Dec 14 HK China Wrap HSI -116pts, CSI +45pts Europe Higher US Futures +VE


14 Dec

HSI -116pts (-0.4%) 26,390 HSCEI -9pts (+0.1%) 10,443  T/O HK$143.3bn (+5.4% DoD) 

EUROPE 
opened higher on the news that Brexit talks have extended and that the FDA approved the Pfizer covid vaccine. DAX strong despite news it will go into lockdown on Wednesday. CAC strong too but the FTSE trading just above flat as sterling bounced on the news along with Banks and Builders. M&S also strong.
AstraZeneca shares weak after announcing it had bought out Alexion Pharma for $39 billion. FT article thinks its a good deal.
Data Out
EUROZONE 
Industrial Production Oct -3.8% YoY vs -6.3% Sept revised (F/cast was -4.9%)
Industrial Production Oct +2.1% MoM vs +0.1% Sept revised (F/cast was +1.5%)
GERMANY 
Wholesale Prices Nov +0.1% MoM vs -0.2% Oct (F/cast was +0.1%)
Wholesale Prices Nov -1.7% YoY vs -1.9% Oct (F/cast was -1.7%)
Bundesbank Report due later
US Futures 
Opened higher Dow +150pts, S&P +0.6% and NDX +0.5% in Asian time and have risen to Dow +200pts with S&P and NDX strong too. As markets positive to the news of FDA approval of Pfizers covid vaccine. Electoral College meets today to confirm the election results.
Data Due
Consumer Inflation Expectations

CHINA CSI 300 Closed  +45pts (+0.9) @ 4,935
Opened higher but initially sold down on the weak House Price data and traded sideways in the range 4,890/4,912 before seeing a small push higher into lunch. PM opened flat and traded sideways until 2pm and then worked higher to close at the day high.
Sentiment encouraged by FDA approval for the Pfizer vaccine to be used in the US a rolled out immediately and Bahrain’s approval for Sinopharm's vaccine too. Renewables +VE after comments from President Xi at the Paris accord virtual summit.
Leaders today were White liquors, agriculture, wind power and auto names
Laggards were coal miners, cement, oil & gas, insurers and brokers.
Indexes
Shanghai Comp +22pts (+0.7%) @ 3,369
Shenzhen Comp +137pts (+1%) @ 13,692
ChiNext Index +39pts (+1.4%) @ 2,727

CHINA DATA today
House Price Index Nov +4% YoY vs +4.3% Oct (F/cast was +4.1%).
Prices new homes in Beijing -0.1%, Shanghai & Shenzhen flat, Guangzhou +0.9%
Secondhand prices rose: Beijing +0.5%, Shanghai +0.3%, Guangzhou +0.8% and Shenzhen +0.6%.
Nov New residential property prices rose 3.9% yearly in tier-1 cities, -0.2 ppts MoM,
Nov New commodity home prices +4.2% yearly in tier-2 cities, -0.2 ppts MoM
New commodity home prices +3.8% YoY in tier-3 cities, 0.2 ppts MoM
Tomorrow morning we get NBS Press Conference, Fixed Asset Investment, Retail Sales and Unemployment Rate
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HSI Pre Market Pre Market Opened  at 26,522 +16pts vs -242pts ADRs after the positive news about FDA arriving the Pfizer vaccine and Brexit talks (HSBC was higher).
But sold down 70pts initially to 26,406 with weakness in Ecommerce on news some Chinese suppliers were banning supplying community group buying programmes. It then rebounded to around Friday's closing level. Then pushed higher to 26,544 but without great conviction and trended lower into lunch. Sold down on the PM open to the day low 26,318 and then worked slowly higher through the afternoon to 26,434 only to tick 45pts lower in the closing auction. Ecommerce weak on fears of more rules from Beijing, Financials mainly +VE Tech rebounding with Xiaomi and Sunny Optical +VE. Chinese Developers firm.

PICKs Techtronics (669 HK) closed flat @ HK$103.50. Having opened at 105.00 level again.  I would look to accumulate if it dips below HK$100.

