Nov 12 HK WRAP HSI -58pts T/O -38% DoD Europe in the red, US futures -180pts
HSI -58pts (-0.2%) 26,169 HSCEI +38pts (+0.4%) 10,580 T/O HK$167.13bn (-37.5% DoD)
The broad macro view dos not look good; weak Chinese loan data and rising covid cases with new lockdowns in Europe and US are raising concerns about the global recovery. Arkman and the EU expect more corporate defaults ahead. The Chinese tech sell off will have hurt investors and Beijing’s patriot test for HK politics also hurting sentiment. All that said there are good individual stock pick opportunities and whilst people may have got over excited about prospect of a covid vaccine being available soon; the fact that there is one is a reason for encouragement.I still like stocks like Daiken in Japan on the basis people will want better aircon/fitration systems. Techtronics which saw pull back to HK$100 from HK$115. I also like the gold stocks on the pull back because I do think we will get inflation.
EUROPE Markets opened lower and trading sideways as US futures sell down and Asia closed mixed. UK GDP growth in line but new lock down could derail the recovery as covid cases rise. Other data was mixed. German inflation in-line. Banks were weak.Earnings in focus , Burberry higher in early trade on a good Q3 earnings report. Rolls-Royce also trading higher but Siemens weak in early trading after mixed earnings and conservative forward guidance.
EUROZONE Economic Bulletin, Industrial Production Speeches by Guindos, Panetta, Mersch, Schnabel and Lagarde.
GERMANY Inflation Rate Oct -0.2% YoY vs -0.2% Sept (F/cast was -0.2%)
Inflation Rate Oct +0.1 vs -0.2% Sept (F/cast was +0.1%)Speech by Mauderer
FRANCE No data due
UK Balance of Trade Sept GBP +0.6b vs +2.9b Aug revised (F/cast -1b)
GDP Growth Rate Q3 -9.6% YoY vs -21.5% Q2 (F/cast was -9.7%)
GDP Growth Rate Q3 +15.5% QoQ vs -19.8% Q2 (F/cast was +15.5%)
GDP 3 Mth Ave Sept +15.5% vs +7.9% Aug revised (F/cast was +15.5%)
GDP Sept -8.4% YoY vs -9.3% Aug (F/cast was -8.2%)
GDP Sept +1.1% MoM vs +2.2% Aug revised (F/cast was +0.9%)
Industrial Production Sept -6.3% YoY vs -6.4% Aug (F/cast was -6.2%)
Industrial Production Sept +0.5% MoM vs +0.3% Aug (F/cast was +0.4%)
Manufacturing Production Sept -7.9% YoY vs -8.3% Aug (revised) (F/cast was -7.6%)
Manufacturing Production Sept +0.2% MoM vs +0.9% Aug (revised) (F/cast was +0.8%)
Business Investment Prelim Q3 -20.7% YoY vs -26.1% Q2 (F/cast was -17.6%)
Business Investment Prelim Q3 +8.8% QoQ vs -26.5% Q2 (F/cast was +15.9%)
Construction Output Sept -10% YoY vs -13% Aug (F/cast was -11.7%)
Construction Orders Q3 +0.6% YoY vs -46.2% Q2 revised (F/cast was -20%)
Labour Productivity Q3 +5.3% QoQ vs -2% Q2 (F/cast was +1.5%)
Goods Trade Balance Sept GBP -9.35b vs -6.83b Aug revised (F/cast was -9.6b)
BoE Bailey speaks, NIESR Monthly GDP Tracker due later. Speech by Tenreyro and Bailey
US Futures opened Dow +30pts, S&P slightly higher NDX flat but have fallen in Asian hours and currently Dow -181pts with the S&P and NDX -VE too. Covid concerns still overhang the market along with warning of corporate defaults.
Inflation Rate, Core Inflation Rate, Initial Claims, 4 week Average Claims, Continuing Claims, EIA Oil Report, Monthly Budget Statement. Speech by Evans, Williams and Bullard.
