to launch its new Hoi Wong Road project in Tuen Mun this month, offering 669 units.

*INSURERS STRONG on improving May insurance premiums and recovery in the markets. CHINA TAIPING (966 HK +4.6%) said consolidated premium in the first 5 months of the year -0.6% YoY to 90.42b yuan. CH LIFE (2628 HK +3.5%) NCI (1336 HK +2.6%) PICC (1339 HK +3%).

*TECH & COMPONENTS STRONG Helped by news that the US will allow interaction between US companies and Huawei in the development of international 5G standards. Huawei suppliers jumped, AAC (2018 HK +5.1%) SUNNY OPT (2382 HK +8.4%) TONGDA (698 HK +7%).

Although the purpose is to ensure that China does not get carte blanche to set the specifications for 5 and 6G. Remember China lost out when its 2G was designed along a different specification to the US/Global one. Now it is trying to reset the playing field by being the one to set the standard and the US has lost out but not allowing interaction with Huawei in several international bodies that are writing the specifications because of the ban on working with Huawei. This move is only to try a dilute Huawei’s influence.

INVESTECH (1087 HK +9.3%) said its subsidiary was granted by IBO the exclusive right of the sales and distribution of products to the telecom operators in Sichuan province of China under a 3-year agreement. SMIC (981 HK +12%) jumped on A-shs listing speculation. The Shanghai STAR Board listing committee will review SMIC's (981.HK) initial application on June 19.

*HK RETAILERS STRONG on hopes HK may reopen ‘travel bubbles’ in the near future to allow tourist from some cities/countries that are COVID-19 safe to travel to HK quarantine free. Also speculation that the HK administration is expected to announce further easing of the distancing rules this afternoon. SASA (178 HK +3.9%) CHOW TAI FOOK (1929 HK +4.6%) LUK FOOK (590 HK +4.4%) I.T. (999 HK +5.3%).

*OTHER MOVERS

WANT WANT (151 HK +9%) reported today FY net profit 3.65bn yuan, vs CNY3.48b last year (Stoker’s has been a popular short recently).

CMOC (3993 HK+9%) on reports that Telsla is to buy cobalt for use in its Shanghai factory and planned Berlin plant.


CONNECT FLOWS

Shanghai

Northbound RMB 27,484m Sell 12,692m : 14,792m Buy

Southbound HK$ 10,564m Sell 4,672m : 5,892m Buy

Shenzhen

Northbound RMB 48,022m Sell 23,076m : 24,946m Buy

Southbound HK$ 9,043m Sell 4,119m : 4,924m Buy


DATA 

CHINA PBOC registered RMB21.18 trillion of foreign exchange reserves for China in May, down RMB11.22 billion monthly, representing a reduction for four straight months. Such figure indicated the epidemic continued to pose impact on the cross-border capital of China.

HONG KONG Data after market Unemployment May 5.9% vs 5.2% Apr (F/cast was 5%) A fifteen year high and with expectations that it could go higher.

Centre for Health Protection said that as of 4pm today there were no new covid-19 cases


Active Heavyweights
TENCENT (700.HK) +3.5%
HKEX (388.HK) +2.9%
HSBC HOLDINGS (5.HK) +2.5%
AIA (1299.HK) +2.1%
ICBC (1398.HK) +1.4%
CCB (939.HK) +1.3%
PING AN (2318.HK) -0.5%

HSI & HSCEI Constituents on the move
WANT WANT CHINA (151.HK) +8.7%
SUNNY OPTICAL (2382.HK) +8.1%
CITIC (267.HK) +7.8%
PETROCHINA (857.HK) +6.2%
TECHTRONIC IND (669.HK) +5.5%
WHARF REIC (1997.HK) +5.2%
SHENZHOU INTL (2313.HK) +5.2%
AAC TECH (2018.HK) +5.2%
CHINA TAIPING (966.HK) +4.4%
CNOOC (883.HK) +4.2%
WH GROUP (288.HK) +4.1%
CHINA OVERSEAS (688.HK) +4%
SINO BIOPHARM (1177.HK) +4%
HANG LUNG PPT (101.HK) +3.5%
CKI HOLDINGS (1038.HK) +3.4%
PICC P&C (2328.HK) +3.3%
HENGAN INT'L (1044.HK) +3.2%
CHINA UNICOM (762.HK) +3.1%

HSMI & HSSI Constituents on the move
CHINA TRAVEL HK (308.HK) +16.3%
ZTE (763.HK) +15.3%
WISDOM EDU INTL (6068.HK) +15%
SMIC (981.HK) +11.9%, hits new high
CMGE (302.HK) +10.6%
VPOWER GROUP (1608.HK) +7.8%, hits new high
YADEA (1585.HK) +6.8%, hits new high
CNLP (1589.HK) +5.5%, hits new high
KINGDEE INT'L (268.HK) +5.3%, hits new high

REGIONAL MARKETS  

JAPAN opened higher and worked higher currently +4.4%. BoJ kept rates unchanged along with current policies.  It expects to inject around JPY 110 trillion to the economy via its market operations and lending facilities aimed at mitigating the impact of the pandemic. Market closed  around the highs +4.9%

S KOREA Opened higher and has worked higher through to mid day then traded sideways but sold down around 1pm on news N Korea blew up the inter Korean Liaison office but then resume trading higher to close at the highs. Kosdaq +6.1%, Kospi +5.3% TAIWAN Opened higher initially dipped but rebounded and then traded sideways for most of the day but drifted higher late in the session Closed +1.8%


NEWS
MARKET HOURS 

MTR CORPORATION (66.HK) plans to roll out a series of service upgrades to Airport Express (AEL), including self-service ticket machines, enhanced passenger waiting information and refurbished train seats in Q3 this year. Following changes in customer behavior, the Corporation has also decided to change the mode of AEL feeder services to enhance flexibility to passengers. Customers can soon use MTR Mobile to hail taxis and enjoy fare discounts for their airport-bound trips on AEL. 
HKTDC is revising down Hong Kong's 2020 export growth forecast to -10% from -2%, pricing in ongoing trade protectionism whereas the coronavirus crisis has sent economy into a steep slide, said Director of Research Nicholas Kwan at a press conference. According to the latest survey done with 500 exporters, 82% disclosed that they recorded over 10% year-on-year sales decline. 97.5% of them expressed that their business was overshadowed by the plague.
North Korea has blown up Inter-Korean Liaison Office located in Kaesong, said Yonhap News Agency.  Pyongyang had repeatedly threatened Seoul of sabotaging the liaison office established in 2018.
TENCENT (700.HK)'s WeChat Pay announced the debut of a "Shenzhen Shopping Festival" WeChat mini-program on 16 June in cooperation with Commerce Bureau of Shenzhen Municipality. Multiple merchants will make an appearance at live broadcast rooms, including JD-SW (09618.HK), Suning.com, Miniso, Watsons and LY.com. In addition to live-streaming promotions, there will be RMB2 bn worth of vouchers available on the mini-program.
HSBC announced that individual customers who apply for Cash Payout Scheme of the government through the bank can enjoy HKD preferential deposit rates and the chance to win rich prizes. Clients who register on or before 31 August via the bank and obtain the distributed cash from their accounts on or before 17 September will be entitled to 10% p.a. of HKD deposit rates for a month with the maximum principal amount of $10,000. Customers should complete at least one designated digital procedure or transaction within the offering period. 
BABA-SW (9988.HK)'s Alibaba Cloud announced that it has injected special funds in an amount of RMB2 bn this fiscal year to help 50 partners accelerate their innovation. Alibaba Cloud anticipates to bring more opportunities to its cooperation partners.
NTES-S (9999.HK) forged a strategic partnership with Warner Bros Interactive Entertainment to develop a new "Lord of the Rings" mobile title, reported Reuters. The new licensed strategy game, "The Lord of the Rings: Rise to War", is based on the LOTR movie trilogy. 
US Department of Transportation has amended its order that would allow a total of four round-trip flights per week by Chinese airlines, cited the Wall Street Journal.
TENCENT A first batch of 55 domestic game edition numbers have been approved by China for June, according to the website of State Administration of Press, Publication, Radio, Film and Television. Crown Trick, a Switch game developed by TENCENT (700.HK)'s Next Studios, was on the approval list. +VE also for Nintendo
WANT WANT CHINA (151.HK) At lunch annual results ended March 2020. Net profit  RMB3.649 billion, +5% yearly.  EPS 29.38 fen. Final DPS was US2.42 cents. Together with special DPS of US1.1 cents, the total DPS was US3.52 cents. During the year, operating profit +4.8% yearly to RMB4.806 billion.
Govt Economist: said HK 2Q GDP Unlikely to Improve A Lot; HK National Security Law Favours the Economy.  The consumption sentiment in Hong Kong is getting warmer as the Government has partially relaxed social distancing measures and given waiver to certain business activities upon the gradually muted coronavirus situation, said Government Economic Advisor Andrew Au. However, a sharp rebound in 2Q20 GDP is hardly possible amid still lackluster tourism businesses and global market pullback. The local social unrest has fretted the city further, opined Au, who thus deemed the national security law legislation favorable to economic landscape and salubrious to business and investment environments. The economist also opined that the significance of "Belt-and-Road Initiative" has been magnified by ongoing de-globalizaton, which had emerged well before the coronavirus crisis.
WHEELOCK (20.HK) After the shareholders' meeting, Vice Chairman Stewart Leung said he is upbeat on Hong Kong's prospect as the city is recovering bit by bit although the coronavirus pandemic has gone rampant across the world. Asked if the latent emigration tide will take toll of property prices, Leung stated that people kept coming back to their motherland on the uniqueness of the city after Hong Kong had been through a couple of migratory flows. While home prices have ebbed back 5-7% year to date, they may progressively grow back healthily in a short period of time, likely followed by a few percentage of rise in early-21, estimated the vice chairman.
US President Donald Trump is working on a US$1 trillion infrastructure investment project, including roads and bridges, Bloomberg citing insider sources. The Democrats have also provided a proposal in an amount of US$500 billion, said the insiders.
Overnight HIBOR last posted at 0.12393%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.51863%, down for 13 days, marking a 1-month low.
HNA Group held a contract signing ceremony at HNA Building in Haikou today for the strategic cooperation agreement with TENCENT and DONICA.  Pursuant to which, the three parties will mold an "intelligent aviation + free trade port" and propel comprehensive application of new and high technology, through construction and operation of high standard and high quality. The cooperation represents the onset of build-out of intelligent aviation. 
Strategy Analytics released a 1Q20 smartphone revenue report for Western Europe. Despite ASP hike, smartphone revenue receded 10% YoY to US$10 billion in the region given limited handset supply amid the pandemic. Particularly, XIAOMI-W (1810.HK) and OnePlus both shared 2% of the handset market, with rising sales volumeand value.
The HKSAR government will relax the prohibition on group gathering to boost local economy and address citizens' wishes, Chief Executive Carrie Lam said. Nevertheless, the ban will not be lifted completely due to ongoing epidemic in the city and nearby regions. Lam furthered Food and Health Bureau will make the related announcement this afternoon.
COUNTRY GARDEN (2007.HK) announced the first cross-sector alliance with BABA-SW (9988.HK) for online property selling.  Opening an official flagship store on Tmall, COUNTRY GARDEN will sell 618 suites in the first batch, involving around 60 key projects across 19 cities in Zhejiang Province and Fujian Province. 
Despite the coronavirus crisis, Chinese cloud infrastructure service market grew 67% yearly during the first quarter, driving the spending up to US$3.9 billion, according to a research report from Canalys. China remained the second largest market in world, accounting for 12.5% of the total, up 2.5 ppts yearly.

