Oct 5 HK WRAP HSI +308pts, T/O -6%, Shorts @ +24%


07 Oct
Oct 5 HK WRAP HSI +308pts, T/O -6%, Shorts @ +24%

HSI +308pts (+1.3%) 23,768  HSCEI +51pts (+0.5%) 9,447 T/O HK$92.58bn (-5.8% DoD)  
As at 6pm HK time
EUROPE markets to opened higher with investors encouraged by Trump’s improving condition although the rise of covid cases in the US and France remains a concern. PMI data out today was slightly better than forecast +VE European & French retail sales also beat. But UK Car sales missed.Weir Group +17% in early trade after the sale of its oil and gas division. But Centamin -6% to extend Friday’s losses after warning of a hit to its gold production.
US Futures opened strongly with Dow futures +150pts and they climbed to +200pts before easing back to +175pts. S&P and NDX both +VE too. Trump's condition and the rising covid cases in the New York likely to over shadow the markets.Data due today Services and Composite PMI, ISM Non Manufacturing Data (Business Activity, Prices, New Orders, Employment, PMI).

HSI Pre Market Market opened +580pt @ 24,039 vs +209pts ADR’s @ 23,668 but then sold down nearly 300pts and then worked it way back up to the 23,800 level in choppy trading. PM opened flat but started to see weakness from about 3pm when it sold down to the 23,730 level before seeing a small bounce into the close. E Commerce, Financials and Property strong but SMIC and other tech names weak.

PICK 
Techtronics (669 HK) Spiked to HK$109.70 on the open but then sold down but held above HK$100 all day, rising after lunch to HK$104 before easing into the close at HK$103.50. I would still accumulate below HK$100.

SHORT SALES Monday 23.5% vs 17.7% Wednesday
Top Shorts Ping An (2318) 48%, HK & China Gas (3) 45%, CCB (939) 36%, Hang Seng Bank (11) 33%, BoC HK(2388) 33%, China Res Land (1109) 31%, NWD (17) 31%, Henderson Land (12) 30%, Sunny Optical (2382) 30%, AIA (1299) 29%, HSBC (5) 28%,Petrochina (857) 27%, Sands China (1928) 27%, BABA-SW (9988) 26%, Shenzhou Int (2313) 25%.

AFTER MARKET NEWS 
COUNTRY GARDEN (02007.HK) announced that for the single month of September 2020, the group achieved contracted sales of RMB64.63 billion, up by 25.30% year on year, with contracted sales GFA of 7.59 million square meters, up by 31.67% compared to September 2019.
S-ENJOY SERVICE (01755.HK) announced that Executive Director Qi Xiaoming had on 5 October 2020 purchased a total of 200,000 shares at an average price of HK$19.16 per Share on open market, for an aggregate consideration of HK$3.832 million.
Moody's in its report affirmed SHIMAO PROPERTY (00813.HK)'s corporate family rating at "Ba1", with the outlook moved up to "Positive" from "Stable", attributable to likely credit metrics improvement in the coming 12-18 months, driven by its strong sales over the past 1-2 years, and controlled debt growth.
MEITUAN-W (03690.HK)'s daily food delivery orders secured by errand runners burgeoned by 151% YoY on average during 1-3 October, according to Meituan Waimai's data. Of which, takeaway orders secured by hired queuers ballooned by 419%.
The Government announced that the inflation-linked bonds (iBonds) for 2020 will be open for subscription from 23 October until 2 p.m. on 5 November. The bond will have a denomination of $10,000 and a tenor of three years. The target issue size will be $10 billion, with a ceiling of $15 billion when necessary. The interest will be paid once every six months, with a floating rate linked to inflation, and a fixed rate of 2 per cent (raised from 1 per cent).

