Headlines

l  Y’day: NKY +0.73%, HSI +2.31%, SHCOMP +0.2%, KOSPI +1.39%

l  Overnight: Dow +0.6%, SPX +0.17%, Nasdaq -0.81%

l  COVID: Antibodies in patients w/ mild symptoms fade fast, ↑ concerns immunity short-lived - new study

l  EU: Reaches historic €750b deal on pandemic recovery a/f fractious summit

l  US/CN: US Dept of Justice indicted 2 CN nationals for govt sponsored "decade-long cyber espionage" …
…in 11 western countries in areas incl defense + COVID rsch

l  US/UK/CN: Pompeo met Dominic Raab in London & called for a "coalition" to resist Chinese threats

l  US/CN: US Defense Sec Esper said he hoped to visit China by yr end to discuss areas of mutual interest

l  CN: Xi said China to implement more proactive fiscal policies

l  CN: Requires virus test results for inbound air passenger

l  CN/FR: China & France pledge more cooperation on plane sales & 5G

l  HK: HK govt said speculation on lock-down in the nxt few days is false

l  HK: Caixin says Didi Chuxing is preparing to list at HKEx (388)

l  HK: Luk Fook (590) Apr-Jun SSS -71% on yr

l  HK: Harbour City offers rent concessions & shocks tenants with lease renewal terms

l  AU: VIC records 484 new Covid cases

Prologis report 2Q:  beats highest est; increased outlook for devt starts. Leasing spreads strong & cash SS NOI grew 2.9% in 2Q.  Jun 30 occupancy +20 bps to 95.7% QoQ.  HOWEVER: Asia occupancy ↓350bps YTD.  PLD pointed to small space in China less than 100K SF weighing on Asia occupancy.

Finally:  New laptops all round?  The US back-to-school shopping season will be a ‘dud’, 1 analyst says, but the National Retail Federation is forecasting a record breaker. “I am not sure what will ultimately happen, but LA & San Diego schools are virtual-only for the fall, & I suspect that many blue-state districts (in high population areas) will do the same, so back-to-school shld be a dud,” said Michael Pachter, MD at Wedbush.  On the flip side, the National Retail Federation says back-to-school cld be a blockbuster. Parents of children in elementary & high school plan to spend an avg of $789 per family, while college students & their families xpct to spend $1,059, according to the group’s latest data. Both are record amts.  NRF attributes the record-breaking spending to purchasing computers & laptops. 63% of families w/ children in grades K-12 + 60% of college shoppers say they will buy a computer.  Wedbush’s Pachter disagrees w/ this f/c. “While I agree that more kids are going to need PCs to continue w/ remote learning, I think it is likely that the uptick in demand from those households who don’t have a PC will be offset by those households w/ 1 or more parents laid off or unemployed b/c of the pandemic, & I think the latter households will try to let the kids use existing equipment rather than buying new equipment,” he said. (MSN) …another reminder about how the virus situation is discriminating

Sunac China reportedly considers $1b prop mngt IPO in HK per IFR. (Guandian) Property management spin-off and listing likely an upside catalyst. Based on 35x 2020E P/E, the unit could be worth HK$18.7bn or about 11% of Sunac’s market cap vs. only 1.6% of overall profit.

New tightening policy in Shenzhen begins. An agency says 35% clients were unable to obtain home purchase qualifications under the new tightening policy, cld cut 35-50% home-purchasing demand. (Netease News)   Since 2016, nearly 1mn people obtained Shenzhen Hukou. Most of these people will lose the home-purchase qualification under the new policy.

Shenzhen unveiled new urban redevt regulations. If approval rate to be bought out exceeds 95%, govt can force the remaining 5% to sell. + new rule sets up minimum compensation. (Guandian)  .

Qingdao says new homes’ buyers have rights to delay or reject the delivery of prop upon completion. If the house delivered is not in line terms specified in the contracts (eg. fl plans), buyers can cancel the contracts. (Guandian).

Evergrande Chairman Hui Ka Yan bought 5.5% interest in China Bohai Bank IPO at total consideration of HK$763mn (Apple Daily)

China Vanke repurchased bond for Rmb2.98bn. (Co)

A-Living (3319) +ve profit alert: 1H net profit attributable to sh/ldrs +35-50%YoY. (Co)

Jiangsu Province 1H RE invsmt ↑3.1%YoY, resi RE invsmt ↑4.8%YoY. (The Paper)

China OCT acq a 56.5k m² resi site in Tangzhen, Shanghai for Rmb5b, or Rmb44,000/m² based on fl area. (The Paper)

Guangzhou R&F reportedly plans to sell Rmb1b-2b local bonds on Shenzhen xchng as early as this mth, maturity ≥ 2 yrs. (BBG)

Greenland restructuring: Shanghai SASAC plans to sell partial stake in Greenland in mixed ownership reforms (21Jingji)

Greenland Prelim 1H NI ↓11% to Rmb8.02b, revenue Rmb210b, EPS Rmb 66c, 1H contracted sales val ↓21%YoY. Chairman Zhang Yuliang xpcts Greenland’s FY key earnings indicator to rebound. Liquidity condition to further improve; vows to ensure funding chain safe. (Sina)

Ronshine China proposes domestic bonds of up to Rmb4b, 1^st tranche w/ face value of up to Rmb1.65b approved by Shanghai Stock Exchnge, term 4 & 5 yrs, w/ option for issuer to adjust coupon rate & put option for investors at end of 2^nd & 3^rd yr respectively. (Co)

