This and previous notes can be found at asianmarketsense.com
Check out ERI-C.com for interesting research and trading analysis
HSI -112pts (-0.4%) 27,961 HSCEI -120pts (-1.2%) 10,150 T/O HK$156.55bn (+8% DoD but 2 IPO’s today)
Markets opened higher with all sectors in the green and initially traded sideways. Shell announced to boost returns vs buybacks & dividends sooner than expected. Expect some caution ahead of the FOMC minutes.
Industrial Production May -0.3% MoM vs -0.3% Apr revised (F/cast was +0.7%)
Balance of Trade May €-6.8B vs €-6.3B Apr (F/cast is €-5.4B)
Current Account May €-2.3B vs €-2B Apr (F/cast is €-2B)
Halifax House Price Index Jun -0.5% MoM vs +1.2% May revised (F/cast was 2%)
Halifax House Price Index Jun +8.8% YoY vs 9.6% May revised (F/cast was 12.3%)
Labour Productivity Q1 +0.7% QoQ vs -4.3% Q4 (F/cast was +0.8%)
BBA Mortgage Rate Jun 3.62% vs 3.62% May (F/cast was 3.62%)
Opened Dow -54 points, or 0.16%. S&P 500 -0.1% and Nasdaq 100 -0.06%, but now Dow +7pts, with the S&P and NDX slightly +VE
Ahead MBA Mortgage Applications & 30yr Mortgage Rate, Redbook, JOLTs Job Openings, IBD/TIPP Economic Optimism, FOMC minutes. After Market API Crude Oil Stock Change.
CHINA CSI 300 closed +57pts (+1.1%) @ 5,141
CSI 300 opened lower at 5,052 but worked higher through the morning to 5,134 before easing into lunch. PM saw the market work higher with resistance at 5,150; which was tested a few times before market eased back into the close. Suggests team China supporting the market as Tech plays under pressure as China reviews the regulations.
PBoC continues to drain liquidity via reverse repo although a former PBOC official says China should cut interest rates in the second half of the year to safeguard the economy’s recovery and create policy room to deal with the Fed’s future tightening. Another negative was the regulator saying they would tighten up on market manipulation.
Leaders: electrical equipment, nonferrous metals, industrial machinery, medical & health care and mineral products.
Lagards coal, insurance, petroleum, electricity, Harmony-concept and tourism.
Shanghai Composite +24pts (+0.7%) @ 3,554
Shenzhen Composite +272pts (+1.9%) @ 14,940
ChiNext Composite Index +97pts (+2.8%) @ 3,531
Yunnan's Health Commission reported 15 confirmed local COVID-19 cases yesterday (6 July), along with 2 asymptomatic cases and 1 imported asymptomatic case.
Foreign Exchange Reserves Jun $3.214T vs 3.22T May (F/cast was 3.2T).
HSI Pre market opened @ 27,778 -295pts vs -415pts ADR’s
Markets worked higher in choppy trading through the morning, early resistance was around 27,900 level, although it did spike once to 27,927 but was 27,865 at lunch. PM saw initial selling down to the opening levels before rebounding to trade with support at 27,800. Market then rallied in the last hour as Europe opened higher and I would imaging some recent shorts covered. Day high was 27,969 around 3:50pm. Then eased into the close but spiked +36pts in the closing auction.
Some late bargain hunting in Tech having been under pressure, most sectors in the red except Healthcare. With Evergrande under a lot of pressure through the morning but did rebound.
CHAOJU EYE CARE (02219.HK) closed at $14.1 after opening flat on its first listing day, up $3.5 or 33% against its listing price of $10.6, on a
volume of 165.7 million shares, involving $2.122 billion. Excluding the handling fees, a book gain of $1,750 was reported per board lot of 500 shares.
XPENG-W (09868.HK) closed at $165, flat against its listing price on its first listing day, on a volume of 10.51 million shares, involving $1.731 billion. The stock opened high by 1.8% at $168 and reached as high as $168.5 only to drop back afterwards due to the lack of support.
LANDSEA LIFE (01965.HK), whose shares will be listed tomorrow, opened at $3.4 in gray market, up 6.9% against the listing price of $3.18, and last stood at $6.2, up 95% against the listing price, on volume
of 200,000 shares, PhillipMart data showed.
KEYMED BIO-B (02162.HK), which is scheduled to be listed tomorrow, opened high at $58 in the gray market, up 8.8%, PhillipMart data showed. The stock last posted $68.7, up 29% against its listing price of $53.3, on a volume of 2.09 million shares.
