June 24 HK WRAP HSI -125pts HK Closed Thursday China Closed Thurs & Friday


June 24 HK WRAP HSI -125pts HK Closed Thursday  China Closed Thurs & Friday


HSI -125pts (-0.5%) 24,782  HSCEI -57pts (-0l6%) 9,937 T/O HK$115.42bn (-3.4%)  

Europe opened lower and sold down with concerns over surging covid-19 cases worries investors

US Expect a flat open; Futures opened -35pts but initially traded higher but sold down later, currently Dow futures -250pts, with S&P and NDX weaker too


INDEXES      

CSI 300 closed +17pts (+0.4%) @ 4,139 Market opened higher and initial spiked to the day high of 4,145 which it tested a couple of times but unable to break out and sold down to 4,126 it then traded sideways in choppy trading into lunch.  PM saw some initial selling to the day low (4,123) before trending higher tot he day high 4,145 about 10 minutes before the close, before selling down slightly into the close. 
Tech names seeing interest with the ChiNext nearing 2,400 the highest since 2016
China closed for Tuen Ng Festival on Thursday and Friday.

HSI Pre Market +127pts @ 25,034 vs -60pts ADR’s @ 24, 847 opened above 25,000 lead by E Commerce names Tencent , Alibaba etc and initial tested slightly higher to the day high of 25,071 but selling down and consolidating around yesterdays closing price in the morning session.  PM saw the market initially sell down to 24,855 before rebounding to 24,950 but then trended lower into the close with caution ahead of tomorrows Tuen Ng Festival (Dragon Boat Day), markets re-open Friday 

AFTER MARKET 
SUCCESS DRAGON (1182.HK) expected to record the loss in the range of HK$11mn to HK$14mn for the year ended 31 March 2020 as compared with the loss of HK$38.898mn for the year ended 31 March 2019.
As USD/ HKD re-hit the Strong-side Convertibility Undertaking, the HKMA undertook US$510 million of selling orders during Hong Kong trading hours to inject HK$3.953 billion. The balance of the banking system of Hong Kong is expected to increase to HK$131.609 billion next Monday (29 June). 
YTO EXP INTL (6123.HK) POSITIVE  PROFIT alert The Group was expected to record an increase in the revenue and a substantial increase in the net profit for the six months ending 30 June 2020 as compared with the corresponding period in 2019, based on the preliminary review by the Company’s management on the unaudited consolidated management accounts of the Group for the five months ended 31 May 2020 and other information currently available to the Board. 
Li Ka-shing and Victor T K Li acquired shares of CK ASSET (01113.HK) further by a wholly-owned subsidiary of Li Ka Shing (Global) Foundation. They acquired a total of 1.3295 million shares in CK Asset at the average price of HK$47.25, HK$47.1437, HK$47.2822 and HK$46.9328 per share on 18 June, 19 June, 22 June and 23 June 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset increased from 35.17% to 35.2%, and from 35.23% to 35.27%.
COWELL (1415.HK) POSITIVE PROFIT alert The Company expected to record a significant improvement in the Group’s profit for the six months ending June 30, 2020 as compared with the same period in 2019. The significant improvement in profit was primarily attributable to the increase in camera module sales; improved production yield; and efficient cost management.
TAI CHEUNG HOLD (88.HK) announced annual results ended March 2020. Net profit amounted to HK$125 million, down 46.2% yearly. EPS equaled HK$0.2. Final DPS was HK$0.12, as compared with HK$0.23 in the year-ago period.
Google stated that it is considering alternative destination to Hong Kong after the US Department of Justice has suggested Federal Communications Commission ban its application to link Pacific Light Cable Network with Hong Kong out of national security  concerns
CATHAY PAC AIR (293.HK) said around 80% of its employees have so far expressed willingness to partake in the new round of voluntary furlough arrangement.  The second round of furlough application will expire on 28 June.
Centa-Salesman Index (CSI) last printed at 60.48, +1.35 pts  WoW.  For almost five weeks, CSI lingered within a narrow range around 60 with the peak and trough at 60.48 and 57.9. The index has been maintaining at the upper end of the critical point of 55. In near term, they forecast the CSI to hover around 60 continuously and amass upswing momentum, which foretold an ongoing uptrend of housing prices. 
 

Market and Pre Market News at bottom of page.


