Nov 9 HK WRAP HSI +303pts but off initial highs. China CPI and PPI tomorrow

12 Nov
HSI +303pts (+1.2%) 26,016 HSCEI +135pts (+1.3%) 10,633  T/O HK$168.45bn (+2.4% DoD)

A strong positive reaction to Biden’s victory and whilst Trump has not conceded his legal plays are for the most part without substance. It is now a matter of whether he co-operates over the next couple of months. During which time we will get a better picture of Biden’s plans.

Covid Cases continue to rise -VE for Airlines 
Personal Gripe they need, in my opinion, to introduce statutory pre flight covid testing. My wife was was on a flight and on arrival one person tested positive for covid, so everyone is now under observation and feeling scared and vulnerable. Many countries require you to have a covid test before arrival and that seems a sensible and easy measure to take to stop the spread to the virus.

EUROPE opened higher and trading sideways. A positive reaction to the Biden victory but upside limited by the rising number of covid cases both in Europe and the US.Taylor Wimpey strong after a +VE trading update.
EUROZONE No data due, Speeches from Lagarde and Mersch
GERMANY Balance of Trade Sept Euro 20.8b vs 11.9b Aug revised (F/cast was 19.9b)
Import sa Sept -0.1% vs +5.8% Aug (Consensus was +2.1%)
Exports sa Sept +2.3% vs +2.4% Aug (Consensus was +2%)
Balance of Trade sa Sept Euro 17.8b vs 15.7b Aug (Consensus was 15.8b)
Current Account Sept Euro 26.3b vs 16.5b Aug (F/cast was 20.8b)
FRANCE No data due
UK No data due BoE’s Haldane speaks
US Futures opened @ Dow +152pts in Asian time and rose to +395pts in Asian time with the S&P and NDX higher too.
Data Consumer Inflation Expectation. Speeches from Mester and Harker
Earnings include McDonald’s, SoftBank, Beyond Meat, Simon Property Group, Ambac Financial, Tilray, ZoomInfo, Occidental Petroleum, Myriad Genetics, Taubman Centers, International Flavors and Fragrances, Norwegian Cruise, Canopy Growth, Aurora Cannabis, Party City

CHINA CSI 300 Closed +96pts (+2%) @ 4,981
CSI 300 opened strongly helped by the good trade data out Saturday and the Biden victory in the US election. Market worked higher to test 5,000 just before lunch. PM continued to test the 5,000 level but then sold down in the last hour to 4,960 before rebounding; to close at 4,981. The yuan extended its recent rally as the dollar weakened and after the strong Chinese trade data.ChiNext led the index gainers. Markets were led higher by semiconductors, shipping, communications equip and brokers.
The Foreign Ministry spokesman says China believes the US should promote the sound and stable development of bilateral relations. Many are hoping that Biden will be more reasonable to negotiate with but I think China will find itself confronted by a more unilateral deal with many countries taking part in the trade negotiations rather than the bilateral ones it has been pursuing.
Shanghai Composite Index +62pts (+1.9%) @ 3,374
Shenzhen Component Index +303pts (+2.2%) @ 14,141
ChiNext Index +81pts (+3%) @ 2,814

CHINA Data None tomorrow we are due Inflation and PPI

HSI Pre Market Opened new the day high 26,158 +445pts vs +135pts ADR’s @ 25,847. E-commerce names rebounded, AIA strong as Q3 numbers in line. Shorts squeezed as the uncertainty over the US election removed. Market then trended slightly lower finding support around 25,990 which it tested several times before working better into lunch. PM Market tested 26,160 again but without conviction and trended lower for the rest of the afternoon finding support at 25,960 and then seeing a 30pt uptick in the closing auction.
At lunchtime Razer issued a +VE profit alert.

IPO’s NEW ORIENTAL-S (09901.HK), on debut, closed at $1,365, up $175 or 15% against the listing price $1,190, on volume of 773,000 shares and turnover of $1.043 billion. Excluding the handling fees, a book gain of $1,750 was reported per board lot of ten shares.
REMEGEN-B (09995.HK), on debut, closed at $69.8, up $17.7 or 34% against the listing price $52.1, on volume of 35.71 million shares and turnover of $2.298 billion. Excluding the handling fees, a book gain of $8,850 was reported per board lot of 500 shares.

