HSI +65pts (+1.8%) 28,883 HSCEI +3pts (unch) 10,677 T/O HK$133.95bn (-14.4% DoD)
Markets opened mixed; FTSE flat and trading sideways after BoE kept policy unchanged. DAX slightly higher, CAC trading higher.
EUROZONE ECB General Council Meeting
Business Climate Jun 101.8 vs 99.2 May (F/cast was 100.1)
Current Conditions Jun 99.6 vs 95.7 May (F/cast was 97.3)
Expectations Jun 104 vs 102.9 May (F/cast was 104.1)
Business Confidence Jun 107 vs 107 May (F/cast was 110),
Climate Indicator Jun 113 vs 108 May (F/cast was 111),
BoE Interest Rate Decision unch
CBI Distributive Trades Jun 25 vs 19 May (F/cast was 15)
After market Consumer Confidence Jun (May was -9 f/cast is -70
Opened in Asia; Dow +44pts, S%P+0.05% and NDX +0.1% and improved through the day Dow +191pts, S&P +0.5% & NDX just positive.
Durable Goods, GDP Price Index, Corporate Profits, Goods Trade Balance, Wholesale Inventories, Initial Claims, 4 week Average Claims, Continuing Claims, Core PCE Prices and PCE Prices, EIA Natural Gas Report, Kansas Fed Manufacturing Index. Fed Bank Stress Test Results
NY Fed Treasury Purchases 22.5 - 30yrs
FED Speakers Bostic, Williams and Bullard
Earnings: Accenture, Darden, Rite Aid, Nike, FedEx, Blackberry
CHINA CSI 300 closed +9pts (+0.2%) @ 5,156
PBoC resumed open market operations (first since March), net injection of 20bn Yuan but tension with the US worrying investors about possibly more action. New that top Chinese and U.S. diplomats may hold talks during a Group of 20 meeting next week in Italy, +VE and hopes it’s prelude to a meeting between Biden and Xi later in the year
CSI 300 opened higher but sold down to 5,130 in early trades and then traded sideways in a tight range 5,130/5,150. PM saw the market work higher to 5,160 around 2pm. It then eased back over the next 40 mins before rallying into the close. US banning some solar elements from Xijiang raising concerns about further sanctions
Leaders Trade agency, electrical instrument, home decorations, shipbuilding, coal miners, photovoltaic
Laggards hotel and catering, chemicals, medical & Pharma, F&B, and software
Shanghai Composite flat @ 3,566
Shenzhen Composite -59pts (-0.4%) @ 14,784
ChiNext Composite Index -39pts (-1.1%) @ 3,394
China’s National Health Commission reported 16 confirmed cases yesterday (23rd), all being imported cases.
Guangdong's National Health Commission reported zero local COVID-19 case and asymptomatic case yesterday (23 June), along with eight imported infections.
HSI Pre market opened @ 28,866 +49pts vs +82pts ADR’s Macau names and Solar weak but E-Commerce, Tech and Auto +VE But saw resistance approaching 29,000 in early trades. HSI then sold down to traded around flat. PM opened higher and traded around 28,850 with resistance at 28,900 and support around 28,830 Cautious trading and light T/O
HONG KONG DATA
The Centre for Health Protection (CHP) reported 7 new covid cases An untraceable case was temporarily listed as a locally-contracted infection. The remaining cases were imported ones. (vs 2 imported on Wednesday)
Short Selling Thursday 16.4% vs 15.6% Wednesday
Top Shorts Bud APAC (1876) 43%, Bank of China (3988) 35%, Hengan (1044) 34%, Mengniu Dairy (2319) 31%, AIA (1299) 29%, Citic (267) 27%, Sunny Optical (2382) 26%.
AFTER MARKET NEWS
LUK FOOK HOLD (00590.HK) announced annual results for the year ended 31 March 2021. The net profit increased by 17.4% yearly to HK$1.017 billion. EPS was HK$1.73. The company proposed final and special dividends of HK$0.5 each per share, totalling HK$1 per share. Taking into account of the interim dividend paid, the total dividend would amount to HK$1.5 per share. The dividend payout ratio would be 86.6%.
