Oct 27 HK WRAP HSI -135pts, T/O +17% DoD Ant Road Show Europe selling off

30 Oct
Oct 27 HK WRAP HSI -135pts, T/O +17% DoD  Ant Road Show Europe selling off

HSI -135pts (-0.5%) 24,783 HSCEI -120pts (-1.2%) 10,005  T/O HK$130.52bn (+16.9% DoD)  

EUROPE FTSE and DAX open slightly higher but CAC lower as PPI missed. But trending lower with new record cases of covid in US, Russia and France and the UK on its highest alert. Brexit concerns also in focus as the EU’s negotiator travels to London. Earnings also in focus; Santander up after Q3 core profits trebled YoY. HSBC up as Q3 Net Profit beat forecasts easily. Good results also from Swedish Match and Capgemini. But Austrian retail bank Bawag and Finnish forestry firm UPM both fell more on poor earnings.
Loans to Households Sept +3.1% YoY vs +3% Aug (F/cast was +2.8%)
Loans to Companies Sept +7.1% YoY vs +7.1% Aug (F/cast was +7.5%)
M3 Money Supply Sept 10.4% YoY vs +9.5% Aug (F/cast was +10.1%)
PPI Sept +0.2% vs +0.1% Aug (F/cast was +0.3%)
Unemployment Benefit Claims, Jobseekers
UK CBI Distributive Trades

US Futures Opened flat in Asian time but have risen during Asian trading to +73pts with S&P and NDX also +VE. I would expect a weak open with covid still an overhang on the market.
AHEAD Durable Goods Orders Data, Redbook, Case Swiller Home Prices, Home Price Index, Consumer Confidence, Richmond Fed Manufacturing Index, API Crude Oil Stock Change.
Key Earnings Pre market 3M, Caterpillar, Pfizer, Merck, Eli Lilly.
During trading Stanley Black & Decker, BP, Harley Davidson, JetBlue, Raytheon Tech
After Market Microsoft, AMD, Chubb.

CHINA CSI 300 Closed +8pts (+0.2%) 4,699  
CSI 300 opened lower Industrial Profit data was worse than F/cast but market rallied into the green on the hope of more stimulus but it was short lived and the market then trended lower to the day low of 4,672 just before lunch. PM market opened higher and traded up into the green; day high was 4,708 around 2:15pm, then saw a pull back before tested support at 4,696 before a small uptick into the close.Fifth Plenum of the Nineteenth Communist Party Congress continues to Thursday.
Shanghai Composite Index +3pts (+0.1%) @ 3,254
Shenzhen Component Index +78pts (+0.6%) @ 13,269
ChiNext Index +33pts (-1.3%) @ 2,651

CHINA DATA on market open
Industrial Profits Sept (YTD) -2.4% YoY vs -4.4% Aug (F/cast was -1.6%)

HSI Pre Market re-opened @ 24,839 -78pts vs -166pts @ 24,752 ADR's with BABA weak as Ant IPO starts but HSBC slightly up ahead of results. Then saw choppy sideways trading initially but then around 10:15am having failed to break higher for the second time the market sold down to 24,600. It tested the support a couple of times and saw a small uptick into lunch. After lunch with the good HSBC results market worked back to trade around the 24,800 level for the rest of the afternoon

IPO SIMCERE PHARMA (02096.HK) debut closed at $10.98, down $2.72 or -19.9% against the listing price of $13.7, on volume of 125 million shares and turnover of $1.369 billion. Excluding the handling fees, a book loss of $2,720 was reported per board lot of 1,000 shares.

HONG KONG DATA After market
Balance of Trade Sept HK$-12.7b vs -14.6b Aug (F/cast was -5b)
Export Sept -9.1% vs -2.3% Aug
Imports Sept +3.4% vs -5.7% Aug

Exports beat; driven by those going to the mainland, with moderate growth for those going to the USA with those to the EU saw a smaller decline.
Centre for Health Protection said there were 5 new COVID-19 cases in Hong Kong today (vs 8 Monday) all imported.