PRE MARKET

Former Huawei employee Li Hongyuan posted a group chat screenshot on his "leedeson" Weibo account last Sunday (14th), saying the US sanctions on Huawei are taking effect, reported Chinese media. Depicting Huawei as "cutting off its arm to exist", Li foretold a substantial reform by the Chinese giant in mid-July. This will likely involve stake changes and layoff of 90,000 workers from the headcount of 190,000.

COSCO SHIP PORT (1199.HK) announced that its throughput -3.7% yearly in May 2020 to 8.2803 million TEUs.

Zhejiang Geely Holding Group's "Blue Ocean Initiative"  has led to sharp pay cut for some employees, raising doubts that it is indeed a layoff plan, Chinese media citing sources. 20% of general staff members will be cut and 30% of management members will be streamlined. The initiative has been launched since May, requiring all staff with a "C" grade in appraisals to receive roughly a one-month training from mid-May. Employees are not entitled to merit pay during the training, facing huge uncertainty in sustaining their positions in the future. Hence, a majority of workers decided to quit under the initiative.

NTES-S (09999.HK) said that the Joint Global Coordinators had on June 15, 2020 fully exercised the Over-allotment option, in respect of an aggregate of 25.722 million shares. The company expected to receive additional net proceeds of approximately HK$3.155 billion from the issue.

US government confirmed a Reuters report that it will amend the ban on American firms doing business with Huawei, in order to allow them to work together on next-generation 5G network standards.

HSBC British Foreign Secretary Dominic Raab took to task HSBC’s support on the national security bill in Hong Kong, adding that the government will not sacrifice Hong Kong residents for banker bonuses. The former British Foreign Secretary Malcolm Rifkind also castigated the London-based lender for its cowardice after its Top Asia Executive Peter Wong had signed up to support the bill. Personally I think it had no option

Tencent Games Annual Release will be convened on 27 June with heavy feature on cloud games. Under the backdrop of accelerated progression of 5G commercial use, cloud games will penetrate to users briskly, Shanghai Securities News cited an institution, which was sanguine about the current window period for the game deployment amid expedited commercialization of cloud games.

Ministry of Finance announced to issue the first batch of the RMB100-billion anti-epidemic special treasury bonds by tender on Thursday (18th), half being five-year bonds and the rest being seven-year bonds. The bonds comprise of the first and second tranches of 2020 anti-epidemic special treasury bonds, to be traded on market from 23 June.

SWIRE PROPERTIES (1972)’ spokesperson said overall performance of the company's investment portfolios remain solid despite the impact brought by COVID-19. With its balanced portfolio and strong balance sheet, it is well placed to withstand the effects of this difficult time and to benefit from improved conditions in the future.

BYD COMPANY (1211.HK) said BYD Semiconductor, a subsidiary of the Company, entered into the second Investment Agreement with 30 investors, pursuant to which, the Investors will make a capital increase of around RMB800 million in aggregate to BYD Semiconductor for a total of approximately 7.843% of equity interest in BYD Semiconductor. After the completion of the Capital Increase, the Company will hold diluted equity interest of approximately 72.301% in BYD Semiconductor.

AIR CHINA (753.HK) operating data of May 2020; number of passengers carried totaled 4.0702 million, -57.1% YoY but +52.7% MoM. Cargo and mail carried totaled 83,600 tonnes, -30.3% YoY but +27.8% MoM





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HK WRAP 15 June HSI -524pts SwireProps provision, Pony Ma sells more Tencent

HK WRAP 15 June HSI -524pts   SwireProps provision, Pony Ma sells more Tencent


HSI -524pts (-2.2%) 23,777  HSCEI -177pts (-1.8%) 9,656 T/O HK$128bn (-10.9% DoD).

Europe Markets opened down over 1.5% saw a bounce back but now look to be rolling over.

US Futures Opened -300pts but sold down mid day -922pts (Asian time) and are currently -624pts


INDEXES      

CSI 300 closed  -48pts (-1.2%) @ 3,955 Market opened lower on news of a Covid-19 outbreak in China and intially sold down as House Price Data came out in line with forecasts.  Markets then worked higher into the next data release which was mixed Retail Sales & Fixed Asset Investment missed small. Industrial Production and Unemployment were slightly better; the market after a small pull back worked better into lunch.  PM saw a huge sell off following the sell down in US futures; with initial support at 3,975 with a small bounce but unable to hold and then sold down to 3,960 bounced back to the 3,975 but again unable to sold a so continued selling;  to close at the day low.
Sentiment very cautious on the news of a new outbreak in Beijing, with the Chinese Global Times saying the virus was detected on cutting boards used for imported salmon; fuelling the idea the virus did not originated in China and was brought in by foreigners; another spin story?  Also of concern are the lack of fiscal schemes from the Government and news that the IMF intends to lower its forecasts at its upcoming report on June 24.  All that combined with news of increased tensions with India put investors on the back foot.

HSI Pre Market -310pts @ 23,991 vs -37pts ADR’s @ 24263 with a broad based sell off as US futures opened lower and sold down. News that the IMF intends to lower its forecasts further a concern for the implications on China’s exports.  The index then saw an initial rebound and worked higher in choppy trading to 24,232 around 10:20am; helped by the generally inline China data.  But then it sold down 240pts to 24,000 which may have been margin call selling because then it worked back to 24,150 at lunchtime.  PM saw another wave of selling; nearly 470pts in an hour to the day low of 23,685 as European traders awoke to the news which may have prompted some further margin selling.  Market then traded sideways into the close with a small 20pt uptick into the close.  There will probably be more margin selling on the open in Tuesday.
Sentiment for HK slightly hurt by news that another Global Advertising agency has withdraw from tendering for the job of re-launching HK on the international stage -VE

AHEAD After Swireproperties has warned about taking a provision for negative property revaluation expect the others to as well -VE.

Pony Ma continuing to sell down his stake in Tencent will the seen as -VE but he may just be diversifying his personal investment portfolio.


Short Selling HSI Monday 21.4% vs 20.7% Friday

Top Shorts Wharf REIC (1997) 38%, HSBC (5) 35%, Hang Seng Bank (11) 33%, MTRC (66) 33%, ICBC (1398) 31%, CLP (2) 31%, Ping An (2318) 29%, Want Want (151) 27%, CCB (939) 27%, China Shenhua (1088) 27%, Hang Lung Ppty (101) 27%, Sunny Optical (2382) 26%, NWD (17) 26%, Galaxy (27) 26%, China Res land (1109) 25%, Mengniu Dairy (2319) 25%


COMMENT 

*HK BANKS WEAK Concerns about the impact of the National Security Law on HK, despite Financial Secretary Paul Chan saying HK is seeing more capital inflows than outflows and has no plans to review its currency peg to the USD. Those inflows could just be due to current large IPO’s and companies repatriating money ahead of paying dividends. For me the more worrying aspect is individuals looking to diversify assets out of Hong Kong.HSBC (5 HK -2.1%) STAN CHARTERED (2888 HK -2.9%) HANG SENG (11 HK -0.2%) BOCHK (2388 HK -1.5%).

*FINANCIALS/BROKERAGES WEAK despite news after market Friday that the HSI Company would scrap a weighting limit for dual-class shares on some of its gauges, in a move seen as paving the way for more tech stocks to eventually join the benchmark. HKEX (388 HK -2.8%) CITIC SEC (6030 HK -3.2%) CGS (6881 HK -2%).

