HSI -187pts (-0.7%) 26,357 HSCEI -85pts (-0.8%) 10,555 T/O HK$131.93bn (-1.4% DoD)
Many are asking if the good news on vaccines is already priced in or still to be priced in. Still many looking at the rotation into value names. But interestingly Mark Mobius is expecting 2021 to be a tough year as most of the good news is priced in.
EUROPE Markets open lower as a resurgence of covid cases raises fears of more shutdowns and damage to the recovery outweighs the positive covid vaccine news. Comes as AstraZeneca and University of Oxford announced in Phase 2 their vaccine was proven safe and produced an immune response among all adults, including the elderly aged above 70 and Pfizer said that final analysis had shown its vaccine was 95% effective and would be submitted to the U.S. Food and Drug Administration (FDA) for approval within days. ECB Lagarde cautioned that euro area inflation is likely to remain negative into early 2021 as fresh economic shutdowns sweep through the continent and warned of the damage to the EU economy if countries didn’t implement the recovery package.Royal Mail strong in early trade on good earnings. Nel also strong
Kion Group weak after a capital increase and Thyssenkrupp weak after its Q3 results and announcement of more than expected job loses.
EUROZONE Current Account, Construction Output, Speech from ECB’s Lagarde
GERMANY No data due Speech from Bundesbank’s Mauderer, Buch and Wuermeling.
FRANCE No data due
UK CBI Industrial Trends Orders
US Futures Dow and S&P opened flat drifted slightly lower NDX opened slight lower Data
Philadelphia Did Manufacturing Index, Initial Claims, 4 week Ave Claims, Continuing Claims, Existing Home Sales, CB Leading Index, EIA Natural Gas Stock Change Report, Kansas Fed Manufacturing Report and 10yr TIPS Auction. Speeches from Fed's Mester.Earnings: BJ’s Wholesale, Macy’s, NetEase, Intuit, Ross Stores, Workday, Helmerich and Payne, BellRing Brands
CHINA CSI 300 Closed +36pts (+0.7%) @ 4,928
opened lower but worked higher through the day following President Xi’s positive comments in the morning to the APEC conference about China opening up and not decoupling from the US and to peak at 4,940 level at 2:45pm before easing back to close +36pts (+0.7%) @ 4,928 Market also saw encouragement from policies announced at a state council meeting to boost auto consumption which could mean further stimulus is forthcoming from Beijing. Sector wise; Leaders were national defence, household appliances, leisure services, agriculture; Laggards were; construction materials, non-ferrous metals, and mining.
Shanghai Comp +16pts (+0.5%) @ 3,363
Shenzhen Comp +119pt (+0.9%) @ 13,777
ChiNext Index +25pts (+0.9%) @ 2,645
CHINA Data None
HSI Pre Market Opened @ 26,460, -84pts vs -116pts ADR’s With Ecommerce names still weak along with Chinese Financials. Auto’s were mixed on news of more government support via increased licences plate quota’s and for trade ins. The HSI then sold down to 26,312 level before bouncing then rebounded to 26,420 level and traded sideways in that PM. From 2pm the market traded around the upper limit of that range; Market traded lower in the last 15 minutes and ticked down 42pts in the closing auction.
IPO SUNAC SERVICES (01516.HK) on debut, settled the day at $14.14, up $2.54 or 22% against the listing price $11.6, on volume of 189 million shares and turnover of $2.385 billion. Excluding the handling fees, a book gain of $2,540 was reported per board lot of 1,000 shares.
ANTENGENE-B (06996.HK), to be listed tomorrow, opened at $19.7 in gray market, up around 9% against the listing price $18.08, and last stood at $18.5, up 2.3%, on volume
of 890,000 shares, PhillipMart data showed.
HONG KONG DATA
Centre for Health Protection said there were 12 new COVID-19 cases in Hong Kong today (vs 9 Wednesday) 2 local infection of unknown origin. It also added 20 initially diagnosed confirmed cases; if diagnosed it would suggest a vast amount of unknown origins and possible resurgence.
SHORT SELLING Thursday 14.7% vs 16.8% Wednesday
Top Shorts Ping An (2318) 48%, Country Garden (2007) 40%, Galaxy Ent (27) 38%
Sunny Optical (2382) 37%, CLP (2) 34%, Hang Seng Bank (11) 28%, Hang Lung Ppty (101), BoC (3988) 26%, AAC Tech (2018) 26%, Sinopec (386) 25%.
AFTER MARKET NEWS
HISENSE HA (00921.HK) announced that it subscribed for wealth management products in a total amount of RMB200 million with an investment period of 90 days. The expected maximum rate of return was 3.51%.
