Nov 5 HK WRAP HSI +810pts Highest since Mid July. US Futures higher

09 Nov

Nov 5 HK WRAP HSI +810pts Highest since Mid July.  US Futures higher

HSI +810pts (+3.3%) 25,696 HSCEI +380pts (+3.8%) 10,479  T/O HK$172.82bn (+2.2% DoD)  

EUROPE opened slightly higher but drifting lower with investors watching the US results which still have Biden leading but requiring 6 votes to take victory according to the FT and Trump filing lawsuits. German Factory Orders Sept missed and the BoE left rates unchanged and looked to expand asset purchases. UK lockdown starts today too.
Soc Gen +2.5% as Q3 earnings beat, comes after a Q2 loss; stock opened higher but was drifting lower. Commerzbank -6.4% as it reported a Q3 loss due to covid and restructuring costs.A
lso reporting today Lufthansa, AstraZeneca, Euronext, Unicredit and ING.
EUROZONE Construction PMI Oct 44.9 vs 47.5 Sept (F/cast was 46.2)Retail Sales due
GERMANY Factory Orders Sept +0.5% vs +4.9% Aug revised (F/cast was +1.5%), Construction PMI Oct 45.2 vs 45.5 Sept (F/cast was 44.4)
FRANCE Construction PMI Oct 42.7 vs 47.3 Sept (F/cast was 44.6)Retail Sales due
UK Construction PMI Oct 53.1 vs 56.8 Sept (F/cast was 54.4)New Car Sales Oct -1.6% YoY vs -4.4% Sept (F/cast was -7.6%)
US Futures opened +70pts in Asian time but rallied through the day currently +300pts with S&P and NDX positiver too. US election still too close to call with Biden on 264 and Trump filing law suits with 65 electoral votes still to be called.
AHEAD Challenger Job Cuts, Initial Claims, 4 wk Ave Claims, Continuing Claims, Unit Labour Costs, Non Farm Productivity, EIA Natural Gas Reports. FOMC Rate Decision.
Earnings Bristol-Myers Squibb, AstraZeneca, Booking Holdings, Square TripAdvisor, Uber. Roku, Electronic Arts, T-Mobile, AIG, Zillow, Live Nation Entertainment, EOG Resources, Tanger Factory Outlet, XPO Logistics, Cigna, Regeneron, Alibaba, General Motors, Cardinal Health, Duke Energy, Papa John’s, ArcelorMittal, Dun and Bradstreet, Murphy Oil, Cardinal Health, Sempra Energy, SeaWorld, AmerisourceBergen

CHINA CSI 300 Closed +72pts (+1.5%) 4,885
Opened higher rallied to 4,880 but then trended lower to 4,840 before a bounce back into lunch. PM opened flat after a small pull back it worked higher to close at the day high. Sentiment +VE on the hope that a Biden victory might ease tensions between the US and China. Also encouraged by President Xi’s telling global businesses at a trade fair, that China is committed to open trade globally. Premier Li said China is close to setting a target for average annual economic growth of around 5% for the next 5 years.
Shanghai Composite Index +43pts (+1.3%) @ 3,320
Shenzhen Component Index +235pts (+1.7%) @ 13,894
ChiNext Index +37pts (+1.4%) @ 2,788

After Market
China Association of Automobile Manufacturers estimated automakers to have completed sales volume. of 2.544 million units in October 2020, -0.8% MoM but +11.4% YoY

HSI Pre Market opened at 25,500 +614pts vs +548pts ADR’s @ 25,435 E-Commerce firm, CK Hutch +6.4% on European masts deal; broad based rebound with shorts being squeezed, as money tied up in Ant IPO put back to work. Initially trended lower to 25, 350 but then worked higher hitting resistance around 25,600. PM opened lower and traded sideways until 3pm when it gradually worked higher to 25,630 level and then saw a 66pt uptick in the closing auction.

Centre for Health Protection said there were 7 new COVID-19 cases in Hong Kong today (vs 3 Wednesday) 1 local infections with unknown origin. 6 imported cases.