*HK PROPERTY WEAK A lack of primary launches over the weekend. Although the secondary market rose to a four-week high with 22 deals in 10 major housing estates over the weekend, +37.5% WoW. The fundamentals remain +VE with the low-interest-rate environment expected to continue to the foreseeable future. The 1-mth HIBOR slid for a 10th consecutive day to 0.56071%, the lowest since October 2017. An covid-19 concerns and protests also seem to have eased. But today I think was less about that and more just about selling liquid positions. HENDERSON LAND (12 HK -1%) CKA (1113 HK -2.8%) SHKP (16 HK -2%) NWD (17 HK -2.1%).

KERRY PROP (683 HK +0.2%) is reported to have pocketed around HK$580m from sales at its luxury project The Bloomsway in Tuen Mun; where it sold two units at the weekend

*CHINA PROPERTY WEAK despite China May home prices +0.49% MoM, compared to April’s +0.42% MoM; the news of a covid-19 outbreak prompted selling.

EVERGRANDE (3333 HK -2%) despite buying back 13.1m shs for HK$249.8m on June 12, paid HK$18.20-HK$19.42 a piece.

SUNAC CHINA (1918 HK -2.5%) CIFI (884 HK -2.9%) VANKE (2202 HK -2.6%) CH JINMAO (817 HK -4%).

*INSURERS WEAK after premium data and concerns about the wider investment environment.

PING AN (2318 HK -1.7%) gross premium income in the first 5 months -1% YoY to 382.8b yuan. YTD. Property & casualty insurance premium income of 119.7b yuan, and YTD Life and health insurance premium income 263.1b yuan.

CPIC (2601 HK -2.8%)/(601601 CH) confirms GDR offering price range on the LSE of $17.60 to $19.00 per GDR.

CH LIFE (2628 HK -2.6%) CH TAIPING (966 HK -3.3%) NCI (1336 HK -2.5%).

*AVIATION WEAK as China's civil aviation administration has issued first circuit-breaker to Southern Airline's route from Dhaka to Guangzhou for 4 weeks after 17 passenger were found to have positive nucleic acid test on the flight on Jun.11.

CEA (670 HK -2.7%) CSA (1055 HK -5.1%) AIR CHINA (753 HK -3.7%).

Airports also traded weak. BEIJING AIRPORTS (694 HK -4.3%) MEILAN AIRPORTS (357 HK -4.4%).

*OTHER MOVERS: 

CAFE DE CORAL (341 HK -3.5%) at lunchtime said profit attributable to shareholders -87.1% to HK$73.6m for the year ended 31 March 2020.

EVERGRANDE HEALTH (708.HK +37%) announced that it will purchase ~17.6% of the remaining equity of NEVS at a total consideration of US$379.5m, to wholly own NEVS, a subsidiary of the company located in Sweden, focusing on the fields of electric smart vehicle manufacturing, electric motor control, smart charging, and shared travel. JINMAO HOTEL (6139 HK +30%) after its parent China Jinmao Holdings offers to take it private at HK$4.80/unit.


CONNECT 

Shanghai

Northbound RMB 32,931m Sell 19,028m : 18,532m Buy

Southbound HK$ 8,672m Sell 4,072m : 5,048m Buy

Shenzhen

Northbound RMB 51,156m Sell 25,051m : 26,105m Buy

Southbound HK$ 8,171m Sell 3,226m : 4,945m Buy


DATA 

CHINA House Price Index May +4.9% YoY vs 5.1% Apr (F/cast was 4.9%)

Fixed Asset Investment (YTD) May -6.3% YoY vs -10.3% Apr (F/cast was -6.2%),

Industrial Production May +4.4% YoY vs +3.9% Apr (F/cast was +4.5%)

Retail Sales May -2.8% YoY vs -7.5% Apr (F/cast was -2.6%)

Unemployment May +5.9% vs 6% Apr (F/cast was 6.2%)

The fall in retail sales to me is a concern and will be watched closely. Also employment as a number of jobs may only be short term to deal with the back log of orders and may also be lower paid positions rather than more substantial positions


HONG KONG 

No data tomorrow after market Unemployment data

Centre for Health Protection said that as of 4pm today (June 15), the CHP was investigating three additional confirmed cases of coronavirus disease 2019 (COVID-19), taking the number of cases to 1,113 in Hong Kong so far (comprising 1,112 confirmed cases and one probable case).


Active Heavyweights
AIA (1299.HK) -3.1%
HKEX (388.HK) -3%
HSBC HOLDINGS (5.HK) -2.1%
TENCENT (700.HK) -1.7%
PING AN (2318.HK) -1.5%
ICBC (1398.HK) -1.4%
CCB (939.HK) -1%

HSI & HSCEI Constituents on the move
TECHTRONIC IND (669.HK) -4.9%
GALAXY ENT (27.HK) -4.8%
GUANGDONG INV (270.HK) -4.5%
SANDS CHINA LTD (1928.HK) -4.3%
SHENZHOU INTL (2313.HK) -4.2%
ANTA SPORTS (2020.HK) -4%
GEELY AUTO (175.HK) -3.7%
CITIC (267.HK) -3.6%
BYD COMPANY (1211.HK) +3.5%
CHINA RES BEER (291.HK) -3.3%
SHIMAO PROPERTY (813.HK) -3.3%
CHINA TAIPING (966.HK) -3.3%
MTR CORPORATION (66.HK) -3.2%
COUNTRY GARDEN (2007.HK) -3%

HSMI & HSSI Constituents on the move
MAOYAN ENT (1896.HK) -11.9%
XIABUXIABU (520.HK) -10.5%

REGIONAL MARKETS  

JAPAN Opened lower and initially traded sideways but sold down from midday as US futures dropped further.  The Tertiary Industry Index Apr-6% vs -4.2% Mar (F/cast was -14.3%) was better than forecast but had little impact on the market.

S KOREA Markets opened lower saw small bounce mid morning but then reverting and are trending lower.

TAIWAN Opened flat and sold down slightly before rebounding to flat and traded sideways but selling down; following the regional trend and US futures.


NEWS 

AFTER MARKET 
TENCENT (700.HK) Chairman Pony Ma Huateng reduced his stake further this year. According to the Stock Exchange, Ma unloaded a total of 9.6478 mn shares on market between 9-12 June, cashing in over $4.269 bn. His shareholding in the company cut to 8.42% from 8.52%.
Chief Executive Carrie Lam called for support for the Hong Kong National Security Law in a video clip, which is a minute and 10 seconds long. The clip will be played as an announcement in the public interest from tomorrow (16 June).  Lam stressed the legislation is aimed at punishing an extremely small amount of national security offenders. The law will neither undermine Hongkongers' rights and freedom in accordance with law, nor affect the city's business environment.  As the text of the law has not been revealed how can she say with certainty and if she does know the text why hasn’t it been revealed?
CAFE DE CORAL H (341.HK) to suspend dividend payment due to covid-19. CEO Lo said the COVID-19 outbreak, had eaten into past earnings and slashed annual earnings to around $74 million. Hong Kong has been seeing a weak consumer sentiment so far, without sales improvement during April and May.  Lo depicted the epidemic as the gravest challenge since listing, much worse than the SARS episode.  He also said it spends roughly $200 million per month on salary payment, and had signed up for the Employment Support Scheme, and the group may receive $80 million of monthly subsidy during the first three months. Staff wages have been frozen and his wage was cut by 36% while some workers were furloughed. As at end-March, average meal prices were brought down by $0.5, mainly attributable to various discounts offered at their menus.
CHINA SOUTH AIR (1055.HK)  in May 2020, the passenger capacity (measured by available seat kilometres) -52.94% YoY.  During the month, passenger traffic (measured by revenue passenger kilometres) -61.38% YoY.
CHINA TAIPING (966.HK)  gross premium income of its subsidiaries for the period from 1 January 2020 to 31 May 2020.  The income generated from Taiping Life Insurance was RMB 76.755bn, -0.83% YoY.  Taiping General Insurance RMB11.273bn +0.79% YoY and Taiping Pension RMB2.414bn,  +0.96% YoY
Beijing has been reporting additional COVID-19 infections since 11 June, Beijing Daily citing the municipal government's spokesman. The capital has quickly suspended the Xinfadi wholesale market and enforced closed-off supervision in neighboring communities. Beijing has also put the Yuquandong market and nearby communities under closed-off management, while activating the wartime emergency mode in the territory.
BABA-SW (9988.HK)'s Alipay said it will be distributing nationally applicable vouchers for 17 straight days beginning 1 July, totaling RMB10 billion.
SWIRE PACIFIC A (19.HK) May take a HK$4.3b provision It made an announcement to give further information about the financial performance of certain Swire Pacific group companies in the first half of 2020. Demand for oil has fallen significantly this year, principally as a result of COVID-19. Business conditions in the offshore supply industry and the outlook for the industry have deteriorated substantially. All this has a significant influence on the value of Swire Pacific Offshore’s fleet. Accordingly, a review of the carrying value of the fleet has been undertaken. As a result of the review, impairment charges currently estimated at approximately HK$4.3 billion are expected to be made against the consolidated profits of Swire Pacific for the first half of 2020. Swire Pacific Offshore is also expected to continue to make a recurring loss during the period.
SWIRE PROPERTIES (1972.HK) PROFIT WARNING expected a substantial decrease in the profit  for the six months ending 30th June 2020, as compared to the same period in 2019. It is expected that there will be a loss on revaluation of investment properties, net of deferred tax, of HK$2.6 bn in the first six months of 2020, compared with a profit on revaluation of investment properties, net of deferred tax, of approximately HK$3.6 billion in the first six months of 2019.
KEY expect other property investment companies and even the developers to be considering taking provisions against negative property revaluations

