Sept 10 HK WRAP HSI -155pts (again) T/O -14% DoD, Shorts increased

14 Sep

Sept 10 HK WRAP HSI -155pts (again) T/O -14% DoD, Shorts increased

HSI -155pts (-0.6%) 24,585  HSCEI -45pts (-0.5%) 9,684 T/O HK$103.87bn (-14% DoD)  

markets opened flat/higher but saw initial selling for the first ahead of the ECB rate decision before reversing and working higher. French Industrial Production +3.8% MoM vs +13% Jun but missed F/casts
US Futures opened +50pts, with S&P and Nasdaq also slightly +VE but eased back to flat and are now slightly -VE -20pts. Expect caution ahead of the initial claims number. Other data today 4 week Average Claims, PPI, Core PPI, Wholesale Inventories, EIA Report.

CSI 300 Closed -3pts (-0.1%) @ 4,582 
Opened higher trended slightly lower in the morning. PM saw initial selling but then bounced back to the morning levels. Around 2pm trended lower in choppy trading to 4,570 before a bounce into the close. ChiNext saw weakness with T/O down nearly 25% DoD. Rotation trading evident. Sentiment weak as tensions with US, India and Australia increase.
Shanghai Composite Index -19pts (-0.6%) @ 3,234 T/O Rmb 309.7bn (lower DoD)
Shenzhen Component Index -118pts, (-0.9%) @ 12,742. T/O Rmb 563.5bn (lower DoD)
ChiNext Index -40pts (-1.6%) @ 2,483. T/O Rmb 302.2b (vs 402bn record on Wednesday)

HSI Pre Market opened +116pts @ 24,585 vs +139pts @ 24,607 with E commerce names rebounding along with the tech names. But HSI then sold down in the first hour, possibly margin calls from Wednesday, Then a rebound and was flat going into lunch. PM opened higher saw some initial selling then a bounce around 3pm tested the 24,480 support a few times before selling down for the last hour to close around the day lows.
E commerce names gave up their early gains as investors worry about Trump’s possible actions. Chinese Banks weak on rising NPL’s and ahead of New Loans data due tomorrow. Notably less analysts reports now that earnings season is essential complete.

YUM CHINA-S (9987.HK), closed at $390.2, down $21.8 or 5.3%
against the listing price of $412, on. volume. of 7.74 million shares and. turnover. of $3.083 billion. Excluding the handling fees, a book loss of $1,090 was reported per board lot of 50 shares.
MACAU E&M (1408.HK), to be listed tomorrow, opened flat at $1 in the grey market and last stood at $1.65, up 65% against the listing price, on volume of 670,000 shares, PhillipMart data showed.

SHORT SALES Thursday 20.4% vs 19.6% Wednesday
Top Shorts
Bank of China (3988) 41%, MTRC (66) 36%, BABA (9988) 33%, SHKP (16)31% , AAC Tech (2018) 30%, Hengan (1044) 28%, ICBC (1398) 26%, Mengniu Dairy (2319) 25%, Ping An (2318) 25%, Sunny Optical (2382) 25%,