SHENZHEN INVEST (00604.HK) announced that, for the first 5 months of 2021, the Group recorded total contracted sales of approximately RMB5.778 billion, representing an increase of 25.9% YoY, and the total contracted sales area was approximately 290,623 sq.m., up 77.7% YoY. The average selling price was approximately RMB19,882 per sq.m..
Hong Kong Book Fair will be held at the Hong Kong Convention and Exhibition Centre in Wan Chai between 14 and 20 July. 738 companies have applied for participation in the fair so far, roughly the same as that in 2020 with a 3.3% YoY size growth.
To encourage vaccination, Hong Kong Trade Development Council will hand out 35,000 fair tickets to citizens who have received at least one dose of Covid vaccine on a first-come-first-served basis.
Since BABA-SW (09988.HK) established the MMC business group in March, Hema Supermarket tracked increased number of orders nationwide to approximately 6 million currently from April's around 2 million. The company targeted the gross merchandise
volume (GMV) at RMB350 million on a daily basis. Community group buying (CGB) is the focal point of BABA-SW this year in new retail investment. It was known that the company has at least pumped RMB20 billion in this regard, wrestling for the top three positions in the battlefield.
*PETROCHEMS FIRM as U.S. crude supplies fell for a fifth week, pointing to a rapidly tightening market. Demand is back above 9.4m barrels a day for the first time since May as Americans' return to the highways continues. PETROCHINA (857 HK +2.2%) SINOPEC (386 HK +0.7%) CH OILFIELD (2883 HK +0.35).
*E-COMMERCE/INTERNET FIRM ALIBABA's (9988 HK +2.1%) Ant Group is in discussions with Chinese state-owned enterprises to begin a credit-scoring firm, which would put Ant’s proprietary consumer data under regulators’ purview. New entity, which could be established as soon as 3Q this year, could result in Ant ceding some control over the voluminous data it has on the financial habits of Chinese citizens. MEITUAN (3690 HK +2.4%) BILIBILI (9626 HK +2%) BIDU (9888 HK +1.3%) BUT KUAISHOU (1024 HK -4%) after yesterday's rally.
*SPORTSWEAR MAKERS WEAK some profit-taking following recent gains amid Olympic optimism.
DONGXIANG (3818 HK -5.7%) said net profit rose 3.9 times to 1.81b yuan for the year to March, thanks to a consumer recovery in the mainland. The owner of the Kappa brand said sales rose 27.8% to 1.94b yuan. ANTA SPORTS (2020 HK -1.4%) XTEP (1368 HK -2.5%) LI NING (2331 HK -2.4%).
*PROPERTY MANGERS FIRM as sector on positive outlook, after Capital Group recently increased its holdings in EVER SUNSHINE LIFESTYLE SERV (1995 HK +6.6%), boosting its stake to over 6%. CH RES MIXC (1209 HK +6%), POLY PROP SERV (6049 HK +3.1%) KWG LIVING (3913 HK +3%).
*PHARMA MAKERS MIXED signs of rotation with the sector, following a report that drugs from 61 categories won bids in the fifth round of China’s national drug procurement plan, with an average price cut of 56%, state broadcaster CCTV said. There are also some rotations seen following drug development/approval news. SINOPHARM (1099 HK -2%) SICHUAN (460 HK -3.1%) SIMCERE PHARM (2096 HK -4.6%) ALPHAMAB (9966 HK +9%) SINO BIOPHARM(1177 HK +1.2%).
*SOLAR FIRM on news said the U.S. will bar some solar products made in China’s Xinjiang region on Thursday, according to news, marking one of the Biden administration’s biggest steps yet to counter alleged human rights issues in Xinjiang. Factories in Xinjiang produce roughly half of global supply of polysilicon, a material critical for solar panels and semiconductors. XINYI SOLAR (968 HK +3.3%), COMTEC (712 HK +1.1%) SHUNFENG (1165 HK -3.8%) XINTE ENERGY (1799 HK +7.3%).
Market opened lower and is trading sideways in a tight range 7,300 - 7,264 but then solddown in the last 30 minutes to close -23pts (-0.3%) @ 7,275. Weakness in Banks and Healthcare but strength in Iron ore miners and Tech with Afterpay +7% launched a digital card strategy that opens itself to US retail use. The rise in covid cases in Sydney also weighing on the market.
