Dec 10 HK WRAP HSI -92pts but T/O-20% Europe flat, US watches for FDA, Inflation & Initial Claims


10 Dec

HSI -92pts (-0.4%) 26,411 HSCEI -73pts (-0.7%) 10,416  T/O HK$110bn (-19.5 DoD) 

EUROPE 
FTSE opened slightly better on good data but initially dipped and rebounded now trading sideways. , DAX opened flat and traded sideways around flat. CAC opened better on good data handworked slightly better in choppy trading . Sentiment cautious with the overhang of Brexit, concerns about further lockdowns in Europe in the run up to Christmas and ahead of the ECB’s decision. The lack of a US stimulus deal also -VE for sentiment
Data due
EUROZONE ECB Interest Rate Decision and EU Council Meeting.
FRANCE 
Industrial Production Oct +1.6% MoM vs +1.6% Sept revised (F/cast was +0.6%)
UK 
Balance of Trade Oct GBP -1.7b vs +0.6b Sept (F/cast was +0.5b)
Construction Output Oct -7.5% YoY vs -10% Sept (F/cast was-7.6%)
Industrial Production Oct -5.5% YoY vs -6.3% Sept (F/cast was -6.8%)
Industrial Production Oct +1.3% MoM vs +0.5% Sept (F/cast was +0.2%)
Manufacturing Production Oct -7.1% YoY vs -7.9% Sept (F/cast was -8.2%)
Manufacturing Production Oct +1.7% MoM vs +0.2% Sept (F/cast was +0.3%)
GDP 3 mth Average Oct +10.2% vs +15.5% Sept (F/cast was +9.8%)
GDP Oct -8.2% YoY vs -8.4% Sept (F/cast was -8.2%)
Goods Trade Balance Oct GBP -12b vs -9.35b Sept (F/cast was -9.6b)
Due later NIESR Monthly GDP Tracker.

US Futures 
Dow & S&P opened flat but traded slightly higher and the NDX now also slightly +VE. Hopes for stimulus remain but I think are muted. Key today will be the FDA meeting to consider approval of vaccine use in the US which if approved is likely to give the markets a boost. Initial claims numbers will also be watched along with inflation data; expected to see a small uptick.
Data due Core Inflation Rate, Inflation Rate, Initial Claims, 4 week Ave Claims, Continuing Claims, EIA Natural Gas Report, WASDE Report, Monthly Budget Statement.

CHINA CSI 300 Closed  -2pts (flat) @ 4,941
CSI 300 opened lower following weak New Loans data and concerns that relations will get worse between US and China on sanctions and countermeasures. Plus news S&P would remove those Chinese companies barred by Trump. Market trended lower in early trades. But the reversed at 10am and spiked higher into the green and worked higher in choppy trading into lunch. PM saw the market try to test higher but without conviction and then reversed and sold back down to test the morning low, which held. Bounced back to flat and then trended lower into the close in choppy trading.
Leaders were Liquor, steel, agriculture, and photovoltaic names.
Laggards autos, banks, insurers, and shipping names.
Indexes
Shanghai Comp 1pt (unch) @ 3,373
Shenzhen Comp +15pts (+0.1%) @ 13,731
ChiNext Index +21pts (+0.8%) @ 2,719

CHINA DATA None today

HSI Pre Market Pre market opened at 26,308 -195pts vs  -193pts ADR’s
Initially bounced but then reversed and sold down to test 26,335. It then spiked higher and worked to 26,435 before easing back into lunch. PM opened by testing the 26,400 level but unable to break out and then trended lower to test 26,330 support which held and then trended slowly higher in choppy trading back to 26,400 and then ticked up 10 pts in the closing auction.
Concerns over the US/China relations and more possible sanctions continues to worry along with the potential clamp down on Ecommerce names, Bank NPLs and the local covid outbreak which does not seem to be under control and could potentially increase. BUT the fear of missing out keeps money invested.

IPO
HBM HOLDINGS-B (02142.HK) on debut, settled the trade at $11.02, down $1.36 or 11% against the listing price $12.38, on volume of 57.89 million shares and turnover of $695 million. Excluding the handling fees, a book loss of $1,360 was reported per board lot of 1,000 shares.
LEADING HLDGS (06999.HK), on debut, settled the trade at $5.69, flattish with the listing price, on volume of 8.52 million shares and turnover of $48.45 million.

