Dec 9 HK WRAP HSI +198pts, CHINA surprisingly releases New Loans Data


09 Dec

HSI +198pts (+0.8%) 26,503 HSCEI +79pts (+0.8%) 10,488  T/O HK$136.6bn (flat DoD) 

EUROPE opened open higher following Asia but upside limited by the Brexit overhang.FTSE trading sideway having pulled back from an initial rake. DAX working higher despite weak data and the CAC drifting lower
Data out
GERMANY 
Balance of Trade Oct Euro 19.4b vs 20.6b Sept revised (F/cast was 23.2b)
Exports sa Oct +0.8% MoM vs +2.3% Sept (Consensus was +1.2%)
Imports sa Oct +0.3% MoM vs +0.2% Sept (Consensus was +1%)
Current Account Oct Euro 22.5b vs 25.2b Sept revised (F/cast was 24.2b)
Due later
UK BoE FPC Record & Financial Stability Report

US Futures Opened slightly higher and have ticked up slightly in Asian hours Dow now +100pts, S&P and NDX positive too
Data due
MBA 30 Year Rate & New Applications, Wholesale Inventories, JOLTs Job Openings, EIA Oil report.

CHINA CSI 300 Closed  -67pts (-1.3%) @ 4,943
CSI 300 opened higher but sold down on disappointing inflation data. Then traded sideways in a tight rage into lunch. PM saw the market drift lower initially to the 4,970 level then around 2pm a small rally to 4,990 but hit resistance and then sold down into the close. Sentiment remains weak with concerns about more US sanctions after 14 NPC members were sanctioned and a tougher outlook for the Phase 2 trade deal with the US.Weakness in Brokers, chipmakers, agriculture, integrated circuits and Tesla suppliers were among the top decliners. Reuters reported today that on Sunday Foreign Minister Wang Yi said in a video conference call with the US that China was committed to the phase-one trade deal and that phase-two talks will be led by Chinese Vice Premier Liu He. According to US-China Business Council President Craig Allen.After Market China unexpectedly released New Loans data
Indexes
Shanghai Comp -38pts (-1.1%) @ 3,372
Shenzhen Comp -257pts (-1.8%) @ 13,717
ChiNext Index -49pts (-1.8%) @ 2,698

CHINA DATA on the open
Inflation Nov -0.5% YoY vs +0.5% Oct (F/cast was +0.1%)
Inflation Nov -0.6% MoM vs -0.3% Oct (F/cast was -0.1%)
PPI Nov -1.5% vs -2.1% Oct (F/cast was -1.8%)
After Market 
New Yuan Loans Nov CNY 1430b vs 689.8b Oct (F/cast was 1510b)
Outstanding Loan Growth Nov 12.8% YoY vs 12.9% Oct (F/cast was 12.8%)
Total Social Financing Nov CNY 2130b vs 1420b Oct (F/cast was 1950b)
M2 Money Supply Nov 10.7% vs 10.5% Oct (F/cast was 10.4%)

HSI Pre Market Pre market opened at 26,510 +206pts vs +60pts ADR’s,
Some initial margin call selling before working higher, resistance at 26,650 and eased to 26,600 before working slightly higher into lunch. PM saw the market trend lower, following the A shares, sharp initially selling to 26,550 and then traded sideways until another bout of selling around 2:30pm for 45 minutes down to 26,450, and then worked higher into the close, to finish about 26,500 thanks to a 16pts uptick in the closing auction.
Market saw an initial broad based drive higher with Ecommerce, Financials, Autos leading the gains. But 5G names were weak. Covid concerns are rising with HK seeing another 104 cases and some draconian social distancing measures by the Govt prompting concerns of a much larger outbreak to come.

IPO
CHINA RES MIXC (01209.HK), on debut, settled the trade at $28, up $5.7 or 25.6% against the listing price $22.3, on volume of 167 million shares and turnover of $5 billion. Excluding the handling fees, a book gain of $1,140 was reported per board lot of 200 shares.
HBM HOLDINGS-B (02142.HK), to be listed tomorrow, opened at $14.5 in grey market, up 17% against the listing price $12.38, and last stood at $15, up 21%, on volume of 780,000 shares, PhillipMart data showed.

