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Louise Moon

Srinivasan Iyer

Good day traders,
Finally, Hong Kong ended its seven-session losing streak as the index held on to meagre gains throughout the day.
Shanghai too closed in positive territory, although it gave up some gains towards the end.
Kweichow Moutai continues to remain investors' darling, rising to yet another all-time high.
If you would like to receive the Live Stocks Blog each morning via email, shoot Deb a message at deb.price@scmp.com. 
-- Louise Moon and Srinivasan Iyer in Hong Kong


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Stocks

Stocks blog: Hong Kong's benchmark Hang Seng Index snaps six-session losing streak, Shanghai Composite ends higher as well  

It has been slow going for Hong Kong stocks in the past few days. Photo: Xiaomei Chen

Business

Markets

Still 27 of the 50 constituent stocks in the Hang Seng Index fell 
Kweichow Moutai closes at record high yet again


There are not many catalysts to make the Hong Kong market go any higher, says Louis Wong, director of Phillip Capital Management


Hong Kong Stock Exchange

Hang Seng Index

China stock market

A-shares

Live

Here’s what we are watching this morning:
Overnight markets/ What futures foretell
-- On Monday in US markets, S&P 500 lost 0.01 per cent, Nasdaq was down 0.06 per cent, while the Dow Jones Industrial Average gained 0.05 per cent
-- Hong Kong futures are up 0.64 per cent to 26,300, while the China A50 futures are down 1.11 per cent to 13,696.60. Asian markets are mixed this morning: Tokyo’s Nikkei, Seoul’s Kospi and Sydney All Ordinaries are up, while other major indices are down
IPO debuts: None
Economic statistics/Central Bank action: None to note
Corporate events: NWS Holdings (0659 HK), investment managers Sunwah Kingsway (0188 HK), department store company NWDS China (0825 HK), media company AM Group Holdings (1849 HK), Nine Dragon Paper Holdings (2689 HK) and PPS International (8201 HK) are all reporting earnings.


Morning guidance

Jiyuan International Group (2768 HK), the developer of T-Plus hosting Hong Kong’s tiniest flat, issued 434.2 million yuan worth of asset-backed securities.
The ABS, backed by revenue from its sold properties, comprises three tranches – 273 million yuan with a coupon rate of 7.1 per cent, 117 million yuan with a coupon rate of 8.1 per cent and 44.2 million yuan with no fixed coupon rate.
All three tranches have a tenure of two years and six months.
The mainland builder’s shares plunged 81 per cent on January 17 over concerns on a US$350 million bond maturing on the same day. The company denied that there were problems with the debt and later said that the bond had been repaid in full.
-- Pearl Liu


Jiyuan issues 434 million yuan worth of asset-backed securities

Guotai Junan Securities (2611 HK), a leading mainland brokerage, said its chairman Yang Dehong, 53, has resigned for personal reasons.
He Qing, 47, currently the president of China Pacific Insurance (Group), will take over as Chairman of Guotai Junan.
Yang joined Guotai Junan in 2014. The brokerage was listed in Shanghai in 2015 and then in Hong Kong in 2017.
In 2018, Guotai Junan was China’s second-largest securities company in terms of net profit, according to Securities Association of China.
-- Pearl Liu


Guotai Junan's chairman Yang Dehong resigns

Topsports International Holdings, the sportswear business of Chinese footwear retailer Belle International, today launched a Hong Kong initial public offering of up to US$1.2 billion, according to a marketing term sheet seen by Reuters.
The Chinese distributor and retail partner of foreign brands Nike and Adidas is selling about 930 million shares in the indicative price band of between HK$8.30 and HK$10.10 per share, the term sheet showed.
The Hong Kong IPO comes two years after a consortium led by Hillhouse Capital Group and CDH Investments took Belle private in a US$6.8 billion deal completed in July 2017.


Hillhouse-backed Chinese sportswear retailer to raise up to US$1.2 billion in Hong Kong IPO

Hong Kong’s Hang Seng rose at the opening bell, by 0.3 per cent to 26,300.21.
On the mainland, the Shanghai Composite gained 0.08 per cent to 2,979.48, while the CSI 300 rose 0.13 per cent to 3,895.87.
Major indices around Asia remained mixed, as investors are unsure of a clear direction after all three major US indices ending flat overnight.
James Bullard, president of The Federal Reserve Bank of St Louis – one of the 12 regional reserve banks that make up the US central bank – said the central bank may need to ease monetary policy further to offset downside risks from trade conflicts and low inflation, according to Bloomberg.
Meanwhile investors were reminded just how fragile the global economy is at the moment after Europe also edged lower last night following weaker-than-expected business activity data from France, and Germany's worst factory slump in a decade.
-- Louise Moon


