Hong Kong/China Market

Transcription

1 Hong Kong/China Market Technical Strategy The HSI has risen along an uptrend since Feb16, but rising momentum weakened noticeably in recent sessions as turnover volume shrank Indices Latest Chg. Pts HSI 21, HSI Future 21, DJIA 18, S&P 500 2,101 6 NASDAQ 4, H-share 9, Red-chip 3, Shanghai Comp 3,043 9 Shenzhen Comp 1,958 6 Source: Bloomberg, VC Research But the rebound yesterday prevented a three black crows pattern from developing further, which bodes well for the short-term outlook of the index. Hong Kong Market Review Bounced back on DJIA gain. The local bourse opened 276 points higher, tracking the strong finish of the DJIA on Monday. But rising momentum was not firm and the HSI rose only 124 points before lunch break. Trading was fairly stable in the afternoon session and the HSI extended gains towards market close. At close the HSI rose 274 points, or 1.3%, to Turnover volume increased to HKD63bn. Int l banks strengthened. Management of HSBC (005.HK) said that the bank may want to repurchase shares and increase dividend payout ratio when circumstances permit. Investors took it as a positive news flow and the bank bounced back 3.67% to HKD50.75/share. Stanchart s (2888.HK) Chairman and CEO are reportedly to go, and its share price surged 5.79% to HKD59.3/share. Mainland telecom shares fell following China Unicom (762.HK) posted a negative earnings alert. China Mobile (941.HK) edged down 0.5% to HKD89.55/share, China Telecom (728.HK) 1.41% to HKD4.17/share, and China Unicom 1.91% to HKD9.74/share. Macao gaming rose as GGR grew 2.4% yoy in 1H16. Sands China (1928.HK) was up 2.32% to HKD30.75/share, while Galaxy Ent. Gained 2.61% to HKD29.45/share.

2 Economic News China's urbanization rate at 56.1 pct. Over 56 percent of China's population lived in cities in 2015, as the country's urbanization continues apace, a report showed on Tuesday. The number of people registered as permanent residents in cities expanded from 170 million in 1978 to 750 million in 2014, according to the report compiled by the National Development and Reform Commission, the country's top economic planning body. (Xinhua News) Central gov't to cut travel, vehicle, reception budget. China's central government will this year spend less on overseas visits, vehicles and receptions, popularly known as the "three public consumptions," said the Ministry of Finance on Tuesday. The central government will spend 6.31 billion yuan (about 970 million U.S. dollars) on such items in 2016, slightly down from last year. This year's budget includes billion yuan for overseas travel - an increase of 89 million yuan from billion yuan for government vehicles (down 18 million yuan) and 842 million yuan for receptions (down 77 million). (Xinhua News) China's investment in highways, waterways up 7 pct in Q1. China's fixed investment in highways and waterways in the first quarter (Q1) reached billion yuan (39.35 billion U.S. dollars), up 7 percent year on year, the transport ministry said Tuesday. Of the investment, billion yuan was in highways, a year-on-year increase of 8.5 percent. The growth rate in western regions hit 11.1 percent year on year, which was much higher than central and eastern China, Ministry of Transport (MOT) data showed. (Xinhua News) China's service outsourcing growth accelerates in Q1. China's service outsourcing industry expanded at a faster pace in the first quarter (Q1) of 2016 despite a slowing economy, data from the Ministry of Commerce (MOC) showed Tuesday. Chinese companies inked service outsourcing contracts worth 33.9 billion U.S. dollars, up 25.4 percent year on year, MOC spokesperson Shen Danyang told a press conference. The growth rate accelerated from the 7.5 percent increase recorded in the first two months of the year. (Xinhua News) China's FDI to maintain steady growth this year: Commerce Ministry. Foreign direct investment (FDI) in China will likely sustain steady growth this year, the Ministry of Commerce (MOC) said Tuesday, highlighting robust inflow in western regions and acquisitions. (Xinhua News) China's Q1 land prices surge. China's land costs continued climbing in the first quarter with prices in top-tier cities surging the most amid a heating up property market. Prices of land for residential use jumped 1.27 percent during January-March from the previous quarter, while prices of land for industrial development increased 0.73 percent, according to the Ministry of Land and Resources (MLR). In general, land prices increased 0.96 percent, 0.22 percentage points higher than those recorded in the previous quarter. (Xinhua News)

3 Market News U.S. dollar declines on downbeat data. The U.S. dollar decreased against most major currencies on Tuesday as economic data from the country came out weaker than expected. U.S. privately-owned housing starts in March were at a seasonally adjusted annual rate of 1,089,000 units, reported the Commerce Department Tuesday. The latest reading was below market consensus of 1,167,000 units and also 8.8 percent below the revised February estimate. (Xinhua News) Crude prices rise as the U.S. dollar drops. Oil prices gained Tuesday as the U.S. dollar depreciated against other currencies. A weaker greenback made the dollar-priced crude less expensive and more attractive for buyers holding other currencies. The strike of oil workers in Kuwait continued to boost the oil market. The strike started from Sunday cut Kuwait's output by about 1.7 million barrels per day to 1.1 million barrels a day. Kuwait is the fourth largest member of the Organization of Petroleum Exporting Countries. (Xinhua News) Shanghai gold fix aims China towards global pricing power. The yuan-denominated gold benchmark debuted in Shanghai yesterday as China took a step forward in vying to be a global price-setter for the precious metal. The gold fix is also the latest sign that Beijing will continue to expand the role of its currency to match the country s increasing economic might. The gold benchmark launched by the Shanghai Stock Exchange is based on a 1 kilogram-contract and was set at yuan yesterday morning. (SCMP) More Chinese property developers eye Hong Kong sites. More and more mainland Chinese developers are setting their sights on Hong Kong s land market to diversify in the wake of the a property market slowdown at home, especially in smaller cities, as well as to take advantage of the falling land prices in the city. (SCMP)