SHORT SALES Tuesday 18.3% vs 21.3% Friday
Top Shorts Galaxy Ent (27) 35%, Bank of China (3988) 32%, CCB (939) 30%, Henderson (12) 30%, Hang Seng Bank (11) 28%, CLP (2) 28%, Swire Pac A (19) 28%, Sinopec (386) 25%, ICBC (1398) 25%, China Mobile (941) 25%.

HSBC HOLDINGS (00005.HK) Group CEO Noel Quinn, at the analyst conference call, said the group is poised to extend its presence in Asian market. Given market share gain in local insurance, the bank will keep making related investment in Hong Kong, as well as other markets, such as Singapore, India and China. It will also explore Asian private banking business and expand customer manager team, especially in South Asia and China. The group said in its report that it will seek to pay a conservative dividend for FY2020 if circumstances allow. Group Chief Financial Officer Ewen Stevenson responded that it is the group's top priority to resume dividend pay, before considering buyback if it has spare capital.
NCI (01336.HK)  announced first three quarter results ended September 2020. Operating income rose 27.8% yearly to RMB169.772 billion. Net profit amounted to RMB11.105 billion, down 14.6% yearly. EPS equaled RMB3.56.
PING AN 1-3Q NP -20.5% to RMB103.041B
WH GROUP (00288.HK) announced first three-quarter results ended September 2020. Before biological fair value adjustments, revenue +9.2% yearly to US$18.767 billion. Net profit amounted to US$890 million, +8.5% YoY EPS equaled US6.04 cents. EBITDA +12.82% to US$1.953 billion.
CHINA LONGYUAN (00916.HK) nine-month results ended September 2020. Revenue +0.1% yearly to RMB19.986 billion. Net profit amounted to RMB3.899 billion, +11.1% YoY
At ANT GROUP (06688.HK)'s roadshow today, CFO Cyril Han said the share should have been reasonably priced as investors broadly recognize the sustainable growth outlook and long-term investment value of the company, cited Chinese media. Hao Huang, President of the digital finance business group, told Chinese media It is strategically and profoundly partnered with banks to strive for win-win outcomes,. Leveraging on the group's technological edges and banks' financial strengths, the two parties will reach out to and serve millions of consumers and small-and-micro enterprises at a higher efficiency and, yet, lower costs, opined Huang. Executive Chairman Eric Jing believes that blockchain is a trusted new infrastructure in the digital era and that the core value lies on reconstructing a cross-party trust system. The group has seized the top spot worldwide for four consecutive years in terms of application. volume of blockchain patents, added Jing. It is interesting that they mention partnering with Banks for win win, because that is an area that US sanctions could hurt them. Also a number of the banks they have currently partnered with in Asia are not leaders which could also slow the build out of that business.

Regional Markets
opened lower following the US and tested down to 23,300 before rebounding and working higher but resistance around 23,450 about 50pts of Monday’s close. PM session opened lower, but then worked higher to close at the day high basically flat -8pts
S KOREA Pre market GDP growth data showed a slight improvement. Large caps mixed with Samsun and Hynix both slightly lower. Samsung Electronics licensed by US, allowing it to go on supplying particular display panel products to Huawei. But Hyundai and Kia higher despite poor headline numbers due largely to a huge provision. Moderate turnover. Covid concerns dominating trading
Kospi opened opened at 2,329 and tested to 2,321 before working higher and back into the green briefly. But around 1pm trended lower again and sold down to the day low (2,321 before a small bounce to close -0.6% @ 2,331
Kosdaq opened around the lows but has rallied strongly with resistance at 794 which it tested a coupled of times, the second around 1pm after which it sold down to 775 level before a bounce to close +0.7@ @ 784
Data pre market
GDP Growth Rate Adv Q3 -1.3% YoY vs -2.7% prior (F/cast was -1.5%)
GDP Growth Rate Adv Q3 +1.9% QoQ vs -3.2% prior (F/cast was +1.6%)
TAIWAN opened lower and traded down to 12,820 level before rebounding but resistance currently around the 12,880 level. Traded sideways from around 10am with a small rally at the end to close -0.3% @ 12,875

