Sept 18 HK WRAP HSI +115pts, T/O +22% DoD, Shorts ease to 17%


22 Sep
Sept 18 HK WRAP HSI +115pts, T/O +22% DoD, Shorts ease to 17%

HSI +115pts (+0.5%) 24,381  HSCEI +71pts (+0.7%) 9,746 T/O HK$144.08bn (+22.4% DoD)  
General

Markets are interestingly poised many still expect a further sell off but buyers on the sidelines who are overweight cash are cautiously returning suggesting a limited downside. But key for the US still remains a new stimulus package without which the risk of more downside is increasing. That in turn could prompt a slower global economy. Covid in Europe rising another -VE, with he UK and France seeing increases in daily cases

EUROPE markets opened mixed FTSE & CAC lower and moving sideways in choppy trading as covid cases rise. DAQ flat worked slightly higher. Data due EUROZONE Current Account, GERMANY PPI, UK Retail Sales.
US Futures Opened -30pts but ticked up to slightly +VE but basically flat. S&P futures still flat but NDX now indicating higher. Data due Current Account, Michigan Prelim Data (Current Conditions, Inflation Expectations, 5 Year Inflation Expectations, Consumer Sentiment and Consumer Expectations), Leadings Index, Baker Hughes Total Oil Rig Count.

INDEXES
CSI 300 Closed +104pts (+2.3%) @ 4,737 
opened slightly higher and traded slightly (+20pts) higher through the morning. PM rallied ahead of the FTSE re-weight with Insurers and brokers leading. Some talk of positioning ahead of an expected Q4 recovery. Closed just off the day high.
Shanghai Composite Index +67pts (+2.1%) @ 3,338
Shenzhen Component Index +300pts, (+1.8%) @ 13,245
ChiNext Index +39pts (+1.5%) @ 2,596.

HSI Pre Market Opened +40pts @ 24,382 vs +106pts ADRs @ 24,446. Tencent weak as it may be a US target for US gaming. Alibaba weak too. Xiaomi and Meituan +VE Tech mixed other stocks broadly +VE. Initially ticked lower before bouncing back to 24,450 which was resistance for the morning. Market then consolidated around yesterday’s closing level before working higher into lunch. PM worked higher to 24,500 but unable to break above and then sold down into the close. Chinese consumer names were weak.Sentiment cautious ahead of the weekend with concerns that the US sell off could continue because of the lack of agreement on the next round of US stimulus. Also concerns about the rising number of covid cases in UK and France.

IPO FULU HOLDINGS (02101.HK) closed at $9.18, up 28 cents or 3.1% against the listing price of $8.9, on volume of 124.5 million shares and turnover of $1.258 billion. Excluding the handling fees, a book gain of $140 was reported per board lot of 500 shares.
PICK Techtronics (669 HK) A long time favourite of mine as readers will know. Traded below $100 yesterday but rallied on the open but then sold down but ticked up into the end to close at HK$100. I think upside is likely but I would look to accumulate below HK$100.

SHORT SALES Friday 16.8% vs 20.8% Thursday 
Top Shorts HK & China Gas (3) 43%, Ping an (2318) 33%, BABA-SW (9988) 31%, Sands China (1928) 30%, ICBC (1398) 25%.