POP MART (09992.HK), to be listed tomorrow, opened at $70 in grey market, up around 82% against the listing price $38.5, and last stood at $70, on volume. of 600,000 shares, PhillipMart data showed.
DATANG GROUP (02117.HK), whose shares will be listed tomorrow, opened at $4.51 in grey market, down 1.1% against the listing price of $4.56, and last stood at $4.53, down nearly 0.7% against the listing price, on
volume of 52,000 shares, PhillipMart data showed.

PICKs Techtronics (669 HK) closed +3.7% back over HK$100.  Macquarie upgraded their price target today.

HONG KONG DATA
Centre for Health Protection said there were 112 new COVID-19 cases in Hong Kong today (vs 104 Wednesday) 34 cases with unknown origin

SHORT SELLING Thursday 14%  vs 14.2% Wednesday Top Shorts  Ping An (2318) 42%, AAC Tech (2018) 33%, Anta Sports (2020) 28%, Hang Seng Bank (11) 27%, BankComm (3328) 26%, CKI (1038) 24%

AFTER MARKET NEWS 
S HARBOURHOLD (01663.HK) announced that the Company’s chairman and substantial shareholder, Wong Lam Ping, continued to acquired shares and bought an aggregate of 900,000 ordinary shares of the Company in the open market at an average price of approximately HK$0.14 per share on 10 December 2020.
The Urban Renewal Authority (URA) will conduct a random assignment of priority numbers (random assignment) tomorrow (11 December) for the 4,909 applications for the 43 remaining “Starter Homes” units in its eResidence project. Upon completion of the random assignment, the list of assigned priority numbers and the video will be uploaded to the eResidence’s website (www.eresidence.hk) later on the same day.
Business receipts in value terms of many major service industries showed decreases of different magnitudes in Q3 2020 when compared with Q3 2019, according to the provisional figures released today (Dec 10) by the Census and Statistics Department. Double-digit decreases were recorded in business receipts of the accommodation services (-50.8%), food services (-35.3%), administrative and support services (-27.5%), transportation (-23.7%), retail (-16.7%) and banking (-13.8%) industries.
SMIC(00981.HK) : Chip Capacity Tight on Faster-than-expected Demand Growth, According to Qualcomm's forecast, the global 5G handset shipment will reach 200 million units this year and 550 million units next year.  PLUS SMIC found it hard to catch up with the demand growth with production expansion. The schedule of output expansion has been pushed back amid the pandemic.
National Health Commission, National Healthcare Security Administration and National Administration of Traditional Chinese Medicine issued a notice on deep promotion of service actions - "Internet + Medical Health" and "Five Ones".   The notice stated that China should foster "One Body" co-sharing services to improve the level of convenient, intelligent and humanized service; nudge "One Code" integrated service to break down the barriers of coexistence of multiple codes that are not universal; encourage "One Stop" settlement service to perfect the "Internet+" medical online payment; promote "One Internet Office" to address difficult and complicated administrative cases; and push forward "One Chess Game" to enhance anti-epidemic IT support.
The Financial Reporting Council (FRC) has for the first time gained access to the audit papers of Chinese companies listed in Hong Kong in a breakthrough which may serve as a model for cooperation between the financial watchdogs of the US and China, SCMP reported. The Chinese finance regulator has passed the auditor document of seven companies to the FRC and will soon hand over the papers of another four companies, which are regarded as “state secrets”, said the report.
Australia is seeking to boost her cotton supply to countries like Vietnam as her tension with China is leaving Canberra with large stockpiles, sources familiar with the plan were quoted as saying by Reuters.
Centa Valuation Index (Major Banks) (CVI) last printed at 38.15, down 8.73 pts weekly to the trough since early September, said Centaline Property. Banks turned conservative on mortgage loans for the week when anti-plague measures had been tightened. This lead CVI to drop below 40, the lower limit of the critical range.