Spot USD/CNY closed at 6.6400, up 738 bps
and once hitting a 28-month high. As at 16:49, USD/CNY added 51 bps in the night session. USD/CNH stood at 6.6349, down 100 bps.
China may set its average annual economic growth target at around 5% for the next five years (i.e. 14th Five-Year Plan period), the lower end of its previous forecast, policy sources told Reuters.
BABA-SW (09988.HK) announced that the phase-one sales of Tmall's 11.11 Global Shopping Festival had ended on 3 November. The giant saw robust sales of beauty and cosmetics products. Sector GMV exceeded RMB10 billion within 40 minutes after the launch of the shopping frenzy, while growing over 150% YoY in the first hour.

*SOLAR STRONG rebound as Biden inches closer to winning the White House race. Biden earlier proposed a US$2t climate change response plan before the election, promising to achieve net zero carbon emissions in the U.S. by 2050.
XINYI SOLAR (968 HK +7.3) FLAT GLASS (6865 HK +14%) GCL-POLY (3800 HK +4.3%).
*E-COMMERCE STRONG ahead of ALIBABA's results, on the day of ANT GROUP's IPO planned debut, which has now been pulled regulators. The company is set to resume its pre-pandemic growth pace in the September quarter, and it may discuss several positive near-term drivers for its sales, profit and valuation. Investors' seen investing in other quality names in the sector as an alternative to the ANT GROUP IPO, as it is expected that it may take at least 6 months before the fintech giant could meet additional capital and regulators' listing requriements.
ALIBABA (9988 HK +6.3%) TENCENT (700 HK +6.2%) JD.COM (9618 HK +9.4%) NTES (9999 HK +7.3%).
*CHINA PROPERTY FIRM as more developers reportedly plan to tap China's main interbank bond market to ease their debt burden. Sector helped as yuan climbed as much as 0.9% in late trading yesterday to 6.6202/USD, its strongest level since July 2018.
COUNTRY GARDEN (2007 HK +8.7%) Oct contracted sales -5% YoY to 53.9b yuan. The company's Co-Chairman Yang bought 14.8m shs at avg HK$9.5659 each on Oct 30, according to filing.
AGIILE PROP (3383 HK+4.3%) Oct contracted sales +18.1% YoY to 15b yuan. GREENTOWN CHINA (3900 HK +5.5%) Oct contracted sales +44.3% to 28b yuan. SUNAC (1918 HK +7.6%) SHIMAO (813 HK +9%).
*AUTOS STRONG led higher by BYD (1211 HK+16%), it reported car sales in October +16.1% YoY to 47,700 units. Among them, the sales of new energy vehicles were 23,200, a YoY increase of 84.8%; the sales of fuel vehicles were 24,500, a YoY decrease of 14.2%.
BRILLLIANCE CHINA (1114 HK +10.6%) DONGFENG (489 HK +4.7%) GEELY (175 HK +8.7%).
*PHARM FIRM on vaccine speculations. FOSUN PHARM (2196 HK +1.6%) to end Germany company BioNTech's Covid-19 vaccine early-stage trial, and plans to focus on a more advanced experimental vaccine. Fosun will seek China’s approval to focus on BioNTech’s vaccine in final-stage of human trials in the US.
CANSINO (6185 HK +5.3%) CSPC (1093 HK +3.3%) INNOVENT (1801 HK +2.9%) SINO BIOPHARM (1177 HK +2.6%).
CKH (1 HK +8.8%) said it has reached a "substantial agreement" on terms to sell the European telecommunication towers to Cellnex, a Spanish phone tower operator, for about 10b euros, but hasn't taken a final decision, according to a filing yesterday.
MICROPORT (853 HK -2.3%) but off low of 10% after media reported that coronary stent px were lowered to below 1,000 each in a govt procurement contract.
H&H INTL(1112 HK +7.1%) after saying it will buy US pet food company Solid Gold Holdings for US$163m.