HONG KONG DATA
After market Industrial Production Q3 -7.4% YoY vs -5.1% Q2 (F/cast was -3%)
Centre for Health Protection said there were 82 new COVID-19 cases in Hong Kong today (vs 92 Sunday) 37 cases with unknown origin

SHORT SELLING Monday 13.3% vs 12.9% Friday 
Top Shorts  Hang Seng Bank (11) 49%,  Country Garden (2007) 48%, MTRC (66) 37%, Anta Sports (2020) 33%, Wharf REIC (1997) 32%, Sinopec (386) 30%, Galaxy Ent (27) 30%, CK Asset (1113) 29%, Ping An (2318) 29%, Bank of China (3988) 28%, Link Reit (823) 25%

AFTER MARKET NEWS 
MediaTek may begin to supply its 5G chips to Honor next year, Taiwan's Digitimes cited industry sources. Earlier, the market had rumored that MediaTek is in talks with the US DoC on legal issues for resuming supply to Honor.
PING AN (02318.HK) announced that the accumulated gross premium incomes of the four subsidiaries of the Company for the period from January 1, 2020 to November 30, 2020 ratcheted up 0.98% yearly to RMB729.727 billion.
SWIRE PACIFIC A (00019.HK), CATHAY PAC AIR (00293.HK) and SWIREPROPERTIES (01972.HK)  announced that effective 1 April 2021, Martin James MURRAY will become the finance director of Swire Pacific; and LOW Mei Shuen Michelle will cease to be a director of Swire Pacific. Besides, Martin James MURRAY will become a non-executive director of Swire Properties; and LOW Mei Shuen Michelle will cease to be a director of Swire Properties.   Effective 25 January 2021, Rebecca Jane SHARPE will become an executive director and the chief financial officer of Cathay Pacific; and Martin James MURRAY will cease to be a director and the chief financial officer of Cathay Pacific. Effective 1 April 2021, Martin James MURRAY will become a non-executive director of Cathay Pacific; and LOW Mei Shuen Michelle will cease to be a director of Cathay Pacific.
Singapore entered into COVID-19 vaccine agreements with each of Pfizer-BioNTech, Moderna and Sinovac Biotech. Singapore plans to vaccinate the entire adult population on a voluntary basis.
JD-SW (09618.HK)'s retail group has completed a new round of organizational structure overhaul, 36Kr citing sources.  JD Retail's lifestyle service group will be headed by Qin Miu, while the unit's former head Yan Yao will be in charge of the 3C home appliance retail business group. Both of them will report to JD Retail CEO Lei Xu.
CK ASSET (01113.HK) announced that Li Ka Shing Foundation Limited acquired a total of 620,000 shares in CK Asset at the average price of HK$41.8058, HK$42.7847, HK$42.7333 and HK$43.1300 per share on 8 December, 9 December, 10 December and 11 December 2020 respectively.
As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset increased from 35.83% to 35.85%, and from 35.90% to 35.91%, respectively.
Fitch Ratings' mentioned about Chinese official press criticism against tech magnates' foray into community group buying market. It assumed the reasons behind the criticism were tied to unemployment concerns where community group buying averts "agent" role. Yet, the rating agency deemed such business mode could enhance retail efficiency and reshape mainland agricultural and retail sectors.  In Fitch's opinion, the Chinese government did not intend to squash such online platforms, instead it nudged offline-online alliance. BABA-SW (09988.HK), MEITUAN-W (03690.HK), JD-SW (09618.HK) and so on were not expected to withdraw from the community group buying market given the strategic significance. While e-commerce platforms still need to undergo expansion and coordination, Fitch foresaw community group buying platforms to keep a low-profile operation and increase ties with small-and-medium retailers.
MTR CORPORATION (00066.HK)  to invite developers and/or consortia to submit Expression of Interest (EOI) for Wong Chuk Hang Station Package Five  Property Development tomorrow (15 December). The deadline for submission is 2:00 pm on 22 December 2020.  Wong Chuk Hang Station Property Development, situated on Aberdeen Inland Lot No. 467, is a comprehensive development located atop the MTR Wong Chuk Hang Depot and adjacent to MTR Wong Chuk Hang Station. It is bounded by Heung Yip Road, Police School Road and Nam Long Shan Road, and is being developed in phases.

