Name: SCMP
Telephone: +852-2680-8888

bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

Zhang Shidong

Deb Price

Good day, traders --
Pro-democracy voters scored a big win Sunday, gaining a majority in 17 of the 18 district councils, in a landslide defeat of the pro-Beijing camp. (Read full SCMP story here.)
The results boosted the Hang Seng, as traders hope it will mean the violence of recent protests will subside. 
Meanwhile, mainland markets rallied as well.
Catch up on the day's action below.
Please help us improve our blog by taking this quick -- under 2 minutes! -- survey. Your feedback will really help us make the blog better for you!
Also, if you would like the Live Stocks Blog emailed to you each morning, click here. 
-- Zhang Shidong and Deb Price in Hong Kong
Note: Information in this blog is on an "as is" basis and not a solicitation or offer to buy or sell any securities or otherwise; and is not investment/professional advice or services in this regard.  It is subject to our T&C.  SCMP (as defined in T&C) shall not be liable for any loss, damage and costs relating to any investments in securities or otherwise in this connection.
 


An America awash in global capital risks spreading financial instability

Rush to ‘value up’ may be Asia stocks’ best defence against Trump

China’s stimulus policy: why leadership, foreign investors can’t see eye to eye

Jack Ma returns to Alibaba campus, as China moves to boost business confidence

Stocks

Hang Seng jumps on heels of big pro-democracy win in Hong Kong elections; Tencent, Wharf REIC among gainers

Pro-democracy supporters celebrate huge gains in the district council elections. Protests have weighed on trading sentiment in Hong Kong. Photo: AP

Business

Markets

Sa Sa International, Wharf REIC shoot up on hopes violence in Hong Kong may wane
ArtGo surges more than 100 per cent 


“The gains are highly related to the election results and the peaceful weekend,” said Alan Li, portfolio manager at Atta Capital. 


China stock market

Alibaba

Tencent

China Mengniu Dairy

Hong Kong protests

Trade war

Hang Seng Index

Hong Kong district council election

Wharf Reic

Live

Auto Italia (720 HK) -- which sells Ferraris and Maseratis -- is in talks with certain independent third parties about taking a minority stake in a biologistics-linked company, it said in a stock exchange filing after market close Friday. 
The company being looked at “holds facilities to provide comprehensive biologics development andmanufacturing services to biotech and pharmaceutical companies at all stages,” Auto Italia said. 
It added that it has sought professional advisers to conduct due diligence on the potential investment, which if proceeds, may constitute a notifiable transaction under Hong Kong listing rules.
Its shares shot up 40 per cent last Friday, marking a two-year high, despite that the company posted a profit warning on Monday that it expects a loss before tax of HK$8 million for the first 10 months of this year.
-- Georgina Lee    


Auto Italia considers minority stake in biologics developer

The drama around ArtGo (3313 HK) continues.
Last week, it saw some US$5.7 billion worth of its value wiped out after the MSCI reversed its initial plan to include the stock in its indexes citing concerns abou its “investibility.”
In a Sunday stock exchange filing, ArtGo said 385.5 million shares held by a company controlled by Leung Ka Kit, the spouse of chairwoman Wu Jing, were forced to be sold by certain stock brokers under a margin financing arrangement. 
This was on top of another 150.8 million shares that were forced to be sold on Thursday. These were held by the same company of Leung. 
The force-sale was caused by the sharp drop in ArtGo share price, which plunged 98 per cent last Thursday following MSCI decision. It fell another 8.2 per cent to 28 HK cents.
-- Georgina Lee    


Embattled marble maker ArtGo’s saw further forced selling of director’s spouse shares to zero

China Mengniu Dairy (2319 HK) says it has entered into a share sale and purchase agreement to buy 100 per cent of the shares of Lion-Dairy and Drinks, an Australian-branded dairy company.
The shares would be valued at about HK$3.9 billion, China Mengniu said in a stock exchange filing this morning.
Lion-Dairy is an indirect subsidiary of Kirin Holdings, listed in Japan (25030).
The move comes after Mengniu Dairy moved in September to buy Australia baby milk formula maker  Bellamy’s for US$1 billion as part of its global expansion goals.
“Together with the infant milk formula products offered by Bellamy’s upon completion of its acquisition by the Group, this extensive business layout would equip the Group with a stronger foundation to excel in the Asia Pacific markets,” it said in its filing.
-- Deb Price 


