Dec 8 HK WRAP HSI -202pts. China inflation data out tomorrow Wednesday.


08 Dec

HSI -202pts (-0.8%) 26,305 HSCEI -64pts (-0.6%) 10,410  T/O HK$135.41bn (flat DoD) 

EUROPE opened lower and are trading sideways/slightly lower with investors concerned about Brexit as talks enter a ‘last effort’.  UK rolling out covid vaccinations but the number fo covid cases still a concern.  The lack of news on a new US stimulus deal also -VE
Data 
EUROZONE
Employment Change Q3 -2.3% YoY vs -3.1% Q2 (F/cast was -2%)
Employment Change Q3 +1% QoQ vs -3% Q2 revised (F/cast was +0.9%)
GDP Growth Rate Q3 +-4.3% YoY vs -14.7% Q2 revised (F/cast was -4.4%)
GDP Growth Rate Q3 +12.5% QoQ vs -11.7% Q2 revised (F/cast was +12.6%)
ZEW Economic Sentiment Index Dec 54.4 vs 32.8 Nov (F/cast was 32)
GERMANY 
ZEW
Economic Sentiment Index Dec 55.0 vs 39 Nov (F/cast was 40)
Current Conditions Dec -66.5 vs -64.3 Nov (F/cast was -68)
FRANCE
Non Farm Payrolls Q3 +1.6% QoQ vs -0.8% Q2 revised (F/cast was +1.5%)
Private Non Farm Payrolls Q3 +1.6% QoQ vs -0.8% Q2 revised (F/cast was +1.8%)
Balance of Trade Oct Euro -4.9b vs -5.6b Sept revised (F/cast was -4.7b)
Current Account Oct Euro -3.7b vs -5.6b Sept revised (F/cast was -2.8b)

US Futures opened lower and have fallen further in Asian trading but seeing a small uptick as Europe starts trading Dow now -84pts, S&P -0.3% and NDX -0.25%.  Concerns over covid and the lack of a stimulus package remain.
Data due NFIB Business Optimism, Non Farm Productivity, Unit Labour Costs, Redbook, API Crude Oil Stock Change


CHINA CSI 300 Closed -12pts (-0.3%) @ 5,010
CSI 300 opened higher at 5,029 ticked higher to 5,043 but then reversed and trended lower into lunch. PM the market initially worked higher but resistance just above yesterday’s closing level and after trying to work higher for a third time the market reversed and trended lower into the close.Weak sentiment after 14 NPC member sanctioned by the US leads to worries about more sanctions from Trump before he leaves office. News that funding to BRI had been reduced raised concerns over the general health of the financial system.
Indexes
Shanghai Comp -6pts (-0.2%) @ 3,410
Shenzhen Comp +0.4pts (unch) @ 13,974
ChiNext Index +20pts (+0.7%) @ 2,746

CHINA No data today 
Tomorrow we get Inflation and PPI data on the market open.

HSI Pre Market Pre opened at 26,460 -47pt vs -5pts ADR’s.  
Initial margin call selling and then saw a relief bounce but then the market reversed and trended lower in choppy trading. PM opened higher but hit resistance at 26,400 and then trended lower for the rest of the afternoon, tested 26,280 a couple of times before ticking up to close. Third down day, expect more margin selling Wednesday morning.
Ecommerce names were weak except Xiaomi which rallied on news its new Mi11 equipped with the Snapdragon 888 chip will debut shortly.
HSBC and Standard Chartered weak as Sweden asks local banks to freeze dividend payments next year raising fears that their dividends will not be resumed in the near future.

IPO 
JD HEALTH (06618.HK), on debut, settled the trade at $110, up $39.42 or almost 56% against the listing price $70.58, on volume of 156.5 million shares and turnover of $16.0 billion. Excluding the handling fees, a book gain of $1,971 was reported per board lot of 50 shares.

CHINA RES MIXC (01209.HK), whose shares will be listed tomorrow, opened at $24 in gray market, up 7.6% against the listing price of $22.3, and last stood at $25.2, up 13% against the listing price, on volume of 2.24 million shares, PhillipMart data showed.

PICKs Techtronics (669 HK) closed +0.7% Again tested HK$97.50 in the afternoon. I would continue to slowly accumulate sub HK$100 as I think US and global recovery will involve a lot more construction work and DIY.

