Nov 3 HK WRAP HSI +480pts as other Asian Markets rally. US Futures +400pts
HSI +480pts (+2%) 24,940 HSCEI +135pts (+1.4%) 10,071 T/O HK$129.63bn (+11.6% DoD)
EUROPE markets opened higher following Asia. The only data due is the French Budget Balance. Investors will watch covid cases and US election but it would seem most are relaxed with their current positions. IWG up on improving sales activity, BNP Paribas rallied as earnings beat.
US Futures Futures opened higher in Asian time +87pts but have now risen to +400pts; S&P and NDX also +VE. Focus on the election as covid cases continue to rise
Data Redbook, ISM New York Index, IBD/TIPP Economic Optimism, Factory Orders, Factory Orders Ex Transport, API Crude Oil Stock Change, Presidential Election.
Earnings Humana, Fox Corp, Bayer, Sysco, BNP Paribas, Gartner, Eaton, Thomson Reuters, Exelon, McKesson, Bausch Health, Expeditors International, Progressive, Super Micro, Prudential Financial
CHINA CSI 300 Closed +56pts (+1.2%) 4,778 opened higher, chopping initial trading around 4,740 level but then rallied to 4,793 before easing back into lunch. PM opened flat and traded sideways until 2pm before working higher into the close.
RMB was remained resilient. Materials stocks led the gainers, followed by chipmakers, financials, IT/Comm equipment.
Shanghai Composite Index +46pts (+1.4%) @ 3,271
Shenzhen Component Index +159pts (+1.2%) @ 13,580
ChiNext Index +36pts (+1.3%) @ 2,744
After market China's service trade deficit plummeted in the first three quarters of 2020, according to Ministry of Commerce (MOC). The country's service export slide was 22 ppts less than the import decline in the period, resulting in a service trade deficit of RMB591 billion (down 50% or RMB590.1 billion YoY).
HSI Pre Market opened @ 24,689 +229pts vs +202pts ADR’s @ 24,662 E-commerce names mixed, tech component names +VE along with Mobile, HSBC and Petrochems. AIA strong on news of a new branch in Sichuan.
Market gapped higher on the open as shorts covered and worked higher to 24,940 and then saw a spike to 25,048 but without momentum and sold down to 24,900 an worked slightly higher into lunch. PM rallied to test 25,050 again but failed to hold above. Market eased back to 24,940 and traded sideways to the close with a 30pts down drop in the closing auction. We are now back to levels last seen in early Sept.
Hopes of a clear US election result and that HK will see some additional economic aid as Carrie Lam travel to Beijing to talk with officials.
IPO JW THERAP-B (02126.HK) on debut, finished the day at $22, down $1.8 or -7.6% against the listing price $23.8, on volume of 48.18 million shares and turnover of $1.14 billion. Excluding the handling fees, a book loss of $900 was reported per board lot of 500 shares.
HONG KONG DATA
Centre for Health Protection said there were 9 new COVID-19 cases in Hong Kong today (vs 6 Monday) 3 local infections, 1 unknown.
AFTER MARKET NEWS
Li Ka-shing and Victor T K Li, through Li Ka Shing Foundation Limited, acquired a total of 810,000 shares in CK ASSET (01113.HK) at the average price of HK$36.5575, HK$36.055, HK$36.1333 and HK$36.05 per share on 28 October, 29 October, 30 October and 2 November 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset increased from 35.7% to 35.73%, and increased from 35.77% to 35.79%, respectively.
HK&S HOTELS (00045.HK) unveiled the unaudited operating statistics for the third quarter of 2020. The average room rate of the company's The Peninsula Hong Kong was $2,929, down 39.7% yearly. The RevPAR was $760, slumping 55.1% yearly.
Macau casinos are now quite pessimistic as the visitor footfall remained slender and results turned out lackluster during the "October 1 Golden Week" despite China's revived individual travel pass granting to the gambling hub, SJM HOLDINGS (00880.HK) Co-Chairman Angela Leong told Radio Macau. The six casinos have shouldered their social responsibilities by dismissing no workers and sourcing supply from local SMEs during the coronavirus pandemic, opined Leong
RONSHINECHINA (03301.HK) announced that for the ten months ended 31 October 2020, the aggregate contracted sales amounted to approximately RMB114.83 billion, up 5.37% yearly.
BOC HONG KONG (02388.HK) announced that it, in collaboration with Bank of China Guangdong Provincial Branch and Shenzhen City Branch, leads the market with the completion of the first batch of blockchain-based cross-border trade transactions and the first trade finance transaction upon the connection of Hong Kong's innovative trade finance platform eTradeConnect and the Mainland's Trade Finance Platform.
