Aug 4 HK WRAP HSI +528pts on mid pm rally T/O +12% DoD
HSI +528pts (+2.2%) 24,986 HSCEI +207pts (+2.1%) 10,240 T/O HK$145.97bn (+11.9% DoD)
EUROPE Markets to opened mixed/lower on weak earnings from Hugo Boss, BP, Diageo, IWG and Bayer. But Easyjet +VE after its trading update. Eurozone PPI slightly better but the French Budget Balance missed. Also sentiment weak as US still hasn’t agreed the next stimulus package.
US Futures opened flat and traded sideways. Caution as Congress yet to agree a new stimulus package and Earnings and covid in focus.
Data due includes Redbook, ISM New York, Factory Orders, IBD/TIPP Economic Optimism, Factory Orders Ex Transport, API Crude Oil Stocks.
EARNINGS Include Walt Disney Co, Sony, Bayer, BP, Diageo, KKR, AMC Networks, Exelon, Incyte, Cyberark Software, Allegheny Tech, Vulcan Materials, Activision Blizzard, BioMarin Pharmaceutical, Boingo Wireless, Devon Energy, Ethan Allen, Western Union, Planet Fitness, Monster Beverage, Allstate, Pioneer Natural Resources, Owens-Illinois, Gartner
CSI 300 Closed +3pts (+0.1%) @ 4,774 Market opened lower and saw choppy trading through the day; CSI300 ranged from 4,807 to 4,747. Sentiment +VE after yesterday’s PMI data but also some concerns regarding the recent covid outbreaks and US/China tensions. Market saw rotation with financials leading the gainers at the expense of pharma and tech names which were weak.
HSI Pre Market +207pts @ 24,665 vs +59pts ADRs @24,517 With E-commerce names and Financials +VE and then traded sideways into lunch.
Earnings at lunchtime include Lifestyle (loss), Lee & Man (profit -20%), L&M Chemical (profit -61%), HK Electric (Net profit +14%).
PM saw the market initially trade sideways and then at 1:40pm it gapped up 285pts lead by Insurers and Developers. Then traded sideways for an hour before pushing higher to test 25,000, which it traded around for about an hour before easing back into the close.
RONSHINECHINA (3301.HK) for the month ended July 2020, the total contracted sales amounted to RMB12.144 billion, -5.77% YoY
FITCH RATING Back in April, it projected China's property contract sales to slip by around 15% YoY. However, all of the top-100 developers saw growth in sales volume and GFA sold for the first seven months of 2020, given satisfactory work resumption and sales. Therefore, Fitch revised its 2020 contract sales growth forecast to flattish or +5% for Chinese developers, where large caps may even register sharper hike.
EVERGRANDE (3333.HK) contracted sales RMB50.3 bn in July 2020, +24.4% YoY
The Land Registry announced that the number of sale and purchase agreements for all building units received for registration in July was 7,576 (-8.2% MoM but +18.7% YoY). The 12-month moving average for July was 5,438 (+1.9% the 12-month moving average for June 2020 but -11.5% that for July 2019).
HSBC HOLDINGS (5.HK) aims to hire 2,000-3,000 wealth management advisers in four years to boost its wealth management unit in China, it pointed out in the interim result report. The first 100 new staff members have started in Guangzhou and Shanghai already.
"Game Broadband", jointly developed by China Telecom's Shanghai Branch and TENCENT (700.HK), has launched experiencing activity to SDN gateway users in some districts, rendering users with exclusive broadband protection for downloads and game updates and supporting faster game playing.
Market and Pre Market News at bottom of page.
JAPAN opened higher as Tokyo inflation data beat forecasts and market has worked higher all day to close +1.7%
Sony Q1 results after market operating profit -1.1% to JPY228.4 bn (USD2.147 bn) beating. It forecast operating profit to fall 26.7% to JPY620 billion in the year ended March 2021, the lowest in 4yrs but better than the 30% drop it estimated in May 2020.
SoftBank Q1 operating profit +4.1% to JPY280 bn (USD2.63 bn), beating JPY262 bn in consensus. +VE
Tokyo added 309 new covid cases today.
S KOREA Pre market inflation data missed but Kosdaq opened higher and traded sideways to close +0.9% and the Kospi also opened higher an initially rallied but drifted lower from midday to close +1.3%.
TAIWAN opened higher with some initial bargain hunting after yesterday’s weakness and has worked higher through the Dayton close +1.6%
Short Selling HSI Tuesday 17% vs 19.8% Monday
Top Shorts Hang Seng Bank (11) 55%, CCB (939) 37%, CLP (2) 31%, Ping An (2318) 28%, Power Assets (6) 28%, MTRC (66) 28%, HK & China Gas (3) 27%, China Res Land (1109) 26%, AAC Tech (2018) 26%, Sunny Optical (2382) 25%.