PICKs Techtronics (669 HK) closed +2%  intial traded to HK$101.20  as recent shorts covered but then sold down and traded sideways.  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 DATACentre for Health Protection said there were 104 new COVID-19 cases in Hong Kong today (vs 100 Tuesday) 35 cases with unknown origin

SHORT SELLING Wednesday 14.2% vs 14.4% Tuesday 
Top Shorts  Wharf REIC (1997) 41%, Ping An (2318) 34%, Anta Sports (2020) 32%,  Country Garden (2007) 31%, Hang Seng Bank (11) 29%, Galaxy Ent (27) 29%, CSPC Pharma (1093) 28%, CCB (939) 27%, MTRC (66) 26%,  BoC (3988) 26%,

AFTER MARKET NEWS 
YIXIN (02858.HK) announced that the Company’s total financed automobile transactions for Q3  2020 were approx 110,000, -14%YoY and +59% QoQ .
S HARBOURHOLD (01663.HK)  announced that Wong Lam Ping, the Company’s chairman and substantial shareholder, has acquired an aggregate of 738,000 ordinary shares of the Company in the open market at an average price of approximately HK$0.137 per share today (9 December).
SUNNY OPTICAL (02382.HK) November  shipment volume of spherical glass lenses -14.3% YoY to 2.887 million units. The shipment volume of handset lens sets  -0.8% YoY, or 19.2% MoM, to 129 million units, which was mainly due to the shortage of the key components in the smartphone supply chain.
The Census and Statistics Department (C&SD) released today the results of the 2019 Annual Survey of Economic Activities - Information and Communications, Financing and Insurance, Professional and Business Services Sectors.
In the insurance industry, total receipts amounted to $629.6 billion in 2019 +12.5% YoY In the financing (except banking) industry, total receipts -4.3% YoY to $606.9 billion in 2019.
The Leisure and Cultural Services Department (LCSD) announced that, in view of the latest developments of COVID-19, a large number of leisure and cultural venues/facilities will be temporarily closed from tomorrow (December 10) until further notice. All gazetted bathing beaches and outdoor leisure venues/facilities including tennis courts, bowling greens, sports grounds, Ngau Chi Wan Park Archery Range, Shek O Obstacle Golf Course, Tuen Mun Recreation and Sports Centre, gateball courts, table tennis tables, chess tables, skateparks, roller skating rinks, skateboard grounds and outdoor fitness equipment will be temporarily closed. All indoor sports facilities including sports centres, the Hong Kong Velodrome, squash centres, badminton centres and table tennis centres will also be closed on the same day. All public libraries and their students' study rooms will be temporarily closed. All performance venues, music centres of the Music Office and museums will be temporarily closed until further notice. All programmes and activities will be suspended.

