3 June WRAP HSI +330pts, T/O +22% Shorts ease to 18%
HSI +330pts (+1.4%) 24,325 HSCEI +91pts (+0.9%) 9,967 T/O HK$139.45bn (+22.3% DoD).
Warrants were 5.7% of market turnoverEurope
opened higher and trending higher after good employment and PMI data and the expectation of good news from the ECB to be announcement today although there are some concerns about the US protests especially ahead of this Friday’s US jobs report.US futures
opened flat initially touched lower but then rebounded with the focus on the US re-opening. Currently +180pts helps by news that US Total vehicle sales May were 12.2m vs 8.6m Apr. Other key data today being the ADP jobs reports and ISM Non manufacturing data and Factory orders.
US 24 companies due to reporting tonight incl American Eagle Outfitters, Campbell Soup, Fossil and others(for full list https://finance.yahoo.com/calendar/earnings/ )CONNECT
Northbound RMB 31,855m Sell 15,596m : 16,259m Buy
Southbound HK$ 9,505m Sell 4,862m : 4,643m Buy
Northbound RMB 46,786m Sell 21,517m : 25,269m Buy
Southbound HK$ 9,603m Sell 4,127m : 5,477m BuyIPO On debut
, HAINA INTEL (1645.HK) closed at $1.2, -18 cents or -13% vs the listing price of $1.38, on volume of 102.8m shares and turnover of nearly $130m. Excluding the handling fees, a book loss of $720 was reported per board lot of 4,000 shares.Short Selling HSI
Wednesday 18% vs 18.2% Tuesday
Top Shorts Wharf REIC (1997) 37%, CLP (2) 35%, CKI (1038) 35%, ICBC (1398) 31%, BoC (3988) 28%, Ping An (2318) 28%, China Shenhua (1088) 25%, Country Garden (2007) 25%.DATA
CHINA During Market
Caixin Services PMI May 55.0 vs 44.4 Apr (F/cast was 48.6)
Composite PMI May 54.5 vs 47.6 Apr (F/cast was 49.1)
Moved back into expansion fro the first time since February.
Full text https://www.markiteconomics.com/Public/Home/PressRelease/e2faca3a3cc549e88b9091439705c8faHONG KONG Pre Market
PMI May 43.9 vs 36.9 Apr (F/cast was 38.0) a four month high.Afternoon
Centre for Health Protection said there were no new COVID-19 cases today;INDEXES
China Closed CSI 300 flat @ 3,983 Opened higher and rallied to the day high (4,019) as the Caixin PMI data came out. But then sold down to 3,995 before working back to above 4,000 in choppy trading. PM saw an initial uptick but then increased selling retesting the morning support several times before giving way around 2:15, when the market sold down to Tueday’s closing level before bouncing but only to sell down again into the close. Investors remain concerned about US/China tensions and the lack of detail over government direct stimulus plans.
Market saw rotational trading with recent winners being sold and laggards being bought.
Shanghai Composite Index +1 pt to 2,923; T/O Rmb300.4b
Shenzhen Component Index -4 pts to 11,108. T/O Rmb477.4b
ChiNext Index -2 pts to 2,143. SHCI and SZCI recorded
HSI Pre Market +307pts @ 24,303 vs +270pts ADR’s with a broad bounce lead by the E-commerce, Tech and Financials. HSI hit the day high 24,364 as the China Caixin data came out, beating forecasts but then the market pulled back and trended lower to the day low (24,220) around 10:30am. It then traded in that range for the rest of the day. Investors watching for developments/details on the Chinese proposed National Security Law as Carrie Lam and team travel to Beijing to give feedback.
