Nov 27 HK WRAP HSI tested 27k but failed. Europe Mixed, US higher

02 Dec

HSI +75pts (+0.6%) 26,895 HSCEI +89pts (+0.8%) 10,790  T/O HK$112.71bn (-1% DoD) 
EUROPE FTSE opened lower, dipped and then worked better through the day. CAC and DAX open higher, CAC worked higher  DAX traded sideways all on light volumes.AstraZeneca weak after questions about their trial results.  Banco Sabadell weak on news it called off merger talks with BBVAData outEUROZONE Economic SentimentConsumer Confidence Nov -17.6 vs -15.5 Oct (F/cast was -17.6)Consumer Inflation Expectations Nov +15.4 vs 13.3 Oct (F/cast was 13.6)Industrial Sentiment Nov -10.1 vs -9.2 Oct revised (F/cast was -10.8)Services Sentiment Nov -17.3 vs -12.1 Oct revised (F/cast was -14.2)
GERMANY Import Prices Oct -3.9% YoY vs -4.3% Sept (Consensus was -4.1%)Import Prices Oct -0.3% MoM vs +0.3% Sept
FRANCE Inflation Rate Prelim Nov +0.2% YoY vs unch Oct (F/cast was +0.1%)Inflation Rate Prelim Nov +0.2% MoM vs unch Oct (F/cast was +0.1%)GDP Growth Rate Q3 +18.7% QoQ vs -13.8% Q2 revised (F/cast was +18.2%)Household Consumption Oct +3.7% MoM vs -4.4% Sept revised (F/cast was -2%)PPI Oct +0.1% MoM vs +0.3% Sept revised (F/cast was +0.1%)

US Shortened trading today and no data due.  Markets opened higher but DOW traded lower initially S&P traded sideways but the NDX worked higher.  Light volumes  with talk of day traders driving the NDX. Retail names seeing interest as black Friday kicks off the Christmas Shipping season.  Russell index seeing strong performance as investors rotate into the names.Sentiment +VE as Trump said he would hand over power if the Electoral College voted Biden the winner of the election.

CHINA CSI 300 Closed +61pts (+1.2%) @ 4,981Opened higher as data showed Industrial Profits surged and initially traded in a tight range 4,930/40 but then rallied to 4,950 before selling down into lunch 4,924.  PM opened lower but traded sideways for the first hour before working higher and then rallying in the last 30 minutes to close at the day high.Some encouragement from the Industrial profits data with some rotation into Financials while cyclicals saw weakness.  Profits at the SOE’s were -7.5% whist Private sector profits were +1.1%.  Special equipment manufacturing saw the biggest increase in profit (22.9%) followed by the agricultural and food processing (14.6%), communications (12.6%), automobile (6.6%).On Monday we get PMI dataIndexesShanghai Comp +39pts (+1.1%) @ 3,408Shenzhen Comp +91pts (-0.7%) @ 13,691ChiNext Index +10pts (+0.4%) @ 2,619
CHINA DataIndustrial Profits (YTD) Oct +0.7% YoY vs -2.4% Sept (F/cast was -0.6%)For 10M20, the total profits of Chinese companies of industries above designate scale was  RMB5.01 trillion, up 0.7% yearly, data from the National Bureau of Statistics (NBS) showed. For the month of October, the amount was RMB642.91 billion, up 28.2% yearly.Early it was released that State-owned enterprises and state-owned holding companies in China grew their total profits by 52.5% YoY in October 2020, announced the Ministry of Finance. Their revenue ballooned 7% in the month.
HSI Pre Market opened -60pts in line with the futures and traded sideways through the morning 26,790/720.  PM saw the market rally back to flat in the first hour and then it worked higher to test 27,000 but failed to break and then sold down into the close   and saw 100pt drop in the closing auction.
HONG KONG DATACentre for Health Protection said there were 92 new COVID-19 cases in Hong Kong today (vs 81 Thursday) 17 cases with unknown origin.
