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HSI -515pts (-1.8%) 27,787 HSCEI -194pts (-1.9%) 9,959 T/O HK$142.89bn (-7% DoD)
Opened lower and trending lower as the UK revokes covid restrictions investors worry about the surge in covid cases globally. The massive flood in Germany and Belguim -VE for sentiment and Insurers but +VE for infrastructure plays. Inflation worries also hightened.
All sectors weak with Travel and Leisure leading the declines. Oil lower after OPEC+ agreement.
Opened in Asian time Dow -64pts, S&P -0.15% and NDX -0.11%, then dropped as Europe kicked off but now Dow -351pts, S&P -0.7% and NDX -0.4%. ahead NAHB Housing Market Index.
CHINA CSI 300 closed +19pts (+0.4%) @ 5,114
CSI 300 opened lower and sold down to 5,048 where it found good support before bouncing into lunch. PM saw the market rally back into the green briefly dip and then rally back and hold in the green for the final hour.
Suggests that Team China out supporting the market.
Laggards were steel, chemical and real estate sectors
Leaders were leisure service sector, communications, medical & biological and household appliances
Shanghai Composite flat @ 3,539
Shenzhen Composite +21pts (+0.1%) @ 14,993
ChiNext Composite Index +4pts (+0.1%) @ 3,556
China's National Health Commission reported 31 confirmed COVID-19 cases yesterday (18th), with 26 of them being imported cases and 5 of them being local cases (all located in Yunnan).
HSI Pre market opened @ 27,787 -218pts vs -194pts ADR’s and sold down to 27,400 in the first hour. It then worked better in lunch. PM opened slightly higher but basically traded sideways in a tight range.
Tech lead the declines with news of more investigation into Didi and others plus Biden’s warning. Covid’s recent surge and the potential -VE impact on the recovery; prompting broad weakness. Evergrande and companies linked to it weak as a units bank deposit was frozen. But Chalco and iMAX +VE on good results
HONG KONG DATA
HK reported no new covid cases.
Further to the external merchandise trade statistics in value terms for May 2021 released earlier on, the Census and Statistics Department (C&SD) released today (July 19) the volume and price statistics of external merchandise trade for that month.
In May 2021, the volume of Hong Kong's total exports of goods +17.7% YoY and imports of goods +20.1% YoY
Comparing the first five months of 2021 with the same period in 2020, the volume of Hong Kong's total exports of goods +26.2% YoY and imports of goods +22.8% YoY
Short Selling Monday 17.4% vs 16% Friday
Top Shorts Hengan (1044) 72%, CLP(2) 54%, Country Garden (2007) 37%, Hang Seng Bank (11) 37%, Ping An (2318) 36%, CKH (1) 25%, CK Asset (1113) 34%, Bank of China (3988) 33%, ICBC (32%), CCB (939) 30%, Henderson Land (12) 30%, MTRC (66) 28%, Power Assets (6) 28%, Sunny Optical (2382) 26%, AIA (1299) 25%, Wharf REIC (1997) 25%, China Life (2628) 25%.
AFTER MARKET NEWS
ZHEJIANGEXPRESS (00576.HK) announced that Zheshang Securities Co., Ltd., a subsidiary of the company, reported a net profit of RMB880 million for the six months ended June 30, 2021, up 8.7 times yearly.
PROSPERITY REIT (00808.HK) entered into a facility agreement with DBS Bank (Hong Kong) with respect to its first sustainability-linked term loan facility of an aggregate amount of HK$800 million, which will become payable in five years.
FAW Group announced the development plan for the "14th Five-Year Plan", targeting to achieve revenue of over RMB1 trillion, profit of over RMB68 billion and sales volume of 6.5 million units while progressing towards the new green low (zero)-carbon development model.
Li Shaohua, Deputy Secretary General of China Association of Automobile Manufacturers (CAAM), led a team to launch investigation and research into GREATWALL MOTOR (02333.HK) (601633.SH) . Both sides exchanged views thoroughly on the auto market conditions, chip supply, alternative application as well as long-term technical planning and layout.
