HK WRAP HSI -76pts, T/O flat, Shorts steady at 21% China data at W/end.
HSI -76pts (-0.3%) 23,235 HSCEI -69pts (-0.7%) 9,303 T/O HK$116.73bn (flat DoD although if you exclude the IPO down small)
As at 5:30pm HK time
EUROPE markets opened around flat FTSE slightly higher and now trading sideways after a better Consumer Confidence #Sept -25 vs -27 Aug (F/cast was -27) and Public Sector Net Borrowing in line. DAX and CAC opened slightly lower and initially trended lower but now rebounding
Other data due today
EUROZONE Loans to households and Companies and M3 Money Supply European Council Special MeetingFRANCE Unemployment Benefit Claims and JobseekersUK Car Production
US Futures opened +70pts and initially rose to +110pts but have now eased back to +20pts S&P and NDX slightly +VE I would expect a flat open with caution ahead of the weekend.
Data due today Durable Goods Data, Baker Hughes Total Rig Count.
CSI 300 Closed +7pts (+0.2%) @ 4,570 opened higher and traded sideways for the first hour, spiked to 4,600 but then sold down into lunch 4,565. PM opened around 4,580 but sold down to test yesterday's closing level for support and traded around that level for most of the afternoon an before an uptick around 2:20pm back to 4,580 but was unable to held and eased back into the close. Caution ahead of the weekend (Industrial Profits data will be out Sunday) and next weeks Golden Week holiday which starts Thursday. Volumes were light but Yuan strengthened. News that FTSE Russell would add Chinese bonds into its World Government Bond Index next year a slight +VE
Shanghai Composite Index -4pts (-0.1%) @ 3,219
Shenzhen Component Index -2pts, (flat) @ 12,815
ChiNext Index +5pts (+0.2%) @ 2,540
HSI Pre Market Opened +114pts @ 23,426 vs +21pts ADR’s @ 23,332 as shorts squeezed and E Commerce names rebounded although Financials remained weak. It then traded up to test 23,500 but failed to break out and sold down to 23,250 going into lunch. PM opened flat but trended lower as I expected ahead of the weekend. Found support at 23,124 band then bounced back but unable to retake yesterday’s closing level and ease lower into the close but ticked up 20pts in the closing auction. Sentiment cautious ahead to the China Industrial Profits number out Sunday and the Golden Week holiday starting next Thursday. HSI closed below its 100 day MA which is a slight concern.
IPO MING YUAN CLOUD (00909.HK), debut closed at HK$30.70. up $14.2 or +86.1% vs the listing price of $16.5, on volume of 313 million shares and turnover of $8.35 billion. Excluding the handling fees, a book gain of $14,200 was reported per board lot of 1,000 shares. It had been +52% in gray market. The IPO was 644x oversubscribed and will ease concerns about IPO performance waning.
ZAI LAB-SB (09688.HK), to be listed on 28 September, opened at $562 in gray market, flattish with the listing price, and last stood at $585, up 4.1% against the listing price, on volume of 15,800 shares, PhillipMart data showed.
Techtronics (669 HK) Opened higher and tried to re tested HK$100 but failed. Tight range of trading in the PM. I would continue to accumulate slowly below HK$100; I still think the outlook is +VE Interesting to see the short interest rise which will make it prone to a squeeze on good news.
SHORT SALES Friday 20.9% vs 20.9% Thursday
Top Shorts MTRC (66) 55%, Country Garden (2007) 47%, Bank of China (3988) 47%, Hang Seng Bank (11) 40%, Ping An (2318) 37%, Henderson Land (12) 33%, Sinopec (386) 32%, BoC HK(2388) 32%, CCB (939) 31%, New World Dev (17) 31%, Swire Pac A (19) 30%, Hang Lung PPT (101) 29%, HK EX (388) 29%, CKH (1) 29%, SHKP (16) 28%, CITIC (267) 27%, AIA (1299) 27%, HK & China Gas (3) 26%, China Res Land (1109) 25%,
AFTER MARKET NEWS
Centa-City Leading Index (CCL) last posted at 176.59, -0.10% weekly.
CCL (small-and-medium units) last reported at 177.31, down 0.01% weekly.
CCL Mass last stood at 179.81, up 0.03% weekly.
CCL (large units) last tracked at 172.85, down 0.56% weekly.
Centaline Property, observed the narrower slide in CCL and CCL (small-and-medium units) and expected a successful trough-seeking for home prices soon.
