Nomad Investors

HKEX (00388.HK)    -1.100 (-0.613%)      Short selling $30.91M; Ratio 4.829%     expects a trading link with the Shenzhen Stock Exchange to be launched in the second half of this year, Reuters cited the source as saying. Such timeline could lower China's chance of being included in the MSCI Index.

HKEX (00388.HK)    -1.700 (-0.935%)      Short selling $126.70M; Ratio 12.786%     issued a notice to securities brokers that the Exchange will carry out a test for the short selling function under the Shanghai-Honng Kong Stock Connect at the end of this month, and the it tentatively aims to launch the service in February.

As the QE scale unveiled by the European Central Bank exceeded market projection, stocks with greater exposure of business in Europe were benefited, especially for CATHAY PAC AIR (00293.HK)    +1.020 (+5.910%)      Short selling $27.01M; Ratio 9.888%     , which advanced for 4 days, peaked at $18.3 (hitting nearly 3.5-year high) and last traded at $18.14, up 5.1%, with volume rising to 10.62 million shares. ESPRIT HOLDINGS (00330.HK)    +0.300 (+3.695%)      Short selling $18.18M; Ratio 28.361%     also snapped the two-day declining streak and rebounded 3.3% to $8.39 after hitting the high at $8.48. In addition, HSBC HOLDINGS (00005.HK)    +1.200 (+1.669%)      Short selling $318.83M; Ratio 10.684%     , moving up for four days, saw resistance at the 50MA and last stood at $73, up 1.5%, with volume increasing...

Credit Suisse said in a research report that Macau's fourth-quarter gross gaming revenue declined 25% year-on-year or 9% quarter-on-quarter, showing a faster drop against the 7% decline in the third quarter. With the high-profit mass market turning more negative, it is estimated that gaming stocks' fourth-quarter EBITDA would fall 12% over the previous quarter, or drop 22% compared with a year ago; the EBITDA profit margin forecast was reduced by 1.2 ppt.  The broker further pointed out that in terms of revenue, MELCO CROWN (06883.HK)    0.000 (0.000%)      is the only one operator that recorded a quarterly growth (about 3%) in 4Q2014. WYNN MACAU (01128.HK)    +0.050 (+0.249%)       Short selling $73.31M; Ratio 51.006%      's EBITDA may see a substantial decline of 25% quarterly due to the possible loss of market share.  Credit Suisse suggested investors should slowly add quality gaming stoc...

CITIC SEC (600030.SH)'s substantial shareholder cut 348 million shares or 3.16% equity interest in the company last week. Meanwhile, the company was asked to suspend the account opening of new margin financing, together with HAITONG SEC (600837.SH) and Guotai Junan, for three months as a result of a crackdown by the China Securities Regulatory Commission (CSRC). In addition, the China Banking Regulatory Commission (CBRC) recently released the draft of management methods on commercial banks entrusted loans.  Shanghai and Shenzhen stock markets were under hefty selling pressure today. Shanghai Composite Index fell from its near 5.5-year closing high, with a plunge of 8.3% at most, and ended the day trading at 3,116, down 7.7%. Shenzhen Component Index hit the intraday low of 10,634 and closed the day at 10,770, down 6.6%. ChiNext Index edged down 0.6% at close after rising to 1,691. Turnover of the two markets rose further to RMB409.8 billion and RMB291.4 billion, respectively. In...

Deutsche Bank pointed out that CCB (00939.HK)    -0.020 (-0.312%)    Short selling $30.99M; Ratio 4.262%   's management predicted that the bank's net interest income growth will be weak this year, as the 10% (yoy) loan growth target will be offset by the narrowed profit caused by the rate cuts. The Bank estimated that CCB can maintain a dividend payout of about 35% this year, and may have a chance to issue preferred shares in the second half of the year at the earliest. The target price was set at $8.46, with a Buy rating

According to Morgan Stanley's report, it is believed that CHEUNG KONG (00001.HK)    +0.200 (+0.140%)      Short selling $84.50M; Ratio 7.983%     's share price has a chance of 80% or above to outperform the industry in the coming 60 days, mainly because the announced reorganization plan of Chueng Kong and Hutchison has helped improve the transparency, removed double discount and signified a decline in WACC, which suggests re-rating opportunities. In addition, Cheung Kong planned to raise the dividend payment for this and next year. The group can also benefit from the further integration of telecom business in the UK and Italy. The broker gave the Overweight rating on the stock.