Northbound Rmb 41,783m Buy 22,471m vs 19,312m Sell
Southbound HK$ 14,135m Buy 5,005m vs 9,130m Sell
Northbound Rmb 55,630m Buy 28,554m vs 27,076m Sell
Southbound HK$ 13,553m Buy 5,503m vs 8,050m Sell

Active Heavyweights
TENCENT (00700.HK) +4.2%, hitting new high
CCB (00939.HK) -3.3%
AIA (01299.HK) -2.2%
PING AN (02318.HK) -1.9%
MEITUAN (03690.HK) +1.4%
HKEX (00388.HK) -0.9%
BABA (09988.HK) +0.7%

HSI & HSCEI Constituents on the move
CHINA RES LAND (01109.HK) -5.2%
HSBC HOLDINGS (00005.HK) +4.8%
PSBC (01658.HK) -4.7%
CHINA LIFE (02628.HK) -4.4%
CNOOC (00883.HK) -4%
SHIMAO GROUP (00813.HK) -4%
ICBC (01398.HK) -4%
COUNTRY GARDEN (02007.HK) -3.8%
CHINA TAIPING (00966.HK) -3.8%
CITIC BANK (00998.HK) -3.8%
SUNAC (01918.HK) -3.6%
XIAOMI-W (01810.HK) -3.4%
HANG LUNG PPT (00101.HK) -3.3%
MINSHENG BANK (01988.HK) -3.1%
PICC P&C (02328.HK) -3.1%
CHINA VANKE (02202.HK) -3%

HSMI & HSSI Constituents on the move
XIABUXIABU (00520.HK) +6.9%, hitting new high
CIMC (02039.HK) +4%, hitting new high
COSCO SHIP HOLD (01919.HK) +1.3%, hitting new high

ANT GROUP (06688.HK) CEO Simon Hu said digital currency is positioned as M0 under a two-tier operating system, reported China Business Network. Supposing Alipay and other mobile e-wallets are examples of financial infrastructure, digital currency would be a payment tool and what's inside of a wallet. Digital currency has been a positive increment for the group in the course of DCEP R&D, helped by the deep involvement of MYbank, Hu added.
HENGTEN NET (00136.HK) announced that in order to maintain sufficient public float upon full exercise of the Warrant Shares, the Company may place new Shares to potential investors, or the existing Shareholder(s) may sell further Shares to the public. It had earlier announced that its subsidiary Power Wave Holdings had acquired all stakes in Jingxiu, Beijing Xiaoming and Shanghai Ruyi, which are engaged in the contents development, production, service provision in the Chinese telecommunication industry, etc..
The anti-plague measures for local restaurants will be relaxed to allow a table to serve six customers, whereas that for bars will be eased to four people. However, no customers are permitted to eat at places other than their designated tables.
HSBC announced that for the first three quarters of 2020, the reported profit before tax -57.1% yearly to US$7.392 billion. Adjusted profit before tax -43.8% annually to US$9.939 billion. Change in reported expected credit losses and other credit impairment charges reached US$7.643 billion during the period, above US$2.023 billion for the same period a year ago. Q3 PBT -36.4% YoY to US$3.074 billion, vs street forecast US$1.765-2.419 billion During the period, reported expected credit losses and other credit impairment charges was US$785 million, lower than US$883 million a year ago and the expected US$1.638-2.458 billion in consensus.
ANT GROUP (06688.HK) weighs to close the institutional investor order book a day earlier on Wednesday (28 October), making the concurrent closure in Hong Kong and Shanghai, Bloomberg cited sources. As at 10:30 pm yesterday (26 October), the offering for H shares of the group by institutions notched over-US$100-billion subscription, representing an overshoot of five times against the international placing, as Chinese media cited market sources.
Lotte Online Duty Free is introducing Huabei, the key consumer credit product of ANT GROUP (06688.HK), to woo more young Chinese consumer groups. Huabei, a digital unsecured revolving credit product with similar functionality to a credit card, has gained popularity among youngsters for its low application threshold.
XIAOMI-W (01810.HK) Vice President Lu Weibing disclosed that the company will retain RMB1-billion-omni-channel subsidy during 11.11 Shopping Craze for 500 smart items, with an aim to drive the universal popularity of intelligent lifestyle given utmost discounts.
BOCOM INTL (03329.HK) announced that Hainan BOCOM International Science and Technology Innovation Shengxing Equity Investment Partnership (Limited Partnership), a wholly-owned subsidiary of the Company, and ANT GROUP (06688.HK) and the A Shares Underwriter entered into the Strategic Subscription Agreement for a subscription amount of RMB600 million.
OPEC said the coronavirus pandemic may keep the oil market further away from a recovery. A rebound in demand had been anticipated in the second half of 2020, but economic and demand recovery turned out sluggish. Nevertheless, oil producers do not expect a renewed oil-price collapse in the second quarter.
ANT GROUP (06688.HK) initiates public offering today (27 October). As at 10:30 pm yesterday (26 October), the offering for H shares of the group by institutions notched over-US$100-billion subscription, representing an overshoot of five times against the international placing, as Chinese media cited market sources.China Foreign Exchange Trade System announced today ((27 October) that the central parity of USD/ RMB declined 264 bps from the last trading day to 6.6989.