MARKET COMMENT 
*CHINESE BANKS FIRM  good support; attractive valuations and recovery hopes as concerns about bad debts and defaults ease.  BOC (3988 HK +1.1%) ICBC (1398 HK +1%) ABC (1288 H +1%).
*HK BANKS FIRM rebounding from yesterday's weakness triggered by worries that  dividends would not be resuming any time soon; HSBC (5 HK +0.7%) HANG SENG BANK (11 HK +0.2%) STAN CHART (2888 HK +0.7%).
*E-COMMERCE STRONG led by Healthcare platforms after JD HEALTH (6618 HK +1.9%)’s strong debut and continued buying; +VE FT Lex article worth reading, ALI HEALTH (241 HK +4.2%) PA GOOD DOC (1833 HK +0.6%). Most other names firm to despite CBIRC chairman Guo Shuqing saying some dominant technology companies are engaged in the financial business, involving public interest. The market needed to pay attention to the risks of these institutions, which were relatively complex. ALIBABA (9988 HK +1.1%) TENCENT (700 HK +0.3%) NTES (9999 HK +1%),MEITUAN (3690.HK -0.4%).
*PHARMA WEAK on profit-taking as more vaccine news is released showing a number of candidates could be ready soon. The Covid-19 vaccine developed by China’s SINOVAC BIOTECH showed up to 97% effectiveness in early trials, according to an Indonesian company set to produce the doses locally. UAE media reported that vaccine developed by SINOPHARM's (1099 HK) unit protected 86% of people against Covid-19 in trials conducted in the UAE.
*AUTOS MIXED after news reported that CSRC is reviewing BYD's (1211 HK -1.2%) H-shs issuance application. GREATWALL (2333 HK -2.3%) GAC (2238 HK -2.7%). GEELY (175 HK +3.9%) on optimism on EV sales.
*HK PROPERTY FIRM as the Li Ka Shing Foundation bought another 800,000 CK ASSET (1113 HK +1.5%) shares between Dec. 2-7. HENDERSON (12 HK +0.6%) SHKP (16 HK +1.3%) HYSAN (14 HK +1.8%) NWD (17 HK +1%).
*CHINA PROPERTY FIRM  Focus on the spinoff of CR LAND (1109 HK -0.8%), CR MIXC LIFESTYLE SERVICES (1209 HK), which was up more than 30% in gray markets and closed at HK$28  vs IPO price HK$22.30. JIAYUAN SERVICES (1153 HK), spinoff unit of JIAYUAN INTL (2768 HK+1.6%), closed at 3.88 vs its price of HK$3.86.
*OTHER MOVERS: PAX GLOBAL (327 HK +14.4%) news its planned meeting on Dec 18 is to consider declaring a special dividend. L'OCCITANE (973 HK +8%) after mgmt says overall sales YoY growth turned positive in Oct and expected to expand YoY in Nov.

Regional Markets
JAPAN 
Pre market Machinery Orders were much better than expected Nikkei 225 opened higher the market rallied to 26,700 and spiked around 10am to 26,800 before easing back and trading around 26,750 into lunch. After lunch market opened higher and tested 26,800 a number of time but unable to breakout convincingly above but did tick up at the end to Close +351pts (+1.3%) @ 26,818 Topix Opened higher and worked higher through the morning to 1,774 at lunch. PM opened above 1,775 and worked higher to close +21pts (+1.2%) @ 1,779
Data Pre market
Machinery Orders Oct +2.8% YoY vs -11.5% Sept (F/cast was -10%)
Machinery Orders Oct +17.1% MoM vs -4.4% Sept (F/cast was +2.5%)
Out in PM
Machine Tool Orders Nov 8% YoY vs -5.9% Oct (F/cast was -3%)
S KOREA  
Kospi opened higher as the UK starts vaccinations and on hopes for new US stimulus package. It rallied to 2,730 in early trades and has worked higher to 2,740 from 12:30pm and then traded sideways until 2:15pm when it eased back to 2,735 before then rallying to close +55pts (+2%) @ 1,755
Kosdaq opened higher and tested to 917 in early trades before selling down to 905 which it tested a couple of times before working higher. Then traded in the 910 915 range for the rest of the day to close +7pts (+0.8%) @ 914
Futures and Options expiry tomorrow.
TAIWAN 
Opened lower but worked back to flat in early trades then tested higher in choppy trading before resting the support around yesterday’s closing prices. Around 10:15 market worked higher to 14,420 where it hit resistance and eased back to 14,385 level and then traded sideways around the 14,400 level before closing +30pts (+0.2%) @ 14,390

CONNECT FLOWS (up DoD)
Shanghai 
Northbound Rmb 37,165m Buy 17,60m vs 19,556m Sell
Southbound HK$ 11,524m Buy 5,913m vs 5,611m Sell
Shenzhen 
Northbound Rmb 47,106m Buy 22,582m vs 24,524m Sell
Southbound HK$ 11,783m Buy 5,523m vs 6,260m Sell

Active Heavyweights
AIA (01299.HK) +2.2%
PING AN (02318.HK) +1.3%
BABA (09988.HK) +1.1%
CCB (00939.HK) +0.9%
MEITUAN (03690.HK) -0.4%
TENCENT (00700.HK) +0.3%