It is expected that POLY PROPERTY (00119.HK) will record an increase in net profit of not less than 60% for the six months ended 30 June 2021, as compared to HK$828 million for the corresponding period in 2020. The expected increase in net profit is primarily attributable to, among others, an increase in the interim gross profit.
Charles Li, former CEO of HKEX (00388.HK) , will be joining the bond trading platform MarketAxess (MKTX.US) listed in the U.S. as non-executive director, marking Li's first corporate role since his departure from HKEX in December last year, reported South China Morning Post.
The report added that Li will be on the company's board and station in Hong Kong while advising the trading platform which is actively expanding its business across Asia.
At a regular press conference, Chinese Foreign Ministry Spokesperson Zhao Lijian was asked to comment on U.S. Treasury Secretary Janet Yellen's remark that the phase 1 China-US trade deal could not address bilateral issues and that U.S. tariffs on Beijing had been detrimental to American consumers. Stressing mutual benefit and win-win cooperation as the nature of China-US trade relations, Zhao said a trade war would only lead to a no-win situation. Equally, he hoped Washington would deal with their economic problems properly in a bid to promote the health and solid development of China-US trade ties.
The Securities and Futures Commission (SFC) has publicly censured BIT Mining Limited (formerly known as 500.com Limited) for breaching the rules on special deals under the Code on Takeovers and Mergers.
On 28 January 2021, LOTO INTERACT (08198.HK) announced a proposed share subscription by BIT Mining which would trigger a mandatory general offer upon completion. During the offer period, BIT Mining issued certain amount of shares to Man San Law twice, in February and April 2021 respectively.
The Hong Kong Monetary Authority (HKMA) announced today (July 19) the composite interest rate at the end of June 2021.
The composite interest rate, which is a measure of the average cost of funds of banks, decreased by 2 basis points to 0.18% at the end of June 2021, from 0.2% at the end of May 2021.
The decrease in composite interest rate mainly reflected a decrease in the weighted funding cost for deposits during the month.
*COMMODITIES WEAK except COAL MINERS, as coal price and electricity demand continue to increase during the peak summer season; YANGZHOU COAL (1171 HK +2.1%), CH SHENHUA (1088 HK unch) June coal sales volume +8.4% YoY.
OIL WEAK as OPEC+ agreed to boost production into 2022, resolving an internal dispute. CNOOC (883 HK -1.7%) CH OILFIELD (2883 HK -2.6%) SINOPEC(386 HK -2.1%).
BASE METAL WEAK; JIANGXI COPPER (358 HK -3.3%) ANGANG (347 HK -3.7%) MAANSHAN (323 HK -2.9%).
*CHINA PROPERTY WEAK after CH EVERGRANDE (3333 HK -16%) and EVERGRANDE SER (6666 HK -13%) after a court Jiangsu province ordered the freezing of a bank deposit of 132m yuan held by its key unit. KAISA GROUP (1628 HK -4%) SUNAC (1918 HK -3.8%) CIFI (884 HK -3.8%) VANKE (2202 HK -3.2%)
*E-COMMERCE WEAK after software designed to help users obtain WeChat red packet automatically was fined 4.75m yuan for unfair competition, following a court ruling on a lawsuit filed by WeChat's owner TENCENT (700 HK-2.6%).
DIDI shares plunged by more than 7% in U.S. pre-market trade on Friday and closed down 3% on the day also weighted on the sector, after officials from seven Chinese govt departments visited the ride-hailing company's offices to carry out a cybersecurity review, news reports. ALIBABA (9988 HK -3.2%) KUAISHOU (700 HK -2.6%) JD (9618 HK -2.8%). MEITUAN (3690 HK -5%) following broker's downgrade. GAMERS plunged after broker revised down gaming growth outlook of TENCENT; HOMELAND INTERACTIVE (3798 HK -21%) BAIOO (2100 HK -2.1%) ZENGAME (2660 HK -2.5%).
*SEMICONDUCTOR WEAK amid negative news on sector. FIT HONG TENG (6088 HK -3.9%) said 1H unaudited net profit of the group is anticipated to be between US$8m and US$10m, as compared to US$22m in the same period a year ago.