MARKET COMMENT 
*CHINESE BANKS WEAK liquidity concerns as the year end approaches.
BUT CMB (3968 HK +1.1%)  as it and JD.COM's Online Banking (Beijing) Business Service received approval from the CBIRC to jointly prepare for the establishment of China Merchants Topology Bank Co.Ltd. The second domestic independent legal person direct selling bank approved by the CBIRC.
*INSURERS MIXED after premium data.
NCI (1336 HK -1.3%) 11-month premium +17.2% to 152.57b yuan.
CH LIFE (2628 HK flat) 11-month premium +8.3% to 586.2b yuan.
CPIC (2601 HK +3%) 11-month premium grows 338.626b yuan.
China Pacific Life Insurance 11-month premium 1.94% YoY and
China Pacific Property Insurance 11-month premium +12.8% YoY
*E-COMMERCE  WEAK on regulatory concerns and a clamp down on them selling to community platforms. Expectations of tighter trading conditions ahead.
ALIBABA (9988 HK -2.6%) and TENCENT (700 HK-2.9%) were fined 500,000 yuan each by China’s anti-monopoly watchdog got volations but did not have to unwind their acquisitions.
MEITUAN (3690 HK -3.8%) news that major e-commerce platforms including Meituan, Alibaba and Pinduoduo, will withraw from the community group buying business. JD.COM (9618 HK -1.6%) says it will invest about $700m in Xingshen  Preference Electronic Business Limited, an e-commerce platform for fresh foods and daily necessities.
*TECH & COMPONENTS FIRM on speculation of demand recovery amid vaccine hopes.
XIAOMI (1810 HK +6%) led the sector higher after saying product sales +40% YoY to 7.15b yuan in the “Double 12” shopping festival in China on Saturday. BYDE (285 HK +2.2%) SUNNY OPTICAL (2382 HK +3.8%) TONGDA (698 HK +6.45). MICROPORT (853 HK +1.2%) is considering separate listing of MicroPort MedBot (Shanghai) Co a non-wholly-owned subsidiary, on a recognized stock exchange.
*PHARMA MIXED  vaccines are starting to be distributed in various nations starting this week. Bahrain followed the United Arab Emirates in approving SINOPHARM GROUP's (1099 HK -1.5%) Covid vaccine, as the US prepared to roll out the Pfizer/BioNTech vaccine. BUT Peru temporarily suspended trials of the Sinopharm vaccine after an unspecified “adverse event” was reported during a clinical trial. CANSINO (6185 HK -1.4%) FOSUN (2196 HK +0.3%) CSPC (1093 HK +1.8%) SINO BIOPHARM (1177 HK +0.5%).
*AUTO STRONG as China Association of Automobile Manufacturers said in
November auto sales in the mainland was 2.77m units, +12.6% YoY. Sales of new energy vehicles increased +104% to 200,000 units YoY. For the first 11 months this year, sales -2.9% YoY while that of new energy vehicles were +3.9% YoY. GAC (2238 HK +5.1%) GREAT WALL (2333 HK +8.1%) DONGFENG (489 HK +5%). EVERGRANDE's stake in EVERGRANDE NEV (708 HK -3.7%) has been raised to 74.48%.
*COAL MINERS WEAK after NDRC capped prices of the power plant fuel and approved more imports. The NDRC at a Saturday meeting told representatives from 10 major power utilities they should pay no more than 640 yuan per ton for the fuel, and also gave approval to power plants to import coal without restrictions, except from Australian suppliers.
CH COAL (1898 HK -7.3%) YZ COAL (1171 HK -2.1%) CH SHENHUA (1088 HK -3.1%).
*OTHER MOVERS: 
TSINGTAO (168 HK -3.3%) as several shareholders reportedly selling US$31m of its H shares by means of accelerated placement at HK$75.34; a 4.2% discount from the closing price of HK$78.65 on Friday. Stock at one point was nearly -8%
XINYI SOLAR (968 HK +3.8%) and GOLDWIND (2208 HK +2.5%) advanced after President Xi announced increases to China’s climate goals.

Regional Markets
JAPAN 
Nikkei 225 Opened higher but off the initial highs suggested by the Nikkei futures when they first opened. Tankan survey showed improvement in sentiment and the market rallied to 26,850 which was the morning resistance and was tested a couple of times. Market then traded sideways 26,850/26,780 into lunch. Opened lower after lunch, and traded sideways until 2pm but then sold down to close +80pts (+0.3%) @ 26,732
Topix followed a similar trading pattern but saw selling pressure through the afternoon; closed +9pts (+0.5%) @ 1,791
Data
Large Manufacturers Index Q4 -10 vs -27 Q3 (F/cast was -17)
Large All Industry Capex Q4 -1.2% vs +1.4% Q3 (F/cast was -0.4%)Small Manufacturers Index Q4 -27 vs -44 Q3 (F/cast was -38)
Non Manufacturing Outlook Q4 -6 vs -11 Q3 (F/cast was -8)
Large Manufacturing Outlook Q4 -8 vs -17 Q3 (F/cast was -12)
Large Non Manufacturing Outlook Q4 -5 vs -12 Q3 (F/cast was -7)
Out at 11:30am
Industrial Production Oct +4% MoM vs +3.9% Sept (F/cast was +3.8%)
Industrial Production Oct -3% YoY vs -9% Sept (F/cast was -3.2%)
Capacity Utilisation Oct +6% MoM vs 6.4% Sept (F/cast was +1.5%)
Tertiary Industry Index Oct +1% MoM vs +1.8% Sept (F/cast was +1.5%)
S KOREA  
Tech and Pharma and Ecommerce strong but concerns about the rising number of local covid cases(over 1,000 for the first time on Sunday) hurting sentiment.
Kospi market opened lower and tested down to 2,755 before rebounding to 2,783, which it tested a couple of times before tended lower, and trading sideways in the range 2,766/2,776 until 2pm when is traded lower and closed -8pts (-0.3%) @ 2,762
Kosdaq Opened higher but sold down to 924 in early trades rebounded to the opening level but eased back to test support before working higher to test 936. Failed to break out and traded around there until 2pm when it sold down tp 924 before a small bounce to 931 and then eased lower to close +1pt (+0.1% @ 930
TAIWAN 
Opened lower and sold down to 14,182, then rebounded to Friday’s closing level which it tested a couple of times but unable to break above and so drifted lower to 14,220 where if found supper and traded sideways for around an hour before retesting Friday’s closing level. But failed to break out an d then sold down at the end to 14,224 with tick higher at the end to close -51pts (-0.4%) @ 14,211