Government spokesman announced today (September 10) that government departments will fully resume normal public services from September 15 
subject to the implementation of targeted measures to reduce social contact and the application of infection control measures.
Hang Seng Indexes Company announced that, subject to all the conditions of the privatisation proposal being fulfilled or waived, HUADIAN FUXIN (816.HK) will be delisted from the Stock Exchange of Hong Kong. Appropriate constituent changes will therefore be made to Hang Seng Composite Index, Hang Seng Composite SmallCap Index, Hang Seng Composite MidCap & SmallCap Index, Hang Seng Composite Industry Index - Utilities, and Hang Seng China State-holding Enterprises Index after market close on 21 September 2020.
Business receipts in value terms of most of major service industries showed decreases of different magnitudes in Q2 2020 YoY according to the provisional figures of business receipts indices released today (September 10) by the Census and Statistics Dept (C&SD).
Accommodation services (-71%), administrative and support services (-35.5%), retail (-31.4%), transportation (-28.6%), food services (-25.9%), infor and coms (-13.9%) and wholesale (-11.9%) industries.
The courier industry recorded an increase of 30.2% in business receipts during the same period.
SHK PPT (16.HK) annual results ended June 2020. Net profit $23.521bn, -47.6% YoY. During the year, underlying profit attributable to the shareholders -9.4% to $29.368 bn. Underlying EPS equaled $10.13. Chairman Raymond Kwok wrote that the Group’s medium-term earnings prospects are expected to be uncertain, mainly depending on the development of the pandemic and the easing of respective containment measures, including the reopening of cross-border travel, which are crucial to the performance of property sales, rental income and hotels of the Group. The outbreak of COVID-19 has become the biggest threat to the world economy for the year 2020. While the impact of the pandemic has yet to come to its head, global economic activities are expected to remain subdued in the short to medium term as containment measures are likely to linger for a while. This, together with intensified Sino-US tensions, increased trade protectionism and continued geopolitical risks, will pose further challenges and uncertainties to economic recovery. SHKP Also said Lee Shau-kee informed the Company that he, being advanced in age, will not seek re-election at the AGM of the Company to be held in November 2020 and that he will retire as a Non-Executive Director of the Company and cease to act as the Vice Chairman of the Board of the Company at the AGM.
China's handset shipment totaled 26.907 million units in August 2020, -12.9% YoY, announced by China Academy of Information and Communications Technology (CAICT).
MEITUAN-W (3690.HK)'s related company Beijing Sankuai Technology has recently added a new trademark "Meituan Livestream" (Chinese name: 美團主播), which is now under trademark application, local media reported.
Centa Valuation Index (Major Banks) (CVI) last printed at 33.59 this week, 0.52 pts weekly. Centaline Property, said the index was notably narrowing its decline and started to bottom out.

Regional Markets
opened higher Machinery orders declined less MoM and were better than forecast. But market drifted lower through the morning. PM opened slightly higher than the AM session closed but initially drifted lower but then worked higher to close atet eh day high +0.9%. Pre market tomorrow we get PPI and BSI Large Manufacturing Data.
Softbank +2.2% but opened flat, ramped after lunch then effectively traded sideways
S KOREA opened higher and has traded sideways worked higher into the close Kosdaq closed +1.7% and the Kospi +0.9%. Futures and Options expiry today.
TAIWAN opened higher and traded in a tight range 12,650 - 12,710 Closed +0.7% mid range where it opened


Northbound Rmb 40,780m Sell 20,867m : 19,912m Buy
Southbound HK$ 8,307m Sell 3,928m : 4,378m Buy

Northbound Rmb 56,302m Sell 27,174m : 29,128m Buy
Southbound HK$ 8,039m Sell 3,609m : 4,430m Buy

CHINA Next expected data from China is
the new loans, social financing etc which might come out Friday.

Centre for Health Protection said there were 12 additional COVID-19 cases
in Hong Kong today; (vs 6 Wednesday).

Active Heavyweights
AIA (1299.HK) -1.5%
CCB (939.HK) -1.5%
HKEX (388.HK) -1.1%
MEITUAN (3690.HK) +0.4%
TENCENT (700.HK) +0.4%
BABA (9988.HK) -0.2%
PING AN (2318.HK) -0.1%

HSI & HSCEI Constituents on the move
AAC TECH (2018.HK) -3.4%

HSMI & HSSI Constituents on the move
KERRY LOG NET (636.HK) +4.8%, hitting new high

