June 29 HK WRAP -250pts with T/O +38% and Shorts rising


June 29 HK WRAP -250pts  with T/O +38% and Shorts rising


HSI -249pts (-1%) 24,301  HSCEI -96pts (-1%) 9,758 T/O HK$133bn (+38.4%)  


EUROPE opened flat/lower but then trending higher in choppy trading

US Futures Opened -175pts as Asian trading started worked their way back to flat as Europe opened and currently indicating +150pts.


INDEXES      

CSI 300 Closed -29pts (-0.7%) @ 4,110.  Markets re-opened slightly lower after the two day holiday last week but then sold down as investors re-acted to rising number of covid-19 cases. They trended lower through the morning to the 4,100 level in choppy trading before a small bounce into lunch.  PM saw the choppy trading continue down to the day low 4,093 before a 100pt rally into the close.
Sentiment weak as China says it will retaliate and put visa restrictions on US citizens it believed to be meddling in HK matters.  Covid concerns remain,  The weekend Industrial profits number whilst showing signs of improvement was pre the recent covid-19 outbreak in China and the rising cases in the US.
HSI Pre Market +77pts @ 24,627 vs -183pts ADR’s @ 24,366  Despite weakness in ECommerce names but then the market sold down to the 24,331, slightly below where the ADR’s had indicated.  It then traded sideways fro the first hour before selling down 300pts into lunch.  PM saw an initial 110pts bounce, which was gradually sold down over the next 40 mins but then the market worked higher (+150pts) over the next 90 minutes before easing back into the close.  HSI ticked low in the closing auction.
Sentiment -VE as National Security Law could be imposed as soon as Wednesday but HK has still not been told the detail.  Snippets are  except that to release the detail might cause further unrest!  Not a good sign

AFTER MARKET 
SHIMAO GROUP (813.HK) announced that it had on 29 June 2020 submitted a listing application to the Stock Exchange for the proposed spin-off of its property management services, Shimao Services.
SUNCITY GROUP (1383.HK) announced that "HOIANA”, a JV between the Group and its investment partners, has officially opened for preview on 28 June. HOIANA is now ready to introduce some of its first operational facilities, such as the gaming facilities, the Golf Club, and the Hoiana Hotel & Suites managed by Rosewood Hotel Group.
The People's Bank of China announced that in order to facilitate cross-boundary investment for residents in the Greater Bay Area, the bank, together with Hong Kong Monetary Authority and Monetary Authority of Macao, has decided to switch on cross-boundary wealth management connect pilot scheme. The official launch time and implementation details will later be disclosed. Relevant regulators in Hong Kong, Macau and China will respectively adopt all necessary measures to build an effective mechanism under the cross-boundary wealth management connect scheme for the purpose of upholding investor interest and timely coping with illegal behavior and misconduct pursuant to their respective management principle.
HKEX (388.HK) announced that it will shorten the listing cycle of structured products to three trading days from five trading days.  Issuers will be able to list their structured products, such as Derivative Warrants (DW), Callable Bull/ Bear Contracts (CBBC) and Inline Warrants (IW), on the cash market for trading on the third trading day after their submission of term sheets. The new listing cycle will enhance market efficiency on product issuance, and help increase product choices for investors. Products launched on or after 13 July 2020 will use the new listing cycle.
REGINA MIRACLE (02199.HK) results for the year ended 31 March 2020. Net profit +2.7% yearly to $290 million with EPS of 23.7 cents. A final dividend of 4 cents was declared, against 4 cents over a year ago.
KANGJI MEDICAL (9997.HK) concluded the day at $27.6, up $13.72 or 99% vsthe listing price $13.88, on volume of nearly 127 mn shares and turnover of $3.308 bn. Excluding the handling fees, a book gain of $6,860 was reported per board lot of 500 shares.
HYGEIA HEALTH (6078.HK) concluded the day at $26, up $7.5  +40.5% against the listing price $18.5, on volume of 78.68 mn shares and turnover of $1.913 bn. Excluding the handling fees, a book gain of $1,500 was reported per board lot of 200 shares.
CICC (3908.HK) and TENCENT (700.HK) formed a joint venture, which is held 51% by the former with a registered capital of RMB500 million, reported Chinese media.  The JV is engaged in information technology consultation and other services.
 

Market and Pre Market News at bottom of page.