CHINA MOBILE (00941.HK) has sold 85 million units of 5G terminals, The Paper citing Wang Hengjiang, Deputy General Manager of China Mobile Terminal. Wang projected the sales. volume. to at least exceed 100 million units by the end of 2020.
NTES-S (09999.HK) -1.800 (-1.325%) net income from continuing operations came in at RMB3 billion in Q3 2020, which counts net exchange losses of RMB1.6 billion, compared to RMB4.1 billion a year ago. Net revenue surged by 27.5% year on year to RMB18.7 billion during the quarter, beating the estimates.
The euro was the most-traded currency for global payments in October, overtaking the US dollar for the first time since February 2013, Bloomberg citing SWIFT's data. 37.82% of the SWIFT cash transfers were handled in euros, a new high since February 2013 and showing an over-6-ppt rise from the end of 2019. In contrast, the US dollar's usage dipped about 4.6 ppts to 37.64%.
At Chinese Ministry of Commerce's standing news conference, Spokesperson Gao Feng stated that Beijing supports Hong Kong to take part in international and regional economic cooperation and to join RCEP as soon as possible.
SA SA INT'L (00178.HK) Chairman Simon Kwok Siu-ming foresaw a better performance for the second half of the fiscal year than in the first half, mainly driven by the Macau operation under customs clearance resumption. Equally, he expected a positive sales growth as Hong Kong stores undergo destocking during Christmas and Chinese New Year.
VITASOY INT'L (00345.HK) interim results ended September 2020. Reported art lunchtime Revenue -5.9% yearly to HK$4.41 billion. Net profit amounted to HK$672 million, +26% yearly. EPS equaled HK63.1 cents. Interim DPS was HK3.8 cents, flattish with the corresponding period of the previous year. In the after market conference is said it is set to ride on the silver lining in the pandemic situation of Mainland China during the second half of 2020, said CEO Roberto Guidetti, who expected the business performance to go on improving mildly and get back to normal in the future. While the group had seized the top spot in terms of beverage products during the "11.11 shopping frenzy", Guidetti foretold the Mainland income contribution from online retail to go up gradually from roughly 10% at this moment.
Spot USD/CNY closed at 6.5851, down 426 bps. As at 16:48, USD/CNY sagged 273 bps in the night session. USD/CNH stood at 6.5815, down 195 bps.
The Hong Kong Monetary Authority (HKMA) announced that the composite interest rate, which is a measure of the average cost of funds of banks, decreased by 7 basis points to 0.29% at the end of October 2020, from 0.36 per cent at the end of September 2020.
PACIFICTEXTILES (01382.HK) interim result ended September 2020. The net profit amounted to HK$376 million, -8.8% YoY. EPS was HK$0.27. An interim dividend of HK22 cents was declared.
Centa Valuation Index (Major Banks) (CVI) last printed at 42.58, down 5.86 pts weekly, said Centaline Property. The index will see support at around 40, opined Wong.
CH WANT WANT (151 HK +5.4%) net profit for the six months ended September rose 21% YoY to 1.95b yuan, helped by higher revenue from its diversified sales channels. VITASOY (345 HK -4.7%) reported a interim net profit up 26% YoU to HK$672m, mainly due to tightened cost controls and the govt's virus pandemic subsidies for job.
SASA INTL (175 HK +0.9%) said interim net loss extended by 5.6 times to HK$242mn for the six months ended September. Turnover for continuing operations slumped by 62.1% to HK$1.29b.
*CHINESE BANKS WEAK as investors worry about the credit stresses linked to bond defaults. CCB (939 HK -1.3%) ICBC (1398 HK -2.3%) BOC (3988 HK -1.8%) ABC (1288 HK -1.7%).
*ECOMMERCE WEAK, as JOYY INC (YY US) shares tumbled after Muddy Waters Research said Joyy’s live-streaming service YY is “guilty of bot forming, creating fake transactions and having fake users.” The report, published Wednesday, came just days after Baidu Inc. agreed to buy YY for $3.6b.
JD (9618 HK -2.3%) ALIBABA (9988 HK -1.9%) TENCENT (700 HK -2.7%) NTES (9999 HK -1.3%) ahead of earnings.
*PHARMA FIRM China has five vaccines for COVID-19 currently undergoing phase III clinical trials in some foreign countries, a Foreign Ministry spokesperson Zhao said Wed. He said China expects its vaccines, after completion of research and development, will be included on the purchasing list of the COVAX initiative at an early date. FT report points out the Pharm names are down 11% since Pfizer announced its phase III trial results and 33% since August. FOSUN (2196 HK +1.8%) CANSINO (6185 HK +3%) 3SBIO (1530 HK +2%) SINO BIOPHR (1177 HK +1.1%).
