Oct 28 HK WRAP HSI -79pts T/O flat , Shorts 20%. Europe opened lower US Futures very weak
HSI -78pts (-0.3%) 24,709 HSCEI -40pts (-0.4%) 9,963 T/O HK$132.62bn (+1.6% DoD)
EUROPE Markets opened lower and initially trended lower before a bounce although that seems to be fading. Covid still the major concern. But also the fact there would be no US stimulus pre election and uncertainty over the US election result. All sectors in the red. Pfizer and BioNTech say the data on their late stage trial will not be available until after the election. Also worry markets was a comment that EU officials said a vaccine may not be available until 2022
Deutsche Bank Q3 Net Profit 182m Euro’s beating forecasts but the stock was still trading lower.
Data FRANCE Consumer Confidence Oct 94 vs 95 Sept (F/cast was 91)
US Futures opened -100pts traded to -150pts in early trades in Asia but at lunchtime they had eased to -118pts but with Europe opening lower they sold down to -467pts but now eased to -400pts with S&P and NDX lower too. Covid cases still key with some cities re-introducing social distancing measure. The election is less than a week away and with no clear leader many are looking to hedge positions.
Earnings still in focus after market there were good numbers from First Solar, AMD and Chubb but Microsoft’s guidance disappointed despite earnings and revenue beating.
Data MBA Mortgage Applications and 30 year Mortgage Rate, Goods Trade Balance, Wholesale Inventories, EIA Oil Report.
Key Earnings United Parcel, Boeing, General Electric, Ford, ServiceNow, Etsy, Pinterest
CHINA CSI 300 Closed +38pts (+0.8%) 4,737
opened slightly higher and saw a uptick before selling down to test 4,690 support a few times and then rallied into lunch. PM saw the market continue to work higher until around 2:15pm having tested the day high (4,753) the market sold back to 4,735 and then traded slightly higher into the closeFifth Plenum of the Nineteenth Communist Party Congress continues to Thursday.
Shanghai Composite Index +15pts (+0.1%) @ 3,269
Shenzhen Component Index +119pts (+0.9%) @ 13,388
ChiNext Index +20pts (+0.7%) @ 2,671
CHINA DATA None
HSI Pre Market Opened 24,774 -14pts vs +63pts @ 24,850 ADR’s E-Commerce names were higher but Chinese Financials were weak. Market trended lower to test 24,600 support, which it did a couple of times before trending higher into lunch in choppy trading. PM saw the market work higher to 24,845 around 2:15pm and having tested the resistance then trended lower to 24,675 around 3:30pm. Market then saw a small rebound into the close. E commerce still firm, Financials weak with HSBC giving up much of yesterday’s gains. Telcos also weak. Earnings in focus with a number reporting after the market
(See earlier email or visit the website to a list)
HONG KONG DATA
Centre for Health Protection said there were 2 new COVID-19 cases in Hong Kong today (vs 5 Tuesday) both imported.
SHORT SALES Wednesday 19.6% vs 18.3% Tuesday
Top Shorts Country Garden (2007) 43%, Bank of China (3988) 41%, HSBC (5) 37%, CCB (939) 37%, MTRC (66) 36%, Henderson (12) 34%, Hang Seng Bank (11) 33%, Galaxy Ent (27) 33%, ICBC (1398) 31%, Swire Pac A (19) 29%, Ping AN (2318) 29%, Wharf REIC (1997) 28%, BOC Hong Kong (2388) 26%, AIA (1299) 25%, HK & China Gas (3) 25%.
AFTER MARKET NEWS
SAN MIGUEL HK (00236.HK) announced that the business term of the Company’s indirect majority-owned subsidiary in the People’s Republic of China, Guangzhou San Miguel Brewery (GSMB), will expire on 29 November 2020 in accordance with GSMB’s Articles of Association and the Joint Venture Contract between San Miguel (Guangdong) (SMG) and Guangzhou Brewery (GB). As a result of the expiry of its business term, GSMB will cease operations on 30 November 2020. The company believes that the cessation of GSMB’s operations will not have any material effect on the operations of the Company and its subsidiaries.
SINOPEC CORP (386.HK) that in accordance with China Accounting Standards for Business Enterprises, net profit amounted to RMB23.507 bn, -45.7% yearly, during the nine-month period ended 30 September. In accordance with International Financial Reporting Standards, net profit reached RMB24.459 billion during the period.
CHINA COAL (01898.HK) result for the first nine months ended September 2020. The net profit amounted to RMB4.15 billion, -27.9% yearly. EPS was RMB0.31.
SINOTRANS (00598.HK) result for the first three quarters ended September 2020. The net profit amounted to RMB2.081 billion, down 1.7% yearly. EPS was RMB0.2812.
PICC P&C (02328.HK) results for the nine months ended 30 September 2020, the gross written premiums surged by 3.6% yearly to RMB344.881 billion. Net profit receded 21.1% annually to RMB17.344 billion.
