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Louise Moon

Srinivasan Iyer

Good Day, traders
A lack of drivers saw Hong Kong stocks end the last trading day of the week on a disappointing note.
On the mainland, although equities rose, there wasn't much to cheer either, as the Shanghai benchmark saw its biggest weekly loss since the second week of August.
That's all for today.   
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: Shanghai Composite's weekly loss the highest in seven weeks   

A general view of Hong Kong stock exchange in the city's main business district of Central. Photo: AFP 

Business

Markets

Chinese stocks rise in last session before week-long holiday 
CSI 300 gains 0.3 per cent 


Hong Kong's Hang Seng Index continued last week’s declines as a lack of progress in trade talks and ongoing protests played on investors’ minds


Hong Kong Stock Exchange

China stock market

A-shares

Live

Here's what we are watching this morning:
Overnight markets/ What futures foretell
-- On Thursday in US markets, S&P 500 lost 0.24 per cent, Nasdaq was down 0.57 per cent, while the Dow Jones Industrial Average fell 0.29 per cent.
-- Hong Kong futures are down 0.23 per cent to 25,961, while the China A50 futures are up 0.07 per cent to 13,712.56.
IPO debuts:
None.
Economic statistics/Central Bank action:
9:30am: China's industrial profits for August
Corporate events: earnings, meetings, news conferences
None to note.


Morning guidance

Ping An Bank (00001 CH) received a banking licence from Hong Kong's regulator yesterday.
The Hong Kong Monetary Authority said it has granted banking licences to Ping An Bank and Hua Xia Bank from the mainland and Doha-based Qatar National Bank.
The HKMA also approved the upgrading of the restricted banking licence of Morgan Stanley Asia International, a wholly-owned banking subsidiary of Morgan Stanley to a banking licence.
-- Pearl Liu


HKMA grants three new banking licences

Box office films focusing on patriotism have fetched 300 million yuan in advance ticket sales as of 6pm last night, according to industry data tracker Entgroup.
Me and My Country, which comprises seven short videos about the country’s progress since 1949; The Climbers, a story about a Chinese team that ascends Mount Everest; and The Chinese Pilot are scheduled for release on September 30, ahead of the National Day, which marks the the country’s 70th anniversary under Communist rule.
Market observers are expecting box office sales for the seven-day National Day holiday to touch 2.5 billion yuan, about 30 per cent higher than last year’s 1.9 billion yuan.
-- Pearl Liu


Box office bonanza in China

Hong Kong’s Hang Seng opened down 0.25 per cent at 25,977.98.
On the mainland, the Shanghai Composite gained 0.01 per cent to 2,929.49, and the CSI 300 rose 0.06 per cent to 3,843.46.


Hang Seng opens lower

China failed to win inclusion into one of the world’s benchmark bond indices, as FTSE Russell opted not to follow two competitors in adding the country’s domestic debt, Bloomberg reported.
China will remain on the FTSE Russell’s watchlist, according to a statement yesterday that showed the firm demurred on including it in its flagship World Government Bond Index.
The decision means China could be missing out on US$6 billion to US$7.5 billion of extra investment inflows a month, according to a previous estimate by Goldman Sachs Group.


FTSE Russell decides against including China in flagship bond index

Last night Hong Kong’s leader Carrie Lam held her first public dialogue event, addressing a randomly selected audience of 150 from a total 20,200 who had applied to take part. Outside the venue in Wan Chai, more than 100 protesters blocked nearby roads, trapping Lam for four hours after the session ended.
Lam said it was up to the government to deal with the unrest that has overtaken the city for almost four months, damaging the economy and hitting businesses across the board. More demonstrations are expected this weekend, which marks the fifth anniversary of the city’s 2014 Umbrella Movement over Beijing’s role in appointing Hong Kong’s chief executive.
Overnight, US stocks slid as investors prepared for potential political uncertainty in the US’ White House. Impeachment proceedings have started against US President Donald Trump.
-- Louise Moon


