HSI +196pts (+0.7%) 26,729 HSCEI +13pts (+0.1%) 10,586 T/O HK$135.45bn (-25.5% DoD)
EUROPE markets opened lower; PMI data was weak but generally better than F/cast. Caution ahead of US initial claims and watching for news on a new stimulus package. Banks weak and Tech seeing +VE interest
Services PMI Nov 41.7 vs 46.9 Oct (F/cast was 41.3)
Composite PMI Nov 45.3 vs 50 Oct (F/cast was 45.1)
To come Retail SalesECB General Council Meeting.
Services PMI Nov 46 vs 49.5 Oct (F/cast was 46.2)
Composite PMI Nov 51.7 vs 55 Oct (F/cast was 52)
Services PMI Nov 38.8 vs 46.5 Oct (F/cast was 39)
Composite PMI Nov 40.6 vs 47.5 Oct (F/cast was 39.9)
To come Retail Sales
Services PMI Nov 47.6 vs 51.4 Oct (F/cast was 45.8)
Composite PMI Nov 49 vs 52.1 Oct (F/cast was 47.4)
US Futures opened flat for Dow and S&P, the NDX futures were +0.1% in Asian trading and remained there though the day. Investors cautious ahead of Initial claims and PMI data. Also in ficus will be news on a new stimulus package. Bond market is in focus at the US T10 flirts with 1%.
Challenger Job Cuts, Initial Claims, 4 week Ave Claims, Continuing Claims, Services and Composite PMI. ISM Non Manufacturing Data (PMI, Employment, New Orders, Prices, Business Activity), EIA Natural Gas Report
CHINA CSI 300 Closed -10pts (-0.2%) @ 5,057Opened slightly lower ahead of the Caixin Data and sold down to 5,034 before rebounding to the opening level at lunchtime. PM market opened lower and the rebounded but seeing resistance at it approached yesterday’s closing level. Around 1.30pm market sold down to 5,045 level but then saw a rally to 5,072 the day high, but unable to hold and sold down into the close.
Sentiment remains cautious as the US passes a bill that requires Chinese companies to allow the US to audit their accounts or delist and the growing expectation that Biden’s approach to trade negotiations will results in China having to make more concessions; not just to the US but its allies too.
Shanghai Comp -7pts (-0.2%) @ 3,442
Shenzhen Comp +9pts (+0.1%) @ 13,970
ChiNext Index +30pts (+1.1%) @ 2,712
CHINA Data out after the open
Caixin Services Nov 57.8 vs 56.8 Oct (F/cast was 56.4)
Caixin Composite Nov 57.5 vs 55.7 Oct (F/cast was 55.4)
Saw a recovery in consumer demand but inflationary pressure being evident, sentiment was +VE
HSI Pre Market Opened at 26,623 +90pts vs +99pts ADRs with Ecommerce and Developers +VE Market drifted lower initially ass govt said it would not roll any massive relief measures but around 11am rallied to 26,780 level as Carrie Lam said she would gradually broaden mutual market access between China and Hong Kong. Market then eased back into lunch. PM opened lower but trended slightly higher and saw a 28pt up tick in the closing auction. Market struggling to find a driver to move higher as US / China trade tension unlikely to ease anytime soon. Also more share placement a concern along with the high number of covid cases.
PICKs Techtroncis closed -2.8% 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 Pre market
PMI Nov 50.1 vs 49.8 Oct (F/cast was 49)
Centre for Health Protection said there were 92 new COVID-19 cases in Hong Kong today (vs 103 Wednesday) 31 cases with unknown origin.
SHORT SELLING Thursday 17.8% vs 12.5% Wednesday
Top Shorts NWD (17) 47%, Wharf REIC (1997) 45%, Ping An (2318) 42%, Hang Seng Bank (11) 38%, Galaxy Ent (27) 33%, MTRC (66) 31%, HSBC (5) 31%, Country Garden (2007) 31%, Sinopec (386) 31%, Swire Pac (19) 31%, ICBC (1398) 28%, boć HK (2388) 28%, Bank of China (3988) 28%, HK & China gas (3) 26%.