Market Commentary 
*F&B WEAK most of the sector saw profit-taking, except for the newly listed NONGFU SPRING  (9633 HK +7.7% ) after the Hang Seng Index announced yesterday after the market closed that Nongfu Spring will be included in the Hang Seng Composite Index because it meets the rapid inclusion criteria.
*CHINA BANKS WEAK this month's lending data could eb release tomorrow. But there are general concerns about the NPL and lower profitability as Beijing expects to banks to sacrifice profit to keep businesses going; see LEX FT Wednesday.  Consensus is for the aggregate financing tally to rise to 2.59t yuan from July's 1.69t, as govt bond sales increased, and bank loans to 1.25t yuan from 992.7b yuan. CCB (939 HK -1.3%) ICBC (1398 HK -1.8%) BOC (3988 HK-1.2%) ABC (1288 HK-1.2%).
*E-COMMERCE FIRM following this week's correction. BYTEDANCE talking to the U.S. govt about possible arrangements that would allow TikTok to avoid a full sale of its U.S. operations, which may lead to some type of restructuring of TikTok.
ANT GROUP, which is pending to list in both HK and Shanghai, said China's new online loan regulation will not have a material impact on its business. ALIBABA (9988 HK -0.08%) TENCENT (700 HK +1.6%) MEITUAN (3690 HK+0.4%) JD (9618 HK +0.34%).
*VACCINE PHARMA WEAK as the race for a viable coronavirus vaccine continues, but news reported that AstraZeneca's paused clinical trials may resume next week, but the pause worried investors. BioNTech and Pfizer will supply the EU with 200 million doses in the biggest initial order yet for the U.S.-German partners. INNOVENT (1801 HK -4.6%) CANSINO (6185 HK -7.8%).
*AUTOS WEAK  after China CAAM said passenger vehicle sales to dealershi p were 1.755m units in Aug, +6% YoY. GREATWALL (2333 HK -1%) GEELY (175 HK -0.8%) GAC (2238 HK -0.8%) DONGFENG (489 HK -0.33%). BYD (1211 HK +2.7%) rose as New Energy vehicle wholesales rose 25.8% YoY to 109,000 units.
Dealerships traded mixed, ZHENGTONG AUTO (1728 HK -3.6%) ZHONGSHENG (881 HK +0.6%) YONGDA (3669 HK +1%).
*HK PROPERTY WEAK The Inland Revenue Dept's data showed stamp duty collected from property transactions -54.5% YoY to about HK$6.9b in the first eight months as home transactions slowed during the Covid outbreak. NWD (17 HK -0.6%) SHKP (16 HK -0.2%) HENDERSOND (12 HK -0.5%).
HAIDILAO (6862 HK +5.3%) hits record today as it predicts new store openings this year may top 400.
Jimmy Lai's NEXT DIGITAL (282 HK +37%) after HK police arrested 15 people for allegedly manipulating the share price of the company.