HONG KONG DATA
The Centre for Health Protection (CHP) of the Department of Health (DH) announced that as of 0.00am, July 7, the CHP was investigating 1new(COVID-19), taking the number of cases to 11,946 in Hong Kong so far The newly reported case is an imported case.
Foreign Exchange Reserves Jun $491.6b vs 494.5b May
Short Selling Wednesday 15% vs 13.5% Tuesday
Top Shorts Hang Seng Bank (11) 48%, Bank of China (3988) 42%,CK Asset (1113) 40%, Petrochina (857) 39%, China Life (2628) 39%, Country Garden (2007) 36%, HSBC (5) 35%, Anta (2020) 32%, CLP (2) 31%, ICBC (1398) 30%, CCB (939) 30%, Henderson Land (12) 30%, Longfor (960) 29%, AIA (1299) 29%, BankComm (3328) 29%, (27) Citic (267) 27%, Galaxy Ent (27) 26%, NWD (17) 26%, Bud Apac (1876) 25%, SinoBionpharm (1177) 25%
AFTER MARKET NEWS
Chinese media reported the talks between CHINA JINMAO (00817.HK) and EVERGRANDE (03333.HK) on their equity cooperation. However, EVERGRANDE replied that the news was inaccurate.
For the first half of 2021, SUNSHINE 100 (02608.HK) achieved unaudited contracted sales of approximately RMB2.109 billion, down 12.42% yearly. The figure was corresponding to a contracted sales area of approximately 195,300 sq.m..
The Employment (Amendment) Bill 2021 underwent the Third Reading and was passed at the Legislative Council today, by which the number of days for legal holidays will progressively increase to 17 from currently 12, effective 1 January 2022.
RAZER (01337.HK) announced an investment of EUR2 million in Loupedeck, the Helsinki-based creator of custom consoles, through the company's zVentures. The investment will be used to further Loupedeck’s growth, building off the release of the Loupedeck Live. Founded in 2016, Loupedeck has experienced rapid growth and is now the leading brand of custom editing consoles. Loupedeck’s three consoles – the Loupedeck+, Loupedeck CT and Loupedeck Live, address the rising demand to simplify the overwhelming complexities of streaming and creative software on the market today.
China's State Administration for Market Regulation mounted a probe into 22 internet cases involving illegal concentration of business operators under the Anti Monopoly Law. These included seven cases tied to DiDi's arms, six from BABA-SW (09988.HK), five from TENCENT (00700.HK), two from Suning.com (002024.SZ), and one from MEITUAN-W (03690.HK). SAMR has recently fined each of these companies RMB500,000.
*PETROCHEMS WEAK oil pared losses after falling toward $73 a barrel. The dollar’s climb spurred a commodities selloff, and uncertainty remains on OPEC+ next move. CH OILFIELD (2883 HK -1.7%) CNOOC
(883 HK -2.4%) PETROCHINA (857 HK -2.1%).
*NON-FERROUS METALS FIRM lead higher by Rare Earth, amid speculation the rapid growth on EV means strong demand of the metal would continue. CH RARE EARTH (769 HK +6.7%) CH MOLYB (3993 HK +9.3%).
*E-COMMERCE/INTERNET WEAK as Didi's incident continue to weight on the sector's sentiment, after China ramped up scrutiny over the company's data security.
WEIBO denied a report that the chairman of the Chinese Twitter-like service and a state investor are in talks to take the company private. News said the offer on the table is about $90-$100 per share and the deal would allow ALIBABA (9988 HK -1.7%) to exit its stake. China's antitrust regulator is set to officially bar TENCENT (700.HK -1.9%)'s plan to merge two of its key live-streaming platforms - Huya (HUYA.US) and DouYu (DOYU.US), according to news. JD (9618 HK -2.1%) BILIBILI (9626 HK -5%) KUAISHOU (1024 HK -3.4%).
*AUTOS FIRM GAC (2238 HK +10%) surged after GAC Aion’s (former GAC New EV) sales in 1H of the year increased by 128% YoY, and rose 190% in the month of June.
GEELY AUTO (175 HK -0.8%) June vehicle sales -9% YoY to 100,163 units. June new energy, electrified vehicle sales 7,515 units. 1H sales achieved 41% of FY sales vol target. GREAT WALL (2333 HK +2.9%) BYD (1211 HK +0.6%) EVERGRANDE EV (708 HK +4.8%).
*HK PROPERTY FIRM after U.S. 10-years Treasuries yield hit February lows. CK ASSET (1113 HK+1.3%): Li Ka Shing Foundation Bought 850k CK Asset shs on July 2. HENDERSON LD (12 HK +0.4%) SINO LD (83 HK +0.8%).
