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Zhang Shidong

Azar Zaidi

Trade tensions have reappeared overnight, in US trading hours, and could determine the direction Asian equities take on Friday. 
Any comfort derived from stabilisation of the yuan by Beijing could also be short-lived as all eyes will once again shift to the daily reference rate against the US dollar.
We – Azar Zaidi in Hong Kong and Zhang Shidong in Shanghai – will stay abreast of all developments through the day. Stay with us as we keep you updated about the bourses in Hong Kong and mainland China.


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Stocks

Stocks blog: Shanghai Composite posts biggest weekly loss in three months

Business

Markets

Hong Kong stocks end week about 4 per cent lower
China consumer inflation accelerates at fastest pace since February 2018 


Trade tensions have reappeared overnight, in US trading hours, and could determine the direction Asian equities take on Friday.


China stock market

Hong Kong Stock Exchange

Live

Nan Hai Corporation (680.HK) and its Malaysian partner will take legal action after being blocked by Taiwan from developing a property project connecting metro stations, office buildings and shopping malls near the Taipei railway station over national security concerns. In June, Taiwan’s ministry of economic affairs blocked the consortium from transferring a NT$1 billion (US$32.2 million) down payment for the project because of Nan Hai’s connection with mainland China.
Nan Hai and Malton Berhad said the position taken by the authorities “is not only illegal under the relevant laws of Taiwan, but also contradicts the terms of the tender for the project”.
Nan Hai closed 1.4 per cent higher on Thursday at 14.1 HK cents.
The president of the largest coal miner in China has resigned after only 11 months in the post. China Shenhua Energy Company (1088.HK), also the largest state-owned coal mining company in China, said Zhang Jiming had with immediate affect on Thursday. The 54-year-old engineer became president in September last year. His departure was down to work adjustment, the company said, while Zhang confirmed he had no disagreement with the board. The coal miner has not announced a replacement yet. Its stock edged up 0.3 per cent on Thursday to close at HK$15.04.
PCCW (8.HK), the telecommunications and media company chaired by Richard Li Tzar Kai, the younger son of Hong Kong’s richest man, Li Ka-shing, reported a 12 per cent year-on-year decrease in its net profit to HK$163 million (US$20.79 million) for the first half of 2019. The decline was partly due to sluggish mobile product sales at HKT, with consumers delaying upgrades in anticipation of 5G handsets. Ebitda at its pay television unit, Now TV, grew by 3 per cent to HK$204 million as it streamlined its content costs. The company closed 1.2 per cent higher at HK$4.39 on Thursday.
Kasen International Holdings (496.HK), a sofa manufacturer that also invests in property and tourism businesses, said it expected its first-half profit will increase from 100 per cent to 400 per cent year on year from 103.9 million yuan (US$14.73 million). The strong growth was mainly due to an increase in delivery of residential buildings in mainland China. The company will announce its full results at the end of this month. Kasen was unchanged at HK$6.36.
– Enoch Yiu


Overnight filings on the Hong Kong stock exchange

Overnight markets/ What futures foretell:
– Overnight in US markets, the S&P 500 gained 1.9 per cent, the Nasdaq rose 2.2 per cent and the Dow Industrials added 1.4 per cent
– Hong Kong futures were 0.1 per cent higher, while the FTSE China A50 futures climbed 0.5 per centIPO debuts: Nantong Haixing Electronics (603115 CH) and Beida Jade Bird Universal Fire Alarm Device (002960 CH) will begin trading in Shanghai and Shenzhen, respectively, on FridayEconomic statistics/Central bank action: The National Bureau of Statistics will release July data on consumer and factory-gate inflation at 9.30am. Data on money supply and aggregate financing may also be releasedCorporate events: earnings, meetings, news conferences
– nothing major


Morning guidance

China’s central bank set the yuan fixing at 7.0136 against the US dollar on Friday, weaker than 7.0039 a day earlier. The yuan strengthened by 0.2 per cent against the US dollar yesterday, despite a weaker reference rate.
– Zhang Shidong 
 


China sets weaker daily yuan reference rate

China’s consumer inflation rose 2.8 per cent from a year earlier in July, the National Bureau of Statistics said on Friday morning. Producer prices fell 0.3 per cent, it added. A Bloomberg survey had forecast a gain of 2.7 per cent gain in consumer prices and a 0.1 per cent drop in producer prices.
– Zhang Shidong 


China consumer inflation rises at fastest pace since February 2018

Stocks in mainland China and Hong Kong extended their rebounds at the open on Friday, despite economic data showing inflation accelerated at its fastest pace since February last year. Li Chao, the vice-chairman of China Securities Regulatory Commission, talking up the market has added to the positive mood. The Shanghai Composite Index has added 0.4 per cent to 2,805.08, while the Hang Seng Index has added 0.6 per cent to 26,275.78.
– Zhang Shidong 


China and Hong Kong stocks extend rebound

Nantong Haixing Electronics (603115 CH) and Beida Jade Bird Universal Fire Alarm Device (002960 CH) have both jumped 44 per cent – the maximum allowed for stocks debuting on mainland Chinese exchanges – from their offer prices on their first day of trading. Nantong Haixing is traded at 14.66 yuan in Shanghai and Beida Jade Bird is at 24.97 yuan in Shenzhen.
– Zhang Shidong 
 


