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Zhang Shidong

Srinivasan Iyer

After a strong start to the day, Chinese equities were unable to maintain momentum as caution prevailed among investors. The initial momentum provided by Trump's trade comment faded and the Shanghai Composite eventually closed nearly 1 per cent lower.
The Hang Seng, however, held on to its gains and moved up briskly in the last hour or so. 
That's all from us today.  
If you would like to receive the Live Stocks Blog each morning via email, shoot Deb a message at 
deb.price@scmp.com
-- Zhang Shidong in Shanghai  and Srinivasan Iyer in Hong Kong


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Stocks

Stocks Blog: Mixed day for equities in Hong Kong and China as developers lead Hang Seng higher

The corporate flag for Hong Kong Exchanges & Clearing (HKEX) and the Chinese flag fly outside the Exchange Square complex. Photo: Bloomberg

Business

Markets

China Resources Land and New World Development rise at least 2 per cent   
Investors resort to profit-taking on the mainland ahead of week-long holiday 


Shanghai Composite Index slips to lowest level since September 2, while ChiNext falls the most in four months


China stock market

Hong Kong Stock Exchange

Hang Seng Index

Live

Overnight markets/ What futures foretell
  -- Overnight in US markets, the S&P 500 and the Dow Industrials both gained 0.6 per cent, the Nasdaq rose 1.1 per cent
 -- Hong Kong futures were 0.3 per cent higher, while the FTSE China A50 futures climbed 0.5 per cent
IPO debuts: Travel agency Ying Hai Group Holdings (8668 HK) will start trading in Hong Kong today.
Economic statistics/Central Bank action: nothing major
Corporate events: earnings, meetings, news conferences
-- nothing major
Tomorrow: The National Bureau of Statistics will release the August data on profits for industrial companies at 9:30am. Profits increased 2.6 per cent a month earlier.


Morning guidance

China Evergrande (3333HK) has announced partnerships with five car engineering companies to conduct R&D on 15 new electric vehicle models, pressing ahead with its EV business.  
The partners are development and testing service provider FEV Group, product and production plant development company EDAG Engineering Group, vehicle technology developer IAV Group, powertrain development company AVL Group, and Canadian supplier Magna Group.
China Evergrande chaired by billionaire Xu Jiayin, did not mention the investment in the newly announced partnerships.
The company has invested 14 billion yuan in the EV business in the first half while it plans to spend another 6 billion by the end of this year, it said in the interim result briefing in August.
-- Pearl Liu


China Evergrande announces R&D tie-ups for electric cars

BYD (1211 HK), is reportedly planning to list its power-management device-making unit.
 
The Chinese EV maker is considering an initial public offering of the business that produces insulated gate bipolar transistors (IGBT), a key technology which can affect electric vehicle’s performance, according to Bloomberg.
 
No final decisions on the IPO timing or listing destination have been made.
 
BYD unveiled its latest IGBT technology last December and claimed that it is the only Chinese carmaker that can mass produce car-level IGBT with complete industrial chain.
-- Pearl Liu


BYD mulls IPO for affiliate

New World Development’s (17 HK) donation of 3 million square feet (278,710 square metres) of land to the Hong Kong government has not gone down well with investors.
David Webb, an activist investor in Hong Kong, questioned the move, saying it was not mentioned in the company’s annual report at all and would be probably of no help to enhance shareholders’ values.
“Is this just a kowtow to deter further government intervention, or to get permission to develop better land?” he wrote on his namesake website. The donation was released by executive vice-chairman Adrian Cheng at a media briefing after the earnings result yesterday.
The shares however surged 2.4 per cent to HK$10.24 in early trading.
-- Zhang Shidong


Activist shareholder Webb questions New World’s land donation

The comment by US President Donald Trump is adding impetus to stocks in China and Hong Kong today.
The Shanghai Composite Index rose 0.2 per cent at the open, while the Hang Seng Index gained 0.4 per cent after Trump suggested that a trade deal with China was possible, with Beijing starting to procure US agricultural products.
Financial stocks led gains in the mainland and property developers in Hong Kong.
-- Zhang Shidong