Earnings Include Walt Disney, Palantir Technologies, Applied Materials, Beazer Homes, Cisco Systems, Siemens, Burberry, Brookfield Asset Management, Unity Software
CHINA CSI 300 Closed +4pts (-0.1%) @ 4,909
CSI 300 opened higher at 4,917 and tested to 4,920 but then sold down to test 4,900 level which it tested five times before bounding to the day high 4,926 only to reverse and sell down into lunch @ 4,902. PM opened flat and trended lower to 4,892 before a bounce to close just in the green. Concerns about the weak loans data and the implications for the recovery. Rotation still evident with Auto’s and Liquor names leading the gainers. E-commerce and Appliance names +VE as Singles Day hit new records. Laggards were Financials after weak loans data trigger concerns, Ports weak along with Tourism and Semiconductors.
Shanghai Comp -4pts (-0.1%) @ 3,339
Shenzhen Comp +72pts (+0.5%) @ 13,792
ChiNext +19pts (+0.7%) @ 2,701
CHINA No Data
HSI Pre Market Opened 26,409 +182pts vs +9pts ADR’s with E-commerce names bouncing but Financials were weak and the HSI trended lower through the morning session to -0.4% @ 26,123 at lunchtime. PM market traded sideways around the 26,150 level with a slight uptrend into the close. E-commerce/Tech names have lost circa US$290bn of market cap since Beijing changed the rules. Financials weak after loans data missed with mortgages and corporate loans down raising concerns about the Developers and the recovery; especially with rising covid cases globally. Local sentiment also weak as opposition LegCo members resigned on mass over Beijing’s patriot requirement. It also raises questions about the direction of Hong Kong legal system.
HONG KONG DATA
Centre for Health Protection said there were 23 new COVID-19 cases in Hong Kong today (vs 18 Wednesday) 6 local infections from unknown sources.
SHORT SELLING Thursday 15.8% vs 11.6% Wednesday
Top Shorts BoC (3988) 44%, Hang Seng Bank (11) 43%, CCB (939) 35%, China Overseas (688) 32%, HSBC (5) 29%, BankComm (3328) 29%, Wharf REIC (1997) 26%, BoC HK (2388) 25%, ICBC (1398) 25%.
AFTER MARKET NEWS
TENCENT (00700.HK) announced results for the first three quarters ended September 2020. Net profit amounted to RMB100.545 billion, +40.2% YoY. EPS
equaled RMB10.601. Non-IFRS net profit was RMB89.535 billion, up 30% yearly. Non-IFRS EPS equaled RMB9.44. No dividend was declared.
CHINA LIFE (02628.HK) announced that the accumulated premium income of the Company for the first ten months of 2020 was RMB565.9 billion, +8.74% YoY
Centa Valuation Index (Major Banks) (CVI) last printed at 48.44, +0.13 pts from 48.31 in the previous week, with 1.17-pt rise in two straight weeks, said Centaline Property. Keeping up the upswing momentum, the index marched towards the level of 50. Hong Kong Mortgage Corporation Limited (HKMC) had earlier announced that the Fixed-Rate Mortgage Pilot Scheme will be extended for a year, which was expected to be salubrious to the housing market and boost banks' mortgage motivation, and such positives will be unfolded progressively in the next few weeks. They furthered the market uptick could be affirmed if the CVI hikes above and stands firm at the critical point of 50 effortlessly.
*CHINESE BANKS WEAK after new yuan loans in October, fell more than expected with mortgages and corporate loans weak; raising concerns over the developers and the recovery. CCB (939 HK -0.8%) issuing a block chain related bond.
ICBC (1398 HK -2%) ABC (1288 HK -0.7%) BOC (3988 HK -1.8%) CMB (3968 HK -3%). Sector saw significant shorting activity today.
*E-COMMERCE FIRM, but gains were pared after a vice chairman of the CBIRC said that fintech companies don’t change the nature of the financial industry and regulators should be attentive to the risks and challenges of digitization.