China Mengniu Dairy aims to buy another Australia milk company

MSCI will raise the weighting of Chinese stocks in its global benchmarks for a third time this year after the market closes Tuesday.
The rebalance will increase the inclusion factors to 20 per cent from 15 per cent currently and will also add Chinese mid-caps for the first time, according to MSCI.
The move is expected to spur an inflow of between 250 billion yuan (US$35.5 billion) and 300 billion yuan, according to the estimate by China International Capital Corp, an increase by as much as 70 per cent from the balances in May and August.
-- Zhang Shidong


MSCI to rebalance China stocks third time this year

* Overnight markets/ What futures foretell
-- Friday in US markets, the S&P 500 gained 0.2 per cent, the Nasdaq rose 0.16 per cent, and the Dow Industrials added 0.4 per cent
-- Hong Kong futures were 0.1 per cent lower, while the FTSE China A50 futures climbed 0.4 per cent
* IPO debuts: Huali University Group (1756 HK) will begin trading in Hong Kong today. Guangzhou Tongda Auto Electric (603390 CH) will debut on the Start Market in Shanghai and Jiangsu Sidike New Material Science & Technology (300806 CH) in Shenzhen.
* Economic statistics/Central Bank action: nothing major
* Corporate events: earnings, meetings, news conferences: nothing major
*Later this week: China’s statistics bureau is due to release the October data on industrial companies’ profit on Wednesday.


Morning guidance 

The Hang Seng Index shot up 1 per cent to 26,868.98 on the heels of a big win at the ballot box for pro-democracy candidates and their supporters.
Internet giant Tencent (700 HK) jumped 1.7 per cent to HK$339.40, while online ticketing to food delivery services provider Meituan Dianping (3690 HK) shot up 2.2 per cent to HK$100.20.  
China Mengniu Dairy (2319 HK) slipped 0.5 per cent to to HK$29.25 after announcing it has entered into a share sale and purchase agreement to buy 100 per cent of the shares of Lion-Dairy and Drinks, an Australian-branded dairy company.
The step to buy Lion-Dairy and Drinks comes after China Mengniu Dairy in September said it was moving to purchase Australia baby milk formula maker  Bellamy’s for US$1 billion as part of its global expansion goals.
Also in Hong Kong, Kasen International Holdings (496 HK) shot up 15.2 per cent to HK$3.03.
The Chinese furniture maker and developer soared 478 per cent on Friday after it rebutted claims of wrongdoing by short-seller Blue Orca.
The stock had slumped 90 per cent after the attack.
-- Deb Price    


Hang Seng rallies after big pro-democracy win; Tencent, Meituan Dianping gain

Sentiment remained cautious on the mainland’s stock market today as traders watch out for possible unraveling of crowded trading that triggered sell-offs on some of the best-performing stocks this year on Friday.
The Shanghai Composite Index added 0.2 per cent to 2,889.50 after falling 0.6 per cent for the previous trading day.
Steelmakers led the pack of gainers, while electronics companies and liquor distillers were among the worst performers.
-- Zhang Shidong


China’s stocks open little changed as traders stay vigilant of crowded trading

Huali University Group (1756 HK) fell as it debuted on the main board of Hong Kong Stock Exchange today.
The share price fell 12.3 per cent to HK$2.86, from the offering price of HK$ 3.26. The shares were oversubscribed 3.72 times before the debut.
Huali University Group has three schools in Guangdong Province and provides private higher education and vocational education programs. Currently, there are more than 40,000 students enrolled.
In terms of the number of students, it was ranked as the fourth among all private vocational schools in China in 2018, according to a Frost & Sullivan’s report.
 