AIA (1299.HK) +5.3%
HSBC (5.HK) +2.6%
PING AN (2318.HK) +2%
HKEX (388.HK) +1.5%, hits new high
CCB (939.HK) +0.8%
TENCENT (700.HK) +0.5%
HSI & HSCEI Constituents on the move
CNOOC (883.HK) +4.6%
SINOPEC CORP (386.HK) +3.5%
GEELY AUTO (175.HK) +3.4%
PICC P&C (2328.HK) +3.4%
ANTA SPORTS (2020.HK) +3.1%
CHINA UNICOM (762.HK) +3%
HSMI & HSSI Constituents on the move
CR MEDICAL (1515.HK) +24.6%
CTIHK (6055.HK) +13.3%
AGRITRADE RES (1131.HK) +10.2%
MAN WAH HLDGS (1999.HK) +9.8%, hits new high
WEIMOB INC (2013.HK) +8.7%, hits new high
GOME RETAIL (493.HK) +6.7%, hits new high
CSC (6066.HK) +6.2%, hits new high
Markets opened higher following the moves in Europe and the US.JAPAN
opened higher initially rallied but then trended lower for the rest to the day with a small bounce into the closed Nikkei closed +1.3% at a three month highS KOREA
markets opened higher Kosdaq trended lower all day to close -0.8% but the Kospi trended higher to close +2.9% TAIWAN
opened higher and worked higher through they to close at its day high Closed +1.7% at 11,320
Financial Secretary Paul Chan, during an exclusive interview with CCTV, said the legislation of National Security Law in Hong Kong is salubrious to cement its position as an international financial hub. Despite unprecedented headwinds, Chan believed Hong Kong can make it through with the support from China and its own strength. As to the sanctions from the US and western world, Chan said such moves are insensible, voicing full-fledged confidence in the linked exchange rate system. Chan underscored that the system has been established by Hong Kong itself, needless the consent of foreign countries. Given approximately US$440bn foreign exchange reserves of Hong Kong now and swap currency agreements with China (i.e. HKD-USD exchange), Hong Kong is capable of maintaining the currency peg.
On another note, Hong Kong is definitely not going to enforce forex control, Chan pledged. As stipulated in the Basic Law, Hong Kong allows capital free flow and HKD free exchange. Chan implored the public not to be panic as the system is a solemn guarantee under the Constitution.
Sec for Transport and Housing, Frank Chan, stated that the total housing supply target for the next 10-year period from 2020-21 to 2029-30 is 430,000 units. According to the public/ private split of 70:30 for new housing supply, the public housing supply target is 301,000 units and the private housing supply target is 129,000 units. When announcing the above housing supply targets, the Government also pointed out that assuming that all sites identified could be smoothly delivered on time for housing development, the estimated public housing production for the above 10-year period would be about 272,000 units. Comparing with the public housing supply target of 301,000 units, the production shortfall is 29,000 units.
BEIGENE (6160.HK)'s innovative BRUKINSA (zanubrutinib) capsules were approved for commercialization under a prioritized approval process said the China National Medical Products Administration. The drug is mainly used for treating adult patients with mantle cell lymphoma, chronic lymphocytic leukemia or small lymphocytic lymphoma who have received other prior therapy.
Spot USD/CNY closed at 7.1099, up 6 bps. As at 16:50, USD/CNY sagged 112 bps in the night session. USD/CNH stood at 7.1168, down 102 bps.
Foreign institutes have been raising their Chinese bonds holdings for 18 months, during which the purchase volume in May reached RMB111.9 bn, logging a new high on record, according to data from China Central Depository & Clearing Co., Ltd..
YUZHOU PPT (01628.HK) May contracted sales RMB10.751 billion, +108.72% YoY.
ZHONGLIANG HLDG (2772.HK) contracted sales for the first five months of 2020 RMB43 billion.
DAFA PPT (6111.HK) contracted sales for 5 months ending 31 May 2020 were RMB8.019bn.
HKT-SS (6823.HK) is considering a sale of the company's subsidiary PCCW Global, an arm having business valued as much as US$1bn, said Bloomberg citing insiders. The deal may draw interest from other telecom operators or private-equity funds. The considerations are at an initial stage, while a formal process may start later this year, the people said. HKT-SS, controlled by PCCW (8.HK) has yet to decide on the transaction structure and the deal may or may not proceed.