EVERGRANDE (03333.HK) for the first ten months of this year, the aggregate contracted sales amounted to RMB632.59 billion, which has exceeded the sales amount of RMB601.06 billion for the whole of last year, and achieving 97.3% of the contracted sales target of RMB650 billion for this year.
China will ban AUD6-billion products imported from Australia from Friday by issuing a widely distributed notice to Australian food and wine distributors, foreign media reported. Such products included wine, coal, cotton, lobster, wood and barley. Currently, Australian government is still confirming the ban.
*MATERIALS/RESOURCES STRONG as China orders traders to halt imports of commodities from Australia products including coal and copper ore amid trade tensions. Miners also jumped following China's 15-year development plan for the new-energy vehicle industry. JIANGXI COPPER (358 HK +3%) CHALCO (2600 HK +3.6%) CH RARE EARTH (769 HK +7%).
ZIJIN MINING (2899 HK +3.3%) CHGOLD (2099 HK +3.6%) advanced as gold remain strong as havena assets.
*AUTO MAKERS STRONG as China's New Energy Vehicle Industry Development Plan (2021-2035) has been approved. NEV buildout is the road China must follow in order to evolve from a car superpower to a car hyperpower. Accordingly, the top-four basic principles of the plan are the quality of being market-oriented and innovation-driven, as well as coordination facilitation and open development. China said EV sales is expected to be around 20% of total new auto sales by 2025. GEELY (175 HK +5.5%) DONGFENG (489 HK +3.8%) GREAT WALL (2333 HK +7%), but BYD (1211 HK -2%) dropped on profit-taking.
*FINTECH/E-COMMERCE FIRM ahead of the ANT GROUP's listing Thursday, despite news reported that Chinese regulators called Jack Ma and ANT GROUP’s top executives to a rare joint supervisory interview on Monday, underscoring rising regulatory risk to the stock. Gray market trading for ANT GROUP shares is reportedly being executed at HK$120 apiece, compared with the listing price of HK$80.
ALIBABA (9988 HK +0.7%) is in advanced talks to invest US$300m in retailer FARFETCH (FTCH US).
MEITUAN (3690 HK+0.8%) denied rumours it is considering a second listing in China next year.
*TECH & COMPONENTS FIRM on optimism about potential easing of US/China tensions if Biden wins in the election. There are even hopes that some restrictions imposed on Chinese tech firms maybe relaxed.
APPLE-related names jumped ahead of next week's Apple event on Nov 10, in which it is expected that new Macbooks will be revealed.
AAC (2018 HK +3.7%) SUNNY (2382 HK +8%) HUA HONG (1347 HK +8.4%) SMIC (981 HK +4.8%) QTECH (1478 HK +3.3%).
*TELCO FIRM 5G names rebound following recent consolidation. CH TOWER (788 HK +6.6%) led as it's management said as of the end of September, a total of 690,000 5G base stations have been built and operated nationwide, with more base stations to be built. ZTE (763 HK +7.5%) COMBA (2342 HK +7%).
*INSURERS STRONG as AIA (1299 HK +6.3%) got approval for a branch in China’s southwestern Sichuan province, the company’s first since setting up an insurance subsidiary this year. CH LIFE (2628 HK +3.7%) NCI (1336 HK +3.4%) CH TAIPING (966 HK +3.7%) CPIC (2601 HK +4.5%).
*HK PROPERTY STRONG on hopes that commercial landlords will see improvements in commercial/retail rents, and that the HK economy has bottomed and will recover after 20 months of falling retail sales. HANG LUNG PT (101 HK +4.4%) SWIRE PAC-A (19 HK +4.9%) SHKP (16 HK +3.1%) HENDERSON LAND (12 HK +2.9%).
*HK RETAILERS MIXED after HK reported retail sales -12.9% YoY in Sept, improving from a 13.1% contraction in August, although slightly missing forecast. SA SA (178 HK +4.4%) CHOW TAI FOOK (1972 HK -1.3%) I.T. (999 HK +10%). ESPRIT (330 HK +1.2%) expects a final resolution is close in ending insolvency proceedings involving 6 of its subsidiaries in Germany.
