Dec 24 HK/China Wrap HSI closed higher but ECommerce under pressure. China closed lower


24 Dec

HSI +44pts (+0.2%) 26,387 HSCEI -52pts (-0.5%) 10,431  T/O HK$97.98bn (24.2% DoD but only half day trading)

EUROPE 
Germany & Italy closed for Christmas Eve.  FTSE and CAC opened slightly higher and trading sideways on the expectation of announcement that a Brexit deal has been agreed. Sterling rallied and UK Banks +VE on the hope.
US Futures 
Opened flat higher in Asian time but rose in European hours currently Dow +100pts , S&P and NDX +VE. Expect markets to nudge higher following Asia and Europe.Half day trading; Stock market close at 1pm, Bond Market at 2pm
No data due and Markets closed tomorrow

CHINA CSI 300 Closed  -7pts (-0.1%) @ 5,000
CSI 300 opened lower but after an initial down tick rallied to 5,027 and traded sideways in choppy trading for the next hour before selling down to test the support at Wednesday’s close and then ticked higher into lunch. PM opened lower trended lower to 4,980 around 2:15pm before working higher into the close. News that Alibaba being investigate for monopolistic behaviour a concern about wider investigations into other Ecommerce names
Indexes
Shanghai Comp -19pts (-0.6%) @ 3,363
Shenzhen Comp -100pts (-0.7%) @ 13,916
ChiNext Index -44pts (-1.5%) @ 3,018

