Aug 6 HK WRAP HSI -172pts T/O +10% DoD, fails to hold 25k


10 Aug

Aug 6 HK WRAP HSI -172pts  T/O +10% DoD, fails to hold 25k

HSI -172pts (-0.7%) 24,931  HSCEI -54pts (-0.5%) 10,202  T/O HK$135.87bn (+10.6% DoD)  

EUROPE opened lower as BoE kept rates unchanged. Saw an initial up tick but then then sold down and now trading sideways. Investors still watching for an agreement on the next round of US stimulus.
US Futures were indicating +90pts but now back to flat; with the S&P and NDX also now flat Key data today Challenger Job Cuts, Initial Claims (and 4 week average), EIA Natural Gas Report,


EARNINGS include Bristol-Myers Squibb, News Corp, ViacomCBS, Cardinal Health, Mylan,Mylan, Booking Holdings, Uber Technologies, First Solar, Zillow, Cushman and Wakefield, Datadog, Dropbox, Murphy Oil, Hilton Worldwide, Papa John’s, Zoetis, Sealed Air, Ball Corp, AXA, ING, Adidas, Siemens, Nintendo, Toyota

INDEXES
CSI 300 Closed -14pts (-0.3%) @ 4,763 
Market opened flat and ticked higher to 4,792 but then trended lower in choppy trading to 4,696 at around 11am before a small bounce back into lunch. PM saw the market initially trend lower but then worked higher for the last hour.

HSI Pre Market +98pts @ 25,201 vs +1ADR’s @ 25,103 Opened at the day high with E Comerce names mixed and Auto’s strong but then sold down sharply through the morning to the day low around 11am @ 24,640 level with a small bounce before lunch. PM saw an initial up tick and then trade sideways for an hour before working higher for the last two hours but hit resistance at 24,965 level and eased back into the close. Gold miners and Brokers did well.
25,000 is becoming a significant resistance level for the market.


AFTER MARKET
SMIC (981.HK) announced that the net profit surged 6.44 times YoY
to US$138 million in 2Q20. EPS was US$0.03. Revenue was US$938 million, an increase of 18.7% YoY. Gross margin was 26.5%. For 3Q20, the company expected the revenue to increase by 1% to 3% QoQ; and gross margin to range from 19% to 21%.
PCCW (8.HK) announced that interim loss amounted to $584 million, against $163 million of profit a year ago. LPS equaled 7.57 cents. Interim cash dividend was 9.18 cents. The company also resolved to declare a special interim dividend in the form of the distribution involving a distribution in specie of PCPD Shares on the basis of 85 PCPD Shares for every 1,000 Shares held by the Qualifying Shareholders.
The Hong Kong Monetary Authority announced that the Monetary Authority has granted a banking licence to CBHB (9668.HK) under the Banking Ordinance. CBHB is incorporated in the People's Republic of China. The granting of this banking licence takes effect Thursday
YUEXIU REIT (405.HK) results for the six months ended June 2020. Interim distribution dived 24.9% yearly to RMB319 million. Distribution per unit was RMB0.099, or HKD0.1098.
CKH HOLDINGS (1.HK) interim results ended June 2020. On a Post-IFRS 16 basis, revenue -12.5% yearly to HK$189.942 billion. Net profit -29.1% annually to HK$13 billion, with an EPS of HK$3.37. Interim DPS equaled HK$0.614, against HK$0.87 over a year ago.
CK ASSET (1113.HK) interim results for 2020. Total revenue +6.8% yearly to $36.323 billion. The net profit -58% yearly to $6.36 billion. Underlying profit -35.5% yearly to $8.367 billion. Chairman Victor Li wrote that the global battle against COVID-19 continues, pending an effective line of defense to contain the spread of the virus. With the roll-out of various government relief packages, the full economic impact of the pandemic is yet to be reflected. The global economy is projected to contract sharply and significant challenges lie ahead for all sectors. Implementation of the China-US Phase One Trade Agreement, the approaching US presidential election, Brexit and escalating international conflicts present additional uncertainties. The business environment is expected to remain volatile amid a rapidly changing economic and political landscape. However, with CK ASSET's solid financials, a low debt ratio and a portfolio of quality assets, the Group remains resilient amid a macro-environment full of uncertainties. Li is optimistic that their worldwide businesses will regain growth momentum at times of economic recovery once the virus has subsided, and are well-equipped to seize quality investment opportunities in Hong Kong and overseas. The Group will adhere to its strategy “Advancing Without Forgoing Stability” and continue to generate sustainable value for shareholders.
MTR CORPORATION (66.HK) interim results ended June 2020. Revenue from recurrent businesses -23.6% year-on-year to HK$21.592 billion. The Company swung into a loss of HK$334 million, against net profit of HK$5.506 billion in the same period over a year ago. LPS was HK$0.05. The interim dividend was kept at HK$0.25. CEO Jacob Kam Chak-pui expected the pandemic to last for a period of time, hence finding the firm's performance unpredictable for the second half of year. Given limited COVID-19 impact, MTR will still push for the commissioning of Sha Tin to Central Link (SCL) as scheduled.
Property Director David Tang Chi-fai did not expect any occupation permit to be granted for new projects in the second half of year. However, MTR will continue to conduct tenders for Lohas Park Phase 13, and Wong Chuk Hang Station Package 5 and 6 in the next few months.
The Home Affairs Department (HAD) said in view of the severity of the epidemic, it will extend the scope of the COVID-19 Community Testing Scheme from tomorrow (7 August) and conduct COVID-19 tests for households of some private residential buildings with confirmed cases as well as households of buildings in public housing estates. The HAD, together with charities and a social service organisation, will extend the scope of the scheme to cover a total of 46 buildings and about 86,000 residents.
LEADER EDU (1449.HK) On its debut closed at $1.85, down 25 cents or -12% against the listing price of $2.1, on volume of 117 million shares and turnover of nearly $220 million. Excluding the handling fees, a book loss of $250 was reported per board lot of 1,000 shares.
TIGERMED (3347.HK), to be listed tomorrow, opened at $110, up 10% against the listing price $100, and last stood at $115, up 15% against the listing price, on volume of 160,000 shares, PhillipMart data showed.
HSBC HOLDINGS (5.HK) will have the bonus pool of traders and investment bankers axed by US$600 million compared to a year ago, despite their outstanding performance during the second quarter, according to the corporate filing seen by foreign media. If the London-based lender keeps cutting bonus at the same pace through this year, relevant staff will have their variable compensation axed by a third yearly.
Centa Valuation Index (Major Banks) (CVI) last printed at 45.44 this week, slightly up 0.13 pts weekly. Centaline Property, said the index stood firmly around 45 for four weeks a stabilizing sign.

