HSI +8pts (+0.03%) 28,458 HSCEI +60pts (+0.6%) 10,703 T/O HK$151.9bn (-10% DoD)
FTSE opened lower and dipped despite good retail sales and PMI data. CAC and DAX opened higher and are trading just above flat.
French PMI’s beat but German slightly missed expectations. Eurozone business growth hit a 3 year high. Ahead we have a EU Finance ministers in person meeting.
BioNTech said, Thursday, said the Covid-19 vaccine it developed alongside Pfizer is likely to be equally as effective against the new virus variant first discovered in India as it was against the one found in South Africa.
Richemont +4.6% in early trade after it proposed doubling its dividend after a 38% rise in net profit for its fiscal year 2020/21.
CTS Eventim +5% after Commerzbank raised its price target following a strong earnings report Thursday.
Swedish business group Lifco gained 5.8%.
Lufthansa -6% after the Thiele family, its second-largest shareholder, offloaded more than half of its stake in the airline following the death of Heinz Hermann Thiele.
Opened flat Dow +18pts S&P +0.03% and NDX +0.07% and have worked slightly better; Dow +65pts S&P and NDX +VE
AHEAD Existing Home Sales,Baker Hughes Rig Count.
Earnings Deere, Foot Locker, Buckle, VF Corp, Booz Allen Hamilton
CHINA CSI 300 closed -52pts (-1%) 5,134
CSI 300 opened higher and hit 5,216 in the first 5 minutes but then sold down in steps to 5,120 level over the next 50 minutes. It traded around that level into lunch. PM saw it initially traded up small to 5,158 but then drift lower into the close. T/O dropped suggesting Team China are having a long weekend.
Shanghai Composite -20pts (-0.6%) @ 3,487
Shenzhen Composite -118pts (+0.8%) @ 14,418
ChiNext Index -19pts (-0.6%) @ 3,104
None Next data from China is onThursday when it announces Industrial Profits
Pre market opened @ 28,584 +134pts vs +9pts ADR’s
But market sold down, saw a brief bounce around Thursdays closing level before selling down to 28,285 level at 10:30am. Then trended slightly higher into lunch. PM opened higher at yesterday’s closing level and traded sideways into the close.
Tencent -3.4% post results on regulatory concerns going forward and broker target price downgrades. BABA, Meituan and JD-SW were all stronger despite the internet watchdog saying on Friday that companies including ByteDance, Baidu and Kuaishou had improperly collected user data, Reuters reports.
INDEX After Market
HSI quarterly review will reflect the results of the HSI optimization consultation for the first time. The goal is to increase the number of constituent stocks of the HSI to 80 through regular index reviews by mid-2022, and the final number will be fixed at 100. Brokers predict the coverage of consumption, medicine and technology industries might be significantly improved, and JD Group (9618 HK, +2.9%), NetEase (9999 HK, +4.8%), PA Healthcare (1833 HK, +5.4%), and Li Ning (2331 HK, +2.5%) are the potential candidates.
HONG KONG DATA
HK Inflation Rate Apr +0.7% vs +0.5% Mar (F/cast was +0.4%)
Netting out the effects of all Government's one-off relief measures, the year-on-year rate of increase in the Composite CPI (i.e. the underlying inflation rate) in April 2021 was 0.3%, marginally larger than that in March 2021 (0.2%). The larger increase was mainly due to the increases in local transport fares and the enlarged increases in the prices of motor fuel.
The Centre for Health Protection (CHP) reported 1 new covid cases imported (same as Thursday)
Short Selling Friday 13.1% vs 18.9% Thursday
Top Shorts ICBC (1398) 43%, Bank Comm (3328) 41%, Hengan (1044) 40%, Country Garden (2007) 36%, Henderson Land (12) 35%,Bud Apac(1876) 34%, Hang Seng Bank (11) 34%, BOC (3988) 34%, Petrochina (857) 30%, Shenzhou Int (2313) 30%, HSBC (5) 30%, CK Asset (1113) 29%, Anta Sports (2020) 25%.
AFTER MARKET NEWS
Following the conclusion of the public consultation on proposals to amend the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) (Cap. 615), the Government published today (May 21) a paper outlining the views received during the consultation, its responses and conclusions on the way forward.
CHINA RE (01508.HK) announced that the aggregate primary premium income of China Reinsurance (Group) Corporation as derived from the operating subsidiary of the Company, China Continent Property & Casualty Insurance Company Ltd., for the period from 1 January 2021 to 30 April 2021 was approximately RMB15.791 billion.
HKEX (00388.HK) announced the appointment of Alejandro Nicolas Aguzin as the Chief Executive, effective 24 May 2021, for a term of three years until 23 May 2024. Aguzin’s compensation package includes a basic salary of HK$10 million per annum.
Centa-City Leading Index (CCL) last tracked at 184.65, up 0.53% weekly to a new high since September 2019, which put the index only 3.06% away from its record high.