MARKET COMMENT 
*CHINA  BANKS WEAK as new loans issued by Chinese banks missed estimates.  CCC (939 HK -1.4%) ICBC (1398 HK -0.8%) ABC (1288 HK -1.4%) BOC (3988 HK -0.7%).
*COMMODITIES STRONG on speculation that there could be shortages next year; especially iron ore (price has been rallying on Chinese demand) and coal (due to import restrictions from Australia) ANGANG (347 HK +2.8%) MAANSHAN (323 HK +2.7%) CH COAL (1898 HK +2.1%) JIANGXI COPPER (358 HK +2.3%).
*PETROCHEMS WEAK rising US inventories and sanctions on CNOOC (883 HK -2.4%). PETROCHINA (857 HK -1.3%) CH OILFIELD (2883 HK -2.9%) SINOPEC (386 HK -1.2%).
*E-COMMERCE WEAK as the sector could face more Govt restrictions both in China and the US as Facebook is sued over unfair practices. JD HEALTH  (6618 HK +0.6%) saw some profit-taking but managed to hold firm as it meets the fast entry rule of various indexes and will be added effective Dec. 22 BABA (9988 HK -2%) TENCENT (700 HK -1.2%) NTES (9999 HK -4.3%).
*TECH & COMPONENTS MIXED SUNNY OPTICAL (2382 HK -3.3%) after reported handset lens set, Vehicle lens set  and hanset camera module  shipments fell in November.  BUT it said it was mainly due to component shortages which suggests shipments are delayed not lost.  But investors are in the mood to take profit rather than wait at these levels. AAC TECH (2018 HK -2%) BYDE (285 HK -3.8%)  ZTE (763 HK -1.5%).COWELL (1415 HK) trading halted pending takeover code announcement.
*HK PROPERTY MIXED  Some weighted down on the current Covid outbreak while others saw  support on amid attractive valuations. This year, transactions are forecast to drop by 5% to 73,253. NWD (17 HK -0.8%) SINO (83 HK -0.2%)  HYSAN (14 HK -0.8%) KERRY (683 HK -0.7%) CKA (1113 HK +0.9%) SHKP (16 HK +0.3%).
*PHARMA WEAK Whilst vaccine news was positive; China’s state-backed coronavirus vaccine developed by SINOPHARM (1099 HK -0.6%) protected 86% of people against Covid-19 in trials conducted in the United Arab Emirates, state media in UAE reported, paving the way for Beijing to distribute vaccines around the developing world. The vaccine may have already been given to 1m people in China under emergency authorisation. But there are concerns about how well it will be received in the global market compared to Pfizer and others. CANSINO (6185 HK+11.5%) on news of Mexico placing an order for 35m doses. PHARMARON (3759 HK +1%) INNOVENT (1801 HK -0.5%) CSPC (1093 HK -2.5%).

Regional Markets
JAPAN 
Nikkei 225 opened lower and traded sideways in the morning session. PM opened higher and has rallied to yesterday’s closing level but failed to break above and dropped to 26,760 before testing Wednesdays closing level but failed and sold down to close -62pts (-0.2%) @ 26,756Topix has followed a similar trading patten but only tested Wednesday’s level once the second attempt was with a lot less conviction and the market closed -3pts (-0.2%) @ 1776Data pre market PPI Nov -2.2% YoY vs -2.1% Oct (F/cast was -2%)PPI Nov 0% MoM vs -0.2% Oct (F/cast was +0.2%)BSI Large Manufacturing Q4 21.6 QoQ vs 0.1Q3 (F/cast was 5)
S KOREA  
Futures and Options expiry today.Kospi opened lower and sold down to the day low 2,720 before working better; test yesterdays closing level at 11am and traded around there until breaking above at 1pm to the day high of 2,765 before selling down below Wednesday’s close which it tested a couple of times in the PM but failed to break above. Closed -90pts (-0.3%) @ 2,747 Kosdaq opened lower and sold down to the day low 906 before rebounding into the green. And after 10am worked better to 922 around 1:30pm and then traded sideways to close +8pts (+0.9%) @ 922.
 TAIWAN 
Opened lower at 14,295, initially sold down to 14,250 level rebounded to 14,300 and then drifted back to 14,250. Around 12:30pm it dipped down to 14,200 and then rebounded to close -141pts (-1%) @ 14,250
TSMC announced that November sales amounted to TWD124.87 billion, up 15.7% year-on-year.

CONNECT FLOWS (down slightly DoD)
Shanghai 
Northbound Rmb 37,287m Buy 17,894m vs 19,393m Sell
Southbound HK$ 9,182m Buy 4,313m vs 4,869m Sell
Shenzhen 
Northbound Rmb 46,216m Buy 23,096m vs 23,119m Sell
Southbound HK$   9,921m          Buy    4,330m  vs     5,591m  SellActive Heavyweights
BABA (09988.HK) -2.1%
CCB (00939.HK) -1.5%
TENCENT (00700.HK) -1.2%
AIA (01299.HK) +0.6%
MEITUAN (03690.HK) +0.2%
PING AN (02318.HK) +0.1%