PPI Services May +1.5% YoY vs 1.1% Apr revised from1% (F/cast was +1.5%). At lunch Supermarket sales expected.
Nikkei opened lower but worked better through the morning to 28,920 at lunch. PM traded around flat before dipping to 28,836 before rallying back in the last 30 mins to close flat @ 28,875.
Topix traded in a similar patten to close -2pts (-0.1%) @ 1,947
Tomorrow we get Tokyo CPI data.
Pre market Consumer Confidence was stronger. BoK released its inflation target report and said that it expected 2% inflation next year and orderly normalisation to start this year .
Kospi opened higher support at 3,280 and resistance around the 3,290 level but eased back into the close +10pts (+0.3%) @ 3,286
Kosdaq sold down through the morning to 1,010 but worked hgiher from midday, PM resistance around 1,015 and eased at the end to close -4pts (-0.4%) @ 1,013
Taiex opened higher on good Industrial data and despite weak Retail sales after an initial dip, it rallied to 17,435 level which was resistance and tested a couple of times before easing back to 17,370 around 11:15am. Then worked better to trade around 17,400 and traded sideways to close +71pts (+0.4%) @ 17,408. T/O was US$14.87b vs US$18.74 Wednesday
After market M2 Money Supply May +9.21% YoY vs +8.83% Apr
CECC reported 130 new covid cases (1 imported)
CONNECT FLOWS (Lower DoD)
Northbound Rmb 47,187m Sell 22,292m vs 24,894m Buy
Southbound HK$ 15,951m Sell 7,864m vs 8,087m Buy
Northbound Rmb 57,879m Sell 28,692m vs 29,187m Buy
Southbound HK$ 19,207m Sell 9,039m vs 10,168m Buy
MEITUAN (03690.HK) +2.3%
BABA (09988.HK) +1.4%
AIA (01299.HK) +0.6%
PING AN (02318.HK) -0.4%
TENCENT (00700.HK) +0.1%
HSI & HSCEI Constituents on Move:
EVERGRANDE (03333.HK) +4.2%
KUAISHOU-W (01024.HK) -4%
JD HEALTH (06618.HK) +3.4%
XINYI SOLAR (00968.HK) +3.4%
EVERG SERVICES (06666.HK) +3.2%
PETROCHINA (00857.HK) +2.2%, hitting new high
HSMI & HSSI Constituents on Move:
GGUORUI PPT (02329.HK) +12.5%
GOME RETAIL (00493.HK) -11.7%
HUABAO INTL (00336.HK) +11.4%, hitting new high
CGN NEW ENERGY (01811.HK) +8%, hitting new high
GENSCRIPT BIO (01548.HK) +4.5%, hitting new high
CANVEST ENV (01381.HK) +4%, hitting new high
MARKET HOURS NEWS.
CHINA OVERSEAS (00688.HK) unveiled the first price list for One Victoria, its first residential project at the former runway of Kai Tak, involving 212 units measuring 329-643 sq.m. each. Based on the maximum discount of 13.5%, the sales prices of the project range $6.563-16.544 million.
The Lands Department (LandsD) today (June 24) posted notices in accordance with the Lands Resumption Ordinance and Water Pollution Control (Sewerage) Regulation for the resumption and acquisition of land for implementation of public housing development in Area 46, and other facilities and infrastructure works for the Tung Chung New Town Extension development.
A total of 294 private lots with an area of about 4.94 hectares will be resumed and the land which is occupied by a grave with an area of about 22.6 square meters will be acquired. The said land will revert to or vest in the Government upon the expiry of a period of three months from the date of affixing the notices (i.e. September 25, 2021).
The grade-A office market recorded a 116,300 square feet positive take-up in May, first time of recording a positive take-up figure since July 2019, with the leasing situations of shops and warehouses likewise saw signs of improvement, reported JLL.
Alex Barnes, Head of Office Leasing Advisory at JLL said that as the companies gradually regain confidence for the Hong Kong economy, tenants are more willing to make real estate-related decisions.
Barnes contended that the worst times has passed for the office market and expects the decrease in rent to stabilize in the second half of the year.
A spokesperson of the Chinese Ministry of Commerce expressed during a press conference that, the ministry will actively support Hong Kong's participation in international and regional economic collaborations. The ministry spokesperson also stated China will support Hong Kong to join the RCEP as soon as possible.
