This and previous notes can be found at asianmarketsense.com and Substack ( Asian Market Sense )
Check out ERI-C.com for interesting research and trading analysis
HSI -176pts (-0.6%) 27,788 HSCEI -48pts (-0.5%) 10,065 T/O HK$143.63bn (-7.8% DoD)
Markets opened lower as UK inflation came in stronger than expected. Weakness in Utilities and Travel names. Auto’s +VE
Also caution as US earnings get underway.
Tele2 strong in early trading after beating Q2 core earnings expectations and raised its outlook.
Avanza Bank very weak after its Q2 earnings report.
Industrial Production May 20.5% YoY vs 39.4% Apr revised (F/cast was 25.1%)
Industrial Production May -1% MoM vs +0.6% Apr revised (F/cast was +0.1%)
Inflation Rate Jun +2.5% YoY vs +2.1% May (F/cast was +2.3%)
Inflation Rate Jun +0.5% MoM vs +0.6% May (F/cast was +0.3%)
Core Inflation Rate Jun +2.3% YoY vs +2% May (F/cast was +2%)
Core Inflation Rate Jun +0.5% MoM vs +0.8% May (F/cast was +0.4%)
PPI Input Jun +9.1% YoY vs +10.4% May revised (Consensus was +10.8%)
PPI Input Jun -0.1% MoM vs +1.2% May revised (Consensus was +1.2%)
PPI Core Output Jun +2.7% YoY vs +2.3% May revised (F/cast was +3%)
PPI Core Output Jun +0.3% MoM vs +0.7% May revised (F/cast was +0.3%)
PPI Output Jun +4.3% YoY vs +4.4% May revised (F/cast was +4.7%)
PPI Output Jun +0.4% MoM vs +0.8% May revised (F/cast was +0.5%)
Retail Price Index Jun +3.9% YoY vs +3.3% May (F/cast was +3.6%)
Retail Price Index Jun +0.7% MoM vs +0.3% May (F/cast was +0.3%)
Opened flat Dow +9pts, S&P and NDX slightly +VE. Futures weakened through the day Dow -50pts in European time S&P and NDX flat.
Focus tonight on PPI data, Fed Chairman Powell’s Testimony and the Beige Book.
CHINA CSI 300 closed -59pts (-1.2%) @ 5,083
CSI 300 opened lower and trended down to 5,080 through the morning before a slight bounce but resistance at it approached 5,100.
PM after an initil dip the market trended higher but resistance at 5,120, then around 2pm sold down to 5,090 and traded sideways into the close with support at 5,080.
Leaders Coal miners and medical beauty names
Laggards were financials, consumer-discretionary and materials. Foreigners net sold US$1.7b in Chinese shares via Stock Connect, most since Sept.
Caution ahead of tomorrow’s GDP, Retail Sales, Unemployment and Industrial Prodcution data. Also worries in International relations and debt defaults as local authorities prevented from expanding their balance sheets.
Shanghai Composite -38pts (-1.1%) @ 3,529
Shenzhen Composite -132pts (-0.9%) @ 15,056
ChiNext Composite Index -39pts (-1.1%) @ 3,606
Guangdong province's National Health Commission reported to have found 2 imported confirmed COVID-19 cases yesterday (13th), along with 3 imported asymptomatic cases. Yunnan, on the other hand, found 1 local confirmed case yesterday, along with 10 imported confirmed cases, reported the province's National Health Commission.
For the first half of 2021, China's utilized foreign capital amounted to RMB607.84 billion, up 28.7% YoY (converting into USD90.96 billion and a 33.9% YoY growth) and 27.1% from the same period in 2019, according to the statistics from Ministry of Commerce (MOC).
HSI Pre market opened @ 27,965 +2pts vs -98pts ADR’s but sold down through the morning to 27,700 level before a small bounce into lunch @ 27,800. PM saw an initial dip to 27,740 and then a bounce back to 27,800 and then tested to 27,840 but couldn’t break out and sold down to 27,740 again. Then rebounded and traded around 27,760 and closed on an uptick. Choppy trading which suggest support from Team China.