HSI & HSCEI Constituents on Move:
CHINA RES LAND (01109.HK) +4.7%
NTES (09999.HK) -4.3%
TECHTRONIC IND (00669.HK) +3.7%
SUNNY OPTICAL (02382.HK) -3.4%
HAIDILAO (06862.HK) +3.1%

HSMI & HSSI Constituents on Move:
YIXIN (02858.HK) +12.2%, hitting new high
CANSINOBIO (06185.HK) +11.5%
LUYE PHARMA (02186.HK) -10.8%
PAX GLOBAL (00327.HK) +7.8%, hitting new high

MARKET HOURS NEWS
China will impose sanctions on certain Americans including U.S. Congress members, as well as individuals of non-profit organizations and their families, said Chinese Foreign Ministry Spokeswoman Hua Chunying.  Equally, China's Ministry of Foreign Affairs will scrap the visa-free entry to Hong Kong and Macau for US diplomatic passport holders.
Mexican health ministry had signed an agreement Wednesday to purchase 35 million doses of coronavirus vaccines from CANSINOBIO-B (06185.HK), said Foreign Minister Marcelo Ebrard.  CANSINOBIO-B rallied on the news.
Mastercard and The U.S. Fletcher School at Tufts University jointly published the Digital Intelligence Index.  In terms of state of digital evolution, Hong Kong came in third globally and second in Asia-Pacific with a score of 88.12. Though preceded by Singapore (98.82) and the United States (89.82) in the global chart, Hong Kong still outpaced other Asia-Pacific countries and regions, including South Korea (83.09), Taiwan (80.75), Japan (77.76) and China (61.89).   In other words, Hong Kong has become one of the world's most advanced digital economy.
Qutoutiao denied the rumoured that it is in talks with sector giants and leaders such as TENCENT (00700.HK) and BABA-SW (09988.HK) over a full or partial disposal, reported Chinese media. Qutoutiao is said to have included Midu in the assets for sale.  
The Japanese government confirmed that Japanese banks with business ties with the U.S. shall adhere to the sanctions imposed by Washington, meaning they are not permitted to conduct transactions with Hong Kong Chief Executive Carrie Lam and the other sanctioned, South China Morning Post reported.
TSMC announced that November sales amounted to TWD124.87 billion, up 15.7% year-on-year.
KPMG predicted Hong Kong IPO fundraising to reach $389.9 billion this year, and in a range of $350-400 billion for the next. At this moment, around 50-60 US-listed Chinese concept stocks will likely return to Hong Kong for IPO, said the firm, who thus predicted there will be a higher comeback rate in 2021 than 2020's.
In November, there were 442 residential transactions involving Ad Valorem Stamp Duty (AVD), up 160 cases or 56.7% monthly, on a three-month rally, setting an over-a-year high, Inland Revenue Department's Stamp Office announced. The taxation amounted to $999 million, up almost 42% monthly, also hitting an over-a-year high
S&P Dow Jones Indices announced that 21 Chinese companies will be removed from its global stock and bond benchmarks according to US President Trump's executive ban. The ousted Chinese companies include CRRC (01766.HK), CHINA COMM CONS (01800.HK), CHINA STATE CON (03311.HK), CHINA RAIL CONS (01186.HK) and SMIC (00981.HK)
Overnight HIBOR last posted at 0.04732%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.25071%, up for 12 days, marking a 1-month high.
ADB Sees 2020 Developing Asia Economies  -0.4% from previous -0.7% and raises PRC's to +2.1% up from +1.8%
GREATWALL MOTOR (02333.HK) is working to switch on a novel standalone brand for electric and smart automobiles, Reuters learnt from sources familiar with the plan.
US President-elect Joe Biden has named Katherine Tai, the chief trade lawyer for the House Ways and Means Committee, to serve as the US trade representative, Reuters citing insiders. Tai, aged 45, is a Chinese American speaking fluent Mandarin, with two years of English teaching experience at a Guangzhou university.
Apple will set up an Apple Car factory in the U.S., hunting for executives and engineers from Tesla and other carmakers while initiating talks with the automotive electronics supply chain, reported Taiwanese media. The Apple Car is expected to debut in 2024-25, according to rumors.
AT&T has agreed to sell the Crunchyroll anime operation to Sony's Funimation Global Group for US$1.175 billion.
XIAOMI-W (01810.HK) plans to expand its R&D engineer manpower in Japan double after it has set foot in the Japanese market for a year, said Chinese media.
China Foreign Exchange Trade System announced today (10 December) that the central parity of USD/ RMB dropped 165 bps from the last trading day to 6.5476, snapping six-day rising streak.
China's Ministry of Commerce (MOC) has proposed to the Customs Tariff Commission of the State Council the temporary countervailing measures against wine imported from and made in Australia, in accordance with Article 29 and 30 of the Countervailing Regulation of the PRC.
HAIER SMARTHOME (06690.HK) announced that it expected listing by way of introduction on the Stock Exchange from 23 December and withdrawal of the listing of HAIER ELEC (01169.HK)