CSI climbed 1.85 pts weekly to last stand at 59.75. It had fallen 10.78 pts last week due to protest concerns but remained above 55 this week, the index showed front-line agents’ uncertainty in the short term but longer term bullish view on home market. The crisis of COVID-19's resurgence will be factored in the Centa-Salesman Index (CSI) from next week onwards said Centaline Property. They forecast CSI to struggle at around 60, before gathering momentum for another rally.
Shanghai recorded online retail turnover of almost RMB100 bn in May, according to the "5.5 Shopping Festival" data unveiled by Shanghai Municipal Commission of Commerce. Next Shanghai will kick-start the first Shanghai Nightlife Festival on Saturday (6 June) and launch over 180 special events like midnight diner and sleepless shopping night.
MAOYAN ENT (1896.HK)'s survey findings suggested the number of audience anticipating to return to cinemas had surged from 70% to almost 90% during March-May, with more moviegoers being optimistic about plague prevention and control. 70% of them found it appropriate to revisit cinemas in June. MAOYAN ENT's price hit $13.1 today, highest since 6 February. Closed +7.8% at $12.98, on volume of 2.97m shares.UBS said Hong Kong's property prices
have bottomed out this year, as annual housing demand reached 60,000 units against annual supply of around 40,000 flats, opined John Lam, head of Hong Kong and China real estate research at UBS Investment. The home market will likely stick to its upward trend under supply-demand imbalance. Hong Kong's retail revenue plunged by half given vanishing tourists under entry curbs, where luxury sector has the dimmest outlook, added Lam.Macau Chief Executive
Ho Iat Seng met with officials from Guangdong Province to exchange views on extending Guangdong-Macao ties; accelerating effort on the Guangdong-Macao Intensive Cooperation Zone planned for the island of Hengqin; and the resumption of normal cross-boundary travel. +VEAmcham survey
of its 180 US firm members; 30% of them were “moderately” concerned and 53.3% were “very concerned” about Hong Kong National Security Law legislation. Some 30% of the respondents stated that they are considering moving capital, assets or business operations out from Hong Kong.Principal payment holiday schemes
; Govt said the HKMA has been maintaining close liaison with the banking industry and rolled out several rounds of relief measures through the Banking Sector SME Lending Coordination Mechanism with a view to helping different industries as far as possible. As of May 15, more than 24,000 cases of principal payment holidays and other extensions of repayment schedules have been granted by banks, involving more than HK$257 billion. As of 22 May, 3,300 applications totalling around HK$6.8 billion have already been approved by the Hong Kong Mortgage Corporation Limited under the Special 100% Loan Guarantee.BYD COMPANY
(1211.HK) has missed its Sunday deadline to obtain a US federal certification for its masks, for which it is subject to a second delay on its US$1 billion deal to sell N95 masks to California, said the Wall Street Journal.HKD remained resilien
t this morning (3 June), leading the spot USD T/T rate to 7.7505. The near-term demand for HKD was shored up by wave of tentative second listings of heavyweight Chinese-concept stocks in Hong Kong. The balance of the banking system is expected to be $94.779 billion this Friday (5 June).Canalys said
the global PC and tablet shipment is set to slide 7% YoY to 368m devices in 2020, followed by a flattish figure and 2% growth in 2021 and 2022, according to their forecast.TikTok
was the world's most-downloaded app in May, with two times higher installs YoY at 112 million, announced by Sensor Tower. 20% of the downloads came from India, and 9.3% from the United States.US Department of Commerce
opened an investigation into whether vanadium imports from China and Russia would impair US national security. AMG Vanadium and US Vanadium LLC claimed they have been harmed by unfairly priced imports, value-added tax regimes in other vanadium-producing nations, and the "distortionary effect of Chinese and Russian industrial policies", according to their petition.The European Union is opposed