Not in this mornings report
ZHAOJIN MINING (01818.HK) announced first three quarter results ended September 2020. Net profit amounted to RMB891 million, up 181.1% yearly. EPS equaled RMB0.27.
CHINA SHENHUA (01088.HK)  announced the results for the first three quarters ended September 2020. The net profit amounted to RMB32.578 billion, down 10.1% yearly. EPS was RMB1.638.
The PBoC announced that it will today commence 7-day RMB100-billion reverse repurchase operation. As RMB70-billion reverse repurchase is falling expired, the intra-day net capital injection amounts to RMB30 billion.
ALI HEALTH (00241.HK) issued a POSITIVE PROFIT ALERT, expecting the profit for the six months ended September 30, 2020 to likely to be not less than RMB200 million, as compared with a loss for the period of RMB7.6 million for the corresponding six months ended September 30, 2019.
BABA-SW (09988.HK) and BMW recently signed a strategic cooperation MOU in Beijing.   Accordingly, BMW and BABA-SW will join hands to launch the first online sales and services business for dealers among premium auto brands, in order to offer a seamless end-to-end online-to-offline digital experience.
BABA-SW (09988.HK) co-founder Jack Ma delivered a speech at the 2nd Bund Summit in Shanghai, saying digital currency may redefine currency, reported Shanghai Securities News. Ma suggested digital currency is far from reaching the time to meet the standard, instead it is time to create value and consider how to build a new type of financial system using digital currency.
Las Vegas Sands (LVS.US), the parent of SANDS CHINA LTD (01928.HK), is exploring disposal of its flagship casinos in Las Vegas in a deal possibly amounting to US$6 billion, insiders told Reuters.
Brilliance Auto said in response of its RMB1 billion bond defaults, the group is now amid financial woes and hence not able to repay the matured bonds on time, The Paper reported. The automaker revealed it is actively working out the solutions and believed it will solve the problem properly.

VINDA INT'L (03331.HK) announced that Li Chao Wang, the Chairman and an Executive Director of the Company, through a corporation controlled by him made on-market purchases on The Stock Exchange of Hong Kong Limited of an aggregate of 500,000 shares in the Company at an average price of HK$21.8408 per Share on 23 October 2020, involving approximately HK$10.92 million.

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