Short Selling HSI Wedneday 17.5% vs 21% Tuesday

Top Shorts Wharf REIC (1997) 42%, MTR (66 HK) 38%, Hang Lung PPT (101) 38%, Hang Seng Bank (11) 38%, PetroChina (857) 36%, Bank of China (3988) 33%, AIA (1299) 33%, Mengniu Dairy (2319) 31%, Ping An (2318) 30%, CCB (939) 28%, Country Garden (2007) 28%, CLP (2) 26%, China Unicom (762) 26%.


COMMENT 

*PETROCHEMS WEAK as oil slipped overnight from a three-month high. API data showed U.S. crude inventories rose 1.75m barrels last week, signaling the market has yet to clear a massive supply glut. Oil/energy demand in China is also being questioned as the China's economy contracted YoY in 2Q, which could signal the start of a recession. CHINA OILFIELD (2283 HK -1.9%) CNOOC (883 HK -2%) ANTON OIL (3337 HK -2.1%).
*E-COMMERCE FIRM led higher by newly-listed stocks amid speculation of Stock Connect and indexes inclusion. ALIBABA (9988 HK +1.3%) JD.COM (9618 HK +2.1%) NETEASE (9999 HK +2.9%) are likely to be included in China-HK stock link programs.TENCENT (700 HK -1.3%) but hit a new intraday high HK$505 in early trading.
*TECH & COMPONENTS STRONG; XIAOMI (1810 HK +9%) on approval of share buyback plan. Sector also strong on speculation of  demand increase for Chinese-made components if India restricts imports of Chinese parts for smartphones amid a border clash between the two nations. AAC (2018 HK +5.1%) SUNNY (2382 HK +2.7%) TONGDA (698 HK +13.6%) HUA HONG (1347 HK +4.6%) TRULY (732 HK +13%).
*HK PROPERTY WEAK uncertainties linked to the national security law. MTRC (66 HK -0.7%) plans to open tenders for Lohas Park phase 13 in the third quarter, offering 2,550 units, as well as phase five and six of Wong Chuk Hang project early next year, which encompasses 1,800 units. SHKP (16 HK -1.6%) HENDERSON (12 HK -0.8%) NWD (2909 HK -2%) SINO LAND (83 HK -1.1%).
*PHARM/MEDICAL FIRM on vaccine speculation as Covid-19 cases increased in  some countries. CANSINO (6185 HK +13%) SINO BIOPHARM (1099 HK +2%) ASCENTAGE (6855 HK +6.8%) INNOVENT (1810 HK +11%). CSPC PHARM's (1093 HK +2.5%) Bortezomib gets drug registration approval. CK LIFE's (775 HK +16%) cancer vaccine Polynoma gets FDA fast tract designation for Seviprotiut-L. CSTONE (2616 HK +13%) released preclinical data on its cancer drugs.
MED DEVICES such as MICROPORT (853 HK +15%) and VENUS MEDTECH (2500 HK +8%) also rallied.
*OTHER MOVERS:
BOSIDENG (3998 HK +3.7%) net profit for the year ended March 31 +22.6% YoY to 1.203b yuan.
CAR INC (699 HK +3.5%) holder UCAR sold 7m shares from May 12 to June 22, represents about 0.33% of the company's total issued share capital.
GOME (493 HK +16%) and GOME FIN TECH (628 HK +32%) on the news that chairman Wang has been released from prison and the companies to make an announcement later.

CONNECT

FLOWS (Southbound closed due to HK holiday Thursday & China holiday Thursday & Friday)

Shanghai

Northbound RMB 30,741m Sell 14,522m : 16,219m Buy

Southbound HK$

Shenzhen

Northbound RMB 47,924m Sell 23,883m : 24,041m Buy

Southbound HK$


DATA
CHINA No data
HONG KONG 

Centre for Health Protection said there were 2 new local covid-19 cases today.


Active Heavyweights
ICBC (1398) -1.4%
TENCENT (700.HK) -1.3% 
AIA (1299.HK) +0.9%
HKEX (388.HK) -0.7
CCB (939.HK) -0.6%
PING AN (2318.HK) +0.1%

HSI & HSCEI Constituents on the move
AAC TECH (2018.HK) +5.4%
BYD COMPANY (1211.HK) +1%, hits new high

HSMI & HSSI Constituents on the move
GOME RETAIL (493.HK) +17.4%, hits new high
MICROPORT (853.HK) +14.8%, hits new high
TONGDA GROUP (698.HK) +12.5%
TRULY INT'L (732.HK) +11.8%
FIRST CAP GP (1269.HK) +10.4%
ZHOU HEI YA (1458.HK) +8%, hits new high
HUA HONG SEMI (1347.HK) +4.6%, hits new high