MARKET HOURS 

Hong Kong Tourism Board announced the preliminary tourist figures for May. The number of arrivals totaled 8,139, down 99.9% YoY and equivalent to roughly 260 in daily average. -VE for the Hotel Sector.
Jockey Club Mulls Resuming 1 Mark Six Draw/Week in Mid-Jul  That would be a significant sign that the government believes the worst is over, as Mark Six is known to be a tax on the lower income earners who spend more, as a proportion of their earnings ,on Mark Six, its early cancellation was seen as a way of helping lower income groups save money.   
HSBC has so far approved over 10,000 cases of principal moratorium and other deferred repayment measures for enterprises, aggregating $120 billion of loan amount, Terence Chiu, Head of Commercial Banking for Hong Kong at HSBC.  The deposit and loan businesses of commercial banking of the bank has been relatively sturdy with healthy asset quality, Chiu stated.
CAFE DE CORAL H (341.HK) results for the year ended 31 March 2020. Net profit -87.1% YoY to HK$73.634mn with EPS of HK$0.13. No final dividend was declared.
TENCENT (700.HK)'s mobile game PUBG Mobile reaped US$106 million of revenue in American region in May, up 33% yearly or 14% monthly, according to the surveyor report of Sensor Tower. The scale of overseas users whopped nearly 600 million.
Manulife Hong Kong  launched  a ‘Virtual Face-to-Face’ agency sales platform for all Manulife individual insurance products in Hong Kong, except investment-linked assurance schemes, making it among the first wave of insurers approved to do this in the market. The sales process requires no physical meeting or wet-ink signature, offering unparalleled convenience and security.  Starting from June 15, Manulife’s individual insurance products ranging from life insurance, savings and retirement plans, to critical illness and other medical protection will be available to customers through this insurtech solution.
HUTCHTEL HK (215.HK) CEO Koo Sing Fai told Hong Kong Economic Journal that 3HK plans to introduce 5G network-based 4K live broadcast solution. While the solution will not turn out a major income source for this year, it will be one of the growth drivers for HUTCHTEL HK in the future, furthered Koo.
Overnight HIBOR last posted at 0.12018%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.55%, down for 12 days, marking a 1-month low.
HKEX (388.HK). On the 20th listing anniversary revealed that the listed company market capitalisation burgeoned from $4.86 trillion in 2000 to $33.98 trillion at a 10% CAGR.   The number of listed companies ballooned from 790 to 2,482 during the period. Cash market ADT increased from $12.7 billion to $115.9 billion at a 12% CAGR. Derivatives market ADV surged from 37,500 contracts to 1.1832 million contracts.
Charles Li praised on his blog that the Stock Exchange has made its foray out of Hong Kong and Asia, and cemented its top three position among global exchanges in terms of total market cap.  Although the dualization of US-China tussles seems to reach a point of no return, both the world and China cannot detach from each other nowadays, in particular the investment market. Li envisaged that the liberalization of Chinese capital market will not alter no matter how the US-China row pans out. Moreover, the free exchange of RMB and progression of RMB internalization will not stall and reverse.  Let's hope he’s right.  
CHINA MER PORT (144.HK) after the shareholders' meeting, Chairman Deng Renjie disclosed that the performance during the first five months of 2020 remained flattish yearly, mainly attributable to the contribution from newly acquired portals, and anticipated FY20 performance to stay stable. The company has never considered privatization, furthered Deng, and he has no clue where the news is sourced from. Listed in Hong Kong for long, CHINA MER PORT will go on fully leveraging on the capital platform here to develop and expand.
Airport Authority Hong Kong (AA) announced the traffic figures for Hong Kong International Airport (HKIA) for May 2020.  During the month, freighter movements continued to surge, +29.3% YoY. Cargo throughput -6.8% to 377,000 tonnes YoY  The COVID-19 pandemic continued to impact passenger volume -99.4% YoY to 35k and flight movements -68.7% YoY to 11,355 flight movements.
HNA had in 2015 acquired a high-rise duplex at 39 Conduit Road from HENDERSON LAND (12.HK) with $430 million, Ming Pao reported. Yet, the property was recently taken over by PwC. Besides, HNA Chairman Chen Feng resigned as the director of Sihon Company Limited, which held the said property. The above incidents proved that HNA may be unable to repay the second mortgage, so that the property has to be retrieved by the mortgagee.
NTES-S (9999.HK) has 2.049 bn shares in CCASS in Hong Kong, representing 59.75% of the issued share capital of the company, as revealed by the CCASS. The market cap of the stock in Hong Kong was valued at least $263.3 billion based on its shareholding in CCASS and closing price of $128.5 last Friday. By harboring a large batch of stocks in Hong Kong, NTES-S can not only convert more ADS into ordinary H shares, but can also amplify its market cap in Hong Kong, making the stock eligible to join blue chip family as soon as possible, as the market perceived.
Hong Kong Disneyland theme park announced that it will officially reopen to the public on June 18, 2020. The park reopening will demonstrate a deliberate approach with new and enhanced health and safety measures, reflecting the guidance of health and government authorities. During this initial reopening phase, all guests, including park ticket holders, Magic Access members and complimentary ticket holders, will be required to make a reservation for their visit date with their valid tickets or membership cards through the Hong Kong Disneyland Park Visit Reservation website.
Former CHINA LIT (772.HK) Co-CEO Wu Wenhui dumped 10mn shares of the company off the market last Friday (12 June), cashing in about $455 million, revealed by HKEX. His shareholding in the company fell from 2.67% to 1.68% afterwards.
The US is in talks with Brazil and its local telecoms firms on funding their purchases of 5G equipment produced by Ericsson and Nokia, in attempt to impede Huawei's entrance, according to foreign reports.The subsidies are a matter of national security to Washington, who hopes to protect data, intellectual property and sensitive information linked to nation security, the US Ambassador to Brazil was quoted as saying.
MTR CORPORATION (66.HK) said that the domestic service patronage totaled 97mn passengers in May 2020, +30.1% MoM but -32% YoY which extended the losing streak to the 11th month.
Secretary for Food and Health, wrote on her blog that the public should get prepared for the coexistence of novel coronavirus for a protracted period as epidemiology experts expected the fatal respiratory disease not to fade away soon. Yet, the Government may conditionally relax the gathering ban on a gradual basis, such as revising up the upper limit on the number of group participants, should the situation go on muted, added Chan.
Bitauto, the parent company of YIXIN (2858.HK) said that it entered into a privatization agreement with a buyer consortium formed by TENCENT (700.HK) and Hammer Capital. The consortium would acquire Bitauto share at a cash price of US$16 per ADS with the transaction amount of US$1.1 billion. Upon completion, Bitauto will exit the New York Stock Exchange.  Trading in the shares of YIXIN on The Stock Exchange of Hong Kong Limited has been halted with effect from 9:00 a.m. on June 15, 2020 pending the release of an announcement pursuant to The Hong Kong Code on Takeovers and Mergers and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
The People's Bank of China (PBOC) announced that it commenced the Medium-term Lending Facility (MLF) of RMB200 billion today with a bidding interest rate of 2.95%.

PRE MARKET

C TRANSMISSION (658.HK) said Non-executive Director Yuen Chi Ping is currently under an investigation in relation to an alleged offence or offences under the Prevention of Bribery Ordinance by the Independent Commission Against Corruption of Hong Kong (ICAC).

ZHONG AO HOME (1538.HK) to place 36.928mn shares, representing 4.32% of the share capital of the Company as enlarged. The subscription price of HK$0.98 per share represented a discount of 16.24% to the closing price last Friday (12 June). The aggregate net proceeds are estimated to be approximately HK$36 million.

China Securities Regulatory Commission announced amendments to the shareholding regulation on securities firms, whereby the qualification threshold on major shareholders is lowered and the valuation adjustment mechanism is prohibted. In particular, the definition for key shareholders is changed to "a shareholder with 5% or more shareholdings in a broker", versus the previous "the shareholder with more than 25% stake in a broker or  the first substantial shareholder with more than 5%".  Meanwhile, a key shareholder is no longer required to show sustainable profitability.

CSA to Halt Dhaka-Guangzhou Flight from Next Mon; 17 Passengers Tested Positive for COVID-19  The 17 passengers on a China Southern Airlines flight CZ392 from the Bangladeshi capital of Dhaka to Guangzhou had tested positive for COVID-19 on 11 June, meeting the "circuit breaker" conditions for flight suspension, reported Xinhua. Civil Aviation Administration of China decided to halt the route for four weeks from 22 June.

CHINA SHENGMU (1432.HK)  +VE PROFIT ALERT  expecting a profit attributable to equityowners for the six months ending 30 June 2020 of not less than RMB130 million (the unaudited net loss attributable to equity owners for the six months ended 30 June 2019 was RMB73.5 million).

Hong Kong unemployment rate is set to climb higher from April's 5.2% and very possibly beyond the peak set during Financial Tsunami 2009, Financial Secretary Paul Chan wrote on his blog. While the $10,000 cash distribution is opening for registration from 21 June, Chan reminded the public that it is not necessary to register on the first day as all residents successfully registered on 21-30 June will receive the monies on 8 July.

Huawei Forgoes Handset Mkt Shr for Samsung Chips: Rumors.  A further US ban on Huawei has cut off TSMC's chip supply to the Chinese telecom company, reported foreign media. Hence, Huawei intends to give up its smartphone market share to Samsung in exchange for the latter's 5G base station chipsets. Huawei opts for saving its telecom business by sacrificing the smartphone unit, given its contracts to deliver 600,000 5G base stations, according to the report.