Hang Seng opens higher

US-China trade talks will resume in two weeks, US Treasury Secretary Steven Mnuchin said in an interview with Fox Business Network. Mnuchin said he and US Trade Representative Robert Lighthizer would meet Chinese Vice-Premier Liu He.
Meanwhile, US President Donald Trump seemed surprised when Mnuchin said the US government had requested China to cancel its planned visit to farms in Montana, northwest America. At a press conference in New York, Mnuchin told reporters the US had asked Chinese delegates to delay the visit, causing Trump to ask, “Why was that our request, just out of curiosity?”
Both Mnuchin and Trump then confirmed the Chinese have committed to buying agricultural products.
-- Louise Moon


US-China trade talks to resume in two weeks: Mnuchin

Budweiser Brewing Company APAC, the regional unit of the world’s biggest beer brewer, priced its Hong Kong initial public offering at the﻿ bottom of its indicative pricing range today, a source said.
Budweiser priced its offering at HK$27 a share, the low end of a price range of between HK$27 and HK$30 a share, said sources familiar with the company’s listing, speaking on condition of anonymity before an announcement. 
Read Chad Bray's full story here


Budweiser prices revived IPO at HK$27 each 

All major Hong Kong-listed airlines were down in morning trading after the Board of Airline Representatives (BAR) in Hong Kong, which represents over 70 carriers, asked the government to suspend expensive landing and parking fees, to ease losses caused by protests.
In a letter to the Transport and Housing Bureau, BAR chairman Ronald Lam Siu-por, who is also a Cathay executive, said the losses had made flights to Hong Kong no longer financially viable.
Relief measures worth HK$19 billion (US$2.4 billion) was announced by the government last month but it did not cover airlines.
Cathay Pacific Airways (0293 HK), which has been caught in the eye of the storm, was down 1.19 per cent to HK$10.00. It has lost 8.5 per cent since the first large-scale protest on June 9. On August 13 – the day after the airport was shut down – it hit a 10-year low of HK$9.27.
Air China (0753 HK) fell 1.13 per cent to HK$7.03, China Eastern Airlines dropped 1.29 per cent to HK$3.84, while China Southern Airlines (1055 HK) was trading flat.
-- Louise Moon


Cathay, Air China shares fall after trade body seeks suspension of airport fees

Kweichow Moutai (600519 CH) looks set to hit another record high as it rose 1.7 per cent to 1,168.50 yuan in morning trading. Its previous high of 1,157.42 yuan was set on September 20.
The world’s most valuable distiller has skyrocketed this year, up over 98 per cent so far. In July it became the first Chinese stock to trade above 1,000 yuan a share.
The gains come ahead of a week-long holiday in China to celebrate National Day, and after Kweichow Moutai announced it would increase supply in the fourth quarter.
According to a group of analysts polled by Bloomberg, 40 recommend “buy”, one “hold” and one “sell”. They estimate a target price of 1,178.28, marking a 1.8 per cent increase compared to the last high on Friday.
On Monday, the company announced it had selected Alibaba Group Holding’s online retail platform Tmall, and Suning.com (002024 CH), to distribute its flagship liquor. More distributors will be announced soon.
In July it said it would pick pick three e-commerce companies to distribute 400 tons of its popular brand.
-- Louise Moon
 



Kweichow Moutai set for another peak

Fosun International (0656 HK) and Fosun Tourism Group (1992 HK) continued to fall in reaction to British travel operator Thomas Cook going into liquidation on Monday. Both stocks lost over 2 per cent each in morning trading.
The Shanghai-based conglomerate had offered a a 900 million pound lifeline to Thomas Cook in August. Now, 150,000 passengers stranded in Europe are being rescued by the UK government.
-- Louise Moon


Fosun feels the pressure from Thomas Cook's closure 

Hong Kong’s Securities & Futures Commission has imposed a lifetime ban on former Bank of Communications (BOCOM) vice-president Ye Feng, following a bribery conviction.
The ban comes after a conviction in August last year, where the former banker was found guilty of taking illegal payments from a client for stock trading profits.
In Hong Kong, BOCOM (3329 HK) was down 1.71 per cent to HK$1.15, while its Shanghai-listed stock (601328 CH) rose 0.36 per cent to 5.52 yuan in morning trading.
-- Louise Moon