AFTER MARKET NEWS 
The Hong Kong Monetary Authority (HKMA) published today (September 18) statistics of payment cards issued in Hong Kong for the second quarter of 2020. According to the quarterly statistics, the total number of credit cards in circulation was 19.52 million by the end of Q2/2020; -0.5% QoQ (-0.4% YoY)
The total number of credit card transactions was 203.71 million for Q2/2020, +0.4% QoQ (-0.6% YoY). The total value of credit card transactions was HK$143.6 billion for Q2/2020, -15.7 % QoQ (- 24.3% YoY).
HUI XIAN REIT (87001.HK) announced that, through the Distribution Reinvestment Arrangement in respect of 2020 interim distribution of Hui Xian REIT, CK ASSET (01113.HK) and Li Ka Shing Foundation Limited have elected to receive their 2020 interim distribution in the form of new Units (issue price: RMB1.72 per unit) in lieu of a cash distribution. Upon transaction, CK Asset's holding in Hui Xian REIT increased from 1.902 billion units to 1.925 billion units. Li Ka Shing Foundation Limited's holding increased from 600,000 units to 607,400 units.
RAZER (01337.HK) repurchased 2.949 million shares through the Stock Exchange today (18 September), involving $5.0628 million.
As USD/HKD triggered the Strong-side Convertibility Undertaking of 7.75, the HKMA undertook a USD700-million selling order to inject HKD5.425 billion into the market. The balance of the banking system of Hong Kong will increase to HKD221.342 billion next Tuesday (22 September).
Apple (AAPL.US) is poised to start a direct online sales in India this month, marking the first time in over 20 years since the tech giant started operation in India. Apple said it will launch its online store in India on 23 September, selling products from iPhone to Mac computers and providing direct support to customers.
The Lands Department (LandsD) announced today (September 18) that a site, Tai Po Town Lot No. 241 at Tai Po Road - Tai Po Kau, Tai Po, New Territories, in the 2020-21 Land Sale Programme will be disposed of by public tender. The tender invitation for the lot will commence on September 25, and close on October 23. Tai Po Town Lot No. 241 has a site area of about 6,238 square metres and is designated for private residential purposes. The minimum gross floor area and the maximum gross floor area are 5,615 sq m and 9,357 sq m respectively.
BABA-SW (09988.HK)'s interactive entertainment division (Aligames), in charge of the gaming unit, will be upgraded to an independent business group and stand side by side with Alibaba Digital Media & Entertainment Group, according to Chinese reports.
Li Ka-shing and Victor T K Li acquired through Li Ka Shing Foundation a total of 600,000 shares in CK ASSET (01113.HK) at the average price of HK$41.0488, HK$41.32 and HK$40.8775 per share on 14 September, 16 September and 17 September 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CKA increased from 35.54% to 35.56%, and from 35.61% to 35.62%.
The consumer protection committees of CBIRC and PBoC recently guided investors to embrace concepts of rational investment and value investing. In practical terms, investors should cast doubt on capital-protected financial products with a yield of over 6%, while realizing those with a yield of over 8% are dangerous ones. Investors should brace for the loss of principal when investing in products with a yield of over 10%.
PING AN (02318.HK) Co-CEO Chen Xinying said at a seminar that Ping An Group has been the pioneer of digital transformation and that coronavirus pandemic has sped up the such transformation. The group's "financial + ecology" strategy leverages the five major ecospheres - financial services, healthcare, smart cities, real estate services and automobile services - which facilitate the group to approach internet users outside its core financial business scope. As of 30 June 2020, PING AN owns over 210 million individual customers and 560 million internet users.
Centa-City Leading Index (CCL) last posted at 176.76, -0.62% weekly.
CCL Mass last stood at 179.76, down 0.54% weekly. CCL (small-and-medium units) last reported at 177.32, down 0.55% weekly. CCL (large units) last tracked at 173.83, down 0.99% weekly.
The indices of two New Territories districts advanced together for two weeks, being the first time since June 2019, said Centaline Property.
CCL Mass of New Territories East +2.53% and West grossed +1.89% in two weeks. Illustrating that the rise of these two indices led the bottom-out of housing prices and demonstrated sequential uptrend signs, indicating the recent peak season began in New Territories and helped snap losing streak of overall housing prices.

