HSI +406pts (+1.4%) 29,288 HSCEI +201pts (+1.9%) 10,878 T/O HK$157.04bn (+17.2% DoD)
Markets opened flat again FTSE slight +VE DAX & CAC slightly -VE but all tradeing sideways. Caution ahead of US inflation data.
Adidas +VE as U.S. rival Nike beat quarterly profit expectations and offered a strong full-year forecast.
Logitech weak after Goldman Sachs downgraded its shares to “neutral” from “buy” on the back of recent outperformance.
Loans to Households May +3.9% YoY vs +3.8% Apr (F/cast was +4%)
Loans Companies May +1.9% YoY vs +3.2% Apr (F/cast was +3.4%)
M3 Money Supply May +8.4% YoY vs +9.2% Apr (F/cast was +8.8%)
Unemployment Benefit Claims May -133k vs +65.9k Apr (F/cast was -42k)
Jobseekers Total May 3.4901m vs 3.6238m Apr (F/cast was 3.5818m)
CBI Distributive Trades Jun 25 vs18 May (F/cast 15)
BoE Quarterly Bulletin.
Opened Dow +100pts, S&P +0.1%, NDX flat and rose in Asian time but now Dow +89pts, S&P +0.1% NDX +0.2%
Good results from Nike and Banks strong pre market but focus on the inflation data and Fed speakers
Personal Income & Spending, PCE Price Index, Core PCE Price Index, Michigan Final (Inflation Expecations, Consumer Sentiment, 5yr Inflation Expectations, Consumer Expectations, Current Conditions), Baker Hughes Rig Count, NY Fed Treasury Purchases (2.25 - 4.5 yrs).
FED Speakers Mester and Rosengren
Earnings: CarMax, Paychex
CHINA CSI 300 closed +84pts (+1.6%) @ 5,240
CSI 300 opened slightly higher and worked better through the morning to 5,200 in the first 90 minutes then traded sideways before a rally into lunch. PM opened higher and worked higher with resistance at 5,250 and eased back into the close.
Expect contined support from Team China going into end of month and Party anniversary.
Leaders were cyclicals like coal, chemicals, steel and brokerages rebounded again;
Laggards Harmony-concept, autonomous driving, and 5G stocks.
Shanghai Composite +41pts (+1.2%) @ 3,608
Shenzhen Composite +219pts (+1.5%) @ 15,004
ChiNext Composite Index +37pts (+1.1%) @ 3,431
S&P Global Ratings announced to affirm an "A+" long-term credit rating for China and "A-1" for short-term credit, with a stable outlook, reflecting the rating company's belief that China will be able to sustain higher economic growth in the coming few years, compared to other middle-income economies.
The report stated that the rating result is partly attributable to the Chinese government's effective measures towards containing the spread of COVID-19 and the speedy launch of vaccine.
Guangdong's National Health Commission reported zero local COVID-19 cases and asymptomatic infections yesterday (24 June).
HSI Pre market opened @ 29,003 +122pts vs +78pts ADR’s broad based buying and then worked better through the morning to 29,200 and lunch and PM worked better with resistance at 29,300.
Tech and Infrastructure stocks +VE after Biden’s US infrastructure bill, Shoemakers +VE on Nike results.
HONG KONG DATA
The Government announced that the average wage rate, as measured by the wage index, March +0.9% YoY in nominal terms. The year-on-year rate of increase was lower than that recorded in December 2020 (1%).
About 50% of the companies reported increase in average wage rates in March 2021 compared with a year ago. A total of 47% of the companies recorded decrease in average wage rates over the same period. The remaining 3% reported virtually no change in average wage rates.
The Centre for Health Protection (CHP) reported 4 new covid cases all imported (vs 6 imported on Thursday and one untraceable).
Meanwhile, the CHP was notified by the UK health authority of a confirmed case in the UK today, which involved a 19-year-old female patient. Her specimen collected on June 16 was tested positive for COVID-19. She remains asymptomatic and repeated testing on June 22 was negative. The CHP announced that the building (Tower 2, Springdale Villas, Yuen Long) where she had resided will be put under a compulsory testing notice (CTN) today.
Short Selling Friday 16.5% vs 16.4% Thursday
Top Shorts Bud APAC (1876) 44%, Geely (175) 33%, Hang Seng Bank (11) 32%, CLP(2) 31%, Bank of China (3988) 31%, Petrochina (857) 28%, AIA (1299) 28%, Hengan (1044) 27%, MTRC (66) 27%, Sunny Optical (2382) 27%, Henderson Land (12) 26%.