AFTER MARKET NEWS
Hong Kong Airlines announced that it will resume the flight between Hong Kong and Tokyo on every Friday with effect from tomorrow (4 December), while also resuming that between Hong Kong and Osaka on every Thursday and Saturday with effect from 1 January 2021. Meanwhile, greater flexibility is offered by the airline for travel plans with unlimited changes without change fees for tickets purchased from 24 November 2020 onwards.
The Census and Statistics Department released the statistics on vessels, port cargo and containers for the third quarter of 2020. In the Q3 2020, total port cargo throughput -5.7% YoY to 63.3 million tonnes.
Within this total, inward port cargo -1.8% YoY to 42.9m tonnes and outward port cargo -13% YoY to 20.4 million tonnes.
NEXT DIGITAL (00282.HK) To resume trading Friday; announced that Lai Chee Ying, Chairman and Executive Director of the Company, Chow Tat Kuen, Royston, Executive Director of the Company and Wong Wai Keung, Administrative Director of the Group have on 2 December 2020 respectively been charged with the offence of fraud contrary to section 16A of the Theft Ordinance (Chapter 210 of the Laws of Hong Kong). Also that the Charges are in respect of violation of the terms of a lease with Hong Kong Science and Technology Parks Corporation regarding the Company’s business premises at 8 Chun Ying Street, Tseung Kwan O Industrial Estate resulting in benefit to Apple Daily Printing Limited and/or Dico Consultants Limited. Based on information currently available, after a mention hearing in the morning of 3 December 2020, Mr. Lai was remanded in custody pending the next hearing on 16 April 2021. Mr. Chow and Mr. Wong were granted bail on terms. As the Group is operated by a team of management personnel, the Board does not expect the Charges to have an immediate material adverse impact on the daily operations of the Group.
EVERGRANDE (03333.HK) further increased 22.3285 million shares of EVERG VEHICLE (00708.HK) today (3 December) at an average price of $28.568 per share.
EVERGRANDE (03333.HK) aggregate contracted sales amount of the Group’s properties for the first eleven months of 2020 amounted to RMB678.66 billion, +16.9% YoY. As at the end of November 2020, the Group outperformed the contracted sales target of RMB650.0 billion for the year with an achievement rate of 104.4%.
Centa Valuation Index (Major Banks) (CVI) last printed at 46.88, +2.47 pts from 44.40 in the previous week, posting the sharpest rally in nine weeks.After two weeks of the 4th Covid resurgence, CVI edged up 4.30 pts for two weeks without hitting the soft spot, said Centaline Property. Regarding mortgage, banks stayed positive instead of turning bearish. Under such case, Wong did not expect property prices to tumble steeply.
*PETROCHEMS FIRM as oil prices rose overnight on hopes that vaccinations will improve demand. CH OILFIELD (2883 HK +1.7%) CNOOC (883 HK +0.3%) PETROCHINA (857 HK +0.4%).
*ECOMMERCE MIXED on the delisting threat from the US., rumours of an Ant restructuring as Jack Ma is criticized by mainland netizens for lowering his shareholding of ALIBABA (9988 HK +0.8%) listed in US to 4.8%, as of July 2, cashing out US$10.18b, according to exchange data. News reported that JD.COM (9618.HK +1.4%), SF Express and Carlyle will bid for CJ Logistics, the Chinese logistics business of South Korea's CJ Group. The deal is expected to be more than US$1b. TENCENT (700 HK +2.4%) MEITUAN (3690 HK -0.7%) NTES (9999 HK -1.3%).
