July 7 HK WRAP HSI -364pts T/O HK$240bn HK rising new covid-19 cases
HSI -364pts (-1.4%) 25,976 HSCEI -126pts (-1.2%) 10,600 T/O HK$240bn (-4.3% DoD)
EUROPE opened lower and drifting lower; German Industrial Production was weak and French trade data was weak also concerns about rising US covid-19 cases.
US Futures opened flat but have trended lower Dow currently -260pts with S&P and NDX also looking at opening lower
The expected loss is mainly due to the significant adverse impact of the COVID-19 pandemic and the deterioration of the general economic environment on the Group’s Recurrent Businesses; and the revaluation loss on the Group’s investment property portfolio which is expected to be around HK$6 billion for the six months ended 30 June 2020. On another note, the Group said its Recurrent Businesses are continuing to be significantly adversely affected as a result of the COVID-19 pandemic and the deterioration of the general economic environment. Various measures have been implemented in Hong Kong and globally to address the outbreak of COVID19 such as, in the case of Hong Kong, the closure of several boundary crossings between Hong Kong and the Mainland of China (including the crossings at Lo Wu, Lok Ma Chau and Hong Kong West Kowloon stations, as well as the Intercity through train control point at Hung Hom Station), travel restrictions, social distancing, work-from-home and school closure measures. These measures, coupled with the deterioration of the general economic environment, have had a significant adverse impact on the Group’s Recurrent Businesses, which has led to a substantial reduction in patronage on the Company’s services as previously disclosed by the Company.
The patronage of the group in Hong Kong for 6M20 was 637 million, down 37.7% yearly.
Market and Pre Market News at bottom of page.
Short Selling HSI Tuesday 17.5% vs 18.9% Monday
Top Shorts Wharf REIC (1997) 52%, Ping An (2318) 36%, MTRC (66) 36%, China Res Land (1109) 35%, Hang Lung PPT (101) 35%, Henderson Land(12) 34%, Galaxy (27) 32%, CK Asset (1113) 25%
*CHINA FINANCIALS MIXED relative market valuations remain attractive but some deciding to lock in recent gains; CH LIFE (2628 HK -0.5%) having surged 30% since end of June.
PING AN (2318 HK +1.2%) NCI (1336 HK -0.2%).
BANKS WEAK Modest profit-taking, CCB (939 HK +0.3%) ABC (1288 HK -3.1%) BOC (3988 HK -2%) ICBC (1398 HK -1.3%).
BROKERS saw the biggest losses have been the major gainers in the past 3 days CITIC SEC (6030 HK -6.6%), HAITONG SEC (6837 HK -5%) CGS (6881 HK -8%).
*TECH & COMPONENTS WEAK after the strong rally on STAR Board listing optimism.SMIC (981 HK -8.7%) HUA HONG (1347 HK -13%) FIT HON TENG (6088 HK -4.6%).
*HK PROPERTY WEAK Concerns as new details are revealed about the ability of security agents to confiscate assets under the HK national security law and new covid-19 cases.
Li Ka Shing and Vitor Li bought continue to buy CKA (1113 -2.7%) their combined stake must raise questions about a possible privatisation.
SHKP (16 HK -3%) HENDERSON LAND (12 HK -3.1%) SINO LAND (83 HK -4%).
*CHINA PROPERTY MIXED saw rotation from the DEVELOPERS who have been very strong over the past 2 days into PROPERTY MGMT companies. Worth noting that Developers are also looking to raise money
SUNAC CHINA (1918 HK -4.5%) to raise US$1b via issuance of two senior notes,
SHIMAO (813 HK -4.4%) to raise US$300m via issuance of a senior note,
EVERGRANDE (3333 HK -7.7%) CIFI (884 HK -5.8%).
TIMES NEIGHBOR (9928 HK -0.3%) despite raising HK$787m in top-up placement, selling 77m shs at HK$10.22 each, its a 7.4% from last closing of HK$10.98 but the stock is trading at a 5 year high.
REDSUN SERVICES (1971 HK +4%) closed above IPO price of HK$4.15. EVERSUNSHINE (1995 HK +5%) GC SERV (6098HK +12.5%).
