Oct 15 HK WRAP HSI -509pts, Europe sell down and US Futures falling


18 Oct
Oct 15 HK WRAP HSI -509pts, Europe sell down and US Futures falling

HSI -509pts (-2.1%) 24,159  HSCEI -159pts (-1.6%) 9,762  T/O HK$130.53bn (-15.4% DoD)  

As at pm 5:30pm HK time
EUROPE Markets opened lower but then sold down as rising Covid case prompts France to introduces curfews (it had 22,951 cases in 24 hours). Investors will be also concerned that there is unlikely to be any US stimulus pre elections. Also in focus European and US earnings.
Data French Inflation Sept 0% YoY vs +0.2% Aug (F/cast was +0.1%)
Inflation Sept -0.5% MoM vs -0.1% Aug (F/cast was -0.5%)

US Futures opened opened flat and have sold down initially to -100 but now Dow showing -300pts with S&P and NDX also lower. Key will be the initial claims data along with earnings today from Morgan Stanley and Walgreens Boots Alliance along with others.
Data due Philadelphia Fed Manufacturing Index, Import and Export Prices, NY Empire Set Manufacturing Index, Initial Claims 4 week Ave Claims, Continuing Claims, EIA report

Summary 
CHINA CSI 300 Closed -8pts (-0.2%) 4,799
Markets opened slightly higher after the good New Loans data and President Xi speech that China should seize the opportunity to lead in tech and other strategic industries. But the Inflation and PPI data out on the open missed expectations. Sentiment weak as US relationship continues to deteriorate and investors start to worry about the prospect that whatever the US election result the outcome for China will be -VE. Financial stocks +VE on the loans number.Shanghai opened lower and traded sideways in choppy trading to 3,344 at lunch. PM trend continued until 1:40pm after which the market trended lower to close at the day low.Shenzhen opened higher but trended lower in choppy trading to 13,677 at lunch. Re-opened flat but then tested the morning low for support, bounced to 13,700 but then trended lower to close the session at the day low
Shanghai Composite Index -8pts (-0.3%) @ 3,332 T/O Rmb 263.8bnShenzhen Component Index -66pts (-0.5%) @ 13,624 T/O Rmb 500.2b
ChiNext Index -26pts (-1%) @ 2,737 T/O Rmb 258.8b
Data at the open 
Inflation Sept +1.7% YoY vs +2.4% Aug (F/cast was +2%)
Inflation Sept +0.2% MoM vs +0.4% Aug (F/cast was +0.2%)
PPI Sept -2.1% YoY vs -2% Aug (F/cast was -1.8)
Detail
Inflation the lowest since Feb 2019 with a marked easing in food price inflation. Non Food was flat and declines in transport costs, rent, fuel, utilities, household goods & Services and clothing. Price rises in healthcare, other goods & services, education, culture & recreation.
PPI fell for the eighth month as covid continues to impact the economy.

HSI Pre Market opened at 24,533 -133pts vs -178pts @ 24,489 ADR’s with E Commerce names and HK Banks weak on the threat of more US sanctions. Evergrande remains weak. Market then sold down to find support at 24,400 and bounced to 24,573 before selling back down to 24,400 and trading sideways for a while before selling down to 24,312 and saw a small bounce into lunch. PM opened flat and traded sideways until around 2:30pm when it trended lower, finding support a 24,100 and then saw a small uptick into the close. Only to tick down 23pts in the closing auction. HSBC(5 HK -2%) closed at HK$29.90; with continued concerns on the outlook.

IPO 
CHANNEL MICRON (02115.HK) , on debut, closed at $1.13, up 77 cents or almost 2.1x against the listing price $0.36, on volume of 112 million shares and turnover of $130 million. Excluding the handling fees, a book gain of $7,700 was reported per board lot of 10,000 shares.
CN LOGISTICS (02130.HK) closed at $2.71, +1.9% against the listing price of $2.66, on volume of 26.6 million shares and turnover of $72.5 million.

HONG KONG DATA
Centre for Health Protection said there were 12 new COVID-19 cases
in Hong Kong today (vs 0 Wednesday) 2 of unknown origin,

SHORT SALES Thursday 19.3% vs 17.4% Wednesday
Top Shorts 
Wharf REIC (1997) 50%, Henderson Land (12) 46%, Bank of China (3988) 44%, Galaxy Ent (27) 40%, Hang Seng Bank (11) 40%, China Res Land (1109) 36%, HSBC (5) 36%, Sunny Optical (2382) 33%, Ping An (2318) 32%, AIA (1299) 30%, CCB (939) 29%, CSPC Pharma (1093) 29%, Shenzhou (2313) 25%.