Carrie Lam holds first public dialogue, trapped for hours after event

Henderson Land (0012 HK) fell 0.68 per cent to HK$36.40, to its lowest level since September 2. The property developer told the Post yesterday that it would offer three plots of land totalling 1 million square feet in Fanling north for public housing if the government seizes it under the Lands Resumption Ordinance.
New World Development (0017 HK), which earlier hit a two-week share price peak after saying it would donate land, lost 0.59 per cent in morning trading.
Other developers were mixed. Sun Hung Kai Properties (0016 HK), the city’s most valuable property company, Wharf Real Estate Investment Company (1997 HK)and Sino Land (0083 HK) were down between 0.27 and 0.6 per cent, while Link Real Estate Investment Trust (0823 HK), Swire Properties (1972 HK) and Hang Lung Properties (0101 HK) rose up to 2 per cent.
The government has said it would take back 68 hectares of private farmland in the New Territories to build 21,000 new homes, and pressure has been piling on property developers to help ease the city’s housing crisis amid the ongoing protests.
-- Louise Moon 


Property developers slide in Hong Kong  

Chinese tech suppliers rose yesterday after being battered for days and it comes even after the US is unlikely to extend a waiver to allow American firms to supply China’s Huawei Technologies.
OLED display panel maker BOE Technology Group (000725 CH) gained 1.08 per cent to 3.75 yuan, reversing five straight sessions of losses. Maker of fingerprint sensors Shenzhen Goodix Technology (603160 CH) added 2.83 per cent to 218.22 yuan, Shennan Circuit (002916 CH) gained 0.19 per cent to reverse a more than 5 per cent drop yesterday. Luxshare Precision Industry (002475 CH) rose 0.92 per cent to 26.3 yuan after three days of losses, and Shenzhen Sunway Communication (300136 CH) was up 2.12 per cent to 34.6 yuan.
In trade war related news, China's Foreign Minister Wang Yi told Reuters that the Trump administration had shown goodwill by waiving tariffs on many Chinese products. China has already started to buy agricultural goods, and its top diplomat said the country was willing to buy more.
The two sides are still discussing details about trade talks in October, according to the Chinese commerce ministry yesterday. The two sides are expected to meet in Washington in two weeks.
-- Louise Moon


China tech stocks bounce back 

Many mainland-listed food companies gained in morning trading after China yesterday said that it would curb rapid rises in food prices, while keeping producer prices basically stable. This is to ensure the overall price level remains in a reasonable range.
Wens Foodstuff Group (300498 CH) looks on track to rise the most in one day since the beginning of August. The agribusiness gained 3.52 per cent in early trading to 36.1 yuan.
Among others, Muyuan Foods (002714 CH), which breeds and distributes pigs, gained 6.8 per cent to reverse a 10 per cent decline yesterday. Poultry processing company Fujian Sunner Development (002299 CH) added 3.31 per cent after four sessions of decline, and agriculture company New Hope Liuhe (0000876 CH) rose 0.56 per cent.
-- Louise Moon


Investors regain appetite for food firms 

Profits of Chinese industrial firms fell 2 per cent year on year in August to 517.8 billion yuan (US$72.59 billion), according to data released by the National Bureau of Statistics.
Profits rose 2.6 per cent in July.
August’s contraction was mainly because of slowing sales and falling producer prices, according to a statement from Zhu Hong, an official with the statistics bureau, according to Reuters.
Industrial profits have been slowing since the second half of 2018, as domestic demand remains weak and the US-China trade war continues to drag on.
-- Louise Moon


China's August industrial profits fall over slowing sales and weaker prices

Western Mining Group (601168 CH) cancelled a one billion yuan bond sale scheduled for September 25, due to market fluctuation, according to a statement to Shanghai Clearing House.
The sale was cancelled amid a lack of demand, according to Bloomberg, citing people who asked not to be identified. The upper end of the price range for the note was 5.50 per cent, they said.
The group mines and distributes metal products. It was up 0.5 per cent to 5.61 yuan in morning trading.
-- Louise Moon


Western Mining cancels bond sale owing to market fluctuation 

China’s pig herd has halved to 200 million head over the past year because of a deadly swine disease that may depress pork supplies for years, a Bloomberg report said, quoting a Rabobank analyst.
The emergence of African swine fever in China in August 2018, and the subsequent deaths and culling of pigs, have wiped out 25 per cent of the country’s pork production, or about 13 million metric tons, which is “unprecedented”, said Pan Chenjun, Rabobank’s Hong Kong-based senior animal proteins analyst, in an emailed statement yesterday.
“This has resulted in a serious shortage in animal protein, with the market shrinking by 8 million tons -- even with the considerable increase in imports this year,” she said.


