June 4 WRAP HSI +41pts T/O -10% DoD, Shorts 20%
HSI +41pts (+0.2%) 24,366 HSCEI +0.4pts (unch) 9,968 T/O HK$125.41bn (-10% DoD).
Warrants were 6.5% of market turnover vs 5.7% Wednesday
Europe opened lower initial rallied but currently trending lower. Retail Sales weak but improving but caution ahead of the ECB decision today and some concerns about the speed of the bounce back. US/China and US protests especially ahead of this Friday’s US jobs report.
US futures indicating a lower open Dow futures -150pts
Northbound RMB 26,463m Sell 12,988m : 13,475m Buy
Southbound HK$ 7,434m Sell 3,872m : 3,562m Buy
Northbound RMB 40,131m Sell 18,867m : 21,264m Buy
Southbound HK$ 9,088m Sell 4,069m : 5,019m Buy
Short Selling HSI Thursday 20.8% vs 18% Wednesday
Top Shorts Shenzhou (2313) 43%, Ping An (2318) 38%, ICBC (1398) 38%, China Res Land (1109) 38%, Wharf REIC (1997) 37%, AAC Tech (2018) 36%, Bank Comm (3328) 34%, Techtronics (669) 29%, CKI (1038) 29%, Henderson Land (12) 26%, MTRC (66) 26%, Galaxy Ent (27) 26%, Tencent (700) 26%, Bank of China (3988) 25%, CLP (2) 25%, Country Garden (2007) 25%.
After market The Census and Statistics Department (C&SD) announced that in the first quarter of 2020, total port cargo throughput -3.2%YoY to 57.2 million tonnes. Within this total, inward port cargo +5.5% YoY to 39.0 million tonnes, while outward port cargo -17.8% YoY to 18.1 million tonnes.
Centre for Health Protection said there were 5 new COVID-19 cases today; Another 72-year-old man has initially tested positive for the virus. Living in Luk Cheun House, Lek Yuen Estate, the man mostly stays at home to take care of his wife and seldom goes out. The man and the first two cases of the cluster live in Flats 12 of Luk Cheun House. Hence, experts suggest all asymptomatic residents of Flats 10 and Flats 12 be evacuated to quarantine centres for 14-day isolation.
CSI 300 closed -1.5pts (-0.04%) @ 3,982 Opened higher but sold off in choppy trading. Tried to hold yesterday’s closing level a couple of the but failed and sold down to the days low 3,969 at 11:15 but then a small bounce into lunch. PM saw the market tried to hold above yesterday’s closing price, got there or above about 5 times in the PM session but was always met with selling pressure.
HSI Pre Market +318pts @ 24,303 vs +270pts ADR’s with a broad bounce following gains in Europe and the US prompting recent shorts to cover. Chinese Financials strong along with Chinese Developers on the RMB strengthening. China Vanke +3.2% despite announcing a share issue to raise money which will be used to pay down off shore debt.
But investor sentiment was cautions and after the shorts had covered the market sold down, in choppy trading, to the day low (24,204) at around 11am. Having found support it then regained a 100pts into lunch. PM saw the market twice try and regain yesterday’s closing level but failed to hold the gains and after the second attempt sold down and traded sideways for about an hour before rallying to the close, and saw a 50pt spike in the closing auction to close in the green.
HSBC HOLDINGS (5.HK) +1.8%
PING AN (2318.HK) +0.7%
ICBC (1398.HK) +0.6%
TENCENT (700.HK) +0.6%
CCB (939.HK) -0.3%
AIA (1299.HK) +0.2%
HKEX (388.HK) -0.1%
HSI & HSCEI Constituents on the move
SANDS CHINA LTD (1928.HK) +4.9%
CHINA RES BEER (291.HK) +3.6%
SHENZHOU INTL (2313.HK) +3%
SINO BIOPHARM (1177.HK) +1.7%, hits new high
HSMI & HSSI Constituents on the move
GIORDANO INT'L (709.HK) +13.6%
COFCO MEAT (1610.HK) +11.6%
GOME RETAIL (493.HK) +4.7%, hits new high
VPOWER GROUP (1608.HK) + 4.1%, hits new high
WEIGAO GROUP (1066.HK) + 3.4%, hits new high
TSINGTAO BREW (168.HK) +3.4%, hits new high
REGIONAL MARKETS Markets opened higher following the moves in Europe and the US.