Centre for Health Protection said there were 6 new COVID-19 cases in Hong Kong today (vs 10 Sunday) all imported

SHORT SELLING Monday 16.6% vs 14.4% Friday
Top Shorts Hengan (1044) 50%, Ping An (2318) 48%, CLP (2) 46%, Hang Seng Bank (11) 44%, CCB (939) 39%, Henderson Land (12) 31%, BOC HK (2388) 29%, Power Assers (6) 29%, China Res Land (1109) 28%, Galaxy Ent (27) 28%, Wharf REIC (1997) 26%, HSBC (5) 26%, AIA (1299) 26%, Link REIT (823) 25%.

Spot USD/CNY closed at 6.5728, up 487 bps to the new high since late June 2018. As at 17:01, USD/CNY elevated 313 bps in the night session. USD/CNH stood at 6.5618, up 297 bps.
Beijing is aware of Joe Biden's victory announcement, said Chinese Foreign Ministry Spokesperson Wang Wenbin at today's regular press conference. China understands the US presidential election results will be determined by US law and procedures. China is always in favor of boosting communication and dialogue with the US side, while managing divides on the basis of mutual respect. Both countries shall extend cooperation based on mutual benefit to facilitate the solid and stable development of bilateral relations, Wang added.
LONGFOR GROUP (00960.HK) for the first ten months of 2020, the Group achieved aggregated contracted sales of RMB214.35 billion, up 6.31% yearly. Contracted sales in terms of GFA amounted to 12.655 million sq.m.
SUNNY OPTICAL (02382.HK) October 2020, the shipment of handset lens sets grew 9.3% yearly to 159 million units. During the month, the shipment of handset camera modules rose 7.6% yearly to 57.505 million units.
VTECH HOLDINGS (00303.HK) interim result ended September 2020. The net profit amounted to US$124 million, +4.7% yearly. EPS was US49 cents. An interim dividend of US17 cents was declared against a dividend of US17 cents in the corresponding period of the previous year.
LINK REIT (00823.HK)'s online briefing, CEO George Hongchoy disclosed that the group now seeks acquisition targets in China and Hong Kong as it is not easy to travel overseas at this moment. Yet, they will not blunt their appetite for acquisition because of the prevailing landscape. Citing the interim DPU growth by 0.1% to 141.65 cents, Hongchoy expressed that the dividend growth will hopefully go on, which both executives and the board are pondering over how to realize. Its goal was to maintain a high occupancy rate, considering the beleaguered retailing sector (e.g. Chinese restaurants as well as education and tutoring centers) in the first half of 2020, said CEO George Kwok Lung Hongchoy. Hence, the REIT has been taking the lead to help its tenants. The REIT tracked an overall tenant growth, with most tenants being supermarkets and wet markets, and burgeoning home cooking demand amid the plague.
China Passenger Car Association announced in October 2020, Chinese passenger vehicle retail sales volume +8% YoY to 1.992 million units, meaning the growth approximated 8% for four straight months, according to its statistics.