Broad weakenss on news of Biden warning US companies about operating in Hong Kong and rumours of more sanctions. T/O a little light which suggest investors remain in wait and see mode. HK Property weak on concerns that higher inflation could see rates rise.
Healthcare +VE. Talk that Lalamove may shift its listing from the U.S. to Hong Kong to avoid China’s new scrutiny on user data.
HONG KONG DATA
Hong Kong reported 3 new imported covid case today and no untraceable cases
Short Selling Wednesday 16.5% vs 14.8% Tuesday
Top Shorts Hang Seng Bank (11) 47%, Country Garden (2007) 46%, Ping An (2318) 35%, Bank of China (3988) 35%, Hengan (1044) 35%, Geely Auto (175) 34%, Longfor (960) 29%, Shenzhou (2313) 28%, Bud Apac (1876) 26%, HSBC (5) 26%, AIA (1299) 26%, BYD Co (1211) 25%
DEXIN SER GROUP (02215.HK), whose shares will be listed tomorrow, opened at $3.1 in gray market, up 1.3% against the listing price of $3.06, and last stood at $2.9, down 5.2% against the listing price, on volume of 1.06 million shares, PhillipMart data showed.
MEDLIVE (02192.HK), which is scheduled to debut tomorrow, opened high at $34.95 in the gray market , up 28.5%; last posted $32.2, up over 18% against its listing price of $27.2, on a volume of 1.32 million shares, PhillipMart data showed.
BETTERLIFE HLDG (06909.HK), whose shares will be listed tomorrow, opened at $5 in gray market, up 13.6% against the listing price of $4.4, and last stood at $5.6, up 27.3% against the listing price, on volume of 3.22 million shares, PhillipMart data showed.
AFTER MARKET NEWS
CHINA MER PORT (00144.HK) positive profit alert. The Group is preliminarily expected to record an increase of profit for the six months ended 30 June 2021 by more than 170% as compared with the same period last year. The expected increase in the interim results of the Group was primarily attributable to the total container throughput and the bulk cargo volume handled by the Group’s ports increased by approximately 20% and 40% respectively over the same period last year; and so on.
CHINA COAL (01898.HK)'s Positive Profit Alert: its net profit for the six months ended 30 June 2021 is expected to range from RMB80.65 billion to RMB89.2 billion, representing a year-on-year increase of 218.9% to 252.7%.
The Hong Kong Monetary Authority (HKMA) announced that the foreign assets, representing the external assets of the Exchange Fund, decreased in June by HKD22.7 billion to HKD4.0134 trillion.
CHINA TAIPING (00966.HK) announced the gross premium income of the subsidiaries of the Company for the period from 1 January 2021 to 30 June 2021. Taiping Life Insurance Company Limited reported premium income of RMB93.797 billion, up 3.12% yearly.
ZA ONLINE (06060.HK) announced that the aggregate gross written premiums of the company for the period from January 1, 2021 to June 30, 2021 were approximately RMB9.835 billion, up 45.4% compared to approximately RMB6.763 billion from the corresponding period in 2020.
CHINA LIFE (02628.HK) announced that the accumulated premium income of the company for the period from 1 January 2021 to 30 June 2021 was RMB442.6 billion, up 3.41% YoY.
CPIC (02601.HK) announced that the premium income of the company for the period between 1 January 2021 and 30 June 2021 amounted to RMB223.186 billion, up 3.67% YoY.
|BASE METALS slumped after Premier Li Keqiang said China should prepare for possible cyclical risks with cross-cyclical adjustments. He said Beijing will act to ease pressure from rising commodity prices. JIANGXI COPPER (358 HK -3%) ANGANG (347 HK -3.8%) CHALCO (2600 HK -4%).
COAL MINERS SURGED amid supply shortage and high demand during the summer season for power. It is reported that rising temperatures and robust economic activity have caused one of the worst power shortages since 2011. YZCOAL (1171 HK +8%) CH COAL (1898 HK +4.4%) .
*E-COMMERCE FIRM seeing some attract buying interest. Chinese on-demand logistics firm LALAMOVE is reported to be considering shifting its planned US$1b IPO to Hong Kong from the U.S., news report.
TENCENT (700 HK +0.2%) is attempting to buy German games developer Crytek through a European subsidiary, for more than EU300m.