CONNECT FLOWS (down DoD)
Shanghai 
Northbound Rmb 37,537m Buy 19,529m vs 18,009m Sell
Southbound HK$ 15,565m Buy 8,306m vs 7,259m Sell
Shenzhen 
Northbound Rmb 44,703m Buy 21,480m vs 23,223m Sell
Southbound HK$ 13,730m Buy 6,293m vs 7,437m Sell

Active Heavyweights
MEITUAN (03690.HK) -3.8%
TENCENT (00700.HK) -2.9%
BABA (09988.HK) -2.6%
PING AN (02318.HK) +0.9%
CCB (00939.HK) -0.9%
AIA (01299.HK) +0.8%
HKEX (00388.HK) +0.5%

HSI & HSCEI Constituents on Move:
XIAOMI (01810.HK) +6%, hitting new high
WUXI BIO-NEW (02269.HK) -4%
SUNNY OPTICAL (02382.HK) +3.8%
SUNAC (01918.HK) +3.7%
CNOOC (00883.HK) +3.5%
CHINA RES BEER (00291.HK) +2.1%, hitting new high

HSMI & HSSI Constituents on Move:
MING YUAN CLOUD (00909.HK) +13%, hitting new high
JIUMAOJIU (09922.HK) +3.8%, hitting new high
XIABUXIABU (00520.HK) +3.5%, hitting new high