Northbound Rmb 54,746m Sell 25,370m : 29,377m Buy
Southbound HK$ 12,515m Sell 5,972m : 6,543m Buy
Northbound Rmb 74,352m Sell 38,111m : 36,241m Buy
Southbound HK$ 13,887m Sell 5,514m : 8,373m Buy
Centre for Health Protection said there were 80 additional COVID-19 cases in Hong Kong today; 75 local inflections with 32 of unknown sources
The Government announced today (August 3) that it would extend the social distancing measures currently in place. The above directions and specifications will take effect at 0.00am on August 5 for a period of seven days till August 11. The requirements and restrictions under the latest directions include: tables available for use or being used by customers within any catering premises must be arranged in a way to ensure there is a distance of at least 1.5 metres. Dine-in services at restaurants remain banned.
AIA (1299.HK) +4.1%
CCB (939.HK) +2.6%
TENCENT (700.HK) +2%
PING AN (2318.HK) +2%
HKEX (388.HK) +1.5%
HSI & HSCEI Constituents on the move
FOSUN INTL (656.HK)+8.2%
WHARF REIC (1997.HK) +7.5%
TECHTRONIC IND (669.HK) +6.9%
CHINA LIFE (2628.HK) +4.5%
CM BANK (3968.HK) +4.4%
BYD COMPANY (1211.HK) +4.4%
BOC HONG KONG (2388.HK) +4%
HANG LUNG PPT (101.HK) +4%
SHENZHOU INTL (2313.HK) +3.4%
NEW WORLD DEV (17.HK) +3.3%
CHINA RES GAS (1193.HK) -3.3%
HSMI & HSSI Constituents on the move
HENGTEN NET (136.HK) +15.5%
GUANGSHEN RAIL (525.HK) +10.8%
XINYI SOLAR (968.HK) +10.6%, hit new highs
E-HOUSE ENT (2048.HK) -10.4%
MAN WAH HLDGS (01999.HK) +7.2%, hit new highs
NEW HIGHER EDU (02001.HK) +6.9%, hit new highs
HOPSON DEV HOLD (00754.HK) +4.6%, hit new highs
XINYI GLASS (00868.HK) +2.2%, hit new highs
*CHINESE FINANCIALS STRONG The PBOC proposed for the first time its in-depth participation in global financial governance and effective defense of multilateralism to facilitate the orderly opening of the world’s financial sector. The central bank also announced the ongoing application of its previously declared measures for opening the sector. Traders are also betting on the upcoming earnings results.
CH LIFE (2628 HK +4.5%) NCI (1336 HK +5.6%) CMB (3968 HK +4.4%) BOC (3988 HK +2.3%).
CH TAIPING (966 HK +1.1%) warned that 1H profit to drop 57% YoY due mainly to changes in tax policies in the PRC during the 2019 Interim Period which resulted in an increase in the consolidated profits of the Group, and the recognition of impairment loss during the 2020 Interim Period.
*HK FINANCIALS FIRM AIA (1299 HK +4.1%) speculation the insurer may resume growth in 2Q following after its Value of New Business dropped 32%. HSBC (5 HK +0.7%) after yesterday’s weakness on disappointing results and HANG SENG BANK(11 HK +0.5%) traded relatively flat after a cut in dividend was announced.
*E-COMMERCE FIRM very much in focus after U.S. President Trump said TikTok will have to close its US operations by Sept 15 if it isn't sold by then. He said that he's okay with the idea of Microsoft buying the video-sharing app company, but he repeatedly insisted that any sale of TikTok’s US operations would have to include a substantial payment to the US which is likely to raise questions. MEITUAN (3690 HK +9%) earnings speculations and broker upgrades.
ALIBABA (9988 HK +3.3%)'s Ele.me has overtaken MEITUAN-W (3690.HK)'s Meituan Waimai as China's most-downloaded Food & Drink app
TENCENT (700 HK +2.5%) NTES(9999 HK +2.3%) JD (9618 HK +1.6%).
*HONG KONG PROPERTY FIRM on attractive valuations and after the city’s home July sales +35% YoY in terms of value, despite the Covid-19 outbreak. And a Citi report saying residents view now as a good buying opportunity. WHARF (4 HK +9%) after earnings it recorded a 1H net loss of HK$1.74b, vs a net profit of HK$2.45b a year ago. HANG LUNG PROP (101 HK +3.7%) SHKP (16 HK +2%) NWD (17 HK +3.3%) CKA (1113 HK +2.8%).
GUANGSHEN RAILWAY (525 HK +11%) as China approves 474b yuan of railway projects in the Greater Bay Area.
EVERGRANDE HEALTH (708 HK -6%) slumped on profit-taking, after surging ~300% this year. It unveiled six EV car designs without detail on production. The six cars are branded under Hengchi, Evergrande’s new EV brand. MELCO (200 HK +3.1%) plans to raise HK$3.88b through a private placement to develop Phase 2 of the Studio City project and for general corporate purposes. involving MCO Cotai, an indirect wholly-owned subsidiary of the company, and SCIHL, a subsidiary of Melco Resorts also under the listed company.
LEE & MAN PAPER (2314 HK +0.6%) 1H net profit -16.6% YoY to HK$1.40b. Revenue -14.5% YoY to HK$11.07b.
LEE & MAN CHEMICAL(746 HK-1%) reported 1H net profit -61.1% YoY to HK$156m.