SFC imposes lifetime ban on former BOCOM executive

China Pacific Insurance (601601 CH) shed 3.84 per cent to 35.05 yuan after its president, He Qing, resigned after market close on Monday.
He will take over as chairman of leading mainland brokerage Guotai Junan Securities (2611 HK). Guotai’s previous chairman, Yang Dehong, has resigned for personal reasons. Its stock fell 0.32 per cent to HK$12.44.
-- Louise Moon


China Pacific's shares react to president's resignation 

Casino operator Sands China (1928 HK) is the biggest loser on the Hang Seng in morning trading, following a report by The Wall Street Journal that its chairman, Sheldon Adelson, warned US President Trump in a phone call last month that the escalating trade war with China could hurt his re-election prospects.
Adelson, who also chairs Las Vegas Sands and is a top Republican donor, didn’t discuss the impact on his own business, according to the report. Revenue of Macau casinos dropped 8.6 per cent in August because of fewer visitors stemming from slowing economic growth amid the trade war and protests in Hong Kong.
Sands China dropped 1.23 per cent to HK$36.25, its lowest level since September 3.
-- Louise Moon


Sands China slips on chairman's warning to Trump on trade war 

Shenzhen-listed NavInfo (002405 CH), a digital-map provider, rose 5.13 per cent to HK$18.86, its highest level since November 2017, after signing a deal with BMW.
The agreement, it said, would further consolidate its leading position in the smart car location service industry and help promote profitability. The stock has risen over 90 per cent this year and looks set for its seventh straight week of gains.
-- Louise Moon


BMW deal boosts NavInfo in Shenzhen 

Hong Kong’s Hang Seng rose through the morning to end up 0.32 per cent at 26,305.85.
Sectors were mixed: telecommunications led the gains, with China Mobile (0941 HK) at the forefront, and healthcare leading losses, with Sino Biopharmaceutical (1177 HK) seeing the largest drop on the bourse.
On the mainland, the Shanghai Composite also stayed ahead, rising 0.76 per cent to 2,999.91 at the lunch break.
All sectors were positive, completely reversing Monday’s sweeping losses.
Meanwhile, the CSI 300 of large caps rose 0.8 per cent to 3,922.09.
-- Louise Moon


Hang Seng and Shanghai Composite up at midday break

New World Department Store China (0825 HK) reported revenue fell by 7.9 per cent and same store sales growth declined 9.5 per cent for the full year ended June 30, 2019, according to a filing to the Hong Kong stock exchange.
However, due to the closure of stores, operating expenses and rental expenses dropped, while operating profit rose. This resulted in net profit increasing by 194 per cent to HK$32.7 million compared to the previous year.
The company closed six stores, and currently operates 31 department stores and shopping centres across mainland China.
“Global economic growth remained in the doldrums and international trade and investments further slackened during the first half of 2019, resulting in an overall performance which was below market expectations,” according to the filing.
NWDS has expanded its offline department store retail “amidst economic uncertainties at home and abroad, and as competition in the mainland’s retail sector intensified,” the company said, and will continue with this in future. 
The shares were unchanged at HK$1.31 after the lunch break. 
-- Louise Moon


Mainland department store operator's earnings disappoint

Apple’s Hong Kong and China-listed suppliers predominantly rose in afternoon trading.
The company said its new Mac Pro desktop computer will be assembled in Austin, Texas, after the US government approved on Friday its request for a waiver on 25 per cent tariffs on several parts imported from China. Some key components will still be made in China and exported to the US for final assembly.
AAC Technologies Holdings (2018 HK) reversed Monday’s losses to rise 0.35 per cent to HK$43.25, while Sunny Optical Technology Group (2382 HK) similarly gained 1.23 per cent to HK$115.40.
Among Apple's mainland-listed partners, Foxconn Industrial Internet (601138 CH) gained 8.23 per cent to 15.38 yuan, Lens Technology (300433 CH) rose 0.85 per cent, Goertek (002241 CH) was up 3 per cent and Jiangsu Changjiang Electronics Technology (600584 CH) added 1.55 per cent.
-- Louise Moon


Apple's suppliers rise on tariff waiver 

Shenzhen Salubris Pharmaceuticals (002294 CH) fell 8 per cent to HK$22.31 – its lowest level since August 30. According to domestic media, the company failed to win a bid for a bulk-buy programme in auctions organised by Chinese cities.
At the beginning of this month China expanded a pilot drug bulk-buy programme to almost the whole country, after it was rolled out to 11 cities last year. It saw the cities bulk-buy 25 type of drugs in a tender process, causing the prices of some medicines to plunge over 90 per cent, according to state media Xinhua.
The idea is to negotiate lower prices from drug manufacturers, putting pressure on multinational companies and domestic rivals.
Other pharma companies were mixed. Sino Biopharmaceuticals (1177 HK) was the biggest drag on the Hang Seng, dropping 5.12 per cent, while Sinopharm Group (1099 HK) lost 3.49 per cent. On the mainland, Huadong Medicine (000963 CH) fell 3.47 per cent, but Jiangsu Hengrui Medicine (600276 CH), Shanghai Pharmaceutical Holding (601607 CH) and Tonghua Donbao Pharmaceutical (600867 CH) rose.
-- Louise Moon