SMIC (981 HK -3.6%) after the Dutch govt agreed to the U.S. request to restrict the export of ultraviolet (EUV) lithography machines produced by semiconductor equip maker ASML to China because of the machine's great strategic value.
*PHARMA/BIOTECH STRONG resurging COVID cases around the world. CANSINO BIO (6185 HK +0.6%) reported preliminary net income for the first half of 900m yuan to 1.05b yuan, vs a net loss of 102.2m yuan in 1H 2020.
KINTOR (9939 HK +5.7%) FOSUN PHARM(2196 HK +3.3%) INNOVENT (1801 HK +3.2%) JINMAO (817 HK -4%).
*SPORTWEAR RETAILERS WEAK after CH DONGXIANG (3818 HK -6.5%) said Q1 retail performance of Kappa stores of the group for the overall platform registered a mid-to-low teen growth on YoY basis. XTEP (1368 HK -4.5%) LI NING (2331 HK -1.4%) 361 DEGREES (1361 HK -6%).
Market opened lower finding initial support around the 7,250 level. It then sideways around that level through the morning and improved slightly after lunch to close -62pts (-0.9%) @ 7,286.
Healthcare +VE with CSL +2.2% and Wesfarmer hit a new high. But Financials and miners lower. New covid cases and the lockdowns continue to overhang the market.
A shortened trading week with markets closed Thursday and Friday for the start of the Olympic’s. But covid concerns running high as PM Suga’s ratings fall. Toyota has said that it will pull its Olympic related adverts. Nintendo says new switch console will yield higher margin, no plans for additional models.
Nikkei opened lower -337pts at 27,663 saw an initial bounce but trended lower to 27,494 shortly before lunch. PM market opened higher and traded sideways. Closed -350pts (-1.3%) @ 27,653
Topix a similar pattern; opened 1,913, touched 1,900 pre lunch. PM traded sideways; -25pts (-1.3%) @ 1,907
KDCA reported 1,252 new covid cases this morning.
Kospi opened lower and trended lower through the morning to a low of 3,236 around 11am before working slightly better. Closed -33pts (-1%) @ 3,244
Kosdaq opened @ 1,050 level and traded in a tight range; 1,047/1,051 to close -2pts (-0.2%) @ 1,050
Taiex opened lower @ 17,850 and trended lower to 17,700 in the first 70 minutes and then worked better but resistance at 17,800 level. Closed -106pts (-0.6%) @ 17,789 T/O US$16.69b vs US$20.45bn Friday
CECC reported 21 cases, (15 domestic and 6 imported)
Electronics under pressure with rotation into old economy especially shipping and steel.
Northbound RMB 58,344m Sell 28,584m vs 29,760m Buy
Southbound HK$ 13,884m Sell 7,279m vs 6,606m Buy
Northbound RMB 70,390m Sell 33,596m vs 36,795m Buy
Southbound HK$ 16,477m Sell 10,337m vs 9,226m Buy
MEITUAN (03690.HK) Short selling Ratio 16.356% closed at $276.2, -5%
AIA (01299.HK) Short selling Ratio 29.605% closed at $93, -3.3%
BABA (09988.HK) Short selling Ratio 14.120% closed at $202.6, -3.2%
TENCENT (00700.HK) Short selling Ratio 10.188% closed at $549.5, -2.6%
PING AN (02318.HK) Short selling Ratio 30.143% closed at $72.45, -1.3%
CCB (00939.HK) Short selling Ratio 29.464% closed at $5.53, -0.9%
HKEX (00388.HK) Short selling Ratio 20.205% closed at $522, -0.4%
HSI & HSCEI Constituents on Move:
EVERGRANDE (03333.HK) Short selling Ratio 25.933% closed at $8.21, -16.2%
EVERG SERVICES (06666.HK) Short selling Ratio 0.048% closed at $6.73, -13.4%
KUAISHOU-W (01024.HK) Short selling Ratio 25.468% closed at $142.3, -5.8%
WH GROUP (00288.HK) Short selling Ratio 11.611% closed at $6.31, -4.1%
SUNAC (01918.HK) Short selling Ratio 21.021% closed at $23.95, -3.8%
BIDU-SW (09888.HK) Short selling Ratio 26.221% closed at $172.5, -3.8%