IPOs surge by daily cap on debuts in Shanghai, Shenzhen

China’s stock market regulator has joined in the condemnation of the US for intensifying its trade war with Beijing. In an interview with the state-owned Xinhua News Agency, Li Chao, vice-chairman of the China Securities Regulatory Commission, said Washington designating China as a currency manipulator had caused turbulence in global financial markets and was an irresponsible action that would hurt US interests too. He also dismissed the trade war’s impact on Chinese stocks, saying the country’s capital markets were becoming increasingly resistant to external factors because of economic growth potential at home, cheaper stock valuations and low leveraged bets.
– Zhang Shidong 


CSRC vice-chairman dismisses impact of trade war on China stocks

The China Securities Regulatory Commission said on Thursday night it had no plans of relaxing restrictions on overseas investors trading stock index futures. The regulator was responding to a report by Bloomberg News that cited unidentified people as saying that China was mulling the biggest changes to its futures market since 2015, an overhaul that would give global investors unprecedented access. The commission denied Beijing was mulling such an overhaul to attract more foreign capital.
– Zhang Shidong 


Top regulator denies media reports on easing foreign investment in index futures

Hisense Electric (600060 CH), China’s biggest maker of LCD television sets, tumbled by 5.2 per cent to 7.71 yuan in Shanghai trading, heading for its lowest close since January 2012. First-half net income at the Qingdao, Shandong province-based company decreased 82 per cent from a year earlier to 62 million yuan (US$879,370), Hisense said in an exchange statement last night. The company was struggling with shrinking demand and increasing competition from technology companies such as Xiaomi, whose online sales of TV sets took the No. 1 position in the first half, Shenwan Hongyuan Group said in a research note on Friday. The brokerage slashed Hisense’s earnings forecast for this year by 54 per cent to 281 million yuan and that for 2020 by 49 per cent to 393 million.
– Zhang Shidong 
 


China’s biggest flat TV panels maker drops to six-year low on earnings woes

Xtep International Holdings (1468 HK), China’s third-largest home-grown sports brand, expanded its portfolio into basketball on Friday, signing Taiwanese-American NBA star Jeremy Lin as brand ambassador in Guangzhou, southern China. A collection of four shoes will be created around Lin, to be released in October.
The Fujian-based company has so far positioned itself as China’s running brand and has been on a global spree of running gear in the past year, snapping up the owner of K-Swiss in May for US$260 million.
In terms of market share, Xtep currently sits behind Chinese rivals Anta and Li-Ning.
Lin’s endorsement will boost “Xtep’s development as a company” and spur “future investment into basketball”, founder and chief executive Ding Shui Po said at the launch.
Read a full report here.


 Xtep signs NBA star Jeremy Lin as brand ambassador 

China Mobile (941 HK) advanced 3.6 per cent to HK$65.30 in Hong Kong, for the biggest gain on the Hang Seng Index on Friday. The management of China’s biggest wireless phone operator pledged to maintain stable dividend payouts after the company said on Thursday its first-half profit dropped 15 per cent from a year earlier.
The stock had its recommendation updated to buy at BOC International and CLSA, but neutral at Mizuho.
– Zhang Shidong 


China Mobile rises on hope of stable dividend after earnings decline

ZTE (000063 CH) and other stocks linked with fifth-generation wireless networks are dragging the market down. The US is said to have shelved a decision allowing American companies to restart business with Huawei Technologies, as Beijing and Washington ramped up retaliatory measures amid a flare-up in their trade war. ZTE, China’s second-largest phone equipment makers after Huawei, sank 7.7 per cent to 27.90 yuan in Shenzhen. Eastcompeace Technology (002017 CH) slid 8.1 per cent to 11.30 yuan and Datang Telecom Technology (600198 CH) shed 4.7 per cent to 10.13 yuan.
– Zhang Shidong 


ZTE leads declines in China’s 5G-linked stocks

The Shanghai Composite Index posted its worst weekly performance in three months on Friday, amid a retreat by ZTE and other telecoms equipment makers on renewed concerns the ongoing US-China trade war will further hurt business. The gauge fell 0.7 per cent to 2,774.75, losing 3.3 per cent for the week, its biggest decline for a five-day period since May 10. ZTE slumped 7.7 per cent to 27.90 yuan. Meanwhile, flat television maker Hisense Electric dropped 5.5 per cent to 7.68 yuan on lower first-half profit.
– Zhang Shidong 


Shanghai Composite Index posts biggest weekly loss in three months

The Hang Seng Index dropped 0.7 per cent to 25,939.30 on Friday, declining for the first time in three days, posting a 3.6 per cent decline for the week. Conglomerate Swire Pacific led the declines after saying the ongoing unrest in the city would affect many of its businesses. China Mobile, on the other hand, gained after senior executives pledged to stabilise dividend issuances in coming years.
– Zhang Shidong 


Hong Kong stocks drop, end week about 4 per cent lower

Stocks blog: Shanghai Composite posts biggest weekly loss in three months

Hong Kong stocks end week about 4 per cent lower China consumer inflation accelerates at fastest pace since February 2018

Hong Kong stocks end week about 4 per cent lower

China consumer inflation accelerates at fastest pace since February 2018