SHORT SELLING Friday 20.5% vs  22.1% Thursday Top Shorts   Ping An (2318) 58%, Swire Pac (19) 51%, Hengan (1044) 45%, Galaxy Ent (27) 42%, Petrochina (857) 40%, Bank of China (3988) 40%, Wharf REIC (1997) 40%,  CLP (2) 38%, MTRC (66) 35%, HSBC (5) 33%, Country Garden (2007) 32%, Sinopec (386) 29%,  Hong Lung Property (101) 27%, Shenzhou Int 27%.

AFTER MARKET NEWS CHINA GAS HOLD (00384.HK) Chairman, Managing Director and President, revealed at the results conference that the group still managed to manifest a total gas sales of 12.83 billion cubic meters (+8.4% YoY) in 1HFY2020/21 in spite of pandemic. For full FY2020/21, the company was confident of meeting the 15% growth target in gas sales given traditional peak season for gas supply. While the group has recently been the cornerstone investor of EVERG SERVICES (06666.HK)’s. IPO, Liu said it has also stroke a comprehensive strategic cooperation with Evergrande, under which the group will provide gas services to Evergrande's property projects etc.. The Chairman envisaged the cooperation with the bellwether of Chinese property industry to shore up the business of the company.JD HEALTH (06618.HK) registered margin of almost $110 billion from local brokers as at around 6 pm today (27 November). Based on the fundraising amount of approximately $1.347 billion from the public offering, the margin was oversubscribed by approximately 80.5 times. The stock initiated public offering in Hong Kong for the second day.The residential site Kai Tak Area 4E Site 1, whose tender has closed at noon, has received at least ten tenders as of 12:00 pm, according to on-site witness.  The tenderers include WING TAI PPT (00369.HK), CHINA OVERSEAS (00688.HK), CK ASSET (01113.HK), SHK PPT (00016.HK), SINO LAND (00083.HK) and K. WAH INT'L (00173.HK) and a consortium formed by Chinachem, Empire Group and K&K Property.CMC Holdings, the Asian exclusive agent of FANCL outside Japan, intended to dispose the unit, Reuters cited people familiar with the matter. More than ten companies and institutions vied for the deal, including JD-SW (09618.HK), Blackstone, Carlyle Group, Bain Capital and MBK Partners. The transaction was expected to value at nearly US$1 billion.  Some private equities are seeking strategic partnership, sources said, adding BABA-SW (09988.HK) and TENCENT (00700.HK) have expressed interest and may line up for the bid afterwards.TSUI WAH HLDG (01314.HK) interim result ended September 2020. The loss widened to HK$77.645 million from HK$44.502 million in the corresponding period of the previous year. LPS was HK5.63 cents. No dividend was declared.FDG KINETIC (00378.HK) interim result ended September 2020. The loss narrowed from HK$65.232 million in the corresponding period of previous year to HK$59.907 million. LPS was HK0.89 cents. No dividend was declared.CHUANG'S INT'L (00367.HK) interim result ended September 2020. The net profit amounted to HK$49.237 million, up 54% yearly. EPS. was HK2.94 cents. An interim dividend of HK1.5 cents was declared, flattish yearly.BABA-SW (09988.HK) and TENCENT (00700.HK) purportedly halted talks on acquiring iQIYI (IQ.US) shares held by Baidu (BIDU.US), while ByteDance was evaluating the possibility of buying iQIYI shares based on internal evaluation, as Chinese media cited sources.  ByteDance replied that the news is untrue and the rumored acquisition does not exist, reported The Paper. On the news, iQIYI dived over 6% pre-trading.BAUHAUS INT'L (00483.HK) interim result ended September 2020. The loss narrowed to HK$37.573 million from HK$95.196 million in the corresponding period of last year. LPS was HK10.2 cents.  Dividends totaled HK14.5 cents, including an interim dividend of HK2.5 cents and a special dividend of HK12 cents, against no dividend in the year-ago period.CHINA GAS HOLD (00384.HK) interim result ended September 2020. The net profit amounted to HK$5.09 billion, up 3.7% yearly.  EPS. was HK97.53 cents. An interim dividend of HK10 cents was declared, flattish year-on-year.
