HSI -13pts (-0.2%) 26,157 HSCEI -34pts (-0.3%) 10,545 T/O HK$151.4bn (-9.4% DoD)
Asia was mixed following the US with coivd on investors minds; rising cases in Japan and S Korea as well as in Europe and US. Increased sanctions from Trump on China also hurting China which also saw its banks under pressure as a Coal Miner defaulted and talk of banks reassessing their credit market positions. Coming after the weak lending data the banks were a popular short. China reprimanded over its clear violation of the Handover agreement also weighing on investors minds; with some wondering if it hoped it would go unnoticed as covid cases rise and the US is in a state of flux. Also interestingly the HK Financial Sec said that the conditions for including Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE) into the MPFA's List of Approved Stock Exchanges were mature, and the related revision has been gazetted today with immediate effect. HK trade with mixed sentiments after Tencent’s good results and E-commerce names rebounding but Financials and sanction names weak. Monday on the open we are due China’s House Price Index, Fixed Assert Investment, Industrial Production, Retail Sales and Unemployment.
EUROPE Markets opened mixed FTSE lower, DAX and CAC lower but now all rising higher. Rising covid cases a concern with and the threat of increased sanctions on China also hurting sentiment.
Wholesale Prices Oct -1.9% YoY vs -1.8% Sept
Wholesale Prices Oct -0.2% MoM vs 0% Sept
Inflation Rate Oct 0% YoY vs 0% Sept (F/cast was 0%)
Inflation Rate Oct 0% MoM vs -0.5% Sept (F/cast was -0.1%)
EUROZONE GDP Growth Rate, Balance of Trade, Employment Change
UK No data due BoE Bailey speaks
US Futures opened flat +24pts S&P and NDX also slightly higher but rebounded in the Asian afternoon. Good after market results from Cisco and Disney but wider markets seeing weakness.Data PPI, Core PPI, Michigan Prelim Data (Current Conditions, Inflation Expectations, 5 year Inflation Expectations, Consumer Sentiment, Consumer Expectations) EIA Gas Stock Report, Baker Hughes Total Oil Rig Report.
Earnings include Manchester United, Draftkings, Vipshop
CHINA CSI 300 Closed -52pts (-1.1%) @ 4,857
CSI 300 opened lower with the threat of more sanctions from the US, the UK and potentially more countries over the ousting of elected opposition Hong Kong LegCo members. Plus Trump barring US investors from 31 Chinese companies including CHINA COMM CONS (01800.HK), CHINA RAIL CONS (01186.HK), CRRC (01766.HK), China Teleco, China State Construction, China Mobile, Huawei and HIKVISION (002415.SZ) and potential more ahead. Rising covid cases casting doubt over the global recovery. ASold down to 4,832 in the morning and then a small rebound in the PM. PM opened lower with caution on the Financials on news that there were re-assessing the credit market. It trended lower to the day low (4,849) but then saw a rally in the last 30 mins. Liquor names led the decliners. Stocks saw a small rebound off the day lows into the close.
Shanghai Comp -29pts (-0.9%) @ 3,310.
Shenzhen Comp -37pts (-0.3%) @ 13,755
ChiNext +6.3pts (+0.2%) @ 2,707
CHINA No Data but on the open Monday House Price Index, Fixed Assert Investment, Industrial Production, Retail Sales and Unemployment
HSI Pre Market Opened @ 26,114 -54pts vs -242pts ADR’s @ 25,927 with Telco’s and Construction names weak on Trump’s latest executive order to deter US investment in them. Overnight Central bankers said at a forum they were encouraged by the vaccine news but the short term outlook was still uncertain and fiscal stimulus was needed. As Trump’s team is stepping back from stimulus talks. Covid cases continue to surge globally. Tencent +VE after results E-commerce rallying.
Market initially sold down to day low (25,909) before rallying back to the opening level but sold down into lunch. PM opened higher but trading sideways with a small rally into the close and a 19pt uptick in the closing auction. Chinese Financials weak on news they were re-assessing the Chinese credit markets.