SMIC (00981.HK) Short selling Ratio 3.294% closed at $21.4, -3.6%
AAC TECH (02018.HK) Short selling Ratio 11.347% closed at $50.05, -3.5%
HAIDILAO (06862.HK) Short selling Ratio 18.719% closed at $43.3, -3.3%
HENGAN INT'L (01044.HK) Short selling Ratio 58.835% closed at $47.15, -3.2%
HSMI & HSSI Constituents on Move:
Q TECH (01478.HK) Short selling Ratio 25.627% closed at $14.4, -14.5%
HENGTEN NET (00136.HK) Short selling Ratio 10.314% closed at $4.05, -11.8%
SHENGYE CAPITAL (06069.HK) Short selling Ratio 5.744% closed at $9.73, +8.4%, hitting new high
CHINA TELECOM (00728.HK) Short selling Ratio 1.074% closed at $3.16, +6%, hitting new high
ZTE (00763.HK) Short selling Ratio 7.497% closed at $27, +4.7%, hitting new high
GENSCRIPT BIO (01548.HK) Short selling Ratio 8.933% closed at $41.95, +4.1%, hitting new high
SHINEWAY PHARM (02877.HK) Short selling Ratio 6.161% closed at $9.38, +2.2%, hitting new high
MARKET HOURS NEWS.
In a statement, EVERGRANDE (03333.HK) said the RMB132 million project loan to Yixing Hengyu Real Estate, the project company under the group's Jiangsu wing, from China Guangfa Bank (CGB)'s Yixing branch will be due on 27 March 2022. Accordingly, EVERGRANDE will bring a lawsuit against the abuse of pre-litigation preservation by CGB's Yixing branch in accordance with the law.
TENCENT (00700.HK) proposed to acquire British video game company Sumo Group for GBP919 million (around US$1.27 billion or HK$9.818 billion), reported Reuters. The Chinese tech giant offered to buy the British firm at GBX513 per share,
CK Asset Holdings Limited (‘CKA’), CK Hutchison Holdings Limited (‘CKHH’) and the Li Ka Shing Foundation (‘LKSF’) earlier announced they would give away a total of HKD20 million of vouchers through a lucky draw to encourage vaccination. The CK Group/LKSF $20 Million Vouchers Support Vaccination Lucky Draw (‘Lucky Draw’) website will begin accepting registrations tomorrow (20 July 2021). Holders of HKID card (permanent or non-permanent residents) aged 18 or above who have completed two doses of the COVID-19 vaccine in Hong Kong by 31 August 2021 are eligible to register for the Lucky Draw.
Shanghai Pudong New Area People's Court released the typical cases of unfair internet competition, involving Alipay, TENCENT (00700.HK) and BIDU-SW (09888.HK). Particularly, the preservation case of unfair competition disputes between Alipay and Zebra Technologies was on the list. The Court also unveiled the preservation case on unfair competition disputes between TENCENT and Chen Hongtao.
The U.S. is hindering Dutch semiconductor maker ASML from selling extreme ultraviolet (EUV) lithography machines to China, reported The Wall Street Journal. Shares of SMIC (00981.HK) tanked 4.3% to close the midday at $21.25, on volume of 46.38 million shares.
Suzhou Liangyihui's original shareholders have been replaced by the likes of Guangxi Tencent Venture Capital, with its register capital stretched around 15% from approximately RMB15.6 million to approximately RMB17.93 million, reported Chinese media, citing data from Tian Yan Cha App. According to the official website, Liangyihui is an anti-cancer academic platform and an official cooperation platform designated by the Chinese Society of Clinical Oncology.
BABA-SW (09988.HK)'s Hema announced to establish the NB Business Group to develop community business services in the outer ring of urban areas as well as suburbs leveraging its core product, the HEMA neighborhood service stations, according to the platform's internal notice.
