Headlines

l  Y’day: NKY +1.7%, HSI +2%, SHCOMP +0.11%, KOSPI +1.29%

l  Overnight: Dow +0.62%, SPX +0.36%, Nasdaq +0.35%

l  Gold: New highs overnight printing $2026.19

l  US: moderately higher as investors weighed prospects for another govt stimulus package

l  US/CN: CN vows retaliation if US persists on hostile action re Chinese Journalists.

l  US/CN: US & China will hold high lvl talks on Aug 15 to assess Beijing's compliance.

l  US/CN: Reuters report that China only fulfilled 5% of Sino-US energy trade deal in H1 of 2020

l  IN/CN: Reports that India is planning to ban Tencent & Bytedance

l  HK: France halts approval of extraction treaty w/ HK (AFP)

l  CN/FT:  French decision interferes in China’s internal affairs

l  HK: 75 local cases y’day w/ 50 preliminary cases on Aug 4th (same as Aug 3rd)

l  HK: Jul home sales ↑35%YoY in val, per Land Registry

l  HK: Swire Props reportedly sold 2 office bldgs at Miami’s Brickell City Centre for $163m

l  SG: SGX to launch 2 int’l REIT futures products

Today:  Top question I got last night was can the HK props keep running.  

I think they can.  Though maybe not in a straight line.

ü  US RE outperformed overnight (+1.49%).  Was M&A press in the hotel space & some earnings beats.  

ü  Positioning remains light in HK props (eg REIC borrow >11 days to cover), meaning y’days moves might draw funds to cover / narrow underweights.

ü  A lot of these moves are driven by the virus situation in which I have no edge & am reluctant to broke.  News on that front y’day: Improved – 75 local cases, only 50 prelim cases again, plans for dramatically more testing with mainland support;  vs comments that Mon/Tues are usually lower anyway & of cases in wet-markets.

ü  R_t falls to 0.88

Upcoming events / Conf calls:

Finally:  Read my mind?!!  Neurocientist Marcel Just & colleagues at Carnegie Mellon University are using fMRI brain imaging to decipher what a person is thinking. By using machine learning to analyze complex patterns of activity in a person’s brain when they think of a specific #or object, read a sentence, experience a particular emotion or learn a new type of information, the researchers can read minds & know the person’s specific thoughts & emotions.  Armed w/ the ability to know what a person is thinking, scientists can do even more.  The ability to control electrical activity in brain circuits has the potential to do for brain disorders what electrical stimulation has accomplished in treating cardiac disorders. By beaming electrical or magnetic pulses through the scalp, & by implanting electrodes in the brain, researchers & doctors can treat a vast array of neurological & psychiatric disorders, from Parkinson’s disease to chronic depression. (Scientific American)  

Sigma Delta Partners JV w/ an int’l insto investor, completed acqn of U-Show Plaza office complex in Beijing for $530m. (Mingtiandi)

Beijing govt rolled out guideline for property mgt industry (the paper)  Calling for 90%+ penetration rate by ‘22 for “prop services penetration”, “household committee penetration” & “CCP branch penetration”

CAS proposed 4 cities to be upgraded to municipalities (the paper)  China Academy of Science published an academic article recently proposing the upgrade of Shenzhen, Qingdao, Dalian and Kashgar to municipalities during the 14th Five-Year Plan (2021-25). However, CAS later stated the proposal was merely an academic essay.  Relevant stocks: Logan, and CRL (Shenzhen), Jinmao, COI,and Sunac (Qingdao), Shimao, and Sino-Ocean (Dalian).

Haikou issues guidelines for property market (Wind)  Haikou to crack down misconduct in property sales & marketing incl intentional launches delay, hire actors to queue up to create false sense of demand, etc.

Fuyang tightened housing provided fund (Guandian) city in Anhui province, tightened its housing provident fund policy to cease to grant new loan to household who plans to buy a third home.

CapitaLand sold 40% equity interest in Guangzhou Kai Ke Xing Mao RE Devt (GKK) to an unrelated party for Rmb395.7m. GKK owns a mixed-use site in Huangpu District, Guangzhou. (Co)

Vanke won’t provide extra financial aid to Tahoe beyond proposed 19.9% stake acqn, per Moody’s. Vanke will remain as a financial investor in Tahoe.  Will not provide guarantees to any of Tahoe’s debt. (Moody’s)

Yanlord Land (51%) / GIC (49%) form platform to co-invest in resi projects in China. Total invsmt Rmb7b ($1b) for 7yrs, w/ option to extend for 2 more. (Co)

Zhenro Jul contract sales Rmb13.6b (+35%YoY), GFA 902,692m², Jan-Jul Rmb69.6b, GFA 4.6m m². (Co)

Yuzhou Jul contract sales Rmb11b, GFA 676,295m². Jan-Jul Rmb53.9b, GFA 3.3m m². (Co)

China Vanke Jul contract sales Rmb59b, GFA 3.9m m². Jan-Jul Rmb379.5b, GFA 24.7m m². (Co)