Huali University Group (1756 HK) debut on the Hong Kong Stock Exchange today. @SCMPNews @scmpbusiness @HKEXGroup pic.twitter.com/zrmOmwpkta
  — Snow Xia (@SnowXia05) November 25, 2019
-- Snow Xia   


Huali University Group falls in Hong Kong debut

China’s cyclical stocks are coming back.
Steel and cement stocks have been long abandoned by investors as China transitions to a more consumption-based economy.
Steel and cement stocks are helping the benchmark gauge post gains in early trading.
A gauge of steelmakers surged 3.7 per cent, while a measure of cement makers added 2.7 per cent.
Changjiang Securities attributed the rare buying interest in the sectors to rising demand amid improving property sales and curbs on excessive capacity.
Steel transactions rose 28 per cent from a year earlier last week and aggregate inventories dropped 6 per cent from a week earlier, the brokerage said.
Low expectations among investors also helped the valuation expansion of the sectors, the report said.
Among them, SGIS Songshan (000717 CH) and Xinjiang Ba Yi Iron and Steel (600581 CH) both surged by the 10 per cent daily cap, while Gansu Shangfeng Cement (000672 CH) rose 7.6 per cent.
-- Zhang Shidong


Steel and cement makers rally on improving demand

Guangzhou Tongda Auto Electric (603390 CH) and Jiangsu Sidike New Material Science and Technology (300806 CH) both surged by the 44 per cent daily limit from their initial public offering prices today in their debuts.
Gains are capped at 44 per cent gains for debutants on the first day of trading on the mainland’s exchanges, while losses are limited to no more than 36 per cent.
-- Zhang Shidong


China’s two IPOs jump by daily limit in debuts

The runaway rise in China’s pork prices may come to an end.
A major positive signal has emerged: the stock of breeding sows posted its first month-on-month increase for the first time since April last year in October.
The gauge, an underlying measure of future supply of the meat, increased 0.6 percent from the previous month, according to the agricultural ministry.
Declines in the stock of hogs also narrowed last month, with a 0.6 per cent drop against 3 per cent and 9.8 per cent decreases in September and October, according to the ministry.
The decline in hog production basically hit the bottom and a recovery in the hog stock was expected by the end of the year, said Yang Zhenhai, a director at the agricultural ministry, at a press conference in Beijing on Friday.
That is good news for stock investors, as a pause in rises in pork prices takes pressure off consumer inflation and allows the central bank to further loosen monetary policies.
Still, that is bad news for hog-breeding companies. Muyuan Foodstuff (002714 CH) lost 1.8 per cent to 90.33 yuan and Hunan New Wellful (600975 CH) retreated 2.4 per cent to 7.47 yuan.

-- Zhang Shidong


China’s hog cycle may end

Property stocks shot up in early trading, with the Hang Seng Properties Index rising 2.4 per cent, on hopes violent protests may subside after the big win by the pro-democracy camp in Sunday’s elections.
“We believe these election results could lead to less violence of the protesters, who should be quite happy with this set of results, and that should bode well for Hong Kong property stocks’ share prices in the near term,” said Raymond Cheng, head of Hong Kong and China research and Hong Kong and China Property at CGS-CIMB Securities.
“For Hong Kong property stocks, we like Sun Hung Kai Properties (16 HK) and New World Development (17 HK). For landlords, investors may consider Swire Properties (19 HK) and Wharf REIC (1997 HK),” Cheng said.
 -- Lam Ka-sing


Property stocks gain on heels of pro-democracy election wins

Sa Sa International (178 HK) shot up 6.9 per cent to HK$1.86, while Wharf REIC (1997 HK) gained 5.7 per cent after the huge pro-democracy win in Sunday’s elections.
Among Hang Seng sub indexes, the property sector led gains, posting a 2.9 per cent gain.
Property stocks have been hammered as violent protests led to a sharp decline in mainland tourist visits, which are a huge source of revenue for shopping malls. Also, new flat sales have often been affected, as buyers worried about the impact of the protests on home prices and employment.
“The victory of pro democracy boosted up the market sentiment and people expect at least short term alleviation of the social unrest,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.
Other factors for the positive market sentiment include growing optimism that a partial trade deal will be agreed upon by Beijing and Washington, as well as the first day of trading on Tuesday of e-commerce giant Alibaba in Hong Kong in its secondary listing. (Alibaba is the parent company of the South China Morning Post.)
“The gains are highly related to the election results and the peaceful weekend,” said Alan Li, portfolio manager at Atta Capital.
-- Deb Price    