For 10M20, the automobile manufacturing industry of China yielded a total profit of RMB421.15 billion, up 6.6% yearly, as revealed by China Association of Automobile Manufacturers (CAAM).Centa-City Leading Index (CCL) last posted at 175.68, down 1.07% weekly. CCL Mass plunged 1.35% weekly to 178.88, CCL (small-and-medium units) sagged 1.27% weekly to 176.40.
The seven key CCL indices hit the soft spot altogether this week, reflecting the weekly condition after HKMC had announced the extension of the Fixed-Rate Mortgage Pilot Scheme for one year, said Centaline Property.
MARKET COMMENT *CHINA BANKS STRONG after PBOC report reveals lending rates improved from end-June. The weighted average interest rate on new loans increased to 5.12% at end-September from 5.06% at end-June. CCB (939 HK +2.5%) ICBC (1398 HK +4.3%) ABC (1288 HK +3.5%) BOC (3988 HK +2.2%) CMB (3968 HK +3%).
*HK PROPERTY MIXED after Hong Kong's home prices fell to a half-year low in October,  data from the Rating and Valuation Department showed. The home price index for lived-in homes dropped 0.6% to 380.9 last month, down from 383.1 in September. But that was still  0.44% higher than 379.2 in December last year. NEW WORLD DEV (17 HK +1.3%) has collected HK$3.28b after selling about 90% of the 315 units on offer at The Pavilia Farm phase two atop Tai Wai Station this week. Li Ka Shing Foundation bought 700,250 shares of CK ASSET (1113 HK +0.6%) Nov 11-25. SHKP (16 HK +0.2%) HENDERSON (12 HK -0.5%) SINO(83 HK +1.7%).
*PHARMA MIXED as investors await for additional development on Chinese vaccine.CANSINO (6185 HK +0.6%) SINOPHARM (1099 HK +0.7%) CSPC (1093 HK +0.5%) 3SBIO (1530 HK +2%). LEE'S PHARM (950 HK +3.1%) net profit in the first three quarters rose 51.85% YoY to HK$122m.
*AUTO MAKERS FIRM after the recent weaknesses as authorities are said to be looking into EV investment programs. EVERGRANDE GROUP says it won’t make  electric-car battery pack modules at a plant in Shanghai, reversing a previou  manufacturing decision, according to an environment report Evergrande submitted to the Shanghai govt. EVERGRANDE EV (708 HK +0.44%) GREATWALL (2333 HK +0.7%) DONGFENG (489 HK +1.2%) GAC (2238 HK -0.3%) BYD (1211 HK -1.6%).
*POST-EARNINGS MOVERS:  LUK FOOK (590 HK +3%) yesterday said its interim net profit -41.3% to HK$291m. Due to the pandemic, revenue -47% YoY to  HK$3.3b. Operating profit -41.4% to HK$387m. DICKSON CONCEPTS INTL (113 HK -4.8%) said its net profit for the six months ending September rose 12.13% to HK$133.45m. Its turnover in Hong Kong slumped by 47.4% and its retail operations in the city incurred substantial negative cash flows. BOSIDENG (3998 HK +6.2%) reported 1H net profit +41.8% YoY to about 486m yuan.