Short Selling HSI 
Monday 16.5% vs 14.7% Friday

Top Shorts Hang Seng Bank (11) 57%, Galaxy Ent (27) 40%, Henderson Land (12) 36%, Hengan (1044) 36%, Sino Land (83) 34%, MTR (66 HK) 34%, CLP (2) 32%, Wharf REIC (1997) 32%, Sunny Optical (2382) 31%, Petrochina (857) 31%, China Shenhua (1088) 30%, Sands China (1928) 30%, Hang Lug PPT (101) 29%, China Unicom (762) 26%, HK & ChinaGas (3) 25%, Mengniu Dairy (2319) 25%.

COMMENT

*CHINESE BANKS MIXED. PBOC to implement new monetary tools to make sure liquidity reaches the real economy. The central bank said it will increase the proportion of smaller company, credit and manufacturing loans, and continue to lower lending rates. CCB (939 HK +1%) BOC (3988 HK -0.7%) CMB (3968 HK +0.7%) ABC (1288 HK -1.2%).

*CHINA BROKERS WEAK on the news that China plans to offer brokerage licenses to commercial banks, as the country is trying to foster big-sized brokerages amid the opening up of its finance market to global firms, as well as promote an international expansion of its brokerage industry. HAITONG (6837 HK -4.4%) CITIC SEC (6030 H K-4.7%) HUATAI SEC (6886 HK -3.5%) CGS (6881 HK -4.4%) GF SEC (1776 HK -3.3%).

*AUTO MAKERS WEAK China's May auto imports and exports -10% MoM said CAAM. Import and export volume totalled US$8.33b last month, -36.9% YoY. Imports -47.2% YoY to US$3.78b, Export -24.6% YoY to US$4.55b. GAC (2238 HK-5.6%) GEELY (175 HK-2.8%) DONGFENG (489 HK-4.7%).

*PHARMA/MED MIXED rotation from recent flyers to those with more certain prospects. CANSINO (6185 HK +0.6%) coronavirus vaccine gets China military drug approval. It is reported that its recombinant novel coronavirus vaccine received military specially-needed drug approval for one year on June 25.

SINOPHARM (1099 HK +0.7%) says 2nd Covid vaccine found to be safe in testing. 3SBIO's (1530 HK -0.3%) Sunshine Guojian gets FDA clinical drug trial approval for anti-IL-4RA monoclonal antibody.

*IPOs HYGEIA HEALTHCARE (6078 HK +40%) KANGJI MED (9997 HK +99%) on debut.

*E-COMMERCE WEAK on concern of rising completion

ALIBABA (9988 HK -2.4%) successfully published another Sango-based CCG named Sango Fantasy World.

TENCENT (700 HK +0.2%) is testing twitch-line game-streaming service in the US. It held its annual game conference on 27 June and disclosed major updates for nine of its existing game titles. It also displayed over 50 games in its pipeline.

MEITUAN (3690 HK -2%) JD.COM (9618 HK -2%) NETDRAGON (777 HK -3.9%).

*TECH & COMPONENTS WEAK on concerns over deteriorating China/US relations. SMIC (981 HK -7%) and HUA HONG (1347 HK -5.3%) after recent rally on STAR Board listing news.

AAC (2018 HK -2.1%) SUNNY (2382 HK -2.3%) TONGDA (698 HK -6.2%) as China retaliates on US visa restrictions on some Chinese officials, announced imposing visa restrictions on some US individuals who are linked with HK troubling making.

*HK PROPERTY WEAK ahead details on the national security law on HK.

CK ASSET (1113 HK -1.5%) has released 238 flats in the third price list of Sea to Sky in Lohas Park at an average HK$16,599 psf after discounts and 4.9% higher than the first price list, after selling nearly all 462 flats offered in the first two batches.

HYSAN DEVELOPMENT (14 HK -1.8%) warns it may record loss for the 6 months through June.

SHKP (16 HK -1.7%) NWD (2909 HK -3.9%) HENDERSON LD (12 HK -1.4%).

*HK RETAILERS MIXED. LUK FOOK (590 HK +3.8%) rebound on speculation the worst may be over, after it reported net profit -42% YoY for the year ended March 31 to HK$866m, as the Sino-US trade tensions, social unrest in Hong Kong and the coronavirus pandemic weighed on sales in HK and Macau.

CHOW TAI FOOK (1929 HK -1%) SASA INTL (178 HK -3.2%) BONJOUR (653 HK +3.6%) GIORDANO (709 HK -3%) I.T. (999 HK -1.7%).