Regional Markets
JAPAN
opened opened slightly higher and rallied on positive inflation data but resistance at 23,400 level and then trended lower in choppy trading to 23,290 where it found support and bounced into lunch. PM opened slightly lower but worked higher to 23,350 level eased back before a rally at the end to close +0.2%
S KOREA Kosdaq opened higher at 890 and ticked higher initial before selling down to 878 support, which was tested a couple of times and them the market worked back into the green. Initially traded sideways then drifting lower before trending higher to close +0.4% Kospi followed a similar trading pattern to close +0.3%
TAIWAN opened lower and traded in an 90pt range. Initial ticked higher but then sold down to 12,840 level which was tested a couple of times, before working higher to 12,930 resistance which was tested a couple of time, consolidated to yesterday’s closing level and then worked higher to close +0.02%

CONNECT FLOWS (up DoD)
Shanghai
Northbound Rmb 50,767m Sell 22,386m : 28,380m Buy
Southbound HK$ 10,098m Sell 4,769m : 5,330m Buy

Shenzhen
Northbound Rmb 62,158m Sell 29,339m : 32,819m Buy
Southbound HK$ 8,639m Sell 3,528m : 5,110m Buy


DATA
CHINA No data
HONG KONG

Centre for Health Protection said there were 3 additional COVID-19 cases in Hong Kong today (vs 9 on Thursday) with 2 local infections

Active Heavyweights
PING AN (2318.HK) +2.4%
AIA (1299.HK) +1.2%
HKEX (388.HK) +0.7%
BABA (9988.HK) +0.7%
TENCENT (700.HK) -0.4%
CCB (939.HK) +0.4%
MEITUAN (3690.HK) +0.3%
HSI & HSCEI Constituents on the move
CHINA TAIPING (00966.HK) +6.5%
CHINA UNICOM (00762.HK) +4.8%
CHINA LIFE (02628.HK) +4.5%
CPIC (02601.HK) +4.3%
FOSUN INTL (00656.HK) +3.8%
ANTA SPORTS (02020.HK) +3.8%
XIAOMI-W (01810.HK) +3.5%
WUXI BIO (02269.HK) +3.3%
MENGNIU DAIRY (02319.HK) -3.2%
LONGFOR (00960.HK) +2.2%, hitting new high

HSMI & HSSI Constituents on the move
FIRST PACIFIC (00142.HK) +14.9%
BEIGENE (06160.HK) +12.1%, hitting new high
POWERLONG (01238.HK) +7.7%, hitting new high
POWERLONG CM (09909.HK) +7.6%, hitting new high
LI NING (02331.HK) +6.6%, hitting new high

Market Commentary 
*INSURERS STRONG as A-shs peers surged on low valuations and speculation of a strong Q4 recovery CH LIFE (2628 HK +4.2%) CH TAIPING (966 HK +7%) NCI (1336 HK +7.5%) PING AN (2318 HK +2%).
*E-COMMERCE MIXED on concerns US regulators could target Chinese gaming companies following letters sent to Epic, Riot and others, inquiring about their security protocols in handling Americans' personal data, which was the official concern on TikTok. TENCENT (700 HK -0.4%) owns Riot and has a 40% stake in Epic, maker of Fortnite.
JD Health, the online health care unit of JD.COM (9618 HK+1.6%), is planning to file for a HK IPO as soon as this month, raising at least US$1b in the share sale, news reported.
ALIBABA (9988 HK +0.8%) NTES (9999 HK +1.1%) KINGSOFT (3888 HK +2.4%).
*HK PROPERTY MIXED following recent rebound, as home viewings increased given the latest round of outbreak has been contained. NWD (17 HK +1.4%) WHARF (4 HK +2.7%) CKA (1113 HK -2%) SHKP (16 HK -0.5%).
*COAL MINERS STRONG on rising thermal coal prices which analysts forecast could rise to 620 yuan per ton or higher in the near future as a cold winter may come  early. YZ COAL (1171 HK +3.4%) CH SHENHUA (1088 HK +1.9%) CH COAL (1898 HK +1.6%).
*SPORTSWEAR MAKERS STRONG on speculation of a retail recovery during the Oct National Day Holiday. LI NING (2331 HK +6.6%) ANTA SPORTS (2020 HK +3.8%) POU SHEN (3813 HK +4.1%) XTEP (1368 HK +0.4%).