HONG KONG DATA
Centre for Health Protection said there were 100 new COVID-19 cases in Hong Kong today (vs 78 Monday)  27cases with unknown origin

SHORT SELLING Tuesday 14.4% vs 16% Monday 
Top Shorts  Wharf REIC (1997) 48%, Hang Seng Bank (11) 34%, CKI (1038) 32%, CK Asset (1113) 30%, Anta Sports (2020) 29%, HK & China Gas (3) 27%, Country Garden (2007) 27%, Ping An (2318) 27%, BOC HK (2388) 24%.

AFTER MARKET NEWS 
BYD COMPANY (01211.HK)  announced that it received a notice from China Securities Regulatory Commission (CSRC) on 8 December for the acceptance of application of the company's additional overseas share (H-share) issuance and listing on the Stock Exchange, subject to the approval of CSRC, the Stock Exchange and other regulators.
MSCI said JD HEALTH (06618.HK) will be added to MSCI Standard Index and Large Cap Index with effect from 22 December.
Li Ka Shing Foundation Limited acquired a total of 800,000 shares in CK ASSET (01113.HK) at the average price of HK$42.9088, HK$42.8385, HK$43.0434 and HK$42.6928 per share on 2 December, 3 December, 4 December and 7 December 2020 respectively.  As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset under the Securities and Futures Ordinance respectively increased from 35.81% to 35.83% and from 35.87% to 35.90%.
The Monetary Authority of Singapore (MAS) announced initiatives at the 16th Joint Council for Bilateral Cooperation to enhance financial cooperation between Singapore and China. MAS declared that a qualifying full bank licence is granted to CCB (00939.HK), under the China-Singapore Free Trade Agreement Upgrade Protocol.
Indonesian vaccine maker Bio Farma said the Covid-19 vaccine developed by Beijing's Sinovac (SVA.US) was 97% effective in early tests, foreign media reported.  The preliminary results were derived from a one-month clinical trial. The final efficacy rate will be unveiled in January 2021

Regional Markets
JAPAN 
Opened lower per market data was better than expected but the current rise in covid cases and the onset of winter is worrying investors
Nikkei opened lower at 26,380 but worked higher after the good data but resistance around 26,515 which was tested as couple of times before easing slightly into lunch. PM opened lower but worked higher to 26,520 (similar to the morning resistance) and then saw a small sell off at the end. Closed -80pts (-0.3%) @ 26,467
Topix Similar trading pattern but briefly broke into the green mid morning but eased back into the red at lunch. PM opened lower but rallied back to flat, tested there a few times but saw a small sell down at the end. Closed -2pts (-0.1%) @ 1,759
Data 
Tankan Index Dec -9 vs -13 Nov (F/cast was -10)
Household Spending Oct +2.1% MoM vs +3.8% Sept (F/cast was +1.2%)
Household Spending Oct +1.9% YoY vs -10.2% Sept (F/cast was +2.7%)
Average Cash Earnings Oct -0.8% YoY vs -1.3% Sept revised (F/cast was -0.6%)
Current Account Oct Yen 2,144.7b vs 1,660.2b Sept (F/cast was 1940b)
Bank Lending Nov +6.3% YoY vs 6.2% Oct (F/cast was 5.9%)
GDP Growth Rate Final Q3 +5.3% QoQ vs -8.3% Q2 revised (F/cast was 5%)
GDP Growth Annualised Final Q3 22.9% vs -29.2% Q2 revised (F/cast was 21.4%)
GDP Price Index Q3 +1.2% vs +1.4% Q2 (F/cast was +1.1%)
GDP Private Consumption Q3 +5.1% vs -8.3% Q2 revised (F/cast was +4.7%)
GDP Capital Expenditure Q3 -2.4% vs -4.5% Q2 (F/cast was -3.4%)
GDP External Demand Q3 +2.7% vs -3.3% Q2 (F/cast was +2.9%)
During Market Hours
EcoWatchers Current Nov 45.6 vs 54.5 Oct (F/cast was 54)EcoWatchers Outlook Nov 36.5 vs 49.1 Oct (F/cast was 50)
S KOREA  
Kospi opened flat but trended lower through the morning to 2,705 before finding support. Trended higher to but resistance at 2,730 and sold down to close on the lows Closed -45pts (-1.6%) @ 2,701
Kosdaq opened higher and intially ticked higher to 933 but then reversed and sold down to 915 before finding support and traded sideways around there for a while before selling down at the end to close -20pts (-2.2%) @ 907
TAIWAN 
Opened flat initial dipped to 14,200 but then worked back to flat before trading sideways until 11:45am; then worked higher for the rest of the session to close at the high buoyed by the good trade data after market Monday. Closed +104pts (+0.7%) @ 14,360
Data 
After Market 
Wholesale Prices Nov -6.33% YoY vs -7.37% Oct (F/cast was -5.1%)
Inflation Rate Nov +0.09% YoY vs -0.24% Oct (F/cast was 0%)
Inflation Rate Nov +0.35% MoM vs -0.08% Oct (F/cast was +0.2%)