Regional Markets
JAPAN 
Opened higher following Friday’s sell off and worked higher in the first 30 minutes to the 23,360 level and traded slightly lower into lunch. PMI data beat forecasts helping sentiment. PM opened slightly lower but still trading sideways. Closed +1.23% @ 23,312
S KOREA Kospi opened slightly higher and traded sideways for the first 30 minutes but then rallied on the good Manufacturing PMI data and climbed to 2,360 level which has become resistance. For most of the day but was retested late afternoon and index saw a small flirt above to close +1.29% @ 2,358
Kosdaq opened slightly higher but sold down to day low 843 but then rallied on the good PMI data and worked its way to 855 level and then traded sideways around that level until about 1:30pm when it started to work higher to close at the day high +1.2% @ 858
TAIWAN Opened higher and rallied to 12,637 in the first 10 minutes but since then has trended lower and around midday was only slightly above Wednesday’s close and then traded slightly better to close +0.26% at 12,548
DATA 
Japan
Final Services PMI Sept 46.9 vs 45.0 Aug (F/cast was 45.6)
Final Composite PMI Sept 46.6 vs 45.2 Aug (F/cast was 45.5)
Services contracted at the weakest for 8 months. New business fell for a third month but at a slower pace. Overseas sales still subdued but the international travel restrictions and closing businesses impacting. Employment shrank. Imputes prices dropped for aa second month and cost savings were passed onto clients and some signs of discounting to stimulate sales. Sentiment strengthened to a 9 month high on hopes of a recovery.
S Korea 
Manufacturing PMI Sept 49.8 vs 48.5 Aug (F/cast was 48.1)
Contraction slowed to its slowest in 9 months as international supply chains re-open and lockdown restrictions eased. Output expanded for the first time since January and new orders fell by their least in 8 months. Despite new orders falling the least, export order were weak and job losses accelerated. Input prices rose slightly but selling prices fell due to competitive pressures. Businesses remain optimistic and expect output to rise in the next 12 months.
Taiwan 
Manufacturing PMI Sept 55.2 vs 52.2 Aug (F/cast was 50.0)
The strongest growth since March 2018; as covid restrictions are eased domestically and globally. Output rose on a substantial increase in new work; which hit a 32 month high. Export order growth was the fastest since June 2018 and employment rose for the first time since March; at the fastest pace in 30 months. Input prices rose at their sharpest for two years as raw material costs rose. Selling prices rose modestly with competition remain strong. Sentiment hit its highest for 8 months.
CHINA Market closed
HONG KONG Centre for Health Protection said there were 11 additional COVID-19 cases in Hong Kong today (vs 5 Sunday) 1 from an unknown source; 7 imported cases

Active Heavyweights
AIA (1299.HK) +3.7%
TENCENT (700.HK) +2.6%
BABA (9988.HK) +2.3%
MEITUAN (3690.HK) +1.7%
HKEX (388.HK) +1.2%
CCB (939.HK) -0.8%
PING AN (2318.HK) +0.8%

HSI & HSCEI Constituents on the move
ANTA SPORTS (02020.HK) +5.3%
CHINA LIFE (02628.HK) +4.7%
HANG LUNG PPT (00101.HK) +4.7%
GEELY AUTO (00175.HK) -4.4%
HSBC HOLDINGS (00005.HK) +4%
WHARF REIC (01997.HK) +3%
SHENZHOU INTL (02313.HK) +2.9%, hitting new high

HSMI & HSSI Constituents on the move
FIRST CAP GP (01269.HK) -25%
YANZHOU COAL (01171.HK) -12.8%
GCL-POLY ENERGY (03800.HK) +12.3%
BOSIDENG (03998.HK) +12.1%
C TRANSMISSION (00658.HK) +11.1%, hitting new high
CRRC TIMES ELEC (03898.HK) +10.6%
RAZER (01337.HK) +10.3%, hitting new high
LI NING (02331.HK) +7.6%, hitting new high
XINYI SOLAR (00968.HK) +6.2%, hitting new high