4 Company Announcements Jingrui Hldgs (01862) unit buys Tianjin Tianrui. On 19 April 2016, Shanghai Xiaoze Investment Co., Ltd., an indirect non-wholly-owned subsidiary of Jingrui Holdings Limited (01862), entered into a Share Purchase Agreement with Tianjin Chaobaihu Investment Development Co., Ltd., pursuant to which Tianjin Chaobaihu Investment agreed to sell, and Shanghai Xiaoze Investment agreed to acquire, 100% of the equity interests in Tianjin Tianrui Investment Development Co., Ltd. at a total consideration of RMB million (HK$ million). (Infocast News) RENHENG Ent (03628) in talk on buying biotech company. RENHENG Enterprise Holdings Limited (03628) announced that it was engaged in discussion with independent third parties with respect to the possible acquisition of a biotech company which is engaged in research projects. As at 19 April 2016, no definitive terms had been agreed upon and no agreements had been entered into. (Infocast News) Co-Prosperity (00707) plans to buy 60% in Million Federal. Co- Prosperity Holdings Limited (00707) has entered into a non-legally binding MOU for the acquisition of 60% of the entire share capital of Million Federal International Limited from Sincere Finance Holding Limited. (Infocast News) Hengxing Gold (02303): Gold Mt Mine Q1 output up 118%. Updating the operation of its Gold Mountain Mine for the first quarter of 2016, Hengxing Gold Holding Company Limited (02303) says that the mine crushed and processed approximately 620,359 tonnes of ore and produced approximately 14,680.6 ounces (472 kg) of gold during the first quarter of 2016, approximately 6% and 118% respectively higher than the corresponding figures for the same period last year. Due to Chinese New Year holiday, the processing plant operated for two months only in the first quarter of However, the production volume nearly doubled compared to the same period of (Infocast News) MCC (01618): Q1 new contracts RMB112.69B, up 75%. The aggregate value of newly signed contracts of Metallurgical Corporation of China Ltd. (01618) from January to March in 2016 amounted to RMB billion (representing an increase of 74.9% from the same period of last year), including newly signed overseas contracts totalling RMB16.26 billion. (Infocast News) SEA Holdings (00251) sees $90M loss from New Insight sale. Asian Growth Properties Limited (AGP), a 97.17%-owned subsidiary of S E A Holdings Limited (00251), has entered into an agreement to sell the entire issued share capital of, and liabilities due from, New Insight Holdings Limited for HK$900 million, S E A announced. (Infocast News) Esprit Holdings (00330) refunded $134M, writes back $409M. Esprit Holdings Limited (00330) announced that it received favorable revised notices of tax assessment and a corresponding cash refund in the aggregate amount of approximately HK$134 million. In addition, the group will write back the excess of the tax provision in the amount of approximately HK$409 million to its Income Statement, which will contribute positively to the financial results of the group for the

5 financial year 2015/16, the company said. (Infocast News) China Ship Dev (01138): Q1 net profit up 135% to RMB155M. China Shipping Development Company Limited (01138) expects its net profit attributable to the equity holders of the company for the three months ended 31 March 2016 to be approximately RMB155 million (HK$186 million), representing a significant increase of 135% on year. (Infocast News) Dongjiang Env (00895) sees 1H NP rising 15-45%. Dongjiang Environmental Company Limited's (00895) net profit attributable to shareholders of the company for the six months ending 30 June 2016 is expected to rise 15-45% on year to RMB million compared to the RMB million net profit the company had for the previous corresponding period, the company announced. (Infocast News) Emperor Capital (00717) expects sharp rise in profit. Emperor Capital Group Limited (00717) expects to record a significant increase in the consolidated profit for the six months ended 31 March 2016 compared with the corresponding period in (Infocast News)

6 Today s Theme The NBS announced that average prices of new homes in 70 Chinese cities increased 4.9% yoy in Mar16 from 3.6% yoy in Feb16. It is the sixth straight month of gain and the highest rise since May It appears that Beijing s newly implemented administrative measures have failed to curb property price rise in first-tier cities, such as Shenzhen, where flat price surged 63% yoy in Mar16. Gemdale PPT (0535.HK) Hit the floor of its uptrend and rebounded. Staying at above all major MAs bodes well for its trading outlook. Source: Bloomberg, VC Research China Vanke (2202.HK) Has risen along an uptrend since Feb16. Rising momentum is still strong; trade way above all major MAs on increased turnover volume. Source: Bloomberg, VC Research

7 Greentown China (3900.HK) Built a support at around HKD5.6/share. But trading at below all major MAs is not a bullish sign. And turnover volume shrank markedly in recent sessions. Source: Bloomberg, VC Research Hang Seng Composite Sectors Sector Index Day (%) Week (%) MTD (%) YTD (%) Hang Seng Index (HSI) 21, Hang Seng Composite 2, HSCI Utilities 7, HSCI Industrial Goods 1, HSCI Materials 4, HSCI Conglomerates 2, HSCI Telecommunication 1, HSCI Property & Construction 2, HSCI Info Technology 6, HSCI Consumer Goods 3, HSCI Financials 3, HSCI Services 3, HSCI Energy 7, HS Mainland 100 6, HS China Enterprises 9, HS China H-Financial 14, HS China Affiliated Corps 3, HS HK 35 2, HS HK Large Cap 1, HS HK MidCap 4, HS HK Small Cap 1, Source: Bloomberg

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