Sa Sa International, Wharf REIC surging on hopes violence in Hong Kong may wane

Sell-offs of some of the best performers on China’s stock markets extended into today, as traders cashed out of technology companies and liquor distillers. 
WUS Printed Circuit (002463 CH), a maker of circuit boards that are supplied to Huawei Technologies, dropped 4.5 per cent to 20.90 yuan, heading for a fourth consecutive day of declines. The stock had surged by as much as 307 per cent this year. 
Kweichow Moutai (600519 CH), the world’s most valuable distiller, slid 1.8 per cent to 1,172.87 yuan and Wuliangye Yibin (000858 CH) shed 1.4 per cent to 127.11 yuan, with both stocks at least doubling this year. 
Institutional traders typically trim their holdings of stocks with outsized gains by the year end to meet demand for redemption and performance reviews, said Li Lifeng, a strategist at Sinolink Securities in Shanghai. 
He recommends investors shift to banks, building material makers and other low-valuation companies.
-- Zhang Shidong   


Crowded trading of China’s best-performing stocks continues to unravel

Meituan Dianping (3690 HK) has been upgraded to buy from outperform by Daiwa Capital Markets, with its target price raised significantly to HK$115 from HK$85. 
“Meituan’s strong 3Q19 print makes us believe it has reached a critical inflection point, as its food delivery segment has been able to achieve two consecutive quarters of profitability,” John Choi and Candis Chan wrote in a report emailed out today.
“With its “Food+” strategy clearly gaining momentum supported by a growing number of transactions in different use cases, we expect Meituan to further solidify its leadership in the Super App category,” they wrote. 
Despite shares of the online ticketing-to-food-delivery provider soaring more than 100 per cent this year, “we expect Meituan to see further upside as it embarks on solidifying its position in local services,” they added.
Meituan Dianping climbed 0.7 per cent in morning trading to HK$98.70.
-- Deb Price    


Meituan Dianping raised to ‘buy’ at Daiwa Capital Markets

The Hang Seng Index ended the morning session with 1.7 per cent in gains, to 27,062.53.
Of the 50 stocks on the Hang Seng, 47 posted gains.
Of Hang Seng sector sub-indexes, property was the top gainer, rising 2.9 per cent.
Wharf REIC (1997 HK) shot up early 6 per cent to HK$45.30, while Sun Hung Kai Properties (16 HK) ran up 3.5 per cent to HK$114.80 and New World Development (17 HK) rose 2.5 per cent to HK$10.60.
Meanwhile, Chinese Internet giant Tencent (700 HK) rose 1.9 per cent to HK$339.80.
In other Hong Kong stocks, Kasen International (496 HK) soared 62 per cent to HK$4.26. 
The stock shot up 478 per cent on Friday after rebutting a short seller’s claims. The stock had slumped 90 per cent after the short-seller’s attack on Thursday, when trading was halted before the lunch break.
Meanwhile, ArtGo (3313 HK) shot up 35 per cent to 38 HK cents. Last week, it saw some US$5.7 billion worth of its value wiped out after the MSCI reversed its initial plan to include the stock in its indexes citing concerns about its “investibility.”
-- Deb Price 


Kasen International shoots up 62 per cent; property stocks top gainers in morning 

