Hong Kong/China Market

Transcription

1 Hong Kong/China Market Technical Strategy The SZCOMP embarked on a downtrend after a short-lived rebound Indices Latest Chg. Pts HSI 31, HSI Future 31, DJIA 25,322 6 S&P 500 2,782 3 NASDAQ 7, H-share 12,172 6 Red-chip 4,666 8 Shanghai Comp 3, Shenzhen Comp 1, While the index is testing the 1630 support again, the next support has retreated to 1655 points. Hong Kong Market Review Quiet trading. Investors are still digesting the potential dispute between the US and other G7 members and prefer to stay at the sidelines before the FOMC meeting. The benchmark index opened 58 points higher and once dipped into red. It quickly strengthened again, however, to gain over 100 points for most of the day. The index closed the day up 105 points and restored the point level. But turnover was slim at only HKD77.3bn. Southbound Shanghai-HK Stock Connect capital outflow slowed. Net outflow decreased to Rmb58M compared with Rmb2.2bn last Friday. Tencent (0700.HK) and CCB (0939.HK) were the main targets with more than Rmb200M net outflow. They rose 0.96% to HKD419/share and stayed put, respectively. HAECO (044.HK) soared 55% to HKD68.1/share after Taikoo (019.HK) announced a privatization plan by offering a 64% premium to its last closing price, i.e HKD72/share. Taikoo claimed they would not offer to raise the prices for the privatization plan.

2 Economic News After 'difficult' G7 summit, UK's May warns against unilateral action on trade. British Prime Minister Theresa May said on Monday that a meeting of the Group of Seven leaders in Canada had been difficult and that countries had to avoid taking unilateral action in order to protect the global trading system. A divisive summit in Canada at the weekend ended with U.S. President Donald Trump firing off a volley of tweets, venting anger against NATO allies, the European Union and Canadian Prime Minister Justin Trudeau. Trump has slapped import tariffs on metals, saying he has to protect American jobs against what he says is unfair competition. This was a difficult summit with, at times, some very candid discussions, May told parliament. (Reuters) IMF's Lagarde says global economic outlook darkening by the day. International Monetary Fund chief Christine Lagarde led an attack by global economic organizations on U.S. President Donald Trump s America First trade policy on Monday, warning that clouds over the global economy are getting darker by the day. Trump backed out of a joint communique agreed by Group of Seven leaders in Canada at the weekend that mentioned the need for free, fair and mutually beneficial trade and the importance of fighting protectionism. The U.S. president, who has imposed import tariffs on metals, is furious about the United States large trade deficit with key allies. Fair trade is now to be called fool trade if it is not reciprocal, he tweeted on Monday. (Reuters)

3 Market News Wall Street ekes out gains ahead of Singapore summit. All three major U.S. stock indexes closed slightly higher on Monday as investors eyed the looming United States-North Korea summit on Tuesday in Singapore while shrugging off the weekend s factious meeting of the Group of Seven nations. President Donald Trump announced the United States withdrawal from the G7 s joint communique following a series of bellicose tweets aimed at Prime Minister Justin Trudeau after the Canadian leader announced retaliatory tariffs on goods imported from its ally to the south. (Reuters) Dollar rises, stocks cautious before U.S.-North Korea summit. The dollar jumped to a 3-week top on Tuesday while Asian shares started cautiously as investors were hopeful of a positive outcome from a highly anticipated U.S.-Korea summit, which could set the stage for ending a nuclear stand-off on the Korean peninsula. Japan's Nikkei.N225 climbed 0.8 percent to the highest in three weeks and South Korean shares added 0.1 percent. Australia's benchmark index was a tad firmer while New Zealand eased 0.3 percent.nz50. That left MSCI s broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS a touch softer at (Reuters) Oil near flat as OPEC supply hike appears less certain. Oil prices were little changed on Monday as comments from the Iraqi oil minister cast doubt as to whether the Organization of the Petroleum Exporting Countries would decide to boost output at its upcoming meeting. Global benchmark Brent crude LCOc1 was unchanged to settle at $76.46 a barrel. U.S. West Texas Intermediate crude CLc1 rose 36 cents to settle at $66.07, its highest level since June 1. U.S. crude s relative gains were the result of profit-taking on the wide spread between the two benchmarks, said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois. (Reuters) Bitcoin tumbles as hackers hit South Korean exchange Coinrail. South Korean cryptocurrency exchange Coinrail said it was hacked over the weekend, sparking a steep fall in bitcoin amid renewed concerns about security at virtual currency exchanges as global policy makers struggled to regulate trading in the digital asset. In a statement on its website on Monday, Coinrail said its system was hit by cyber intrusion on Sunday, causing a loss for about 30 percent of the coins traded on the exchange. It did not quantify its value, but in an unsourced report local news outlet Yonhap news estimated that about 40 billion won ($37.28 million) worth of virtual coins were stolen. (Reuters) U.S. reveals ZTE settlement details, ban still in place. ZTE Corp s ( SZ) settlement with the U.S. Commerce Department that would allow China s No. 2 telecommunications equipment maker to resume business with U.S. suppliers was made public on Monday, days after the company agreed to pay a $1 billion fine, overhaul its leadership and meet other conditions. But the ban on buying U.S. parts, imposed by the department in April, will not be lifted until the company pays the fine and places $400 million more in escrow in a U.S.-approved bank, the agency said. ZTE (0763.HK) did not immediately respond to requests for comment on Monday. (Reuters)