EY forecast the number of IPOs in Hong Kong in the first half of 2021 to drop 24% year-over-year to 45; and the fundraising amount to soar 127% to $210.8 billion, setting a new high since 2010. EY's Asia-Pacific IPO Leader Ringo Choi said that the IPO markets around the globe have been extremely vibrant in the first half of the year, amassing USD210.6 billion in total, nearly up 2x year-over-year. Combined with other external factors, he suggested that EY maintains its rather conservative full-year IPO estimate for Hong Kong at about $350 billion and contended that it might be extremely difficult for Hong Kong to retake the top spot as the worldwide number one fundraising location this year.
BYD COMPANY (01211.HK) officially commenced the sale of its electric buses to Japanese bus operators and planned to boost the sales figure in the Japanese market from over 50 units to 4,000 units by 2030. BYD has launched its J6 electric bus earlier and has just delivered the K8 model to the city of Chiba in February this year.
The company also announced its plan to expand the after-sales services in Japan, following its rapid sales growth in the country.
Changes are needed to be made for investing in small-and-micro businesses nowadays, raised former HKEX (00388.HK) CEO Charles Li at an online forum. First of all, in terms of products, such businesses should shift their credit approach to investment; second, in terms of capital sources, they should rotate to commercial funds from over-reliance on banks and national funds. At present, performance of small-and-micro businesses could be grasped through internet and digitalization, much easier than one-on-one investigation on countless businesses across the country.
AlipayHK expressed that within 24 hours of the detail release of the consumption voucher scheme last Friday, ten thousands of users raced to register for voucher collection on AlipayHK so as to receive an "early bird reward" worth HKD30, resulting a nearly tripled subscription number compared to the previous day.
China today brought a lawsuit against Australia's anti-dumping and anti-subsidy measures on railway wheels, wind towers and stainless sinks imported from China under WTO's Dispute Settlement Mechanism, announced by China's Ministry of Commerce
Local insurance demand remains resilient as Manulife’s business is still thriving despite pandemic, said Damien Green, the company's CEO in Hong Kong and Macau. In appearance at an Ocean Park's event, Green said Hong Kong residents' demand for healthcare insurance and retirement solution is as strong as the past, adding the company managed to keep a double-digit growth during the plague on the ride of such demand.
CATHAY PAC AIR (00293.HK), in a memo to staff, said all Hong Kong aircrew members must be fully vaccinated against COVID-19 on or before 31 August, said Chief Operations and Service Delivery Officer Greg Hughes. Only a fully-vaccinated aircrew could be exempted from quarantine in most places and be allowed to work on flights from and to high-risk places, he explained.
BYD COMPANY (01211.HK)'s management is reported to have expressed during an internal meeting that the petrol automobile sales this year is estimated to be approximately 150,000 units, and that as long as the monthly capacity of DM-i's hybrid vehicles reaches 80,000 units, the company would shut down the production of petrol vehicles completely by 2022 at the earliest. Responding to said rumors, BYD COMPANY stated that they have no plan to discontinue the production of petrol cars at the moment.
SSY GROUP (02005.HK) announced that the group’s new product ropivacaine hydrochloride injection in form of ampoule and fluconazole & sodium chloride injection were awarded the third place and the second place respectively in the tender results of national centralized medicines procurement in the PRC on 23 June. The company's board expects that the tender results will be beneficial to rapid market development, formation of large-scale sales and increase in market share of the relevant products, and will bring a positive result on the group’s sales in the future.
EVERGRANDE (03333.HK) announced that the Company has arranged its own funds of approximately HK$13.6 billion to be remitted into the bond repayment account to repay relevant bonds due to mature on 28 June 2021 in the principal amount of US$1.451 billion, and interests payable for all offshore US$ bonds of the Company in the sum of US$299 million, totaling US$1.75 billion.
A1 Telekom Austria Group may consider adopting equipment from Chinese suppliers like Huawei and ZTE (00763.HK) for upcoming 5G network buildout projects in several countries, said the group's Chief Operating Officer Alejandro Plater in a Reuters interview.