ALIBABA (9988 HK+0.6%) is setting up the Alibaba Artificial Intelligence Governance Laboratory (AAIG).
JD.COM (9618 HK+1.6%) NTES (9999 HK +2%) KUAISHOU (1024 HK +1.5%).
*AUTOS WEAK after Himalaya Capital sold ~7.14m BYD (1211 HK -5.6%) H-shares at average HK$227.6229 apiece on July 8, cutting its stake in BYD from 7.03% to 6.35%. GEELY (175 HK -2.5%) GREAT WALL (2333 HK -2.5%).
*BIOTECH/MEDICAL FIRM; outperformers amid positive news. WUXI BIO (2269 HK +6.5%) expects 1H net to rise more than 135% on year.
SIHUAN (460 HK +11%) said it is actively evaluates participation in the acquisition of South Korea's Hugel, a listed company that focuses on developing beauty/cosmetics related products.
SISRAM MED (1696 HK +30%) has entered into a relicensing agreement with the company’s controlling shareholder, Fosun Industrial, to introduce, use, sell or commercialize the licensed RTOO2 product in the field. This product is a new type of next-generation neuromodulator under development for the treatment of cosmetic indications and a number of potential therapeutic conditions.
XTEP (1368 HK -5.1%) expects 1H interim profit to rise at least 65% YoY.
CHOW TAI FOOK (1929 HK -10%) reported 1Q retail sales +69.8%. 1Q Mainland China same-store sales +42.8%, 1Q HK & Macau same-store sales +110.4%.
Market opened lower but worked higher through the morning on good confidence data to peak at 7,369 at 11:20am and then like yesterday trended lower to 7,327 but then worked better after around 2pm and rallied back to 7,363 before easing back to close; +23pts (+0.3%) 2 7,355
Covid cases and an extension of the lockdown -VE along with BNPL names on news Apple entering the sector; Afterpay -9.6% and Nearmap -2.2%. Leaders were materials, consumer discretionary, and utilities. Macquarie Telecom strong on news it would build a super sized data centre.
NZ$ strong on news the RBNZ would end bond buying
Consumer Confidence Index Jul 108.8 vs 107.2 Jun (F/cast was 105)
Consumer Confidence Change Jul+1.5% vs -5.2% Jun (F/cast was -2.5%)
Nikkei opened lower (28,517) but worked better though the morning to test yesterday’s closing level mid morning but then eased back into lunch at 28,650 level. PM opened lower and traded sideways but dipped into the close; finished -110pts (-0.4%) @ 28,608 .
Topix opened lower but rallied back to flat in early trades and then traded sideways before dipping to close -5pts (-0.2%) @ 1,963.
PM Suga’s popularity dropping. Focus on earnings. Tire makers seeing weakness. Tech mixed as Apply increases orders to suppliers. SMFG said to buy a 5% stake in Jefferies. Continued weakness in Nippon Paint and gains for Olympus.
Tokyo has found 1,149 confirmed COVID-19 cases today (14th), marking the first time for the Japanese capital to record over 1,000 cases in a single day in around two months since 13 May.
Data out pre market
Tankan Index Jul 25 vs 22 Jun (F/cast was 20)
Out at 12:30pm
Industrial Production May -6.5% MoM vs +2.9% Apr (F/cast was -5.9%)
Industrial Production May +21.1% YoY vs +15.8% Apr (F/cast was +22%)
Capacity Utilisation May -6.8% vs +1.1% Apr (F/cast was +0.9%)
Pre market data was better than forecast but new covid cases at 1,615 hit a new high and is the eigth day above 1,000. BoK rate decision tomorrow no change expected but inflation concerns remain.
