Oct 23 HK WRAP HSI +133pts, Shorts rise to 21% Market will be closed Monday
HSI +133pts (+0.5%) 24,919 HSCEI +40pts (+0.4%) 10,126 T/O HK$111.64bn (+4.1% DoD)
EUROPE Opened flat but trended higher on hopes of a US stimulus package agreement. Banks +VBE after good results from Barclays, Nordea Bank and Elis. Daimler raised its guidance. Flash PMI data was better than forecast for the most part and UK Retail sales beat
US Futures Opened Dow +44pts then eased to +22pts, at lunchtime Asia they were -23pts and now they are +100pts with S&P and NDX also +VE. Presidential debate didn’t have any knock out blows, traders still watching for news on the Stimulus package and covid.
Data Services, Manufacturing and Composite PMI (Flash), Baker Hughes Total Oil Rig Count
CHINA CSI 300 Closed -60pts (-1.25%) @ 4,719. Having opened slightly lower at 4,776 it rallied to 4,796 and then saw choppy sideways trading in that range into lunch. PM saw the market sell down to 4,725 level saw a bounce but then continued to sell lower, small bounce at the end but then a down tick into the close. Weakness in Semiconductor names after Intel numbers, concerns about vaccine quality and caution ahead of next weeks Fifth Plenum of the Nineteenth Communist Party Congress. China Life lead the declines
Huawei's revenue +9.9% YoY to RMB671.3 billion for the first nine months of 2020, slower than the 13% growth for the first half of 2020. Hurt by U.S. export curbs, together with weakened smartphone and telecom gear sales under COVID-19 outbreak
Shanghai Composite Index -35pts (-1%) @ 3,278
Shenzhen Component Index -268pts (-2%) @ 13,128
ChiNext Index -72pts (-2.7%) @ 2,601
HSI Pre Market opened @ 24,773 -13pts vs +118pts @ 24,773. Tested down to 24,700 before working higher through the morning to 12,970 level but unable to break above, and eased back into lunch. PM saw the market sell down to 24,800 level (Thursday’s close and then work back towards 24,960 but fell short and saw a small downtick in the closing auction. E-commerce names weak as Ant expected to unroll IPO next week with Nov 6 mentioned as a listing date; so some rotation expected.
HONG KONG DATA After market
Business Confidence Q4 -8 vs -11 prior (F/cast was -28)
Quarterly Business Tendency Survey Q4 2020. The survey gathers views on short-term business performance from the senior management of about 550 prominent establishments in various sectors in Hong Kong.
The proportion of respondents expecting their business situation to be worse (25%) in Q4 2020 over Q3 2020 is slightly higher than that expecting it to be better (17%). When compared with the results of the Q3 2020 survey, the proportion of respondents expecting a worse business situation in Q4 2020 as compared with the preceding quarter has slightly decreased to 25%, against the corresponding proportion of 28% in Q3 2020.
Centre for Health Protection said there were 4 new COVID-19 cases in Hong Kong today (vs 11 Thursday) 1 linked origin, 3 imported.
SHORT SALES Friday 21.3% vs 16.8% Thursday
Top Shorts Ping An (2318) 41%, Bank of China (3988) 34%, CCB (939) 32%, Galaxy Ent (27) 31%, ICBC (1398) 31%, MTRC (66) 30%, HK & China Gas (3) 29%, HSBC (5) 28%, Mengniu Dairy (2319) 28%, Sands China (1928) 26%, Country Garden (2007) 25%.
AFTER MARKET NEWS
K11 announced its formal foray into Shenzhen Prince Bay. Modeling its Hong Kong's flagship project Victoria Dockside, the Shenzhen's one-stop cultural and retail flagship integrated landmark elements - K11 Art Mall, Discovery Park and K11 ATELIER.
NONGFU SPRING (09633.HK) and ANDRE JUICE (02218.HK) will be added to the Southbound Trading of Shanghai-Hong Kong Stock Connect, with effect from the next trading day for the Stock Connect, announced Shanghai Stock Exchange.