Regional MarketsJAPAN opened lower and dipped initially, Tokyo CPI was weaker than expected.  But then market rallied to the morning high of 26,638 but then sold down to morning low 26,420 before bouncing into lunch.  PM market opened higher and traded sideways around the 26,600 level.  Currently +120pts (+0.5%) @ 26,659Topix opened higher but followed the same trading pattern as the Nikkei; currently +11pts (+0.6%) @ 1,789Data Pre marketTokyo CPI Nov -0.7% YoY vs -0.3% Oct (F/cast was -0.4%)Tokyo Core CPI Nov -0.7% YoY vs -0.5% Oct (F/cast was -0.6%)On Monday we get Retail Sales and Industrial Production, Housing Starts and Construction OrdersS KOREA opened lower and initially dipped to 2,620 level before working higher in choppy traded to 2,635 mid morning but then sold down to 2,620 level at midday before rallying back to 2,630. Currently +8pts (+0.3%) @ 2,633Kosdaq opened higher and worked higher but saw resistance as it approached 885 level.  Then traded sidewise around that level currently +11pts (+1.3%) @ 886.On Monday we get Construction Output, Industrial Production and Retail Sales TAIWAN opened lower bounced to flat initially but then trended lower to 13,812 before working higher but resistance as it approached 13,880.  Then traded sideways to close +21pts (+0.2%) @ 13,867 After Market GDP Growth Rate Q3 +3.92% YoY vs -0.58% Q2 (F/cast was +3.33%)

CONNECT FLOWS (flat DoD)Shanghai Northbound Rmb  36,962m        Buy 17,618m  vs 19,344m   SellSouthbound HK$  12,856m        Buy   4,559m  vs   8,297m   Sell
Shenzhen Northbound Rmb 42,199m        Buy  20,724m  vs   21,475m  SellSouthbound HK$ 11,476m        Buy    4,952m  vs     6,524m  Sell
Active HeavyweightsCCB (00939.HK)  +2.2%
AIA (01299.HK) -1.5%
MEITUAN-W (03690.HK) +1.3%
HKEX (00388.HK) +0.9%
PING AN (02318.HK) + 0.9%
TENCENT (00700.HK) -0.5%
BABA (09988.HK) +0.2%

HSI & HSCEI Constituents on Move:
CHINA TAIPING (00966.HK) +5.6%
BANKCOMM (03328.HK) +4.6%
ICBC (01398.HK) +4.3%
ABC (01288.HK) +3.5%
CHINA OVERSEAS (00688.HK) +3.3%
MINSHENG BANK (01988.HK) +3.2%
CM BANK (03968.HK) +3%, hitting new high
CHINA LIFE (02628.HK) +3%

HSMI & HSSI Constituents on Move:
CHINA OVS PPT (02669.HK) +11.2%
ANGANG STEEL (00347.HK) +5.7%, hitting new high
VSTECS (00856.HK) +4.6%, hitting new high
MARKET HOURS NEWSMinistry of Industry and Information Technology (MIIT) established a Personal Information Protection Supervision Committee under the theme of national App, as Chinese media reported. MIIT said it uncovered a slew of issues, including thought disregard, fluke psychology and technological antagonism, during the rectification of tech magnates.  BABA-SW (09988.HK), ByteDance, TENCENT (00700.HK), Baidu (BIDU.US), NTES-S (09999.HK) and XIAOMI-W (01810.HK) were targeted by MIIT.Canalys issued a research report, saying China's cloud infrastructure expenditure increased 65% yearly in 3Q20 to exceed US$5 billion. China was still the world’s second largest cloud market, making up about 14% of global investment. The top four Chinese suppliers represented 80% of total expenditure in 3Q20.  BABA-SW (09988.HK)'s Alibaba Cloud took the lion's share of 41% on the market.XIAOMI-W (01810.HK) Vice President cum Redmi Brand General Manager Lu Weibing said at a conference that the company will accelerate its sales channel deployment to the county-level markets in future, with a target to have Mi Home covered every county nationwide within a year. At this stage, Mi Home only covers less than 30% of county markets, report said.Nanshan Zhong, Academician of Chinese Academy of Engineering, said developing a new vaccine will take at least more than five years, reported Chinese media. Currently, all COVID-19 vaccine candidates are developed within a year and hence inevitably flawed.   Accordingly, Zhong encouraged the development of more types of vaccines and the production of some vaccines for emergency use. However, he admitted it will take time for large-scale vaccinations.CATHAY PAC AIR (00293.HK)'s management declared to cancel the year-end negotiation, local media citing the Cathay Pacific Airways Flight Attendants Union (FAU).  The airline's management aimed to undermine FAU's influence and hollow out the union, commented FAU Chairwoman Zuki Wong.Moody's said the unsecured consumption loans in China scaled up with higher mobile phone usage and e-commerce growth, which in turn escalated retail loans of banking industry. Consumer debt/GDP mushroomed to 55% at the end of 2019 from end-2015's 39%. The rating agency expected higher risk on Chinese banks' short-term debts amid impact from real estate cycle.  