Harbour City offers rent concessions & shocks tenants with lease renewal terms. Tenants have a July 24 deadline to accept the retail landlord’s terms or forego rent concessions. Some have expressed discontent & shock over the tactic, given the state of the industry and a 3^rd wave of coronavirus cases. (SCMP)

National security law: S. Korea’s largest internet portal Naver moves data centre from HK to Singapore amid concerns Chinese authorities cld use the new legislation to access users’ info. (SCMP)   >>> think this might be owned by Equinix

SHKP puts 108 units in Regency Bay project, Tuen Mun up for sale this Sat, price HK$14,992-19,922/ft². Received total 1300 subscriptions. (Co)

Some Japanese firms consider reducing exposure in HK. Out of 600 Japanese firms were polled by their consulate, 37% wld consider reducing their HK offices, or even withdrawing. 35% wld continue w/ their current strategy. (Nestia).

Luk Fook Jewellery SSSG ↓71%YoY 2Q (vs. -57% 1Q). Plans to close 5 HK stores (out of 49). (Metro Radio)

HK govt puts up a resi site in Tai Po for tender, close on Jul 24. Total GFA 781,897ft², mkt val HK$3.9b (Sina) >>> Comment: The land costs in Tai Po (except Pak Shek Kok) ranged from HK$1.8k-7.0k psf while primary market price ranged from HK$11-14k psf.

12 units were sold in the primary market on 21 Jul as of 9pm, despite resurgence of coronavirus cases. Incl 2 2-bedroom units at Evergrande’s The Vertex (Cheung Sha Wan) for HK$10.1mn & HK$10.2mn + a large unit at Citic’s The Entrance (Ma On Shan) for HK$18mn. (HKET)

Hoe Chiang Rd site in CBD up for sale w/ S$715m guide price. The freehold 39,337ft² site has been approved for hospitality use w/ GFA 248,483ft². Provisional permission was granted early this yr, which allows for add’l 25% GFA approved for proposed use on the site. (Biz Times)

Pil Bldg put on the mkt w/ S$350m guide price, ~S$3,265/ft² based on existing ~107,200ft² NLA; EOI draws strong interest. (Biz Times)

CMT & CCT update on proposed merger. Both are working towards convening the CMT EGM, CCT EGM & Trust Scheme Meeting (as the case may be) b/f 30 Sep. (Co)

CapitaLand Mall 2Q DPU S$0.0211 vs S$0.0292 YoY. 2Q NPI S$68.1m, ↓49%YoY; distributable income S$78.1m, ↓27%YoY; gross rev. S$114.1m, ↓40%YoY. CMT has bank facilities in place for working capital requirements of FY20 & FY21.  Remains cautious in the near-term given economic weakness & softening demand for retail space. (Co)

CapitaLand Commercial Trust directors receive units as part payment of director’s fee for FY19 @ S$1.7578/unit. Soo Kok Leng 14,885 units, Ng Wai King 6,826 units. (Co)

CapitaLand anncd application of scrip div scheme to FY19 div. (Co)

Keppel DC REIT distributable income ↑38%YoY to $75m in 1H20, largely contributed by the acqns of Keppel DC Singapore 4 & DC1 in 4Q19. (Co)

Mapletree Industrial Trust DPU ↑0.7%QoQ or ↓7.4%YoY in 1Q to 2.87c. 1Q Distributable Income ↑11.6%YoY to S$70.6m (Co)

Cromwell board advises securityholders to ‘Ignore ARA’s Opportunistic Proportional Takeover’. (Co)

Charter Hall names Carmel Hourigan as new Office CEO, replacing Adrian Taylor who leaves to pursue other opportunities. (Co)

Vicinity Centres 15m share block trades at A$1.35/sh. (Co)

Australia Preliminary Retail Sales +2.4% in June (BBG) “led by cafes, restaurants & takeaway food services. Many businesses in these industries saw a full month of trade, having been closed for 1^st wk of May 2020. Turnover in these industries remained below the levels of June 2019,” the ABS said.  “Food retailing +0.9%, ↑ in supermarkets & grocery stores offset by ↓ in liquor. Levels in supermarkets % grocery stores remained elevated, with evidence of stockpiling occurring at the very end of June, particularly in Victoria”

Nomura Secs’ stake in Mitsubishi Estate ↓to 4.83% from 5.04%. (Kabutan)

Nomura Secs’ stake in Mitsui Fudosan ↑to 5.61% from 5.23%. (Kabutan)

Zoom opens up new technology centre in Bengaluru. COO says will allow paid users to choose where to store their data. (Biz Insider)

CapitaLand Malaysia Mall REIT 1H NPI ↓43%YoY to RM58.7m due to rental waiver & rental relief granted to tenants, 1H DPU 1.01 sen, income available for distribution RM20.8m. >90% of co’s tenants have reopened & resumed normal trading hours as of July 5. Portfl occupancy as of Jun 30 ↓to 88.3%. (Co)

MEG said reservation sales reached Php38bn in 1H20. This implies sales of Php18bn in 2Q20 alone. This puts them halfway to their FY20 tgt of PhpPhp75bn, which they raised from Php50bn in June. However, the 1H20 reservation sales figure is still 53% down vs 1H19 & 45% lower than 2H19. MEG

AP (Thailand) disclosed the Minutes of the AGM for the yr 2020. (Co)

Taiwan's export orders ↑ 6.5%YoY to US$41b in Jun. (Taipei Times)

1H FDI in Taiwan approved by the govt ↑ 9.27%YoY to US$3.84b. (Taipei Times)

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