*CHINA PROPERTY WEAK as property developers again led declines in Chinese high-yield dollar bonds yesterday, including EVERGRANDE (3333 HK -1%) & KAISA's (1638 HK -1.4%).
TIMES CH (1233 HK -1.4%) June contracted sales +1.7% YoY to 8.09b yuan. EVERGRANDE (3333 HK -1% but off the morning lows.
*PHARMA/MEDICAL FIRM, after the MSCI China Health Care Index fell as much as 7.5% and closed down 5.5% yesterday, its biggest drop since March 2020, on concerns that new government draft guidelines would make it more difficult to develop oncology drugs in China. WUXI BIO (2269 HK +6.4%) GENSCRIPT BIO (1548 HK +11%) CSPC (1093 HK +4.7%) PHARMARON (3759 HK +5%).
*SPORTWEAR MAKERS STRONG ahead of ANTA SPORT's (2020 HK +2.8%) Investor Day tomorrow. XTEP (1368 HK +9%) 361 DEGREES (1361 HK +5.9%) POU SHENG (3813 HK +7.6%) LI NING (2331 HK +5%).
Market opened higher and has worked higher to the 7,320 and then traded sideways until a rally into the close to close +65pts (+0.9%) @ 7,327
Laggards miners, banks and retailers. But Sydney Airport +38% on a takeover offer. Tabcorp -5.1% as it confirmed it intends to demerge its lotteries and Keno business from its wagering & GamingCo operations, creating two separate ASX-listed companies. News that Sydney would extend the quarantine seemingly having little impact.
Data Services Index Jun 57.8 vs 61.2 May (F/cast was 61)
RBA Chart Pack released
Broad based selling reflecting concerns over the recovery. Nintendo has a weak open on the unveiling of the new Switch console but has rallied All sectors in the red lead lower by Energy, Materials, Consumer and Financials. Nomura weak as US PB ops being withdrawn, follows losing key analysts. Softbank continues to be under pressure
Nikkei opened much lower @ 28,262 and initially dipped to 28,200 before working better to 28,430 level before easing into lunch. PM opened and tested 28,400 level but then sold down to 28,265 before a rebound to close; -276pts (-1%) @ 28,367
Topix traded in a similar pattern; opened 1,933, touched 1,926 then bounced to 1,945 eased lower into lunch. PM dipped to 1,932 before a bounce to close -17pts (-0.9%) @ 1,938
Data pre market
Foreign Exchange Reserves Jun $1376.5b vs 1387.5b May
Coincident Index May 92.7 vs 95.3 Apr (F/cast was 95)
Leading Economic Index May 102.6 vs 103.8 Apr (F/cast was 104)
Samsung forecast the operating profit in the second quarter to stretch 53% to KRW12.5 tn (USD11 bn), surpassing the market estimate of KRW11.3 trillion, mainly due to the strong chip prices and demand.
Samsung also predicted the second quarter revenue to jump 19% to KRW63 trillion.
Kospi opened lower and sold down to 3,290 in the first few minutes and then sold down to 3,280 which became support through the morning as it worked slightly higher until around 1pm when it drifted lower to 3,278 before a small rally to close -20pts (-0.6%) @ 3,285
Kosdaq dipped lower initially to 1,042 bounced back to flat before working higher. Resistance at 1,050; trading sideways until around 1:30pm when it sold down to 1,046 before a small bounce to close +2pts (+0.2%) @ 1,047
Data pre market
Current account May $10.76b vs $1.91b Apr (F/cast was $2.7b)
KDCA reported 1,212 new covid cases this morning (+494 DoD); the highest since Dec -VE as it could impact the recovery.
Taiex opened lower following the US and after weak employment data. It dipped to 17,880 before bouncing to 17,930 level and traded sideways until around 11 am when it trended lower to 17,850 level before a bounce; but then saw further selling to 17,770 and then traded sideways to close -62pts (-0.4%) @ 17,850
Industrial’s and Energy weak. Tech, Property and Consumer seeing interest.