Morgan Stanley believed that the share price of CHINA MOBILE (00941.HK)    -0.200 (-0.210%)      Short selling $93.39M; Ratio 15.005%     will increase in the next 60 days. The broker was bullish on Chinese telcos, mainly attributable to the effective cost control and positive impacts bought by tower company. China Mobile remained the top pick within the industry due to the continuous 4G advantage and possible surge in earnings. In addition, the upside of tower spinning-off was not yet taken account in the share price. The research house expected that there will be an 80%+ chance for the rise in the upcoming 60 days.

Morgan Stanley expected that the share price of BYD ELECTRONIC (00285.HK)    +0.650 (+9.003%)      Short selling $37.81M; Ratio 44.766%      will rise in 15 days, with a possibility of 60% to 70%. The expected increase was due to the attractive valuation in near-term after the recent sharp decline. The stock is trading at PE of 9.6x, compared with 10x to 14x in the past profit growth periods. The share price of BYD Electronics was corrected by approximately 30% from its peak on 8 October, as dragged down by the intensive competition in metal casings and negative news of its parent company.

JP Morgan predicted that the U.S. stocks have a positive outlook next year, the target of S&P 500 Index for 2015 was set at 2,250, suggesting potential upside of nearly 9%; and index constituents' 2015 earnings growth was predicted to be 8%, representing an estimated comprehensive P/E of 17.7x.  Moreover, the broker also anticipated that the Federal Reserve might start to raise interest rates in June 2015 and the market will reflect the liquidity factors, so the volatility of the market next year will be greater than the first half and the fourth quarter of this year.

Shanghai Composite Index and Shenzhen Component Index traded mixed in the afternoon session. The former peaked at 3,117 and eventually gained 51 pts or 1.67% to 3,108, fueled by the rally of banking and brokerage shares. Shenzhen Component Index fell 38 pts or 0.36% to 10,627. Turnover of the Shanghai and Shenzhen markets equaled RMB515.6 billion and RMB285.6 billion, respectively

BYD COMPANY (01211.HK)    -10.150 (-28.835%)      Short selling $7.37M; Ratio 6.180%     , in response to the request of the HKEx, said in a statement that it is not aware of any reasons for today's price or volume movements.  The H shares once slumped over 40% today, and it was last traded at $26, down 26%, on volume of 233 million shares

Morgan Stanley maintained the rating of SMARTONE TELE (00315.HK)    +0.500 (+4.630%)      Short selling $737.70K; Ratio 4.934%     and HUTCHTEL HK (00215.HK)    +0.050 (+1.656%)      Short selling $65.64K; Ratio 1.550%     as Overweight after the spectrum auction. HKT-SS (06823.HK)    +0.320 (+3.265%)       Short selling $1.40M; Ratio 15.869%     and PCCW (00008.HK)    +0.010 (+0.194%)      Short selling $3.82M; Ratio 20.462%     was kept at In-line. The broker pointed out that SmarTone Telecommunications and Hutchison Telecommunications Hong Kong sustained the spectrum at a low price, which was 27% lower than estimates, while CHINA MOBILE (00941.HK)    -2.100 (-2.238%)      Short selling $54.29M; Ratio 9....

Shanghai Composite Index and Shenzhen Component Index saw rising sell orders in the afternoon and finally ended at 2,856 and 10,116, down 5.4% and 4.2% respectively. Turnover of the two markets increased to RMB793.3 billion and RMB473.1 billion (or RMB1.2664 trillion in total, hitting a record high again).  In the Shanghai-Hong Kong Stock Connect sector, 40 stocks were suspended against further decline. 