BIDU-SW (09888.HK) Short selling $70.03M; Ratio 26.221% announced its Apollo Robotaxi to officially commence operation in Guangzhou, becoming the largest-scaled autopilot mobility service in Guangzhou currently. At the moment, BIDU-SW's Apollo has opened its ride-hailing service to the public in 4 cities including Changsha, Cangzhou, Beijing and Guangzhou.
TRIP.COM-S (09961.HK) announced the launch of a joint e-sports hotel project with Tencent Game Life and LY.COM. CTRIP.COM and LY.COM will open up more entrants for platform flow, providing support in flow, promotion and marketing for e-sports hotel.
Sinopharm announced that the inactivated vaccine for COVID-19 developed by the group's Beijing Institute of Biological Products has been approved for emergency use on people aged 3-17 by relevant departments on 16 July.
Overnight HIBOR last posted at 0.03631%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.07857%, down for 6 days, marking a 1-month low.
BABA-SW (09988.HK) declared to kick off the campus recruitment program for 2022 fresh graduates with 113 job positions. Of which, 45 new postings and an array of non-technical jobs are available to fresh graduates for the first time. This is said to be the giant's biggest-ever campus recruitment event.
The lock-up period for KUAISHOU-W (01024.HK)'s substantial shareholders will expire next month. A major investor of the Company transferred more than 560 million shares (or a 13.6% stake) held in its own name to JPMorgan, involving $87.3 billion as reported by Sing Tao Daily. It was speculated that the substantial shareholder intended to arrange for a placing, or the Company was planning to place shares to secure shareholder loans. Tencent and Ronnie Chan's 5Y Capital (previously known as Morningside Venture Capital) are the only shareholders with an over 13% stake in KUAISHOU-W.
EVERGRANDE (03333.HK) was slapped with a property freeze application by a bank, Bloomberg cited the ruling of Wuxi Intermediate People's Court. China Guangfa Bank requested to freeze the RMB132 million bank deposit of Hengda Real Estate Group and Hengyu Real Estate Co., Ltd. or seize other property of equivalent value.
On the news, EVERGRANDE's shares slipped 4.38% in last posting; EVERG VEHICLE (00708.HK) dropped 1.25%; and EVERG SERVICES (06666.HK) once dived 4.24% at most.
Black Spade Capital, the family office of MELCO INT'L DEV (00200.HK) Chairman and CEO Lawrence Ho, will file for the U.S. listing of its SPAC, Black Spade Acquisition. The blank check company plans to offer 15 million units at US$10 apiece to raise US$150 million.
Macau's Gaming Inspection and Coordination Bureau announced Macau's 2Q21 GGR to be MOP25.381 billion, up 7.36% QoQ; while the revenue from VIP baccarat in 2Q slumped 6.85% QoQ to MOP8.503 billion, accounting for 33.5% of the GGR.
HSBC disclosed that the first group of employees under the "Greater Bay Area Youth Employment Scheme" will take up their posts this week. In the next 18 months, they will regularly station in Guangzhou and Shenzhen, working in the departments of wealth management and private banking, as well as commercial and financial units.
Diamond Casino, indirectly run by SJM HOLDINGS (00880.HK), is scheduled to shut down permanently by the end of this month due to operating difficulties, with its casino and departments ceasing operation from the corresponding day. The site will be taken over by SJM HOLDINGS as a self-proprietary project, which will be revamped into a new casino, expressed SJM HOLDINGS vice chairman and CEO Ambrose So
Roughly 40 new homes were transacted at the weekend, hitting the trough in nearly three months given the lack of new project launches.
As for the second-hand market, Centaline's ten major housing estates tracked 15 deals, down 16.7% weekly yet staying in double digits for the 22nd straight week.
U.S. Treasury Secretary Janet Yellen cast doubt on the Trump administration's trade deal with China last year, saying the country's tariffs on China were not thoughtful and even detrimental to American consumers in some cases, reported foreign media. Such deal failed to address the fundamental problems Washington had with Beijing, she added.