CHOW TAI FOOK (1929.HK) announced that Chow Tai Fook (Holding) Limited (CTFH) had on 12 June 2020 distributed all its shares in the Company by way of a distribution in specie. As a result, CTFH has ceased to hold any shares in the Company and Chow Tai Fook Capital (CTFC), the immediate holding company of CTFH, now holds approximately 72.4% of the total number of issued shares in the Company.

ICBC (01398.HK) (601398.SH) announced that the bank had signed a strategic partnership  agreement with Vestate Group in Beijing, aiming to further deepen their collaboration in serving national strategies and supporting SOE reform.

CN Health Expert: Beijing Not Need Lockdown; Virus Allegedly Mutated from Europe's Virus.  The virus samples from two diagnosed patients who had been to Xinfadi market were found seemingly not to be a local virus, said Zeng Guang, a senior member of National Health Commission.Instead, it should according to preliminary findings to be mutated from Europe's coronavirus. However, Beijing will not escalate into another Wuhan or need any lockdown measures, as its virus will unlikely spread rampantly across the country, opined Zeng.


Feedback and questions welcomed



Read More  

June 12 WRAP HSI -179pts, T/O -19%, Shorts rise to 21%

June 12 WRAP HSI -179pts, T/O -19%, Shorts rise to 21%


HSI -179pts (-0.7%) 24,301  HSCEI -112pts (-1.1%) 9,833 T/O HK$115.43bn (-19% DoD).

Europe Markets opened lower and have trended higher and now trading in the green

US futures opened higher and have gradually worked higher through the day, currently +480pts with the S&P and Nasdaq also indicating a higher open


CONNECT 

Shanghai

Northbound RMB 37,795m Sell 19,263m : 18,532m Buy

Southbound HK$ 9,342m Sell 4,293m : 5,048m Buy

Shenzhen

Northbound RMB 49,811m Sell 24,987m : 24,824m Buy

Southbound HK$ 7,820m Sell 3,400m : 4,421m Buy


Short Selling HSI Friday 20.7% vs 19.3% Thursday

Top Shorts Hang Seng Bank (11) 42%, Wharf REIC (1997) 38%, Hang Lung Ppty (101) 38%, HSBC (5) 34%, Sino BioPharm (1177) 34%, ICBC (1398) 33%, HK & China Gas (11) 33%, China Res land (1109) 31%, Link REIT (823) 29%, Bank of China (3988) 29%, Country Garden (2007) 27%, NWD (17) 24%.


DATA CHINA 

No data but on Monday we get House Price Index on the open, then at 10am; NBS press conference, Fixed Asset Investment (YTD), Industrial Production, Retail Sales and Unemployment; all expected to show MoM improvements.

HONG KONG After Market 

Industrial Production Q1 -4.6% YoY vs -0.5% Q4 (F/cast was -1.5%)

It was the largest decline in manufacturing activity since the last quarter of 2009, amid the coronavirus pandemic. Output dropped in paper products, printing & reproduction of recorded media (-4.2% vs 1% in Q4 2019); Miscellaneous manufacturing industries (-1.8% vs 0.7%). Production of food, beverages and tobacco fell further (-10.1% vs -1.9%). In contrast, output decreased less for metals, computers, electronics & machinery (-3.2% vs -0.8%) while rose at a faster pace for textiles and wearing apparel (0.8%vs 0.5%).

Centre for Health Protection said there was 1 new local COVID-19 case


INDEXES      

CSI 300 closed  +7pts (+0.2%) @ 4,003 Opened lower but worked steadily higher through the day to the day high around of 4,008 around 2pm. Then eased back before rallying into the close.  No data today but concerns about China/India border dispute as China sends more troop to the area which adds to worries about US/China tensions. I think Team China was active today ahead of Monday’s data House Price Index on the open, then at 10am; NBS press conference, Fixed Asset Investment (YTD), Industrial Production, Retail Sales and Unemployment; all expected to show MoM improvements.

HSI Pre Market -559pts @ 23,920 vs -589pts ADR’s @ 23,891 with a broad based sell off. Market then worked higher to the 24,250 level and effectively traded sideways for the rest of the day.  Interesting not see see significant margin call selling which reflects that a lot of margin is tied up in forth coming IPO’s and that traders are being far more cautious.
Talk by US Treasury Sec Mnuchin about possible curbs capital flow I think should be rising warning flags about Trumps next action regarding the Chinese imposing a national security law on China and the secondary listing of Nasdaq listed Chinese companies; I would suggest that investors hedge their positions.

Active Heavyweights
HSBC HOLDINGS (5.HK) -1.5%
CCB (939.HK) -1.3%
ICBC (1398.HK) -0.8%
PING AN (2318.HK) -0.6%
HKEX (388.HK) +0.6%
TENCENT (700.HK) -0.3%
AIA (1299.HK) +0.1%

HSI & HSCEI Constituents on the move
CNOOC (883.HK) -4.6%
BYD COMPANY (1211.HK) -3.5%

HSMI & HSSI Constituents on the move
NEW HIGHER EDU (2001.HK) +5%, hits new high
WEIGAO GROUP (01066.HK) +4.3%, hits new high


REGIONAL MARKETS
  Weak but saw buying/bargain hunting from investors that have been waiting for a pull back.

JAPAN opened lower and initial traded sideways. Data out mid morning was weak and missed but the index saw buying; and worked higher for the rest of the day to close -0.75%

S KOREA Markets Kospi opened lower but worked higher; closed Kosdaq -1.45%, Kospi -2%

TAIWAN opened lower and worked higher through the day closed at -0.9%


AFTER MARKET 
The listing review committee of Sci-tech Innovation Board in Shanghai passed the IPO application of Ninebot on the Board, with XIAOMI-W (1810.HK) as one of the substantial shareholders through People Better. Upon the effectiveness of the registration at China Securities Regulatory Commission (CSRC), Ninebot will become first red-chip CDR (Chinese Depositary Receipt) of the Board and A shares.
JD-SW (9618.HK)'s self-owned automobile brand, Jauto, logged an all-time high in turnover again in June by growing 77% yearly.  The brand had earlier launched ten new products, including motor oil, start-stop battery and tire, to further enrich its product lines. 
PHOENIX TV (2008.HK) said  that Liu Changle, the chairman and substantial shareholder of the Company, through Today’s Asia, bought in the market an aggregate of 2.2 mn shares between 9-11 June 2020.
China's mobile game market in May, grew 11.9% MoM to a scale of RMB17.68 billion, meaning the YTD growth momentum is continuing, according to Gamma Data's report.  TENCENT (700.HK)'s Honor of Kings remained the top-grossing title during the month, followed by PUBG Mobile. BABA-SW (9988.HK)'s Three Kingdoms Strategic came as the third. 
NTES-S (9999.HK) Hang Seng Indexes said it meets the Fast Entry Rule of the Hang Seng Composite Index, it will be included to Hang Seng Composite Industry Index - Information Technology, Hang Seng Composite LargeCap Index and Hang Seng Composite LargeCap & MidCap Index under Hang Seng Composite Index; as well as Hang Seng Internet & Information Technology Index.  The changes of relevant indexes will be made after market close on 24 June 2020. All changes will come into effect on 26 June 2020.
SUCCESS UNIVERSE (487.HK) business tumbled at least 90% since the COVID-19 outbreak, said Deputy Chairman Ma Ho Man, Hoffman. However, it started improving last month and had returned to around 20% of normal levels. It is paying roughly tens of million dollars of monthly expenses with barely any revenue. Still, Ma emphasized that the firm's cash flows are healthy and free of pressure.  Regarding is relationship with SJM (880.HK) it has worked smoothly for more than a decade, without any impact or change in arrangement at the moment. He expects the Macao government to reopen its border in phases, hence seeing little chance of reviving last year's results. However, he was confident in the market improvement in the second half of year, adding health code would be the first step towards the Guangdong-Hong Kong-Macao border reopening.
PROPERTY All of the four major CCL indices declined this week following a two-week uptrend, as  sentiment towards the housing market was briefly undermined by the flare-ups of social unrest.  Looking ahead, they expect an upswing struggle of home price trend. The ramifications from the Fed's unchanged interest rate decision and easing policy until end-2022 will impact Hong Kong's housing prices and begin to be reflect on the CCL in early July 2020.
CCL last posted at 178.64, down 0.89% weekly. 
CCL Mass last stood at 182.23, down 0.89% weekly. 
CCL (small-and-medium units) last reported at 179.84, down 0.82% weekly. 
CCL, CCL Mass and CCL (small-and-medium units) eased back after a four-week upswing. CCL (large units) last printed at 172.30, down 1.3% weekly, which also softened after two-week rise. 