Shenzhen Salubris takes a hit after failing to win government drug auction 

China Education Group Holding (0839 HK) rose 5 per cent to HK$11.40 after it said it would buy a school in Australia. This is its highest level since September 2.
The education management firm will buy King’s Own Institute, a tertiary level higher education institution in Sydney, for A$128 million (US$86.67 million).
-- Louise Moon


China Education Group rises after making acquisition Down Under 

Chinese policymakers mixed enthusiasm with caution as they offered their views to boost the economy.
At a press briefing in Beijing ahead of the 70th anniversary of the PRC, Ning Jizhe, vice-chairman of the National Development and Reform Commission, said China will step up efforts to stabilise economic growth by speeding up the construction of infrastructure projects and relaxing restrictions on car purchases.
Yet at the same event, central bank governor Yi Gang, reiterated that the world’s second largest economy would maintain a cautious monetary policy stance and not heavily rely on stimulus. He said authorities were not in a rush to take big steps to ease policy to cope with downward pressure on the economy.
Gang ruled out an interest-rate cut in the short term.


China to take steps to boost economy, but rate cut looks unlikely 

The euro zone’s lower-than-expected PMI released yesterday has “triggered worries about the global economic slowdown”, while US-China trade progress remains uncertain, said Louis Wong Wai-kit, director of Phillip Capital Management.
But indications the two sides will resume talks in October lifted market sentiment in Hong Kong and China this morning.
According to Wong, “there aren't sufficient catalysts to make the market go any higher”. Describing today’s rebound as “technical”,  he expects the Hang Seng to drop to 26,000 towards the end of the week if there is no further positive development on the trade talks.
He said that investors' response to the Chinese government's statements on stimulus policies has been neutralised. Policymakers have emphasised they will not flood the market with liquidity, which has "helped to manage market expectations of upcoming monetary policy."
-- Louise Moon


Today's rebound technical, says  Louis Wong of Phillip Capital

The Shanghai Composite closed 0.27 per cent higher at 2,985.34 yuan, reversing yesterday's losses.
Ten of its 1,530 constituent stocks hit the daily maximum gains of 10 per cent, while consumer and technology stock led the rise.
The CSI 300 gained 0.26 per cent to 3,901.08 yuan.
-- Louise Moon


China stocks end day with modest gains

Kweichow Moutai (600519 CH) closed at a fresh all-time high of 1,184 yuan, as demand booms for the company's fiery drink ahead of the upcoming week-long National Day holiday.
The new price takes the world’s most valuable liquor maker 0.5 per cent higher than the price target set by analysts polled by Bloomberg, which stands at 1,178.28 yuan.
The stock has gained just over 100 per cent this year, and became the first Chinese stock to close above the 1,000 yuan mark on July 1.
-- Louise Moon
 



Yet another record close for Kweichow Moutai

Hong Kong’s Hang Seng rose to end up 0.22 per cent at 26,281.00. Gains reversed six straight sessions of losses.
Still, 27 of the 50 constituent stocks ended down, including casino giant Sands China (1928 HK), conglomerate Swire Pacific (0019 HK) and rail operator MTR (0066 HK).
Sectors were mixed. Health care boosted the index, led by an 8.5 per cent gain by CSPC Pharmaceutical Group (1093 HK). HSBC lifted CSPC Pharma from HK$19.8 to HK$20.8 and maintained its “buy” rating, having visited the company’s headquarters in Shijiazhuang on September 9 and meeting CEO Cuiloang Zhang.
HSBC said it is bullish on CSPC’s near-term strong performance of current products. It said it thinks the market has underestimated the commercialisation potential of CSPC’s innovative products.
-- Louise Moon


Stocks blog: Hong Kong's benchmark Hang Seng Index snaps six-session losing streak, Shanghai Composite ends higher as well

Still 27 of the 50 constituent stocks in the Hang Seng Index fell Kweichow Moutai closes at record high yet again

Still 27 of the 50 constituent stocks in the Hang Seng Index fell

Kweichow Moutai closes at record high yet again