4 Company Announcements Grand Ming (01271) FY18 profit $172M, down 15%; div $ Net profit: HK$ M, down 15.38% YoY Basic EPS: HK 24.2 cents Final dividend per share proposed: HK 5.8 cents. (Infocast News) Next Digital (00282) FY18 loss widens to $476M; no div. Net loss: HK$ M (HK$ M net loss for the previous year) Basic LPS: HK 19.6 cents Final dividend per share proposed: (Nil). (Infocast News) Yue Yuen Ind (00551): 5-mth revenue US$876M. Yue Yuen Industrial (00551) announced that its net consolidated operating revenue was US$ million for May and US$4.021 billion for the five months through May. (Infocast News) Good Friend (02398): Jan-May sales RMB468.6M, down 14%. Good Friend International (02398) announced that its total sales to customers for the five months ended 31 May 2018 amounted to RMB million, representing a decrease of 14% on year. (Infocast News) China Res Cement (01313): 1H profit rises significantly. China Resources Cement (01313) expects its profit attributable to the owners of the company for the six months ending 30 June 2018 to increase significantly on year, primarily attributable to the higher selling prices of cement products during the period. (Infocast News) Le Saunda: Q1 self-owned retail biz sales down 18.2%. Shimao Property Holdings (00813) said that in May 2018, the group's contracted sales rose 50.4% on year to RMB10.57 billion and contracted sold area rose 63.8% to 675,603 square metres. (Infocast News) L'Occitane (00973) FY18 profit drops 27%; div EUR Net profit: EUR96.313M, down 26.99% YoY Basic EPS: EUR0.066 Final dividend per share proposed: EUR (Infocast News) Guorui Ppt (02329): Jan-May contract sales RMB4.739B. Guorui Properties (02329) announced that for May, the group recorded contract sales of properties of RMB1.499 billion, or million square metres by gross floor area. (Infocast News)

5 Today s Sector Focus Property Management company CG services (6098.HK), a spin-off from the Country Garden Group (2007.HK), is due to list on 19th June through introduction of the entire issued share capital of the company. Other property management shares act as shadow stocks and they were sought after yesterday. Zhong Ao Home (1538.HK) Has had a steep rally in recent sessions. Turnover also expanded markedly in recent sessions. 14-day RSI suggests the counter is seriously overbought. Color Life (1778.HK) Embarked on an uptrend again after a noticeable correction. Trading above all major MAs is a positive signal. The rise was accompanied by hefty turnover.

6 A-living (3319.HK) Has had a good run in recent weeks. The increase in turnover is a positive sign. Hang Seng Composite Sectors Sector Index Day (%) Week (%) MTD (%) YTD (%) Hang Seng Index (HSI) 31, Hang Seng Composite 4, HSCI Utilities 7, HSCI Industrial Goods 1, HSCI Materials 7, HSCI Conglomerates 2, HSCI Telecommunication 1, HSCI Property & Construction 4, HSCI Info Technology 14, HSCI Consumer Goods 6, HSCI Financials 4, HSCI Services 4, HSCI Energy 10, HS Mainland 100 9, HS China Enterprises 12, HS China H-Financial 18, HS China Affiliated Corps 4, HS HK 35 3, HS HK Large Cap 2, HS HK MidCap 5, HS HK Small Cap 2, Source: Bloomberg

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