JAPAN Market closed for Culture Day
S KOREA opened higher and worked higher be eased back after 1pm but then rebounded into the close. Foreigners and Institutions buying, retail sellers
Kospi closed +1.9% @ 2,343
Kosdaq currently +1.9% @ 819
TAIWAN opened higher worked higher to 12,750 and then traded sideways to close +1.2% @ 12,736
CONNECT FLOWS (Flat DoD)
Northbound Rmb 40,176m Buy 18,536m vs 21,639m Sell
Southbound HK$ 15,797m Buy 5,115m vs 10,682m Sell
Northbound Rmb 53,763m Buy 26,872m vs 26,891m Sell
Southbound HK$ 12,195m Buy 5,202m vs 6,993m Sell
AIA (01299.HK) +6.3%
CCB (00939.HK) +1.8%
HKEX (00388.HK) +1%
BABA (09988.HK) +0.7%
TENCENT (00700.HK) -0.6%
PING AN (02318.HK) +0.5%
MEITUAN-W (03690.HK) +0.5%
HSI & HSCEI Constituents on the move
SUNNY OPTICAL (02382.HK) +7.8%
CHINA TOWER (00788.HK) +5.7%
GEELY AUTO (00175.HK) +5.5%
WHARF REIC (01997.HK) + 5.5%
SWIRE PACIFIC A (00019.HK) +4.9%
SHIMAO GROUP (00813.HK) +4.6%
CPIC (02601.HK) +4.5%
HANG LUNG PPT (00101.HK) +4.4%
BOC HONG KONG (02388.HK) + 4.4%
CHINA TAIPING (00966.HK) +3.7%
CNOOC (00883.HK) +3.7%
CHINA LIFE (02628.HK) +3.7%
CK ASSET (01113.HK) +3.6%
AAC TECH (02018.HK) +3.5%
CHINA UNICOM (00762.HK) +3.3%
COUNTRY GARDEN (02007.HK) +3.2%
PETROCHINA (00857.HK) +3.2%
PSBC (01658.HK) -3.1%
CKI HOLDINGS (01038.HK) +3.1%
SHK PPT (00016.HK) +3.1%
SANDS CHINA LTD (01928.HK) + 3.1%
HSBC HOLDINGS (00005.HK) +3%
CITIC (00267.HK) +3%
HSMI & HSSI Constituents on the move
AKESO (09926.HK) +13.5%
MAN WAH HLDGS (01999.HK) +11.1%, hitting new high
COSCO SHIP HOLD (01919.HK) +9.9%, hitting new high
HAITIAN INT'L (01882.HK) +8.5%, hitting new high
SITC (01308.HK) +4.7%, hitting new high
ZIJIN MINING (02899.HK) +2.6%, hitting new high
MARKET HOURS NEWS
The Land Registry announced that the number of sale and purchase agreements for all building units received for registration in October was 6,189 (-6% YoY but +22% MoM). Among the sale and purchase agreements, 4,951 were for residential units (+23.7% YoY). The total consideration for sale and purchase agreements in respect of residential units was $50.1 billion (+23% YoY).
In response to rumors that MEITUAN-W (03690.HK) is pondering over a secondary listing in China as soon as next year, the Chinese shopping platform told our reporters that it has no such plan or schedule.
Jardine Aviation Services CEO David Walker wrote in a notice addressed to the staff today that around 340 of them will be dismissed next month as part of the business reshuffle, where few may choose to retain their post with salary frozen, cited local media. Those who choose to leave will be entitled to the same treatment as their departed peers’. The local airport ground handling service supplier decided to extend its no-pay leave scheme through March 2021 and warned that adjustments may be made next year to the current employment contract unless there is any improvement in the business situation.
LENOVO GROUP (00992.HK) results for the six months ended September 30, 2020. The revenue +7% yearly to US$27.867 billion. The net profit +43.7% yearly to US$523 million. EPS was US4.39 cents. The Board declared an interim dividend of HK6.6 cents (2019/20: HK6.3 cents) per share.
Moody's wrote in its report that the ten rated Hong Kong property companies may report FY20 weighted average EBITDA down by 10%-15%, followed by a further drop of 5% in FY21. In spite of its expectation for weaker retail and office rental income, the ratings agency retained ratings unchanged on most rated developers for their ample financial buffers and business diversity, for some names in particular.
HKEX (00388.HK) CEO Charles Li said at an online forum that he is looking at the usage of blockchain in business and trial in new arenas. Despite transition to digitalization in last few year, HKEX still gets plenty of jobs in hand awaiting digitalization, for example paperless issue.
Overnight HIBOR last posted at 0.11196%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.27964%, marking a 1-month low.