China's pig herd down by half

Hog producers collectively edged up, despite number of pigs halving over the past year.
The world’s largest pork producer WH Group (0288 HK) gained 0.58 per cent, Muyuan Foods (002714 CH) boosted 7.87 per cent to 67.57 yuan, and Wens Foodstuffs (300498 CH) added 5.67 per cent to 36.88 yuan in morning trading.
-- Louise Moon


Pork producers rise despite alarming herd data

Steel companies are losing out after the Ministry of Industry and Information Technology said yesterday that China – the world’s top steelmaker – is still having trouble containing increasing illegal new capacity of steel.
Maanshan Iron & Steel (600808 CH) lost 0.37 per cent, Baoshan Iron & Steel (600019 CH) dropped 1.49 per cent, and Angang Steel (000898 CH) was trading flat, while in Hong Kong China Oriental Group (0581 HK) fell 0.36 per cent.
-- Louise Moon


Illegal capacity addition hits steelmakers 

Chinese infant formula maker Ausnustria Dairy (1717 HK) rose 5.36 per cent to HK$9.43 in morning trading to reverse six-straight sessions of declines.
The company said sales of its milk powder products were expected to rise more than 30 per cent jump in the quarter ending September 30. Ausnustria also said it would buy back shares worth an initial HK$100 million.
Yesterday its share price had reached its lowest level since February.
-- Louise Moon


Chinese dairy firm Ausnustria reverses losing trend

Geely Automobile Holdings (0175 CH) is the largest gainer on the Hang Seng in morning trading, up 3.3 per cent to HK$13.14.
Yesterday, New York-listed global fintech company Ideanomics’ Mobile Energy Group said it had finalised its first order of electric vehicle taxis for Chengdu, the capital of China's southwest province of Sichuan.
Hangzhou-based Geely is to supply a total of 15,000 taxis, and 4,000 have already been delivered. Deliveries are due to be completed by the end of December.
Ideanomics’ deal was done through a joint venture with Chinese ride-hailing service iUnicorn, as part of a mandate by Sichuan province to convert all licensed taxis to clean energy vehicles.
Geely was also upgraded to “buy” by Bank of China International yesterday. BOC analyst Lou Jia raised Geely’s target price from HK$11 to HK$15.
The average target price among the 39 analysts polled by Bloomberg stands at HK$12.31. Among them, 18 recommend “buy”, 16 “hold” and five “sell”.
-- Louise Moon


Geely charges ahead with solid gains

Supply chain manager Li & Fung (0494 HK) has raised US$400 million from a bond offering, which it plans to use for refinancing and general purposes, according to a filing to the Hong Kong stock exchange.
The company, which supplies apparel, accessories and other products to global retailers, is vulnerable to supply chain disruption as a result of the US-China trade war tensions. It has previously urged US clients to shift manufacturing away from China, as tariffs make goods more expensive for US companies.
Its stock was down 3.23 per cent to 90 HK cents.
-- Louise Moon


Li & Fung raises US$400 million from bond sale

Hong Kong’s Hang Seng fell 0.3 per cent to 25,963.28 at the lunch break.
Mainland markets were mixed. The Shanghai Composite traded flat at 2,928.97, having started the day with slight gains, while the CSI 300 of large caps rose 0.04 per cent to 3,842.67.
-- Louise Moon


Hang Seng edges lower, Shanghai Composite flat at midday 

Shares of China’s fintech firms are soaring as investors prepare for the imminent launch of Beijing’s digital currency and the demand it would generate for security and payment services, Reuters reported.
The CSI fintech theme index, an index tracking major financial technology firms, has gained more than 50 per cent so far in 2019, far outperforming the broader market.
Among the big gainers are Beijing Certificate Authority (300579 CH), which mainly provides electronic authentication services; its share price hit a record high this month after having soared nearly 200 per cent this year. 360 Security Technology (601360 CH), China’s biggest network security services provider, has seen its shares jump more than 50 per cent.
Mu Changchun, deputy director of the People’s Bank of China’s payments department, said in August China is “almost ready” to issue its own sovereign digital currency, that the proposed new digital currency would bear some similarities to Facebook’s Libra coin and could be used across major payment platforms such as WeChat and Alipay.