AFTER MARKET NEWS
The Lands Department received 17 bids for a residential site in Kwu Tung, Fanling after closing the tender today (25th).
According to the on-site witness, KOWLOON DEV (00034.HK), SINO LAND (00083.HK), CK ASSET (01113.HK), EMPEROR INT'L (00163.HK), HON KWOK LAND (00160.HK), KAISA GROUP (01638.HK), HENDERSON LAND (00012.HK), and others, have submitted tenders.
BABA-SW (09988.HK)'s new retail platform Hema was fined RMB500,000 for false advertising, according to the Administration for Market Regulation of Pudong New Area of Shanghai city.
SAICMOBILITY under SAIC MOTOR (600104.SH) announced to have reached an agreement with BABA-SW (09988.HK)'s Ali Cloud on a strategic alliance, entailing extensive collaborations on aspects like smart travel, safety and risk control, etc., to ensure safer and better travel services for its users.
The Urban Renewal Authority (URA) announced that 36 expressions of interest (EOIs) had been received for the To Kwa Wan Bailey Street/ Wing Kwong Street Development Project, the invitation of which had been closed today (25th). Interested developers included GREAT EAGLE H (00041.HK), China Overseas and CHI MER LAND (00978.HK), EMPEROR INT'L (00163.HK), Kaisa Group, FE CONSORT INTL (00035.HK), CIFI HOLD GP (00884.HK), Chinachem, Nan Fung, SEA HOLDINGS (00251.HK) and others.
LI NING (02331.HK) Profit Alert announced that the Group is expected to record a net profit of not less than RMB1.8 billion for the six months ending 30 June 2021 as compared with that of RMB683 million for the corresponding period in 2020. The improvement in the performance of the Group is mainly due to a growth of over 60% in revenue as well as the continuous improvement in operating margin.
Centa-City Leading Index (CCL) last stood at 188.1, hitting a 96-week high and up 0.81% weekly.
For 1H21, CCL +6.74% / CCL Mass +6.46% / CCL (small-and-medium flats) +6.64% / CCL (large units) +7.22%.
CCL will soon return to its 190.48 historical high, being just 1.25% below the peak right now.
CCL Mass for New Territories West last printed at 175.81, up 0.34% weekly, said the research department of Centaline Property. The index had thrived 3.62% in seven straight weeks for the first time in 479 weeks.
*COMMODITIES FIRM. CNOOC (883 HK +2.6%) PETROCHINA (857 HK +2.4%) on the news that crude stockpiles in Cushing; currently 41.7m barrels could fall to the 30-million-barrel range in the next three months as refineries ramp up fuel-making while oil production is still lagging.
BASE METALS rebound as metal prices stabilized; JIANGXI COPPER (358 HK +4.4%) CHALCO (2600 HK +7%).
*AIRLINES WEAK after IATA said will propose the airline industry eliminates carbon emissions on a net basis by 2050. AIR CHINA (753 HK -0.8%) CATHAY PAC (293 HK -0.7%).
*E-COMMERCE/INTERNET FIRM rebounded as recent laggards, despite regulatory concerns, as traders risk-on mode returns on growth stocks. The music-streaming arm of TENCENT (700 HK +2.8%) is likely to face a penalty after the Chinese Communist party's July 1 100th anniversary celebrations according to news. ALIBABA (9988 HK +2.6%) MEITUAN (3690 HK +4.7%) KUAISHOU (1024 HK +8.3%).
*INFRASTRUCTURE STRONG on US infrastructure bill; ZOOMLION(1157 HK +3.5%), SANY (631 HK +1.3%), WEICHAI POWER (2338 HK +5.2%
*SPORTSWEAR MAKERS MIXED as Nike's earnings beat estimates, growing across all regions except China which may reflect the impact of boycotts over statements on forced labor in Xinjiang.
Revenue +17% less excluding currency to $1.93 billion, missing analysts’ expectations of $2.25b. DONGXIANG (3818 HK +6%) LI NING (2331 HK -0.5%) YUE YUEN (551 HK +0.4%) XTEP (1368 HK -1.8%).
* JEWELLRY/WATCH RETAILERS FIRM, after LUK FOOK (590 HK +12.7%) Net profit +17.4% to HK$1.02b for the year ended March, proposed a special div of 50 HK cts.
ORIENTAL WATCH (398 HK -0.4%) Net profit rose 1.33 times to HK$233.26m for the year ended March, driven by mainland sales, declared a final dividend of 12 HK cents with a special dividend of 27 HK cents.