*AUTOS MIXED. GEELY (175 HK +2.3%) off initial highs as June total sales +21% YoY to 110129 units, but 1H total sales volume -19% to 530446 units. That is 38% of its full-year sales target.
GREATWALL (2333 HK +0.4%) but DONGFENG (489 HK -4.3%) BRILLIANCE CHINA (1114 HK -5.3%).
TIANNENG PWOER (819 HK +3.8%) received approval from the Shanghai Stock Exchange for the spin-off of its batteries business, approved the issue and listing of A- shares by the spinoff company.
KB LAMINATES (1888 HK -8%) Warns interim net profit drop of 25%-30%.
Northbound RMB92,164M Sell 42,751M : 49,413M Buy
Southbound HK$32,773M Sell 15,255M : 17,518M Buy
Northbound RMB98,994M Sell 47,906M : 51,088M Buy
Southbound HK$27,228M Sell 12,686M : 14,542M Buy
CHINA AFTER MARKET
Foreign Exchange Reserves Jun $3.112tn vs 3.102tn May (F/cast was 3.12tn)
Slightly below forecasts amid a stronger yuan and an increase in asset prices. Meanwhile, the value of gold reserves increased to USD 110.76 bn from USD 108.29 bn in May.
HONG KONG AFTER MARKET
Foreign Exchange Reserves Jun $445.9b vs 442.4b May (F/cast was 448.8b)
Centre for Health Protection said there were 14 Confirmed COVID-19 Cases today, including 9 Local Cases. Five of the nine additional local COVID-19 cases were of unknown origin, revealed Chuang Shuk-kwan, Head of Communicable Disease Branch at Centre for Health Protection (CHP). Some patients had either dined at Bun Kee Congee & Noodle Foods in Ping Shek Estate, or Sun Fat Restaurant in Man Ying Street, Ferry Point. CHP Controller KH WONG suggested this could be an example of community outbreak, as those five patients were of different occupations and living in different districts.
JAPAN opened lower after weak Household spending and average cash earnings data pre market. It bounced but failed to hold above Monday’s close, and then sold down to the day low just before lunch. PM saw the market trade sideways. Closed around the lunchtime level thanks to a late rally. Final -0.4%
S KOREA market’s opened higher but have tracked lower into the red. Kosdaq after the initial sell-off rebounded and sideways just below yesterday’s closing levels; Final -0.1%. Kospi drifted lower through the day to finish at on its lows Closed -1.1%
TAIWAN opened higher but sold down initially into the red before rebounding and then traded flat Closed -0.2%
Chinese media reported the upcoming exodus of TikTok from Google Play Store and Apple's App Store in Hong Kong. ByteDance's China CEO Kelly Zhang Nan responded that Douyin, the Chinese version of TikTok, will continue to serve the great number of Hong Kong users. It is TikTok, rather than Douyin, that will be exiting the Hong Kong market, according to insiders.
EVERGRANDE (3333.HK) plans to sell some of its commercial properties, which should be a normal disposal according to people familiar with the matter, cited by Chinese media. It is mapping out a sale of offices, hotels and commercial properties measuring aloft 1,000 sq.m. across the country, revealed by several group employees.
US Secretary of State Mike Pompeo told Fox News that the government is "looking at" a ban against Chinese social media apps, including TikTok. US politicians have repeatedly accused TikTok of latent submission to and cooperation with Chinese intelligence agencies.
CITIC RESOURCES (1205.HK) announced an inside information, involving a potential disposal of the equity interests in CITIC DAMENG (1091.HK) held by the Company. Citic Dameng rallied strongly on the news, Citic Resources also traded higher
Chief Executive Carrie Lam told reporters this morning that some people have misinterpreted the law by accusing the Government of expanding police power through detailed rules for Article 43 under Hong Kong security law. As a matter of fact, the police can apply those actions only in case of four kinds of behavior that jeopardizes national security. Regarding Britain's potential offer of citizenship to BNO holders, Lam stated that BNO is deemed a travel pass following the handover to facilitate holders' return to their homeland and that Beijing may solemnly respond and react should London unilaterally change the policy.