REGIONAL MARKETS 

Japan opened slight higher but has traded sideways around yesterdays closing level. Closed -0.1%

S Korea Opened higher and worked higher for most of the session but looks to be running out of steam. Kosdaq dipped lower in the afternoon but rebounded Closed +0.8%

Kospi Continued sideways in the PM Closed +1.4%

Taiwan Opened higher but has drifted lower through the day but still in the green. Closed +0.4%  Market Closed Thursday for Tuen Ng Festival (Dragon Boat Day), re-opens Friday


NEWS
MARKET HOURS 

XIAOMI-W (1810.HK)'s India Managing Director Manu Jain told local press that the company is facing a backlash on social media, but shareholders do not need to attach too much worry.  All its smartphones and most of its smart TVs are locally made and 65% of their components are locally sourced, added Jain.
HSBC HOLDINGS (5.HK) Chairman Mark Tucker said at the conference call of International Business Leaders' Advisory Council for the Mayor of Shanghai (IBLAC)  That in the last few decades, Shanghai reaped enormous growth from stunning target development on the ride of the city's open-mindedness, unwavering marketization commitment, tremendous infrastructure investment, as well as close cooperation among business institutions, Meanwhile, Shanghai's new initiatives in promoting foreign investment will entail higher business potential to multinational corporations (MNCs). The Chairman furthered HSBC will invest more in mainland businesses, including polishing itself into a pioneering forex financial institutions in wealth management and insurance services, while supporting the future development of Shanghai.
Xinhua Commentary: Opposition Camp Shows Conspiracy by Defaming HK National Security Law. After the Standing Committee of the National People's Congress had last week vetted Hong Kong National Security Law bill and taken a huge step forward on legislation, Hong Kong opposition camp as expected distorted and defamed the law publicly, which clearly displayed their anti-China political attempt by creating chaos in Hong Kong, said Xinhua News Agency in an editorial.   As Beijing has repeated again and again, Hong Kong National Security Law is enacted to combat illegal behavior of secession, treason, terrorism and collusion with foreign powers, said the Chinese press. The authority aims at precisely crumbling these four kinds of actions that pose the most severe threat to the national security by legal means.
GOME RETAIL (493.HK) Rallying as its founder has purportedly been discharged from the jail. Huang Guangyu has recently been released from the prison, Beijing Business Today citing insiders, and the Chinese appliance retailer had in an executive meeting last night disclosed relevant news.
SFC in its Annual Report 2019-20,wrote that total income for the year ended March 2020 approximated $1.591 billion, -10% from last year.  Owing to the decrease in income, a deficit of $375 million was recorded for the year.
TENCENT (700.HK)'s Timi Studios was one of the mobile game developers of "Call of Duty: Mobile” which has recorded more than 250 million downloads across the globe, with nearly 45 million downloads from the U.S.
The local governments of Hong Kong, Macau and Guangdong ponder to roll out a pilot scheme for mutual recognition of COVID-19 testings and mutual quarantine waiver, revealed Sophia Chan, Secretary for Food and Health. Also, the three governments mull to loosen curbs on the cross-border footfall among the three cities on a limited basis. 
HK e-Commerce Mkt Value May Cross US$25B by 2023: that’s +40% growth on the ride of increased momentum of consumers in using bank transfers and e-wallets,Survey by FIS finds 
XIAOMI-W (1810.HK)  announced that all ordinary resolutions proposed at the AGM held on June 23, were duly passed, including a general mandate to repurchase the Company’s shares not exceeding 10% of the total number of issued shares.  Redmi made an official announcement that the pre-sale of its entry phone Redmi 9 has started at 10 am today, mainland media reported. The price for each Redmi 9 is set from RMB799.  XIAOMI-W Founder Lei Jun said on his personal Weibo that the entry phone has already equipped the function of Snapdragon 835 as technology moves speedily ahead. 
LENOVO GROUP (992.HK) Chairman Yang Yuanqing delivered a thematic speech at the 4th World Intelligence Congress, Tencent Tech reported. He said the intelligent sector should propel consumption growth through forceful development in smart economy which is driven by digitalized and intelligent technology. At the occasion, the group also demonstrated a series of real-life scenarios in smart solutions, ranging from smart cities and smart administration to smart medical and smart education. 
IDC: China 1Q20 Wearable Device Shipment Sinks 11.3%; Smart wearable device shipment -33.3% yearly to 2.76 million units. In terms of market share, Huawei ranked the topped, with shipment +18.8% to 4.282 million units, followed by XIAOMI-W (1810.HK) with shipment down by 0.6% to 4.144 million units.
TENCENT (700.HK) COO Mark Ren delivered a speech titled "New Era of Intelligence: Machinery, Industrial Development and Governance" at the 4th World Intelligence Congress, Tencent Tech reported. In Ren's view, China has not had purely traditional industry after the coronavirus epidemic as each sector has its own digitalization progress more or less. Such change requires every party to make devotion to new infrastructure, and expedite the internet development. As to 5G technology, Ren opined the content consumption habit of internet users has shifted to video platform increasingly. He also envisioned abundant opportunities in 5G era despite immense uncertainties. In arena of digital contents, the company has the confidence of running marathon and is poised to make long-term devotion.
CATHAY PAC AIR (293.HK)  Chairman Patrick Healy said at the shareholders' meeting yesterday (23 June) that he is confident of tiding the company over rough seas through its capital restructuring plan, and hopeful of assisting the airline to overcome challenges.  Yet he refused to respond as to whether there will be further cost control measures on the company, such as layoff. 
BANK OF CHINA (3988.HK) had Euro 80m and ABC (1288.HK)  Euro 55m exposure to a Euro 1.75bn revolving credit facility to Wirecard along with13 other banks.  BANK OF CHINA has tapped an external legal team to look at how to minimize its loss. -VE
Moody's downgraded the ratings outlooks on EVERGRANDE (3333.HK)  , Hengda Real Estate and relevant subsidiaries to "Negative" from "Stable”.  The downgrade was attributable to concerns whether the group can materially reduce their high level of short-term debt over the next 12-18 months.
Legislative Affairs Committee of the NPC Standing Committee held 12 seminars in Hong Kong with Hong Kong and Macau Affairs Office of the State Council and the Liaison Office of the Central People's Government in the HKSAR, pooling opinions in regards of the legislation of National Security Law in Hong Kong.  The responsible person of the central government said it is essential for China to reserve the exercise of jurisdiction right in some severe criminal cases that endanger national security under specific condition, so as to ensure the effective implementation of laws in Hong Kong.
Note that they didn't tell Carrie Lam about their intentions... a sign of things to come.
ESPRIT HOLDINGS (330.HK) said that Raymond OR Ching Fai was re-designated from Executive Chairman of the Board and Executive Director of the Company to Non-executive Chairman of the Board and Non-executive Director of the Company effective from 24 June 2020.