Evergrande Jul contract sales Rmb50.3b (+24%YoY), GFA 5.4m m²(+40%YoY). Jan-Jul Rmb399.1b (+24%YoY), GFA 44m m² (+46.6%YoY). (Co)

Ronshine (3301) July contract sales -6% YoY

KWG (1813) July contract sales +38% YoY

HK Jul home sales ↑35%YoY in val, per Land Registry. 2^nd mthly ↑a/f declines in Jan-May period.  HK prop names trading at 8x xpctd earnings over nxt 12mths, vs peak of 27 reached in ‘07. (Gov.HK / BBG)

Swire Props reportedly sold 2 office bldgs at Miami’s Brickell City Centre for $163m, the largest sale to close in South Florida during the pandemic. (The Real Deal)

Swire Props secures 5yr HK$1b green loan from OCBC bank to fund its ongoing green bldg devts. Projects earmarked to benefit from the loan incl 2 Taikoo Place, a new triple Grade-A office twr at Taikoo Place set to launch in 2022. (JRJ)

Lifestyle pays no interim dividend; Kai Tak project completion delays (co) Lifestyle International (1212 HK), which runs SOGO department stores, reported a 63% ↓ in net profit in 1H20; no interim dividend.  Store operating rev ↓55% YoY. Its new IP project in Kai Tak will be completed in 2023, a delay vs the original 2022 completion plan due to COVID.

Asking rent falls to HK$40 psf at The Center (HK-01)  suggesting only 1% yield on investment for consortium buyers of the building from 3yrs ago.

Banks cut incentives for new mortgage applications (HKET)  Several banks (e.g. CCB) has eliminated cash rebate (e.g. 0.5%) for new mortgage applications involving loan size at less than HK$3m.

HKRI / Nan Fung put 6 units in La Cresta luxury resi project, Sha Tin up for sale by tender this Sat. (HKET)

Singapore's visitor arrivals in June sink YoY to 2,200. (Biz Times)

SGX to launch 2 int’l REIT futures products, based on indices tracking REITs listed in SG, HK, Malaysia & Thailand. 1^st int’l Reit futures in Asia. (Biz Times)

Qingjian / Perennial to launch sales of 633-unit Forett At Bukit Timah condo project on 8 Aug. (Yahoo)

ARA LOGOS Logistics Trust appoints Ms Karen Lee Kiah Ling CEO, effective 15^th Aug. (Co)

Frasers Logistics & Commercial Trust looking to acq 2 props in Australia & UK from sponsor Frasers Prop, + sell remaining 50% stake in a cold storage facility in Australia. (Biz Times)

Manulife US Reit H1 DPU ↑0.3%YoY to 3.05 US cents, gross revenue ↑18.3%YoY to US$98.6m, NPI ↑18.8%YoY to US$62.2m. (Biz Times)

Ascendas Funds & CapitaLand Singapore transferred aggregate ~690m units in Ascendas REIT to Ascendas Land. They are all wholly owned subsidiaries of CapitaLand Ltd. (Co)

Dwelling values across Aust ↓ 0.6%MoM in July, Syd ↓0.9% to A$866,110, Melb ↓ 1.2%MoM to A$678,334. (Perth Now)

Centuria Industrial REIT halted pending capital raising. (Co)   Telstra to sell Clayton Data Centre to Centuria for A$416.7m. Complex is 3.2ha, 10 bldgs. Sale incls triple-net lease-back arrangement; Telstra will retain ownership of all IT + telecom equipment. Lease for initial 30 yrs w/ 2, 10yr options for Telstra to extend the lease. (IT News).  A$340.8M ENTITLEMENT OFFER AT A$3.15/UNIT

Suntec REIT office devt Olderfleet at 477 Collins St Melbourne achieved practical completion. (Biz Times)

Costco plans A$60m, 14k m² warehouse & fuel station project in Lake Macquarie City, NSW. (Inside Retail)

Goodman Property Trust 1Q div NZ1.325cts. (BBG)

Tokyo Station’s newly enlarged shopping area opened doors a/f 1mth coronavirus delay, introducing >60 new stores & restaurants. (Japan Times)

Tokyo Tatemono sees FY operating income Y48b. Still sees FY net income Y31b, FY net sales Y350b, FY div Y45. 2Q operating income Y5.14b, ↓71%YoY;  net income Y2.83b, ↓72%YoY;  net sales Y55.43b, ↓45%YoY. (Co)

PGGM Vermogensbeheer’s stake in Tokyo Tatemono ↑to 6.29% from 5.25%. (Kabutan)

Resolution Professional for Housing Devt & Infrastructure has received expression-of-interest from 6 parties, incl Sunteck, Adani, Suraksha,  Int’l Asset Reconstruction, N S Software & Harsha Vardhan Reddy. (Mint)

LMIRT completes divestment of Binjai Supermall for IDR 262b (S$24.5m). (Biz Times)

COVID: DoH recorded its highest single day case count of 6,352 y’day. ~28% from Metro Manila/NCR which accounts for 67% of GDP.  Govt stated that it gave into requests by hospitals / medical workers being overwhelmed by recent spike in cases to go into tighter lockdown but also warned it cannot afford to keep the capital and NCR under MECQ status for long.

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