Summary CHINA CSI 300 Closed +142pts (+3%) @ 4,823
HSI +531pts (+2.2%) 24,650 HSCEI +260pts (+2.7%) 9,879 T/O HK$140.29bn (+25% DoD)
As at 6:20pm HK time
EUROPE Markets opened mixed following Asia DAX and CAC slightly higher, FTSE slightly lower; German Wholesale Prices improved slightly. Markets trending higher on Chinese optimism but cautious ahead of Chinese Trade data tomorrow and US earnings getting underway Plus the fact that there is still no stimulus plan. Covid continues to overhang the markets too. Investors will be watching for any policy moves in the speeches by Schnabel and Lagarde.Data outGERMANY Wholesale Prices Sept -1.8% YoY vs -2.2% Aug (Sept 0% MoM vs -0.4% Aug)
US Futures opened flat and remained all day. Its Columbus Day (Federal Holiday) so expect lighter volumes. No data due. Investors will be watching for news on the stimulus negotiations, with caution ahead of earnings, the Apple launch event Tuesday and China Trade data Tuesday .
Market opened higher building on Friday’s strength. It traded higher through the morning and in the PM saw three waves of buying. The first two sold back down to the 4,800 level but the final wave into the close, held and the market closed at the day high. PBOC changed the rules on FX trading making it easier to short and hence easing pressure on Offshore Yuan. That is more a sign of USD weakness which is also benefiting stocks with USD debt. The the onshore yuan was at 6.7224 per dollar, vs below 6.7 last week. The offshore traded at 6.7188 per dollar.Also China unveiled the implementation of integrated reform for Shenzhen's pilot demonstration area and President Xi is due to visit this week for the 40th anniversary of the special economic zone. All seen as +VE.
Shanghai Composite Index +86pts +2.6% @ 3,358. T/O RMB 355.7bn (vs 264.2 bn Friday)
Shenzhen Component Index +418pts, +3.2%, @ 13,708. T/O RMB 615.7bn (vs 447.1 bn Friday).
ChiNext Index +104pts +3.9% @2,777, T/O RMB 296bn (vs 211.0 bn Friday).CHINA DATA due tomorrow pre market
Balance of Trade (F/cast $60bn was 58.93b in Aug),
Exports (F/cast +9% YoY was +9.5% Aug)
Imports (F/cast +0.5% YoY having been -2.1% in Aug))Data that could be released any time this week
Vehicle Sales Sept. Aug was +11.6% F/cast is +10.5%
FDI (YTD) Sept. Aug was +2.6% F/cast is +2.7%
New Yuan Loans Sept . Aug was CNY1280b F/cast is 1700b
Outstanding Loan Growth Sept. Aug was +13% YoY F/cast is +12.7%
Total Social Financing Sept. Aug was 3580b F/cast is 3200b
M2 Money Supply Sept. Aug was +10.4% F/cast is 10.3%HSI Pre Market opened +98pts @ 24,217 vs +97pts ADRs
. Handset equipment names were strong as AAC Tech on news of a fund injection and recent shorts in Sunny Optical were squeezed. E Commerce names were the leaders. Shenzhen concept names in focus too on the unveiling of the implementation of integrated reform for Shenzhen's pilot demonstration area. Market then rallied higher through the morning. News that President Xi would have a private meeting with Carrie Lam was seen as a positive endorsement of Hong Kong importance as a financial centre. Financials strong but Macau names remain weak. A number of smaller China names hitting new highs. Trend was for investors to buy H-shs as the A/H premium is at the highest level in years, Chinese equities listed in HK have underperformed their mainland peers this year. PM saw a small uptick as Europe came in but then traded sideways to the close
No data due for HK this week but investors will be watching for the China data, with trade data tomorrow pre market and new loans expected out sometime this week.HONG KONG DATA Centre for Health Protection said there were 11 additional COVID-19 cases
in Hong Kong today (vs 7 Sunday) I of unknown origin.PICK Techtronics (669 HK +0.8%)
Opened lower at HK$105 but worked higher. PM saw it trade 106.50 to 107.30. Next key driver will be US earnings and housing data.SHORT SALES Monday 17.7% vs 16.9% FridayTop Shorts
Hang Seng Bank (11) 60%, Wharf REIC (1997) 58%, Ping An (2318) 51%, China Res Land (1109) 46%, HSBC (5) 37%, Henderson Land (12) 35%, AIA (1299) 24%.AFTER MARKET NEWS YUEXIU PROPERTY (00123.HK) announced that the value of the aggregate contracted sales for the first nine months of 2020
amounted to RMB58.636 billion, +22%YoYHKMA announced that, as USD/HKD triggered the Strong-side Convertibility Undertaking during Hong Kong trading hours,
the HKMA undertook a US$870 million selling order to inject HK$6.743 billion into the market. The balance of the banking system of Hong Kong will increase to HK$286.882 billion on 14 October.Hong Kong Construction Industry Employees General Union (HKCIEGU) Proposes Salary Freeze for 15 Fields as Jobless Rate Hits 27.8%, Way Above Official Data.