United Airlines announced to further expand its international schedule by resuming flight service between Chicago and Hong Kong and Los Angeles and Sydney from September. Meanwhile, nonstop flights between Chicago and Tel Aviv will be added
Samsung Electronics assumed the Q2 operating profit to grow 23% to KRW8.1 trillion (about USD6.8 billion), way higher than KRW6.4 trillion in consensus.
COSCO Shipping inked a third-party strategic cooperation deal with BABA-SW (9988.HK) and Ant Financial to facilitate the collaboration and application of Blockchain technology for shipping and logistics. The parties will commence an in-depth cooperation in global shipping and logistics network going ahead.
CSC (6066.HK) announced in relation to purported merger with CITIC SEC (6030.HK), that Central Huijin, CSC’s second largest shareholder, had on July 5 sent it a written reply that there is no disclosable information of significance in relation to it which has not been disclosed at this moment.
Government spokesman said the Cash Payout Scheme yesterday (July 6) started effecting payment in batches to eligible people who have registered electronically through banks on or before June 30. The first batch of about 3.15 million people have received payment through their specified bank accounts yesterday. The remainder will receive payment in the coming one to two days.
Multiple social media platforms and instant messaging software, including Facebook, Google and Twitter, suspended processing Hong Kong government requests for user data. Facebook stated that it was freezing reviews of data requests pending further assessment of the Hong Kong National Security Law. Google claimed it immediately halted data request reviews from Hong Kong authorities after the law had taken effect. Twitter expressed grave concerns about the legislation's implication.
MBV INTL (1957.HK), to be listed tomorrow, was priced at $0.8, the lower limit of the offer price range $0.8-0.88. 22.5 times of over-subscription was recorded in the public offering. One-lot (2,500 shares) success rate was 65.01%.
CAFE DE CORAL H (341.HK)'s annual report showed that discretionary bonuses to CEO Lo Tak Shing, Peter for the year ended 31 March 2020 amounted to HK$1.44 million, -75% YoY Fees, salaries and allowances, and discretionary bonuses to Lo shrank by 38.8% annually to HK$6.308 million. His fees remained at HK$50,000, while salaries, allowances and benefits in kind burgeoned by 11.9% yearly to HK$4.8 million.
TIMES NEIGHBOR (9928.HK) announced a planned top-up placement of 77 million shares at $10.22 per share, representing 6.92% discount to the closing price yesterday. The net proceeds from the Subscription are expected to approximate $780 million.
The Indian government is looking at 50 investment proposals involving Chinese enterprises under the new screening policy announced in April, inside sources were quoted as saying by Reuters.
Sina announced that it had yesterday (6 July) received a preliminary non-binding privatization offer from New Wave MMXV Limited, effectively controlled by Sina chairman Charles Chao, at US$41 per share, representing a 11.8% premium over its closing price last Thursday (2 July). The offer values the US-listed Chinese internet firm at around US$2.7 billion.
US President Trump is weighing multiple executive orders on China, manufacturing and immigration issues, said White House Chief of Staff Mark Meadows, who refused to offer details.
The Centre for Health Protection (CHP) of the Department of Health announced that as of 4pm yesterday (July 6), the CHP was investigating 17 additional confirmed cases of coronavirus disease 2019 (COVID-19), taking the number of cases to 1,286 in Hong
Chinese Vice Premier Liu He and US. Trade Representative Robert Lighthizer plan to hold a call conference in mid-August to discuss the compliance progress of the phase one trade deal between the two countries, the Wall Street Journal citing insiders. In a letter addressed to Liu and Lighthizer, over 40 US business chambers called on Beijing and Washington to step up their efforts on implementing the deal.
HKTV (01137.HK) announced that Gross Merchandise Value on Order Intake amounted to $431 million in June 2020, up 91.6% yearly.
KINGBOARD HLDG (148.HK) and KB LAMINATES (1888.HK) profit warning, expecting to record 25%-30% and 30%-35% year-on-year decrease in net profit for the six months ended 30 June 2020.