AFTER MARKET NEWS
CHOW TAI FOOK (01929.HK) retail sales value (RSV) +2.6% yearly
during the second quarter ended 30 September 2020. In particular, the RSV of Hong Kong, Macau and other markets slid 51.6% yearly, where same store sales and SSS volume slipped 52.5% and 56.7%.
ANTA SPORTS (02020.HK) retail sales (in terms of retail value) of ANTA branded products for the third quarter of 2020 recorded low single-digit positive growth compared to the same period of 2019. Retail sales of FILA branded products recorded 20-25% positive growth compared to the same period of 2019.
Chinese Foreign Ministry Spokesperson Zhao Lijian voiced the PRC's opposition against the convenient concept of the US on "national security", which allows misuse of national power to suppress foreign companies irrationally. China will continue to take all necessary initiatives to safeguard the rightful interest of Chinese firms, the Minister said. Comes after the U.S. State Department proposed to the White House to put Ant Group onto the trade blacklist, Reuters cited people with the knowledge of the matter.
The phase II of the Royale project series was named "Starfront Royale", with Empire Group, HK FERRY (HOLD) and HENDERSON LAND (00012.HK) as selling agents. It consists of two towers, offering 614 residential flats with saleable area of 186-1,374 sq.ft..
Centa Valuation Index (Major Banks) (CVI) last printed @ 47.40 this week, -0.65 pts weekly, said Centaline Property. The index sagged this week after amassing 14.46 pts of increment in four weeks, seeing resistance at 50. Given the slight decline, they believed the index will struggle at around 50 in short run to gather momentum.
Regional Markets
JAPAN Market opened lower at 23,550 and drift lower through the morning. That move lower continued after lunch with the market re opening and selling down to 23,460 before finding support. Market has trended higher back to the lunchtime level but then sold down at the end to close -0.5% @ 23,507
DataTertiary Industry Index Aug +0.8% vs -0.5% July (F/cast was +0.6%)
S KOREA Markets opened lower following US markets and with concerns of a new covid cluster in Busan. The BTS’ debut saw the stock hit the 30% max limit initially and I currently +28% with other entertainment stocks weaker. Samsung and Hyundai also weak.
Kospi opened lower and traded sideways in a range 2,350 - 2,370 and closed -0.8% @ 2,361
Kosdaq opened flat but sold down quickly to 841 level before a small bounce to 850 but then drifted lower to 833 level before seeing a small reversal in the last hour to close -2% @ 844.
TAIWAN Market opened slightly lower at 12,892 and initially traded sideways around 12,900 (vs 12,920 Wednesday close) but then sold down to 12,786 before working back to 12,850 level from there it drifted lower to close -0.7% @ 12,828
CONNECT FLOWS Down DoD especially Shenzhen flow decreases 
Shanghai
Northbound Rmb 34,888m Buy 17,303m vs 17,585m Sell
Southbound Rmb 10,533m Buy 3,996m vs 6,538m Sell
Shenzhen
Northbound Rmb 50,818m Buy 25,716m vs 25,102m Sell
Southbound Rmb 11,591m Buy 5,175m vs 6,416m Sell

Active Heavyweights
MEITUAN (3690.HK) -4.8%
BABA (9988.HK) -4.3%
TENCENT (700.HK) -3.7%
AIA (1299.HK) -3.7%
HKEX (388.HK) -2.9%
CCB (939.HK) -0.8%
PING AN (2318) unch
HSI & HSCEI Constituents on the move
XIAOMI-W (01810.HK) -3.4%
ENN ENERGY (02688.HK) -3.3%
HENGAN INT'L (01044.HK) -3.1%
HSMI & HSSI Constituents on the move
ANGANG STEEL (00347.HK) +3%
FIRST CAP GP (01269.HK) -11.5%
GOLDWIND (02208.HK) +11.1%, hitting new high
TEXHONG TEXTILE (02678.HK) +10.3%
YONGDA AUTO (03669.HK) +5.1%, hitting new high
MEIDONG AUTO (01268.HK) +4.3%, hitting new high
ZHOU HEI YA (01458.HK) +1.5%, hitting new high