EVERGRANDE (03333.HK) announced that on 23 October, the Company has redeemed an aggregate principal amount of US$1.565 billion of all outstanding 11% senior notes due 2020. EVERGRANDE shall pay off the debt of about $29.4 billion in ten days.
CHINARES CEMENT (01313.HK) announced the first three quarters result ended September 2020. The turnover +1.8% YoY to HK$27.201 billion. The net profit amounted to HK$7.393 billion, +27.6% yearly. EPS was HK$1.059.
The Hong Kong Monetary Authority (HKMA) announced that it designated nine authorised institutions as Primary Liquidity Providers (PLPs) for offshore renminbi (RMB) market in Hong Kong (i.e. CNH market) for another term of two years with effect from October 27, following the expiry of their current 2-year term of designation. They are: Agricultural Bank of China Limited, Bank of China (Hong Kong) Limited, Bank of Communications Co., Ltd., BNP Paribas, China Construction Bank (Asia) Corporation Limited, Citibank, N.A., Hongkong and Shanghai Banking Corporation Limited, The Industrial and Commercial Bank of China (Asia) Limited and Standard Chartered Bank (Hong Kong) Limited.
HSBC spokesman said iBond was overwhelmingly received on the first day of subscription, with the total application amount via HSBC more than that on the first sale day of 2016.
HSBC said it will set aside over $100 billion funds for customers to subscribe for the IPO of Ant Group.
While Chief Executive Carrie Lam had revealed her late October trip to Beijing to discuss measures good for Hong Kong's health, the trip may not be happening this month, as local media citing sources.
Centa-City Leading Index (CCL) last posted at 176.85, +0.58% weekly. Centaline Property, highlighted seven major indices surged altogether this week, representing the first time in 14 weeks. Besides, all of the four overall key indices rose, being the second time in three weeks, reflecting the market situation as of the week of Mid-Autumn Festival, which hinted at the trough-shunning prices.
JAPAN opened higher but sold down to Thursdays closing level on poor Inflation data and tested the support a couple of time before working higher into lunch After lunch opened higher but eased back to 23,550 level and traded sideways before selling down into the close: +0.2% @ 23,516. Tech mixed after the poor Intel numbers. Tokyo Electron -2.7%, Advantest -1.1%
Inflation Rate Sept 0.0% YoY vs +0.2% Aug (F/cast was +0.1%)
Inflation Rate Sept -0.1% MoM vs -0.1% Aug (F/cast was +0.2%)
Inflation Rate Ex Food & Energy Sept 0.0% YoY vs -0.1% Aug (F/cast was +0.0%)
Core Inflation Rate Sept -0.3% YoY vs -0.4% Aug (F/cast was -0.3%)
PMI Flash data
Services Oct 46.6 vs 46.9 Sept (F/cast was 47.6)
Manufacturing Oct 48 vs 47.7 Sept (F/cast was 48.5)
Composite Oct 46.7 vs 46.6 Sept (F/cast was 47.8)
S KOREA Markets opened higher but sold down before rallying back and trading sideways
Kospi opened at 2,365, sold down to 2,345 before rebounding to the day high 2,369 around midday but then trended lower to close +0.2% @ 2,361
Kosdaq opened at 818, sold down to 805 and then rallied back to 815, (just above yesterday’s closing level) before trending slightly lower to close -0.6% @ 808
SY Hynix +0.7% having opened lower, rebounded but sold down to the close, Samsung +0.2%