China and Hong Kong stocks edge higher at open

China’s finance ministry will transfer a 10 per cent stake each in Industrial and Commercial Bank of China (601398 CH) and Agricultural Bank of China (601288 CH) to the nation’s social security fund, according to separate statements from the two state-owned lenders last night.
The move falls in line with an earlier plan unveiled by the State Council, China's cabinet, to allocate stakes in state-owned enterprises to replenish the fund pool. The stake transfers were valued at a combined 115.2 billion yuan (US$16.2 billion) based on yesterday’s closing share prices of the two banks.
ICBC added 1.3 per cent to 5.55 yuan in Shanghai today and Agribank gained 0.9 per cent to 3.49 yuan.
-- Zhang Shidong


US$16 billion worth of ICBC, Agribank shares transferred to social security fund

Macanese travel agent Ying Hai Group Holdings (8668 HK) started trading on Hong Kong’s GEM board today.
Its shares sank 10.5 per cent at the open to HK$0.215. The company had an indicative price range for the initial public offering price from HK$0.20 to HK$0.24.
The company mainly offers its domestic travel services and car rental service to travel agents and corporate customers. L’Arc Hotel Macau has been the company’s largest hotel room supplier, accounting for over 60 per cent of its total revenue generated from the sales and distribution of hotel rooms last year.
The company, which has three permits for the Hong Kong-Zhuhai-Macau Bridge, plans to start cross-border transport services between Macau and Hong Kong in the fourth quarter.
-- Holly Chik
 
Macanese B2B travel agent Ying Hai Group Holdings (8668 HK) started trading on Hong Kong’s GEM board today.@SCMPNews @HKEXGroup pic.twitter.com/fQS3RYbR5Q
— Holly Chik (@hollycwchik) September 26, 2019


Ying Hai slumps on GEM debut

The southbound Mainland-Hong Kong Stock Connect will be closed from tomorrow to October 7, while northbound trading will be suspended from October 1 to October 7 because of holidays.
Shenzhen and Shanghai stock exchanges will be closed from October 1 to 7 October during China's National Day “golden week”. Hong Kong's stock exchange will be closed on October 1 for National Day and October 7 for Chung Yeung Festival. Trading and the stock connect will resume on October 8.
-- Holly Chik


Stock Connect trading set for temporary pause

New World Development (17 HK) and other real-estate companies are topping the gainers on the Hang Seng Index today.
New World Development rose 3.6 per cent to HK$10.36, heading for the biggest gain in three weeks, even as activist investor David Webb criticised the company’s land donation as a move that would harm shareholders' interests and a potential breach of fiduciary duty. China Resources Land (1109 HK) advanced 1.9 per cent to HK$32.60. CK Asset (1113 HK), Link Reit (823 HK) and Longfor Group (960 HK) were up, while Sun Hung Kai Properties (16 HK), Henderson Group (12 HK) and Swire Properties (1972 HK) were trading lower.
The Hang Seng Index is trading up 0.3 per cent now.
-- Zhang Shidong


Property developers lead charge on Hang Seng

Traders are dumping Chinese pig-breeding stocks fearing their share price gains are excessive amid insider selling, sending Jiangxi Zhengbang Technology (002157 CH) and Muyuan Foodstuff (002714 CH) tumbling by the daily 10 per cent limit in mainland trading.
Jiangxi Zhengbang slumped to 14.56 yuan in Shenzhen, paring its advance to 174 per cent this year, while Muyuan sank to 62.64 yuan, trimming its annual gain to 118 per cent. New Hope Liuhe (000876 CH), which is controlled by billionaire Liu Yonghao, tumbled 9.6 per cent to 16.11 yuan after the stock had surged 145 per cent through yesterday this year.
Rising pork prices amid the spread of African swine fever have fuelled a rise in pig-farming stocks. Prices of the meat, already at record highs, show no sign of abating, as the stock of breeding sows continues to fall and the work on vaccines for the disease is still some way off.
The outsize gains in stock prices have prompted senior executives to cash out of stocks. Jiangxi Zhengbang said this week that chief financial officer Zhou Jinming plans to sell up to 27,500 shares in the company within six months.
-- Zhang Shidong


Speculative bets on Chinese pig stocks recede

China CIFCO Investment (000996 CH) plunged by the 10 per cent daily cap to 11.86 yuan in Shenzhen today after the company said it had scrapped a plan to buy a majority stake in International Futures, a futures brokerage.
The plan was terminated because the company could not reply to the feedback by the regulator on the acquisition within the specified time frame, the company said in an exchange statement.
-- Zhang Shidong


China Cifco plunges on termination of asset purchase plan

Hang Seng Bank’s China unit has become the first foreign bank admitted to participate in bond trading on the exchange, it said yesterday.
The move is widely seen as part of China’s pledge to open up its financial markets to more foreign investors.