HONG KONG DATA
GDP growth rate Q3 Final +2.8% QoQ vs -0.1% Q2 (F/cast was +3%)
GDP growth rate Q3 Final -3.5% YoY vs -9% Q2 (F/cast was -3.4%)
The Government released today the Third Quarter Economic Report 2020, together with the revised figures on Gross Domestic Product (GDP) for the third quarter of 2020.
Considering the actual outturn in the first three quarters of the year and the cushioning effects of the Government's massive relief measures, the real GDP growth forecast for 2020 as a whole is revised from -6% to -8% as announced in the August round of review to -6.1% in the current round. Also taking into account the actual outturn in the first three quarters of the year, the forecast rates of underlying and headline inflation
for 2020 as a whole are revised downwards to 1.3% and 0.3% respectively, from 1.8% and 0.8% in the August round of review.
Centre for Health Protection said there were 6 new COVID-19 cases in Hong Kong today (vs 23 Thursday) 2 with unknown sources.
SHORT SELLING Friday vs 15.8% Thursday
Top Shorts Country Garden (2007) 32%, CNOOC (883) 32%, Ping An (2318) 30%, BankComm (3328) 28%, BoC (3988) 27%, Hang Seng Bank (11) 27%, HSBC (5) 27%, CCB (939) 26%, ICBC (1398) 24%, Wharf REIC (1997) 24%.
AFTER MARKET NEWS
Chinese Ministry of Foreign Affairs, gave response to Trump's executive order that will ban American investment in companies tied to the CCP military, China Daily reported. He urged the US to look at China's military-civilian integration development policy rightfully, stop suppressing specific Chinese companies in the name of national security, and revoke such wrongful decision, The Chinese government will adamantly safeguard the legitimate rights of national companies.
JD-SW (09618.HK) announced that sales turnover surmounted RMB271.5 billion to a new high during 11.11 Global Love Season (1-11 November 2020). During the period, sales turnover of household cleansing and paper products from Hong Kong jumped over eight times.
Qualcomm has received an export license to supply 4G chips to Huawei, not including 5G chips, foreign reports citing insiders.
China congratulates Biden and Harris on their election victory. A late response by China and after Biden had already had phone calls with the Leaders of Japan, S Korea and Australia.
Centa-City Leading Index (CCL) last posted at 176.69, down 0.54% weekly. Centaline Property, pinpointed that all of the four major CCL indices advanced last week but fell this week. Blunted by negatives, such as layoffs of big companies and unsuccessful tenders of Tung Chung Commercial Land, local housing prices waned for the week, showing the upswing was briefly trapped. That said, prices have shun the trough obviously since the Mid-Autumn Festival, and elevated. In four weeks' time,
CCL grossed increment +0.49%, CCL Mass grossed increment +0.65% and CCL (small-and-medium units) grossed increment of 0.61%
*PETROCHEMS WEAK as increasing Covid-19 cases and lockdowns may hurt the global economic recovery. The IEA cut oil-demand projections for this quarter by 1.2m barrels a day and cautioned the vaccine breakthrough won't revive markets until the 2H of 2021. CNOOC (883 HK -4%) PETROCHINA (857 HK -3%) CH OILFIELD SVS(2883 HK -3.6%) SINOPEC (386 HK -2.2%).
*E-COMMERECE REBOUND helped by TENCENT's (700 HK+4.3%) revenue and profit beat estimates, President Martin Lau pledged to work with Beijing on the new antitrust rules to control the fintech arena but said Tencent was more about a platform than a FinTech. Also helping was the surprise profit from Pinduoduo which was +20% in US trading.
BABA (9988 HK +1.6%) as good extended Singles Day promotion MEITUAN (3690 HK +6.6%), ALI HEALTH (241 HK +4.1%).