JAPAN opened higher and has basically traded sideways to close +0.5%
S KOREA Kosdaq opened higher but sold down to 800 level before rebounding and then trading sideway but trended lower from 1pm to close +0.2%
Kospi followed a similar pattern, sold down to 2,275 before rebounding but saw less selling pressure than the Kosdaq; closed +0.3%
TAIWAN opened higher trended lower for most to the session with support at 12,150 before seeing a small bounce towards yesterday’s closing level but unable to test and closed -0.3%
CONNECT FLOWS (down DoD)
Northbound Rmb 29,779m Sell 15,424m : 14,355m Buy
Southbound HK$ 8,160m Sell 3,977m : 4,183m Buy
Northbound Rmb 40,480m Sell 20,351m : 20,129m Buy
Southbound HK$ 8,148m Sell 3,736m : 4,412m Buy
CHINA No data. But on Sunday due to get Industrial Profits (YTD) F/cast is -4.7% vs Jul -8.1%
Centre for Health Protection said there were 2 additional COVID-19 cases in Hong Kong today (vs 7 Thursday)
MEITUAN (3690.HK) -2.8%
AIA (1299.HK) +1.3%
BABA (9988.HK) -1.1%
CCB (939.HK) -0.8%
HKEX (388.HK) -0.5%
TENCENT (700.HK) -0.3%
PING AN (2318.HK) -0.1%
HSI & HSCEI Constituents on the move
SUNAC (01918.HK) -5.2%
COUNTRY GARDEN (02007.HK) -3.9%
SHIMAO GROUP (00813.HK) -3.3%
HSMI & HSSI Constituents on the move
HENGTEN NET (00136.HK) -19%
*E-COMMERCE WEAK as the TikTok drama unfolds in the U.S. with a federal judge in New York ordering the Trump admin to either delay a ban on the app scheduled to start Sunday or to show up in court by Friday afternoon to argue why ByteDance shouldn't get the injunction it's seeking. The Trump admin also asked a California judge to put her ruling on hold, filing motions to stay the injunction against it; TENCENT's (700 HK -0.2%).
ANT GROUP said the company will shift its focus to technology investment after going public. Chief executive Hu Xiaoming said the company will invest in technology fields: artificial intelligence, risk management, online security, blockchain, computing and infrastructure.
ALIBABA (9988 HK -0.8%) JD (9618 HK -2.4%).
*HK PROPERTY FIRM after a good response to MTRC (66 HK+0%) Lohas Park phase 13 although no indication of tender prices; surveyors valet the site at HK$8.51b to HK$15.47b, or HK$5,500 to HK$10,000 per buildable sq ft. A wide range
Li Ka Shing and Victor Li have bought another 1.4m shs of CK ASSET (1113 HK-0.4%) between Sept 18-23.
CK ASSET received around 900 checks for the 285 units on offer at Sea to Sky, or about three times oversubscribed.
SHKP (16 HK -0.6%) received around 2,200 checks for the 165 units on offer for Saturday at Wetland Seasons Park Phase 3 - 12x oversubscribed.
*CHINA DEVELOPERS WEAK even after EVERGRANDE (3333 HK -10%) said the letter purporting to show it might default was a fake. The company does have 835.5b yuan in debts and it bonds got hit too. BUT on the +VE it also got approval to spinoff its property management business. It highlights investor concerns about potential property company defaults in China, although a couple of brokers are saying they don’t think it will bring broader negative impact. BUT with China going through a two part recovery with coastal states +VE but interior ones slower there could be issues. That could prompt further consolidation in the sector which many see as +VE.
SUNAC CHINA (1918 HK -5.2%) VANKE (2202 HK -3.4%) AGILE (3383 HK -6.7%) R&F (2777 HK -4.5%).
*AUTOs WEAK dropped after the China Association of Automobile Manufacturers data showed that in early and mid-September, vehicle sales volume were -9.1% YoY.DONGFENG MOTOR (489 HK -0.8%) said Aug. Vehicle sales +5.8% YoY to 246,711 units.GAC (2238 HK -5%) BRILLIANCE (1114 HK -1.2%) GREAT WALL (2333 HK -0.9%).
DEALERSHIPS WEAK on the news HARMONY (3836 HK -2.9%) ZHONGSHENG (881 HK -2%).
EVERGRANDE EV (708 HK -12.8%) on it’s parent's cash crunch rumours.
MARKET HOURS NEWS
SIPG and Ant Group nailed a strategic cooperation agreement at INCLUSION Conference today for the co-creation of a blockchain-based port and shipping ecosystem and enhancement of port ecological collaboration efficiency and digital financial services, with an aim to further propel the construction of digital smart port.