ALIBABA (9988 HK +1.8%) posted sales of $75b during the Single's Day. Sales during the event totaled 498.2b yuan at the end of Nov. 11 after Alibaba added several days and additional services to the count for the first time. FT Lex warns there could be more regulatory pressures on its core business going forward -VE
JD (9618 HK +7.7%) MEITUAN (3690 HK +5.8%) NTES (9999 HK +2.1%) TENCENT (700 HK +4.7%).
*TECH & COMPONENTS FIRM SMIC (981 HK +1.8%) said 3Q net profit +211% YoY to US$256.4m. Revenue +32.6% to US$1.08b as of the end of Sept. Said it was disappointed by the US actions but would keep in dialogue with the US to try and improve the current situation.
XIAOMI (1810 HK +3.6%) announced record sales during Singles Day promotions
SUNNY OPT (2382 HK +2.4%) HUA HONG (1347 HK +2.9%).
FIT HON TENG (6088 HK +0.6%) operating net profit in the first 9 months -54% YoY to US$82.51m. Operating net profit in the third quarter -21.17% YoY to US$62.37m.
*PHARMA MIXED sector continues to trade on vaccine news. SINOPHARM (1099 HK -0.6%) says Covid vaccine is close to end of Phase 3 trial. Says Phase-3 trial is proceeding smoothly in countries including The UAE, Egypt, Argentina, and Jordan. More than 50,000 volunteers, of 125 nationalities, have been vaccinated.
FOSUN (2196 HK +1.5%) has received the “Acceptance Notice”, and the clinical trial application for the licensed mRNA vaccine product BNT162b2 in preventing COVID-19 was accepted by the National Medical Products Administration.
CANSINO (6185 HK +3.4%) 3SBIO (1530 HK -1.7%) INNOVENT (1801 HK +2.5%).
*AUTO MAKERS STONG , after CAAM said mainland vehicle sales growth in Oct was +12.5% MoM; over 10% for the 6th consecutive month, to 2.57m units. The report also said sales volume of China's NEV market in October was up.
BYD (1211 HK +12.7%) GREAT WALL (2333 HK +8%) GEELY (175 HK +6.5%).
DEALER CH HARMONY (3836 HK unch) was -16% intraday after allegations in a short seller's report.
PARTS MAKER NEXTEER (1316 HK +9%) after FORD shares surged on recovery hopes.
*EDUCATION PROVIDERS STRONG. News that China's education ministry will alloW some colleges to transform into independent undergraduate universities. First batch allowed to convert to universities will include 21 colleges, according to a statement posted on ministry’s website Wed. It is reported that a few colleges of EDVANTAGE (382 HK +10%) and CH EDU (839 HK +7%) are on the list. VIRSCEND (1565 HK +18%) WISDOM (6068 HK +19%) MINSHENG (1569 HK +7.4%) HOPE (1765 HK +15%).
JAPAN opened higher and rose to 25,587 having attempted a couple of time it sold down into lunch. After lunch it opened lower and tested yesterday’s closing level several times before bouncing and rebounding into the close at the Tertiary Index came out better than F/cast. Closed +171pts (+0.7%) @ 25,520
Topix opened lower but rallied to 1,735 before trending lower hitting the day low 1715 around 1pm and then rallied back but just failed to make the green. Closed -3pts (-0.2%) @ 1,726
Pre market Data
Machinery Orders Sept -11.5% YoY vs -15.2% Aug (F/cast was -11.6%)
Machinery Orders Sept -4.4% MoM vs +0.2% Aug (F/cast was -1%)
PPI Oct -2.1% YoY vs -0.8% Sept (F/cast was -2%)
PPI Oct -0.2% MoM vs -0.2% Sept (F/cast was -0.1%)
Out in PM session
Tertiary Industry Index Sept +1.8% vs +0.8% Aug (F/cast was +1.1%)
S KOREA Pre market data was weaker than expected
Kospi opened lower and effectively traded sideways in a tight range to close -10pts (-0.4%) at 2,476.