*AUTOS RALLIED The State Council encouraged cities to increase their car license plate quotas and subsidise rural residents for purchases of certain trucks and passenger cars. GAC (2238 HK +9.5%) GREATWALL (2333 HK +1.7%) DONGFENG MOTOR (489 HK +5.3%) YONGDA (3669 HK +6.5%).
*CONSUMPTION FIRM on the State Council's call for boosting consumption (see pre market below). HISENSE (921 HK +6.5%) CR BEER (291 HK +4.3%) TSIGNTAO (168 HK +4.4%) LI NING (2331 HK +2.6%).
*HK RETAILERS FIRM on vaccine hopes, despite the HK Retail Management Assoc warns that retailers expect sales in November and December will be worse than in October. The association estimated that 15,000 retail stores will close by year-end. I.T. (999 HK +14%) GIORDANO (709 HK +5%) CHOW TAI FOOK (1929 HK +2%).
*CHINA PROPERTY WEAK on credit concerns after news reported that Fujian Fullsun Group is the latest mainland real estate group that defaulted on bond interest payment and principal; earlier in January this year, Fullsun Group and Shimao Group (813 HK -3%) reached a merger and acquisition agreement. CH JINMAO (817 HK -3.4%) KAISA GROUP (1638 HK -2.3%) SUNAC CHINA (1918 HK -3%).
SUNAC SERVICES (1516 HK) trading debut today, closed up 20% at HK$14 vs IPO price HK$11.60/shr.
Opened lower as Tokyo and national covid cases rises significantly; prompting an increase in the alert level and in addition to those seen globally hurting sentiment. Exporters under pressure as the Yen strengthens. But some tech names seeing interest as deals are still being done. Market traded sideways in the AM session. PM opened lower but worked back to the opening levels Closed -94pts (-0.4%) @ 25,634
Topix Opened lower and work higher to yesterdays closing level around 11am but sold down into lunch. PM opened flat but sold down to 1,710 where it found support and then rallied to close at the day high +6pts (+0.3%) @ 1,726
Kospi opened lower and saw choppy trading testing yesterday’s close but unable to break above in the first hour and then selling down to 2,530 which is tested a number of time between mid day and 2:15 but then rallied into the close to finish +2pts (+0.1%) @ 2,547
Kosdaq opened flat and traded sideways until 1pm when it started to work higher and rallied to 862 before easing back to close +8pts (+1%) @ 860
Opened flat and saw an choppy start popping down to 13,740 before bouncing back to 13,780 but then trended lower 13,700 around mid day and then saw a small rally to 13,732 before easing back to close -51pts (-0.4%) @ 13,722
CONNECT FLOWS (lower DoD)
Northbound Rmb 36,200m Buy 17,433m vs 18,767m Sell
Southbound HK$ 11,028m Buy 4,316m vs 6,711m Sell
Northbound Rmb 49,740m Buy 25,318m vs 24,422m Sell
Southbound HK$ 10,715m Buy 5,148m vs 5,566m Sell
TENCENT (00700.HK) -2.7%
MEITUAN-W (03690.HK) -2%
BABA (09988.HK) -1.9%
AIA (01299.HK) -1.8%
CCB (00939.HK) -1.3%
PING AN (02318.HK) -0.4%
HKEX (00388.HK) +0.1%
HSI & HSCEI Constituents on Move:
XIAOMI-W (01810.HK) +5%
WANT WANT CHINA (00151.HK) +4.6%
CHINA RES BEER (00291.HK) +4.4%, hitting new high
HANG LUNG PPT (00101.HK) +3.7%
ANTA SPORTS (02020.HK) +2.6%, hitting new high
HSMI & HSSI Constituents on Move:
GRAND BAOXIN (01293.HK) +11%
SITC (01308.HK) +5%, hitting new high
C&D INTL GROUP (01908.HK) +2.9%, hitting new high
GCL-POLY ENERGY (03800.HK) +2.1% hitting new high
MARKET HOURS NEWS
Taking into account inflation, Asia-Pacific economies may see an average real wage hike of 1.7% next year, according to ECA International's report. This is far ahead of the global standard of 0.5%. Accounting for a 2.4% inflation, Hong Kong's 2021 average real wage growth may hit 0.6% only, below the 2020 rise of 1.4% and the world average of 1.7%. The city's salary bump will be amongst the lowest in Asia-Pacific.