Japan opened higher but dipped into the red around midday before bouncing back into the green and then trading sideways. Closed +0.4%
S Korea followed a similar pattern Kospi closed +0.2% and Kosdaq +0.6%
Taiwan Opened higher saw some early selling and then traded sideways in the green for most of the day closed +0.7%
WANG ON PPT (1243.HK -69%) said that the Board has noted the decrease in the price and increase in the trading volume of the shares of the Company today (4 June). The Board confirms that it is not aware of any reasons for such decrease in the price and increase in the trading volume of the shares. Volume of 549 million shares and turnover of $230 million.
COUNTRY GARDEN (2007.HK) contracted sales in May RMB56.11 billion, +3.29% YoY
TRULY INT'L (732.HK) unaudited net consolidated turnover of the Group was HK$1.884 bn for May 2020 (-5.4% YoY) and its unaudited net accumulative consolidated turnover for the five months ended 31 May 2020 HK$8.398 bn (-0.6% YoY).
HKTV (1137.HK) the average daily order number in May was 30,400, +120.3% YoY average order value was $500, -8.8% yearly.
CH OVS G OCEANS (81.HK) Jan to May 2020, total property contracted sales RMB17.286 bn +4.6% YoY and the total contracted GFA reached 1.4994 million square meters, -2.6% YoY
SHIMAO PROPERTY (813.HK) May, contracted sales amounted RMB22.02 bn +37% YoY and the contracted sold area 1.26m sq.m +41% YoY The ave selling price was RMB17,469 per sq.m.
TENCENT (700.HK)-backed WeDoctor is seeking to go public in Hong Kong over the next few months that will raise US$700-800 million, the South China Morning Post citing insiders. The online digital healthcare service provider has tapped CM Bank, Citigroup and JP Morgan to help attract investors.
GEMDALE PPT (535.HK) May contracted sales RMB7.567 bn, +52.3% YoY
ONE MEDIA GROUP (426.HK) PROFIT WARNING, expecting to record an increase loss of 400% YoY from continuing operations for the year ended 31st March 2020 and an increased loss of 120% YoY loss for the year ended 31st March 2020. It is mainly attributable to the decrease in advertising revenue of the Group, as a result of the weakening local economy, and the non-cash provisions for impairment loss of approximately HK$10 million for intangible assets, right-of-use assets and property, plant and equipment.
Centa Valuation Index (Major Banks) (CVI) last printed at 88.93 -1.17 pts WoW. The reading implied the re-emerging social incidents, and banks' changing stance toward mortgage valuations in near term. Threats of COVID-19's resurgence have yet to be factored in. They expected the index to stand firmly aloft 80, foretelling a constant home price upswing.
Singapore Airlines announced resumption of Hong Kong flights starting from 10 June. Three flights will be running every week between Singapore and Hong Kong.
Adidas announced that the sales recovery in Greater China came in faster than expected after economic reboot, while the business reopening was gradually underway in Europe and the Americas.
Spokesman of Ministry of Commerce (MOC), said he is not witnessing any withdrawal of foreign capital from mainland China or outbound relocation of industry supply chain. Instead, a wide range of multinational companies are pondering to extend their presence in the supply chain of China, given her sturdy business environment, stronger comprehensive competitive advantages, supermassive market merits and domestic demand potential.
NTES-S (9999.HK) A noon recorded over-subscription in both international and Hong Kong offering, Reuters citing insiders, the Chinese internet technology firm has recorded more than $50 billion in margin quota, according to brokers.
Fitch Ratings said in its report that macro easing policies in responses to the coronavirus crisis have reached an unprecedented level, with US$5 trillion in direct fiscal stimulus kits, or 7% of 2019 GDP for the "Fitch 20”. The ratings agency also noted uneven responses among countries. While developed-countries have spent an aggregate of US$7.6 trillion on stimulus, emerging-market economies have only announced US$1.2 trillion in spending.
LEGEND HOLDING (3396.HK) announced the completion of issue of 2020 corporate bonds (tranche 1) yesterday (June 3). The actual size of this tranche of bonds is RMB1.8 billion with a final coupon rate of 4.5%.
Some global firms are considering shifting some of their treasury operations to Singapore, Malaysia, Thailand, Vietnam from Hong Kong as US President Donald Trump is depriving the city of privileges, Reuters reported.
The International Air Transport Association (IATA) said global airlines saw a 30% monthly rebound in domestic passenger traffic last month, despite an average slide of 23% in domestic fares.
HKD remained resilient this morning (4 June), leading the spot USD T/T rate to 7.7502, close to the Strong-side Convertibility Undertaking. The near-term demand for HKD was shored up by wave of second listings of heavyweight Chinese-concept stocks in Hong Kong.