Kosdaq Opened higher and traded sideway’s for the first couple of hours but then sold down to just above Wednesday’s close, a small uptrend for about an hour before it sold down to 837. Rebound to flat in the last hour and closed +0.2pts (+0.02%) @ 840
Export Prices Oct -6.4% YoY vs -6.2% Sept (Consensus was -5.6%)Import Prices Oct -11.6% YoY vs -11.3% Sept (revised from -11.5%)(Consensus was -10%)
TAIWAN opened higher at 13,325 but sold down to Wednesday’s close, bounced but then drifted lower from 11am to close -40pts (-0.3%) @ 13,222
CONNECT FLOWS (down DoD)
Northbound Rmb 38,939m Buy 20,323m vs 18,616m Sell
Southbound HK$ 13,516m Buy 6,636m vs 6,881m Sell
Northbound Rmb 52,404m Buy 25,602m vs 26,802m Sell
Southbound HK$ 14,395m Buy 6,521m vs 7,874m Sell
MEITUAN-W (03690.HK) +5.8%
TENCENT (00700.HK) +4.7%
AIA (01299.HK) -3.8%
BABA (09988.HK) +1.9%
HKEX (00388.HK) +1.1%
CCB (00939.HK) -0.8%
PING AN (02318.HK) unchanged
HSI & HSCEI Constituents on the move
GEELY AUTO (00175.HK) +6.5%
ANTA SPORTS (02020.HK) +5.5%
CHINA TELECOM (00728.HK) -5.3%
CHINA TAIPING (00966.HK) -4.2%
CHINA UNICOM (00762.HK) -4%
CHINA RES LAND (01109.HK) -3.8%
CPIC (02601.HK) -3.7%
CHINA OVERSEAS (00688.HK) -3.7%
CITIC (00267.HK) -3.6%
CHINA RES GAS (01193.HK) -3.6%
WUXI BIO (02269.HK) +3.6%
XIAOMI-W (01810.HK) +3.6%
TECHTRONIC IND (00669.HK) +3.2%
MINSHENG BANK (01988.HK) -3.1%
CM BANK (03968.HK) -3%
HSMI & HSSI Constituents on the move
TIANLI EDU (01773.HK) +27.9%
WISDOM EDU INTL (06068.HK) +17.7%
HOPE EDU (01765.HK) +16.9%
YUHUA EDU (06169.HK) +15.1%
BYD COMPANY (01211.HK) +12.7%
NEW HIGHER EDU (02001.HK) +10.9%
CHINA KEPEI (01890.HK) +10.7%
NEXTEER (01316.HK) +8.8%, hitting new high
FUYAO GLASS (03606.HK) +5.5%, hitting new high
FE HORIZON (03360.HK) +1.5%, hitting new high
MARKET HOURS NEWS
FWD: VHIS Product Demand Rising; Hopes to Add HK & MO Agents to Over 5,000Citizens are laying more emphasis on protection-oriented goods amid the pandemic, said Jeff Wong, Chief Agency Officer for Hong Kong and Macau at FWD. Since the COVID-19 outbreak, insurance policies under the Voluntary Health Insurance Scheme (VHIS) have outnumbered those for medical products last year. Equally, Wong hoped to raise the agent size in Hong Kong and Macau from 3,600 to over 5,000 in the next 2-3 years.
UnionPay recorded a daily average growth of 36.78% in the total online payment amount during 1-11 November against October, according to Chinese media.
Macau's gaming revenue shrank 74.1% yearly to MOP24.346 billion for 10M20, according to the central budget of Financial Services Bureau.
CHANEL's Hong Kong branches are seeing layoffs underway as the coronavirus pandemic has taken a heavy toll of the global economy, society, business landscape and lifestyle, confirmed a spokesperson of the French luxury brand, although the layoff size remained veiled. The group will protect its brand and workers in strict adherence to Employment Ordinance. The market rumored yesterday that CHANEL will sink roughly 50 positions, involving both frontline and backend staff, due to business impacts from the plague.
