HSI +82pts (+0.3%) 26,670 HSCEI -55pts (-0.5%) 10,558 T/O HK$178.06bn (+24.3% DoD)
EUROPE opened slightly higher but sold down int he morning session as the rally fades ahead of US Thanksgiving. Autos and banks lead losses while utilities gained.The European Central Bank (ECB) on Wednesday warned that European banks will not see profits return to pre-pandemic levels before 2022.Data
EUROZONE ECB Financial Stability Review, ECB speaker Schnabel
GERMANY Bundesbank speakers Mauderer and Wuermeling
FRANCE Unemployment Benefit, Jobseekers
UK 2020 Spending Review, OBR Economic & Fiscal Forecasts.
US Futures opened flat rose in Asian trading but then turned lower DOW futures -70pts, S&P -0.1% and NDX slightly higher. Expect caution in US afternoon trading ahead of the markets being closed Thursday and short trading Friday as many are likely to take a long weekend.
Data MBA 30 yr Mortgage Rate, Mortgage Applications, Durable Goods Data, Corporate Profits, GDP Growth Rate, Goods Trade Balance, Wholesale Inventories, Initial Claims, 4 week Ave Claims, Continuing Claims, Personal Income & Spending, PCE Price Index, New Home Sales, Michigan Final (Consumer Expectations, 5 yr Inflation Expectations, Consumer Sentiment, Current Conditions, Inflation Expectations), Core PCE Price Index, EIA Oil & Gas Report, Baker Hughes Oil Rig Total Count, FOMC minutes.
CHINA CSI 300 Closed -64pts (-1.3%) @ 4,911
Opened higher at 4,993 and initially ticked up to 5,005 but then sold own to yesterday’s closing price and traded around there but then sold down into lunch. The selling continued in the PM session to close at the day low. Sell off lead by big cap Kweichow Moutai. Cyclical stocks and ChiNext stocks also sold down. Weakness in Brewers, Non-Ferrous Metals, Aerospace, Glass ceramics and Steel. Gainers were Insurance, Communications, Telecos, PetroChems and Power.
Shanghai Comp -41pts (-1.2%) @ 3,362
Shenzhen Comp -246pts (-1.8%) @ 13,656
ChiNext Index -59pts (-2.2%) @ 2,616
CHINA Data None
Next data will be Industrial profits on Friday.
HSI Pre Market opened @ 26,819 +231pts vs + 307pts ADR’s 26,895 with Ecommerce firm but Xiaomi weak desire good earnings. HSBC +VE on rumours it may resume dividends soon. Market initial ticked up to test 27,000 before easing back to 26 870 level for most of the morning tick up to 27,040 as Carrie Lam gave her policy address as she mentioned allowing some further cross border trading access but then sold down into lunch. Market drifted lower in the PM but found support at yesterday’s closing level. Disappointment that there was nothing of substance in the policy address. Sentiment weak as HK saw another 80 covid cases and stricter social distancing rules imposed starting tonight at mid-night.
HONG KONG DATA
Centre for Health Protection said there were 85 new COVID-19 cases in Hong Kong today (vs 80 Tuesday) 16 local infections with unknown origins
SHORT SELLING Wednesday 19.7% vs 19.6% Tuesday
Top Shorts Ping An (2318) 44%, Hengan (1044) 41% Bank of China (3988) 36%, CLP (2) 32%, MTRC (66) 31%, Sunny Optical (2382) 30%, CCB (939) 27%, WHARF REIC (1997) 26%, Citic (267) 25%.
AFTER MARKET NEWS
Leading Group (06999.HK) Chairman cum CEO Liu Yuhui disclosed that the company will keep cementing its position in the southwest market in China looking ahead and extend its footprint gradually to the whole country, with the main focus on tier 2 cities and key tier 3 cities. Before entering a market, the company will weigh various factors, for example the local economic development, population, consumption per capita and GDP growth. The group will anchor its deployment along East China, Beijing-Tianjin-Hebei, Greater Bay Area and Chengdu-Chongqing Economic Belt, so as to hoard up land bank by diversified strategies, including beefing up joint development with third parties.