Data out after market
Balance of Trade $5.15b vs 6.16b May (F/cast was 6.1b)
Exports Jun +35.1% YoY vs +38.6% May (Consensus was 30.3%)
Imports Jun 42.3% vs 40.9% May (Consensus was 33.4%)
Wholesale Prices Jun 10.74% YoY vs May (F/cast was +12%)
Inflation Rate Jun +1.89% YoY vs +2.48% May (F/cast was +2.5%)
Inflation Rate Jun -0.2% MoM vs +0.27% May (F/cast was +0.3%)
Northbound RMB 53,890m Sell 26,643m vs 27,247m Buy
Southbound HK$ 18,922m Sell 9,726m vs 9,196m Buy
Northbound RMB 67,707m Sell 31,969m vs 35,737m Buy
Southbound HK$ 21,146m Sell 9,418m vs 11,728m Buy
HKEX (00388.HK) +5.3%
TENCENT (00700.HK) -1.9%
BABA (09988.HK) -1.7%
MEITUAN (03690.HK) -1.3%
CCB (00939.HK) -0.7%
AIA (01299.HK) +0.5%
PING AN (02318.HK) +0.2%
HSI & HSCEI Constituents on Move:
WUXI BIO (02269.HK) +6.4%
XINYI SOLAR (00968.HK) +5.5%
CSPC PHARMA (01093.HK) +4.7%
SUNNY OPTICAL (02382.HK) +3.6%
KUAISHOU-W (01024.HK) -3.4%
CK ASSET (01113.HK) +1.3%, hitting new high
HSMI & HSSI Constituents on Move:
GUORUI PPT (02329.HK) +12.8%
MOBVISTA (01860.HK) +12.1%
GENSCRIPT BIO (01548.HK) +10.7%
XIABUXIABU (00520.HK) +10.1%
GAC GROUP (02238.HK) +10%
COSCO SHIP HOLD (01919.HK) +9.8%, hitting new high
XTEP INT'L (01368.HK) +9%, hitting new high
SITC (01308.HK) +1.8%, hitting new high
MARKET HOURS NEWS.
MTR CORPORATION (00066.HK)'s board decided to freeze salary for all employees, according to CEO Jacob Kam Chak-pui's letter to the staff. However, special rewards will be granted to eligible staff members. Particularly, each eligible non-managerial employee with better performance will be awarded a bonus equal to a month's pay to 2.02 months' pay.
Airbnb (ABNB.US) stated that with the social distancing measures becoming looser, Hong Kong people are more confident in arranging outdoor activities in the Summer, as the search frequency of "domestic travel" on Airbnb spiked close to 40% in the second week of June.
According to Airbnb's booking numbers in June 2021, the millennials topped the chart as the most of active group to seek travel opportunities, with the group of 30-40 years old trailing behind.
XPENG-W (09868.HK)'s comeback to China region for listing has long been the goal of the company, in hope of more closeness with China and Hong Kong investors, said Vice Chairman cum President Brian Hongdi Gu, who viewed the whole listing moved along well. Gu separately said the company has had no plan for A-share return but does not bar any possibilities in future. The President also mentioned about the regulation on the auto industry from all sorts of government departments, not limited to China. In view of this, the company has been communicating and cooperating with these units, and will keep doing so in future.
Although Hong Kong has found no untraceable confirmed local cases for 29 consecutive days, considering that the COVID outbreak still remains unstable, the Hong Kong government expects to extend most of the social distancing measures due to expire by Wednesday evening (7 July) for another two weeks, reported South China Morning Post, citing sources.
KUAISHOU-W (01024.HK) announced internally an adjustment on the organizational structure of the company, involving its growth department and the AcFun video website business, reported Chinese media. The report stated that the KUAISHOU-W's current growth department, which consists of four centers (growth channel center, growth innovation center, growth strategy center and growth product center), would undergo a reshuffle: the growth innovation center will be split into the fission growth unit and regional growth unit; the growth strategy center and growth pr
The index publisher FTSE Russell intends to include DiDi Global Inc. (DIDI.US) in the global equity index tomorrow (8 July) as scheduled, unless there is a trading halt on the shares of DiDi Global, reported Reuters. FTSE Russell added that, if DiDi Global Inc.'s ADS is suspended from trading during U.S. market hours today (7 July), they will temporarily halt adding the stock into the indexes, in accordance with the index policy.
XPENG-W (09868.HK) Chairman He Xiaopeng said the company will develop future automobile prototypes based on the product platform which is designed for the international market. He told Reuters that XPENG-W will roll out a new product platform in two years with which it can develop several models of different segmentations and sizes
TikTok was the world's most installed non-gaming app in June, boasting 65 million downloads as reported by Sensor Tower. 13% of the installs stemmed from its Mainland version, Douyin, followed by Indonesia (12%).
JD-SW (09618.HK)'s JD Cloud announced the strategic partnership with China Unicom Online Information Technology. Pursuant to which, both sides will team up for network infrastructure construction, video cloud technology and dissemination, digital innovation and application as well as other fields, aiming to explore a "5G+Industry" business mode.