BOSSINI INT'L (00592.HK) announced that for the three months ended 30 September 2020, the Group’s revenue -39% YoY to HK$198 million. Should such a tough operating environment persist, the Group will substantially scale down business operations in Hong Kong and Macau accordingly.
TSUGAMI CHINA (01651.HK) announced interim results ended September 2020. Net profit amounted to RMB148 million, +47.3% yearly. EPS equaled RMB0.39. Interim DPS was HKD0.15.
Australia said China stopped importing all timber from the state of Victoria after customs officials had discovered pests. Beijing had already suspended log imports from Queensland, the sources said.
Overnight HIBOR last posted at 0.0438%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.12018%, down for 6 days, marking a 1-month low.
At lunchtime HARMONY AUTO (03836.HK) released the clarification announcement on the short seller report, saying the allegations in it were totally groundless. The Report makes allegations which are misleading, prejudicial, selective, groundless and inaccurate, and is an irresponsible speculation in respect of matters concerning the Group. The Company strongly refutes the allegations in the Report. The Company’s business development is stable, and the management has confidence in the Company’s prospects. The Company will continue to maximize returns for shareholders of the Company. At the same time, the Company is consulting its legal adviser and reserves its rights to take level action.
Bonitas Research issued a research report, alleging HARMONY AUTO (03836.HK) of fabricating financial data and making up fraud transactions. The chairman Feng Changge was also blasted for involving in company's money transfer. The report cited evidence that the automaker claimed it had earned cash of RMB347 million and RMB192 million from disposal of two subsidiaries successively in 2015 and 2019, but such transactions had never taken place. The report further raided the chairman of pocketing RMB1 billion loan from the company via misuse of tax liability transfer, declaring zero value of the automaker. The share price of HARMONY AUTO nosedived over 15% swiftly following the report.
PING AN (02318.HK) and Sunshine Insurance Group are among the suitors of Tahoe Investment Group's life insurance business in a deal that may raise over US$1 billion (representing HK$7.8 billion), Bloomberg citing sources. The potential disposal comes amid Tahoe Investment's need to raise fresh funds.
BABA-SW (09988.HK) saw a record-high order peak value at this year's 11.11 Global Shopping Festival, said CTO Cheng Li. 583,000 deals were made per second at 00:26 on 11 November (i.e. peak-time of the event), being 1,457 times higher than that in the first shopping carnival in 2009.
Sony launched its PlayStation 5 (PS5) console today. Given blooming demand for home consoles amid Covid outbreaks, the PS5 console was sold out on Japan's key retailing sites on debut.
TikTok's parent ByteDance is on track to garner at least RMB180 billion in advertising revenue from China this year, solidifying its second spot in the Chinese digital commercial market, people with knowledge of the matter told Reuters.
XIAOMI-W (01810.HK) announced that its handset models topped the sales chart of Android smartphones across all platforms during 11.11 Shopping Craze. While the sales amount of offline new retail system exceeded RMB750 million, that of live-streaming promotion surpassed RMB1.128 billion. Founder Lei Jun posted on the public WeChat account that the company met a big hurdle in inventory shortage under the influence of pandemic during 11.11 Shopping Festival, which suggested the progression and momentum of the company ran far ahead of the previous expectation. The 11.11 sales was not only a shopping festival to the company, Lei said, but also a combined experience of new retail model and core strategy of "Mobile x AIoT''. The founder viewed the company's new records proved again the advancement of Xiaomi's model.
SMIC (00981.HK) Feeling regret about the U.S. export control, Chairman Zhou Zixue stated that the impacts on the group is controllable and that they will go on evaluating the influences while staying in touch with Washington. The Chinese chipmaker is scaling down its FY20 CAPEX budget to US$5.9 billion from US$6.7 billion, in light of delayed or uncertain shipment of machines amid the U.S. export control or logistics overhangs, furthered Zhou.