*SHIPPING STRONG after China's good trade released on Saturday showed Exports expanded 11.4% on year in October, faster than the 9.2% consensus, providing support for the recovering economy; although the resurgence in the last month I think puts a question mark over the sustainability of that number. The 4.7% gain in imports was lower than anticipated which I think shows that many within China remain cautious. The surplus widened to an above-expectations $58.4m. COSCO SHIP (1919 HK +9.7%) PACIFIC BASIN (2343 HK +9.8%) COSCO SHIPPING PORT (1199 HK +14%) CH MERCHANT PORT (144 HK +7.6%)
*TECH & COMPONENTS STRONG on hopes that the current restrictions on Chinese tech companies may be eased under Biden's leadership.
XIAOMI (1810 HK +1.8%) has surpassed Apple for the first time to become the world's third-largest smartphone maker by shipments in the July-September quarter, according to industry reports. APPLE SUPPLIERS advanced as Apple will show off its new Macs Tuesday in a virtual event. The computers will feature in-house processors for the first time, replacing Intel chips that have been a mainstay since 2006. AAC (2018 HK +4.6%) SUNNY OPT (2382 HK +6.8%) TONGDA (98 HK +8%) TRULY (732 HK +4.4%).
*E-COMMERCE FIRM ahead of the massive shopping spree. ALIBABA's (9988 HK +2.8%) Singles' Day is set for Wednesday. The online shopping event is expected to see its largest international presence ever as some US merchants debut in the Asian market. JD.COM (9618 HK +1.11%) NTES (9999 HK +2.1%) MEITUAN (3690 HK +2.8%) TENCENT (700 HK+1%).
RAZER (1317 HK +18%) surged after issuing a +VE Profit warning at lunchtime it is expecting a non-GAAP adjusted pretax profit for FY 2020 ending Dec 31, vs a loss in the previous year.
*5G-related STRONG follows the recent Qualcomm estimates that 5G smartphone will deliver 200m units this year, and 2021 will grow 150% to 500m units. ZTE (763 HK +5.9%) CH TOWER (788 HK +2.2%) COMBA (2342 HK +3.3%).
*INSURERS FIRM after AIA GROUP (1288 HK+2.2%) reported value of new business
for the third quarter of -28% at US$706m, annualized new premium for 3Q -6% in line with expectations. Sector also benefits from the rallying markets CH LIFE (2628 HK +2.2%) PING AN (2318 HK +2.7%) NCI (1336 HK +1.9%).
*AUTO MAKERS CONSOLIDATED GEELY (175 HK +0.7%) said the total sales volume of the group in Oct was 140,026 units, +8% YoY and +11% MoM. Of the total sales volume in October, 5,826 units were new energy and electrified vehicles (NEEVs). The group's export volume was up more than twofold year-on-year to 10,531 units in the month of October. GREATWALL (2333 HK unch) Oct. Vehicle Sales +17.9% YoY to 135,559 units. GAC New Energy Automobile, the electric car unit of GAC (2238 HK +2.7%), will outline its plans for an IPO on the STAR board as soon as this month, news reported.
*MACAU CASINOS STRONG as WYNN (1128 HK +6.1%) reported stable weekend flows since National day and said would work with authorities to renew licences in 2022. Biden's win seen to ease sector uncertainty over licence renewals. SANDS CHINA (1928 HK +3.4%) SJM (880 HK +4%) MEMG (2282 HK +3.8%).
GENESCRIPT's (1548 HK +11.3%) Covid-19 antibody detection kit gets FDA authorization.
CH EVERGRANDE (3333 HK +2.2%) terminated a back-door listing plan on restructuring ShenZhen Special Economic Zone Real Estate & Prop. For most companies that would be -VE but Evergrande continues to see support from ‘friends’.

Regional Markets
JAPAN opened at a 29yr high, much higher than the futures indicated and has worked higher for most of the session. Resistance as it approached 25k (day high 24,963), small pull back and traded sideways with a slight dip at the end to close +2.1% @ 24,840. Topix opened higher and worked higher with a small dip at the end to close +1.4% @ 1,682
Pre market Data 
Tankan Index Nov -13 vs -26 Oct (F/cast was -28). Least -VE for 9 mths but manufacturers remain pessimistic about the recovery and govt efforts to boost domestic demand.
Foreign Reserves Oct $1384.4b vs 1389.8b Sept
Out midday
Leading Economic Index Prelim Sept 92.9 vs 88.5 Aug revised (F/cast was 88)
Coincident Index Prelim Sept 80.8 vs 79.7 Aug (F/cast was 80)
After market SoftBank Group announced interim results to end Sept 30, 2020. Net profit JPY1.88 trillion (aUS$18.267 billion), 3.47x higher YoY. The group's Vision Fund 1 (SVF1) had invested US$75 billion in 83 startups, which was worth US$76.4 billion at end-September, implying an unrealized gain (positive return).
S KOREA opened strongly rallied but then eased back before working slowly higher but eased back in the last hour. Kospi closed +1.3% @ 2,447Kosdaq closed +1.72% @ 851, worked higher all day.
TAIWAN opened above 13,000 and gapped higher to test 13,150 in early trades , before easing back to 13,050 and then trading sideways and closed in the upper side of the band +1.2% @ 13,128
After market
Trade Balance Oct $7.46b vs 7.14b Sept (F/cast was 6.1b)
Imports Oct -1% YoY vs -5.4% Sept (Consensus was -2.5%)
Exports Oct +11.2% YoY vs +9.4% Sept (Consensus was +4.2%)

Shanghai Northbound Rmb 50,743m Buy 21,330m vs 29,413m Sell
Southbound HK$ 18,061m Buy 8,572m vs 9,489m Sell
Shenzhen Northbound Rmb 71,619m Buy 30,002m vs 41,617m Sell
Southbound HK$ 18,347m Buy 8,279m vs 10,069m Sell

Active Heavyweights
ABA (09988.HK) +2.9%
PING AN (02318.HK) +2.7%
MEITUAN-W (03690.HK) +2.6%, hitting new high
AIA (01299.HK) +2.2%
HKEX (00388.HK) +1.8%
TENCENT (00700.HK) +1..3%
CCB (00939.HK) +1.2%