*HK PROPERTY WEAK due to the latest Covid outbreak.CH OVERSEAS LAND (688 HK -1%) won a residential site at Kai Tak 4E Site 1; for HK$4.27b +4% than the estimate but there is an element of specially purchaser as it owns another site there. Li Ka Shing Foundation bought a total of 787,500 CK ASSET (1113 HK+0.3%) between Nov 26 and Dec 1. SHKP (16 HK +0.2%) HENDERSON (12 HK -1.4%) NWD (17 HK -2.8%) HYSAN (14 HK -1.8%).
*AUTOS WEAK Volvo Cars CEO said the company could form alliance with GEELY (175 HK -0.7%) instead of merger, that an alliance with Geely Auto is one option, and “the other would be a more financial merger.” CH EVERGRANDE acquired 25.43m shares in EVERGRANDE EV (708 HK +2.4%) for HK$656m at HK$25.8 on average. GREATWALL (2333 HK -5%) after China Consumers Assoc released a satisfaction evaluation report, in which Great Wall Motors ranks second to last in terms of quality satisfactory. DONGFENG (489 HK -3.3%) BRILLIANCE (1114 HK -1%).
*MACAU CASINOS FIRM on vaccine optimism; Macau CEO said Macau will spend MOP3m to pre-purchase coronavirus vaccines, and that emergency vaccines will be available as soon as the end of this year. It expects more Christmas traffic and there was a denial of the introduction of a digital Yuan. MELCO (200 HK +0.9%) GALAXY ENT (27 HK +1.2%) SANDS (1928 HK +1.6%) WYNN (1128 HK +0.9%).
*PHARMA/MEDICAL STRONG on hopes of faster Covid vaccine approval. CANSINO (6185 HK +2.6%) FOSUN (2196 HK +3.7%) CSPC (1093 HK +5.9%) INNOVENT (1810 HK +3.9%). BEIGENE (6160 HK -2%) proposed public offerings ADS by selling shareholders. 1.5m ADS shares are offered on behalf of fund partnerships affiliated with Baker Bros. Advisors.HYGEIA HEALTH (6078 HK +9%) but I didn’t see any specific news
*M&A XINYI GLASS (868 HK -1.2%) plans to acquire CHINA GLASS's (3300 HK -5.5) all issued ares of 1.81b shares.
*OTHER MOVERS: KINGBOARD (148 HK +4.2%) as glass epoxy laminate products prices increase. HOTPOT RESTAURANTS such as XIABUXIABU (520 HK +4.5% and HAIDILAO (6862 HK +9%) as the winter season approaches.
Nikkei opened lower but rallied into the green ahead of the PMI data but then sold back down in choppy trading to the opening level, only to rally back to close flat at lunch. PM Opened higher but trended lower to 26,735 before bouncing back to close +8pts (flat) @ 26,809
Topix opened higher but again trended lower in choppy trading before rallying into lunch. PM opened higher but sold down to the day low 1,770 and bounced to close flat +1pts @ 1,775
Services PMI Nov 47.8 vs 47.7 Oct (F/cast was 46.7)
Composite PMI Nov 48.1 vs 48.0 Oct (F/cast was 47.0)
Markets opened late due to annual college entrance exams.