HSI & HSCEI Constituents on Move:
ALI HEALTH (00241.HK) +4.6%, hitting new high
XIAOMI (01810.HK) +4.4%
CHINA RES BEER (00291.HK) +4.1%, hitting new high
GEELY AUTO (00175.HK) +3.8%
HANG LUNG PPT (00101.HK) +3.7%
CHINA TOWER (00788.HK) -3.3%
SHENZHOU INTL (02313.HK) +3.2%

HSMI & HSSI Constituents on Move:
GCL-POLY ENERGY (03800.HK) -14.7%
PAX GLOBAL (00327.HK) +14.4%, hitting new high
YIXIN (02858.HK) +9.6%, hitting new high
NEXTEER (01316.HK) +7.9%, hitting new high

MARKET HOURS NEWS
HKTDC: Export Hike due to Low Base; Industry Performance Hinges on Manufacturer Transformation. Primarily due to low base at last year end, the export index of Hong Kong this quarter fared better than assumption, but it was inadequate to prove there was recovery as a whole, commented Nicholas Kwan, Director of Research at HKTDC.  Although certain industries had a good run, for example electronics and medical, the overall performance would hinge on the transformation capability of manufacturers.
AlipayHK boasts over 62,000 local active merchants at the moment, with nearly 50% more merchants preferring the QR code payment solution over the past year. This showed merchants are more willing to accept payments via QR code, and conduct trade and business using contactless means.
The Hong Kong Housing Authority (HA) announced that the ballot drawing ceremony for the Sale of Home Ownership Scheme (HOS) Flats 2020 (HOS 2020) and the White Form Secondary Market Scheme (WSM) 2020 (WSM 2020) will be held on December 15.  In view of the pandemic, the HA will arrange a live broadcast of the entire balloting process through its Facebook page for public viewing. On-site attendance for the public and the media will not be arranged.
XIAOMI-W (01810.HK) announced that the Redmi Note 9 series recorded omnichannel sales of over 1 million units after hitting the shelves for 13 days.
Overnight HIBOR last posted at 0.04964%, logging a 1-month high, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.24786%, up for 11 days, marking a 1-month high.
TENCENT (00700.HK) in November 2020,  it’s Honor of Kings garnered US$231 million in user spending, +62.5% YoY, making it the top grossing mobile game worldwide, Sensor Tower wrote in a report.
US. Secretary of State Mike Pompeo warned business leaders that the United States will treat Hong Kong, a global trade and financial hub, the same way as Mainland China, reported WSJ. The U.S. Treasury had announced sanctions on 14 vice-chairpersons of China's NPC Standing Committee.
BABA-SW (09988.HK) and Anycubic struck a high-level strategic partnership for key merchants to help the latter expand its overseas consumer market further, and explore a globalized strategic market layout, reported Chinese media.
FTSE Russell announced to include JD HEALTH (06618.HK) in FTSE Hong Kong Index, with effect from 21 December.

PRE MARKET NEWS
Not in this mornings report
CHONG KIN GP (01609.HK) announced that on 8 December, Prestige Rich, a controlling shareholder of the Company, transferred 105 million shares of the Company to Lyu Changsheng.  Mr. Lyu shall hold 9.68% of the Company's share capital upon completion. Prestige Rich will continue to be a controlling shareholder holding 34.2% of the stakes in the Company.
NEXT DIGITAL (00282.HK) announced that it had entered into the Sale and Purchase Agreement in relation to the Disposal of a building located at Lane 141, Xing’ai Road, Neihu District, Taipei City 114, Taiwan to Wanin International. The cash consideration is TWD1.75 billion (about HKD476 million). The estimated gain approximates HKD180 million.
LONGFOR GROUP (00960.HK)  announced that in November 2020, the Group recorded contracted sales of RMB28.45 billion +35% YoY with contracted sales in terms of GFA amounting to 1.725 million sq.m., +39.8% YoY.

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