Market Commentary 
*HK BANKS FIRM on a positive outlook on CNY bond underwriting businesses.
STAN CHART (2888 HK +5%) on basis of underwriting Offshore CNY bond this year, with market share rising 0.82% points MoM to 10.32% market share.
HSBC (5 HK +4%) remained the top manager of CNY Bonds with market share of 17.6%; stock continues on a rebounding after falling to a 25-year low recently.
HANG SENG BANK (11 HK +0.8%) declared 3rd interim dividend of HK$0.8/shr vs HK$1.4/shr a year ago.
*E-COMMERCE/SOFTWARES MIXED as ByteDance still working with U.S. regulators to try and resolve outstanding security concerns over its planned sale of TikTok. The TikTok deal in the U.S. complicated further after news reported that a former Chinese govt official ran TikTok's content policy. The revelation raises questions about ByteDance's repeated denials that the Beijing government has any influence over operations.
ALIBABA (9988 HK +2%), TENCENT (700 HK +2.1%) JD (9618 HK +1%) NTES (9999 HK unch) KINGSOFT (3888 HK -3.3%).
FRIENDTIMES' (6820 HK -3%) as equity lock up expires on Thursday, Oct 8, a year after its IPO.
*TECH & COMPONENTS WEAK led lower by chipmakers, after SMIC (981 HK -4.7%) said its U.S. suppliers have been issued with letters telling them they are subject to additional export restrictions. The chipmaker is warning that the export restrictions the U.S. placed on its suppliers could have "material adverse effects" on its production & operations. HUA HONG (1347 HK -5.7%) FIT HON TENG (6088 HK -1.3%) SUNNY (2382 HK -2.3%) BYDE (285 HK -4%).
COWELL (1415 HK +10%) on speculation a special dividend may be declared today.
*MACAU WEAK as Sept gaming revenue dropped more than forecast, as visitation and hotel occupancy would remained soft untill a full resumption of mainland Chinese tourists visas. Gross gaming revenue -90% to 2.21b patacas YoY in Sept. Also announced visitors between 1-3 Oct -86% YoY
*HK PROPERTY FIRM as travel restrictions stimulated home viewings and transactions in the property market.
NWD (17 HK +0.13%) FY underlying profit at HK$6.59b missed lowest estimate. FY net income HK$1.10b, -94% YoY. It reported a final dividend per share HK$1.48.
WHEELOCK PROP collected about HK$143 million after selling 12 flats at seven projects in Tseung Kwan O over the past 4 days.
Li Ka Shing and Victor Li continue to raise their stakes in CK ASSET (1113 HK +0.8%), buying another 771,500 shs Sept 24-29.
*CHINA PROPERTY WEAK during the week-long National Day holiday, but SOHO CHINA (410 HK +8%) and was +22% intraday after Shanghai Stock Exchange disclosed earlier that SOHO CHINA and its subsidiary Beijing Wangjing Souhou Real Estate, will change the status of non-public issuance of corporate bonds in 2020 to "accepted", amount is 2b yuan.
*OTHER MOVERS: 
CRRC TIME (3898 HK +11%) on Star Board A-shr issuance plan.
XINYI SOLAR (968 HK +6%) announced fresh price increases. Raising average selling prices on 2- and 3.2mm glass products by 17% after a month-earlier increase of 11%-15%.


