In this briefing:
- Hong Kong Connect Weekly: SMIC, Shandong Weigao, Xiaomi, Anta
- SH/SZ Connect Flow Weekly: Midea, China Intl Travel Service, Gree
- Smartkarma Webinar
- Big Apparel in Trouble: Renown Finally Goes Under
In our weekly HK Connect Flow series, we aim to highlight key stocks and sectors which the mainland investors traded via the southbound Hong Kong Connect, as analyzed by our proprietary data engine.
Since the opening of Hong Kong Connect scheme in 2014, southbound Chinese money started to play an increasingly important role in the Hong Kong stock market. In a Hong Kong exchange report released in July 2019, the exchange highlighted that flows from mainland China accounted for 12% of the total trading volume in the market and is ahead of the US investors’ 10% and UK investors’ 7% share respectively.
We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.
In this insight, we will highlight inflows into Semiconductor Manufacturing (981 HK) , Shandong Weigao Group Medical Polymer Co (1066 HK), and Xiaomi Corp (1810 HK), as well as outflows from Anta Sports Products (2020 HK). We note that Shandong Weigao announced last week that it plans to list its orthopedic segment on the STAR board.
In our weekly Shanghai/Shenzhen Connect Ideas series, we aim to highlight key stocks and sectors which the mainland investors traded via the northbound Shanghai and Shenzhen Connect, as analyzed by our proprietary data engine and highlight interesting trade ideas.
In this insight, we will have an overview of the weekly inflows into the A-share market via Shanghai/Shenzhen connect, top inflow and top three outflow stocks. We will also cover inflows and holdings by sectors, after which we will highlight top five inflows and outflows on a relative basis for large-cap and mid-cap stocks: stocks with a market capitalization above $5 bn, and those between $1 bn and $5 bn.
In this insight, we will highlight inflows into Midea Group Co Ltd A (000333 CH), Beijing Oriental Yuhong A (002271 CH) , and Boe Technology Group (000725 CH) , as well as outflows from China International Travel Service (601888 CH) , and Gree Electric Appliances (000651 CH).
In this Smartkarma Webinar, Thomas Schroeder will provide his technical outlook for markets. After the recent melt-up, markets are up against renewed concerns from:
- A second wave of COVID-19 cases in the US
- Unexpected lockdowns in Beijing
- Diminished short-base after extensive covering
- Oversold levels on the Dollar Index (DXY) (DXY CURNCY), as well as,
- An acceleration in new capital raising
The webinar will be held on 17 June 2020 at 1700hrs Singapore/Hong Kong time.
Thomas Schroeder starting using charts and trading in the FX markets in 1989 and entered the equities arena in 1992 with Deutsche Bank as a fundamental analyst but found himself relying more on inter-market cycles and charts. In 1994, he become the Asian head of Technical Research for UBS Securities in Hong Kong and in 1997 was charged with heading the Global Technical Research team for SG Securities. In July of 2003, Chart Partners Group Limited was formed which provides clients with timely and accurate progressive trading strategies within a truly global context.
For nearly 30 years, Renown (3606 JP) was the worst of the bunch but it has at last been forced to file for bankruptcy protection, with wider implications for the apparel and department store sectors. Other apparel firms like Sanyo Shokai also look to be in trouble.
In the end, the crisis in the big apparel firms is also a crisis for department store apparel floors. Given that 30% of department store sales come from apparel and, other than cosmetics and jewellery, what profit there is in department stores also comes from clothing, this remains a serious problem. When Onward, Renown, Sanyo Shokai and others close down so many brands in so many department stores, the buildings themselves lose even more lustre, making it harder to find new tenants or wholesale suppliers. More closures and mergers may be on the cards (for details see below).
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