HSI +453pts (+1.9%) 24,388 HSCEI +157pts (+1.6%) 9,883 T/O HK$126bn (+15% DoD)
Warrants were 6.7% of market turnover.
European markets opened higher but sold down initial trading as investors take a more measure reaction to yesterdays vaccine news.
US futures now indicating a lower open with Dow futures indicating -100pts
US 62 companies reporting today
(for full list https://finance.yahoo.com/calendar/earnings/ )
CONNECT
Shanghai
Northbound RMB 23,973m Sell 11,544m : 12,429m Buy
Southbound HK$ 11,857m Sell 5,720m : 6,137m Buy
Shenzhen
Northbound RMB 35,919m Sell 16,552m : 19,366m Buy
Southbound HK$ 8,668m Sell 3,930m : 4,738m Buy
Short Selling HSI Tuesday 19.9% vs 21.1% Monday
Top Shorts Wharf REIC (1997) 51%, Techtronic (669) 37%, Hengan (1044) 35%, Country Garden 28%, Ping An (2318) 28%, Hang Seng Bank (11) 27%, Galaxy Ent (27) 25%.
DATA
CHINA no data today but tomorrow PBOC Prime Loan Lending rate
HONG KONG Centre for Health Protection said there were no new COVID-19 cases today (Fifth day)
After Market Unemployment Rate Apr 5.2% vs 4.2% Mar (F/cast was 4.3%) highest in 10 years. The under employment rate also rose -VE
RESULTS Thus Week: Wednesday Lenovo (992), Xiaomi (1810), Thursday Parkson Retail (3368), Alibaba (9988).|
INDEXES
REGIONAL MARKETS
JAPAN Spiked higher and has traded sideways closed 1.5%
S KOREA didn’t see so much upside and the Kosdaq slipped into the read in early trading. But both now in the green and trending higher. Concerns over US/China hurting. Closed Kospi +2.3% and Kosdaq +0.8%
TAIWAN Opened higher but failed to get close to the resistance of 11k. Then drifting lower. TSMC only +0.5% as impact of US tightening on supplies to Huawei hurts. Closed +1.12%
AFTER MARKET
MARKET HOURS
SOCIAL DISTANCING While class resumption is scheduled on 27 May, it is not an ideal timing to carry out another relaxation to lockdown measures at this moment, taking into account the trepidation among the public and experts, said Secretary for Food and Health Sophia Chan. The shutdown order on karaoke lounges, bathing parlours, party rooms and night clubs will last seven days till 28 May, and prevailing social distancing measures in place, subject to mild adjustments for different industries. "Gathering ban" will be stretched till 4 June, furthered Chan, underscoring that the ban was prolonged each time by 14 days for public hygiene concerns. Many are wondering if the administration is extending the Gathering ban for political reasons; noting the Tiananmen vigil is supposed to take place in June 4.
CIVIL SERVANT PAY The report of Pay Trend Survey Committee suggested wage hikes of 1.15%, 1.98% and 1.68% for lower, middle and upper salary bands of civil servants, after deducting payroll cost of civil service increments.
TENCENT (700.HK) said that its Tencent Health QR Code, having gone online for 100 days for epidemic prevention, has covered 1 bn people in China with over 9 bn screenings. During the epidemic, the total code usages whopped 140 billion with 116 per capita. As to WeChat Pay, the usage in late April has resumed to the level of last year end, marking monthly active accounts of over 800 million and daily transactions of 1 billion orders. During Labor Day holidays, WeChat Pay delivered a monthly increment of 30% in offline consumption. The tech giant has showered over RMB10-bn electronic consumption coupons to citizens since March in 50 Chinese provinces, cities and regions, such as Hunan, Zhejiang, Guangdong and Wuhan, via WeChat platform.
BABA-SW (9988.HK) said its Tmall will distribute cash consumption coupons and subsidies with local governments and brands during the 6.18 Shopping Festival, with an estimated handout size of over RMB10 billion. More than 100,000 brands have applied for the festival this year, doubling the amount of last year.
WUXI BIO (2269.HK) said the successful signing of a land deal for WuXi Biologics’ clinical and commercial manufacturing facility (MFG11) in Worcester at The Reactory, the US. The 107,000-square-foot, two-story facility will be operational in 2022 and create 150 new jobs.
XIAOMI-W (1810.HK) sales volume of AI speakers (Chinese name: 小愛音箱) has topped 22 million devices, while a new model is hitting the market on 21 May.
