Dec 15 HK/CHINA WRAP HSI -182pts Europe working higher US futures rallying


15 Dec

HSI -182pts (-0.7%) 26,207 HSCEI -44pts (-0.4%) 10,400  T/O HK$144bn (+0.5% DoD) 

EUROPE 
Opened lower but working higher in early trades. Brexit and Covid in focus.Chinese Retail Data missed consensus but Industrial Production, FAI and Unemployment inline.
Data
FRANCE
Inflation Rate Nov +0.2% YoY vs 0% Oct (F/cast +0.2%)
Inflation Rate Nov +0.2% MoM vs 0% Oct (F/cast +0.2%)
IEA Oil Report
UK
Claimant Count Changes Nov +64.3k vs -29.8% Oct (F/cast was +30k)
Employment Change Sept -144k vs -164k Aug (F/cast was -200k)
Average Earnings ex bonus Oct +2.8% vs +1.9% Sept (F/cast was +2.3%)
Average Earnings inc bonus Oct +2.7% vs +1.4% Sept revised (F/cast was +2%)
Unemployment Rate Oct +4.9% vs +4.8% Sept (F/cast was 5%)

US Futures 
Opened slightly higher but have eased back in Asian time but now rallying Dow +180pts S&P and NDX higher. As the vaccine roll out and Stimulus packages hopes outweighed covid cases concern. Biden confirmed as the next President +VE, Attorney General Barr resigning a slight -VE
Data due
Import and Export Prices, NY Empire State Manufacturing Index, Redbook, Industrial Production, Manufacturing Production, Capacity Utilisation, IBD/TIPP Economic Optimism, Foreign Bond Investment, Net Long Term Tic Flows, Overall Net Capital Flows, API Crude Oil Stock Change.

CHINA CSI 300 Closed  +10pts (+0.2) @ 4,945
Opened lower and sold down to 4,910 ahead of the data which was largely in line although Retail Sales missed. Rallied back but failed to regain the opening level. Then retested to lows before a small bounce into lunch. PM opened lower but worked higher to 4,954 the day high and then eased back and traded sideways into the close.Sentiment weak on the growing number of global cases putting the global recovery in question. Also trade relations with Australia continue to deteriorate; I would not be surprised to see Australia link iron ore exports to China as being linked to other products. Concerns also about what the new US administrations stance towards China will be now that Biden is confirmed as President Elect.
Indexes
Shanghai Comp -2pts (-0.1%) @ 3,367
Shenzhen Comp +71pts (+0.5%) @ 13,763
ChiNext Index +32pts (+1.2%) @ 2,759

CHINA DATA today
Fixed Asset Investment (YTD) Non +2.6% YoY vs +1.8% Oct (F/cast was +2.7%)
Retail Sales Nov +5% YoY vs 4.3% Oct (F/cast was +4.4% Consensus 5.2%) Industrial Production Nov +7% YoY vs 6.9% Oct (F/cast was 7%) Unemployment Rate Nov 5.2% vs 5.3% Oct (F/cast was 5.5%)
Retail a slight -VE as it is focus for the government.
Unemployment little real use as doesn’t reflect migrant workers as they can only register in their home city.

HSI Pre Market  26,419 +29pts vs -127pts ADR’s @ 26,262 but then sold down to 26,120 level the day low and then traded sideways in a tight range 26,200/275. PM opened lower and tested to 26,140 before working back to 26,240 and traded sideways into the close.  
Ecommerce and Financials weak but drug makers saw interest as negotiations to get on the National Drug list get underway. Renewables and Shipping also seeing interest.   Expect to see margin calls on Wednesday morning.

PICKs Techtronics (669 HK) closed -3.6% @ HK$99.80. I would look to slowly accumulate below HK$100.

HONG KONG DATA
Centre for Health Protection said there were 98 new COVID-19 cases in Hong Kong today (vs 82 Sunday) 30 cases with unknown origin

SHORT SELLING Tuesday 13% vs 13.3% Monday 
Top Shorts  Wharf REIC (1997) 43%, Country Garden (2007) 38%, Sinopec (386) 37%, Hang Seng Bank (11) 35%, Anta Sports (2020) 31%, Ping An (2318) 28%, CCB (939) 28%, Bank of China (3988) 26%,

AFTER MARKET NEWS 
BLUE MOON GROUP (06993.HK), to be listed tomorrow, opened at $15 in grey market, up 14% against the listing price $13.16, and last stood at $14.9, up 13% against the listing price, on volume of 3.57 million shares, PhillipMart data showed
HKEX (00388.HK) announced that it will include JD HEALTH (06618.HK) into the Volatility Control Mechanism (VCM) Securities list with a triggering threshold of +/- 10%, effective 22 December.
MCC (01618.HK) (601618.SH)   announced that the value of newly signed contracts from January to November in 2020 amounted to RMB894.25 billion, representing an increase of 36.2% from the same period of last year.
COSCO SHIP PORT (01199.HK) throughput reached 8.956 million tonnes, +2% yearly, in November 2020.
TENCENT (00700.HK) has officially upgraded its culture and tourism cloud, while launching the "WeRoad Tencent Digital Cloud Platform", announced Zhang Yaohui, Vice President for the giant's culture and tourism products.  The platform will be conducive to culture and tourism sector buildout leveraging digital technology in the fields of product capability, solutions and ecosystem.
AOYUAN HEALTHY (03662.HK) announced that Lei Yiqun, executive vice president of the Group and general manager of commercial management, increased 488,000 shares on the market today, involving $2.342 million.
BABA-SW (09988.HK)  and CATL (300750.SZ) partook in the latest funding round of SAIC Mobility, the auto-sharing subsidiary of SAIC MOTOR (600104.SH) , involving RMB300 million in total, reported foreign media.