MARKET HOURS 

SA SA INT'L (178.HK) handed back a 5,400 sq. ft. double-storey store at Percival Street, Causeway Bay, Ming Pao reported. The cosmetic retailer had at the end of May shut down another branch, in a floor area of 7,000 sq. ft., in Tsim Sha Tsui.
HKMA clarified via Facebook that HKD has strengthened mainly due to IPO fundraising, dividend payment of companies and semi-annual settlement. Capital influx has inflated market demands for HKD. Speculators will find it hard to repeat bilateral rigging strategy as they did during Financial Tornado in 1997-98, underscored the authority, because HKD monetary base has more than doubled the size two decades ago. It is merely possible to shore up interest rates by shorting USD. Aware of certain funds speaking out loud to put their odds on the collapse of linked exchange rate, the authority stated that investors can get a clear picture by looking at the scale and record of the funds and accentuated that it is capable and confident of retaining the system which has been running for 36 years.
My thought is that is all true but if the US government weaponises US pension money then the USD/HKD peg could become a political pawn rather than a purely economic issue.
MIRAMAR HOTEL (71.HK)1H 2020 had its hotel room prices slashed by roughly a half. At the worst days, the occupancy rates approximated 20% only. In terms of retail & shopping malls, rental concession has been in placed for eight months. The discretionary trim ranged 10-50%, depending on the industry nature. The coronavirus crisis has hit its tourism business harder than the catering segment, said the chairman.
CATHAY PAC AIR (00293.HK) plans to operate approx 3.5% capacity in June and 9.4% in July. In May, the carrier carried less than 1% of the number of passengers it had carried in the same month last year; passenger volume averaged some 600 passengers per day. Given the already significant drop in passengers carried and revenue passenger kilometres over the first five months of this year, it continues to anticipate a substantial loss in the first half of 2020. In May, Cathay Pacific & Cathay Dragon carried a total of 18,473 passengers, -99.4% YoY.
BABA-SW (9988.HK) said Tmall Global has amassed over 25,000 brands from across 92 countries and regions year-to-date. During Tmall's 618 Shopping Festival, the number of newcomer brands increased 64% from the same period of 2019.
Japan is going to recruit Hong Kong talents engaged in financial activities and other specialized fields as China moves to slam national security laws on the territory, said Shinzo Abe.
Hang Seng Indexes Company will hike the number of HSI constituents upon market need as more Chinese-concept stocks come to stage second listings in Hong Kong. When 50 constituents are not sufficient to reflect the market, the company will consider an increase. Yet there is now no urgency for any adjustment. The previous HSI adjustment was in 2006 when 33 constituents were lifted to 50. It also announced handling of Weighted Voting Right Companies (WVRs) and Secondary-listed Companies in the Hang Seng Family of Indexes.  As to Secondary-listed Companies, unless otherwise specified in the individual index methodology, the number of shares and freefloat-adjusted factor (FAF) of secondary-listed companies coming from the Greater China region (i.e. Hong Kong, mainland China, Macau and Taiwan) will be assessed across the Hang Seng Family of Indexes based on the company’s market capitalisation upon solely on the Hong Kong-registered portion of its shares. On top of the existing non-freefloat share classes, any of the HK Shares that are held by a depositary or its custodian as underlying for overseas depositary receipts will also be considered as non-freefloat shares and deducted from the total number of HK Shares as defined above for FAF calculation. As to WVRs, the existing aggregate weighting cap of 10% on WVR constituents will be removed from the Hang Seng Composite Index and other relevant indexes.  The above changes will be implemented starting from the August 2020 index review. FAFs of newly listed securities will be calculated using the above definition with immediate effect. 
TENCENT (700.HK)'s PUBG Mobile was the second most downloaded mobile game worldwide (34.2 million downloads) in May, up 91% yearly, Sensor Tower reported. The top spot went to Crazy Labs' ASMR Slicing (36.5 million installs) during the month.
Twitter has deleted over 170,000 malicious accounts likely backed by Chinese influence operation. These accounts deceptively spread messages favorable to Beijing, including the coronavirus pandemic.
ZHONGCHANG INTL (859.HK) halted trading with effect from 9:00 a.m. on 12 June 2020 pending the release of an announcement in relation to inside information of the Company.
CPIC entered into a strategic cooperation agreement with the construction office of an technology innovation and promotion center in Shanghai yesterday (11 June). Both parties will actively explore and leverage their respective advantages surrounding areas of fintech innovation in arenas of services mode, integration of industry and finance, technological capability and resources consolidation. 
MACAU Many Chinese departments will co-ordinate with each other to raise the effectiveness of financial regulation on combating cross-border gambling, Xinhua reported  Slight -VE MACAU names 
US Agriculture Department said American exporters sold 720,000 tonnes of soybeans to China last week, the biggest weekly purchases in at least 16 months. China had bought US soy for the second straight week. Beijing has been ramping up American soy purchases given tightened supplies in Brazil, the top soy supplier to China, and higher Brazilian soy prices under Brazilian real strength.

PRE MARKET

US Treasury Secretary  Mnuchin may explore curbs on capital flows through the territory in response to the Hong Kong National Security Law.  As I have been saying there is an increased risk for those Chinese Nasdaq stocks doing secondary listings in HK; watch for more on this theme.

HKD remained on the Strong-side Convertibility Undertaking despite falling back slightly, USD/ HKD was last at 7.7508.

ALPHAMAB-B (09966.HK) on 12 June, its controlling shareholder Rubymab intended to unload 14.5 million shares, representing 1.55% of the issued share capital of the Company, at a price of HK$16.5 per share, roughly 4% discount to yesterday's closing price of HK$17.2. Rubymab expected to cash in HK$239 million.

MGM CHINA (2282.HK) announced that it proposed to issue US$500 million 5.25% senior notes due 2025. The Company estimates that the net proceeds from the offering of the Notes will be approximately US$493 million, and intends to use the net proceeds from the offering of the Notes to repay a portion of the amounts outstanding under the Revolving Credit Facility and for general corporate purposes.

Covid-19 One more resident of Luk Cheun House, Lek Yuen Estate has initially tested positive for COVID-19, according to sources.  The woman is the sister-in-law of the first patient of the Luk Cheun House cluster, sharing the same flat with the couple and also working at a Kerry warehouse in Kwai Chung. Accordingly, there will be eight diagnosed cases in Luk Cheun House.

TENCENT (700.HK) proactively pushing for a merger between DouYu (a game live-streaming platform) and Huya (a game-centric video live-streaming website), but the details have not been finalized yet, Chinese media citing insiders.

XIAOMI-W (1810.HK) and Oppo are forced to partially import smartphones into India as their local plants failed to restore their output to normal levels, Reuters citing sources familiar with matter.


COMMENT 

*PETROCHEMS WEAK on demand concerns if a second covid-19 wave prompts more lockdowns. CH OILFIELD (2883 HK -5.6%) CNOOC (883 HK -4.6%) PETROCHINA (857 HK -2.9%) SINOPEC (386 HK -2.8%).

*ECOMMERCE PLATFORMS STABLE  JD.COM (9618 HK) priced at HK$226/shr, representing a 3.9% discount to last closing ADR price on June 10. The HKEX said JD will be included in the exchange's designated securities eligible for short selling on its listing date June 18. Its HKPO was reported to be ~179x oversubscribed.

Nasdaq-listed 360 FINANCE (QFIN US) may kick off its HK listing process in December, news said.

ALIABABA (9998 HK -0.4%) TENCENT (700 HK unch) MEITUAN DIAPING (3690 HK +0.7%). NETEASE (9999 HK -1.1%) but off the initial lows on the second day of listing.

PA GOOD DOC (1833 HK +8.5%) on increased demand speculation

*PHARM/MEDICAL MIXED  vaccines speculation increased, as signs of a 2nd wave of COVID-19 outbreak in US and some other countries. ASCENTAGE (6855 HK +17%)  3SBIO (1530 HK +3.2%) CASINO (6185 HK -3%).

ALPHAMA ONCOLOGY (9966 HK +4.2%) shareholders sold a combined 26.7m shs at HK$16.5, at 4.1% discount to last closing price.

*MACAU CASINOS FIRM on border reopening hopes.

WYNN MACAU (1128 HK -1.6%) reported the two months ending May 31, the average monthly adjusted property Ebitda loss was about $61m, compared to an avg gain of $107.6m same period last year. SANDS (1928 HK -0.6%) SJM (880 HK +1.9%) GALAXY (27 HK +1.7%).

*HK PROPERTY STRONG  as the one-month HIBOR slid for a 10th day to 0.56071%, the lowest since October 2017. HENDERSON's (12 HK -0.3%)  general manager Thomas Lam expects the low-interest-rate to sustain and to positively affect the market, as there is still rigid demand. CKA (1113 HK +1.6%) SHKP (16  HK +1%) NWD (17 HK +1.5%) HANG LUNG PROP (101 HK +2.8%).

Office vacancy rates in Central rose to 8.5%, the highest since December 2009, according to CBRE slight -VE BUT news that Mainland tech giants, ByteDance and Alibaba, took up office space in Causeway Bay a slight +VE

*JEWELLERS FIRM on recovery hopes.  CHOW TAI FOOK (1929 HK +5.8%) said net profit for the year ending March 31 -36.6 % to HK$2.9b. In April and May, same-store sales in HK and Macau -80.2% YoY, while the mainland stores -15.4%.

CHOW SANG SANG (116 HK +2.8%) same-store sales -40% plus in the first two months this year. The jeweller said it will close at least 4-5 stores in HK and will shift its focus to the mainland, which has reported a sales recovery since March.

*INSURERS WEAK after premium data release.

CH LIFE (2628 HK -1.8%) said the accumulated premium income for the first five months this year was about 369.8b yuan, + 14.98% YoY growth.

NCI (1336 HK -2%) gross premium income for the first five months this year +32.1% YoY to about 79.01b.

PICC GROUP (1339 HK -1.2%) original premium income for the first five months this year +3.27% YoY to 280.72bn yuan.

PICC P&C (2328 H K-0.6%) original premium income for the first five months this year +3.5% YoY to 200.63b yuan.