TAIWAN opened higher at 12,945, tested higher but then sold down to 12,880 level before rebounding to 12,910 level and then trading sideways to close -0.1% @ 12,899
After Market Retail Sales Sept +2.88% YoY vs 8.17% Aug (F/cast was +3.5%)
Industrial Production Sept +10.73% YoY vs +3.6% Aug revised (F/cast was +5.5%)
M2 Money Supply Sept +7.15% YoY vs 6.69% Aug (F/cast was +6.3%)
CONNECT FLOWS No Northbound flows as HK closed Monday
Southbound Rmb 11,420m Buy 4,438m vs 6,983m Sell
Southbound Rmb 8,848m Buy 3,894m vs 4,955m Sell
MEITUAN (03690.HK) -2.5%
PING AN (02318.HK) +2.3%
BABA (09988.HK) -0.7%
HKEX (00388.HK) -0.5%
TENCENT (00700.HK) -0.4%
CCB (00939.HK) +0.2%
AIA (01299.HK) -0.1%
HSI & HSCEI Constituents on the move
CHINA TAIPING (00966.HK) +8%
CNOOC (00883.HK) +7.3%
SINOPEC CORP (00386.HK) +6.7%
PETROCHINA (00857.HK) +6.5%
HANG SENG BANK (00011.HK) +5.6%
CHINA UNICOM (00762.HK) +4.1%
CPIC (02601.HK) +3.9%
ANTA SPORTS (02020.HK) -3.7%
PICC P&C (02328.HK) +3.4%
CHINA TELECOM (00728.HK) +3.2%
HSBC HOLDINGS (00005.HK) +3.2%
HSMI & HSSI Constituents on the move
ASIAINFO TECH (01675.HK) +12.1%
XIABUXIABU (00520.HK) +8.7%, hitting new high
COSCO SHIP HOLD (01919.HK) +7.9%, hitting new high
CNLP (01589.HK) +6.3%, hitting new high
*PETROCHEMS STRONG CNOOC (883 HK +7%), after reporting Q3 -27.7% to 36.33b yuan. Share price jumped on speculation its output growth is on track to hit the high end of 2020 guidance and similar production increases are on tap for next year. Production for all of 2021 seen rising 5%-6%, led by further ramp-ups and upcoming projects. PETROCHINA (857 HK +6.9%) SINOPEC (386 HK +7.3%).
*CHINESE FINANCIALS STRONG as the yuan held firm and high earnings hopes. But some banks did see increased shorting too
CITIC BANK (998 HK +2%) ICBC (1398 HK +1.3%) ABC (1288 HK +1.8%) BOCOM (3328 HK +2%).
INSURERS STRONG on recovery optimism with the improvement of the economy. NCI (1336 HK +4.2%) CH LIFE (2628 HK +2.4%) CHINA TAIPING (966 HK +8%).
*PHARMA/VACCINE WEAK on vaccine safety concerns, after 28 deaths were reported in South Korea following flu shots; although the authorities say there is no link. CSPC (1093 HK -3.4%) CANSINO (6185 HK -7%) INNOVENT (1801 HK -5.2%) PHARMARON BEIJING (3759 HK -4.6%).
SHANDONG XINHUA (719 HK -1.8%) said net profit attributable to the shareholders +2.03% YoY to 246.07m yuan for the nine months ended 30 September.
*E-COMMERCE WEAK Ahead of the ANT GROUP IPO which is expected to start next week. The expectation is that there will some rotation into the new stock from the existing players. ALIBABA (9988 HK -0.7%) JD.COM (9618 HK -2.1%) NTES (9999 HK -1.5%).
TENCENT (700 HK -0.35%)-backed Kuaishou, the major domestic rival of TikTok, press reports it is seeking a HK IPO as soon as Q1 2021
*PROPERTY MGMT WEAK Reported that investors had placed about HK$3.31b in orders for SHINAO SERVICES (873 HK), the property management unit of SHIMAO GROUP (813 HK -0.7%), meaning its retail portion was oversubscribed about 2.3 times. But rumours of HK$1,8b of retail orders being cancelled, after FIRST SERVICES (2107 HK -3.4%) dropped 27% to HK$1.76 on its trading debut yesterday and was weak again today:
EVERSUNSHINE SERV (1995 HK -0.7%) A-LIVING (3319 HK -0.3%) POLY PPT SERV (6049 HK -2%).