Hang Seng Bank admitted to participate in China bond trading  

China’s central bank sold 10 billion yuan (US$1.4 billion) worth of 6-month yuan-denominated bills in Hong Kong today, Reuters reported.
The notes were priced with a coupon of 2.89 per cent, the People’s Bank of China said in a statement on its website.
The bill auction in Hong Kong is aimed at improving the yuan yield curve in the financial hub, the central bank said on September 20, when it unveiled issuance plans for the latest batch of bills.
Ken Cheung, chief Asian FX strategist at Mizuho Bank in Hong Kong, said the bill auction will have limited impact on liquidity conditions.


China's central bank sells 10 billion yuan bills

A sell-off in Chinese smaller companies is dragging down the broader market, with the benchmark Shanghai Composite Index falling 0.5 per cent at re-open in the afternoon.
The ChiNext gauge of small-caps tumbled 2.5 per cent in Shenzhen, extending the week’s loss to 4.5 per cent, on concern a run-up that had driven up the gauge by more than 20 per cent was overdone.
Hong Kong’s Hang Seng Index also pared its intraday gain of as much as 0.6 per cent. It is up 0.1 per cent.
-- Zhang Shidong


Chinese stocks head lower on sell-off in small-caps

Contemporary Amperex Technology (300750 CH), China’s top maker of electric-vehicle batteries, plans to spend 10 billion yuan (US$1.4 billion) building its first factory in the southwest of the country, adding to ambitious plans for next decade even as the short-term EV outlook get buffeted by subsidy cuts and demand uncertainties, Bloomberg reported.
The company, better known as CATL, will build the facility in Sichuan province, an outpost of China’s car industry, it said in a statement. The first phase will be ready within 26 months from the start of construction, and the second phase two years after that.
CATL's shares however fell 1.78 per cent to 71.66 yuan in Shenzhen in afternoon trading. 


EV battery maker to spend US$1.4 billion to build factory in Sichuan

JL MAG Rare-Earth (300748 CH), which President Xi Jinping visited in May as part of his tour of the nation’s rare earth industry, slid by the 10 per cent daily limit to 41.39 yuan in Shenzhen.
It is the fourth straight day that shares of JL MAG has fallen by the daily cap, with the stock heading for a four-month low. Shenzhen Yuanzhi Fuhai No. 9 Investment, the fifth-largest shareholder with a 6.1 per cent stake, plans to sell a 3 per cent stake in the company within the following three months, according to an exchange statement.
JL MAG said earlier this week that the lock-up period of a nearly 45 per cent stake held by pre-IPO investors in the company expired on Monday, potentially increasing supply of the shares available for public trading.
Shares of JL MAG had jumped more than threefold after Xi’s visit.
-- Zhang Shidong
 



Rare earth producer sinks on stake cut, lock-up expiry

Investors were pulling out of Chinese stocks ahead of a week-long holiday marking the National Day that falls on October 1, according to Wu Kan, an investment manager at Soochow Securities in Shanghai.
“Investors are selling to steer clear of uncertainty that may pop up in the coming days,” he said. “They are pocketing gains for safety sake.”
China’s markets will be shut from October 1 to 7 to celebrate the 70th anniversary of the founding of the Communist nation.
-- Zhang Shidong


Investors cash out to stay clear of holiday uncertainty  

Cautious sentiment gained traction on China’s markets before the week-long National Day holiday from October 1.
The Shanghai Composite Index fell 0.9 per cent to 2,929.09 at the close, the lowest level since September 2. A gauge of smaller companies trading on Shenzhen’s ChiNext board tumbled 2.9 per cent, the most in four months.
Investors’ favourite bets, such as pig-breeding stocks, faded, as traders cashed out for profits.
-- Zhang Shidong


China’s stocks slide to three-week low ahead of National Day holiday

The Hang Seng Index added 0.4 per cent to 26,041.93 at the close today, bucking a decline in mainland equities.
China Resources Land and other property developers led the gain.
-- Zhang Shidong


Hong Kong stocks maintain gains amid mainland sell-off

Stocks Blog: Mixed day for equities in Hong Kong and China as developers lead Hang Seng higher

China Resources Land and New World Development rise at least 2 per cent Investors resort to profit-taking on the mainland ahead of week-long holiday

China Resources Land and New World Development rise at least 2 per cent

Investors resort to profit-taking on the mainland ahead of week-long holiday