It wrote in a report that workers from steel reinforcement fixing, scaffolding and 13 other construction fields will be subject to 1-year salary freeze, effective 1 November. The overall unemployment rate of the construction sector was 27.8%, higher than 11.1% as the Government announced, according to a survey HKCIEGU had in June-August done with over 17,000 members.Regional Markets
Pre market data was mixed and the market opened lower and sold down to 23,500 before finding support. Bounced back to just short of the opening level and sold down into lunch 23,543. PM opened lower but bounced to just short of the lunchtime close and traded sideways to close -0.3% @ 23,559. Investors cautious as tensions with China rise and they watch for US earnings and China lending data for indicators of how the recovery is unfolding.
Pre Market Data
Machinery Orders Aug -15.2% YoY vs -16.2% Jul (F/cast was -15%)
Machinery Ordres Aug +0.2% MoM vs +6.3% Jul (F/cast was -1.5%)
PPI Sept -0.8% YoY vs -0.6% Aug revised from -0.5% (F/cast was -0.3%)
PPI Sept -0.2% MoM vs +0.1% Aug revised from +0.2% (F/cast was +0.1%)
Bank Lending Sept +6.4% YoY vs +6.7% Aug (F/cast was +6.5%).
Out at 2pm Machine Tool Orders Sept -14.98% YoY vs -23.3% Aug (F/cast was -15%)S KOREA
Market re-opened higher following the good profit numbers from Samsung and LG. Only the BoK interest rate due Wednesday and Export/Import prices Friday along with Unemployment. So investors will be watching for US stimulus news and earnings.
Kospi It has effectively traded sideways in a tight range (2,409 - 2,393) which got tighter during the day to close +0.5% @ 2,404
Kosdaq opened higher but sold down first to 871 level (Thursday’s close) and then to 868 level which was Thursday’s support level and then rebounded back to 872 level and traded sideway’s for most the session before small rally at the end to close +0.2% @ 873.5TAIWAN
Market re opened higher after the good numbers from TSMC and ahead of the Apple launch on Tuesday. Tension with China seen to be rising as Tsai called for discussion but as equals; which China is unlikely to accept. Market trended lower through the morning with support around the 12,900 and from there worked slightly higher to close +0.53% @ 12,956No data due this week.CONNECT FLOWS Shenzhen flow increase significantly
Northbound Rmb 48,182m Buy 20,599m vs 27,583m Sell
Southbound Rmb 15,010m Buy 5,601m vs 9,410m Sell
Northbound Rmb 69,281m Buy 31,377m vs 37,904m Sell
Southbound Rmb 14,966m Buy 5,658m vs 9,308m SellActive Heavyweights
CCB (939.HK) +5.6%
TENCENT (700.HK) +3.2%
BABA (9988.HK) +2%
MEITUAN (3690.HK) +1.9%
PING AN (2318.HK) +1.8%
HKEX (388.HK) +1.3%
AIA (1299.HK) +0.9%HSI & HSCEI Constituents on the move
XIAOMI-W (01810.HK) +8.4%
CHINA UNICOM (00762.HK) +7.6%
PSBC (01658.HK) +6%
WUXI BIO (02269.HK) +5.8%, hitting new high
ICBC (01398.HK) +5.7%
CHINA TELECOM (00728.HK) +5.6%
CITIC BANK (00998.HK) +4.7%
ABC (01288.HK) +4.5%
BANK OF CHINA (03988.HK) +4.2%
CPIC (02601.HK) +4%
GEELY AUTO (00175.HK) +3.9%
CM BANK (03968.HK) +3.9%
BANKCOMM (03328.HK) +3.7%
MINSHENG BANK (01988.HK) +3.6%
CITIC (00267.HK) +3.2%HSMI & HSSI Constituents on the move
FIRST CAP GP (01269.HK) +61.3%
XTEP INT'L (01368.HK) +17.5%
KB LAMINATES (01888.HK) +13.7%, hitting new high
HUA HONG SEMI (01347.HK) +12.6%
TEXHONG TEXTILE (02678.HK) +12.4%
INNOVENT BIO (01801.HK) +11.1%, hitting new high
CHINA LIT (00772.HK) +6%, hitting new high
GREATWALL MOTOR (02333.HK) +5.3%, hitting new highMarket Commentary
*CHINA BANKS FIRM
on expectation of good new loans data; ICBC (1398 HK +5.7%) but off highs after trading at the biggest discount to its Shanghai shares since early 2018. PBoC also said it will maintain “normal” monetary policy for as long as possible. Policy makers plan to encourage a “reasonable” increase in household savings and incomes, PBOC Governor Yi said.*HK PROPERTY FIRM
as the first batch of flats at The Pavilia Farm atop Tai Wai Station was 21 times oversubscribed with NWD (17 HK +1.3%) receiving 4,000 checks for the 180 units offered, while homebuyers thronged the sales office to see the show flats.