to Trump's plan to invite Russia back into G7, as the US cannot amend G7 rules herself, Associated Press citing Foreign Policy Chief Josep Borrell.TIME WATCH
(2033.HK) expected the revenue derived from the retail sales network to substantially decrease by approximately 51% for the four months ended 30 April 2020, as compared with the corresponding period of 2019. Given the market condition, uncertainty and expected unsatisfactory financial result for FY2020, unless there is any change of circumstances, the Board has planned not to declare final dividend for FY2020 in order to maintain its strength to face the challenges in the year ahead.US SEC Chairman Jay Clayton
said the bill which is cleared by the Senate to delist firms failing to comply with U.S. auditing standards for three years is sensible, said Bloomberg. The US SEC will write a rule to implement this bill should it be signed into law.SANDS CHINA LTD
(1928.HK) announced the issuance of two batches of senior notes, including the US$800-million 3.8% notes due 2026, and the US$700-million 4.375% notes due 2030. The date of issuance will be June 4 (New York time).PRE MARKET SMIC (
981.HK) said that as part of the RMB Share Issue, the Company has entered into the CICT Agreements with CICT, Haitong Securities and CICC, whereby CICT will participate in the proposed RMB Share Issue as a strategic investor by subscribing for RMB Shares under the RMB Share Issue up to an aggregate subscription amount of RMB2 billion, subject to allotment. It has also entered into the Shanghai IC Fund Agreements with Shanghai IC Fund, Haitong Securities and CICC, whereby Shanghai IC Fund will participate in the proposed RMB Share Issue as a strategic investor by subscribing for RMB Shares under the RMB Share Issue up to an aggregate subscription amount of RMB500 million, subject to allotment.Chinese Foreign Ministry
Spokesman Zhao Lijian is unaware of rumors about China's order to halt purchases of US farm goods, citing Beijing's consistent and clear-cut stance toward China-US economic and trade issues. The U.S. Soybean Export Council (USSEC) confirmed Beijing is purchasing US soybeans step by step, reported Global Times.Bell Canada and Telus,
have chosen to ditch Huawei for their 5G network project, said foreign media. Bell Canada announced a team-up with Ericsson to co-build core 5G network, and Telus with both Ericsson and Nokia. Telefonica Deutschland announced that it will adopt equipment from Ericsson to build its 5G core mobile network in Germany.CHINA VANKE (2202.HK)
contracted sales achieved in May 2020 were RMB61.28 billion, +5.7% YoYCHINA AOYUAN
(03883.HK) said May 2020, the Group achieved unaudited property contracted sales of RMB10.25 bn, +17% MoM (+2% YoY).CPIC
(2601.HK) said the Company was approved by CSRC to issue not more than 125m GDRs, which is calculated based on the conversion ratio determined by the Company, and the corresponding number of newly issued underlying A shares of the Company will not exceed 628m. Also it entered into a Cornerstone Investment Agreement with Swiss Re, pursuant to which Swiss Re agreed to acquire GDRs in the Offering at the final offering price. The number of GDRs to be acquired by Swiss Re shall not represent underlying ordinary shares exceeding 1.5% of the Company’s total number of ordinary shares in issue after the Offering. The GDRs so acquired will in principle be subject to a lock-up period of three years.
*PETROCHEMS FIRM as oil hit a 3-months high WTI +4.1% BRENT 3.4% on the expectation that OPEC+ producers head toward a consensus on extending their output curbs. Also US crude inventories -483,000 barrels last week. CNOOC (883 HK +4.6%) ahead of today's quarterly earnings release. PETROCHINA (857 HK +3%) COSL (2883 HK +6.9%).
*BANKS FIRM HK BANKS continue to rebound as the city remains calm but tomorrow would normally see a Tiananmen Sq vigil which has been banned by the police and I think people are awaiting details of the National Security Law with Carrie Lam in Beijing today to give feedback on the issue HSBC (5 HK +2.5%), STANDARD CHART (2888 HK +2.6%).