Regional Markets
JAPAN 
Sentiment weak due to the rising number of covid cases both domestically and globally. Weakness into the close ahead of Wednesday's pre market Trade and PMI data
Nikkei 225 Opened lower tested to Monday’s close a couple of time in the morning but failed to break above. But found support around 26,650 level. PM opened lower and sold down to test 26,600 before rebounding 88pts to finish -45pts (-0.2%) @ 26,688
Topix followed a similar pattern although the final rebound was less Closed -9pts (-0.5%) @ 1,782
S KOREA 
Weak sentiment as Govt warns covid cases could surge soon. Volumes were moderate. Foreigners and Institutions selling market heavyweights. Tomorrow pre market Export & Import Prices and Unemployment
Kospi Opened just slightly higher but sold down to 2,740 in early trades. Bounced back and traded 2,760/2,759. Around noon eased back to traded 2,750/2,740. Then from 2pm worked higher back to 2,758 and trades sideways to close -5pts (-0.2%) @ 2,757
Kosdaq similar pattern but did briefly break into the green mid morning but then trended lower to 921 before rebounding to close +2pts (+0.2%) @ 931
TAIWAN 
Opened flat but initially ticked higher to 14,250 before tended lower to 14,050 the support level and then traded sideways into the close to end -143pts (-1%) @ 14,069
CONNECT FLOWS (down DoD)
Shanghai 
Northbound Rmb 39,787m Buy 19,768m vs 20,019m Sell
Southbound HK$ 14,408m Buy 7,125m vs 7,283m Sell
Shenzhen 
Northbound Rmb 48,783m Buy 24,692m vs 24,091m Sell
Southbound HK$ 12,247m Buy 5,944m vs 6,303m Sell

Active Heavyweights
MEITUAN (03690.HK) -3%
BABA (09988.HK) -2.2%
TENCENT (00700.HK) -1.9%
HKEX (00388.HK) -1.4%
PING AN (02318.HK) -0.7%
AIA (01299.HK) -0.4%
CCB (00939.HK) -0.3%

HSI & HSCEI Constituents on Move:
SINO BIOPHARM (01177.HK) +5.3%
CSPC PHARMA (01093.HK) +4.4%
SMIC (00981.HK) - 3.8%
WUXI BIO-NEW (02269.HK) +3.6%
TECHTRONIC IND (00669.HK) -3.6%
ALI HEALTH (00241.HK) +3.1%, hitting new high
XIAOMI (01810.HK) +1.2%, hitting new high

HSMI & HSSI Constituents on Move:
GCL-POLY ENERGY (03800.HK) +14.3%, hitting new high
CIMC (02039.HK) -10.8%
COSCO SHIP HOLD (01919.HK) +10.2%
GAPACK (00468.HK) +6.5%, hitting new high
LI NING (02331.HK) + 5.1%, hitting new high

MARKET HOURS NEWS.