Kospi opened slightly lower but sold down to 3,250 within the first 20 minutes. Then bounced and worked better to 3,265 level around 10am. Then traded sideways 3,260/265 to close -7pts (-0.2%) @ 3,265
Kosdaq opened flat but sold down to 1,038 before bouncing back to flat in the first hour. Traded sideways around flat for the next hour and then worked better to 1,045; before drifting back to flat then an uptick into the close +2pts (+0.2%) @ 1,045
Export Prices Jun +12.7% vs +12.6% May revised from +12.3%
Import Prices Jun +14% vs +14.2% May revised from +13.8%
Unemployment Rate Jun 3.7% vs +3.8% May
Taiex opened higher and tested 17,940 in early trades on news that Apple was increasing orders for iPhones. But it then sold down to 17,720 before rebounding to flat, then traded sideways around flat but sold down in the last 40mins to close -2pts @ 17,846. T/O was US$20.46bn vs 23.44bn Tuesday
Investors watching for TSMC’c investor day tomorrow. A series of earthquakes in Hualien slight -VE too
Northbound RMB 60,372m Sell 32,781m vs 27,591m Buy
Southbound HK$ 14,951m Sell 7,812m vs 7,140m Buy
Northbound RMB 74,859m Sell 40,238m vs 34,622m Buy
Southbound HK$ 19,367m Sell 9,458m vs 9,909m Buy
PING AN (02318.HK) Short selling Ratio 35.415% closed at $70.45, -2.1%
AIA (01299.HK) Short selling Ratio 26.145% closed at $95.25, -1.8%
MEITUAN (03690.HK) Short selling Ratio 12.781% closed at $290, -1.7%
CCB (00939.HK) Short selling Ratio 19.735% closed at $5.46, -1.6%
BABA (09988.HK) Short selling Ratio 20.961% closed at $206.4, +0.6%
HKEX (00388.HK) Short selling Ratio 18.513% closed at $507, +0.2%
TENCENT (00700.HK) Short selling Ratio 8.016% closed at $556.5, +0.2%
HSI & HSCEI Constituents on Move:
EVERG SERVICES (06666.HK) -7.2%
WUXI BIO (02269.HK) +6.5%
BYD COMPANY (01211.HK) Short selling Ratio 25.363% -5.6%
CHINA FEIHE (06186.HK) +5.5%
XINYI SOLAR (00968.HK) +4.7%
EVERGRANDE (03333.HK) Short selling Ratio 21.401% -4%
SHENZHOU INTL (02313.HK) Short selling Ratio 27.726% -3.8%
CSPC PHARMA (01093.HK) +3.4%
HANSOH PHARMA (03692.HK) Short selling Ratio 23.893% +3.4%
CHINA RES BEER (00291.HK) +3%
HSMI & HSSI Constituents on Move:
CMGE (00302.HK) +13.2%, hitting new high
SIHUAN PHARM (00460.HK) +11.3%
KANGJI MEDICAL (09997.HK) +10.1%
YANZHOU COAL (01171.HK) +8%, hitting new high
GENSCRIPT BIO (01548.HK) +6.9%, hitting new high
ALPHAMAB (09966.HK) +6.7%, hitting new high
MARKET HOURS NEWS.
Local logistics company Lalamove, in reply to Chinese media inquiry, said the company is constantly keeping an eye on capital market, but it has no concrete listing plan or timetable. Earlier on, Lalamove is purportedly deliberating to shift its listing destination from the U.S. to Hong Kong with a target to pool approximately US$1 billion.
The number of mortgages for completed flats climbed 25.3% YoY to 44,931 in the first half of 2021, said mReferral Mortgage Brokerage Services. Eric Tso, Chief Vice President at mReferral Mortgage, expected the number of existing home mortgages to grow by 30% YoY to around 110,000 this year and even challenge the decade high since 2011. Equally, Tso predicted an over 10% YoY surge in property prices this year.
Morningstar forecast the Chinese technology industry to continue to be weighed down as the looming concern of the tightening regulations from the government lingers, said Lorraine Tan Director of Equity Research, Asia at Morningstar. Tan remarked that until there is a significant shift in the attitude of the regulatory institutions, or the stock valuation becomes more appealing, investors' confidence in the sector is unlikely to be restored.
Morningstar chose TENCENT (00700.HK) as its top pick within the sector, favoring its ability to defend against risks, promising long-term growth prospect and reasonable short-term valuation.
Alibaba Digital Agriculture (Shandong) Ltd. was founded on 12 July (Monday), with a register capital of RMB10 million, reported Chinese media, citing data from Tian Yan Cha. The company's operating area will cover smart agricultural management, agricultural production care services and agricultural garden management, etc.