ByteDance has started launching a comprehensive auction-based search-engine advertising service, Chinese media citing insiders. It is different from Baidu (BIDU.US) +0.840 (+0.683%) 's advertising service in the way that ByteDance has included TikTok (Douyin)'s search function in its engine.
TSMC (TSM.US) has recently unveiled its 3nm mass production target, projecting a monthly capacity of 55,000 wafers for the second half of 2020, reported Taiwanese media. The monthly output will further be ramped up to 100,000 wafers in 2023E. Apple is said to have pre-ordered the entire first batch of the capacity.
EVERGRANDE (03333.HK)'s proposed spin-off IPO of its property management business was approved by HKEX said Bloomberg. On recent introduction of strategic investors, the business unit was valued at US$11 billion.
EVERGRANDE (03333.HK)'s perpetual bond "19 EVERGRANDE 02" (155407.SH) -30%, triggering a suspension for the second time. Meanwhile, "19 EVERGRANDE 01" (155406.SH) -19.92 (-21.210%) was -20.9%.
Overnight HIBOR last posted at 0.05095%, logging a 1-month low, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.49679%.
Global mobile game revenue will surge 13.3% YoY to US$77.2 billion this year, over half of which will come from iOS, predicted Newzoo in its report. Mobile game revenue worldwide will likely increase to US$102.8 billion in 2023. While active 5G smartphones currently account for 5% of the global number, Newzoo expected such proportion to reach 43% until 2023.
EVERGRANDE (03333.HK) S&P Global Ratings foresaw it to have weaker liquidity in wake of sequential increase in short-term debt obligations and possible repayment of partial China domestic A-share strategic investments in January 2021. The exacerbation may be partly compensated by decent contracted sales and active capital-raising plans. The rating agency downgraded the outlook for EVERGRANDE, Hengda Real Estate and Tianji to Negative from Stable. The negative outlook reflected EVERGRANDE's liquidity may continue to come under bigger pressure over the next six months, partly due to unbalanced capital structure.
Billionaires Peter Thiel and Richard Li have set up an SPAC called Bridgetown, mainly targeting technology, financial service and media sectors in Southeast Asia, reported Bloomberg. Bridgetown is a "blank check company" built to recombine businesses through acquisitions, reorganizations and other means, according to a filing with U.S. SEC. It anticipates to raise US$575 million.
PRE MARKET NEWS
Not in this mornings report
Chinese Ministry of Commerce (MOC) published the Circular No.40 (2020), whereby it resolved to mount an anti-dumping investigation from today on Polyvinyl Chloride (PVC) imported from and manufactured by the US. The probe will end by 25 September 2021, subject to extension until 25 March 2022 under special circumstances.
GEELY AUTO (00175.HK) debuted the Sustainable Experience Architecture (SEA) as well as Zero Concept, the first SEA-based luxury pure electric sports sedan by Lynk & Co, reported China Securities Journal. 2021 will be the year for GEELY AUTO's full-speed technology transformation and smart electric car development, said the group's President An Conghui.
A U.S. judge said the U.S. government must decide on whether the TikTok ban from American app stores will be delayed by Friday afternoon, foreign media reported. Should the Trump administration stand its ground, it has to file a response for a preliminary injunction requested by ByteDance earlier.
AMVIG HOLDINGS (02300.HK) announced that the controlling shareholder Amcor Fibre sold 47.63% equity interest to an independent third party Golden Vision Buyout Fund, involving 443 million shares for a total consideration of $965 million. Upon completion, the purchaser should propose mandatory general offer at a cash consideration of $2.18 per share, representing a premium of 51.39% over the price as quoted before trading halt. The company applied for a trading resumption with effect from today (25 September).
UMP (00722.HK) announced the results for the year ended 30 June 2020. Net profit grew 3.6 times yearly to HK$58.915 million. EPS equaled HK7.79 cents. A final dividend of HK2.65 cents was declared, against HK2.55 cents over a year ago.
FDG KINETIC (00378.HK) unveiled the final results for the year ended 31 March 2020. The loss narrowed to $357 million from $629 million over a year ago period. LPS was 5.29 cents. No dividend was declared. The company applied for a trading resumption with effect from today (25 September).
YUZHOU GROUP (01628.HK) announced that Lam Lung On, the chairman of the Board and a controlling shareholder of the Company, acquired 1 million shares of the Company on the market on 24 September 2020 for an aggregate consideration of approximately HK$3.11 million (representing an average price of HK$3.1115 per Share).