CONNECT FLOWS (down DoD)
Shanghai 
Northbound Rmb 35,889m Buy 15,932m vs 19,957m Sell
Southbound HK$ 11,930m Buy 5,441m vs 6,489m Sell
Shenzhen 
Northbound Rmb 42,753m Buy 20,051m vs 22,702m Sell
Southbound HK$ 11,629m Buy 4,798m vs 6,831m Sell

Active Heavyweights
PING AN (02318.HK) -3.4%
CCB (00939.HK) -2%
MEITUAN (03690.HK) +1.8%
AIA (01299.HK) -1%
HKEX (00388.HK) -0.1%
TENCENT (00700.HK) -0.1%
BABA (09988.HK) unchanged

HSI & HSCEI Constituents on Move:
XIAOMI (01810.HK) +4.8%
SINOPEC CORP (00386.HK) -4.8%
SUNNY OPTICAL (02382.HK) +4.5%
CHINA OVERSEAS (00688.HK) -4%
ALI HEALTH (00241.HK) +3.9%
CNOOC (00883.HK) -3.9%
HSBC HOLDINGS (00005.HK) -3.6%
PSBC (01658.HK) -3.4%

HSMI & HSSI Constituents on Move:
GREATWALL MOTOR (02333.HK) +11.7%
HUABAO INTL (00336.HK) +10.6%, hitting new high
MING YUAN CLOUD (00909.HK) +7.1%, hitting new high

MARKET HOURS NEWS
Sophia Chan announced a number of updates to the social distancing requirements at a 3pm press conference.
Fitch Ratings raised the 2021 global economic growth forecast from 5.2% to 5.3%. The stronger economic growth for 2H21 shall offset the weakness in the coming months. Of which, the 2021 economic growth estimates for the US and China came in at 4.5% and 8%, above previous assumptions of 4% and 7.7%.
Baba's Rhino Smart CMO: Beijing Critical for New Digital Consumption Buildout 370,000 Beijing merchants partook in this year's 11.11 shopping frenzy, taking the second spot among China's large and medium-sized cities, revealed Wei Yu, Chief Marketing Officer of BABA-SW (09988.HK)s Rhino Smart Manufacturing Platform.Regarding consumers' total purchases on the platform, Beijing was ranked second with a 42% annual spending growth in imported goods.
Evergrande New Energy Vehicle to Attain 2025 Goal to Produce and Sell 1M Vehicles and 5m by 2035 said its chairman Hui Ka Yan:
TENCENT (00700.HK) spent about RMB280 million to buy into Samsung Property & Casualty Insurance Company (China), according to Chinese media. With a shareholding of around 32%, the tech giant became the second largest shareholder of the insurer. This act was deemed to be laying foundation for reinsurance license.
XIAOMI-W (01810.HK) will continue to take on the responsibility for making heartwarming products with honest pricing, as Chinese media cited Chairman Lei Jun's WeChat article. In the meantime, XIAOMI-W is striving to create a globally-open business ecosystem model, he added.   It also announced it's smartphone Mi 11 has obtained China's 3C accreditation, QQ.com citing market rumours. As the first flagship smartphone with "Snapdragon 888", it will support 55W quick charging. Industry players disclosed that Mi 11 will be available as soon as this month end.
CHINA LIFE (02628.HK)  President Su Hengxuan, during the open day, said the company is poised to focus on two development strategies: Big Health and Big Pension. Thanks to wider middle class base in China, compounded with policy aid, the group's related strategic development was favored.  Su underscored that the long-term bullish fundamentals of Chinese economy and insurance industry remain intact, despite the pandemic repercussion.  The public awareness on insurance heightens in wake of plague, but the client consumption becomes cautious owing to hardest-hit economy, Su said. Hence, a larger volume of insurance policies have to be scouted, in compensation of high-value policy loss.
JD HEALTH (06618.HK) will utilise some IPO funds in business expansion. With both online and offline retail and wholesale business presence, the company will scale up supply chain inputs going ahead, said CEO Lijun Xin. Having connected to over 100,000 pharmacies and clinics, JD HEALTH does not rule out the possibility of acquiring and investing in Chinese medical institutions, and cooperating with foreign firms in R&D, added Xin.
Overnight HIBOR last posted at 0.04946%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.23143%, up for 10 days, marking a 1-month high.
China Foreign Exchange Trade System announced today (8 December) that the central parity of USD/ RMB gained 42 bps from the last trading day to 6.5320, notching an almost-2.5-year high.
Carrie Lam at 10am announced a number of  new measures which included Asking  Financial Secretary to Bail out Industries hurt by the Latest Measures, Restricting dine-in services after 6pm, Fitness centres, massage parlours, beauty salons to be closed and requiring more civil servants to work from home.  Se also said that frozen food staff should try to take a covid test. Also new rules on mandatory covid tests and tourist arrivals.  Details to be released latter in the day.