Kospi opened flat 2,686, after pre market Foreign Exchanges Reserves were better than expected. Market traded sideways for the first hour before seeing an uptick to 2,688 before selling back down to flat. Then another rally to 2,691eased back and then bounced into to the day high but eased at the end to close +20pts (+0.8%) 2,696
Kosdaq followed a similar trading pattern but trended higher to 906 drifted slightly lower before ticking up to close +8pts (+0.9%) @ 907
Foreign Exchange Reserves Nov $436.38 vs $426.51 Oct (F/cast was 420.7b)
Opened flat and initially traded lower to 13,950 support before working higher and breaking through 14,000 to 14,050 before selling back down and trading sideways to close -12pts (-0.1%) @ 13,977
CONNECT FLOWS (down DoD)
Northbound Rmb 40,088m Buy 18,378m vs 21,709m Sell
Southbound HK$ 13,282m Buy 6,073m vs 7,210m Sell
Northbound Rmb 52,151m Buy 25,944m vs 26,207m Sell
Southbound HK$ 13,041m Buy 5,568m vs 7,473m Sell
TENCENT (00700.HK) +2.6%
CCB (00939.HK) -1.9%
HKEX (00388.HK) +1.3%
BABA (09988.HK) +0.9%
MEITUAN-W (03690.HK) -0.7%
AIA (01299.HK) +0.7%
PING AN (02318.HK) +0.3%
HSI & HSCEI Constituents on Move:
CITIC (00267.HK) -6.5%
CSPC PHARMA (01093.HK) +5.9%
LINK REIT (00823.HK) +5.7%
WHARF REIC (01997.HK) +4.2%
XIAOMI-W (01810.HK) +4.1%
MENGNIU DAIRY (02319.HK) +3.3%
HSMI & HSSI Constituents on Move:
KB LAMINATES (01888.HK) +16%, hitting new high
XIABUXIABU (00520.HK) +4.5%, hitting new high
HUA HONG SEMI (01347.HK) +3.1%, hitting new high
MARKET HOURS NEWS
Apple sent a letter to game developers again, requesting those in China region to submit edition number designated by Chinese watchdog to Apple's back office, mainland media reported. In order to enable usage of their paid games and in-app purchases through App Store in China, the developers have to enter the game edition number and supporting document in App Store Connect and file the update via App Review by 31 December. If they fail to submit the required information after the said date, their games will be unable to shelve on China's App Store.
KAISA GROUP (01638.HK) and Choice Holdings announced that The Concerto, a project co-developed by them in the vicinity of Sham Shui Po Station and Nam Cheong Station, had the first price list unveiled, involving 30 flats. The discounted selling price will be $3.8513 million, or $17,997 per sq.ft. of saleable area. The show flats will be made open at 6 p.m. tomorrow (4 December).
i-CABLE News' management issued a statement, apologizing for its recent approaches in reshuffling the news department and offensive remarks made by individual executive. The management said the dismissal of the 40 employees from the news unit was a decision of four management staff and the human resources department. It understood that the related decision was not best taken care of and the communication between the team heads and management could be done more peacefully. As such, the management made three pledges: 1) the editing approaches of i-CABLE News will remain intact; 2) there will be no layoff and wage cut at the team in the next two years; and 3) colleagues with potentials will be actively promoted.
TikTok was the world's top grossing non-gaming app in November 2020, garnering over US$123 million in user spending, 3.7 times the sum in November 2019, according to Sensor Tower's report. 85% of the revenue came from Douyin in China, followed by 8% from the U.S. and 2% from Turkey.
NEXT DIGITAL (00282.HK) The fraud crime case against founder Jimmy Lai Chee-ying was taken to the court this morning (3 December). The magistrate refused the bail of Lai, citing he would be likely to abscond, and therefore be remanded in custody till April 2021. I think anyone who had read the FT over lunch interview with him a couple of weeks back would doubt that he would abscond, but it looks more politically motivated and will raise concerns about the independence of the judiciary.
Chief Executive Carrie Lam, delivering her speech at a financial forum, said she would be devoted to deepening the mutual market access between China and Hong Kong and broadening the scope of eligible equities under the mutual access step by step. She agreed to speed up the inclusion of zero-profit biotech firms listed in Hong Kong and stocks listed on SSE STAR market into the subject scope given fulfillment of specific criteria.
Overnight HIBOR last posted at 0.04613%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.19393%, up for 7 days.
AutoX, a Chinese self-driving startup backed by BABA-SW (09988.HK), is undergoing a fully driverless vehicle testing in China with Pacifica minivans produced by Fiat Chrysler Automobiles NV (FCA).
