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.
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%.
*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%).
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)
Southbound HK$14,596m Sell 6,536m : 8,060m Buy
Southbound HK$13,774m Sell 5,039m : 8,735m Buy
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.
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.
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%
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.