MARKET HOURS NEWS 
While the world has been facing uncertainties wrought by pandemic, BABA-SW (09988.HK) Chairman and CEO Daniel Zhang said at an online conference there is one thing he is sure about, and that is pandemic has accelerated the digital transformation of all sorts of industries as well as the society. It also changes people's lives, and learning and working style. Zhang opined that companies need to leverage digital technique and infrastructure facilities to cope with the new norm, and to reshape business model to cater new market demand.
The Hong Kong Housing Society (HKHS) announced to extend the 75% rent concession for about 450 eligible commercial tenants and car park operators of HKHS, as well as about 530 monthly car park users parking commercial vehicles, for a half-year from 1 October 2020 to 31 March 2021, in response to the Government's latest relief measures. Eligible commercial tenants may apply for full rent waiver for the period during which their businesses are required to be closed due to closure orders or directions as part of the Government's anti-pandemic measures within the selfsame period.
BABA-SW (09988.HK) officially set up a cloud native technology committee, which is led by senior researcher Jiang Jiangwei. Alibaba Cloud (Aliyun) has launched numerous cloud native products so far, including soft-and-hardware sandbox container 2.0, offline real-time integrated data warehouse MaxCompute and cloud native multi-mode database Lindorm. Jiang said the committee will bend over backwards for the comprehensive cloud native development of Alibaba's economy, and initiate cloud native transformation for millions of companies harnessing over-a-decade experience of Alibaba.
The Justice Bureau of Shenzhen seeks opinions on the measures on the supervision and administration of real estate market in Shenzhen (revised draft for comments). The revisions comprise a filing system for property sales price improvement. For second-hand home deals, Shenzhen aims to optimize the regulatory mechanism for property prices and establish a guiding system for in-stock commodity home prices
Hutchison China MediTech Limited (Chi-Med) (Nasdaq/AIM: HCM) announced that its New Drug Application (NDA) for surufatinib for the treatment of patients with advanced pancreatic neuroendocrine tumors (NET) has been accepted for review by the China National Medical Products Administration (NMPA). The NDA is supported by data from the successful SANET-p study, a Phase III pivotal study of surufatinib in advanced neuroendocrine tumors – pancreatic patients in China for whom there is no effective therapy.
GENSCRIPT BIO (01548.HK) Trading has been halted with effect from 9:00 a.m. on 18 September 2020, pending the release of an announcement in relation to an inside information of the Company.
ByteDance is increasingly confident that TikTok's alliance with Oracle (ORCL.US) would be approved by Chinese regulators, seeing it as a pivotal step towards tackling political conflicts, Bloomberg citing insiders.
As USD/HKD triggered the Strong-side Convertibility Undertaking of 7.75, the HKMA undertook a USD240-million selling order during New York trading hours to inject HKD1.86 billion into the market. HKD strengthened this morning, leading the spot USD T/T rate to 7.7501. The balance of the banking system of Hong Kong will increase to HKD215.917 billion next Monday (21 September).
Overnight HIBOR last posted at 0.08357%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.46816%, marking a 1-month high.CTFO (002373.SZ) announced that the establishment of Chongqing Ant Consumer Finance Co., Ltd. obtained the approval from China Banking and Insurance Regulatory Commission (CBIRC). The consumer finance company was jointly contributed and established by Ant Group, Nanyang Commercial Bank, CATL (300750.SZ), CHINA HUARONG (02799.HK) and YUYUE MEDICAL (002223.SZ) and so on.
R&F PROPERTIES (02777.HK) intended to spin off some hotel assets acquired from Wanda in 2017 into an REIT for listing in Singapore in 10 months, Chinese media citing sources. R&F PROPERTIES replied that compliance with policy and measures from multiple government agencies is required for the spin-off. Though being watchful, the developer has no definite timetable or substantive progress so far.
IDC: Low-to-mid Range Smartphones To Steer Mkt This Yr. 73% of the 2020E worldwide smartphone shipments were expected to be priced below US$400 under heavier downward economic pressure, according to IDC's report. Equally, global smartphone value will likely drop 7.9% YoY to US$422.4 billion this year, as consumers are turning to low-to-mid range phones.
China did not have the experimental conditions for the phase III clinical trials of any COVID-19 vaccine, reported Chinese media. Hence, the four vaccine candidates developed by Sinopharm are undergoing phase III clinical tests in countries like Brazil, Indonesia, the United Arab Emirates, Jordan, Peru, Morocco and Pakistan.
Global Science and Life Health Forum was convened in Beijing as a parallel forum of the 2020 ZGC Forum today (18th), reported the Beijing News. At the forum, Minister of Science and Technology Wang Zhigang revealed that 11 coronavirus vaccines are undergoing clinical trials in China, with four candidates entering phase III clinical tests.
The U.S. Federal Energy Regulatory Commission said it is looking for comments from some equipment and service providers on potential national security risks to the electric system. Huawei and ZTE (00763.HK) have been identified as examples of those entities, as their communication systems and other gear and services are critical to the reliability of the bulk electric system, according to the Commission.Huawei is preparing to propose a new legally-binding agreement, hoping to engage in Canada's 5G project, reported the Globe and Mail.Huawei will prove that its 5G equipment does not contain backdoors enabling outside parties to access the networks or set malware in place. Equally, the Chinese tech company pledges to reject Chinese requests for information.
CHINA GAS HOLD (00384.HK) +0.250 (+1.160%)  bought back 1.2184 million shares of the Group yesterday (17 Sept) at $20.95-21.05 each, involving $25.5455 million, revealed HKEX. The repurchased shares represented 0.0233% of the issued share capital of the Company.
SING TAO (01105.HK) announced that the discussions between Ho Tsu-kwok, Charles, the chairman and a controlling shareholder of the Company, and the potential purchaser in relation to the possible disposal and the process of obtaining the regulatory clearance are still ongoing. It is currently expected that the parties will be informed of the outcome of the regulatory clearance by the end of October.