Market and Pre Market News at bottom of page.

Regional Markets
JAPAN
opened lower and initially rallied back into the green but then sold back down to the day low and then traded sideways lower into the close -0.4%
S KOREA opened higher Kosdaq basically traded sideways lower to close +0.8% and the Kospi had opened higher eased back to the opening level before working slightly higher in the afternoon to close +1.3%.
TAIWAN opened higher and rallied before selling back down to the 12,850 level and then traded sideways to close +0.9%

Short Selling HSI Thursday 17.9% vs 16.7% Wednesday
Top Shorts
CLP (2) 50%, Sunny Optical (2382) 45%, Power Assets (6) 44%, Bank of China (3988) 41%, HK & China Gas (3) 40%, NWD (17) 39%, CK Assets (1113) 33%, Henderson Land (12) 32%, Hang Lung PPTY (101) 32%, HSBC (5) 30%, BOC (HK) (2388) 30%, CCB (939) 29%, SHKP (16) 28%, CKI (1038) 27%, Ping An (2318) 27%, China Res Land (1109) 26%, Swire Pac A (19) 25%.

CONNECT FLOWS (small pick up DoD)
Shanghai
Northbound Rmb 52,993m Sell 26,765m : 26,228m Buy
Southbound HK$ 12,762m Sell 6,855m : 5,907m Buy

Shenzhen
Northbound Rmb 73,589m Sell 37,800m : 35,789m Buy
Southbound HK$ 12,973m Sell 5,625m : 7,348m Buy


DATA
CHINA No data
but on Friday Balance of Trade, Exports and Imports due at 10am
Later Foreign Exchange Reserves

HONG KONG No data but Friday due to get Foreign Exchange Reserves
Centre for Health Protection said there were 95 additional COVID-19 cases in Hong Kong today; (vs 85 cases Wednesday)

Active Heavyweights
TENCENT (700.HK) -1%
CCB (939.HK) -0.5%
AIA (1299.HK) -0.5%
HKEX (388.HK) -0.3%
PING AN (2318.HK) -0.2%

HSI & HSCEI Constituents on the move
CHINA TOWER (788.HK) +6.4%
CITIC SEC (6030.HK) +5.7%
CHINA RES GAS (1193.HK) -4.6%

HSMI & HSSI Constituents on the move
IGG (799.HK) +31.3%, hitting new high
XD INC (2400.HK) +11.5%, hitting new high
GCL-POLY ENERGY (3800.HK) +11.3%
GCL NEWENERGY (451.HK) +10.1%
HOPSON DEV HOLD (754.HK) +7.3%, hitting new high
TCL ELECTRONICS (1070.HK) +5.2%, hitting new high
ZHOU HEI YA (1458.HK) +5.2%, hitting new high