MARKET HOURS NEWS 
The Hong Kong Mortgage Corporation (HKMC) announced that the unaudited consolidated loss after tax for 1H 2020 was HK$197 million (profit after tax for 1H 2019: HK$247 million).
BABA-SW (09988.HK) and Dufry have agreed to form a Joint Venture to partner in the Chinese travel retail markets. The Joint Venture will be owned 51% by BABA-SW and 49% by Dufry, which is the world's largest duty-free retailer.
On the fifth day (5 October) of Chinese National Day holidays, Macao Security Police reported that there have been over 82,000 travelers via numerous ports in Macao as at 11:00 today since 1 October, over 58,000 of which were inbound (43,000 of which came from China), according to Radio Macau (TMD).
Hang Seng Indexes Company stated that the results of the 2020Q3 review of the Hang Seng Family of Indexes will be announced on 13 November 2020 (Friday). The constituent changes will be made to the Hang Seng Family of Indexes with effect from 7 December 2020 (Monday).
Savills: HK Retail Mkt Recovering from End-3Q20; Shopping Mall Rents Remain Stable. At the end of the third quarter, the retail leasing market showed signs of bottoming out and bouncing back along with marketing activities from some non-mainstream retailers, Savills said in a report. While the rents of some premium street stores slid 2% quarterly, shopping mall rents (underlying rents) stayed stable.
Savills: HK 4Q20 Home Rents to Keep Sliding as More Severe Layoff to Dampen Demands The local residential leasing market is set to be pressured in the fourth quarter of this year along with the traditional low season coinciding with economic recession, said Savills. As many companies are struggling with reliance on government handouts, more layoffs are possible next six months, which may cast notable negative impacts on local housing demands.
Sino Group stated that its shopping malls had reaped enthusiastic market responses from a series of marketing events launched over the four-day public holidays.
In particular, the patronage figure at TMTplaza, Olympian City and Citywalk averaged 33% growth as compared with general weekends, and merchants’ turnover up by around 30%.
CATHAY PAC AIR (00293.HK) is set to issue a letter of dismissal Monday to 700 pilots and 400 workers, and 1,500 flight attendants to possibly be sacked, according to online news, after it had informed cabin crew members via an internal notice that "roster adjustment" requests were suspended from this month. The local flagship carrier refused to comment on the speculation and rumors on street. CATHAY PAC AIR replied that no announcement will be made today.
On the first three days (1-3 October) of National Day Golden Week 2020, Hong Kong reported 5,585 tourist arrivals, among which 4,954 were local residents.
Cheung Kong Real Estate Investment Director William Kwok told a radio program last Saturday (3 September) that the upcoming six months could be a game changer to Hong Kong's market. He predicted the economy to turn to positive growth in mid-2021 with epidemic under control and launch of vaccine. As to housing prices, long-term low rate environment was expected to remain a bolster, despite a little volatility toward the year end. There will not be remarkable upswing until 2Q21, Kwok forecast, who measured housing prices to hike about 5-10% in the next year.
Macao Government Tourism Office announced a total of 58,300 inbound tourists on 1-3 October (Chinese National Day holiday), -87.2% YoY
Mox Bank, the virtual bank co-developed by PCCW (00008.HK), HKT-SS (06823.HK) and Ctrip, allegedly leaked user data. Hence, Mox Bank is probing the cause of a technical glitch discovered when preparing monthly statements for September, the lender replied to local media.
The Government is in active talks with Beijing and Macao to exempt individuals from 14-day mandatory quarantine by means of the "health code" system should they hold negative COVID-19 nucleic acid test results, as Matthew Cheung, Chief Secretary for Administration, wrote on his blog. The research that will allow Hongkongers residing in Mainland to return to Hong Kong free of mandatory quarantine has now come to the final stage, added Cheung.
33 new homes were transacted at the weekend, -90% WoW highlighted the lack of new projects, according to market sources. During the long holiday,
EVERGRANDE (03333.HK)'s Emerald Bay Phase 2 tracked 14 deals.
K. WAH INT'L (00173.HK)s Solaria sold 4 units.
HENDERSON LAND (00012.HK)'s Two.Artlane reported 8 sales.

PRE MARKET NEWS
Not in this mornings report

Hong Kong Monetary Authority will unveil details of the issue of a new batch of inflation-linked bonds (iBonds) this afternoon, having completed relevant preparations, wrote Financial Secretary Paul Chan in his blog. The guaranteed minimum interest rate will purportedly be fixed at 2%, higher than before.

Ant Group is seeking the approval from Chinese and Hong Kong regulators for going public, SCMP citing insiders. It is exploring price fixing and listing in both markets on the same day, while planning for an online roadshow. Given different listing procedures in China and Hong Kong, the group may see a delay in its listing schedule.

CIMC-TIANDA (00445.HK) announced that it has received a proposed privatization from Expedition Holding and CIMC (02039.HK)'s subsidiary Sharp Vision at a Cancellation Price of $0.266, representing a 20.4% premium from the closing price $0.221 prior to its share trading suspension. Upon the Scheme becoming effective, the listing of its shares on the Stock Exchange will be withdrawn. Trading in its shares has been resumed from this morning.

Prices for Apple's latest iPhone series were disclosed on Twitter, according to multiple reports. The 5.4-inch iPhone 12 Mini, having 64GB of storage, has the cheapest price at US$649 (around HK$5,062). The costliest 6.7-inch iPhone 12 Pro Max is priced at US$1,399 (around HK$10,900) for the 512GB version. The purported prices were consistent with market rumors back in May 2020.

On 1-3 October, China reported snowballing "staycation" consumption, Tencent Tech cited WeChat Pay data. The transaction amount via WeChat Pay in sightseeing and hotel industries surged 83.3% and 70.75% during the first three days of National Day holiday when compared with Labor Day holiday in May.

Macau's Gaming Inspection and Coordination Bureau (DICJ) had earlier announced that the gaming revenue for September slipped 90% YoY to MOP2.211 billion,


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