Esquel Group, the Hong Kong-based textile giant, has filed a lawsuit in the United States District Court for the District of Columbia seeking relief from the economic and reputational harms caused by the placement of its subsidiary, Changji Esquel Textile, on the U.S. Entity List. Esquel is a recognized leader in responsible labor, sustainability and ethical business practices. The company categorically denies the false allegations that have been made by the U.S. Department of Commerce – allegations that are antithetical to everything for which Esquel stands. Under the prior U.S. administration, Changji Esquel was added to the Entity List without notice and with no supporting evidence, causing incalculable reputational and economic harms.
In light of the recent crackdown on the Chinese technology companies, TikTok's parent company ByteDance may delay its IPO and axe its current valuation of USD450 billion or above, due to the growing apprehension, reported CNBC's Deirdre Bosa on Twitter, citing people familiar with the matter.
Hong Kong Airlines has deferred the interest payment on a USD683 million perpetual bond issued through Blue Skyview Company for three instalments in a row, with the accumulative interest due reaching approximately USD149 million (about HKD1.16 billion). As a result of company's failure to settle the interest payment, the rate of the interest due July last year would be hiked to 12.125%, with the rates of the interest due January and July this year to be increased to 15.76%.
The Constitutional and Mainland Affairs Bureau (CMAB) noticed that an overseas media published a report alleging that a number of Internet companies expressed concerns over the proposed amendments to the Personal Data (Privacy) Ordinance (PDPO). The Asia Internet Coalition (AIC) wrote to the HKSAR Government to warn it. However, the letter made no mention of the stance of individual company members nor are there companies planning to retreat from Hong Kong, an issue already clarified by the AIC. The Government spokesman strongly opposed to the reports that took matters out of context to mislead and confuse the public.
PRE MARKET HOURS NEWS
In light of the previous online/ mobile banking confusion, HSBC has updated the relevant chapters, stressing that Hong Kong clients will be able to access the online and mobile banking service as usual when they are overseas, reported local media, citing a spokesperson of HSBC.
Reports on Weibo Corp (WB.US) Chairman Charles Chao's talks with a state-owned investor to take Weibo private were inaccurate, the microblogging web said. Weibo's shares thrived nearly 50% before market open. The stock surged 6.32% to US$57.74.
GCLET (002015.SZ) announced that the Company had signed a strategic cooperation framework deal with Geely Commercial Vehicles Group. Pursuant to which, both sides will join hands to explore the application scenario for CV battery-swapping mode. The signing of the cooperation framework agreement will not pose a material impact on the company's annual financial position and operating performance. The agreement neither involves the specific transaction target and investment amount, nor does it constitute a connected transaction or substantial asset reorganization.
The General Office of the CPC Central Committee and the General Office of the State Council published opinions on strict crackdowns on illegal securities activities in accordance with the law, requiring stringent investigation into securities crimes and stronger probe into major and important cases. In addition, China shall step up supervision of China-concept stocks and brace for relevant risks and emergencies, thus promoting the establishment of a regulatory system.
Business Administration Department of the People's Bank of China formally issued warning for relevant institutions under the PBOC not to provide services to virtual currency-related businesses, including providing operating location, business display, marketing advertisement and payment diversion, etc. Also, financial and payment institutions under the PBOC are forbidden to provide virtual currency-related services to their clients directly or indirectly.
The chairman of China Securities Regulatory Commission, Yi Huiman, voiced great concerns in regards to the illegal behavior of manipulating the market in the name of market value management, reported Xinhua News Agency. Yi stressed that there is a clear boundary between the two and the CSRC will work alongside the Public Security Departments to combat the illegal activity of abusing "market value management".
MEITU (01357.HK) announced that in accordance with IFRS, the decrease in fair value of the Acquired Bitcoin as at June 30 in the amount of approximately US$17.3 million is expected to be recognised as impairment loss in the Interim Results, while the increase in fair value of the Acquired Ether in the amount of approximately US$14.7 million will not be recognised as revaluation gain in the Interim Results.
WISDOM EDU INTL (06068.HK) announced that Liu Xuebin, an executive director and a controlling shareholder of the company, acquired an aggregate of 2.554 million ordinary shares of the company on the market on 6 July 2021 at an average purchase price of HKD2.04 per share, involving approximately HKD5.21 million. Following the above acquisition, Liu's shareholding interest in the company has increased to approximately 42.86% of the total issued share capital of the company.
CHINA SHENGMU (01432.HK) announced that on 6 July 2021, Start Great, a wholly-owned subsidiary of China Mengniu, acquired an aggregate of 1.045 billion ordinary shares of the company, representing approximately 12.48% of the entire issued share capital of the company. After the acquisitions, the shareholding percentage of Start Great will increase from 17.51% to 29.99%.