EVERG VEHICLE (00708.HK) announced that it has started the comprehensive trial production and debugging in the two key production bases in Shanghai and Guangzhou. The carmaker also expected to gradually mass-produce its Hengchi models from next year.
LENOVO GROUP (00992.HK) announced that it has generated over RMB6.3 billion in nationwide sales turnover on 1-11 November 2020.
JD '11.11' Carnival Order Value Tops RMB271.5B, New High. The curtain fell on this year's 11.11 shopping bonanza. From 00:00 on 1 November to 23:59 on 11 November, the accumulated order value for JD-SW (09618.HK)'s 11.11 Global Love Season exceeded RMB271.5 billion, setting a record-high.
PRE MARKET NEWS
Not in this mornings report
During the first week of November 2020, the daily average retail sales volume
of passenger vehicles was 35,000 units, +20% YoY and +42% MoM, according to China Passenger Car Association.
DouYu (DOYU.US) a game-centric live streaming platform held by TENCENT (700.HK), swung into net income of RMB85.86 million for the third quarter of 2020, against loss of RMB164 million for the same period last year. The firm expected to complete the merger with Huya during the first half of 2021.
The Phase III clinical trials of Sinopharm's inactivated COVID-19 vaccine is running smoothly in countries like the UAE, Bahrain, Egypt, Jordan, Morocco, Peru and Argentina, cited by Securities Times. With tests entering the final stage, over 50,000 volunteer subjects of 125 nationalities have been dosed with the vaccine.
FOSUN PHARMA (02196.HK) (600196.SH) announced that Fosun Pharmaceutical Industrial, a subsidiary of the Company, has received the “Acceptance Notice”, and the clinical trial application for the licensed mRNA vaccine product BNT162b2 in preventing COVID-19 was accepted by the National Medical Products Administration.
With the curtain rolling down for 11.11 sales, XIAOMI-W (01810.HK) announced that the gross merchandise volume (GMV) across all platforms during 1-11 November surpassed RMB14.3 billion.
BABA-SW (09988.HK)'s Tmall 11.11 Global Shopping Festival in 2020 came to an end. The 11-day event wooed a total GMV of RMB498.2 billion (US$74.1 billion), up 26% over the same period of 2019. During the Festival, more than 470 brands posted GMV of over RMB100 million, whilst the order peak value also logged an all-time high with 583,000 deals per second.
MANULIFE-S (00945.HK) announced that 3Q20 net income leaped 1.86 times yearly to CAD2.068 billion; core earnings -4.85% yearly to CAD1.453 billion; diluted EPS equaled CAD1.04. With a quarterly shareholders’ dividend of CAD0.28 per share, payable on and after December 21, 2020 to shareholders of record at the close of business on November 23.
Tmall tracked a gross merchandise volume (GMV) of RMB498.2 billion between 1 November and 0:00 on 12 November during the 11.11 Global Shopping Festival in 2020.
CASH FIN SER GP (00510.HK) announced that it had during the period from 9 November to 11 November acquired an aggregate of 35,000 TENCENT (00700.HK) shares and 51,000 MEITUAN-W (03690.HK) shares, at an aggregate consideration of approximately HK$19.99 million and HK$14.81 million respectively.
AUSNUTRIA (01717.HK) announced that during the nine months ended 30 September 2020, revenue reached RMB5.758 billion, up 22.8% yearly; net profit amounted to RMB712 million, up 14%.
DICKSON CONCEPT (00113.HK) announced that on 11th November, the Group disposed a total of 500,000 TOPSPORTS (06110.HK) shares through on-market transactions for an aggregate consideration of HK$5.6272 million.
SMIC (00981.HK) announced that during the three months ended September 30, 2020, revenue +32.6% yearly to a new high at US$1.083 billion; net profit +122.7% yearly to US$256 million; EPS equaled US4 cents.