MGM CHINA (2282.HK) CFO Hubert Wang will be re-designated as the company’s president and COO responsible for the oversight of the company’s business development, casino operations, digital and technology solutions divisions and so on, according to an internal memo signed by Co-chairperson, Pansy Ho Chiu King, as viewed by GGR Asia.The takeover of new management will happen shortly since the retirement of Grant Bowie on 31 May. Their jobs include preparation for quick recovery once the border restrictions are removed and for
application of the 2022 gaming license renewal.
Civil Aviation Administration of China (CAAC) made an announcement on international flight changes. Each domestic carrier is allowed to operate only one international flight per week to any foreign country. Each foreign airline can fly into China no more than once per week. The measure will come into effect from 8 June 2020 (next Monday).
G7 finance ministers agreed to extend a debt relief initiative for the poorest countries in the world beyond end-2020, urging other creditors to join the move. The ministers also suggested strengthened disclosure of public debt data, and that all creditors should make lending decisions aligning with debt sustainability guidelines.
Gulf OPEC members Saudi Arabia, Kuwait and the United Arab Emirates have no intention to extend the voluntary additional crude output cuts beyond June, Reuters citing sources. The three countries are axing oil output voluntarily by 1.18 million barrels per day under a global output cut deal. The related move will remain in force in June.
The Government signed service level agreements with representatives of 21 banks for the Cash Payout Scheme. The Financial Secretary Paul Chan wished to thank all the participating banks for helping the Government implement the scheme, making it possible for eligible people to register and receive the $10,000 payout quickly, conveniently and safely. Preparation for the scheme has reached the final stage. It is expected that registration would start in the end of June, with payment starting to be made in July. The 21 banks that entered into agreement with the Government will provide the electronic registration platform for the Cash Payout Scheme. To receive the payment with their sole-name bank account, eligible people may register through the relevant bank's website or Internet banking service, which is the fastest way to receive payment. They may also submit a paper registration form to the respective bank.
The worldwide smartphone shipment is set to plunge 11.9% yearly to 1.2 billion devices in FY20 due to the coronavirus pandemic, IDC wrote on a research report. The market researcher expected smartphone shipments to slump 18.2% in 1H20, while growth was expected not until 1Q21.
China Foreign Exchange Trade Center announced, on 4 June, the central parities in the interbank forex market of transaction currencies, including the dollar against CNY, are as follows: USD/CNY = 7.1012, up 62 bps from yesterday's central parity.
Standard Chartered believes the national security law is conducive to Hong Kong's long-term stability, hoping the eventual legislative provisions will be clearer to maintain the city's economic and social stability, RTHK citing the bank's spokesperson.
PIONEER PHARM (01345.HK) announced that the Food and Drug Administration of the United States has recently commenced with the Pre-Emergency Use Authorization process on the Novel Coronavirus (SARS-CoV-2) IgG/IgM Combined Antibody Test Kit (Fluorescence Immunochromatography Method). The Company acts as the exclusive agent in the United States for a term of 10 years from 2020 of various Novel Coronavirus (SARS-CoV-2) test kits of Shenzhen Microprofit currently in development.
GEELY AUTO (175.HK) In response to report saying it planned to acquire HUALING XINGMA (600375.SH), a commercial automobile maker listed on A-share market, GEELY AUTO CEO Gui Sheng Yue told Hong Kong Economic Journal that he could assure the news was not tied to GEELY AUTO, yet did not rule out the linkage with the parent company, Zhejiang Geely.
CHINA VANKE (2202.HK) said that before trading hours today (4 June), the Company planned to place around 316 million H shares, representing approximately 16.67% and 2.72% of the total issued H Shares and the total issued share capital as enlarged. The placing price of HK$25 represented a discount of approximately 4.76% to the closing price yesterday.
Saudi Arabia and Russia have reached a preliminary agreement to extend existing record output cuts by a month and to raise pressure on countries with poor compliance on output cuts, Reuters citing OPEC+ sources. No agreement has been reached yet on whether to hold an OPEC+ output policy meeting today, said the insiders.
FTSE Russell announced the results of the FTSE China Index Series quarterly review. CH (601816.SH) and WUXI APPTEC (02359.HK) will be added to the FTSE China A50 Index and, as a result, 360 (601360.SH) and BOE (000725.SZ) will be deleted from the index.
In the FTSE China 50 Index, BABA-SW (09988.HK) , ALI HEALTH (00241.HK) and HANSOH PHARMA (03692.HK) will be added in this review period, with CHINA COMM CONS (01800.HK), NCI (01336.HK) and SHENZHOU INTL (02313.HK) being deleted. All changes from this review will be made effective from start of trading on Monday 22 June 2020.