HKEX (00388.HK) presented the results of its Cash Market Transaction Survey 2019. The survey found that the contribution of local Hong Kong retail investors to the cash market trading value, increased to 13.6 per cent in 2019, from 10.3 per cent in 2018. The contribution of overseas institutional and retail investors also rose, to 36.6 per cent and 6.7 per cent respectively for 2019, from 35.1 per cent, and 6.0 per cent respectively in 2018.
FOSUN PHARMA (02196.HK) and BioNTech announced that their mRNA novel coronavirus vaccine candidate BNT162b2 will switch on phase II clinical trial in Jiangsu, China.
Centa-Salesman Index (CSI) last stood at 50.69 this week, down 3.27 pts weekly to reflect the market condition for the first week since a local Covid resurgence. Front-line agents were generally worried over the fourth wave of pandemic, with a less bullish sentiment, said Centaline Property.
*PETROCHEMS STRONG as Crude futures rose to their highest since March in New York amid recovery hopes on the back of positive vaccine news. CNOOC (883 HK +4.3%) CH OILFIELD (2883 HK +5.8%) SINOPEC (386 HK +3.4%) ANTON (3337 HK +9.2%).
*HK BANKS STRONG HSBC's (5 HK +6.5%) on hopes it will start paying a dividend again soon. HANG SENG BANK (11 HK +3.2%) BANK OF EAST ASIA (23 HK +1.4%) STAN CHART (2888 HK +3.6%).
*TECH & COMPONENTS WEAK as XIAOMI (1810 HK -4.6%), despite good Q3 net profit that beat the average analyst estimate. 3Q adjusted net 4.13b yuan, +19% YoY, 3Q revenue 72.16b yuan, +34% YoY. Sector's sentiment hurt by ZTE's (763 HK -3.7%) the US Federal Communications Commission affirmed ZTE as security threat over concerns telecommunications gear made by the Chinese company could be used for spying. SMIC (981 HK -4.1%) BYDE (285 HK -3%) SUNNY (2382 HK -2.8%).
*E-COMMERCE/INTERNET WEAK under pressure on consolidation. India blocks 43 more Apps for engaging in activities which are prejudicial to sovereignty and integrity of India, defense of India, security of state and public order. ALIBABA's (9988 HK -1.3%) AliSuppliers Mobile App, Alibaba Workbench, AliExpress - Smarter Shopping and Alipay Cashier among blocked apps. TENCENT (700 HK -1.6%) NETDRAGON (777 HK -3%) CMGE (302 HK -1.7%) KINGSOFT (3888 HK -2.5%). JD.COM's (9618 HK -1) logistics unit is considering an initial public offering that could raise at least $5b, news reported.
*INSURERS FIRM sector rotations on attractive valuations. CH LIFE(2628 HK +1%)
China Railway Construction Capital Holding Co. and Tianjin Hengtongda Investment Co. enter into a partnership agreement with Tianjin Hutong, and will mainly invest in infrastructure projects in China. CH TAIPING (966 HK +3.4%) PING AN (2318 HK +2%) still seeing significant shorting.
*HK DEVELOPERS STRONG after stamp duty cut report at Carrie Lam's policy address, that the govt will abolish the stamp duty for commercial property. NWD (17 HK +2%) WHARF (4 HK +3.5%) HENDERSON LD (12 HK +3.1%) HYSAN (14 HK +2.4%) KERRY 683 HK +1.2%).
*PHARMA/MEDICAL EQUIP WEAK mostly traded lower on the news that HK will expand the scope of the stock connect program to accelerate the pace of the inclusion of pre-profit biotechnology companies listed in HK and stocks listed on the mainland Sci-Tech Innovation Board.
CANSINO (6185 HK +1.8%) have told Mexico vaccines may be ready in December.
SINOPHARN (1099 HK +5.6%) sees approval for public use of its Covid shot.
INNOVENT (1801 HK -5.2%) FOSUN PHARM (2196 HK -2.9%) WUXI APPTECH (2359 HK -4.8%).