Market Commentary
*PETROCHEMS WEAK
despite oil rising overnight to its highest in nearly a week amid a weaker dollar and signs of improving demand in China and India. There are concerns that a resurgence of coronavirus cases in some nations may slowdown the recovery of economic activities globally
*CHINESE BANKS MIXED Good Loans and Credit Growth data. Building on Wednesday news of easing on profitability restrictions. ABC (1288 HK +0.8%) CMB (3968 HK +1.5%) CBC (939 HK -0.8%) ICBC (1398 HK -0.5%).
*E-COMMERCE WEAK as Trump Admin seeks to blacklist Ant Group in the U.S., ALIBABA (9988 HK -4.3%). TENCENT (700 HK -3.7%) President Martin Lau sold 350,000 shs at avg HK$533.3761 apiece on Oct. 8 and 150,000 shs at avg HK$541.1467 each on Oct. 9.
ZHONGAN ONLINE's (6060 HK -4.67%) reported 8-month gross written premiums +12.2% YoY to 11.1b yuan.
*TECH & MOBILE COMPONENTS WEAK as APPLE suppliers retreated after recent new launch-rally. China's 5G tech under attack by the US again as US Under Secretary of State for Economic Growth urged South Korea to join the US led Clean Network initiative for 5G, or the alliance of “trusted vendors” for a united front against China. Also EU wants Huawei and ZTE listed as a threat
ZTE (763 HK -4%) HUA HONG (1347 HK -1.7%) FIT HON TENG (6088 HK -2%). HUAWEI TECH is in talks with Digital China and other buyers including TCL (1070 HK- 4.7%) and XIAOMI (1810 HK -3.4%) to sell parts of its Honor smartphone unit in a deal that could fetch up to 25b yuan, according to news. See FT Lex article Shenzhen/Huawei: the other Bay Area.
*MACAU WEAK on uncertainties amid the the news that China's top legislature was reviewing an amendment to the country's criminal law, proposing a new crime definition for overseas gambling operations aimed at luring Chinese citizens to gamble overseas. There would also be new penalties introduced for establishing casino operations within the mainland, although exactly what any penalties would be; or how they might be enforced, have yet to be revealed. I think this should actually be +VE for MACAU and strengthen its position as the place you can gamble. I think the legislation is to stop money going off short to Philippines, Cambodia, Australia etc.
SANDS (1928 HK -1.3%) WYNN (1128 HK -1.3%) SJM (880 HK -3.2%).
*HK PROPERTY SOFT on news that stamp duty from property transactions -44.9% YoY to about HK$8.97b in the first three quarters, said the Inland Revenue Department show.
NWD (17 HK -1.1%) despite receiving over 15,000 subscriptions for its THE PAVILIA FARM I,
CKA (1113 HK -2.3%) HENDERSON LD (12 HK- 1.7%).
*OTHER 
CATHAY (293 HK +6%) after the govt briefing that HK and Singapore are to scrap quarantine with travel Bubble, details to be finalized in the coming weeks.Also the Flight Attendants Union (CPAFAU) met with the management for the fourth time since the company has not applied for a new round of Employment Support Scheme. After the meeting, the Union cited the management that layoff will only be the last resort, while not pledging the airline will not do so.
GOLDWIND (2208 HK +11%) jumped again on positive sector policies to spur sector's growth.
YONGDA (3669 HK +5.1%) broker raised target price, saying earnings should get a boost from improved efficiency.