At midday close, Hang Seng Index and China Enterprises Index were last traded at 24087 and 11805, up 85 pts and up 204 pts, respectively, on turnover of $57.435 billion.  Mainland insurers and banks led market gainers. PING AN (02318.HK)    +3.150 (+4.315%)       Short selling $769.86M; Ratio 25.880%      soared 4.4% to $76.2, being the best performer of blue chips; CHINA LIFE (02628.HK)    +0.500 (+1.789%)       Short selling $97.34M; Ratio 10.521%      jumped 1.6%; BANK OF CHINA (03988.HK)    +0.190 (+4.600%)       Short selling $107.07M; Ratio 6.114%      ICBC (01398.HK)    +0.200 (+3.650%)       Short selling $87.18M; Ratio 4.339%      and CCB (00939.HK)    +0.240 (+3.890%)       Short selling $86.09M;...

UBS stated that the MIDH group of LENOVO GROUP (00992.HK)    +0.120 (+1.130%)      Short selling $6.53M; Ratio 5.489%     has been marginally profitable since the group sold a number of models at low prices and expanded the operating scales. The broker believed that Lenovo is streamlining its product portfolio, of which the supply chain management is better than MIDH group. The broker believed that it's relatively easy for the company to reach the pre-tax income target of US$250 million in the third quarter due to the gradual recovery of PC demand in China. The earnings forecast in 2015 to 2017 was lowered from US$0.084/0.111/0.128 to US$0.078/0.104/0.119, reflecting the share dilution and revised assumption for business earnings forecast on Motorola and X86 server business. The target price was cut from $13 to $12.8 and the rating was maintained at Buy.

JP Morgan stated that the earnings of PRADA (01913.HK)    -3.300 (-6.984%)      Short selling $21.97M; Ratio 21.799%     achieved a yearly decrease of 28% in the first nine months with a plunge of 44% in the third quarter, missing the estimates. Hence, the earnings forecast was trimmed by 10% and 6% in 2014-15 and the target price was cut from $46.2 to $40. The valuation was not attractive despite the continuous fall since early 2014. The rating of Prada was maintained at Neutral since the revolution in leather goods business was not yet successfully implemented. 

JP Morgan stated that LINK REIT (00823.HK)    -2.300 (-4.492%)      Short selling $83.38M; Ratio 14.000%     closed at historical high at $51.2 due to its inclusion in the Hang Seng Index at the close on 5 December. However, the DPU failed to support the current valuation. Since the current valuation is too high, the rating was maintained at Neutral with a target price of $47.5. Since the stock price will be faded by 7.7% in general over a month following the re-balancing, it is believed that the share price may be reversed in the near-term and hence suggested investors to take profit from the stock.

China export value continued higher by 4.7% yearly in November, but missing estimates for 8%. Meanwhile, the export value fell 6.7% yearly, intensifying hopes for reduced RRR in near term.  Shanghai Composite Index and Shenzhen Component Index closed the day at 3020 and 10554, up 2.8% and up 4.8%, on turnover of RMB593.4 billion and RMB387.5 billion, respectively.  Brokers soared on back of high market turnover. CITIC Securities (600030.SH) and Haitong Securities (600030.SH) were caped for further growth at RMB25.5 and RMB19.72, respectively. Meanwhile, the four major insurers gained 3.7%-9.6%. Ping An Insurance (601318.SH) closed at RMB64.83, hitting a new high. Meanwhile, China Construction Bank (601939.SH) continued higher by 7.2% to the new high RMB6.11.

JP Morgan upgraded the rating of CLP HOLDINGS (00002.HK)    -0.950 (-1.408%)     Short selling $5.61M; Ratio 4.365%   from Underweight to Neutral and the target price was lifted from $59 to $68. The adjustment was mainly attributable to the improving prospect in Australian business and expected smooth passage of the HK tariff hike on 16 December. It is believed that the increasing rating for CLP Holdings will be around 5%, lower than the estimation of 11.8%. The company's new investment will be refrained in China, India and Vietnam. Of all the utilities stocks, the broker preferred CKI HOLDINGS (01038.HK)    -0.300 (-0.523%)    Short selling $1.43M; Ratio 6.357%    and POWER ASSETS (00006.HK)    -1.450 (-1.958%)     Short selling $3.34M; Ratio 3.108%   due to M&A or special dividend. Investors who are looking for yiel...