CHOW TAI FOOK (1929 HK +1.9%) KING FOOK (280 HK +1.7%).
3SBIO (1530 HK -16.6%) following a block trade crossed accounted for a total of 19% of its free float on the board at an 8.2% discount. WEICHAI PWR (2338 HK +5.2%) after exchange data shows Schroder PLC increased its holdings by 3.066m shs on June 18, now holding 10.12% stake.
GANFENG LITHIUM (1772 HK +2.4%) advanced on speculation there is the chance that a tightening market for the battery metal
Market opened rebounded and initially rallied to test 7,320 before easing back to trade around 7,300. Around 12:45pm worked back 7,320 but resistance at 7,325. After testing a couple of times it eased back to 7,300 before a small rally and then traded higher to close +33pts (+0.5%) @ 7,308. Leaders Financials and Miners. Laggards Healthcare.
A lock down in part of Sydney not a big drag as investors accept the new reality of working with covid.
Pre market inflation data was better than expected.
Toshiba -0.6% but off early lows as shareholders reject the Chairman’s reappointment (stock popped on the news) sending a signal to corporate Japan and I would say the Ministry.
Nikkei opened higher at 29,137 but trended lower to 29,000 in the 90 mins before working back to 29,090 at lunch. PM started trading sideways around 29,100 but drifted lower to close +191pts (+0.7%) @ 29,066
Topix followed a similar pattern, opened 1,964 , support 1,955. In the PM it traded around 1,960 and rallied at the end to close +16pts (+0.8%) @ 1,962
Tokyo Core CPI Jun 0.0% vs -0.2% May (F/cast was -0.1%)
Tokyo CPI Jun 0.0% vs -0.4% May (F/cast was -0.2%)
Pre Market Business Confidence beat forecasts
Kospi opened higher and worked better before resistance 3,316 then trended lower to 3,300 level and then traded sideways to close +17pts (+0.5%) @ 3,303
Kosdaq similar pattern, initial rally to 1,019 then traded sideways to around 1,018, then around 1:30pm trended lower to close flat @ 1,012;
Business Confidence Jun 98 vs 96 May (F/cast was 97)
KDCA reported 634 new covid cases (602 local) vs +24 DoD
Taiex opened higher and rallied to 17,568 and traded sideways until 12:45pm with support at 17,550. Then trended lower; currently +95pts (+0.6%) @ 17,503 T/O was US$17.07bn (vs US$14.87b Thursday)
News reported amid the global chip shortage, wafer OEM capacity continues to be under enormous demand. Apart from UMC, the leader in the wafer production market, TSMC (TSM.US) will also raise the price of its wafer in the coming year, with some of its 8-inch and 12-inch models charging for 10-20% more than their current prices, reported Taiwanese media, citing companies with IC design.
CONNECT FLOWS (higher DoD significant northbound buying)
Northbound Rmb 54,408m Sell 23,427m vs 30,982m Buy
Southbound HK$ 18,789m Sell 8,636m vs 10,153m Buy
Northbound Rmb 63,481m Sell 28,466m vs 35,014m Buy
Southbound HK$ 20,063m Sell 9,003m vs 11,060m Buy
MEITUAN (03690.HK) +4.8%
HKEX (00388.HK) +3%
TENCENT (00700.HK) +2.7%
BABA (09988.HK) +2.6%
PING AN (02318.HK) +1.4%
CCB (00939.HK) +0.5%
AIA (01299.HK) unchanged
HSI & HSCEI Constituents on Move:
KUAISHOU-W (01024.HK) +8%
BUD APAC (01876.HK) +4.3%
CM BANK (03968.HK) +4.3%
CHINA RES BEER (00291.HK) +3.4%
TECHTRONIC IND (00669.HK) +3.3%
PETROCHINA (00857.HK) +3.2%, hitting new high
PSBC (01658.HK) +3.1%
JD (09618.HK) +3.1%
HSMI & HSSI Constituents on Move:
3SBIO (01530.HK) -16.6%
VESYNC (02148.HK) +15.7%
SSY GROUP (02005.HK) +14.1%
LUK FOOK HOLD (00590.HK) +12.7%, hitting new high
HEC PHARM (01558.HK) +11.6%
CHINA TELECOM (00728.HK) +8.5%, hitting new high
HUABAO INTL (00336.HK) +5.8%, hitting new high
BOSIDENG (03998.HK) +4.6%, hitting new high
MARKET HOURS NEWS.