HSI & HSCEI Constituents on the move
SUNNY OPTICAL (02382.HK) +8.1%, hitting new high
GALAXY ENT (00027.HK) +5.5%
AAC TECH (02018.HK) +4.9%
CHINA RES BEER (00291.HK) +4.1%
FOSUN INTL (00656.HK) +3.6%
SANDS CHINA LTD (01928.HK) +3.4%
CM BANK (03968.HK) +2.2%, hitting new high
LONGFOR (00960.HK) +0.7%, hitting new high

HSMI & HSSI Constituents on the move
RAZER (01337.HK) +18.2%, hitting new high
COSCO SHIP PORT (01199.HK) +14.3%
GENSCRIPT BIO (01548.HK) +11.3%
XTEP INT'L (01368.HK) +11.1%
CHINASOFT INT'L (00354.HK) +10.6%, hitting new high
BJ ENERGY INTL (00686.HK) +10.6%

CLP Power Hong Kong Limited (CLP Power) today announced a series of community support programmes to benefit people in different parts of society in response to the immense challenges as a result of the COVID-19 pandemic. Funded by a total sum of more than HK$160 million from the CLP Community Energy Saving Fund, the programmes aim to encourage consumer spending and help the Hong Kong economy regain momentum. CLP Power will allocate more than HK$80 million to launch a new CLP Retail and Catering Coupons programme for six months to encourage consumer spending and support disadvantaged people. From January 2021, a total worth of HK$100 retail and catering coupons will be given to each of the nearly 800,000 households, including residential customers with low electricity consumption, elderly customers who qualify for concessionary tariffs, and 10,000 tenants of subdivided units. The coupons can be used in more than 2,000 participating outlets.
Alibaba (Guangdong) Technology Limited was officially founded with a registered capital of RMB10 million, Securities Times citing Tianyancha. Its scope of operations includes general AI application system, tech intermediary service, blockchain-related software and service, and so on.
The Indian government barred 118 Chinese apps in September, including TENCENT (00700.HK)'s PUBG Mobile and PUBG Mobile Lite, according to Newzoo's report. Before the ban, PUBG Mobile amassed over 150 million downloads in the country. After the ban, the title's live viewership slipped to 61.2 million hours in September and 48.6 million hours in October from 134 million hours in August.
The Urban Renewal Authority (URA) announced today (9 November 2020) that a total of 43 remaining units in eResidence are designated as “Starter Homes” (SH) units and open to eligible persons for application starting from 10 November 2020 till 7pm on 23 November 2020. These 43 units are the remaining units in eResidence after the sale of the 450 units under the SH Pilot Project in 2019. With the saleable area ranging from 284 to 574 square feet, the remaining SH units comprise 2 studio, 7 one-bedroom, 5 two-bedroom and 29 three-bedroom units. The selling prices as listed in the price list, after discount, range from HK$3.552 million to HK$7.983 million, with unit prices from HK$12,111 to HK$13,908 per square foot of saleable area.
CATHAY PAC AIR (00293.HK) had last month made a hard decision by slashing 5,300 positions, said Chairman Patrick Healy at the Legislative Council committee, emphasizing that the flagship airline has taken all cost-cutting moves to avoid layoff. With a stable cash flow at this moment, the group will hopefully tide over the crisis, if the aviation industry is restored to a normal level next year, by which no further dismissal will be required, furthered Healy.
RAZER (01337.HK) has issued a positive profit alert of an expected adjusted profit before income tax, a non-GAAP measure, for the financial year ending December 31, 2020, as compared to the adjusted loss before income tax of US$40.3 million for the financial year ended December 31, 2019.
LINK REIT (00823.HK) interim results ended September 2020. After adjustments and a discretionary distribution of HK$144 million, total distributable amount amounted to HK$2.921 billion, down 1.52% yearly. Interim distribution per unit for the period increased by 0.1% to HK141.65 cents.
BYD COMPANY (01211.HK) is considering an acquisition of a commercial vehicle factory at Ulsan, South Korea under Zyle Daewoo, as South Korea media cited sources. A due diligence has been conducted recently.
Overnight HIBOR last posted at 0.03529%, down for 6 days, logging a 1-month low, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.17%, marking a 1-month low.
The SFC has confidentially informed financial institutes that they will unlikely breach Hong Kong National Security Laws by imposing US sanctions on Chinese and Hong Kong officials, Financial Times learnt from insiders.