CHINA DATA  None 
HSI Pre Market Opened @ 26,342 -19pts vs +40pts ADRs.
Alibaba opened -3% (and closed -8%) as Ant Group confirmed it had “received a meeting notice from regulators.” It reported the regulator to investigate alleged monopolistic behaviour -VE cross read to other ECommerce names; the investigation is into its practice known as “pick one of two” in China, among other issues. AAC Tech rallied on proposal to spin off its optics unit on the mainland.
Market initial sold down to 26,221 but then rallied to 23,400 level and traded sideways into lunch. At the close ECommerce remained weak but Chinese Financial +VE on news the PBoC would ’supervise and guide’ Ant Group. Renewables still seeing good interest. Wharf (4 HK +1.2%) traded higher having won the tender for the Peak Site at a premium to f/casts but other developers were mixed. Evergrande (3333 HK -0.6%) continued selling pressure with concerns over its debt levels.
Market closed for the PM session and tomorrow.
HONG KONG DATA
Centre for Health Protection said there were 71 new COVID-19 cases in Hong Kong today (vs 53 Wednesday)  30 cases with unknown origin.  A significant rise from yesterday’s month low number.
SHORT SELLING Thursday 13.3% vs 12% Wednesday 
Top Shorts  Hengan (1044) 48%, CLP (2) 36%, BoC (3988) 33%, Sinopec (386) 32%, Anta (2020) 32%, Country Garden (2007) 28%, Hang Seng Bank (11) 27%,  Bank Comm (3328) 26%, Bud Apac (1876) 25%, Henderson Land (12) 25%.
AFTER MARKET NEWS 
CCL last printed at 175.88, -0.38% WoW. In two-week terms, the three major Centaline property indexes dropped altogether.
CCL grossed -1.05%; CCL Mass -1.34% CCL (small-to-medium flats) -1.31%.
For the next few weeks, the housing prices were projected to stay volatile said Centaline Property. In absence of downtrend or uptrend signals, the price trend is still contingent on observation.
Li Ka Shing Foundation Limited acquired a total of 776,500 shares in CK ASSET (01113.HK) at the average price of HK$40.6770, HK$39.9804, HK$38.8302 and HK$38.9406 per share on 18 December, 21 December, 22 December and 23 December 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset increased from 35.86% to 35.89%, and from 35.93% to 35.95%, respectively.
Regrading the investigation into Alibaba CCTV Finance reported that Setting rules is not a means to stifle the growth of platform economy. Instead, it aims for a better and healthier platform economy development. Only by fixing good rules could the platform economy go a long way steadily. Based on preliminary information, BABA-SW (09988.HK) and other platform companies have responded positively and actively.
Sinovac Biotech (SVA.US)  will delay the late-stage test result of its COVID-19 vaccine in January 2021, reported WSJ. David Hui, Professor of Respiratory Medicine at CUHK, said the delay meant Sinovac's vaccine may not be available in Hong Kong as scheduled for January 2021. The vaccine may arrive as early as February 2021. It also adds to concerns about the openness and effectiveness of the vaccines.
China's CDE announced that Sinopharm's sales application of coronavirus vaccines (Vero cells) has been approved. Subsequently, SINOPHARM(CNCM LTD) (600511.SH) rallied on the news.
KERRY LOG NET (00636.HK)  said that the Proposed Spin-off of KERRY EXPRESS THAILAND (KETH) is complete and the KETH shares have been listed on the SET since 24 December 2020.  It is expected that the Special Dividend of 13.8 cents per share will be paid in cash on or around 31 December to shareholders whose names appear on the registers of members at the close of business on 22 December.
Regional Markets
JAPAN 
Nikkei 225 opened higher and rallied to 26,765 in early trades but then eased back to around 26,675 and trading sideways into lunch. PM opened lower but traded sideways to close +144pts (+0.5%) @ 26,668
Topix traded in a similar fashion to close +9pts (+0.5%) @ 1,774
Tomorrow market open as normal and the Christmas pressies are data on Unemployment, Tokyo CPI, Retail Sales, Housing Starts and Construction orders.
S KOREA  
Kospi opened slightly higher and worked higher thought the session to the day high around 2:30pm of 2,812 before easing lower into the close ahead of tomorrows holiday Closed +47pts (+1.7%) @ 2,807
Kosdaq opened slightly higher and worked higher to 933 around 1pm but then sold down to 926 before rebounding to 932 and currently trending lower to the close. +6pts (+0.6%) at 929.
TAIWAN 
Opened higher in reaction to Wednesday’s good Industrial numbers and rallied to 14,300 before selling down to 14,265. Then basis call trade sideways 14,324/14267. Closed +57pts (+0.4%) @ 14,280
After market
Unemployment Nov +3.77% vs 3.77% Oct (F/cast was +3.8%). Labour force particaption rate was steady at 59.1%
M2 Money Supply Nov +7.6% YoY vs 7.05% Oct (F/cast was +6.5%)
Market open as normal Friday,
CONNECT FLOWS No northbound flows as HK closed Friday so no settlement
Shanghai 
Southbound HK$ 9,996m Buy 4,866m vs 5,130m Sell
Shenzhen 
Southbound HK$ 10,265m Buy 4,308m vs 5,958m Sell

Active Heavyweights
BABA (09988.HK) -8.1%
MEITUAN (03690.HK) -2.7%
TENCENT (00700.HK) -2.6%
CCB (00939.HK) +2.5%
HKEX (00388.HK) +2.3%, hitting new high
PING AN (02318.HK) +0.6%

HSI & HSCEI Constituents on Move:
JD HEALTH (06618.HK) -15.6%ALI HEALTH (00241.HK) -10.9%
AAC TECH (02018.HK) +7.1%
SHENZHOU INTL (02313.HK) +4.7%, hitting new high
PSBC (01658.HK) +3.6%
XIAOMI (01810.HK) +1.7%, hitting new high

HSMI & HSSI Constituents on Move:
CMBC CAPITAL (01141.HK) +11.3%
INNOVENT BIO (01801.HK) +5.1%, hitting new high
XINYI ENERGY (03868.HK)  +3.4%, hitting new high