LIFESTYLE INTL (1212 HK +2.6%) the operator of Sogo malls, reported an interim net loss of HK$227m and holds a pessimistic view of retail recovery.
TAO HEUNG HLDGS (573.HK) said all of its restaurants remain closed from today until further notice, in response to the epidemic development. The company had previously decided to resume business from 5 August.
SWIREPROPERTIES (1972.HK) stated that it has signed a five-year HK$1 bn Green Loan Facility with OCBC Bank. This partnership will fund ongoing green building developments, and allow the developer to adopt environmentally-friendly technologies to save energy, as well as reduce water usage and waste.
Earnings at lunchtime include Lifestyle (loss), Lee & Man (profit -20%), L&M Chemical (profit -61%), HK Electric (Net profit +14%)
Citibank released a survey report on home buying intention of Hong Kong residents in 2Q20. 11% respondents viewed the present is a good/ extremely good timing to buy homes, ratcheting up QoQ, with the proportion logging the peak in nine years. Residents also showed averaged view on the housing price trend. Double-up respondents (33%) envisioned a price rise in next 12 months in 2Q20, compared to 1Q20. The number of people who perceived a fall reduced notably.
BABA-SW (9988.HK)'s Ele.me has overtaken MEITUAN-W (3690.HK)'s Meituan Waimai as China's most-downloaded Food & Drink app on China's App Store since August, following MEITUAN-W's removal of Alipay from its payment options, reported Chinese media.
Android system made up almost 80% of Chinese smartphone market in 1H20, among which Huawei's expanded 4.7 ppts yearly to 26.3%, according to an observation report of QuestMobile, a surveyor in China. Meanwhile, Apple's market shares narrowed 1.9 ppts to 21.6%, the report said. OPPO was 19%, Vivo 16.6% and XIAOMI-W (1810.HK) 9%.
India in order to encourage local products, the government is weighing new measures to prevent trade partners in Southeast Asia from re-routing Chinese imports to India with a low added value, as Reuters learnt from inside sources. New Delhi intends to heighten quality standards of imports, slam quantity restriction and mount stringent disclosure norms, according to the local officials.
Worldwide tablet shipments Q2 +26.1% yearly to 37.542 million devices, Canalys wrote in a report.
HUI XIAN REIT (87001.HK) interim results from 1 January to 30 June 2020. The total revenue -24.7% yearly to RMB1.203 billion. Net property income -27.9% yearly to RMB751 million. Amount available for distribution slipped 80.7% yearly to RMB140 million. Distributions to unitholders dived 82.6% yearly to RMB126 million. Distribution per unit eroded 83% yearly to 2.12 fen.
The Institute of International Finance found that capital inflow to EM stock and bond markets went on in July, of which the amount slowed to US$15.1 billion from June's US$32.9 billion. In July, US$400 million flooded out from Chinese bourses, as compared with over US$9 billion inflow in 2Q20.
China Resources' CR Capital plans to lead a consortium to acquire 65% stakes in City Super Group, the owner of city'super, at up to US$300 million, Bloomberg reported. The sale is expected to be completed within this week, under which the local supermarket chain will be held 40% as to CR Capital and 25% as to a JV formed by China Resources and Fung Investments. Peter Woo of Wharf selling down.
Google announced the introduction of its first 5G smartphone, Pixel 5, possibly in fall. The innovative device will be priced from US$499.
Ant Group, a subsidiary of BABA-SW (9988.HK intended to fetch approx US$30 bn through A+H listing, Caixin reported. If the fundraising amount was nailed, Ant Group’s IPO will topple Saudi Aramco's US$29.4 billion. With the listing preparation under brisk processing, Ant Group was expected to begin IPO arrangement in September or October, the report added.
Shanghai Zhizhen Intelligent Network Technology Co Ltd, also known as Xiaoi Robot, accused Apple's voice-recognition technology Siri of patent infringement and demanded RMB10 billion in damages. The Chinese A.I. company asked Apple to stop manufacturing, using, selling or importing goods that are said to have infringed on the patent.
SA SA INT'L (178.HK) announced that it has established online personal stores for its cosmetic consultants leveraging on Boutir's solution.
The People's Bank of China (PBoC) announced that it commenced the one-year Medium-term Lending Facility (MLF) of RMB400 billion in July 2020, with a bidding interest rate of 2.95%.
Also in a video conference, the PBoC outlined major plans for 2H20. In particular, monetary policies shall be flexibly enacted and precisely oriented, while re-lending and re-discount policies in an amount of RMB1 trillion shall be properly carried out and extended as much as possible to cover those small-and-micro enterprises hurt by the coronavirus crisis. The Chinese central bank is committed to opening up the financial industry in an orderly and gradual manner by stably taking forward the internationalization of RMB and convertibility of capital projects.
CHINA SHENGMU (1432.HK) said that Greenbelt Global had exercised all warrants on 31 July to subscribe for 140.8 million shares, representing 1.68% of the issued share capital of the Company as enlarged. The exercise price was HK$0.33 per share, involving roughly HK$46.48 million in total.