Regional Markets
opened higher worked higher to 24,000 helped by good PMI data and then eased back into lunch. PM opened at 24,000 level and traded sideways for 30 mins then dipped to 23,940 but then worked higher to test 24,100 but eased back in last few minutes to close +1.7% @ 24,105
Services PMI Oct 47.7 vs 46.9 Sept (F/cast was 46.6)
Highest reading since January. New business falling modestly. Employment levels stabilized after seven months of losses. Outstanding business fell with firms citing a lack of pressure on business capacity. Prices marginal fall in average cost burdens for the third month. Selling prices dropped for the eighth consecutive month, with respondents commonly suggesting that muted demand as a result of the pandemic and efforts to boost sales were behind discounting activity. Finally, confidence strengthened to a near three-year high.
Composite PMI Oct 48.0 vs 46.6 Sept (F/cast was 46.7)
Highest reading in nine months as the private sector continued to gradually recover from April’s nadir. Output fell faster at service providers than at their manufacturing counterparts who noted the softest drop in production since November 2019. Aggregate new orders eased to the slowest since January, while outstanding work was depleted modestly. Employment shrank further, albeit only fractionally. Looking ahead, the level of positive sentiment hit its highest since January 2018
S KOREA opened higher with good Current Account data pre market
Kospi initially rallied to 2,390 level and then worked higher through the session to test 2,400 several times before breaking above and working higher to close +2.4% @ 2,414
Kosdaq rallied to 840 and traded sideways then around 12:30pm worked higher to close +2.2% @ 845
TAIWAN opened higher but initially sold down before bounding back to 12,920 but then sold down to day low 12,840 before rebounding to 12,900. Eased back and traded sideways to close +0.4% @ 12,919
After Market
Inflation Rate Oct -0.24% YoY vs -0.58% Sept (F/cast was -0.1%)
Inflation Rate Oct -0.08% MoM vs -0.1% Sept (F/cast was +0.1% )
Wholesale Prices Oct -7.37% YoY vs -8.12% Sept (F/cast was -6.5%)

Northbound Rmb 39,127m Buy 17,034m vs 22,093m Sell
Southbound HK$ 15,121m Buy 6,908m vs 8,213m Sell
Northbound Rmb 56,857m Buy 25,459m vs 31,397m Sell
Southbound HK$ 8,548m Buy 8,548m vs 8,895m Sell

Active Heavyweights
BABA (09988.HK) +6.3%
TENCENT (00700.HK) +6.2%, hitting new high
MEITUAN-W (03690.HK) +5%, hitting new high
HKEX (00388.HK) +3.1%
CCB (00939.HK) +2.5%
AIA (01299.HK) +2.3%
PING AN (02318.HK) +1.3%

HSI & HSCEI Constituents on the move
CHINA RES LAND (01109.HK) +9.7%
SHIMAO GROUP (00813.HK) +8.9%
CKH HOLDINGS (00001.HK) +8.9%
COUNTRY GARDEN (02007.HK) +8.8%
GEELY AUTO (00175.HK) +8.7%, hitting new high
LONGFOR (00960.HK) +8.3%, hitting new high
SUNAC (01918.HK) +7.6%
WUXI BIO (02269.HK) +7.2%, hitting new high
CHINA VANKE (02202.HK) +7%
MENGNIU DAIRY (02319.HK) +6.5%, hitting new high
CHINA RES GAS (01193.HK) +5.9%
SUNNY OPTICAL (02382.HK) +5.3%
ANTA SPORTS (02020.HK) +5%, hitting new high
CONCH VENTURE (00586.HK) +5%
TECHTRONIC IND (00669.HK) +4.9%, hitting new high
SHENZHOU INTL (02313.HK) +4.5%
AAC TECH (02018.HK) +4.4%
ENN ENERGY (02688.HK) +4.4%, hitting new high
CHINA GAS HOLD (00384.HK) +4%
CHINA MOBILE (00941.HK) +4%
CITIC (00267.HK) + 3.8%
CPIC (02601.HK) +3.8%
PICC P&C (02328.HK) +3.5%
CSPC PHARMA (01093.HK) +3.3%
GUANGDONG INV (00270.HK) +3.3%
CHINA OVERSEAS (00688.HK) +3.2%
FOSUN INTL (00656.HK) +3.2%
GALAXY ENT (00027.HK) +3.1%
CHINA TAIPING (00966.HK) +3.1%
CM BANK (03968.HK) +3.1%, hitting new high

HSMI & HSSI Constituents on the move
ZTE (00763.HK) +18.8%
BYD COMPANY (01211.HK) +16%, hitting new high
BYD ELECTRONIC (00285.HK) +12.6%
HUA HONG SEMI (01347.HK) +12.5%
BRILLIANCE CHI (01114.HK) +10.6%
TIANNENG POWER (00819.HK) +10.2%