MARKET HOURS NEWS
BABA-SW (09988.HK) was notified by SAMR of the latter's investigation into the group's suspected monopolistic behavior.  BABA-SW will actively work with the regulator, adding it is operating normally for now.
BYD COMPANY (01211.HK) told Chinese press that the group is working to expedite the spin-off and listing of BYD Semiconductor and to nourish more competitive subsidiaries to realise marketised operation.
GCL-POLY ENERGY (03800.HK) and GCL NEWENERGY (00451.HK) announced that they had on January 30, 2018 issued the senior notes due 2021 in an aggregate principal amount of US$500 million at 7.1% per annum, payable semi-annually in arrears, which will be due in January 2021. The outstanding principal amount is US$500 million under the Existing Notes. The Company estimates that its existing internal resources may be insufficient to repay the Existing Notes. In light of the above, the Company is conducting the Exchange Offer to improve its overall financial condition, extend its debt maturity profile, strengthen its balance sheet and improve its cash flow management.
Chinese National Bureau of Statistics announced that in mid-December 2020, as compared with early-December, pork prices rose 1.8% to RMB33.9/kg; LNG prices grew 26.3% to RMB5,954.9/ton.
HKMA's Quarterly Bulletin on the banks showed that despite the COVID-19 pandemic and geopolitical uncertainties, the Hong Kong banking sector remained resilient, underpinned by robust capital and liquidity positions.  Retail banks recorded thinner profits alongside the low interest rate environment and the slight deterioration in loan quality. The aggregate pre-tax operating profit of retail banks fell by 26.1% in the first three quarters of 2020 compared with the same period last year.
PRE MARKET NEWS
Ant Group confirmed that it had today received a notice from Chinese watchdogs to schedule a meeting and disclosed that the group will learn and adhere to relevant regulatory requirements, China Business Network reported.
The People's Bank of China, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission and State Administration of Foreign Exchange will soon meet with Ant Group to encourage compliance with financial scrutiny, fair competition and protection of legitimate consumer rights in a marketised and legal principle, said Chinese media.
TENCENT (00700.HK)  announced that on 23 December, a total of 119,200 options to subscribe for Shares are granted at an exercise price of HK$575.8 per Share under the 2017 Option Scheme.
Information from Macao Statistics and Census Service (DSEC) indicated that the number of visitor arrivals +9.3% month-to-month to 636,400 in November 2020; however, the figure represented a year-on-year decline of 78.1%.   Overnight visitors and same-day visitors totalled 323,800 and 312,600 respectively. The average length of stay of visitors went up by 0.5 days year-on-year to 1.7 days; the duration for overnight visitors (3.1 days) rose by 0.7 days, whereas that for same-day visitors (0.1 day) shortened by 0.1 day.  The data is for the period before Macau announced extending its quarantine periods.
Brazil's Butantan Institute unveiled the phase III clinical trial data, proving that Sinovac Biotechs COVID-19 vaccine is over 50% effective, reported Reuters.  Sinovac has asked to delay the announcement of precise efficacy data by 15 days. The result release has now been delayed three times.
GOLDIN FIN HOLD (00530.HK) announced that the Company has made an enquiry to the Receivers to confirm if there has been a sale of Smart Edge and the details thereof.   On the same day, Borrelli confirmed to the Company that the Receivers and the Purchaser have entered into a sale and purchase agreement in respect of the Charged Shares.   The company applied for a trading resumption with effect from today (24 December).
The People's Government of Hainan Province inked a strategic cooperation framework deal with Xiaomi and Kingsoft in Beijing yesterday (23rd).Alibaba launched the Alibaba Cloud quantum development platform as well as the "Taizhang 2.0" quantum computing simulator, reported Sina Tech.  The platform will be used to test quantum algorithms and explore the application in materials, molecular discovery, optimization issue and machine learning.
AAC TECH (02018.HK) announced the proposed Spin-off and Separate Listing of its optics business, AAC Optics, on a stock exchange in the PRC. As yet, no formal listing application has been submitted with any relevant regulatory authorities in the PRC.

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