AK MEDICAL (1789 HK -16%) slumped on price concerns, after reports said China jas issued a notice on the second batch of bulk purchases of high-value medical goods.
*AUTOS WEAK after EVERGRANDE EV (708 HK -5.2%) following the news that NDRC is looking into Evergance and Baoneng's NEV projects. A media report said that Chinese authorities are scrutinizing new-energy investments in the auto industry. BYD (1211 HK -4%) DONGFENG (489 HK -3.2%) GAC (2238 HK -4.5%) GEELY (175 HK -4.4%).
*HK RETAILERS FIRM after CHOW TAI FOOK (1929 HK +3.5%) said its interim net profit rose 45.6% YoY to HK$2.23b, and declared a dividend of HK$0.16 per share. Business in Hong Kong and Macau business suffered due to challenging macros and the closure of major border crossings, with revenue contracting 62.9% YoY during the period, while revenue from mainland China rose by 4.9 percent as the pandemic eased, comprising 86% of total revenue.
SASA (178.HK +3.8%) LUK FOOK (590 HK +1.2%) GIORDANO (709 HK +2.5%). Sector also saw support following the govt annoucement to scrap double stamp-duty for commercial units.
Nikkei 225 opened higher at 26,469 and traded higher to 26,700 level in early trades but drifted lower. PM re-opened lower and sold down to the opening level, then traded sideways but more selling pressure around 2pm saw it dip to 26,275, bounced but then sold back down to close +131pts (+0.5%) @ 26,297
Topix followed a similar pattern to close +5pts (+0.3%) @ 1768
Kospi opened at 2,637 and tested slightly higher before trading sideways until about 1:30pm when it sold down to 2,590 before finding support and then saw small bounce to close -168pts (-0.6%) @ 2,602.
Kosdaq similar trading pattern to close -7pts (-0.8%) @ 865
TAIWAN opened higher again at 13,860 and tested to 13,893 in early trades but sold down from 10:30am to 13,733 and then traded sideways to close -68pts (-0.5%) @ 13,739
CONNECT FLOWS (higher DoD)
Northbound Rmb 42,158m Buy 20,646m vs 21,512m Sell
Southbound HK$ 16,139m Buy 7,389m vs 8,751m Sell
Northbound Rmb 50,764m Buy 26,600m vs 24,165m Sell
Southbound HK$ 17,083m Buy 8,874m vs 8,209m Sell
MEITUAN-W (03690.HK) -3.2%
HKEX (00388.HK) -2.3%
PING AN (02318.HK) +2%
TENCENT (00700.HK) -1.9%
BABA (09988.HK) -1.1%
CCB (00939.HK) +0.9%
AIA (01299.HK) +0.7%
HSI & HSCEI Constituents on Move:
HSBC HOLDINGS (00005.HK) +6.5%
ANTA SPORTS (02020.HK) -5.9%
CPIC (02601.HK) +5%
TECHTRONIC IND (00669.HK) -4.9%
GEELY AUTO (00175.HK) -4.4%
CNOOC (00883.HK) +4.2%
SINOPEC CORP (00386.HK) +3.7%
XIAOMI-W (01810.HK) -3.7%
CHINA RES BEER (00291.HK) -3.6%
MENGNIU DAIRY (02319.HK) -3.6%
CHINA TAIPING (00966.HK) +3.6%
BOC HONG KONG (02388.HK) +3.2%
HENDERSON LAND (00012.HK) +3.2%
HANG SENG BANK (00011.HK) +3.2%
CONCH CEMENT (00914.HK) -3.1%
CHINA OVERSEAS (00688.HK) +3%
HSMI & HSSI Constituents on Move:
AK MEDICAL (01789.HK) -15.6%
CHINA DONGXIANG (03818.HK) +12.3%
KANGJI MEDICAL (09997.HK) -10.5%
KINGBOARD HLDG (00148.HK) +0.3%, hitting new high
MARKET HOURS NEWS
In 3Q20, the EMEA (Europe, the Middle East and Africa) market's smartphone shipment rebounded by 2.1% YoY to 93.1 million units despite the pandemic, for a value of US$27.7 billion, according to IDC's report. For the entire EMEA market, XIAOMI-W (01810.HK)'s 3Q20 shipment burgeoned 121.9% to 13.4 million units. It was ranked second in terms of market share, which had risen to 14.4% in 3Q20 from 6.6% in 3Q19.