SWIREPROPERTIES (01972.HK)'s Eight Star Street project is located at Star Street, Wan Chai in the vicinity of Three Pacific Place, said Residential Director Adrian To. The first log will be available by tender, he added. Sales documents may be unveiled in late November or early December.
At this moment, the smartphones developed by Huawei, XIAOMI-W (01810.HK), OPPO, vivo, Samsung have passed trials of 5G messaging functions, Securities Times learnt from exhibitors. While CHINA MOBILE (00941.HK) is taking the lead against its other two counterparts in terms of 5G platform development, the three major Chinese telecom carriers will possibly jointly announce 5G messaging commercialization by the end of 2020, said the report.
Apple (AAPL.US) has acknowledged glitches with some iPhone 12 displays, which may under certain conditions show flickering, a green or gray glow, or unintended lighting variations, according to an internal document seen by MacRumors. The U.S. tech giant advised its technicians against servicing affected iPhones at this moment, and reminded its customers to keep their iPhone updated to the latest iOS version, which suggests it is confident that it can fix the issue through software updates looking ahead.
KWG LIVING (03913.HK) rumoured to be interested in acquiring Cedar Holdings' property segment, China Business Network citing sources. The disposal had purportedly been materialized two months ago, but the buyer remained unknown until recently.
SA SA INT'L (00178.HK) interim results ended September 2020. Turnover -62.1% yearly to HK$1.286 billion. Loss deepened to HK$242 million from HK$36.53 million in the corresponding period of the previous year. LPS equaled HK7.8 cents. No dividend was declared. For Q3 from 1 October to 15 November 2020 the Group’s retail and wholesale turnover -34.8% YoY
VITASOY INT'L (00345.HK) interim results ended September 2020. Revenue -5.9% yearly to HK$4.41 billion. Net profit amounted to HK$672 million, +26% yearly. EPS equaled HK63.1 cents. Interim DPS was HK3.8 cents, flattish with the corresponding period of the previous year. In the after market conference is said it is set to ride on the silver lining in the pandemic situation of Mainland China during the second half of 2020, said CEO Roberto Guidetti, who expected the business performance to go on improving mildly and get back to normal in the future. While the group had seized the top spot in terms of beverage products during the "11.11 shopping frenzy", Guidetti foretold the Mainland income contribution from online retail to go up gradually from roughly 10% at this moment.
WANT WANT CHINA (00151.HK) interim result ended September 2020. Revenue +10.7% YoY to RMB10.299 billion. The net profit amounted to RMB1.952 billion, up 20.9%. EPS was 15.75 fen. An interim dividend of US0.65 cents was declared, against US0.64 cents in the year-ago period.
SHK PPT (00016.HK) unveiled the fifth price list for Cullinan West III, the residential project in Cheung Sha Wan, rolling out 217 flats with saleable area of 279-1,047 sq.ft.. Priced at $8.512-41.805 million, the prices per sq.ft. ranged $30,079-39,928. Based on the maximum 20% discount, the selling prices were $6.8096-33.444 million. The project is likely to launch for sale next weekend, said Victor Lui, Deputy Managing Director of SHK PPT.
XIAOMI-W (01810.HK) announced that the global sales of its Redmi Note series had exceeded 140 million units. According to Omdia's data, the Redmi Note 8 series was the world's second-bestselling handset model for the first half of 2020.
Overnight HIBOR last posted at 0.03821%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.10286%, marking a 1-month low.
Carrying out digital upgrade as underpinned by BABA-SW (09988.HK)'s ecosystem, Fliggy aims to nurture 150 more merchants with annual turnover exceeding RMB100 million in the coming three years, said Zhuang Zhuoran, Vice President of BABA-SW and President of Fliggy.
Chinese President Xi Jinping today (19th) delivered a speech at the APEC CEO Dialogues virtually in Beijing, reported Xinhua. He suggested opening-up as the premise of national advancement, adding a sealed-off country will surely end up falling behind others. Equally, China will not run against history by decoupling or forming a clique to keep other countries out, Xi furthered. China has not shut the door of opening-up despite an increasingly unstable and uncertain global economy, coupled with widespread unilateralism and protectionism year-to-date, said Chinese President Xi Jinping at the APEC meeting. Instead, the country has launched a raft of policy measures to expand its opening-up. Beijing will uphold the role of innovation as the primary driver of development, stressed Xi. Trump is expected to attend on Friday.
The U.S. Government should over the next decade collect US$1 trillion in tax, the former Treasury Secretary Lawrence Summers told Yahoo Finance. At least, Washington should better enforce on the US$7 trillion tax that is owed but not yet paid, with "most of that coming from the richest taxpayers”. President-elect Joe Biden will find his tax plan unlikely "to be legislated in this political environment", but he may choose to go after tax cheats, which can help raise part of the fund needed, opined Summers.