XINYI ENERGY (03868.HK) announced to have successfully obtained a second-party opinion from HKQAA regarding the Corporate Framework for Green Finance and has been granted $500 million and $600 million of green loan by Hang Seng Bank and Bank of China Hong Kong respectively. The received loan will be utilized in the acquisition of solar farms, the company added.
Deliveroo announced to launch an exclusive partnership program with PARKnSHOP, introducing 50 stores under the brands of PARKnSHOP, FUSION, INTERNATIONAL and TASTE on its platform. During the first phase of the partnership, the companies will focus primarily on fresh food products, expecting a mutual benefit from the strengthened services and the higher market exposure.
Xpeng (XPEV.US) passed the listing hearing of SEHK and has decided to adopt a WVR structure, with its capital including "one share for one vote" class A shares; "one share for 10 votes" class B shares and "one share for 5 votes" class C ordinary shares which was issued to Taobao China under BABA-SW (09988.HK). Taobao China, which holds approximately 178 million class C shares and 13.3 million class A shares, has reached an agreement with He Xiaopeng to convert all its class C shares to class A shares on a one-on-one basis.
Hong Kong Science and Technology Parks Corp (HKSTP) has taken corresponding actions against Apple Daily Printing Ltd's multiple alleged violations in its operation in Tseung Kwan O Industrial Estate, in accordance with lease terms. Accordingly, HKSTP has issued a notice on the breach of lease conditions to the printing company, while initiating land recovery procedures. With the case entering legal procedures, the company will make no further comments on the incident.
Hong Kong Airlines announced to lay off about 700 employees and extend the pay cut margin for its senior management from 15% to 36% in the second half of the year, depending on the specific rank of the staff. The company expressed that the downsizing measures are taken to streamline its operation and to ensure the group to stay afloat in these turbulent and challenging times.
At a forum, Financial Secretary Paul Chan noted concerns from the business sector (especially foreign businesses) amid Hong Kong's strict epidemic control, mostly arising from travel inconvenience and disturbance to family bonds as the pandemic had made traveling difficult for a long period of time. As for IPO, Hong Kong's IPO fundraising size exceeded $180 billion for the first five months of 2021, representing a robust YoY growth. Chan also mentioned the lively queue for Hong Kong IPO.
The Government announced the invocation of the place-specific flight suspension mechanism for Indonesia. From 0.00am on June 25, all passenger flights from Indonesia will be prohibited from landing in Hong Kong. Indonesia will also at the same time be specified as an extremely high-risk Group A1 specified place to restrict persons who have stayed in that place for more than two hours from boarding passenger flights for Hong Kong, so as to stop persons from the relevant place from travelling to Hong Kong via transit.
HKEX (00388.HK) announces Taiwan Futures Exchange has approved the inclusion of Hang Seng TECH Index Futures in its list of offshore exchanges and contracts for which Taiwan Futures Commission Merchants (FCMs) have trading authorization.
CDC expressed that Pfizer (PFE.US) and Moderna(MRNA.US)'s mRNA COVID-19 vaccines might be related to the recently arisen cases of heart inflammation found on adolescents and young adults, and will quickly add a warning to the fact sheets of said vaccines.
On another note, CDC stated that the patients who suffer from heart inflammation after vaccination tend to recover from the symptoms in a short period of time. The authority contended that the advantages of the vaccines significantly outweighs its risk and assured the effectiveness and safety of the vaccines.
The Hong Kong IPO of the Chinese tea chain Nayuki (02150.HK) has recorded an approximately 430x oversubscription in the public offer section, with more than 600,000 subscribers and approximately $220 billion frozen funds, suggested market sources.
From early June to mid-June, the automobile output of 11 key Chinese carmakers declined by 37.7% year-on-year to 864,000 units, according to data from China Association of Automobile Manufacturers (CAAM).
Chief Executive Carrie Lam gave a speech at a forum, saying the world had been vexed by the epidemic in the past year, alongside Covid variant resurgence in some regions. The difference between last year and this year was the presence of effective vaccines. She anticipated the world to overcome the pandemic amid higher injection rate, thus leading the global economy back to an uptrend.
While Hong Kong is gearing up for Wealth Management Connect and Southbound Bond Connect, Lam hoped the schemes could be rolled out as soon as possible for the city to enter a new stage of mutual market access.