Li Ka-shing and Victor T K Li, through Li Ka Shing Foundation Limited, acquired a total of 770,000 shares in CK ASSET (01113.HK) at the average price of HK$37.09, HK$37.1381, HK$37.425 and HK$37.024 per share on 21 October, 22 October, 23 October and 27 October 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset increased from 35.68% to 35.7%, and from 35.75% to 35.77%, respectively.
CHINA LIFE (02628.HK) results for the first three quarters of 2020, net profit amounted to RMB47.078 billion, -18.4% yearly. During the reporting period, the value of new business grew by 2.7% yearly.
CHINA LIFE (02628.HK) announced that the Company (as the Limited Partner) intends to enter into the Partnership Agreement with China Life Properties (as the General Partner) by 31 December 2020 for the formation of the Partnership. The total capital contribution by all partners of the Partnership shall be RMB9.001 billion, of which RMB9 billion shall be contributed by the Company and RMB1 million shall be contributed by China Life Properties. China Life Capital will serve as the manager of the Partnership. The investment by the Company in real estate projects located in first-tier and strong performing second-tier cities of the PRC through the Transaction will facilitate insurance funds to serve the real economy, offer support to the development of the emerging industries with national strategic importance, optimize asset allocation with the use of insurance funds, hedge against external risks, and increase investment return of the Company
India's Tata Group is in talks to acquire a controlling stake in the local online grocery store BigBasket, possibly by buying such shares from private equity funds and BABA-SW (09988.HK) in a deal that may reach US$500-700 million, people directly aware of the talks told foreign media.
Centa-Salesman Index (CSI) last stood at 53.30 this week, -0.75 pts weekly but standing firmly above 50. The index was hovering around 50 in the past five weeks, once peaking at 54.24 and bottoming at 53.28 but still waiting for a breakthrough. The property market will likely pick up if CSI surpasses 55 without pullback, opined Centaline Property.
JAPAN Opened lower 23,372 slightly better than the future indicted (23,335), then tested lower in early trading down to 23,350, before trending higher to 23,425 level before easing back with a small uptick into lunch. Afternoon opened higher but sold down to retest the morning low before then rebounding to 23,450 and easing back to close -0.3% @ 23,419
No data today but tomorrow we get Retail Sales pre market and then the BoJ Rate decision.
S KOREA Pre market Consumer confidence beat
Kospi opened lower at 2,324 and tested lower in choppy trading to 2,316 before rallying yesterday’s closing level. It then traded sideways around that level until around 1:30pm when it rallied to close +0.6% @ 2,345
Kosdaq opened higher and trended higher through the day to finish at the day high +2.9% @ 806
Consumer Confidence Oct 91.6 vs 79.4 Sept (F/cast was 81).
Tomorrow we get Business confidence.
TAIWAN opened slightly lower at 12,854 but did test yesterday’s close in early trading but lacked momentum to break out and reversed and trended lower, saw support around 12,800 for an hour but then sold off in the last 30 mins to end at the day low -0.6% at 12,794
CONNECT FLOWS (Lower DoD)
Northbound Rmb 34,845m Buy 17,269m vs 17,576m Sell
Southbound HK$ 16,291m Buy 4,491m vs 11,800m Sell
Northbound Rmb 51,011m Buy 25,566m vs 25,446m Sell
Southbound HK$ 12,225m Buy 5,030m vs 7,195m Sell
MEITUAN (03690.HK) +5.3%
HKEX (00388.HK) +3.5%
PING AN (02318.HK) -3.2%
TENCENT (00700.HK) +2.7%, hitting new high
BABA (09988.HK) +2.5%, hitting new high
CCB (00939.HK) -1.4%
AIA (01299.HK) +0.3%
HSI & HSCEI Constituents on the move
WH GROUP (00288.HK) +6.9%
CHINA UNICOM (00762.HK) -5%
PICC P&C (02328.HK) -3.6%
HSBC HOLDINGS (00005.HK) -3.4%
CHINA GAS HOLD (00384.HK) -3.3%
CPIC (02601.HK) -3.2%
SINOPEC CORP (00386.HK) -3.2%
CHINA TOWER (00788.HK) -3.1%
HSMI & HSSI Constituents on the move
CIMC (02039.HK) +9.2%, hitting new high
BYD COMPANY (01211.HK) +5.4%, hitting new high
COSCO SHIP HOLD (01919.HK) +2.1%, hitting new high
MARKET HOURS NEWS
Alibaba's Taobao and Tmall HK announced the launch of a Taobao live-streaming TV channel. A two-hour Cantonese live broadcast is scheduled every night starting from 31 October, revealed CK Chan, Head of Hong Kong & Macau for Tmall World. Above all, there will be a 27-hour-long uninterrupted live broadcast on 10 November, the eve of 11.11 Global Shopping Festival, he added.