Having said that, Moody's assumed the consumer debt ratio of China was still moderate as compared with other Asia Pacific economies, viewing the credit risk of Chinese banks has so far been controllable.The Brazilian branch of the Chinese State Power Investment Corporation Limited entered into an MOU for a composite smart energy project with the Brazilian Power Research Center.  The project aimed to intensify the exchange of energy technology experience with one another, and foster energy project construction in Brazil to deepen cooperation of the two nations in the field.TONGCHENG-ELONG (00780.HK) struck a strategic partnership with Kuaishou, aiming to explore the integration of short video live-streaming with travel services. TONGCHENG-ELONG will include its spectrum of hotels and sightseeing tickets in the Kuaishou platform sequentially and extensively.The Indian wearable market posted a record shipment of 11.8 million units, up 165.1% yearly, in Q3 2020, thanks to strong shipment growth from earwear devices and watches, according to IDC's report.FAIRWOOD HOLD (00052.HK)  interim results ended September 2020. Revenue declined 16.4%  yearly to $1.287 billion. Net profit amounted to $64.951 million, up 13.4% yearly.  EPS. equaled 50.14 cents. Interim DPS was 30 cents, as compared with 23 cents in the corresponding period of the previous year.UM HEALTHCARE (02138.HK)  Apart from furloughs for some employees under beauty parlor shut off amid the pandemic, it has seen no impact in other fields, revealed Executive Director and COO Gabriel Lee.  He foresaw expansion preparations by staff recruitment in the coming months, while not ruling out the introduction of other investors. UM HEALTHCARE will also speed up M&As in the second half of year.During the course of pandemic precaution, Hong Kong should also seek for a way out in terms of economy, said Edward Yau, Secretary for Commerce and Economic Development. The city should grasp business opportunities as much as it can wherever it spots traces of economic recovery.  In terms of tourism, the Government hopes to inject new elements into the financial hub by means of the rebirth of Ocean Park and Island South Initiative, so that local residents have more options for leisure and entertainment, added Yau.At the end of Q3 of 2020, 178 Chinese insurers under review tracked an average comprehensive solvency adequacy ratio of 242.5%, said China Banking and Insurance Regulatory Commission (CBIRC). The Commission opined that the overall solvency adequacy ratio of the insurance sector remained stable.Alibaba Cloud announced that it has entered into a cooperation agreement with Swire Coca-Cola, where it will leverage its digital technology, AI and AIoT to help the beverage company achieve full digital intellectualization in production, supply chain, logistics, marketing as well as consumer experience.US President Donald Trump announced that delivery of coronavirus vaccines will begin next week. At the beginning stage, the vaccines will be send to front-line staff, medical personnel and elderly citizens.Fitch Ratings commented that the latest policy address announced by Chief Executive Carrie Lam underscored Hong Kong’s ongoing efforts to take advantage from the growth in Mainland China’s broadening economic recovery, but this also added the city’s sensitivity to developments in her mother country's creditworthiness.  The policy address stressed efforts to pursue further integration between Hong Kong and China, explained the ratings agency. While this approach may help spur city’s economy over time, it also means that her economic outlook and creditworthiness will become increasingly bound to the Chinese economy.  The ratings agency warned that downward rating pressure will emerge when the financial hub’s high degree of autonomy is eroded over key macro-institutional features, such as the linked exchange rate mechanism and financial regulation.Former PBoC governor Zhou Xiaochuan opined in his article that it is impossible to consider prices of investments and assets separately at this stage.   Asset prices not only affect companies' expansion of reproduction, but also impact public spending concerning infrastructure facilities and environmental protection. Hence, asset prices must be factored in when considering