PING AN (02318.HK)'s founder Peter Ma expressed in his public letter that digitization has raised to a new level humans’ ability to understand the world, the underlying principles that govern it and make more intelligent decisions. For business, Ma contended that digitalization will bring about great disruptions in people's ways of thinking and systemic changes in industries across a range of activities from strategy development to product and service delivery.
The Chinese social network application Soulgate, whose shareholder being TENCENT (00700.HK), has announced a halt on its U.S. IPO, since the company has already secured other means of fund raising, reported Reuters. Soulgate's original valuation amounted to USD1.8 billion and was hoping to raise USD198 million with its IPO.
PRE MARKET HOURS NEWS
BABA-SW (09988.HK)'s Ant Group is negotiating with Chinese state-owned enterprises to jointly build a credit-scoring company which will share the group's consumer data, The Wall Street Journal citing insiders. Some of the control over the data will be put under Chinese watchdog's purview. The new entity will be set up as soon as the third quarter of 2021, the people said.
All Wan Hang House residents in Tai Po's Wan Tau Tong Estate were subject to compulsory testing as a male airport ground staff living there had been preliminarily diagnosed with the COVID-19 variant. The Government set up temporary specimen collection stations in the "restricted area" and requested persons subject to compulsory testing to collect combined nasal and throat swab samples at the stations to undergo a COVID-19 virus test before 2am today. As at 2am today, around 2,100 residents had undergone testing. No confirmed cases were found.
SF Holding (002352.SZ) announced that the H-share IPO
application materials of its subsidiary SF Tongcheng Industry have been approved by the CSRC.
251 drug products involving 61 types were tentatively selected in the 5th Batch of National Centralized Medicines Procurement in China, marking the most number of selected drug types of the country on record, Xinhuashidian reported. The average price reduction of the tentatively selected drugs reached 56%. As at around 10:30 pm on 23 June, 21 drug makers amongst A-share companies announced the bid-winning news one after another, most of them had 1-2 drugs picked. Kelun Pharma (002422.SZ) +0.13 (+0.627%) , the biggest winner, reported 11 products were shortlisted which involved 18 speculations.
Africa's MTN and China's ZTE (00763.HK) were accused in the U.S. of indirectly backing an Iranian terrorist campaign that had led to thousands of American casualties in Iraq between 2011 and 2016.
The U.S. Commerce Department banned the imports of solar panel materials from Hoshine Silicon Industry Co, while forbidding exports to Hoshine Silicon, Daqo New Energy Corp, Xinjiang East Hope Nonferrous Metals Co, Xinjiang GCL New Energy Material Co, in addition to the paramilitary Xinjiang Production and Construction Corps (XPCC). The Commerce Department said these companies are toppling human rights in Xinjiang, while Chinese Foreign Ministry spokesperson Zhao Lijian responded that any allegations on genocide and forced labor in Xinjiang are nothing but rumors with ulterior motives and downright lies.
Q TECH (01478.HK) announced that Kunshan QT China submitted an application to the ChiNext of Shenzhen Stock Exchange for the proposed listing. It is expected that the offering of the Proposed Listing will be not less than 320 million shares, representing not less than 10% of the total share capital of Kunshan QT China as enlarged.
HUTCHMED (00013.HK) announced that the Offer Price had been determined at HK$40.1 per Share. The gross proceeds from the Global Offering are expected to be HK$4.17 billion.
CKH HOLDINGS (00001.HK)'s statement disclosed that it repurchased 200,000 shares on the Stock Exchange on 23 June at $59.80-59.85 each, involving approximately $11.97 million. Year to date, the company bought back 7.6305 million shares, representing 0.1979% of the share capital of the company.
CHINA CINDA (01359.HK) announced that the Company has recently received the approval by the China Banking and Insurance Regulatory Commission (the CBIRC) to issue preference shares of no more than RMB18 billion in the offshore market which will be treated as additional tier-1 capital of the Company in accordance with relevant regulatory requirements.
CRRC (01766.HK) announced that, according to the information published by the CSRC, the CSRC has approved the application for registration of initial public offering of shares of CRRC TIMES ELEC (03898.HK), an indirect non-wholly owned subsidiary of the Company, on the Science and Technology Innovation Board.