The HKTB announced that the provisional visitor arrival figure for November 2020 is 5,962, -99.8% yearly. In January to November, the total figure slumped 93.2% yearly to 3.564 million.
Midland Immigration Consultancy disclosed that the enquiry load once surged to over 800 in May amid the political incident in mid-20 and upon Britain's relaxed immigration threshold for BNO holders.  In 2H20, the enquiry load about immigration to Britain has soared 49% from 1H20's, while those about immigration to Australia and Canada boomed 30% and 9%.
Apple plans to produce up to 96 million iPhones for the first half of 2021, almost a 30% year-on-year uptick, reported Nikkei. The giant has purportedly asked suppliers to make about 95-96 million iPhones, including the latest iPhone 12 series and the older iPhone 11 and SE models. However, a key parts shortage may threaten the output target.
BABA-SW (09988.HK) announced that its Hema Fresh will open 21 shops across 13 cities  nationwide in December, with over 90% of which being Hema Fresh stores,  and the rest being new business norms like Hema Mini and Hexiaoma stores.
TVB (00511.HK)  In response to Consumer Council’s report on online shopping with Big Big Shop,stated that the product delivery of Big Big Shop is handled by merchants directly or a third-party logistics provider. The COVID-19 pandemic this year has led to a sudden surge in the demand for online shopping. Big Big Shop has recorded a robust growth of 500% in unit sales year-on-year. The merchants and logistics provider are under immense pressure and challenge, resulting in delayed delivery and products not delivered in good condition.  Big Big Shop will learn from experience and strengthen its communication with merchants and enhance supervision; appoint a new logistics provider; review and improve product delivery; as well as allocate more resources to improve customer service and minimise delivery delays, said the statement.
National Reimbursement Drug List (NRDL) 2020 The three-day negotiation to be enrolled on the list started today in Beijing, CCTV reported. The drugs successfully shortlisted in the morning session were subject to a price cut no deeper than 50%, as compared with 60.7% in last year's average, said on-site rumours.
Baidu is in negotiations with GEELY AUTO (00175.HK), GAC GROUP (02238.HK)  and Hongqi about cooperation for its plan to manufacture its own electric vehicles, Reuters learnt from people with knowledge of the matter.
Ant Group Chairman Eric Jing said the group has been bending over backwards in the past month in clearing up the mess for listing suspension given regulatory guidance, Chinese media reported.  The group is earnestly studying the 14th Five-Year Plan proposal and the central government's policies on financial security and stability, Jing said.
CAR INC (00699.HK) has been informed by UCAR that all the conditions precedent to the UCAR Share Sale have been satisfied.  Upon completion, UCAR would no longer hold any shareholdings in the company.
As of end-November, China's hog stocks and sow stocks had both resumed to over 90% of the previous levels, Xinhua citing sources from Ministry of Agriculture and Rural Affairs (MARA).  The ministry expected a full recovery of production capacity in the first half of 2021
BYD COMPANY (01211.HK) Denied a Rumoured that it will jointly launch Qingyue S1 - first vehicle for teenagers - with XIAOMI-W (01810.HK) at a selling price of almost RMB85,000. However, BYD COMPANY crushed the rumor, saying the report was fake news.  The automaker also stressed that it has not produced any of the car model with XIAOMI-W, furthering it will defend its corporate goodwill through legal means.
Nio (NIO.US) said it intended to issue additional 68 million American depositary receipts (ADSs) at US$39 per share, an approximately 7.1% discount to Friday's closing price of US$41.98. It is expected to raise US$2.65 billion. Underwriters on the deal could choose to buy an additional 10.2 million shares within 30 days, meaning the maximum fundraising amount could reach US$3.05 billion.
BABA-SW (09988.HK)'s  C2M "Tao Factory" directly-operated stores saw over 100 million annual active users, revealed Wang Hai, General Manager of the C2M business unit.  For the next three years, the "Tao Factory" stores will set up warehouses for a hundred industries across 20 Chinese provinces, aiming to build 1,000 super factories with output capacity of over RMB100 million to serve 300 million consumers.
MENGNIU DAIRY (02319.HK) announced that Inner Mongolia, an indirect non-wholly owned subsidiary of the Company, would acquire no more than 101 million shares of Milkground (600882.SH) for nearly RMB3 billion, representing RMB29.71 per share.  Upon completion, Inner Mongolia's shareholding in Milkground will rise from around 5% to 23.8%.
China has built the largest 5G network in the world with 718,000 base stations set up so far, Chinese media cited MIIT Deputy Minister Liu Liehong.
BYD COMPANY (01211.HK) announced that it has started delivering electric buses to Keolis Nederland BV, the Dutch subsidiary of public transportation provider Keolis, marking the biggest electric bus order in Europe. The entire order involves 259 vehicles, among which first 246 low-floor smart buses have been delivered to Keolis Nederland and commenced operation on 13 December, the company said.
SUNAC (01918.HK) announced that it has entered into an investment agreement with GIC to jointly establish a real estate investment platform at RMB7 billion.  The platform will focus on investing in premium residential projects in tier-1 and tier-2 core cities in China.
Adidas is considering different strategic options, including a potential disposal of Reebok. The decision will be unveiled on 10 March.

PRE MARKET NEWS
Not in this mornings report
State Administration for Market Regulation (SAMR) of Nanjing City has recently published a notification regarding compliance operation of community group buying of e-commerce operators, Xinhua Daily reported. It stated that online platforms should not capture transaction opportunities or competitive advantages by inappropriate means so that legitimate interests of other operators or consumers are undermined.  E-commerce operators who are responsible for community group buying, such as BABA-SW (09988.HK), MEITUAN-W (03690.HK), Didi and Suning, have successively signed the notification.
CHINA OVERSEAS (00688.HK)  and CHINA STATE CON (03311.HK)  jointly announced to establish the JV Company, which will be owned as to 80% and 20% by the firms, respectively. The JV Company will develop the residential site situated at New Kowloon Inland Lot No. 6603, Kai Tak Area 4E, Site 1, Kai Tak, Kowloon with a site area of approximately 5,548 square metres.  Working capital requirements in relation to the development of the Land is expected to be HK$5.3 billion.
ZA ONLINE (06060.HK) announced that, pursuant to the PRC Accounting Standards, the aggregate gross written premiums for the first eleven months of 2020 were RMB14.69 billion, +14.3% from the same period of 2019.
S HARBOURHOLD (01663.HK) announced that Chairman Wong Lam Ping had on 14 December acquired an aggregate of 500,000 shares at $0.141 per share.

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