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11 JUNE WRAP HSI -570pts, T/O +12%, Shorts rise to 19%

HSI -570pts (-2.3%) 24,480  HSCEI -199pts (-2%) 9,945 T/O HK$142.43bn (+12% DoD but relatively low considering todays IPO was HK$7.28b so ex that T/O was +8%).


Europe Markets opened lower and have trended lower

US futures have sold down sharply on worries of a second wave of covid-19 that was warned of emerging, currently indicating -900pts as initial claims miss forecasts although PPI data slightly better but still weak.


CONNECT 

Shanghai

Northbound RMB 29,469m Sell 15,677m : 13,792m Buy

Southbound HK$ 10,564m Sell 5,389m : 5,175m Buy

Shenzhen

Northbound RMB 44,760m Sell 21,365m : 23,395m Buy

Southbound HK$ 8,704m Sell 4,023m : 4,681m Buy


Short Selling HSI Thursday 19.3% vs 17.8% Wednesday

Top Shorts Hang Lung Ppty (101) 54%, Hang Seng Bank (11) 36%, HK & China Gas (11) 35%, China Res land (1109) 35%, ICBC (1398) 33%, MTRC (66) 29%, Bank of China (3988) 29%, HSBC (5) 28%, Country Garden (2007) 28%, China Unicom (762) 27%, Want Want (151) 27%, Ping An (2318) 25%, Shenzhou (2313) 25%


DATA 

CHINA Vehicle Sales May +14.5% YoY vs +4.4% Apr (F/cast was +12%)The second straight month of increase, as lockdowns eased. Sales of new energy vehicles (NEVs), which include battery-powered electric, plug-in hybrid and hydrogen fuel-cell vehicles, fell for a eleventh straight month to 82,000 units. Considering the first five months of the year, car sales -22.6% vs -13% drop a year earlier.

HONG KONG
Centre for Health Protection
said there were no new local COVID-19 case


INDEXES      

CSI 300 closed  -44 pts (-1.1%) @ 3,996 Opened lower and trended slightly higher through the morning to flat at lunchtime but PM saw the market sell down to a low of 3,980 before a small rebound in the last 40 minutes.  Sentiment weakened after the poor loans data out after market yesterday.  Increased concerns about defaults in manufacturing, retailing and services sectors as borrowing costs continue to climb. All sectors were weak but lead lower by Consumer Staples, Energy, and Insurance names.

HSI Pre Market -51pts @ 24,997 vs -35pts ADR’s @ 25,015 with Netease (9999 HK) +8% on debut and other internet names strong but Financials were weak.  Market initial tested the support at 24,900 before attempting to regain 25k but failed to breakout.  It then sold back down to 24,900 before working slightly higher and then sideways but around around 11:20 increased selling pressure saw the market sell off into lunch.  The weakness continued though the PM to close at the day lows with a downtick into the closing auction.
T/o relatively light considering the selling pressure and todays IPO.  But a lot of margin money tied up in IPO’s.  Expect margin selling in the morning.  Sentiment weakened by news of increased covid-19 cases in the US as lockdowns ease.  The FOMC’s decision to announce no new measure prompted a ’tantrum’ in the US but in the light of the recent market moves I think was the right decision.  25k remains a key level, with European markets trading lower and the US set to open lower the outlook is likely to remain cautious. 

Active Heavyweights
HSBC HOLDINGS (5.HK) -4.8%
AIA (01299.HK) -2.9%
CCB (00939.HK) -1.7%
PING AN (02318.HK) -1.3%
TENCENT (00700.HK) -0.9%
HKEX (00388.HK) -0.7%

HSI & HSCEI Constituents dropped unto 5.5%.

HSMI & HSSI Constituents on the move
TOPSPORTS (6110.HK) -12.1%
HENGTEN NET (136.HK) -10.1%
YADEA (1585.HK) +3.5%, hits new high

REGIONAL MARKETS 

JAPAN opened lower pre market data was weak BSI Large Manufacturing Q2 -52.3 vs  -17.2 Q1  market initially worked slightly higher then sideways before selling off around lunchtime to close on the lows Closed -2.8%

S KOREA Markets Kospi opened lower but quickly rallied into the green Kosdaq opened higher and trended higher but both then reversed from mid morning and trended lower to close on the lows Kosdaq -0.21% Kospi -0.9%

TAIWAN opened slightly higher but trended lower thought the day, ended on the day low Closed -1.6% @ 11,535


AFTER MARKET 
CHINESE EST H (127.HK) Chairman Lau Ming-wai sold his Century Frontier Limited, which held 476 mn shares of CHINESE EST H, to Solar Bright Ltd. under CHINESE EST H Executive Director Chan, Hoi-wan (Kimbee) on 11 June, according to the disclosure of the Stock Exchange.  Upon completion, Lau Ming-wai will cease to hold long position in the company; while Joseph Lau Luen-hung and Kimbee will continue to hold 74.99% stake in the company in the capacity of their child below 18 years old. au Ming-wai's entire shareholding in the company will be taken over by three other children of Joseph Lau Luen-hung, including Josephine Lau Sau-wah and Lau Chung-hok, according to market sources. 
EVERGRANDE (3333.HK) repurchased 3 million shares through the Stock Exchange today (11 June) at $18.64 per share, involving $55.92 million
CHINA AOYUAN (3883.HK) executive director Chan Ka Yeung Jacky bought  350,000 shares of the company on 11 June at an average price of HK$8.371 each, involving around HK$3 million.
CHINA SDHS FIN (412.HK) said that it has been allocated with 620,000 NTES-S (9999.HK)  Shares at HK$123 per Share. The total subscription monies paid are HK$77.0285 million.
NWS HOLDINGS (659.HK is applying for a licence to manage non-performing assets in Mainland China, Bloomberg citing sources. The group has purportedly established and registered a Hainan firm to submit the application to China Banking and Insurance Regulatory Commission, expecting to obtain the approval soon.
CHINA registered spiking imports of crude oil and soybeans in May based on international market changes, domestic production demand and market principles, reported Ministry of Commerce. Meanwhile, the devaluation of BRL and stronger intention of Brazil exporting soybeans also boosted the soybean import growth of China.  Between January-May 2020, China recorded imports of crude and soy at growth of 5.2% and 6.8%, according to General Administration of Customs of the PRC (GAC). In May alone, respective imports increased 19.3% and 27.7%.
CHINA LIFE (2628.HK) accumulated premium income for the period from 1 January to 31 May 2020 was about RMB369.8 bn, +14.99% yearly
PICC GROUP (1339.HK) aggregate premiums income as derived from the operating subsidiaries for the first five months of 2020 were PICC P&C RMB200.632 bn, PICC Health RMB18.109 billion and PICC Life RMB61.986 bn.  The total premiums income was RMB280.727 bn, +3.3% YoY.
PICC P&C (2328.HK) original insurance premium income for the period from 1 January 2020 to 31 May 2020 aggregated RMB200.632 billion, +3.5% yearly.
NCI (1336.HK) accumulated gross premium income for the period between 1 January 2020 and 31 May 2020 was RMB79.009 billion, +32.1% YoY
CHOW TAI FOOK (1929.HK) annual results ended March 2020. The revenue -14.9% YoY to HK$56.751 bn. The net profit HK$2.901 bn, -36.6% YoY EPS HK$0.29. Final DPS was HK$0.12; full-year DPS was HK$0.24.
NTES-S (09999.HK) closed at $130, up $7 or 5.7% against the listing price of $123, on of 54.54 million shares and T/Oof $7.228 billion. Excluding the handling fees, a book gain of $700 was reported per board lot of 100 shares.
Cheung Kong Real Estate Director William Kwok stated that the group has reserved $1bn as standby mortgage capital for potential buyers of 3- or 4-room flats under SEA TO SKY. The LTV ratio can be as high as 85%. Starting from next week, show flats will be open to the public on the 9th floor at Fortune Metropolis, Hung Hom, disclosed Kwok, expecting a detailed price list to be made public very soon.
Centaline said the US Fed stated that it will put the low rate on hold until 2022, meaning Hong Kong's low interest rate environment will be prolonged by at least two years. The city has a clear direction to keep rates constant, favoring the property market. They expected the Centa-City Leading Index (CCL) to hit the historical high (190.48) before Christmas.
Centa Valuation Index (Major Banks) (CVI) last printed at 82.03, -6.9 pts weekly.  The index slumped by 8.07 pts in two weeks from 90 to around 80 amid the re-emergence of social movements. The steeper slide this week meant banks were turning less proactive on mortgages. -VE