PRE MARKET NEWS
Not in this mornings report
The Government suggested a dine-in ban beginning 6pm, local media citing sources. The proposal will be discussed at the Executive Council meeting.
Chinese General Administration of Customs announced that it has started from Monday suspending import applications from the Australian beef plant Meramist Pty. The announcement did not state any reason behind the decision.
The Macao Government is in close talks with suppliers about booking coronavirus vaccines, so that local residents can be vaccinated free of charge on a voluntary basis, said Novel Coronavirus Response and Coordination Centre.  The gambling hub expects the first batch of delivery by end-20. A higher priority of vaccination will be given to front-line medical personnel, firefighters, outbound travellers and such other high-risk clusters or individuals with emergent needs.
Hong Kong Airport Authority announced that to facilitate the need of COVID-19 test result for travel purpose, COVID-19 testing services for departure passengers will be available at two non-restricted area locations of Hong Kong International Airport (HKIA) starting 8 December. The specimens will be tested by HKSAR Government recognised local COVID-19 nucleic acid testing institutions.
One of the COVID-19 testing service locations is run by Prenetics and will be available starting 8 December. Passengers who want to take Prenetics' test will need to arrive at HKIA at least four hours before boarding to allow sufficient time for completing the test and obtaining test result on the same day.
Starting 21 December, Raffles Medical Group will also provide testing services for passengers. Passengers can go to the Airport Medical Centre to conduct the test. Test result will be available in 24 hours for specimen collected before noon.
MING YUAN CLOUD (00909.HK) announced that the Company has been selected as an eligible stock of the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect with effect from 7 December 2020.
SINO BIOPHARM (01177.HK)  announced Senior Vice Chairman Tse Ping had yesterday acquired 70.02 million shares at $481 million.
All Residents on 5/F, Block 8, Kwai Shing West Estate Must Go To Quarantine Centre.  The Centre for Health Protection (CHP) of the Department of Health (DH) has identified three more confirmed cases last night (December 7), which involved three different household units on 5/F.  As 15 cases involving eight units have already been reported on 5/F at Block 8, KSWE, epidemiological investigations revealed that outbreaks have occurred on the floor concerned. The CHP considered that all residents of 5/F have the risk of infecting and spreading the virus and hence all remaining residents of 5/F have been defined as close contacts.  They will be issued quarantine orders and be transferred to quarantine centre so as to stop the potential risk of further spread of the virus.
Huawei is willing to fulfill any 5G network gear requirement from the Swedish government, and will take other measures to ease concerns about the group, Reuters citing Kenneth Fredriksen, Huawei's Executive Vice President for Central East Europe and Nordic Region.
Beijing Tightens Mgmt of Live-streaming, Self-Media, Etc.  In the lawful society construction blueprint (2020-2025), the Chinese central government mentioned improvements to laws and regulations over network information services, amendments to the oversight of network information services, scrutiny to material misstatement online, and tighter management over online broadcast, self media and question-raising pool of the netizen community, cited Xinhua News Agency.
China is preparing for the "going countryside" promotion of new energy vehicles (NEVs) in 2021, where more automakers and car models will join the program across many more cities, National Business Daily cited China Association of Automobile Manufacturers (CAAM) Deputy Chief Engineer Xu Haidong.  As the event is primarily aimed at catering the traveling need of low-income residents in rural areas, mid-to-high-end car models will not be included in the promotion, Xu said.
HKTV (01137.HK)  announced that Monthly GMV on Order Intake amounted to $490 million, up 96% yearly but down 4.5% monthly, in November 2020.

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