Transport and Housing Bureau (THB) announced that the estimated total public housing production by the Housing Authority and Hong Kong Housing Society in the five-year period from 2020/21 to 2024/25 is 101,300 flats, comprising about 70,500 public rental housing/Green Form Subsidised Home Ownership Scheme (PRH/GSH) flats and about 30,800 other subsidised sale flats.
TENCENT (00700.HK) Chairman Pony Ma Huateng wrote in an article on a Chinese media that advertising and content fields have rotated forcefully to be data-driven, whilst the reform of finance, retail, education and healthcare has also ignited. Ma foresaw an exciting opportunity amid the ten-year development of mobile internet - the "real internet", being the next spike of upgrade. He elaborated that there will be enriched changes in the modes of information contact and human-computer interaction, online and offline integration, and physical and electronic integration.
With the growth of VR technology as well as new hardware and software in different scenarios, Ma predicted a big shuffle to happen very soon in the industry.
PRE MARKET NEWS
Not in this mornings report
The Government will not be launching massive relief measures like before, said Christopher Hui Ching-yu, Secretary for Financial Services and the Treasury, in a radio program. Instead, the Government may prefer more pertinent initiatives, and does not plan for making MPF contributions on behalf of both employers and employees in Hong Kong. Equally, a universal cash handout is not on the agenda.
GCL-POLY ENERGY (03800.HK) announced that Jiangsu Zhongneng (an indirect subsidiary) and Apex Investment (an indirect wholly-owned subsidiary), both being the sellers, and Zhejiang Qixin Technology Limited, being the purchaser, entered into the Share Purchase Agreements. Pursuant to the Share Purchase Agreements, Jiangsu Zhongneng and Apex Investment agreed to sell approximately 2.8% and 3.2% equity interest respectively in Sino IC Leasing to the Purchaser. The net cash proceeds from the Disposals are expected to be approximately RMB718 million.
EVERGRANDE (03333.HK) added 25.427 million shares of EVERG VEHICLE (00708.HK) on 2 December at an average price of $25.7990 per share, involving $660 million, according to HKEX's disclosure of interests.
NEXT DIGITAL (00282.HK) Halts trading as Chairman Jimmy Lai Chee-ying was charged by Hong Kong Police Force and prosecuted by the National Security Department of fraud crime, violating Section 16A of the Theft Ordinance, Apple Daily reported. The case was taken to the West Kowloon Magistrates' Courts this morning. Meanwhile, the COO cum CFO Royston Chow Tat-kuen and the administrative director Wong Wai-keung were also charged. CEO Cheung Kim-hung was quoted as saying that the prosecutions would not pose material impact on the group's operation, declining to comment on the matter though due to legal proceedings underway.
TTI Electronics Asia PTE Hong Kong Ltd, a Hong Kong subsidiary of Berkshire Hathaway's TTI, was added by the U.S. Department of Commerce to the list of 89 firms associated with the People's Liberation Army (PLA). However, the company stressed that it has no links with the Chinese military.
XINYI GLASS (00868.HK) and CHINA GLASS (03300.HK) jointly announced that XINYI GLASS proposed an offer to acquire all the issued shares of CHINA GLASS at an offer price of HK$0.9 per share, representing a discount of 17.4% to the closing price on the Stock Exchange on the last trading day. The Share Offer is valued at HK$1.629 billion
Ant Group replied that the rumored disposal of a 30% stake in Paytm, dubbed as India's Alipay, was untrue, as quoted by Chinese media.
The Chinese regulatory bodies are examining a restructuring of Ant Group without concrete approaches yet, Tencent news citing an insider.
CASH FIN SER GP (00510.HK) announced that on 24 November 2020 and 2 December 2020, the Group acquired an aggregate of 53,000 BYD COMPANY (01211.HK) Shares through the open market at an aggregate consideration of HK$9.9 million. On 24 November 2020 and 2 December 2020, the Group also acquired an aggregate of 380,000 XIAOMI-W (01810.HK) Shares through the open market at an aggregate consideration of HK$9.8 million.