*GAS PROVIDERS WEAK brokers downgraded CHINA GAS (384 HK -8.6%), after it reported net profit +12% YoY for the year ended March 31 to HK$9.19b.ENN ENERGY (2688 HK -1.4%) CR GAS (1193 HK -3.5%).

*OTHER MOVERS: 

FLAT GLASS (6865 HK +9.2%) hopes of increasing demand, after the total size of 2020 state subsides for solar power generation were greater than expected.

COSCO SHIP ENERGY (1138 HK -8%) as crude oil in floating storage remains 289% higher than a year ago.

SHANDONG WEIGAO (1066 HK +6.9%) rallied following posting a 60m shares block trades at HK$15.07, a discount of 6.9% from today's open


CONNECT  FLOWS 

Shanghai

Northbound RMB34,799m Sell 18,131m : 16,688m Buy

Southbound HK$18,606m Sell 9,444m : 9,162m Buy

Shenzhen

Northbound RMB47,42m Sell 23,702m : 23,719m Buy

Southbound HK$15,322m Sell 7,236m : 8,087m Buy


DATA 

CHINA No data but out Sunday

Industrial Profits (YTD) May -19.3% vs -27.4% Apr F/cast was -22%.

Better than forecast +VE; an improving trend +VE, and follows the trend seen in the Industrial Production Data. BUT partly due to a fall in purchase prices and with the recent resurgence of covid-19 cases in June PLUS the fact that the recent Retail Sales data was -VE, so the upside of this data is limited.


HONG KONG 

Centre for Health Protection said there were no new local covid-19 cases today but it was investigating four additional confirmed casesAfter Market Total Exports Value May -7.4% YoY vs -3.7% YoY in April 2020 to $317.6 bn,. (F/cast was -5.5%)Average wage rate for all the selected industry sections surveyed, March +2.2% YoY in nominal terms.

About 56% of the companies reported increase YoY in average wage rates 39% of the companies recorded decrease in average wage rates YoYThe remaining 5% reported virtually no change in average wage rates.

After discounting the changes in consumer prices as measured by the Consumer Price Index (A), the overall average wage rate for all the selected industry sections surveyed decreased by 0.3% YoY in real terms.

A Government spokesman noted that overall wages continued to increase in nominal terms in March 2020 over a year earlier, but the rate of increase decelerated further to the slowest in close to a decade as the threat of COVID-19 seriously disrupted a wide range of economic activities. After discounting for inflation, overall wages declined slightly in real terms over a year earlier.


Active Heavyweights
AIA (1299.HK) -2.3%
HSBC (5.HK) -1.8%
CCB (939.HK) +1%
PING AN (2318.HK) -0.7%
ICBC (1398) -0.2%
TENCENT (700.HK) +0.2% 
HKEX (388.HK) +0.2%

HSI & HSCEI Constituents on the move
CHINA GAS HOLD (384.HK) -9%
PICC P&C (2328.HK) -5.5%
CITIC SEC (6030.HK) -4.7%
SWIRE PACIFIC A (19.HK) -4.7%
CSPC PHARMA (1093.HK) -3.9%

HSMI & HSSI Constituents on the move
STELLA HOLDINGS (1836.HK) -11.2%
TIANNENG POWER (819.HK) +7.9%, hits new high
WEIGAO GROUP (1066.HK) +6.9%, hits new high
XINYI SOLAR (968.HK) +5.2%, hits new high
CHINA VAST (6166.HK) +1.5%, hits new high
YIHAI INTL (1579.HK) +1.4%, hits new high


REGIONAL MARKETS 

JAPAN Opened lower and sold down before rebounding but dropped again after lunch and traded sideways before a final dip at the end to close -2.3%

S KOREA Opened lower Kospi then worked higher for the first 90 minutes before reversing. Kosdaq trading sideways for the first 90 minutes but then sold down. Both traded sideways in the PM to close Kosdaq -2.1%, Kospi +1.9%

TAIWAN Opened lower and drifted lower in the morning but then traded sideways to close -1%


NEWS
MARKET HOURS 

Wheelock Properties has obtained the pre-sales consent for the phase 1 development of its Lam Tin residential project, "KOKO HILLS", said Managing Director Ricky Wong. The sales brochures will be made available within 24 hours, he added.
BABA-SW (9988.HK) today (29 June) sealed a cooperation deal with Galanz, a Chinese electronic home appliance brand, pursuant to which both sides will

strike comprehensive digital cooperation in product innovation, new product R&D, IoT application and other fields. The partnership with Galanz is one of the initiatives to boost new consumption, tap new markets, and accelerate digital upgrade of the home appliance industry, said BABA-SW.