inflation.  However, Zhou is still thinking ways to include asset prices therein.At the opening ceremony of China-ASEAN summit, Chinese President Xi Jinping stated that China is willing to join hands with her ASEAN counterparts and grasp opportunities arising from a new round of technological revolution and industry reform, cited Xinhua News Agency. Beijing is willing to build a China-ASEAN information harbour with her ASEAN counterparts in order to catalyse digital mutual access and construe "Digital Silk Road", said the country leader.Alibaba, Tencent Among 133 CN Firms to Sign Internet Data Security Discipline Pact.  Internet Society of China announced that 133 Chinese telecom carriers and internet magnates, including BABA-SW (09988.HK), TENCENT (00700.HK)  and JD-SW (09618.HK), have executed a self-discipline treaty on telecom and internet network data security. Chinese Ministry of Industry and Information Technology had ordered the association to nail down such a pact in hopes of ramping up protection of online data security and industry discipline.For the first ten months of 2020, China's enterprises of industries above designate scale delivered total profit of RMB5.01 trillion, up 0.7% YoY against the 2.4% slide in January-September, according to NBS senior statistician Zhu Hong. This marked the first turnaround to positive YoY profit growth in 2020.China Mobile Hong Kong announced the official rollout of commercial 5G standalone (SA) network, being the city's first mobile network operator to offer 5G SA services and aiming to head the market with technology.
PRE MARKET NEWSNot in this mornings reportAfter Huawei had announced disposal of Honor, Huawei founder Ren Zhengfei stated on the farewell ceremony that Honor should stay completely departed from the parent upon the divorce and deem it as a rival, cited Chinese media.China's Ministry of Commerce (MOC) announced that the authorities have preliminarily confirmed the dumping of wine imported from and made in Australia.  Hence, the ministry decided to impose temporary anti-dumping measures against these wine imports on the basis of deposits.The People's Bank of China (PBOC) today will carry out RMB120 billion
reverse repos, 
aside RMB80 billion of maturing reverse repos. The single-day net investment reached RMB40 billion today.During the third quarter, Chinese banks handled 64.977 billion deals in electronic payment business, involving RMB696.44 trillion, according to the PBoC.Foxconn is shifting part of iPad and MacBook assembly from China to Vietnam upon the request of Apple, Reuters learnt from a person with knowledge of the plan, as the U.S. tech giant seeks to minimise the impact from Sino-U.S. trade war.BEST MART 360 (02360.HK)  interim results ended September 2020. Net profit amounted to $35.689 million, up 1.65 times yearly.  EPS equaled 3.6 cents. Interim DPS was 2 cents.BANK OF CHINA (03988.HK) (601988.SH)  entered into a comprehensive strategic cooperation agreement with PipeChina. BOC strives to serve the energy industry, being highly concerned about the progress of oil and gas system reform, said Chairman Liu Liange. Hence, the lender aims to deepen their partnership further and achieve high-quality development under the deal.China's NEV sales volume grew by 67.7% yearly in September, Economic Information Daily citing statistics. The NEV industry is shifting to a "self-growth" stage driven by technology upgrades and industrial chain refinement, a sector insider was quoted as saying.MOST KWAI CHUNG (01716.HK) results for the six months ended September 2020. Net profit was $10.86 million, up 23.7% yearly. EPS equaled 4.02 cents. No interim dividend was declared.FE CONSORT INTL (00035.HK) results for the six months ended September 2020. Net profit was $350 million, down 51.1% yearly.  EPS equaled 14.8 cents. Interim DPS remained at 4 cents.BOSIDENG (03998.HK) interim results ended September 2020. The net profit amounted to RMB486 million, up 41.8% yearly.  EPS. was 4.54 fen.   An interim dividend of HK3.5 cents was declared, against HK3 cents in the corresponding period of the previous year.DONGFENG GROUP (00489.HK) announced it entered into a strategic cooperation agreement and seven cooperation sub-agreements with State Grid Corporation of China (State Grid) to promote integrated development of NEV and Energy Internet.

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