The management of Credit Suisse is under pressure of delivering a complete reform proposal, which might entail merger with its competitor UBS, reported Reuters, citing people familiar with the matter. The report stated Credit Suisse has certain apprehension that after suffering an over USD5 billion loss due to the collapse of the hedge fund Archegos in late April, the company might face business break-up requests from investors or become prone to foreign hostile takeovers.
RAZER (01337.HK) announced outstanding sales performance during Amazon Prime Day between 21-22 June, with multiple of its products topping the sales charts of mouse, keyboard, headset and gaming controller, while having an average price of top products that is over 87% higher than that of its competitors.
The French Ministry Foreign Affairs announced yesterday (24th) to include Hong Kong into the "green" list, allowing passengers from Hong Kong to enter or leave the country even if they are not vaccinated, with quarantine measures exempted. Each traveler aged 11 years or older, however, must present a negative PCR or antigenic test taken less than 72 hours before entering the country.
HSBC China launched a corporate-oriented green deposit program, aiming to encourage corporate participation in sustainable development by concentrating their surplus investments on green low-carbon projects. HSBC China will endeavor to match the green deposits with compatible green loan programs, so as to satisfy the companies' desire to include sustainable development as part of their financial activities while securing more capital for green low-carbon projects that require financial support, the bank's President and CEO Mark Wang said
Zhejiang Geely Holding Group announced the strategic cooperation agreement with Ningbo Municipal People's Government. Accordingly, the Group's ZEEKR Intelligent Technology will settle its global headquarter in Ningbo. Both parties will set the benchmark for China's auto industry, while pursuing strategic synergy in tech innovation and application as well as other fields.
The tender has been closed at noon today (25th) for a residential site, Lot No. 4076 in Demarcation District No. 91 at the junction of Fan Kam Road and Castle Peak Road - Kwu Tung, Fanling, New Territories. The Government received at least 15 tenders according to the on-site witness. KOWLOON DEV (00034.HK), SINO LAND (00083.HK), CK ASSET (01113.HK), EMPEROR INT'L (00163.HK), HON KWOK LAND (00160.HK), HENDERSON LAND (00012.HK), KAISA GROUP (01638.HK), and others, have submitted tenders.
NISSIN FOODS (01475.HK) announced that the Company’s controlling shareholder Nissin Japan had recorded profit of JPY4.485 billion for the fiscal year ended 31 March 2021, up 12.9% year-on-year.
JD LOGISTICS (02618.HK) has signed a collaboration agreement with the People's government of Midong district, on building the JD smart logistics port in a chemical industrial campus within the district located in Urumchi, Xinjiang, reported Chinese media.
The smart logistics port will be standing in an area of 500 mou, warranting a total investment of RMB1 billion, and will act as a supporting role within the developed logistics system of the company. The port will be established with the ambition to become the very first smart agricultural by-products wholesale market and fresh food warehouse in the capital of the Xinjiang region.
SCE CM (00606.HK) will price its IPO at the bottom end of its listing price, at $3.7 per share, estimating to raise $1.85 billion, reported foreign media. SCE CM will be offering 500 million shares globally, with 10% of them being Hong Kong offer shares, while the rest being international offer shares.
The government announced today (June 25) that the chief executive has re-appointed Lau Ming-wai and Paulo Pong Kin-yee as the chairman and deputy chairman of the board of the Ocean Park Corporation (OPC) respectively, for a term of one year from July 1, 2021, to June 30, 2022. The government will work with the OPC to proactively implement the future strategy of Ocean Park, a spokesman for the commerce and economic development bureau said. Lam expressed gratitude to the Chinese government for its trust and support and to Matthew Cheung for his 50-year long services and stressed that the appointments are made based on each candidates' merits instead of their backgrounds.
Pursuant to the nomination and proposal of Chief Executive Carrie Lam, China's State Council decided on 23 June to appoint John Lee as the Chief Secretary for Administration, Chris Tang as the Secretary for Security and Raymond Siu as the Chris Commissioner of Police, in accordance with the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China, Xinhua News Agency reported. Meanwhile, the State Council dismissed Matthew Cheung as the Chief Secretary for Administration, John Lee as the Secretary for Security and Chris Tang as the Chris Commissioner of Police.
National Integrated Circuit Industry Investment Fund reduced 16.156 million H shares of SMIC at an average price of $24.5992 per share on market last Friday (18th), cashing in approximately $397 million, according to the Stock Exchange.
SHK PPT (00016.HK)'s vaccination lucky draw with rewards worth $10 million is opened for registration from 25 June 2021 at 9 am.