Guangzhou's ICV industrial ecosystem building unit held the joint operation pilot programme for both autonomous and conventional vehicles in Pazhou today. At the event, Guangzhou officially announced the launch of the pilot programme, taking an important step forward towards scaling up the adoption of autonomous driving.
The General Office of the Shanghai Municipal People's Government published the 14th five year plan for Shanghai's advanced manufacturing sector development to support faster strategic transformation of the city's car-making leaders.
Equally, Shanghai aims to foster the integrated buildout of vehicles with 5G, IoT and intelligent transport to achieve an industrial scale of a trillion yuan.
Fitch Ratings affirmed on STANCHART (02888.HK)'s and Standard Chartered Bank's long-term issuer default rating (IDR) at "A" and "A+", respectively, with negative outlooks and their viability ratings (VRs) being determined at "a". Fitch elaborated that STANCHART has already adjusted its strategies in response to the challenging revenue environment, with the risks on its asset quality risk and capitalization being reduced. The negative outlooks, Fitch remarked, are attributable to the challenges to the company's operation modes and management.
XIAOMI-W (01810.HK) has officially launched the second phase of its Changping smart factory in Beijing today (14 July), covering 58,300 square meters of area. The plant will serve as the second-generation handset smart production line, comprising SMT chip, board testing, assembly, machine testing and finished product packaging. The new factory will likely record an annual output value of around RMB60 billion.
Chinese Internet automobile solution provider Ebanma announced that its four major shareholders, namely BABA-SW (09988.HK), SAIC MOTOR (600104.SH) , SDIC and Yunfeng Financial, have further invested jointly RMB3 billion in the company.
MEDIALINK GROUP (02230.HK) announced that Sesame Workshop, the global non-profit educational organization behind Sesame Street, had engaged the Group as its Greater China licensing agent, covering Mainland China, Hong Kong, Taiwan and Macau.
Hefei BYD Automobile Co., Ltd. was founded on 12 July with a registered capital of RMB1 billion, Securities Times cited qcc.com, a corporate data search engine app. Hefei BYD Automobile is engaged in: manufacturing of auto parts and accessories; sales of new energy vehicles; sales of electrical accessories for new energy vehicles; research and development of auto parts, and so on.
The U.S. Deputy Secretary of State Wendy Sherman is scheduled to visit Beijing in late July, and the U.S. officials hope to have a smoother discussion this time than their previous meeting with China in Alaska, reported Bloomberg News, citing people familiar with the matter.
Apple has asked suppliers to produce up to 90 million units of the next-generation iPhone this year, a sharp increase from last year's shipment volume , Bloomberg citing insiders. Apple used to set the supply volume of its new iPhone at around 75 million units.
The global PC market shipment burgeoned 13% year-on-year to 82.3 million units in the second quarter of 2021, meaning demand had stayed robust during the period, according to Canalys' report.
Macau's hotel industry reported 60-70% hotel occupancy rate at the moment as the nucleic acid test for travelling between Guangdong and Macau resumed normal operation, and expected the occupancy rate to reach 80% during Summer holiday, reported Macao Daily.
Macau Hoteliers and Innkeepers Association predicted the possibility for the room prices of traditional hotels to rise slightly by 2-3% during the Summer holiday.
MILAN STATION (01150.HK) announced that Lin Mei Sze has been appointed as an executive director and chairman of the Company.
Shares of MILAN STATION once skyrocketed 50% this morning. The stock closed 21.4% after a second day of increased volume.
Hong Kong and Singapore have diverged again on reigniting the "travel bubble" program, reported South China Morning Post, citing sources. The report continued to state that the disagreement mainly generated from Singaporean government's approach to treat the COVID outbreak as an epidemic disease, which its Hong Kong counterpart views as a concern and threat for public health.
TENCENT (00700.HK)'s "Honor of Kings" topped the chart as the highest grossing mobile game worldwide in June, with its revenue reaching around USD277 million, up 21% year-over-year, with "PUBG Mobile", also from TENCENT, trailing closely behind, with revenue of USD214 million, up 11% year-over-year, reported Sensor Tower.