*HK PROPERTY FIRM CK ASSET (1113 HK +0.9%) has released the first price list of El Futuro in Sha Tin, involving 54 units at an average price of HK$17,730 psf after discount. HENDERSON LAND's (12 HK+1%) HK FERRY and Empire Group have released the first price list of the second batch of flats at Starfront Royale in Tuen Mun, offering 123 units at an average price of HK$14,585 psf after discount.
NWD (17 HK +0.5%) SINO LAND (83 HK +0.3%).
*TELCOS FIRM after CH TEL (728 HK +3.2%) said yesterday net profit +1.7% YoY to 18.71b yuan for the first three quarters this year. Operating revenues grew by 3.5% YoY to 292.61b yuan, of which service revenues were 280.87b yuan, +3.5%.
CH UNICOM (762 HK +4.1%) CH MOBILE (941 HK +0.8%).
*SPORTWEAR MAKERS WEAK as LI NING (2331 HK -1.5%)said that as of the end of September, the same store sales of the entire platform saw low single-digit growth YoY in Q3.
ANTA (2020 HK -3.7%) CH DONGXIANG (3818 HK- 2%).
*RAILWAY FIRM after CH RAILWAY CONS (1186 HK +7%) as Q3 orders +25% YoY continuing to good number seen in Q2 and it value of property construction contracts +54% on strong YTD real-estate investment. CH RAILWAY (390 HK +2.5%) CRRC (1766 HK +1.9%).
*AIRLINES FIRM as China plans to increase domestic flight services as the covid threat recedes and the economy recovers. AIRCHINA (753 HK +3.6%) CEA (670 HK +3%) CSA (1055 HK +3%). CATHAY PAC (293 HK +3.5%)
MARKET HOURS NEWS
Alibaba Cloud (Aliyun) revamped the home page of its official website thoroughly, according to Chinese media. The design and style were changed in a great way, oriented in bringing the concept of "one-stop online service + one-stop role matching + one-stop ecology". The report said the company added in the services sense and reduced the marketing sense.
The Government will provide the tourism sector with one-off subsidies to set the business in motion, with details coming next week, said Edward Yau, Secretary for Commerce and Economic Development. However, Yau found it impracticable for the Government to keep footing the bill over the long run, thus urging the travel industry to do its utmost.
CHINA OVERSEAS (00688.HK) announced that for the first nine months of 2020, the revenue of the Group’s operations was RMB118.3 billion, +12.1% YoY a year-on-year with operating profit was RMB38.82 billion, +1.9% YoY..
VINDA INT'L (03331.HK) said that LI Jielin, the Chief Executive Officer and an Executive Director of the Company, made on-market purchases of an aggregate of 200,000 shares in the Company today, involving $4.3401 million. Immediately after the said purchase, LI is interested in 200,000 Shares, representing approximately 0.02% of the total issued share capital of the Company.
The tender for the residential site at Tai Po Town Lot No. 241 in Tai Po Kau has been closed today's noon. According to on-site information, seven tenders have been received, including those from WANG ON PPT (01243.HK), COUNTRY GARDEN, SINO LAND (00083.HK), EASYKNIT INT'L (01218.HK) and K&K Property.The new batch of iBond is open for subscription from today (23 October) and end at 2 pm on 5 November. Numerous banks roll out offers to lure customers. HSBC said the interest rate is set at 0.9% p.a.. The minimum subscription amount is $50,000 and the maximum $20 million. HSBC customers can subscribe for the iBond via online banking, phone banking and the bank branches, entitled to waiver of charges, including handling fee and custody service charge.
Huawei took months to hoard numerous important radio frequency chips prior to Washington's sanctions, guaranteeing supply to Chinese operators inclined to 5G technology investment until at least 2021, Bloomberg reported. Before sanctions came into effect last month, TSMC had delivered over 2 million 7nm Tiangang chips to Huawei at the latter's request, according to insiders.