Eurozone banks will be allowed to resume dividend payment from next year if they can convince regulators that their balance sheets are resilient enough to withstand the economic and financial fallout from the Covid pandemic, Financial Times citing a senior European Central Bank official.Moody's observed that private companies will soon hit the peak in their matured debts when it comes to 1H21 given increased issuance of short-term debts this year. Risk-off sentiment from the investor side lingered as the fundamentals of some of those companies which had the weakest credibility remained under pressure, compounded with potentially tapering market liquidity. In the coming few months, private firms with feebler financial strength may lose the financing channels in their domestic markets, the global rating agency forecast.
The Japanese government and ruling party have decided to roll out tax breaks in hopes of attracting overseas financial talents, a further step to morph the Asian country into an international financial hub, Kyodo News reported. Tokyo is weighing legislation that will free foreigners from overseas asset duties even after they stay in Japan for more than ten years, said insiders. Since Hong Kong put the national security law into force, a climbing number of talents have moved to Singapore and such other countries.
According to Chinese National Development and Reform Commission's notice seen by automakers, all local governments shall by 18 November report to Beijing their respective new energy vehicle investment, China Business Network reported. The Chinese watchdog stipulated in the notice that the reports shall trace back to 2017 and elaborate the local investment and planned NEV and component projects made by EVERG VEHICLE (00708.HK) and such other carmakers.
SINOPHARM (01099.HK) Sinopharm Group has filed for the commercialization of COVID-19 vaccine with National Medical Products Administration, said Shi Shengyi, Deputy General Manager of the Group.
Carrie Lam’s policy address took over two hours, whilst she override a lot of topics there was little substantive for the market to act on. Various agencies like the HKEX, HK Airport Authority, MTRC etc ‘warmly supported' Carrie Lam’s address.China insists that homes are built for residency purposes, rather than speculation, Vice Premier Liu He wrote on People's Daily. The real estate market should guarantee healthy and stable development.
PRE MARKET NEWS
Not in this mornings report
LONG WELL INTL (00850.HK) announced that on 24 November, officers of each of the Commercial Crime Bureau (CCB) of the Hong Kong Police Force and the Securities and Futures Commission (SFC) attended the office premises of the Group in Hong Kong with search warrants . Certain records and documents of the Group were obtained by the officers of CCB and SFC in connection with the Investigations. The CCB yesterday arrested four males and three females, aged 31-62, across Hong Kong for suspected collusion in false accounting, said local media. The allegation involved approximately $11.88 billion in aggregate.
China's Ministry of Finance (MOF) published a notice on accelerating review of the subsidized renewable power generation project list, aiming to examine inventory projects and include them in the list by batches. All projects that have obtained approval (completed filing) as stipulated and completed integration of all power grids from 2006 and onwards can apply to join the subsidy list.
BANK OF CHINA (03988.HK) announced that it had on 23 November fully paid the nominal value of the Preference Shares and the dividends accrued for the holding period from 21 November 2019 to 20 November 2020 to holders of the Preference Shares of the Bank registered with the CSDC Shanghai Branch on 20 November, totalling an aggregate amount of RMB33.92 billion, to redeem all 320 million Domestic Preference Shares (First Tranche) issued by the Bank.
The global aviation sector is on course to lose a total US$157 billion this year and the next, foreign media quoted from IATA, who cited the second wave of coronavirus infections and lockdowns in major markets. The airline global body had in June assumed the 2020-21 loss at US$100 billion.
Huawei has started preparing for shipment of new 4G handset orders, China Business Network citing an anonymous supplier to Huawei. Based on market shipment order, this batch of handset products are expected to hit the stores in the first half of 2021.