Four community testing centers will be put into operation in mid-November, said Chief Executive Carrie Lam. Four private medical labs have been shortlisted under public tender, she added. Private testing service will also be provided at testing centers for those in need of health certificates under the travel bubble plan. The charge for each test is reduced to $240.
CN EV Makers NIO, Xpeng, Li Auto Shrs Brisk on Savory Sales NIO (NIO.US) delivered 31,430 electric vehicles in 10M20, up 1.11 times YoY. The carmaker's price surged 9% to US$33.32 Monday. Xpeng (XPEV.US) delivered 3,040 EVs last month, up 2.29 times YoY. The stock mounted 6.9% to US$20.72 Monday. Li Auto (LI.US) delivered 3,692 One SUVs last month, up 5% MoM. The stock rocketed 13.4% to US$22.88 Monday.
TENCENT (00700.HK) announced that it is joining the lawsuit filed by WeChat users that seeks suspension of the U.S. executive ban, emphasizing that it did so only to ensure its business information is kept confidential, South China Morning Post reported.
Chief Executive Carrie Lam announced to prolong the social distancing measures falling due this Thursday's midnight for one week with the details remained intact.
MSCI announced the plan to add the Hong Kong-listed and Shanghai-listed shares of ANT GROUP (06688.HK) to the respective MSCI Indexes as of the close of November 30. MSCI intends to evaluate the H share offering by Ant Group for early inclusion to the MSCI China and MSCI China All Shares Indexes. As A shares are currently not eligible for the Stock Connect program, MSCI intends to evaluate the A share offering by Ant Group for early inclusion to the MSCI China A Onshore and MSCI China All Shares Indexes but not for the MSCI China Index.
PRE MARKET NEWS
Not in this mornings report
AIA (01299.HK)announced that AIA China received approval from the China Banking and Insurance Regulatory Commission (CBIRC) to begin preparations to establish a new branch in Sichuan. This will be AIA China’s first new branch since the inauguration of its wholly-owned life insurance subsidiary in July 2020. Fisher Zhang, AIA China’s Chief Executive Officer, said Sichuan is a fast-growing province and an important region for AIA as the company looks to expand its geographical footprint in Mainland China. It is committed to playing its part in the further development of Sichuan and the financial industry of Western China.
China rejected Australia's appeal to lift a duty on its barley exports, Reuters citing insiders. The Australian government found it extremely disappointing but not surprising. China slapped a 80.5% tariff on Australian barley imports this year. Canberra made an appeal later, arguing the country had neither subsidized nor dumped any of its barley.
AMTD Group's Zhuhai equity investment fund management wing will hopefully embark on 2-3 project funds, in an aggregate size of RMB1-1.2 billion, this year after receiving a QFLP license, Chairman Calvin Choi told Hong Kong Economic Journal. The virtual bank is meanwhile in talks with XIAOMI-W (01810.HK) over financial ties in the Greater Bay Area, although the form of partnership remains yet to be finalized, said the report.
TikTok has entered into an agreement with Sony Music which will grant all users of the short-video sharing app access to the latter's music portfolio, Reuters reported
Apple announced a special event slated for 10 November, when the US tech giant was expected to introduce new Mac computers using its self-developed processor chips, Apple Silicon.
BABA-SW (09988.HK) is in discussions to invest almost US$300 million in online luxury fashion retailer Farfetch, The Information learnt from people familiar with the plan. Subsequently, Farfetch's share price boomed 13.76%.
While ANT GROUP (06688.HK) (688688.SH)'s Huabei is basically similar to banks' credit card business, it is collecting higher handling fees for instalment loans than banks do, 21st Century Business Herald citing an article of Guo Wuping from the consumer rights protection department of CBIRC. Hence, Huabei is inconsistent with the philosophy of financial inclusion. It is indeed universal but not inclusive, added Guo.
Jack Ma, Eric Jing and Simon Hu, respectively ANT GROUP (06688.HK) (688688.SH)'s actual controller, chairman and CEO, had been summoned by PBoC, CBIRC, CSRC and SAFE for regulatory interviews. In response, Ant said it will continue to heighten its inclusive service capability and help with the development of economy and people's livelihood.
GOME RETAIL (00493.HK) on 2 November bought back on-market 5 million shares, involving around $4.49 million.
A-LIVING (03319.HK) announced that on 2 November, its controlling shareholder AGILE GROUP (03383.HK) had through a subsidiary purchased 316,750 H Shares of the Company from the market, involving roughly $10.33 million.