Global debt will possibly surge to a record US$277 trillion by the end of 2020, representing 365% of the global GDP , due to actions in response to the coronavirus pandemic, said the Institute of International Finance (IIF) in a report.
LINK REIT (00823.HK) in relation to its acquisition of office property 25 Cabot Square London, the final aggregate consideration (after adjustment) is GBP367.9 million, which is less than the aggregate consideration of GBP371.4 million.China Foreign Exchange Trade System announced today (19 November) that the central parity of USD/ RMB gained 109 bps from the last trading day to 6.5484, hitting an over-two-year high.
PRE MARKET NEWS
Not in this mornings report
Macau Tourism Office announced that as of 11 November, over 430,000 offline spending vouchers, in a size of approximately RMB4.13 million, have been dispatched, cited Radio Macau. After Beijing resumed its travel pass granting to Macau, the daily average traveler figure of the gambling hub has risen to over 20,000, said the office.
Sweden’s decision to bar Huawei from the local 5G network is restricting free competition and trade, Ericsson CEO Borje Ekholm told the Financial Times. The overall 5G network rollout is set to be delayed, opined Ekholm, adding that slowing the launch of 5G poses an economic risk and that Europe risks falling behind again.
TENCENT (00700.HK) is a lead investor in the latest funding round of the online course platform Udemy, Bloomberg citing sources. Udemy announced yesterday that it has raised US$50 million in its fresh round, with valuation surging to US$3.25 billion.
DBS Bank, being the domestic creditor of Brilliance Auto Group amid default scandal, said the bank has officially filed an application for arbitration regarding the auto group's certain asset transfer behaviors which sabotaged creditor interest. The bank also made application for property preservation of the related assets. According to the announcement on China Bond website dated 14 November, DBS Bank, Shanghai Branch had filed arbitration against Brilliance Auto Group, involving an amount of RMB779 million.
XIAOMI-W (01810.HK) Chairman and CEO Lei Jun, in response to question of whether the company owns valuable technology, said it would be impossible to survive if it lacked fundamentals when it was surfing on the cusp of fierce competition with Apple, Samsung and Huawei, Sina Finance reported. XIAOMI-W finally made itself to the peak in early year harnessing its camera technology, Lei cited the assessment of a third party institution.
Chinese local governments have recently rolled out new moves that encourage consumption at the end of 2020, where they will zero in on the policies to prompt a pickup in automobile spending and large commodity sale, Economic Information Daily reported. In order to dig deeper into tax-free spending potentials, Haikou is striving for opening and expanding tax-free stores at four islands by end-20 and stretching the operation footprint of luxury brands.
HAITONG SEC (06837.HK) announced that, according to the information published by the National Association of Financial Market Institutional Investors (NAFMII) on its website, NAFMII intends to conduct self-discipline investigation on the Company and its relevant subsidiary. The Company will fully cooperate with self-discipline investigation, strictly comply with the relevant requirements of “Notice on Further Strengthening the Issuance Business Standardization of Debt Financing Instruments” promulgated by NAFMII, and fulfil obligations of information disclosure in a timely manner. NAFMII recently found that HAITONG SEC and its relevant subsidiary had allegedly offered help to Yongcheng Coal & Electricity Holding Group Co., Ltd. in the illegal issuance of bonds and market manipulation.
The coronavirus vaccine developed by Pfizer (PFE.US) and BioNTech, according to final trial results, had a 95% success rate. The two drugmakers will hopefully secure emergency U.S. and European authorization for the vaccine next month and start deliveries before Christmas, said BioNTech CEO Ugur Sahin.
ZTO EXPRESS-SW (02057.HK) result for the first three quarters ended September 30, 2020. Net profit amounted to RMB3.024 billion, down 9.7% yearly. EPS was RMB3.86. For the third quarter ended September 30, 2020, the Company's net profit fell 7.4% to RMB1.21 billion.
At a State Council standing meeting, Chinese Premier Li Keqiang mentioned the need to bolster auto consumption. China shall encourage cities to raise the ceiling of vehicle license plate quota, Li added. Particularly, a new round of promotion campaigns will be launched for car-buying subsidy in rural areas and trading in used vehicles for new ones. Citing the tremendous potential in tourism spending, Chinese Premier Li Keqiang said at the State Council meeting that Beijing has ascertained moves to bolster "Internet + Tourism" development as it seeks to nudge healthy development of tourism industry amid normalizing pandemic precaution. The said measures include support to the construction of smart scenic landmarks and inclusion of electronic maps and vocal tour guides.