MARKET HOURS 

XIAOMI-W (1810.HK) launched the Mi Band 5 today. The standard version is priced at RMB189, and the NFC version at RMB229. Public sales will start from 10 a.m. on 18 June.
W. Kowloon Lai Ying St. Project Named as 'Grand Victoria’ being developed by the consortium of Wheelock Properties, Sino Land, K. Wah International, Shimao Property and Sea Holdings. The project is applying for pre-sale consent now and will be launched in the fourth quarter if all goes smoothly, said Wheelock Properties Managing Director Ricky Wong Kwong-yiu. He also said low US interest rates and economic stimulus around the world, will favor the Hong Kong property market. He mentioned the utmost importance of social stability, which supports the economy, businesses and home market. The easing plague and better fundamentals are also conducive to the home market development. Seeing recent home price rally, Wong expected the correction period to almost come to an end.
LINK REIT (823.HK) reportedly in talks to acquire The Cabot for GBP390 mn, Chinese media citing British press. The Cabot, the office tower situated in London’s Canary Wharf, is currently owned by Hines, a US REIT.
Bytedance and BABA-SW (9988.HK) have executed leases to expand their office space in the city, Bloomberg reported. Bytedance has entered into a three-year leasehold for around 3,000-sq. ft. offices at Times Square, Causeway Bay, said insiders, and BABA-SW is occupying one more floor of 17,000 sq. ft. In the same office building.
XIAOMI-W (1810.HK) said that Xiaomi cellphones have notched the top spot in terms of sales  volume as of noon on JD-SW (09618.HK)'s 6.11 shopping day, when its products seized the top six spots in terms of sales volume across all Android smartphones.
CHINESE EST H (127.HK) Chairman Lau Ming-wai's entire shareholding in the company will be taken over by three other children of Joseph Lau Luen-hung, including Josephine Lau Sau-wah and Lau Chung-hok, according to market sources.
CHOW SANG SANG (116.HK) With 95% or above shops having reopened in mainland China at the end of March; sales in May-June have considerably recouped, said CFO and Company Secretary Morison Chan Chi Kong.  As to shop rents, the company was offered an approximate 20% cut in Hong Kong and Macau regions between February-April. Given epidemic tapering off in May, landlords yet set out their tough line again. Around one-third of about 70 shops in Hong Kong and Macau need to have rent renewals every year. Entering 2020, roughly half of shops have rent renewed with 30-40% rental trims.  CFO and Company Secretary Morison Chan Chi Kong said the retailer had applied for Retail Sector Subsidy Scheme and Employment Support Scheme under Anti-epidemic Fund of the Government. Under the Retail Sector Subsidy Scheme, the company obtained a maximum of $3 million subsidy; while application for the Employment Support Scheme is still underway. Since last year end, the group has circa 10,500 employees. It has not taken action on layoff and wage cut so far, or asked their staff to furlough. The group will not dismiss staff unless the economy is aggravating further.
HSBC announced that it maintained the best lending rate at 5% unchanged.The previous adjustment of the rate by the bank happened on 1 November 2019 when a 12.5-bp cut was made.  
Overnight HIBOR last posted at 0.09464%, logging a 1-month low, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.56071%, down for 10 days, marking a 1-month low.
Ricacorp Properties doesn’t see the need to fire staff as front-line agents incapable of meeting the standard in the  gloomy market will leave themselves organically, said CEO Willy Liu. As developers have been pacing up in project launches since May, Liu foresaw a surge in the number of new projects in the second half of the year and modeled 5-6% growth in 2H20 home prices, and 6-8% for FY20’s. Asked about latent impacts from Hong Kong National Security Law legislation, the CEO confessed that the real estate agency has recently been receiving many more inquiries about investment migration, but the number of finalized cases are not as sharp as the early 80's.
Airstar Bank, a virtual bank in Hong Kong co-established by XIAOMI-W (1810.HK) and AMTD Group, officially opens for business today.At the initial stage of operation, Airstar Bank renders services of current deposits, time deposits and loan services. The first  $20,000 current deposits will be given an interest rate of 3.6% p.a.. 
TENCENT (700.HK)  ran the whole show of the world's top-grossing mobile games in May. The giant's PUBG Mobile took the top spot, revenue +41% YoY to US$226 mn, announced by Sensor Tower. Roughly 53% of the user spending was from China, followed by 10.2% from the US and 5.5% from Saudi Arabia. Honor of Kings came in second in the global chart, grossing US$205 million in revenue (+42% YoY). 
TRAVEL Hong Kong government will unveil details of the health code system as early as this week, aiming to resume quarantine-free travel amongst Guangdong, Hong Kong and Macao, Ming Pao citing sources.  Eight accredited testing institutes will be partaking in this stage, including five private hospitals and three private laboratories.
CPIC (2601.HK) announced that it had received the Approval for the Issuance and Admission of the Global Depositary Receipts (GDRs) on the London Stock Exchange (LSE) granted by China Securities Regulatory Commission (CSRC). The intended use of 70% or more of the net proceeds received from the Issuance will be for gradually developing the Company and its subsidiaries’ businesses overseas, in the form of equity investments, partnerships and alliances, and mergers and acquisitions in both developed and emerging markets, supporting core insurance business growth.
MENGNIU DAIRY (2319.HK) announced the issuance of US$500 million 1.875% bonds due 2025 and US$300 million 2.5% bonds due 2030.

PRE MARKET

TOPSPORTS (6110.HK) has been informed by its controlling shareholder Belle Sports that it had entered into a block trade agreement with Merrill Lynch (Asia Pacific), pursuant to which the Placing Agent has agreed to place 277 million existing shares of the Company held by Belle Sports to parties independent of and not connected with the Company at a price of HK$10.50 each (9% discount to the closing price yesterday). The Sale Shares represented approximately 4.46% of the total issued share capital of the Company and involved HK$2.916 billion  in total.

As HKD re-hit the Strong-side Convertibility Undertaking, the HKMA undertook USD195 million selling orders during New York trading hours to inject HKD1.511 billion in the market.  The balance of the banking system will increase to HKD122.127 billion tomorrow (12 June).

DINGYI GP INV (508.HK) about the unusual share price and trading volume movements. On 10 June, there was a forced sale of approximately 263million shares held by Chairman Li Kwong Yuk, arising from partial enforcement of share charges and/ or margin financing by certain securities brokers, and as a result of the above forced sale, the shareholding interest held by Li was reduced from 53.27% to 49.68%.

MGM CHINA (2282.HK) announced proposed issue of USD denominated senior notes, the net proceeds from which were intended to repay a portion of the amounts outstanding under the Revolving Credit Facility and for general corporate purposes.

TRAD CHI MED (570.HK) entered into a cooperative agreement with Ping An Smart City to jointly build a traceable traditional Chinese medicine ("TCM") product quality control and traceability management platform, and the Project has officially launched.

SINOTRANS (598.HK) Sinotrans Shipping, a subsidiary of the actual controlling shareholder of the Company, China Merchants Group, increased 47.725 million H shares between 28 May and 10 June, involving around $80.9642 million.

HEC PHARM (1558.HK) repurchased H Shares on 8 occasions from 29 April to 29 May, involving an aggregate of 4.4088 million shares for $128 million.

SINO BIOPHARM (1177.HK) announced proposed bonus issue of shares on the basis of one new Share for every two existing Shares, under which a total of 6.291 billion new Shares were expected to be allotted.


COMMENT 

*CHINA BANKS WEAK after the latest credit data that came out after market Wednesday.  I wonder if knowing it was bad they put it out to coincide with the Fed announcement in the hope the Fed announcement was good and so it wouldn’t be so noticeable?  Or am I overthinking it?  Anyway it was weak CCB (939 HK -1.3%) ICBC (1398 HK -1%) CMB (3968 HK -3.4%) ABC (1288 HK -2.5%).

*INSURERS WEAK as CPIC (2601 HK -5%) on concern its planned GDR issuance could be a drag on the stock. Citi put the stock on a 30 day negative watchCH LIFE (2628 HK -3.5%) CH TAIPING (966 HK -5.1%) NCI (1336 HK -3.6%) PICC GROUP (1339 HK -3.6%).

*AUTOS WEAK despite good Vehicle Wholesale data from CAAM and Shenzhen to widened its New Energy Vehicles (NEV) applications and it also plans to provide financial subsidy to NEV buyers. GEELY (175 HK -1.5%) BYD (1211 HK +1.7%) GAC (2238 HK -3%).

*E-COMMERCE MIXED  NETEASE's (9999 HK) debut, stock closed at HK$130 vs listing price of HK$123. MEITUAN DIANPING (3690 HK +3.4%) jumped on broker's upgradeand is reportedly invested in Hualala.com, that provides digital-management services forcatering companies. JD.COM (9618 HK) has attracted at least HK$70b retail orders through margin financing for its HK IPO,thats at least 43 times covered, it's priced its listing at HK$226. ALIBABA (9988 HK -1.2%) TENCENT (700 HK -0.8%).

*TECH & COMPONENTS WEAK  SEMICON’s weak as global chip supply is becoming more critical due to US sanctions and as major supplier Arm and its Chinese venture clashed publicly over the dismissal of the Chinese Chairman/CEO. Huawei failed to convince suppliers to move its supply chain to the mainland, while Apple is expected to announce using its own chips (-VE Intel).

FIT HON TENG (6088 HK +1.9%) HUA HONG (1347 HK -3.7%) SMIC (981 HK -0.4%) ASM (522 HK -3.8%).

APPLE plans to launch production of the iPhone 12 in July or August, which is ahead of the pre-planned line up this year for other phone units. AAC TECH (2018 HK -1%) SUNNY (2382 HK -1.7%) BYDE (285 HK -3.2%) TONGDA (698 HK -2.3%).

*SPORTSWEAR WEAK after POU SHENG (3813 HK +3.9%) reported net consolidated operating revenue in May to 2.39b yuan,  +8.1% YoY. YUE YUEN (551 HK -3.2%) reported net consolidated operating revenue -24% YoY to USD692,589.

BELLE is offering 222m shs in TOPSPORTS (6110 HK -12%) in a block trade at HK$10.50/shr, represents a discount of 9% to last close.

*OTHER

EVERGRANDE HEALTH (708 HK +9.3%) said Mini Minor has agreed to subscribe to its subsidiary NEVS new shares worth HK$439m, and make a payment in cash or in assets to NEVS worth HK$22.3b, according to a company filing by Evergrande Health.

CHINESE ESTATE (127 HK +3.8%) after media reported that Joseph Lau's son Lau Ming-wai, who is the chairman of the company, transferred his entire equity stake to three half siblings, children of Chan Hoi-wan.



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