CCL Mass added 0.19% weekly to 187.31;
CCL (mid-and-small units) grew 0.25% weekly to 184.85;
CCL (large units) went up 2.09% weekly to 183.61.
Tencent (700 HK, -3.4%) Headline numbers OK but investors concerned about earnings erosion from its significant investments into the mobile gaming business. ADR closed at 600 handle and HK traded lower throughout the day. Brokers generally trimmed Target Prices but didn’t downgrade.
The National Internet Information Office said 105 apps from platforms including ByteDance, Kuaishou (1024 HK, +5.7%), Baidu (9888 HK, +1.5%) and others about the illegal collection and use of personal information, but little impact.
*BANKS WEAK CBRC announced that after investigating a batch of violations of laws and regulations, five financial institutions including Hua Xia Bank, Bohai Bank, BOC(3988 HK, -0.3%), CMB (3968 HK, -1.2%), and East Asia (23 HK, +0.5%) and related responsible personnel will be subjected to administrative punishment and the total penalty amount is about CNY 366mn.
*Xiabuxiabu (520 HK, -15%) after the company fired its CEO. The performance of some of the group's sub-brands failed to meet the board of directors' expectations, so the dismissal of Zhao Yi as the group's CEO effective today.
*SHIPPING STRONG China Cosco (1919 HK, +4.9%) Pacific Basin (2342 HK, +0.5%) OOIL (316 HK, +2%). Following a sharp 9.8% MoM rise last week, the new container price index rose 4.7% on May 14 to US $5727/40 FTUs, surpassing the peak of US$5,340 in January this year. Follows what we have been seeing elsewhere in Asia this week
*CRYPTOS WEAK Huobi (1611 HK, -3.7%) Meitu (1357 HK, -1.5%) OKG (1499 HK, -7.5%)
*IPO: JD Logistics books closed today. According to market news,JD Logistics has been subscribed by more than 1 million people on the retail front, over-purchasing by more than 700 times, and frozen capital of more than HKD550bn. Deal priced at HKD40.36 lower end of the range.
Market opened slightly higher and rallied to test 7,056 in early trades but failed to hold and dropped top 7,040 level for a while before selling off to test 7,000 support which held after several tests. Market then rebounded to trade around flat for the rest of the day; closed +11pts (+0.15%) @ 7,030
PMI data pre market missed f/casts but Retail Spending out after the open was better than expected. Resources the major drag on the market but CSL lead healthcare stocks higher to off-set the weakness
Pre market data showed inflation remained subdued. But the PMI data out after the open was slightly weaker than forecast and concerns over the latest restriction from the covid surge remain.
Nikkei opened higher and tested higher to trade 28,300/400 for the first couple of hours but sold down into lunch (28,222). PM opened higher and worked up to 28,300 and then traded around there to close +220 pts (+0.8%) @ 28,318
Topix traded a similar pattern, high was 1,910. Currently +9pts (+0.5%) @ 1,905
Pre market PPI was stronger than expected
Export data for the first 20 day as +53.3% Imports were +36%
Kospi opened higher and tested to 3,198 after the first hour but then sold down over the next 90 mins to 3,155 and then traded sideway to close -6pts (-0.2%) @ 3,156
Kosdaq traded in a similar pattern, high was 979. But dipped down to 966 in the last 15 minutes and closed -6pts (-0.6%) @ 966
Taiex opened higher and tested to 16,400 in the first 15 minutes. Then trended lower for the next 90 minutes to 16,145 and then worked slowly better to close +260pts (+1.6%) @ 16,302
Domestic covid concerns remain. Some bargain hunting in Tech as a US house cut target prices on valuation concerns. Shipping and Steel +VE as momentum continued. Foreigners were net buyers today
TSMC announced that the production volume of vehicle-used microcontroller unit (MCU) this year will be 60% higher than last's, the Nikkei reported. The world's largest chip maker also mentioned that it will take unprecedented action to assuage the chip scarcity in auto industry worldwide.
CONNECT FLOWS (significant lower vs Thursday)
Northbound Rmb 40,731m Sell 21,401m vs 19,329m Buy
Southbound HK$ 15,215m Sell 6,936m vs 8,279m Buy
Northbound Rmb 52,974m Sell 24,755m vs 26,249m Buy
Southbound HK$ 23,673m Sell 11,485m vs 12,188m Buy
TENCENT (00700.HK) -3.4%
BABA (09988.HK) +1%
HKEX (00388.HK) -0.9%
MEITUAN (03690.HK) + 0.7%
PING AN (02318.HK) +0.4%
AIA (01299.HK) +0.1%
HSI & HSCEI Constituents on Move:
NONGFU SPRING (09633.HK) +6.4%
KUAISHOU-W (01024.HK) +5.7%
NTES (09999.HK) +4.8%
SHENZHOU INTL (02313.HK) +4.5%, hitting new high
JD HEALTH (06618.HK) +4.3%
HANSOH PHARMA (03692.HK) +4.2%
HAIDILAO (06862.HK) +4.1%
CG SERVICES (06098.HK) +3%
HSMI & HSSI Constituents on Move:
JACOBIO-B (01167.HK) +22%
ALPHAMAB (09966.HK) +19.8%
XIABUXIABU (00520.HK) -15%
MOBVISTA (01860.HK) +14.8%
COFCO JOYCOME (01610.HK) +10.9%
SHINEWAY PHARM (02877.HK) +7.7%, hitting new high
ZHUGUANG HOLD (01176.HK) +7%, hitting new high
HYGEIA HEALTH (06078.HK) +5.1%, hitting new high
VTECH HOLDINGS (00303.HK) +4.3%, hitting new high
MARKET HOURS NEWS.