Mandatory Provident Fund Schemes Authority (MPFA) Chairman Ayesha Macpherson Lau published her latest blog post. She mentioned that according to the "Pension Funds in Figures 2021" issued by the Organization for Economic Co-operation and Development (OECD) covering preliminary pension fund statistics for 2020 in the OECD and non-OECD economies, the Hong Kong MPF System recorded a remarkable outcome of 12.4% of real investment rate of return in 2020, ranking first among all reporting jurisdictions.
PRE MARKET HOURS NEWS
XPENG-W (09868.HK) announced to commence the presale for its "XPENG P5", with prices for the six different models ranging from RMB160,000-230,000. The new models are scheduled to hit the market in September and payment will be collected from the customers from late October.
Financial Secretary Paul Chan expressed that as at midnight of 17 July, the consumption voucher scheme (CVS) has recorded over 6.1 million registrations, among which around 5 million citizens who registered through electronic means would receive the first voucher installment on 1 August. Chan added that Hong Kong economy has seen significant recovery in this year and predicted that latest unemployment rate for April-June, which is scheduled to be released this week, to show further improvement.
China Unicom's Hebei branch and Huawei had recently held an unveiling ceremony of their Fifth Generation Fixed Network (F5G) Joint Innovation Center. The technology will provide both household and industrial users with gigabit broadband connectivity to promote digital transformation across industries.
Guangdong Tonze Electric (002759.SZ) announced that its wholly owned subsidiary, Jiangsu Xintai Material Technology, had nailed a long-term cooperation agreement with BYD COMPANY (01211.HK) (002594.SZ) for the long-term supply of lithium hexafluorophosphate. Both parties determined the supply of lithium hexafluorophosphate products as follows: from July 2021 to December 2022, Xintai Material will supply no less than 3,500 tons of lithium hexafluorophosphate to Shenzhen BYD; and will supply 3,600-7,800 tons in 2023. The specific available capacity will be negotiated by both parties in December 2022.
OPEC and its allies have reached an agreement on relaxing the oil output restrictions, indicating that the output will be stretched by 400,000 barrels a day each month, starting from next month, reported foreign media. The deal would also raise the baselines of the production cuts to which United Arab Emirates and several other countries are subjected, effective from May 2022, with UAE's baseline being lifted from 3.17 million barrels a day to 3.5 million barrels a day.
China Mobile announced the centralized procurement results of main gear for 5G 700M wireless network, where Huawei was the biggest winner, taking up 60% shares. Apart from Huawei and ZTE (00763.HK), the shortlisted companies included Nokia Shanghai Bell, Datang Mobile and Ericsson (China).
CONSUN PHARMA (01681.HK) announced that GZ Consun, a wholly-owned subsidiary of the Company, and WXAT Shanghai, a direct wholly-owned subsidiary of WUXI APPTEC (02359.HK), entered into a strategic cooperation agreement on 27 June in relation to the strategic cooperation in the research and development of certain innovative drugs. Equally, both sides entered into an agreement regarding the research and development project of a Class I new drug used for acute kidney injury on 28 June.
SINO-OCEAN GP (03377.HK) announced that SOG China (a wholly-owned subsidiary of the Company) entered into the Cooperation Framework Agreement with the JV Partner Fortune Joy Ventures, pursuant to which the parties have agreed to form a 50-50 joint venture, Active Growth Ventures, for the purpose of joint investment in Chongqing Hongxing Macalline Enterprise Development.
Prior to the date of the Cooperation Framework Agreement, Fortune Joy Ventures and Tianjin Yuanpu (a wholly-owned subsidiary of Active Growth Ventures) had entered into the Acquisition Framework Agreement with RSM Holding in relation to the Acquisition by Tianjin Yuanpu of an aggregate of 70% equity interest in Chongqing Hongxing Macalline Enterprise Development from RSM Holding for the Consideration of RMB4 billion. Chongqing Hongxing Macalline Enterprise Development is principally engaged in the development of real estate projects and related business in the PRC.
Zurich Insurance (Hong Kong) tracked an over 50% sales surge for new life insurance policies in the first half of 2021, said Chief Executive Officer Eric Hui in an AAStocks interview.
The insurer will continue to hire additional staff to boost its Hong Kong headcount to 700 from the current size of around 500, Hui furthered.