BABA-SW (9988.HK)'s Tmall President Jiang Fan assumed that there will be 1,000 new brands on Tmall that could manifest more than RMB100 million sales per year in the coming three years, according to Chinese media.
Huawei is going through tough times under the third wave of US crackdown, said Yu Chengdong, CEO of Huawei's Consumer Business Group. On another note, he announced the launch of a beta version of the HarmonyOS 2.0 SDK (also known as HMS 2.0), expecting such developer tool to debut on all Huawei phones next year. CEO of Huawei Consumer Business Group, disclosed that Huawei delivered 105 million handsets worldwide in 1H20, whilst sales revenue of consumer business whopped RMB255.8 billion. Yu also revealed Huawei is now having 1.8 million developers on board with 96,000 HMS integrated applications and 490 million active users.
COUNTRY GARDEN (2007.HK) Denied the report it was weighing offering steeper discounts for project launches, having yet to make a decision. COUNTRY GARDEN replied that the rumour was completely false.
China's NEV production was 106,000 units +17.7% YoY and sales volume totaled 109,000 units in August, +25.8% yearly, according to China Association of Automobile Manufacturers.
The worldwide 5G smartphone shipment is set to reach nearly 280 million units in 2020, of which 62% may come from Greater China, followed by North America and EMEA (Europe, Middle East and Africa) markets, as Canalys wrote in a report.
TENCENT (700.HK)'s PUBG Mobile has garnered over US$3.5 billion in operating revenue, US$500 million of which was generated in the recent 72 days, announced Sensor Tower. In late July, the battle royale game hit the US$3-billion milestone, driven by stay-at-home demand amid the pandemic.
NEXT DIGITAL (282.HK) the Narcotics Bureau under the Police Force has arrested 15 individuals for alleged manipulation of Next Digital share price, from which some reaped over $25 million in gains, said market sources. The police will elaborate the details during a briefing at the Police Headquarters at 16:00. Stock rallied in the PM session.
TSMC announced that the operating revenue of the company in August rose 16% monthly or 15.8% yearly to TWD122.878 billion. For 8M20, the total operation revenue added 30.7% yearly to approximately TWD850.137 billion.
The new round of Home Ownership Scheme (HOS) and White Form Secondary Market Scheme (WSM) are open for application from today (10 September) to 7 October. Lot drawing and flat selection are expected to take place in January 2021 and June 2021, respectively.Inland Revenue Department's Stamp Office announced that there were 42 residential transactions involved Buyer's Stamp Duty (BSD) in August, down 37 cases or 46.8% monthly. The tax amount involved surged by 61.8% monthly to $232 million, a half-year high since February 2020.
China Shandong Hi-Speed Financial Group and TENCENT (700.HK) yesterday reached a strategic cooperation agreement, under which both parties will pursue upgrades and development in transportation logistics leveraging on their respective edges.
TENCENT (700.HK) will pour RMB10 billion of resources into creating 100 SaaS products and solutions dedicated to SMEs with partners, revealed Dowson Tong, Senior Executive Vice President and President of Cloud and Smart Industries Group, at Tencent Global Digital Ecosystem Summit. Equally, the group will help SME transform and upgrade through digital training courses.
HSBC announced the termination of 26 basic banking service charges from 1 November 2020, which cover general banking services, deposit and money withdrawal, interbank and global money transfer and remittance, as it seeks to promote the financial inclusion development in Hong Kong by providing clients of all levels with more extensive free banking services. Over 4 million HSBC individual customers were expected to benefit. The London-based lender also announced upcoming launch of "HSBC One" integrated accounts that offer simplified and innovative one-stop smart banking services and will not set the minimum balance requirement for the accounts.
K. WAH INT'L (173.HK) Chairman Lui Che Woo, together with Lui Che Woo Foundation Limited, a corporation controlled by Lui in his own capacity, acquired a total of 5.482 million shares of the company on 1, 2, 3, 4 and 7 September, involving approximately $20.32 million, as revealed by the Stock Exchange. Upon completion, Lui Che Woo and Lui Che Woo Foundation Limited had their shareholding increased to 64.48% and 6.25% from 64.39% and 6.16% in the end of August.
HANG LUNG PPT (101.HK) was the successful tenderer for the US government property at 37 Shouson Hill Road, Shouson Hill, Southern District by public tender at HK$2.566 billion. The property had been purchased by the US government in 1948, serving as dormitory for the US Consulate General in Hong Kong ever since. Hang Lung Ppty said the property will be redeveloped into multiple independent luxury houses, with completion possibly in 2024 at a total investment of approximately $4 bn.
COUNTRY GARDEN (2007.HK) Co-Chairman Yang Huiyan respectively acquired 2.199 million, 6.16 million and 6.641 million shares, involving a total of nearly $145 million, according to the shareholdings disclosures at the Stock Exchange.
J.C. Penney struck a tentative agreement with landlords and lenders valued at US$1.75 billion to avert a liquidation. +VE for Asian suppliers
Marriott plans to lay off around 673 of 4,000 positions from its corporate headquarters in Bethesda, the U.S. from next month due to the devastating blow from the coronavirus pandemic, foreign media reported.
The Hong Kong Government is now discussing the implementation of travel bubble scheme with 11 countries, including Australia and New Zealand, said Edward Yau, Secretary for Commerce and Economic Development. However, Australia's foreign ministry spokesman said the country is only having travel bubble talks with New Zealand at this stage.
Huawei plans to produce 50 million units of cellphones next year, a decline of 74% from the estimated shipment for this year, The Elec citing sources.
GALAXY ENT (27.HK) declared that GEG and all of its properties (including Galaxy Macau, Broadway Macau and StarWorld Hotel) have no affiliations with any online gambling and betting sites, nor has the group directly or indirectly authorised any websites and/or related companies to carry out any form of online gambling and betting activities for and on behalf of it.

Not in this mornings report
SINO PROSPER GP (766.HK) announced in relation to the unusual fluctuation in the price and increase in the trading volume of its shares. Save and except for the disposal of 328 million shares by the substantial shareholder Leung Ngai Man, it is not aware of any reason for such fluctuation in the trading price of its shares.

SINO-OCEAN GP (3377.HK) announced that the contracted sales for August of 2020 amounted to RMB9.12 billion +21% YoY; contracted sales GFA amounted to 492,700 sq.m., +20% YoY.

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