After being fined RMB71.70 million by China Banking and Insurance Regulatory Commission, CM BANK (03968.HK) replied that it has since 2018 taken a series of rectifying measures.
Taobao & Tmall announced that the charges on return freight insurance for platform merchants will be lowered broadly effective 24 May, Chinese media reported. Following the charge cut, the cost of return freight insurance of merchants is estimated to drop by a quarter on average for the year.
China Banking and Insurance Regulatory Commission announced roughly RMB366 million in penalty against five financial institutes, including HUAXIA BANK (600015.SH), CBHB (09668.HK), BANK OF CHINA (03988.HK), CM BANK (03968.HK) and BEA China, under a recent investigation into their unlawful and non-compliance behavior.
XIAOMI-W (01810.HK) announced that Mi 11/ 11 Pro/ 11 Ultra series sold 3 million units worldwide, and have been selling like hot cakes since their launch.
CHINA GAS HOLD (00384.HK) announced that it had on 18 and 20 May repurchased a total of 7.194 million shares, involving $199 million.
Cyberspace Administration of China has made a report about illegal and unlawful personal information collection by 105 apps, including those from Douyin, KUAISHOU-W (01024.HK) and BIDU-SW (09888.HK)
NEW WORLD DEV (00017.HK) announced that sales brochures have been uploaded for The Pavilia Farm III, the residential project jointly developed with MTR CORPORATION (00066.HK) atop Tai Wai Station. The first price list, involving at least 179 flats, will be issued as soon as next week. Sales will likely start in early-June.
The Government announced that a new round of electricity charges subsidy of $1,000 will be provided for each eligible residential electricity account from June 2021. Starting from June 1, 2021, a subsidy of $80 will be credited to each residential electricity account with CLP Power or the Hongkong Electric in existence on the first day of each month for 11 consecutive months, and $120 in the 12th month, making a total of $1,000.
JD LOGISTICS (02618.HK) is fixing its offer price at $40.36, close to the lower limit of the offer price range $39.36-43.36, said Bloomberg.
TENCENT (00700.HK)'s WeBank becoming a trial bank for digital RMB, President Lau Chi Ping Martin opined that the bank joining the trial is conducive to itself and the entire payment platform of the company, adding TENCENT will continue to play a role in the launch of digital currencies.
PRE MARKET HOURS NEWS
The US Federal Reserve will in the coming summer speed up its exploration of a digital dollar, said Chairman Jerome Powell. The US central bank will issue a discussion paper and outline its thoughts on digital payments and relevant benefits.
JW THERAP-B (02126.HK) announced that its substantial shareholder Syracuse Cayman plans to distribute or sell 10.83% shareholdings. Upon completion of the Syracuse Distribution, Syracuse Cayman would cease to hold any direct or indirect interest in the Company and accordingly would cease to be a substantial shareholder.
After announcing the results for the three months ended 31 March 2021, TENCENT (00700.HK) said it looks forward to the advance of technology which will present ample opportunities for its Consumer Internet and Industrial Internet activities. Consequently, the company is proactively increasing its rate of investment in new opportunities by investing a portion of its incremental profits for 2021. Incremental investments will include the following areas - business services, games and short-form video content.
For Short-Form Video Content, it is now incubating the content ecosystem for Video Accounts which connect users with real-life content and bridge high-quality content creators with their customers. The company is strengthening the synergies between its long-form and short-form video services.
China Passenger Car Association (CPCA) expected the retail sales volume
of 1.66 million passenger vehicles in a narrow sense in May, an increase of 3.3% year-on-year. The repercussion of chip shortage on end-sales is continuously alleviating, thanks to the active production deployment of factories, said the Association.
AAC TECH (02018.HK) announced that it proposes to conduct an issuance of notes denominated in U.S. dollars. J.P. Morgan, Citigroup and CICC are the Joint Global Coordinators for the Proposed Notes Issue. The Company currently intends to use the net proceeds of the Proposed Notes Issue for refinancing and general corporate purposes.
XIAOMI-W (01810.HK) Founder Lei Jun disclosed at the 5th World Intelligence Congress that the company is constructing the intelligent factory phase two, which is projected to complete at the end of 2023. Upon completion of construction, the factory will produce 10 million high-end smartphones annually, with the output value reaching RMB50-60 billion.