UK officials have discussed with South Korean and Japanese firms on the supply of 5G networking equipment to develop alternatives to Huawei's products, Reuters citing insiders. The UK government's talks with Japan's NEC Corp and South Korea's Samsung Electronics are part of the plan to diversify Britain's 5G suppliers, reported Bloomberg earlier.
YUEXIU PROPERTY (123.HK) value contracted sales in May 2020 amounted to RMB11.238 bn, +47% YoY. The value of the aggregate contracted sales from Jan to May 2020 RMB25.837 bn, -10% YoY and accounting for 32% of the 2020 target.
*AIRLINES FIRM have opened lower after the US said it was stop Chinese airlines flying the the US whilst Beijing was ignoring the requests of US carriers to resume flights to China. Sector rebound when China said it would allow one inbound international commercial passenger flight to the country per week starting June 8. Meanwhile, IATA said the number of global flights appears to have reached a low on April 21.
CEA (670 HK +1.8%) CSA (1055 HK +0.9%) AC (753 HK +0.4%) CATHAY PAC (293 HK +2.2%).
*HK BANKS FIRM after HSBC and STANDARD CHART said they supported the National Security Law for HK and the Financial Secretary Paul Chan said the city will not adopt FX controls and is confident about being able to maintain the HKD's peg to the USD. He said the SAR's linked exchange rate system was introduced of its own accord and doesn't need foreign approval.
HSBC (5 HK +1.8%) STAN CHART (2888 HK +1.7%) HANG SENG (11 HK -0.2%).
*E-COMMERCE PLATFORMS MIXED MEITUAN (3690 HK +5.7%) another new high on optimism the benefit increased usage during lockdown will transition to permanent business and from the Chinese government latest endorsement for small businesses.
TENCENT (700 HK+0.5%) saw initial selling but then rebounded into lunch. Saw pm selling but rebounded into the close.
ALBABA (9988 HK +0.7%) opened higher and climbed only to sell down into lunch. PM saw to work back to close at its day high.
CH LIT (772 HK -2.3%) after it published a new agreement with its writers, stating clearly that the writers have the rights of copyright and adaptation, adding that revenue will be distributed after negotiations.
*TECH & COMPONENTS WEAK as US puts new restrictions on 33 Chinese firms and institutions it announced last month will take effect on Friday. The entities include software giant Qihoo 360 Technology, cloud robot and services start-up Cloudminds and lidar company Skyeye Laser Technology. -VE for US/CHINA relations.
SMIC (981 HK -0.3%) may have difficulty providing chips to Huawei as it needs to order machinery from the US, which has put Huawei on a watch list, mainland media reported.
ZTE (763 HK -2.3%), AAC TECH (2018 HK -1%) TRULY (732 HK -1.2%) FIT HON TENG (6088 HK -2%).
*CHINESE PROPERTY WEAK after an initially strong start faded on overseas debt concerns after CH VANKE (2202 HK +2.3%) raised HK$7.9b in H-share placement, selling 315.6m new shares at HK$25, about 4.8% discount to last closing price; saying the money raised would be used to pay down debt.
EVER SUNSHINE LIFESTYLE (1995 HK -4.4%) raised US$208m in placement selling 134m shs at HK$11.78, about 7% discount to last closing.
AGILE's (3383 HK -0.7%) May pre-sale value +24% YoY 13.84b yuan.
YUZHOU's (1628 HK +1.1%) May contracted sales jumped 1.08 times to 10.75b yuan.
YUEXIU PROP (123 HK -0.7%) May contract sales 11.24b yuan, Up 47% YoY.
*EDUCATION PROVIDERS MIXED MINSHENG EDU's (1569 HK -7.5%) after placement of 165m new shares at HK$1.22 each in a top-up placement raising HK$239m, at about 8.3% discount from last closing.
VIRSCENT EDU (1565 HK +7%) after two shareholders bought a total of around 6m shares of the company on 29 May.
*MACAU CASINOS STRONG on hopes that the border with Guangdong province may soon be opened after Macau Chief Executive Ho Iat Seng met top Guangdong province officials SANDS (1928 HK +4.8%) MELCO (200 HK +5.6%) WYNN (1128 HK +5.8%).
*SPORTWEAR STRONG after ADIDAS said 2Q sales in greater China are around the prior-year level, and its 2Q is “at least on track, if not slightly better then feared". POU SHENG (3813 HK +3.4%) ANTA (2020 HK +1.7%) XTEP (1368 HK +1.1%).