China’s step to strengthen intellectual property rights -- a key issue in the ongoing US-China trade talks -- gave a boost to the Hang Seng Index and other Asia markets, says equities portfolio manager Ken Wong at Eastspring Investments.
Xinhua, China’s state news agency, reported Sunday evening that the government had issued a notice that strengthening IP will improve the country’s competitiveness. China will strengthen punishment of infringement and counterfeiting, according to the report, and improve patent, trademark and copyright laws. It will also greatly increase legal compensation for infringement, according to the report.
That is boosting sentiment that a partial trade deal can be worked out, Wong said.
The Hang Seng Index gained 1.6 per cent to 27,006.79, while the Shanghai Composite Index rose 0.5 per cent to 2,899.
Meanwhile, as trading continues elsewhere, Japan’s Nikkei 225 has gained 0.55 per cent, while South Korea’s Kospi 200 Index has risen 1 per cent.
-- Deb Price     


China’s step to strengthen intellectual property rights boosting sentiment in Asia markets, says analyst Ken Wong

While Hong Kong-based developers get a tailwind from an overwhelming victory of pro-democratic members in the city’s district council elections, their Chinese counterparts are also rallying.
Valuations have already reached levels that are extremely attractive and there is a chance that tightening measures imposed on the sector may be fined-tuned, Citic Securities said in a research note today.
Among the leading gainers, Guangzhou R&F Properties (2777 HK) surged 6.4 per cent to HK$13.62 in Hong Kong, on track for its biggest gain since August last year, China Vanke (000002 CH) advanced 5 per cent to 28.35 yuan in Shenzhen and Poly Developments and Holdings Group (600048 CH) rose 3.2 per cent to 14.83 yuan in Shanghai.
-- Zhang Shidong


Chinese developers rally as Citic sees battered valuations and prospects of policy fine-tuning

The Hang Seng Index is looking to break a three-session streak below the psychologically important level of 27,000 points.
The two resistance levels to watch for are 27,000 and 27,400, says Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.
The Hang Seng Index has gained 1.7 per cent to 27,035.52.
 

-- Deb Price    


Hang Seng on track to close back above 27,000 

Mainland Chinese property developer JY Grandmark began its Hong Kong share offering today as its seeks to raise up to HK$1.45 billion (US$185 million) before listing on the main board December 5.
The company, founded by Michael Chan, the son of Chan Cheuk Yin, the vice-chairman of Guangdong-based developer Agile Group, will sell a total of 400 million shares globally. Its Hong Kong public offering portion represents 10 per cent of the global total, or 40 million shares. The period for subscriptions will end on Thursday, according to an exchange announcement filed on Sunday night.
JY Grandmark was incorporated in 2013 and operates principally in China’s Guangdong and Hainan provinces, and has land resources in Yunnan and Hunan provinces as well.
JY Grandmark expects to spend 60 per cent of the net proceeds on construction, while 30 per cent will go towards acquiring land in the mainland Chinese provinces that it currently operates in. The remainder is slated for general working capital needs.
For the first half this year, JY Grandmark made a net profit of 181.2 million yuan (US$25.7 million), up from a net loss of 19.1 million yuan. As of the end of September, it had a property portfolio of 30 projects in 10 locations, with aggregate gross floor area of about 3 million square metres. Of this, completed properties available for sale or lease accounted for about 0.2 million square metres.
-- Georgina Lee 


Mainland China property developer JY Grandmark launches Hong Kong IPO seeking US$185 million

Hong Kong’s top judge has reminded critics of court rulings that judicial independence is a cornerstone of the local legal system, saying that is spelled out in the “clearest of terms” in the city’s mini-constitution.
Geoffrey Ma Tao-li was speaking publicly for the first time since Beijing said the power to interpret the Basic Law rested solely with the nation’s top legislative body, the National People’s Congress Standing Committee (NPCSC).
Last week, Zang Tiewei, spokesman for the NPCSC’s Legislative Affairs Commission, attacked a High Court ruling that led to the suspension of the city government’s mask ban. His further assertion, that the power to rule on a law’s constitutionality was the preserve of the committee, drew opposition from local legal experts.
Speaking on Sunday evening at a gala dinner on the 50th anniversary of the foundation of the University of Hong Kong’s law school, Ma renewed calls for a proper understanding of the city’s legal system when a local court ruling is being criticised. The chief justice did not directly mention Zang’s remark.
Read full story by Alvin Lum here.   


