Sales commentary, not BofA research

2^nd. Focus is back on value stocks (vs gwth) which could bode well for RE names (see note below from Savita).  Investors are showing a near record overweight in Growth.  In that context, I thought this chart from my colleagues in India (re Indian stocks) was interesting  

Source:  Bloomberg

Headlines

l  Y’day: NKY -0.87%, HSI -1.14%, SHCOMP -0.83%, KOSPI -0.11%

l  Overnight: Dow +2.13%, SPX +1.34%, Nasdaq +0.94%

l  COVID: Moderna vaccine è antibodies in all patients tested in initial safety trial, federal rschrs said

l  OIL: OPEC+ seeking extra production cuts from members that missed their tgts again in June

l  US: Trump issued an order to end HK’s special status w/ US

l  US: Trump signed HK bill which would sanction CN officials for cracking down political dissent

l  US: Re Phase 2, Trump "not interested right now in talking to China" b/c of virus pandemic

l  US: Reverses Student Visa Curbs After Harvard, MIT Fight

l  UK: Bans Huawei from 5G networks by ‘27; blocks new Huawei 5G equipment buys from end ‘20

l  CN: Shenzhen rolls out property tightening measures… but mild – imposed on singles

l  CN: Regulators to move to avoid shadow banking resurgence. Concerns funds flowing into stock mkt 

l  CN: 2 banks in East China have asked PBOC to ease capital adequacy rule, Reuters reports

l  CN: Spate of China Bank Runs Force Police, Regulators to Act (BBG)

l  CN: To lift ban on cross-province group tours

l  HK: DisneyLand announces temp closure due to increasing #of new COVID-19 cases.

l  HK: Emirates Airlines halts flights to & from HK

l  HK: Reports 48 new virus cases 14 Jul: 40 local. 24 w/ unknown sources of transmission

l  HK: Most short sold names y’day in HK incld Hysan (14, 64% of turnover) & Wharf REIC (1997, 44%)

l  JP: Tokyo to Raise Covid-19 Warning to Highest Lvl, Asahi Says

l  SG:`Very concerned' a/b 2nd virus wave: Chan

l  AU: VIC records 238 COVID cases in past 24hrs

Finally: Walmart is soon to unveil Walmart+, a $98/yr subscription plan that provides members w/ a # of perks that will incl "same-day delivery of groceries & general merchandise, discs on fuel at Walmart gas stations, & early access to product deals," according to multiple sources.  The program seems to be directly competing w/ Amazon Prime, which already offers many of the same benefits.  The fight over same-day grocery delivery benefits b/w Walmart+ & Amazon Prime will largely be fought by varying zip code demographics.  Amazon acqd the upscale Whole Foods in 2017, the locations of which are largely in urban & tonier suburban areas. Walmart, on the other hand, is nearly ubiquitous around the nation. 90% Americans live w/in 10 miles of a Walmart, which presents a much larger mkt opportunity for Walmart+ for subscription-based & same-day grocery delivery. (MSN) 

SZ rolls out 8 prop tightening measures. Key points incl: 1) People can buy a home a/f getting SZ Hukou for 3yrs. 2) Improve differentiated housing credit measures. 3) Adjusted VAT exemption period for 2ndary housing from 2 yrs to 5 yrs. (JRJ) >>> It is much milder than expected. Only imposed on singles & still large room for speculator to bypass.

China resumes inter-provincial team tourism, per Ministry of Culture & Tourism. (The Paper)

At least 10 cities & provinces launched measures to cool resi prop mkts in school districts. (CN Daily)

Sinic (2103HK) 1H contract sales Rmb43.5b, completed 40% of FYr tgt. (Co)

Tahoe appointed financial advisor with regard to its debt restructuring (the Paper)

CR Land: 1H rental fell 12% YoY (announcement): But in June, investment properties of CRL recorded Rmb1.078b rental income, YoY growth of 3.8%. June rental income performance slightly improved vs. May (+3.5% YoY).

5I5J (000560 SZ): negative earnings alert (announcement)  5I5J, a secondary home agency in mainland China expects to record Rmb30-40m net profit in 1H20, representing the YoY decline of 90%.