Facebook CEO Mark Zuckerberg is imploring Western countries to counter China’s "dangerous" internet regulation, as he worries about other countries' attempt to replicate this model.
We Doctor, an online medical platform co-invested by TENCENT (700.HK) will file an application at the Stock Exchange for a listing in Hong Kong at end-May, Chinese media cited sources. The market expected the valuation to be as high as US$15 bn.
EVERGRANDE (3333.HK) on 18 May repurchased 4.133 million shares at the Stock Exchange, involving $66.523 million.
COMMENT
*INDEX: Hang Seng Indexes potential entrants from August ALIBABA (9988 HK +3.3%) slight -VE from news that Softbank looking to raise money from its stake in Alibaba, XIAOMI (1810 HK +5.6%) and MEITUAN DIANPING (3690 HK +3.7%) very likely to be included from August but with 5% cap. Tencent (700 HK +1.6) currently has a 12% weighting.
*PETROCHEMS STRONG as WTI +11.3% BRENT +9.2% as oil output in the Permian Basin is reported to drop to about 4.22m barrels a day in May, the first YoY drop since 2010. It is reported that Chinese oil demand is almost back to pre-virus levels at about 13m barrels a day. CNOOC (883 HK +2.8%) CH OILFIELD (2883 HK +4.4%) PETROCHINA (857 HK +3.35) ANTON OILFLD (3337 HK +5.5%) SINOPEC (386 HK +3.3%).
*ECOMMERCE PLATFORMS FIRM as BAIDU surged in post-market trading after predicting revenue in the current quarter will be as much as 27.3b yuan. Consensus was for 25.61b yuan.TENCENT's (700 HK +1.6%) backed Singapore's Sea Ltd., more than doubled revenue in the first quarter, reported total revenue rose to $714.9m from $351.9m a year earlier.CH LIT (772 HK+0.3%) remained strong amid collaboration with TENCENT.
*TECH & COMPONENTS REBOUND as investors continue to assess the effect of the US curbs on supplying Huawei have on the wider industry. HUAWEI these latest curbs would hurt and could inflict a “terrible price” on the global technology industry. I doubt that as the industry will continue to look for new avenues and developments. Investors are cautious about potential Beijing retaliation. The problem is that imposing sanctions on US firms is likely to hurt China too at a time when it needs all the jobs it can. AAC (2018 HK +2.7%) SUNNY (2382 HK +4%) SMIC (981 HK +7.4%) HUA HONG (1347 HK +5.7%) FIT HON TENG (6088 HK +6.3%).
*HK PROPERTY FIRM as a vaccine would be a major plus. Sentiment helped on news a total of 980 primary home units have been sold this month the largest number in a month since the Covid-19 outbreak. The one-month Hibor dropped by 2.89 basis points to 0.61554, the lowest in more than two-and-a-half years. HENDERSON (12 HK +2.5%) SHKP (16 HK +2.3%) NWD (17 HK +2%) CKA (1113 HK +2%).
*CHINA PROPERTY FIRM on rotational buying out of Management firms and back into developers after yesterday’s good Home Price data. VANKE (2202 HK +4.7%) EVERGRANDE (3333 HK +2.9%) YUEXIU PROP (123 HK +2%) versus A-LIVING (3319 HK -2.8) AOYUAN HEALTHY LIFE (3662 HK -1.9%) S-ENJOY (1755 HK -1.9%).
*INSURERS STRONG on premium data. PICC P&C (2328 HK +2.6%) reported YTD insurance premium income +2.9% YoY to 164.7b yuan. PICC GROUP (1339 HK +2.4%) said YTD insurance premium income +2.3% YoY to 237.9b yuan. CH LIFE (2628 HK +3.2%) PING AN (2318 HK +2%) NCI (1336 HK +3.7%).
*PHARMA/BIOPHARM FIRM on vaccine hopes and new drugs speculations. Also helped by KINTOR PHARM (9939 HK) priced its IPO offering at HK$20.15 apiece, the top end of the indicative price range. AKESO (9926 HK +9.8%) and SINO BRIOPHARM's (1177 HK +1.2%) cancer treatment drug accepted for ASCO presentation. CANSINO BIO (6185 HK +5.7%) continue to rally amid speculation on its Covid vaccine .
*GOLD MINERS WEAK as investors rotate out of haven assets as their risk appetite returns. ZHAOJIN (1818 HK -5.4%) ZIJIN (2899 HK -0.6%) SHANGDONG GOLD (1787 HK -4.7%).