YUM CHINA-S (09987.HK) inked a strategic cooperation framework agreement at the China International Import Expo in Shanghai. The deal was signed by Liu Zhongchu, Deputy Secretary-General of Hubei provincial government, and Joey Wat, CEO of YUM CHINA-S. Under which, YUM CHINA-S shall bring its resources edges like leading digital ability and supply chain into play, while investing and building a Yum China supply chain center.
Bank of England (BoE) Deputy Governor Jon Cunliffe said it is unclear whether banks will be allowed to resume dividend payment, adding lenders could still be restricted from payout following the review, reported the Sunday Times. Slight -VE HSBC
The worldwide pandemic situation is growing more disquieting, where the daily additional cases has surged from 70,000-100,000 between late March and mid May to 550,000 in October, Sophia Chan, Secretary for Food and Health, wrote on her blog. There are over 47 million confirmed cases in a global context, and the death toll nearly 1.2 million. Multi-pronged border restrictions are the first defense to stem virus from entering the local community, said Chan. Keeping eyes wide open at the global pandemic situation and changes in both inbound and outbound tourist figures, the Government will swiftly take tougher precautions against imported cases when necessary.
FAST RETAIL-DRS (06288.HK)'s announced that the final gross amount of the year-end dividend payable per HDR is HK$0.1794148 based on the Japanese yen / Hong Kong dollar exchange rate of 0.0747562 as of 6 November 2020. Also announced UNIQLO debuted at the 3rd China International Import Expo, reported Chinese media. UNIQLO opened 44 new offline stores in China from June to October 2020, owning roughly 800 offline shops in the country so far, said Jalin Wu, Chief Marketing Officer, Greater China. The casual wear retailer plans to open at least 80-100 offline directly-operated stores in China per year, she added.
Fueled by slumping USD Index, CNH once jumped 199 bps to peak at 6.5645 this morning, hitting an over-two-year high. It last stood at 6.5774, up 70 bps. Meanwhile, CNY once leaped 208 bps to peak at 6.5917, also notching an over-two-year high. It last printed at 6.5953, up 172 bps.
Hong Kong's property market registered 489 new home deals at the past weekend, +25.4% WoW. The Pavilia Farm II, co-developed by NEW WORLD DEV (00017.HK) and MTR CORPORATION (00066.HK), sold 337 flats in the first round on 7 November, all of which were sold out in nine hours of launch, cashing in over $3.4 billion. On the same date, the developers unveiled the no. 2 price list, covering 343 flats with saleable area of 330-866 sq.ft..
HKSAR Government is in talks with Beijing for a compromised "health code" solution, whereby the scheme will hopefully be launched when the financial hub adds less than 10 local cases per day for 14 straight days with an established mechanism to track infection sources, local media learnt from insiders. Some local lawmakers applauded the proposal and opined customs clearance between the two borders will be salubrious to retailers, citing a third of retails sales attributable to non-local consumers, where Mainland travelers accounted for nearly 80%.
China Foreign Exchange Trade System announced today (9 November) that the central parity of USD/ RMB rose 167 bps from the last trading day to 6.6123, logging an over-two-year high.

Not in this mornings report

China confirmed 33 additional COVID-19 cases yesterday (8 November), including 32 imported infections and one local case (in Tianjin), National Health Commission reported.

WYNN MACAU (01128.HK) secured stable customer flow to Macau at every weekend since the Chinese National Day holiday, said the Vice Chairman cum Executive Director Linda Chen, who disclosed results uptick of the company and envisioned a better economic recovery in future, reported Macao Daily News. Chen also voiced the company's confidence in rebidding casino license in 2022, saying the company will cooperate with the Macau government policy

On 7 November, tracked 11 times more supermarket orders year-on-year at Tmall's 11.11 Global Shopping Festival, driven by the RMB10-billion subsidy program, according to Chinese media.

SAIC Motor and Alibaba Group had earlier inked a new retail strategic alliance. As part of the new retail cooperation of both parties, the RMB10-billion automobile subsidies rolled out by Tmall Auto will cover several hot brands under SAIC, for example Volkswagen and Buick.

TENCENT (00700.HK) will lure more investees within the group's ecosystem and partners to root in G60 Sci-tech Corridor in the Yangtze River Delta, Chinese media citing Dao Feng, Vice President of Tencent and Tencent Cloud.

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