Li Ka-shing and Victor Li have added to their stakes in CK ASSET (1113 HK +0.26%)
SHKP (16 HK +0.4%) plans to build grade A offices and retail infrastructure in West Kowloon, on top of HK West Kowloon Station – an area of 632,000 sq ft – it bought in November last year for HK$42.23b.*CHINA PROPERTY WEAK
tepid contracted sales and news that several of CH EVERGRANDE (3333 HK -1.3%)’s largest lenders are reducing their exposure to the debt-laden developer, underscoring persistent concerns about the company’s financial strength despite its recent deal with investors to avert a cash crunch.
SHIMAO SERVICES (813 HK -0.9%) Sept contracted sales +0.37% YoY to 32.1b yuan.
MIDEA (3990 HK -0.2%) said contracted sales for the first 9 months +18.4% YoY to 83.83b yuan.*TECH & COMPONENTS FIRM
as XIAOMI (1810 HK +8.4%) after announcing the launch of UWB (Ultra Wide Band) technology, its positioning capability can make the mobile phone point to other smart devices.
SUNNY OPTICAL (2382 HK +0.6%) on good handset lens sets shipments which grew by 15.5% YoY to 168m units last month. Shipment of vehicle lens sets +32% YoY to 6.37m units in Sept, shipments of handset camera modules +21.9% YoY to 58.96m units last month.
Sector generally +VE on speculation of positive policies for techs, with President Xi to make Shenzhen a global tech hub during his visit this week. HUA HONG (1347 HK +12.6%) QTECH (1478 HK +3.4%).
SMIC (981 HK +11.5%) as Innosilicon has completed the world's first chip tape-out and testing based on SMIC (00981.HK)'s FinFET N+1 advanced technology. All IPs are home-grown, having passed the one-off functional testing.*AUTOS FIRM
as GREAT WALL AUTO (2333 HK +5.3%) vehicle sales +17.79% YoY to 117,812 units in September.
GEELY (175 HK +3.9%) GAC (2238 HK +0.15%) DONGFENG (489 HK +1.6%) BYD (1211 HK+5.4%).*PHARMA STRONG.
INNOVENT (1801 HK +11%) after its rituximab injection, co-developed with Eli Lilly, has been officially approved by the National Medical Products Administration (NMPA) of China.
SINO BIOPHARM (1177 HK +0.7%) said its "Canagliflozin Tablets" (brand name: Sailiping), a type 2 diabetes drug, has obtained drug registration certificate granted by the NMPA of China.
CANSINO (6185 HK+3.4%) to start vaccine trial in Mexico, Chile, and Argentina. The trial will last three to six months.*BREWERIES WEAK
as Yanjing Brewery (000729.SZ) last week announced that the company's chairman and general manager, was recently investigated by the relevant department for alleged violations of the law and was unable to perform his duties normally. TSINGTAO (168 HK -0.5%) CR BEER (291 HK -2.4%) BUDWISER APAC (1876 HK -3.3%).*SPORTWEAR MAKERS FIRM
as XTEP (1368 HK +17.5%) after announcing its celebrity spokesperson, Nicholas Tse, has agreed to subscribe to 5m new shares and work on design of new products. LI NING (2331 HK +4.5%) ANTA (2020 HK +1.8%).MARKET HOURS NEWS A Chinese broadcasting network company held the opening ceremony in Beijing,
marking the official birth of China's fourth biggest telecom operator, reported Jiemian. The company completed the business registration on 25 September, with a business license and a registered capital of RMB101.2 billion. Of which, BABA-SW (09988.HK) and State Grid respectively contributed RMB10 billion of funds.EVERGRANDE (03333.HK)'s subsidiary Hengda Real Estate Group plans to issue RMB2-billion corporate bond this week
with a term of five years, Bloomberg cited people familiar with the matter. The reference interest rates range 5.5-7.5%, subject to the market environment.NEW WORLD DEV (00017.HK) will in phase donate 3-million sq. ft. agricultural sites
at Ngau Tam Mei and Fan Kam Road to non-profit organizations for building transitional houses, where over 2,000 units may be available, local media citing market rumors. The local developers remained yet to respond to our reporters' inquiries.Carrie Lam: Policy Address Announcement Initially Postponed to No Later Than End-Nov. Also
announced that she would lead a Government delegation to the Shenzhen 40th Anniversary event this week at which she is expected to have a private meeting with President Xi. Later in Oct she will discuss go to Beijing to discuss with the Central Authorities plans for Hong Kong.Whilst in the past Hong Kong has the semblance of autonomy there are now clear signs that Beijing intends to stamp its authority on Hong Kong
.BYD COMPANY (01211.HK) is speeding up the production of Han and Tang models,
starting to deliver large orders for the flagship vehicles this month, said BYD Auto Sales General Manager Zhao Changjiang.Innosilicon has completed the world's first chip tape-out and testing based on SMIC (00981.HK)'s FinFET N+1 advanced technology.