PRE MARKET NEWS
Not in this mornings report
China Foreign Exchange Trade System announced today (18 September) that the central parity of USD/ RMB rose 84 bps from the last trading day to 6.7591, hitting an over-16-month high.
LEGENDHOLDING (03396.HK)  announced in respect of the proposed spin-off of Levima Advanced Materials Corporation, a subsidiary of the Company, and the application for its proposed initial offering and listing of A-shares on the SME Board of the Shenzhen Stock Exchange.   The application made by Levima Advanced Materials in relation to the Proposed Issue on the SSE was approved. Levima Advanced Materials is yet to receive the approval documents in writing from the CSRC, and the Proposed Issue remains subject to certain conditions precedent.   Levima Advanced Materials and the underwriter for the Proposed Issue will further discuss and confirm with the SSE regarding the listing timetable of Levima Advanced Materials, and will issue relevant listing documents accordingly.
EVERG VEHICLE (00708.HK)  announced that it proposed issue of RMB shares and listing on the Sci-tech Board (SSE STAR Mkt) of the Shanghai Stock Exchange.
As USD/HKD triggered the Strong-side Convertibility Undertaking of 7.75, the HKMA undertook a US$240 million selling order during New York trading hours to inject HK$1.86 billion into the market.  The balance of the banking system of Hong Kong will increase to HK$215.917 billion next Monday (21 September).

XIAOMI-W (01810.HK)  is planning for the phase II construction of its high-end handset smart factory in Beijing Economic-Technological Development Area, revealed Co-founder, Chairman and CEO Lei Jun at the 2020 ZGC Forum. After completion and operation, the factory may deliver an annual output capacity of RMB60-70 billion with only a hundred workers, he added.

CROSS-HAR(HOLD) (00032.HK) announced that Chairman Cheung Chung Kiu (as the Offeror) would make a voluntary conditional general cash offer at HK$14 in cash per share, representing a 42.42% premium to the closing price before trading halt.  The company applied for a trading resumption with effect from Friday (18 September).

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