MARKET HOURS NEWS
Chinese Foreign Ministry Spokesperson Wang Wenbin noted that Nasdaq had removed some of the Chinese listed companies from its indexes following the US government ban on purchasing these stocks. Wang said China vehemently objected the US groundless suppression on Chinese companies since such move completely went against the market economy principles and international economic and trade rules of the US. China called on the US to stop politicalizing economic and trade matters and any behaviors that misuse national power, generalize national security concept and squash foreign companies. The PRC government will continue to uphold the legitimate interest of Chinese companies.
Citibank opened today (14 December) its largest wealth advisory hub globally in Singapore’s Central District, dedicated to Citigold and Citigold Private Clients.  Citibank Singapore aims to expedite its growth in wealth business, with ambitions to double its assets under management (AUM) and to triple the number of clients by 2025, said a senior executive.
CPIC (02601.HK) and BABA-SW (09988.HK) signed a comprehensive strategic team-up agreement in Shanghai.   Based on early-stage cloud computing, security and DingTalk collaboration, both sides will. strikemulti-layered and profound cooperation in building a group-level data mid-end platform and a core database.
HSBC Global Asset Management announced the appointment of Cecilia Chan as Chief Investment Officer for Asia Pacific, with effect from 1 February 2021.  Chan will hence report to Joanna Munro, Global Chief Investment Officer at the group.
Affirming he will not leave Hong Kong after stepping down as HKEX (388.HK) CEO, Charles Li explained himself at an online forum that what he wants to do can only be done in Hong Kong. Without disclosing his whereabouts following resignation, he revealed his intention to try other new things after years of servicing in the company.  The "engineering" of capital flow is appealing to Li, who believed himself to stay at the Exchange Square and meet media again very soon.
In accordance with Antitrust Law, the State Administration for Market Regulation (SAMR) mounted investigation on three acquisitions which were involved in unlawful equity concentration without report to the authority. These acquisitions included Alibaba Investment taking over equity of Intime Retail Group; CHINA LIT (00772.HK) over New Classics Media Holdings; and Shenzhen Hive Box Technology over China Post Smart Logistics Technology.   The SAMR imposed administrative penalties on Alibaba Investment, CHINA LIT and Shenzhen Hive Box Technology in amount of RMB500,000 respectively.  SAMR answered reporters' inquiries regarding penalties on the three unlawful acquisitions, involving Alibaba etc..  said the authority did not request those companies to reverse the equity concentration, yet emphasized internet sector was not exempted under the Antitrust Law. All companies should be abide by Antitrust Law and Regulations and safeguard fair market competition. BABA-SW (09988.HK) and CHINA LIT (00772.HK) said that active ratification were made according to China's policy guidance and requirement, following the receipt of notice from related scrutiny department.
Overnight HIBOR last posted at 0.04768%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.26696%, marking a 1-month high.
TSINGTAO BREW (00168.HK) tanked on news that Fosun Industrial, China Momentum Investment Ltd, Star Insurance and such other companies intended to sell's shares at $75.34-75.67, foreign media cited the sales prospectus. The price represented a discount of 3.8%-4.2% to the closing price of $78.65 as quoted last Friday, involving 31 million shares.
XIAOMI-W (01810.HK) had recorded a Double 12 sales value of RMB7.15 billion, +40% year-on-year, according to Redmi's General Manager Lu Weibing.  As for phones, Xiaomi handsets topped the Android sales chart across all platforms.
65 new homes were transacted at the weekend, -36% WoW, hitting a trough for nearly the past 13 weekends according to market sources. 
The Concerto co-developed by KAISA GROUP (01638.HK) and Choice Holdings sold 39 units immediately,
71% of the available units.
Food and Health Bureau spokesman announced that the Government has reached an agreement with FOSUN PHARMA (02196.HK) to procure a max of 7.5 million doses of the mRNA vaccine (BNT162b2) developed by FOSUN PHARMA in collaboration with the German drug manufacturer BioNTech.  The vaccines supplied to Hong Kong will be manufactured in Europe. The first batch of one million doses is expected to be delivered in Q1 2021 the earliest.
As regards the vaccine provided by Sinovac Biotech to Hong Kong, according to information provided by Sinovac, the relevant vaccine will be produced in Daxing District, Beijing. The first batch of one million doses is expected to be delivered to Hong Kong in January 2021 the earliest.

PRE MARKET NEWS
Not in this mornings report
Managing Director of the Urban Renewal Authority, revealed in a blog post that Development Areas 2 and 3 of the Kwun Tong Town Centre Redevelopment Project had been completed as scheduled, finishing all construction works and acceptance tests required by law at end-November. URA has obtained an occupation permit for the project from the government.The shopping mall under the project is expected to commence operation in April 2021, added Wai.
SHK HK IND (00666.HK) Trading Halt with effect from 9:00 a.m. today (14 December), pending the release of an announcement pursuant to The Hong Kong Code on Takeovers and Mergers, which constitutes inside information of the Company.
ALLIED GROUP (00373.HK) Trading Halt  with effect from 9:00 a.m. today (14 December), pending the release of an announcement pursuant to The Hong Kong Code on Takeovers and Mergers, which constitutes inside information of the Company.
China Unicom inked a strategic team-up framework agreement with Meituan for profound cooperation in 5G, IoT and big data leveraging their principal business activities and resources edges. Both parties aim to
strike a long-term win-win strategic partnership.
According to preliminary statistics, China's NEV sales has exceeded 180,000 units since the launch of car-buying subsidy program for rural areas nearly four months ago, revealed Luo Junjie, Head of Equipment Industry Department of MIIT.
Sinopharm's CNBG currently boasts a production capacity of 300 million COVID-19 vaccine doses per year at its Beijing and Wuhan workshops, Beijing Daily citing the firm's Chairman Yang Xiaoming.  The phase II construction of the production workshops will likely be completed by end-2020. Hence, CNBG envisaged a production capacity of 1 billion vaccine shots per year into 2021.
Huahai Shunda Grain and Oil Seasoning Co. in Cangzhou City, China issued a notice on prohibiting supply to community group buying platforms, saying it had received a handful of complaints regarding serious low pricing at these platforms, such as Pinduoduo's vegetable and Meituan's select. Some of their products were purportedly priced far below the manufacturer price, which harmed the customer interest.   As such, the company required the related community group buying platforms that their prices should not be less than the terminal retail prices; if situation worsens, their dealership will be revoked.

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