All IPs are home-grown, having passed the one-off functional testing.XIAOMI-W (01810.HK) announced the launch of Ultra Wide Band (UWB) technology,
Chinese media reported. The Chinese electronic giant called it a brand new connection technology like "indoor GPS".Triller, a major competitor of TikTok, has tapped Farvaliar Partners for its planned U.S. IPO
by means of merger with a special purpose acquisition company, as Reuters learnt from insiders. The company is meanwhile in talks for US$250-million financing, led by UBS.Frank Chan, Secretary for Transport and Housing, said the authority is planning to launch approximately 4,700 flats
under Green Form Subsidised Home Ownership Pilot Scheme (GSH) in the coming few months, in addition to 39 retrieved units at Tenant Purchase Scheme (TPS) estates.
China Foreign Exchange Trade System announced today (12 October) that the central parity of USD/ RMB surged 670 bps
from the last trading day to 6.7126, setting an almost-1.5-year high.BONJOUR HOLD (00653.HK) set up two financial arms in August,
namely Bonjour Technology Development and Bonjour Financial Services, possibly intending to tap the financial business, local media citing Companies Registry's information. One director of Bonjour Financial Services is Kwan Tat Cheong, the former BANK OF E ASIA (00023.HK) executive who was appointed as an executive director of BONJOUR HOLD in August. BONJOUR HOLD declined to comment on the news.PRE MARKET NEWS
Not in this mornings reportCHINA VANKE (02202.HK) January to September of 2020,
the Company achieved an accumulated contract sales area of 32.648 million sq. m. +6.6% YoY and a contract sales amount of RMB492.76 billion, +3.6% yearly.GREENLAND HK (00337.HK) announced the plan to acquire Guangzhou Greenland Real Estate Development Co.
from controlling shareholder Greenland Holdings (600606.SH) at RMB7.26 billion.GOLDIN FIN HOLD (00530.HK) announced that on 7 October 2020,
the Company received an email from its agent in Bermuda enclosing a copy of the petition dated 7 August 2020 presented by DB Trustees (Hong Kong) Limited (Petitioner) to the Supreme Court of Bermuda for purported winding-up of the Company. The returnable date of the Petition was marked at 9:30 a.m. on 9 October 2020 (Bermuda time), that is, two days after the receipt of a copy of the Petition by the Company through its agent. Since the Company had only received a copy of the Petition at the time indicated above, there was insufficient time for the Company to have a full comprehension of the effect of the Petition. The Petition Hearing was subsequently adjourned to 30 October 2020.Huawei topped the chart of Hurun China 10 Most Valuable Consumption Electronic Companies 2020
with a value of RMB1.1 trillion, preceding XIAOMI-W (01810.HK) with a value of RMB434 billion.General offices of the Communist Party of China Central Committee and the State Council published the implementation plan for integrated pilot reforms to build Shenzhen
into a demonstration area of socialism with Chinese characteristics (2020-2025). The city will hence be granted with greater autonomy in pivotal fields and key links.Shanghai Municipal Government entered into a strategic cooperation agreement with BABA-SW (09988.HK) and Ant Group,
whereby the three parties will embark on cooperation in new economy, digital infrastructure, fintech and such other fields.China Merchants Group signed a comprehensive strategic cooperation deal with BABA-SW (09988.HK) and Ant Group in Hangzhou.
The parties will leverage their existing industrial, financial and internet layouts, share advantageous resources to push for in-depth collaboration in industrial internet, financial services, integrated logistics, emerging sectors and other business fields.