HK National Security Law Voting Draft Submitted to NPC Meeting for ReviewLi Fei, Chairperson of National People's Congress Constitution and Law Committee, had reported his opinions on revising a draft law on safeguarding national security in HKSAR at the meeting of 13th NPC Standing Committee, reported Xinhua. Following, the Chairman of NPC Standing Committee decided to submit the voting draft of the bill for review at the NPC meeting.
Some red-chip companies have keen interest in the ChiNext, anticipating the board to be one of the top-picks for their comeback to the A-share market, reported Shanghai Securities News. Red-chip enterprises mulling over ChiNext listing should be high-tech and strategic emerging players aligning with national strategy, keeping abreast of core technology, and having a high degree of market recognition, according to an official notice. Shenzhen Stock Exchange has also made six major arrangements targeting ChiNext IPO and trading of red-chip firms.
The Government announced that since last Friday (June 26), the Employment Support Scheme (ESS) Secretariat has commenced the disbursement of wage subsidies to the third batch of 30,016 successful employer applicants, with subsidies totalling around $7.7 billion and total committed headcount of paid employees about 335,000.
Financial Secretary Paul Chan wrote on his blog that Hong Kong National Security Law helps the city restore social order and public security, while a stable environment is salubrious to business, investment and livelihood. Chan quoted from industry players that there has been no significant capital outflux from the financial hub as yet, as various findings indicated an ongoing capital influx thereto, leaving the market ample in liquidity.

PRE MARKET

XIAOMI-W (1810.HK) posted a car silhouette poster titled "Make a car? We are serious!" on Weibo earlier, sparking concerns over the firm setting foot icarmaking. However, XIAOMI-W clarified it had no intention to build vehicles; instead, it is going to launch a smart remote control car model.

KINTOR PHARMA-B (9939.HK) announced that Suzhou Kintor Pharmaceutical, a wholly-owned subsidiary of the Company, and JD Healthcare entered into a framework agreement pursuant to which the parties will embark on in-depth collaboration in respect of the sales and marketing of Pyrilutamide (KX-826) on the online pharmaceutical retail platform JD Pharmacy operated by JD Healthcare.

Indian Confederation of All India Traders (CAIT) Secretary General Praveen Khandelwal reprimanded Manu Kumar Jain, Managing Director of XIAOMI-W (1810.HK) India, for hurting the sentiments of millions of Indians and dishonoring the sacrifice of Indian soldiers by stating that the boycott China sentiment only exists on social media and that XIAOMI-W's local business has not been affected.

ORIENTAL WATCH (398.HK) annual result ended 31 March 2020. The net profit amounted to HK$100 million, down 27.4% yearly. EPS was HK17.59 cents.DPS totaled HK13 cents (against HK21.5 cents a year ago), including final DPS of HK8 cents and special DPS of HK5 cents.

CANSINOBIO-B (6185.HK) announced that, the Recombinant Novel Coronavirus Vaccine (Adenovirus Type 5 Vector) (Ad5-nCoV), a vaccine jointly developed by the Company and Beijing Institute of Biotechnology, Academy of Military Medical Sciences, had received Military Specially-needed Drug Approval with a valid period for one year from Health Bureau of the Logistics Support Department of the Central Military Commission on June 25, 2020.

US Commerce Secretary Wilbur Ross said the country is recovering from the pandemic with some little interruptions. He suggested the economic revival may be pushed back from the third quarter to the fourth quarter, and it is crucial for the recovery to be driven by consumer spending.

PRC Warns of US that its actions may jeopardized 1st Phase Trade Deal if the US outs pressure on China over affairs China considers to be off limits including matters concerning Hong Kong, Taiwan, etc., reported WSJ. Yang Jiechi, Director of the Office of the Central Commission for Foreign Affairs, had listed such issues during his meeting with US Secretary of State Mike Pompeo, according to the report.

KING FOOK HOLD (280.HK)  +0.005 (+1.852%)   announced the results for the year ended 31 March 2020. Net profit grew 6.4 times yearly to $5.692 million with EPS of 0.62 cents. A final dividend of 0.2 cents was declared.