PRE MARKET

The European Union is considering suggesting its members ban Americans from entry due to a surging number of confirmed coronavirus cases in America, New York Times citing EU officials.

Tencent's e-sports division manager, Hou Miao, made his appearance at the press conference of an international e-sports/ cultural and creative event in Hainan Province He said Tencent will introduce e-sports and cultural and creative activities aggressively in future and promote the global impact of e-sports and integrate development of cultural and creative strategy consistently, as the tech giant is eyeing on the development potential of tourism and trade at the international window of Hainan.

Three major Chinese telecom carriers have switched on summer promotion, bringing down their 5G plans to below RMB100, Shanghai Securities News reported. In particular, the cheapest 5G plan of China Mobile is priced at RMB69 after discounts.

China yesterday confirmed 12 additional cases of coronavirus infection, National Health Commission of the PRC reported.  Beijing reported seven cases of local contraction.

Sinopharm's CNBG announced that its self-developed COVID-19 vaccine is set to undergo phase three research in UAE, marking an official onset of the world's first international clinical trial for the virus vaccine.

As HKD re-hit the Strong-side Convertibility Undertaking, the HKMA undertook US$147 mn selling orders during New York trading hours to inject HK$1.139 bn in the market.  The balance of the banking system will increase to HK$127.657 bn on Friday (26 June). GREENTOWN SER (2869.HK) said it acquired a total of 122.6 million shares of ZHONG AO HOME (1538.HK) from Central Oscar and Decision Holdings for a cash consideration of $221 million. Upon completion, the company holds 159 million shares of ZHONG AO HOME in aggregate, representing 18.67% of its share capital.

EMPEROR INT'L (163.HK) annual results ended March 2020. Loss amounted to $3.644 bn, against $3.136 billion in profit in the previous year. LPS equaled 99 cents. Final DPS was 3.5 cents. Full-year DPS was 7 cents. During the year, underlying profit was $842 million, -43.7%.