JD.COM (9618 HK +7.8%) is increasing its physical stores in order to be effective in lower tier cities. I think that’s important as it seeks to compete with Alibaba
*TELCOS WEAK as Trump signs executive order to prevent US investments in Chinese firms that Washington says are owned or controlled by the Chinese military may include CH MOBILE (941 HK -5%) and CH TEL (728 HK -7.8%). CH UNICOM (762 HK -6.6%) was also dragged lower.
*INFRASTRUCTURE WEAK impacted by the same executive order; CHINA COMM CONS (01800.HK -3.4%), CHINA RAIL CONS (01186.HK -4.1%), CRRC (01766.HK -3.8%)
*CH BANKS WEAK as Yongcheng Coal Holding Group's defaulted a 1b yuan note this week. Coal miners are reportedly cancelling planned sales of local bonds or extending pricing deadlines as investors turn sour on the Chinese credit market. Prompting the banks to have to re assess their exposure. CCB (939 HK -3%) ICBC (1398 HK -2.9%) ABC (1288 HK -4%) BOC (3988 HK -1.8%) BOCOM (3328 HK -2.8%). Worth noting the Chinese Banks are a popular short.
*HK PROPERTY FLAT as 1-month HIBOR, which is linked to HK's mortgage rate, fell to a near-decade low of 0.12018%, easing the repayment burden for homebuyers +VE BUT the rise of locally infected Covid-19 cases in the past couple of days raised concerns about a new outbreak.
NWD (17 HK -0.2%) has collected about 17,000 checks for the 343 units on offer at The Pavilia Farm II in Tai Wai Station, for about 48x oversubscribed.
SHKP (16 HK -0.7%) KERRY (683 HK -1.6%) SINO (83 HK -0.2%) CKA (1113 HK -0.8%)
*CHINA PROPERTY MIXED Evergrande Property Services, the property mgmt arm of CHINA EVERGRANDE (3333 HK -0.5%), has passed its hearing with the Stock Exchange of HK to raise up to US$3b.
SOHO CHINA (410 HK +7%) but off highs after Reutuers reported that Hillhouse is in talks to take the Chinese developer private; stock still closed higher despite Hillhouse saying it has no plan to privatise Soho China.
*PHARMA MIXED on vaccine development news. CANSINO BIO (6185 HK +4.3%) SINOPHARM (1099 HK -2.1%) CSPC (1093 HK +1.3%) FOSUN (2196 HK -1.6%). WUXI BIO (2269 HK +5.7%) but was +7.2% intraday ahead of it’s 3-for-1 stock split on Monday.
AAC TECH (2018 HK+1.9%) at lunchtime said that its 3Q net profit -38% YoY to 430m yuan , partly because of a weak global smartphone market, but said quarterly revenue +5.7% QoQ, as its main business segments continued to recover.
YUE YUEN (551 HK +2.6%) reported a net loss for the first nine months of US$154m vs a profit in the same period last year. But helped by news of a Nike upgrade in US as broker predicts a faster than expected recovery from COVID-related disruption
SAMSONITE (1910 HK+10%) yesterday reported 3Q adjusted net loss US(98.7m, but analyst expects the company to break-even in 1H 2021 amid travel recovery.
CKH (1 HK +1.3%) confirmed the sale of his European telecommunication towers to Cellnex, a Spanish phone tower operator, for 10b euros.
JAPAN opened lower and sold down to the day low just before lunch, 25,215. PM has seen the market regain some lost ground but investors remain cautious ahead of the weekend. Closed -135pts (-0.5%) @ 25,385
Topix again opened lower traded down into lunch. PM opened at the day low 1,693 and has worked slightly higher currently -23pts (-1.3%) @ 1,703
S KOREA Kospi opened lower rallied, fell back and then worked higher and into the green but seeing resistance at 2,490 currently +19pts (+0.8%) @ 2,494.