Last November, CKH HOLDINGS (00001.HK) announced a disposal of Tower Assets supporting the Group’s Mobile Businesses in Austria, Denmark and the United Kingdom etc. to Cellnex, a Spanish telecom infrastructure service provider. The deal aroused concern later on from the U.K. Competition and Markets Authority (CMA). The U.K. CMA issued a statement that Cellnex is already the largest independent supplier of mobile signal towers in the U.K., and that Cellnex's acquisition of Three UK’s infrastructure assets may lead to higher prices and lower service quality for local network operators.
The Hong Kong government has noticed that an overseas media organisation published a report on July 12, alleging that the purchase agreement entered between the government and Fosun Industrial Co., Limited (Fosun) had clauses which empowered Fosun to collect the personal information of vaccinated individuals in Hong Kong.
A spokesperson for the government today (July 13) clarified that the relevant report is completely untrue and expressed deep regret on the misleading report concerned.
Himalaya Capital had on last Thursday (8th) unloaded 7.144 million shares of BYD COMPANY (01211.HK) at an average price of $227.6229 per share, cashing in $1.626 billion, as revealed by the disclosure of interests of HKEX (00388.HK). Himalaya Capital is a hedge fund founded by Li Lu, who is dubbed as the "Favorite Warrior of Warren Buffet". Upon the share reduction, Himalaya Capital's long position in BYD COMPANY dropped to 6.35% from 7.03%.
PRE MARKET HOURS NEWS
TENCENT (00700.HK) is attempting to acquire German game developer Crytek through a European wing at more than EUR300 million, tweeted a journalist of Germany's Bild newspaper.
Local logistics company Lalamove is deliberating to shift its listing destination from the U.S. to Hong Kong to shun disturbance on
IPO progress, when China has recently toughened up scrutiny around user data of tech firms, foreign media reported. Last month, rumor spread that Lalamove had submitted to the U.S. an IPO application quietly with a target to pool approximately US$1 billion and a valuation of US$10 billion.
The U.S. Federal Communications Commission (FCC) voted unanimously on passing a USD1.9 billion subsidy program, which aims to reimburse U.S. carriers in rural areas for removing the equipment from Chinese makers like Huawei or ZTE (00763.HK) Short selling $13.35M; Ratio 6.580% from their telecommunication networks. FCC has deemed Huawei or ZTE as threats to the national security of the U.S. last year and has barred U.S. companies from purchasing equipment from the Chinese suppliers with the USD8.3 billion government fund.
Shum Yip Holdings and TENCENT (00700.HK) held a strategic cooperation agreement signing ceremony at Tencent Seafront Towers yesterday (12th), reported Chinese media. Pursuant to which, both sides pledged to form and bolster their strategic partnership under voluntary and win-win principles, in addition to mutual benefit and joint development.
SUNAC SERVICES (01516.HK) Positive Profit Alert is expected to record an increase of more than 140% in the net profit of the Company for the first half of 2021 as compared to that of the corresponding period of last year, which is primarily due to the increase in the scale of the management resulting in an increase in the revenue and enhancing the profitability at the same time.
China's Ministry of Commerce, Ministry of Industry and Information Technology and other units jointly published a notice on the first batch of ten demonstration cities and 94 demonstration enterprises for national supply chain innovation and application.
The cities include Beijing, Shanghai, Hangzhou, etc. The companies include FUYAO GLASS (03606.HK), Suning.com (002024.SZ) , Zhejiang Geely Holding Group Co., etc.
Following the People's Bank of China's announcement on lowering the RRR and releasing RMB1 trillion fund, the premier of the State Council Li Keqiang expressed during a forum that the Chinese government aims to maintain the coherence and stability of the policies and will not "flood" the economy with massive stimulus.
Li added that the RRR cuts should be targeted towards medium, small and micro enterprises and the labor-intensive industries, subsequently allowing them to have extensive choices and room for growth in a fair and competitive environment.
PICC P&C (02328.HK) announced that the original insurance premium income of the Company for the period from 1 January 2021 to 30 June 2021 aggregated RMB251.825 billion, up 2.5% yearly.
PICC GROUP (01339.HK) announced that for 6M21, the company's subsidiaries tracked a total of RMB341.528 billion premium income based on China's accounting standards, up 1.9% yearly.