Top judge Geoffrey Ma reasserts Hong Kong’s judicial autonomy after Beijing criticism

In a statement on Monday, city leader Carrie Lam Cheng Yuet-ngor promised to reflect on the voters’ message in the Sunday election results.
“I have noticed many analyses of the elections note the results reflect residents’ dissatisfaction with current social issues and structural problems,” the statement read.
“The government will definitely listen humbly and reflect on the people’s opinion.”
By noon on Monday, the pro-democracy camp had won 17 out of 18 district councils, taking more than 340 seats. Islands district – which has 10 elected seats and eight given automatically to pro-establishment rural chiefs – was the only one held by the pro-Beijing camp.
All councils had been under pro-establishment control since the 2015 elections.
Read full story by SCMP reporters here. 


Hong Kong’s Carrie Lam says government will ‘listen humbly and reflect’ on election message

China’s so-called old economy stocks helped the benchmark close in positive territory, with companies from steelmakers and cement makers to property developers rallying.
The Shanghai Composite Index rose 0.7 per cent to 2,906.17 at the close, snapping a three-day losing streak. Theories on what caused the shift of the buying interest ranged from improving demand for building materials and fairly good home sales to low valuations.
SGIS Songshan (000717 CH) and Anyang Iron and Steel (600569 CH) both surged by the 10 per cent daily cap and Huaxin Cement (600801 CH) also jumped by that much.
On the flip side, the stocks that had the best performance this year bore the brunt of the sell-off in what Sinolink Securities said was a typical year-end practice by institutional investors.
Shenzhen Goodix Technology (603160 CH), a maker of semiconductor components, slid 9.9 per cent to 185.28 yuan after surging 161 per cent this year through last week.
-- Zhang Shidong


China’s stocks rise first time in four sessions as steelmakers rally

The Hang Seng Index rose 1.5 per cent to 26,993.04, with 47 of the 50 constituent stocks finishing with gains, as Sunday elections boosted trading sentiment and hopes growing for a partial US-China trade deal. 
Property stocks were top gainers, with the Hang Seng property sub-index posting a 2.4 per cent increase.
Wharf REIC (1997 HK) shot up. 4.7 per cent to HK$44.75. It owns such shopping centres as Harbour City and Times Square. Retail sales have been clobbered by the protests, which led to a huge drop in tourists arrivals from mainland China. Meanwhile, Sun Hung Kai Properties (16 HK) rose nearly 3 per cent to HK$114.20, and New World Development (17 HK) shot up 1.9 per cent to HK$10.54. 
China Mengniu Dairy (2319 HK) rose 0.9 per cent to HK$29.65 after saying it is moving to buy Lion-Dairy and Drinks, an Australian-branded dairy company. That follows its move in September to buy Australia baby milk formula maker  Bellamy’s for US$1 billion as part of its global expansion goals.
Meanwhile, traders piled into such battered stocks as Sa Sa (178 HK), a cosmetics chain, which gained  5.7 per cent to HK$1.84. 
ArtGo (3313 HK) shot up nearly 118 per cent. Last week, it saw some US$5.7 billion worth of its value wiped out after the MSCI reversed its initial plan to include the stock in its indexes citing concerns about its “investibility.” 
And Kasen International (496 HK) soared 52 per cent to HK$4.  The stock shot up 478 per cent on Friday after rebutting a short seller’s claims. The stock had plunged 90 per cent on the short-seller’s attack last Thursday, when trading was halted before the lunch break.
-- Deb Price    


Hang Seng jumps on heels of big pro-democracy win in Hong Kong elections; Tencent, Wharf REIC among gainers

Sa Sa International, Wharf REIC shoot up on hopes violence in Hong Kong may wane ArtGo surges more than 100 per cent

Sa Sa International, Wharf REIC shoot up on hopes violence in Hong Kong may wane

ArtGo surges more than 100 per cent