Kosdaq similar pattern but has not managed to break back into the green with resistance at Thursday’s closing level currently -1pt (-0.1%) @ 839
TAIWAN opened flat, sold down and then worked higher into the green, seeing resistance at 13,255 currently +52pts (+0.4%) @ 13,273. Good FT article on the tech sectors and highlights TSMC’s importance.
CONNECT FLOWS (slight higher DoD)
Northbound Rmb 38,937m Buy 21,286m vs 17,651m Sell
Southbound HK$ 15,400m Buy 7,063m vs 8,337m Sell
Northbound Rmb 55,013m Buy 28,159m vs 26,855m Sell
Southbound HK$ 13,875m Buy 5,978m vs 7,898m Sell
MEITUAN-W (03690.HK) +6.6%
TENCENT (00700.HK) +4.3%
CCB (00939.HK) -2.6%
BABA (09988.HK) +1.6%
AIA (01299.HK) +1.3%
PING AN (02318.HK) -0.6%
HKEX (00388.HK) +0.4%
HSI & HSCEI Constituents on the move
CHINA TELECOM (00728.HK) -7.8%
CHINA UNICOM (00762.HK) -6.6%
WUXI BIO (02269.HK) +5.7%, hitting new high
CHINA MOBILE (00941.HK) -5%
XIAOMI-W (01810.HK) +4.3%
PSBC (01658.HK) -4.2%
CNOOC (00883.HK) -4%
CHINA TOWER (00788.HK) -3.7%
CHINA TAIPING (00966.HK) -3.1%
ABC (01288.HK) -3.1%
BANKCOMM (03328.HK) -3%
HSMI & HSSI Constituents on the move
SAMSONITE (01910.HK) +10.4%
CHINASOFT INT'L (00354.HK) +5.6%, hitting new high
CHINAHONGQIAO (01378.HK) +4.4%, hitting new high
MARKET HOURS NEWS
PUBG Corporation announced that it is cutting its tie with TENCENT (00700.HK) and working on "PUBG Mobile India", specially created for Indian users. Its parent KRAFTON also disclosed a plan to make US$100-million investment and hire more than 100 employees in India to cultivate local games, e-sports, entertainment and IT ecosystems.
Mobile game revenue burgeoned 25.7% YoY to US$58.7 billion for the first three quarters of 2020, reported Sensor Tower. App Store revenue ballooned 25.3% YoY to US$35.2 billion during the period. By games, TENCENT (00700.HK)'s PUBG Mobile topped the global grossing chart, followed by Honor of Kings. Niantic's Pokemon GO was ranked the third.
Multiple Chinese banks are trimming their exposure to corporate bonds, where some are focusing on notes from state-owned firms, in the wake of credit defaults, people familiar with the matter were quoted as saying by Bloomberg. The said banks, along with several others that have not yet trimmed their exposure, are reviewing their positions and requiring approvals from the headquarters for additional purchases of corporate bonds, said the insiders.
Rumour Hillhouse Capital is in early talks for privatizing SOHO CHINA (00410.HK) in a deal worth over US$2 billion, Reuters citing several insiders. SOHO CHINA's price once rocketed 40% after midday, peaking at $3.22. The stock mounted 27.5% to last post at $2.92, on. volume. of 170 million shares. Chinese media later denied the rumour.
In response to Bonitas' short-selling report, HARMONY AUTO (03836.HK) stated in another clarification announcement that the Company had disposed of its equity in IAC in 2019 for RMB192 million and reduced its shareholding to 19.8%. The payment of RMB192 million was successfully received in the bank records, evidenced by the corresponding payment vouchers, bank statements, and company accounts. Relevant audit procedures were completed in the external audit of that year. There was no failure to receive the payment. The claims in the Bonitas report that the money had not been received were false and totally inconsistent with the facts. In addition, the transferee of the 29% equity is an independent third party and does not have any legal or factual relationship with other shareholders.
RAZER (01337.HK) announced that its overall turnover leaped as much as 45% yearly, with user flow over 4.80 million, during "11.11 Shopping Frenzy 2020".