Ant Group and Merchantrade Strike Tech Partnership The collaboration allows customers of Merchantrade in Malaysia and Singapore to facilitate real-time remittances to Alipay users in China, with funds reaching bank accounts linked to their Alipay app.
HKEX (00388.HK) welcomed the first listings of Exchange Traded Funds (ETFs) in Hong Kong and Shenzhen under the Hong Kong-Mainland ETF Cross-listing Scheme, which facilitates cross-listing of ETFs between markets in Hong Kong and Mainland China. HKEX Chief Executive Charles Li said the ETFs listed today, two each at HKEX and the Shenzhen Stock Exchange (SZSE) under the ETF Cross-listing Scheme, mark the exciting next chapter in cross-border ETFs. The Scheme facilitates access to new but established pools of liquidity and offers broader investment opportunities in both markets.
BYD COMPANY (01211.HK) announced that it stroke a strategic cooperation with Chint Group for joint development in fields of energy storage, smart rail transit and semiconductor. To harness on its advantages of the R&D, production and integration of battery energy storage system, BYD COMPANY will help sustain Chint Group's pioneering position in industrial electrical appliances and new energy.
From 25 October 2020 to 27 March 2021, Civil Aviation Administration of China (CAAC) will ground the 2020/ 21 winter and spring flight schedule, which covers 94,809 passenger and cargo flights per week operated by foreign and domestic airlines across almost 200 countries. Under the 2020/ 21 schedule, there will be 86,735 domestic flights per week (excluding HKSAR and Macao SAR), up 20.2% from 2019/ 20.
CATHAY PAC AIR (00293.HK) restructuring plan requires retained employees will receive new contracts with wage cut by up to 36%, subject to unpaid leave.
PRE MARKET NEWS
Not in this mornings report
The UK Government announced that the Hong Kong BN(O) Visa will be open for applications from 31 January 2021. British National (Overseas) (BN(O)) citizens will be able to move to the UK, to study and work. The cost of the visa has been set lower than many other visas routes to the UK. A five-year visa will cost GBP250 (about HK$2,500) per person. Applicants will also be able to apply for a 30-month visa which will cost GBP180 (about HK$1,800) per person.
China Foreign Exchange Trade System announced today (23 October) that the central parity of USD/ RMB declined 147 bps from the last trading day to 6.6703.
PING AN (02318.HK)'s Lufax intends to go public in United States, raising up to US$2.36 billion in funds, reported Bloomberg. Lufax will issue 175 million American depositary shares (ADS) at US$11.5-13.5 each, raising US$2.01-2.36 billion, according its filings with U.S. SEC. The Shanghai-based platform expects to fix its price on 29 October and list on New York Stock Exchange on 30 October.
GDS-SW (09698.HK)'s international placing has been over-subscribed given overwhelming investor response, according to market sources. The subscription was also appreciated by premium long-term funds. The Chinese data center operator will have IPO ended on 27 October. The offer price will not exceed $86 per share. Entry fee is $8,686 per board lot.
Adidas will decide in the next few months whether to proceed with the Reebok disposal, Bloomberg citing sources. It reportedly plans to strike a deal as early as March 2021, which has drawn interest from ANTA SPORTS (02020.HK) and VF Corp, the owner of Timberland and North Face.
WANG ON GROUP (01222.HK) announced that during the period from 9 July 2020 to 22 October 2020, the Company disposed of:
An aggregate of 199,400 BABA-SW (09988.HK) Shares for HK$53.6 million.
An aggregate of 3.186 million XIAOMI-W (01810.HK) Shares forHK$60.8 million. And During the period from 26 June 2020 to 22 October 2020, an aggregate of 331,000 MEITUAN-W (03690.HK) Shares for HK$66.6 million. The Company is expected to recognise a gain of approximately HK$68.9 million.
SINOPHARM (01099.HK) results for the first three quarters ended September 2020. The net profit amounted to RMB4.958 billion, up 7.9% YoY Basic EPS. was RMB1.66.