NEWS
MARKET HOURS
Hong Kong completed 1,365 private flats in June, down 2,389 flats
or -63.6% monthly, revealed Rating and Valuation Department (RVD).
The Government announced today (August 6) that the special work arrangement for government employees will be extended for one week until August 16. Save for those involved in the provision of emergency services and essential public services, all other government employees will continue to work from home. The Government will closely monitor the epidemic situation and review the arrangement in due course. As the local epidemic situation remains severe, it is necessary for the Government to continue to take measures to significantly reduce the flow of people and social contacts in order to stop COVID-19 from further spreading in the community, said the announcement.
Toyota announced that Q1 operating income -98.1% YoY to JPY13.92 bn (USD132 mn) the worst since 1FQ11 but better than JPY179 bn in consensus. Net profit -74.3% to JPY158.843 bn (USD1.509 bn).
Adidas announced that the second-quarter operating loss amounted to EUR333 million, deeper than EUR290 million in consensus. The sportswear giant anticipated a positive turnaround in the third quarter when operating profit may grow EUR1 billion quarterly.
The Macau government is working hard with all bureaus and Beijing to bring customs clearance back to normal step by step, as Security Secretary Wong Sio Chak told Radio Macau. Good news will likely be coming soon as everything is going well. While the government is striving for gradual resumption of customs clearance, plague precautions will be prioritized, added Wong.
President Xi in his recent instruction to the 14th 5-Year Plan, accentuated that economic and social development blueprint is crucial to the governance, cited Xinhua News Agency. While China should be open for opinions and pool public ideas, Xi stated that Beijing will work harder on the top-up design governance to encourage concerted efforts from all walks of life in the 14th 5-Year Plan.
Chinese operators built 400,000 5G base stations in June 2020, with over 100 million 5G users, said Yang Chaobin, President of Huawei Wireless Network Product Line. Yang projected 800,000 5G base stations to be completed by the end of year, with more than 200 million 5G users, both figure accounting for over 70% of the world's total figures.
China's purchase of US farm products is lagging behind its 2020 target of US$36.5 billion, according to U.S. Department of Agriculture. The US exported US$7.274 billion of farm goods to China in the first half of year, meaning the latter had met only 20% of its 1H20 import target.
The European Commision has decided to extend anti-dumping duties onto Chinese corrosion-resistant steel imports to stop steel manufacturers shunning existing duties by slightly modifying the materials involved in their exports.
Housing Authority proposed to extend the target buyer scope to Green Form applicants for the new arrangements for the sale of recovered Tenants Purchase Scheme (TPS) flats, sources said. Furthermore, the authority planned to provide the existing tenants who are no longer enjoying any discount offers with special discounts.

PRE MARKET
Kwok's family, the controlling shareholder of SHK PPT (16.HK), mopped up US$8 billion wealth in the past year,
marking the steepest slide of wealth among Asian tycoon families, Bloomberg reported. Squashed by the gravest political and economic crisis in Hong Kong since 1997, the company is trading at less than half the value of the company’s net assets, the worst on record, knocking down Kwok's wealth to US$30 billion.
China Foreign Exchange Trade Center announced, on 6 August, the central parities in the interbank forex market of transaction currencies, including the dollar against CNY, are as follows: USD/CNY = 6.9438, up 314 bps from yesterday's central parity and hitting the peak since 10 March.
CHENMING PAPER (1812.HK) announced the dividend adjustment according to the incentive scheme. The final dividend for 2019 was revised from RMB1.5 per 10 shares to RMB1.47 per 10 shares.
Anthony Fauci, Director of the U.S. National Institute of Allergy and Infectious Diseases, told Reuters that drugmakers could make tens of millions of COVID-19 vaccine doses in early 2021, with a billion doses available by end-2021. Fauci added the federal government has "put more than one egg in the basket", seeing multiple subsidized vaccine projects going into clinical trials. He expected at least one vaccine that will be safe and effective by year end.
Google has in April-June deleted more than 2,500 YouTube channels tied to China as it is trying to weed out disinformation.
MANULIFE-S (945.HK) net income -44.6% yearly to CAD2.023 billion for the first half of year. Core earnings -13.7% annually to CAD2.589 billion, with a diluted EPS of CAD1  A second-quarter DPS of CAD0.28 was declared. A strong LICAT ratio of 155% was recorded for the quarter.
US President Donald Trump said the US stock exchanges will take back massive business after ceasing special treatment to Hong Kong. The US had given Hong Kong tremendous incentives in the name of freedom, yet the city grasped tremendous business away from the New York Stock Exchange, Nasdaq and all of the US exchanges, Trump said in an interview with Fox News. Hong Kong will not be a successful exchange anymore, Trump declared, who claimed to take that all back and the US is going to make a lot more money.
HKTV (1137.HK) monthly gross merchandise value on order intake amounted to $620 million in July 2020, +173.1% YoY and +43.9% MoM; average daily gross merchandise value on order intake reached $20 million, +174% YoY and +38.9% MoM
SUNAC (1918.HK) contracted sales value amounted to RMB52.25 billion, +27% YoY, and contracted sales area amounted to 3.728 million sq.m., with contracted average selling price of RMB14,020 per sq.m..
KOWLOON DEV (34.HK) PROFIT WARNING -VE expecting a decrease in underlying net profit in a range of 20% to 30% for the six months ended 30 June 2020 as compared with the corresponding period in 2019.

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