BANK OF EAST ASIA (23 HK +0.5%) after being +17% Tuesday on rumours of asset disposal. BEA clarified that it has had no external discussions regarding the disposal of either the HK or mainland banking businesses. See FT Lex.
CH BANKS mainly firm after PBOC said the temporary loan-purchase plan announced to support credit growth won’t undermine any need to cut reserve ratios or interest rates, dismissing speculation the policy could reduce the room for more easing. CCB (939 HK +0.8%) BOC (3988 HK +0.3%) CMB (3968 HK +1.7%).
*E-COMMERCE PLATFORMS STRONG on recovery optimism and speculation on the 618 shopping spree. ALIBABA (9988 HK +4.8%) MEITUAN (3690 HK +5.6%) CH LIT (772HK +6%).
Sector helped by the news that PINDUODUO plans to return to HK for a second listing this month and news that retail investors has pumped HK$29b into NetEase IPO, circa 44x over-subscribed.
TENCENT (700 HK +0.5%) bought a stake of between 70% and 80% in video game developer Bohemia Interactive for about $260m.
*HK PROPERTY FIRM some consolidation, some investors unsure over the National Security Law impact on the sector's sentiment.
Li Ka-Shing Foundation continue to bought another 1.35m shares of CKA (1113 HK unch) on May 27, 29 and June 1. Average price ranges from HK$41.9428 to HK$43.2819 apiece.
HENDERSON LAND (12 HK +1%) NWD (17 HK +1%) SINO (83 HK +0.2%).
*CHINA PROPERTY STRONG on satisfactory contracted sales in May. AOYUAN’s (3883 HK +2.6%) May sales +2% YoY to 10.25b yuan,
KWG's (1813 HK +4%) May sales 45% YoY to 9.15b yuan,
CIFI's (884 HK+1.49) May sales +26.5% YoY to 20.2b yuan,
CH VANKE's (2202 HK-0.4%) May sales +5.7% YoY to 61.28b yuan, EVERGRANDE's (3333 HK-0.5%) May sales +12.5% YoY to 60.22b yuan. GREENTOWN SERV (2869 HK -3.5%) on news it sold shares to raise US$250m in an accelerated placement with price between HK$10.18 apiece, represents 7.12% discount.
* AUTO MAKERS/DEALERSHIPS STRONG after the CAAM yesterday estimated that wholesales of cars as well as commercial vehicles such as light trucks probably increased about 12% to 2.14m units last month, signaling a recovery in China's car market is gathering pace.
GEELY (175 HK +2.7%) is reportedly planning a big expansion of its showroom network for its premium EV model Polestar, as it prepares to compete with Tesla Inc’s Model 3.
GREATWALL (2333 HK +3.4%) GAC (2238 HK +4.5%) ZHENGTONG (881 HK +5.4%).
|MEIDONG AUTO (1268 HK -2.1%) sold 81m shs @ HK$15.58 each, a 9.9% discount to Tuesday's closing price.
*HK RETAILERS FIRM talk of bargain-hunting and recovery optimism, despite HK extending the limits on gatherings to June 18 from June 4 after nine people were infected locally with the virus. SASA (178 HK +2.4%) CHOW TAI FOOK (1929 HK +2.6%) LUK FOOK (590 HK -0.6%) TAI HING (6811HK -1.5%) CDC (341 HK +2%)
LIFESTYLE (1212 HK -1%).Mandatory quarantines were extended for overseas visitors to Sept. 18 and for arrivals from mainland China, Taiwan and Macau to July 7.
HKEX (388 HK +1.5%) on news US SEC chief signaled support for legislation which may lead to the delisting of Chinese companies from U.S. stock exchanges if American officials aren’t allowed to review their financial audits. HKT (6823 HK +4.6%) is reportedly considering options including a sale of its international enterprise unit, PCCW Global, which may worth US$1b.
MAN WAH (1999 HK +9.8%) surged on recovery speculation and possible dividend rise.
I hope you found it useful, feedback and comment welcomed