SZ Inv (604) 1H contract sales +17.8% on yr

Wheelock puts 36 units in Ocean Marini resi project up for sale this Sat, price HK$14,854-18,108/ft². Co sold total 1615 units of Marini series projects for HK$14b since start of sales. (Co) Px flat vs previous batch, but +14% vs 1st batch launched in early-March.

Henderson Land sold a roof unit in Novum West resi project, Sai Ying Pun for HK$60.4m, or HK$48,000/ft² (new high record in the project). Only 4 out of 645 units remain for sale. (HKET)

Landlords start to offer rental concessions a/f latest social-distancing measures (HKET) Bridgeway Prime Shop Fund cut rent by 30% & purchased shopping coupons (to be given out to consumers) for certain F&B street shop tenants.  Laws Group will offer rental concessions to F&B tenants at D2 Place in Cheung Sha Wan in July, after having made such concessions in Feb-Apr.

Citibank raises mortgage spread (Apple Daily) A/f moves by HSBC + BOCHK, Citibank raises mortgage rate from HIBOR+1.4% to HIBOR+1.5% for mortgage loans below HK$6m.  Prime rate cap remains P-2.75%, or 2.5% currently.

Chow Tai Fok reports 72.5% SSS decline in June quarter (Apple Daily)  Down 72.5% YoY in HK; 93.2% YoY in Macau in June Q.  China SSS fell 11.2%.  Closed 3 shops in HK/Macau in the Q.

Eslite leased 8,000 sqf space at Sino Land’s Olympic City Three (HKET) Former POPULAR bookstore space.

Singapore’s GDP ↓12.6%YoY in 2Q20, per Flash data.  Worse than economists' xpctns of ↓10.5%, worse than 1Q's revised ↓0.3%. Fullyr f/c -7% ~ -4%. (Biz Times)

Guocoland group CFO Lim Yoke Tuan resigns a/f 2yrs at the job; no replacement named yet. (Co)

6-storey Genova Industrial Bldg + office unit in Suntec City Twr 1 are up for sale w/ guide prices S$12m to S$13m, & S$2,900/ft² respectively. (Biz Times)

2 corner shophouses in Lavender for sale w/ S$13.2m guide price, freehold site 2,848ft². (Biz Times)

Syd CBD apts vacancy moderated in Jun, 1^st ↓since onset of pandemic; but asking rents also ↓sharply. (AFR)

Melb Hotel occupancy ↓53.4%YoY to 34% in Jun, per STR.  Hotel demand in most Australian mkts unlikely to return to pre-COVID-19 lvl until 2023. (Hotel News Resource)

Qube sells Minto props in Syd’s south west to Charter Hall entities for A$207m, initial yld 4.76%. (Co)

Ichigo Q1 (Mar 1-May 31) Rev ￥22.7b (↓13.5%YoY), Op profit ￥3.65b (↓57%), NI ￥2.2b (↓55%). (Co)

Gurugaon devr M3M raised Rs5.7b ($76m) from Oaktree Capital thru non-convertible debt. (VCCircle)

Oberoi Realty 1Q Net Income Rs280.7m, ↓82%YoY.  Revenue Rs1.18b, ↓80%YoY. Raising of Funds: approves raising Rs15b via debentures; raising up to Rs20b via equity sale. (Co)

Godrej hiked stake in Sobha from 1% to 9.99% in March qrtr. (BQ)  >> nb Kunal says this is the private family side, not Godrej props

Prestige Estates Unit buys stake in DB (BKC) Realtors. (BBG)

Malaysia’s retail industry sales xpctd to ↓ 8.7%YoY in 2020, per Retail Group Malaysia. (Star)

Govt made no formal announcement on Metro Manila (NCR) lockdown status which expires today. Those who are tasked to enforce quarantine rules believe the NCR would most likely retain its GCQ status & Cebu in ECQ. Govt with the help of the LGUs plan to launch a house-to-house search for Covid19 patients they can transfer to monitoring facilities.

* My pa holdings: BAC US, 1 HK, 6 HK, ST SP