MARKET HOURS NEWS 
David Chan Ping-chi, a veteran investor dubbed the "King of Cassettes", sold the 48th Floor of The Center to HOPSON DEV HOLD (00754.HK) at around $980 million, according to market sources. The 48th Floor measures about 25,695 sq.ft., with a selling price of roughly $38,000 per sq.ft. HOPSON DEV HOLD had bought the 49th Floor of The Center at $1.118 billion in 2018, i.e. a floor price of about $43,500 per sq.ft., roughly 12.6% above that in Chan's deal.
Ant Group stated that it cannot understand the White House's discussion about putting the group into "trade blacklist" as its major operation is carried out in China, as a spokesperson told the Chinese press. The U.S. State Department had proposed to the Trump administration to put Ant Group onto the trade blacklist, Reuters earlier cited people with the knowledge of the matter.
HK, SG Reach Deal in Principle on Bilateral 'Air Travel Bubble’ +VE which may exempt residents of both territories from Covid-19 isolation or stay-at-home notices, reported SCMP.   Edward Yau, Secretary for Commerce and Economic Development of Hong Kong, will meet the press at the Government Secretariat at 14:30 today.
FAST RETAIL-DRS (06288.HK) annual results ended August 2020. Net profit amounted to JPY90.3 billion, down 44.4% yearly. Revenue reached JPY2.01 trillion, down 12.3%. Estimated final DPS was JPY240. Estimated full-year DPS was JPY480, flattish yearly.
Taobao (Taiwan) announced that order-taking and other front-line functions will be gradually suspended from 11am today. Other services, such as official logistics and customer services, will go on running until 31 December.
XINYI GLASS (00868.HK) CEO Tung Ching Sai had on 12 October purchased a total of 1.50 million shares, involving roughly $24.4734 million.
CANSINOBIO-B (06185.HK) announced the pre-order framework deal with Mexico's Ministry of Health. Pursuant to which, the drugmaker plans to supply Mexico with 35 million doses of its COVID-19 vaccine, Ad5-nCoV, from end-2020 to 2021.
RAZER (01337.HK) announced that its products had delivered shiny results on Amazon Prime Day dated 13-14 October. In particular, its PC game mice harvested seven out of the top ten spots, and eight out of ten for its game keyboards.
HAITONG INT'L (00665.HK) announced that its asset management team rolled out Haitong MSCI China A ESG. ETF. today, representing the first ETF traded on HKEX based on Environmental, Social and Governance (ESG). The ETF is based on RMB with an annual management fee of 0.6%. The stock codes are 3031 (HKD), 9031(USD) and 83031 (RMB), available for trading today on HKEX in such currencies.
TikTok's parent ByteDance is moving to a bigger office in Singapore’s One Raffles Quay, which involves at least three floors measuring over 60,000 sq. ft., paving its way to make the city-state its Asian beachhead, as Bloomberg learnt from inside sources.
Overnight HIBOR last posted at 0.06304%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.36554%, marking a 1-month low.
PA GOODDOCTOR (01833.HK) announced the upgrade for the "Private Doctor" pipeline under its sub-brand Ping An Doctor Home. Accordingly, a health butler service with multiple membership levels has been launched for individuals and families. Equally, "Private Doctor" will be enhanced to offer a combination of private doctor and family doctor services.
European Parliament Members Call For Labeling Huawei, ZTE as High-risk 5G Suppliers. In a letter addressed to national telecom ministers and senior EU Commission officials, over 40 European Parliament members wrote that Huawei and ZTE (00763.HK) should be singled out as "high-risk" companies posing security threats to Europe's network security, the U.S. news agency Politico reported. The two Chinese companies are undoubtedly high-risk suppliers who pose security threats to Europe's 5G network, said the letter.
CN Reinforces Crackdown on Illegal Gambling, Criminalizing Solicitation of Gambling Abroad Chinese authority is tabling the draft of the Criminal Law Amendment (11) in front of the Standing Committee of the 13th NPC for a second review, covering reinforcement of crackdown on cross-border gambling crime, adjustment of penalty on casino setup, while criminalizing solicitation of Chinese citizens of gambling abroad, according to Chinese media.
Fitch Ratings initiated LENOVO GROUP (00992.HK)'s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at BBB-, with the outlook Positive. The ratings agency anticipated LENOVO GROUP to retain its leadership in the global PC market with progressively improving profitability.
THE PAVILIA FARM I, a property project on top of Tai Wai Station co-developed by NEW WORLD DEV (00017.HK) and MTR CORPORATION (00066.HK); has recorded over 15,000 subscription registrations for five days as of 7 pm yesterday (14 October), according to market sources. The property is expected to take the victory royale in terms of subscription on first-hand market this year.

PRE MARKET NEWS
Not in this mornings report
The PBoC today kicked off RMB500 billion MLF operation and seven-day RMB50 billion reverse repurchase, with their interest rates respectively at 2.95% and 2.2%.
MEITUAN-W (03690.HK) has set up a community group buying business as a top-tier strategic project within group according to Chinese reports.  This is MEITUAN-W's newly planned growth curve aside two of its major operations, namely food delivery and in-store, hotel & travel businesses.A US appeals court agreed to speed up the appeal on the Tik Tok Ban 

As USD/HKD triggered the Strong-side Convertibility Undertaking during New York trading hours, the HKMA undertook a US$714 million selling order to inject HK$5.534 billion into the market. The balance of the banking system of Hong Kong will increase to HK$310.109 billion on 16 October.

China Mobile Vice President Dachun Zhao said the group had met its full-year construction goal earlier on as of September, commissioning over 350,000 5G base stations for the achievement of commercial 5G in all cities above prefecture level and some key county seats, reported Sina Tech.

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