BABA-SW (09988.HK) At China International Import Expo 2018 had set an import target of US$200 billion for the next five years. The giant completed 123% of its first-year goal in 2019. According to latest data, BABA-SW has completed 102% of its phased target for the second year.China Association of Automobile Manufacturers estimated automakers to have completed sales volume. of 2.544 million units in October 2020, -0.8% MoM but +11.4% YoY
HKEX (00388.HK) announced a plan to introduce futures and options contracts based on the Hang Seng TECH Index on 23 November 2020 and 18 January 2021 respectively, subject to regulatory approval and market readiness.
In October, three projects received pre-sale consent, according to Lands Department's statistics. SHK PPT (00016.HK)'s 195 Prince Edward Road West project, involving 101 units, was among the said projects. As of October 2020, a total of 24 residential projects, involving 12,442 flats, are pending pre-sale consents, according to the statistics from the Lands Department.
CATHAY PAC AIR (00293.HK) announced that the consent period had ended last night (4 November) in relation to its requirement that Hong Kong-based pilots and cabin crew should agree to new conditions of service. 2,613 pilots and 7,346 cabin crew have signed on to the new conditions of service, said the local flagship airline. This represents 98.5% of pilots and 91.6% of cabin crew who were asked to agree to the new contracts.
Apple is struggling to tackle the shortage of chips that control power consumption in iPhones and such other devices, which may render the U.S. tech giant hardly able to meet the holiday demands, Bloomberg learnt from insiders. -VE
Having jointly developed 33 products with XIAOMI-W (01810.HK) from 2014 to 2020, BYD ELECTRONIC (00285.HK) will in the future go on serving the Xiaomi ecological chain by means of smart manufacturing, said BYD ELECTRONIC CEO Wang Nianqiang.
XIAOMI-W (01810.HK) disclosed that the group has recorded more than 36 million smart device users. Also that it will recruit 5,000 engineers next year, involving ten major sectors.
In October 2020, the top grossing non-gaming app worldwide was TikTok, which garnered US$115 million in user spending, up 6.2 times yearly, according to Sensor Tower's report. YouTube (US$94 million) closely followed.
NetEase Yanxuan, the e-commerce platform of NTES-S (09999.HK), is quitting the Singles' Day sales competition this year, according to its Weibo announcement.
As a cross-border payment hub, Hong Kong can definitely nudge the fintech development of the region, said TENCENT (00700.HK) President Martin Lau at Hong Kong FinTech Week. In the fintech field, TENCENT is more of a cooperator than a "subvertor" by providing such technologies, opined Lau, who emphasized that the group will work closely with regulators. Despite tremendous potentials in fintech, risks related to innovation and finance shall be overseen so that the order of the financial industry is not distorted, added Lau.
EVERGRANDE (03333.HK) and SUNAC (01918.HK) may raise funds in the China Interbank Bond Market for the first time to relieve debt burden, foreign media citing people familiar with the matter.

Not in this mornings report
CR ASIA (00831.HK) announced the plan to sell the chain of convenience stores under the brand name of Circle K to Alimentation Couche-Tard (ACT), a convenience store operator whose shares are listed on the Toronto Stock Exchange, for a cash consideration of HK$2.79 billion. It is estimated that the Company will record a gain on the Disposal of approximately HK$2.9 billion. The Company intends to apply all of the net proceeds from the Disposal to the payment of the Special Cash Dividend of HK$3.85 per Share.
BYD COMPANY (1211.HK) announced that the sales volume of the company hit 47,732 vehicles in October, +16.05% yearly.
COUNTRY GARDEN (02007.HK) the group, together with its joint ventures and associates, achieved contracted sales attributable to the shareholders of the Company amounted to approximately RMB53.91 billion for October 2020, -5.02% year on year compared to October 2019.
FOSUN INTL (00656.HK) announced that it had on-market repurchased 2.5 million shares Wednesday, involving $24.281 million.
GREENTOWN CHINA (03900.HK) contracted sales amounted to RMB28 billion, +44.33% yearly, in October 2020.

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