Chinese fintech firms surge on digital currency push

CLP Holdings (0002 HK) rose 0.8 per cent to HK$82.35 after Credit Suisse upgraded it from “neutral” to “outperform”and raised the target price to HK$95 from HK$84.
Credit Suisse said it believed the electricity supplier had an attractive risk-reward.
Of the 14 analysts polled by Bloomberg, half recommend to “buy” the stock, and half to “hold”. They have an average price target of HK$90.23, representing a 10.44 per cent increase from the last close.
-- Louise Moon


Credit Suisse upgrades CLP Holdings to 'outperform'   

Fosun International (0656 HK) addressed market speculation in a filing to the stock exchange this afternoon, after becoming entangled in the collapse of UK-based Thomas Cook earlier in the week.
The group explained it holds an 18.6 per cent equity interest in Thomas Cook, amounting to 327 million yuan, but it had not made any investment in relation to the possible recapitalisation of Thomas Cook.
“Therefore the application for compulsory liquidation of Thomas Cook has limited financial impact to the group. The group has not acquired any further interest in Thomas Cook after 30 June 2019,” it said in the statement.
Fosun dropped 1.53 per cent on Monday, after news of the Thomas Cook collapse. The stock continued to fall through to Wednesday, before picking up. It is currently up 0.3 per cent to HK$9.92.
-- Louise Moon


Fosun clears the air on Thomas Cook speculation

Jiangxi Copper (0358 HK) (600362 CH) posted a slight gain in earnings for the six months ending June 30, according to a filing to the Hong Kong stock exchange.
Revenue rose 0.6 per cent year on year to 104.6 billion yuan, while net profit gained 6.4 per cent to 1.4 billion yuan. Earnings per share increased 7.89 per cent to 0.41 yuan.
The group is the largest producer of copper in China, and owns Dexing Copper Mine in Jiangxi, southeast China: the country’s largest.
Its Shanghai-listed stock has risen around 9 per cent so far this year.
-- Louise Moon


Jiangxi Copper posts 6.4 per cent rise in H1 profit 

China stocks ended their last trading session before their week-long National Day Holiday with slight gains.
The Shanghai Composite rose 0.1 per cent to 2,932.17 to reverse two days of declines.
Still, weekly losses were the most in seven weeks. And for the month, the benchmark rose 1.59 per cent after both June and July saw losses of over 1.5 per cent.
The CSI 300 of large caps gained 0.3 per cent on Friday to end at 3,852.65.
-- Louise Moon


Shanghai Composite ends week on an upbeat note

Man Wah Holdings (1999 HK) rose 3.8 per cent to HK$4.92 in afternoon trading, its highest level since September 2018.
The sofa maker said it repurchased 2.2 million on-market shares yesterday, at prices ranging from HK$4.65 to HK$4.74 per share, totalling HK$10.22 million, in a filing to the stock exchange.
The move, it said, reflects its confidence in the company’s prospects. Man Wah said cash flow from operational activities is healthy, and it could make further repurchases depending on the market condition.
-- Louise Moon


Sofa maker Man Wah rises after buying 2.2 million shares

Hong Kong’s Hang Seng Index fell 0.3 per cent to 25,954.81, reversing yesterday’s gains.
After a mixed but downbeat week, the city’s bourse continued last week’s declines as a lack of progress in trade talks and ongoing protests played on investors’ minds.
Sectors were mixed. Geely Automobile Holdings (0175 HK) gained the most, rising just over 4 per cent, while oil company CNOOC (0883 HK) was the biggest loser, shedding about 2.5 per cent.
-- Louise Moon


Stocks Blog: Shanghai Composite's weekly loss the highest in seven weeks

Chinese stocks rise in last session before week-long holiday CSI 300 gains 0.3 per cent

Chinese stocks rise in last session before week-long holiday

CSI 300 gains 0.3 per cent