CATHAY PAC AIR (00293.HK) and Cathay Dragon carried a total of 38,500 passengers last month, -98.6% YoY, and 114,300 tons of cargo and mail, -37.6% YoY. The airline remains in a very dynamic situation and overall recovery is anticipated to be slow, said Group Chief Customer and Commercial Officer Ronald Lam. As the group previously announced, it expected to operate well under 25% of 2019 passenger capacity in the first half of 2021 and below 50% for the entire year.
At lunchtime AAC TECH (02018.HK) first three quarters result ended September 2020. The revenue -1.8% YoY to RMB12.357 billion. The net profit amounted to RMB751 million, -48.8% YoY. EPS was RMB0.62. The gross profit margin was 23.3%, down 5.1 ppts yearly. The net profit margin was 6.1%, down 5.5 ppts. For the third quarter of 2020, the Group revenue -9.8% YoY to RMB4.52 billion. The net profit -38.1% yearly to RMB430 million. EPS was RMB0.36.1-Month
HIBOR Down to 0.11%, Sinking for 7 Days Logging 1-month Low Overnight HIBOR last posted at 0.03657%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.11661%, down for 7 days, marking a 1-month low.
Given unceasing reform and opening in China's capital market, Financial Services and the Treasury Bureau and regulators have been reviewing regulations in this regard, according to a blog post of Christopher Hui, Secretary for Financial Services and the Treasury. After coordination and research with MPFA, the conditions for including Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE) into the MPFA's List of Approved Stock Exchanges were mature, and the related revision has been gazetted today with immediate effect.
Macao Government Tourism Office is gradually working on the reboot of tourism industry to avoid pressures on ports, said Director Maria Helena de Senna Fernandes. At this moment, the office is focusing on Mainland and reinforcing Mainland visitors' confidence of trips to the gambling hub by means of online propaganda and promotion discounts.
Bonitas Research today (13 November) issued a public letter to Deloitte, stating HARMONY AUTO (03836.HK) hired Deloitte in July 2020 for audit work on the company's financial reports, following the resignations of two auditors earlier this year. The short seller suspected the two resignations were tied to the write-off of the chairman Feng Changge's RMB1 billion loan. Bonitas Research implored Deloitte to do the right thing and tender resignation as the auditor of the automaker. The short seller had issued a research report yesterday (12 November), alleging HARMONY AUTO of fabricating financial data and making up fraud transactions. The chairman Feng Changge was also blasted for involving in company's money transfer.
PRE MARKET NEWS
Not in this mornings report
The Trump administration is dropping out from talks about a fresh economic stimulus package, leaving negotiations to Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi, Bloomberg learnt from people familiar with the matter.
CATHAY PAC AIR (00293.HK)'s local labor union told local press that the flagship airline had yesterday addressed letters of dismissal to clerical officers as part of its business reshuffle. Around 20 workers, ranging from low-rank staff to senior executives, were purportedly impacted. The airline confirmed that the involved white-collars had yesterday been officially notified, who will be entitled to redundancy packages far beyond the statutory level.
VINDA INT'L (03331.HK) on 12 November, Chairman Li Chao Wang had through a corporation controlled by him made on-market purchases of an aggregate of 500,000 shares, involving around $10.72 million.
HARMONY AUTO (03836.HK) on November 12, the controlling shareholder Eagle Seeker acquired a total of 7.5925 million shares of the Company for a total consideration of HKD24.506 million in the market.
CASH FIN SER GP (00510.HK) during the period from 10 November to 12 November, the Group had acquired an aggregate of 46,000 JD-SW (09618.HK) shares through the open market at an aggregate consideration of approximately HK$15.06 million.
HUANENG POWER (00902.HK) as of 10 November, the time limit for the Increase in Shareholdings by Huaneng Group, the controlling shareholder of the Company, has expired. During the period, Huaneng Group has increased 131.5 million H shares in aggregate.