In order to encourage vaccination, the company announced that the batch who registered first could enjoy the most lucky draw opportunities, with the possibility of receiving rewards including iPhone 12 for 62 consecutive days. Apart from that, SHK PPT has also included more hotel dining cash vouchers as the rewards for the scheme, in hope to benefit as many citizens as possible.
New York University Economist Nouriel Roubini cautioned that the soaring inflation is posing an enormous task for the Fed as they may no longer be able to contain the overheating economy by tightening the monetary policy. Roubini believes that the inflation will not be temporary under the increasing imported inflation and the rising dollar price. The government policies which tilt towards the labor workers would also likely lead to high inflation rate and a spiral wage surge eventually. The Fed, however, cannot tighten the policy and hike the interest rate prematurely over the concern of triggering the collapse of the debt-heavy financial market.
GIC acquired 56.298 million shares of CHINA TELECOM (00728.HK) at an average price of $2.5194 each on Monday (21 June), involving $142 million according to HKEX's Disclosure of Interests. Upon completion, GIC's shareholding in CHINA TELECOM rose from 10.84% to 11.25%.
PRE MARKET HOURS NEWS
The United States must stay strong and work with allies when it comes to issues concerning China, said Sarah Bianchi, nominee for Deputy U.S. Trade Representative (Asia, Africa, Investment, Services, Textiles, and Industrial Competitiveness), at a Senate Finance subcommittee hearing. As for competition with Beijing, it is important for Washington to strive for more open markets for its products, said Jayme White, who has been nominated to oversee Europe and Western Hemisphere.
Trading in the shares of FDG KINETIC (00378.HK) 0.000 (0.000%) has been halted with effect from 9:00 a.m. on 25 June 2021 pending the release of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers which constitutes inside information of the Company.
Didi Chuxing's parent DiDi Global is targeting a valuation of over US$60 billion in its U.S. IPO, likely making the biggest IPO in the United States this year. DiDi Global intends to issue 288 million American depositary shares (ADSs) at US$13-14 apiece, on a basis that four ADSs equals to one A-share. The company aims to raise slightly more than US$4 billion.
Microsoft (MSFT.US) unveiled Windows 11 which is scheduled to become available by the end of the year, marking the first major revamp of the Windows operating system since 2015. Microsoft's shares rose 0.53% overnight to USD266.69, indicating a market worth of over USD2 trillion. Likely to prompt more PC sales too.
LENOVO GROUP (00992.HK) entered into a strategic cooperation agreement with MINSHENG BANK (01988.HK) (600016.SH) yesterday (24th), symbolizing that they had formally forged a comprehensive strategic partnership. Pursuant to which, both sides will explore the new "finance + technology" industrial ecosystem together.
China's Ministry of Technology (MOT) signed a strategic cooperation agreement with CCB (00939.HK) (601939.SH) in Beijing earlier. Pursuant to which, both sides will team up for material project rollout, support for the country's emerging sector buildout, strengthening fintech model innovation, fintech platform ecosystem building, diversion and conversion of tech achievements, and backing construction of regional innovative systems.
Dalian Commodity Exchange and COSCO Shipping signed a strategic partnership agreement in Shanghai yesterday (24th).
The alliance entails collaborative exploration on the R&D and applications of shipping derivatives, combining physical delivery and modern logistics services, so as to foster a new mutual advantage for the futures and logistics industries.
FE CONSORT INTL (00035.HK) announced annual result ended March 2021. The net profit amounted to HK$543 million, up 48.5% yearly. EPS was HK22.9 cents. A final dividend of HK15 cents was declared, same as that in the corresponding period of the previous year.
Rumor has it that ICBC (01398.HK) (601398.SH) will ramp up the mortgage loan interest rate for the Guangzhou region today. The news was confirmed by the bank's insider, reported 21st Century Business Herald. Starting today, ICBC is to revise the Guangzhou home loan interest rate to 5.55% (LPR+90BP) for first-time homebuyers and to 5.75% (LPR+110BP) for second-time buyers.
China Passenger Car Association expressed that since the chip shortage arose in the the second quarter, some of the car makers have been experiencing certain negative sales impacts over the structural resource scarcity. The CPCA projects the chip supply issues to ease in the third quarter but remarked that it might take some time for the terminal sales to recover.
PETROCHINA (00857.HK) announced a connected transaction, where the Company had established the JV Kunlun Capital with its controlling shareholder CNPC and CNPCCCL (000617.SZ) to engage in equity investment, investment management and asset management through private equity funds. The registered capital of the JV is RMB10 billion, where RMB2.9 billion will be contributed by PETROCHINA for a 29% equity interest.