LU Hong Kong said it nailed a strategic cooperation with ZA Bank, under which both parties will seek deep cooperation in various areas to bring diversified products and personalized services to customers so as to enhance user experience. LU Hong Kong also announced that both parties will jointly launch welcome offer. During the event of "iBond Plus" from today till 9:00 pm on 4 November, LU Hong Kong's new customers could be showered with 1,500 Asia Miles, on top of "iBond Plus" reward, if they make $10,000 transfer to LU Hong Kong's APP via ZA Bank.
Strategy Analytics, in its report, estimated global 5G smartphone revenue to hit US$34 bn in the first half of year. The 5G smartphone market kept growing despite the pandemic, headed by Samsung and Huawei. Apple is expected to outrun Samsung and Huawei following the iPhone 12 launch in the second half of year, likely taking the 5G crown soon.
ZA ONLINE (06060.HK) said the Company received the formal approval from the CSRC on the Application to convert 950 million domestic shares of the Company into H shares. The Approval shall be valid for 12 months from October 22, 2020. The Conversion and Listing is still subject to the performance of other relevant procedures required by the CSRC.
SINO LAND (00083.HK) Vice Chairman Daryl Ng, after shareholders' meeting, said the pandemic hit hard on all sorts of industries, where many companies weathered with economic headwinds this year. Regardless, the company will do its upmost in cost control, and pledge not to consider layoff easily. Painting bullish picture for local housing market, Ng said properties built on top of MTR stations have recently been well-received, indicating resilient rigid demand. Compounded with consistently low rate environment, the company will keep submitting land tenders in Hong Kong as usual. SINO LAND has so far not planned for asset disposal or privatization, Ng added. After the meeting Chairman Robert Ng depicted Hong Kong at a "golden era" now. Instead of being rattled or startled, the financial hub should take pride in being a neighbor of Shenzhen as the two regions can share their respective edges for mutual complement. He also advised Hong Kong's teenagers to seek jobs or development opportunities in Shenzhen or rest of China. Asked about SINO LAND's exclusion from HSI constituents, Deputy Chairman Daryl Ng replied that it is not the first time that the group was ousted from the family and that he is looking for rejoining after putting greater efforts.
HSBC spokesman said the bank has set aside over $100 billion funds as ANT GROUP (06688.HK)’s IPO subscription loans for individual customers since the subscription started yesterday (27 October). Customers are able to apply for the IPO loans via various channels of HSBC with the annual interest rate as low as 0.48%. As at 6 pm yesterday, the bank received over-$50-billion IPO loan applications.At 9:57am
SWIRE PACIFIC A (00019.HK), SWIRE PACIFIC B (00087.HK) and SWIRE PACIFIC PROPERTIES (1972) announced that trading in the shares has been halted with effect from 9:57 a.m. today pending release of reasons. Then announced over lunchtime the potential sale of CitiPlaza One. Rumour to be by GAW Capital for HK$10bn or HK$16,000 psf.
The Hong Kong Aircrew Officers Association (HKAOA) yesterday called on the Labour Department to take actions against CATHAY PAC AIR (00293.HK)'s recent restructuring.
On behalf of 2,200 Hong Kong-based pilots of CATHAY PAC AIR, HKAOA met with the labour watchdog and discussed its letter addressed thereto on 26 October, which questioned whether the local flagship airline has carried out the said restructuring in accordance with the Employment Ordinance. Without prior talks with the association on the plan, CATHAY PAC AIR executives accord employees ultra-short time to ponder over their new contracts, or they will be dismissed, which is by no means realistic or fair, said HKAOA Secretary General Chris Beebe.
China Resources announced commencement of a three-year large-scale recruitment. Under the program, the group will create 1,000 new positions in 2020, and around 2,000 in Hong Kong through 2022. Targeting last year and this year graduating students
PRE MARKET NEWS
Not in this mornings report
China Foreign Exchange Trade System announced today (28 October) that the central parity of USD/ RMB slipped 206 bps from the last trading day to 6.7195.
SINO BIOPHARM (01177.HK) announced that Tse Ping, senior vice chairman and executive director of the Company, purchased 3.852 million shares yesterday, involving HK$30.004 million.
EDAN Instruments (300206.SZ) has inked a strategic cooperation agreement with TENCENT (00700.HK) to drive long-term cooperation in smart medical field. The company reached a framework cooperation agreement for its ECG diagnosis business, with a bid to expedite the application of new generation of AI in medical machinery and equipment.
Ant Group (688688.SH) announced that 348 effective investors took part in the initial price indication of the blockbuster IPO, with 6,084 placing targets. Some private funds joined the investment through public offering channels as the strategic placing threshold of Ant Group is relatively high, Securities Daily quoted multiple private placing individuals.
CANSINOBIO-B (06185.HK) results for the nine months ended September 30, 2020. In accordance with the Chinese Accounting Standards for Business Enterprises, operating revenue added 194% yearly to RMB5.67 million. Loss deepened to RMB176 million from RMB93.47 million a year ago. LPS equaled 78 fen.