PRE MARKET NEWSNot in this mornings report
EVERGRANDE (03333.HK) had in three straight days acquired around 35.5155 million shares in EVERG VEHICLE (00708.HK) , involving more than $1.015 billion, according to shareholding disclosures at the Stock Exchange.
China is showing a progressive economic recovery from the COVID-19 pandemic, with uneven revival across provinces, according to the report of Moody’s.  Seeing downside economic risks, Moody's had a negative outlook for China's local governments for 2021.
A source within the circle of Qualcomm said the chip supply negotiation between Qualcomm and Honor moved along very well, where both parties nearly wrapped up a supply cooperation, Cailian Press reported. Honor CEO Zhao Ming said the company targeted to become number one in Chinese handset market, yet did not disclose any strategy on how to achieve that.
Yata announced that, after reporting one COVID-19 infection at Yata Shatin on 5 December, it had asked and arranged all staff members working at the store between 22 November and 5 December for NAT tests the day after.Apart from ten initially-diagnosed/ confirmed cases, all other staff had negative test results for the virus, Yata added.
SINO LAND (00083.HK) welcomes the "air travel bubble" scheme agreed between Hong Kong and Singapore, said Deputy Chairman Daryl Ng, who envisaged more countries will join the bubble once it reignites.  The group's local hospitality business in Hong Kong has taken a severe hit from the coronavirus pandemic, added Ng.
SINO BIOPHARM (01177.HK) announced that Senior Vice Chairman Tse Ping had yesterday acquired 11.612 million shares of the company, involving $78.9488 million.
Block 8, Kwai Shing West Estate Cluster & Such Others Shall Take Compulsory COVID-19 by Next Mon Under the novel coronavirus compulsory testing notice issued by the Government last night, persons who had been present for more than two hours at Block 6 of Richland Gardens, 80 Wang Kwong Road, Kowloon Bay, Block 8 of Kwai Shing West Estate, Kwai Chung, Kam Wai House, Kam Fung Court, 638 Sai Sha Road, Ma On Shan and the construction sites for Tseung Kwan O – Lam Tin Tunnel, as well as YATA (Sha Tin) workers, are required to undergo testing by December 14.
COWELL (01415.HK)’s TRADING HALT  pending the release of an announcement under the Hong Kong Code on Takeovers and Mergers, the contents of which would constitute inside information.
Hang Seng Indexes Company announced that JD HEALTH (06618.HK) meets the Fast Entry Rule of various indexes and will be added to Hang Seng Composite Index, Hang Seng China Enterprises Index, Hang Seng TECH Index, Hang Seng Healthcare Index and Hang Seng SCHK New Economy Index after market close on 21 December. All changes will come into effect on 22 December.
Some Chinese tech behemoths took control of several financial firms by means of complicated shareholding structure and rendered part of their businesses at the grey area of the legal regime, Economic Information Daily wrote in an editorial. The invisibility, complexity and contagion of financial risks were thus heightened. Beijing shall accord serious attention to her inadequate and problematic oversight on such tech giants and, in her next step, enforce and improve relevant financial regulation, said the Chinese official press.
PBOC Governor Yi Gang, at Singapore Fintech Festival on 9 December, delivered a video speech titled "Develop Green Finance, Promote Low-carbon Development", cs.com.cn reported.   He said the PBOC will continue to develop green finance harnessing fintech. In some of the trial areas for green finance in China, scenario integration of fintech and green finance has been mounted. In Huzhou, local government has built a green finance integrated services platform mobilizing internet and big data.
XIAOMI-W (01810.HK) announced that it had on December 4 completed the top-up placing of 1 billion shares. The net proceeds from the Subscription amounted to US$3.1 billion.
CASH FIN SER GP (00510.HK)   announced that on 9 December, the Group disposed an aggregate of 380,000 XIAOMI-W (01810.HK)   Shares on the open market at an aggregate consideration of HK$10.5 million. The estimated book gain from the disposal was HK$700,000.

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