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Zhang Shidong

Srinivasan Iyer

Good day traders,
As expected trading was muted in Hong Kong. Trading was mixed in Hong Kong and the mainland. While the benchmark Hang Seng Index eked out small gains in Hong Kong, the Shanghai Composite fell below the crucial 3,000 level.
BTW, if you would like the Live Stocks Blog emailed to you each morning, click here. 
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.
-- Zhang Shidong in Shanghai and Srinivasan Iyer in Hong Kong


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

Hong Kong stocks cap second straight monthly decline

Hong Kong stocks slide after posting biggest gain in 5 weeks

China needs US$1.4 trillion to boost domestic consumption amid impending trade war 2.0

Stocks

Hang Seng Index rises on back of gains in gaming giant Tencent Holdings

The Hong Kong stock exchange flag flies outside Exchange Square. Photo: Bloomberg

Business

Markets

Shanghai Composite closes 3,000 level for the first time since December 17
Turnover falls in Hong Kong ahead of Christmas holiday


Hong Kong Stock Exchange

China stock market

HKEX

Live

* Overnight markets/ What futures foretell
-- Overnight in US markets, the S&P 500 gained 0.6 per cent, the Nasdaq rose 0.5 per cent, and the Dow Industrials climbed 0.4 per cent.
-- Hong Kong futures were 0.8 per cent higher, while the FTSE China A50 futures slipped 0.4 per cent
* IPO debuts: TOMO Holdings (6928 HK) will debut in Hong Kong today and Giantec Semiconductor (688123 CH) will start trading in Shanghai.
* Economic statistics/Central Bank action: nothing major
*Corporate events: earnings, meetings, news conferences
-- nothing major


Morning guidance

Beijing-Shanghai High-Speed Railway, the operator of the 1,300km high-speed railway linking Shanghai and Beijing, has obtained approval from China Securities Regulatory Commission (CSRC) to start fundraising in what could be the largest IPO on the mainland in nine years.
The regulator said on Friday that the company, underwriters and the Shanghai Stock Exchange would meet to decide on a listing date.
It has yet to unveil a targeted fundraising size, but the company said earlier that the IPO proceeds would be used to buy a stake in Beijing Fuzhou Railway Passenger Dedicated Line Anhui Company, which is valued at 50 billion yuan (US$7.1 billion).
Beijing-Shanghai High-Speed Railway passed an initial IPO hearing on November 14.
In China, a company that passes an IPO review by the CSRC has to get another approval from the regulator to kick off the fundraising process.
-- Daniel Ren


Beijing-Shanghai railway operator kicks off mega IPO

The company said in an exchange announcement that it has signed a letter of intent to buy 10 per cent in the enlarged share capital of a Jiangsu company, which is engaged in the research and development and manufacturing of in-vitro diagnostic products used in early screening of digestive tract tumours, for 10 million yuan (US$1.4 million). 
The letter of intent does not legally bind all parties to proceed with the deal, so it possible a deal may or may not materialise. But if it goes through, there is also an option for China Health (673 HK) to increase its stake to 30 per cent within 12 months. It, however, did not disclose the name of the company or its owner.
-- Georgina Lee


China Health mulls stake in cancer diagnostic products maker

China stocks dropped as technology companies fell after China’s national semiconductor industry investment fund said it plans to cut stakes in three listed companies.
The Shanghai Composite Index lost 0.4 per cent to 2,993.99 on Monday morning.
Gigadevice Semiconductor (603986 CH) tumbled 5.6 per cent to 184.45 yuan in Shanghai, Shenzhen Goodix Technology (603160 CH) shed 4.3 per cent to 196 yuan and Hunan Goke Microelectronics (300672 CH) sank 9.4 per cent to 39.80 yuan.
The fund will sell no more than a 1 per cent stake in each of the three companies, according to separate exchange filings.
Meanwhile, Hong Kong’s Hang Seng Index fared better, rising 0.2 per cent at the open.
-- Zhang Shidong
 


China’s stocks open lower as tech companies weigh on stake cut plan

Kingsoft (3888 HK) said its partly owned unit, Kingsoft Cloud, last Friday submitted a draft registration statement to the US Securities and Exchange Commission for a possible IPO of American depositary shares. 
The proposed spin-off and listing, if successful, would also result in Kingsoft distributing certain portion of Kingsoft Cloud’s shares represented by the ADS to its existing shareholders, it said in an exchange announcement on Sunday. 
Kingsoft Cloud provides cloud storage and cloud computing services. No further details were disclosed, but it said if the listing succeeds, Kingsoft Cloud would no longer be its subsidiary.
-- Georgina Lee


Kingsoft’s cloud unit submits draft registration to US watchdog on proposed IPO

China will cut tariffs on 850 items for most favoured nations starting January 1, 2020, the Finance Ministry said in a statement on its website today, citing the tariff committee under the State Council.
The items that will enjoy the tax break include frozen pork, drugs for treating diabetes and asthma, and semiconductor equipment, the statement said.
-- Shidong Zhang


China to cut tariffs on frozen pork and tech equipment next year

Jiugui Liquor (000799 SZ), a Hunan-based producer of fiery Chinese liquor baijiu, plummeted by the daily maximum of 10 per cent to 35.24 yuan as soon as the market opened.
A Jiugui dealer last week accused the company of having added artificial sweetener to its products after detecting the additive in as many as 50,000 bottles.
The distiller denied the claims in a stock exchange filing on Sunday night, saying it has never purchased artificial sweeteners or added it to its products. The company also accused the dealer of attempting to extort money with these claims.
-- Yujing Liu


Chinese liquor maker plunges on additive controversy

Markets in Shanghai and Shenzhen are weakening again after rising briefly.
The Shanghai Composite Index opened with a loss of as much as 0.5 per cent, before eking out a small gain of 0.1 per cent. It has weakened since and was trading 0.2 per cent lower at 2,998.09.
The Shenzhen Component Index fell 0.3 per cent, and the ChiNext Index of start-ups was down 0.5 per cent.
-- Yujing Liu


Chinese markets struggle to keep gains

Chinese e-commerce giant Alibaba Group Holding (9988 HK) climbed by as much as 1.6 per cent to a fresh intraday high of HK$210.2 in early trading.
The Hong Kong-listed shares of Alibaba have gained nearly 20 per cent since they were listed on November 26.
The company – which also owns the South China Morning Post – is now valued at HK$4.5 trillion in Hong Kong.
-- Yujing Liu


Alibaba touches new high

Semiconductor-related firms dropped broadly in China, after three companies announced separately the country’s chip-focused fund – also known as the “Big Fund” – will reduce its shareholding by less than 1 per cent of their overall stakes.
Gigadevice Semiconductor Beijing (603986 SH), a manufacturer of memory devices, plunged 6.4 per cent to 182.84 yuan. Chip component maker Shenzhen Goodix Technology (603160 SZ) slid 5.7 per cent to 193.2 yuan. Chip manufacturer Hunan Goke Microelectronics (300672 SZ) tumbled 8.9 per cent to 40.05 yuan.
The state-backed 200 billion yuan (US$29 billion) China Integrated Circuit Industry Investment Fund is a key force behind the country’s push for home-grown chip makers, as Beijing seeks to reduce dependence on foreign chips amid tensions with the US.
A gauge tracking 116 semiconductor stocks listed in Shanghai and Shenzhen declined by 2 per cent.
-- Yujing Liu


Semiconductors weaken after state fund cuts stake

The Shanghai Composite Index fell 0.5 per cent to 2,990.71 by lunch break. The benchmark failed to stay above the key 3,000-point support level in the morning session, after three straight sessions of closing above the level.
The Shenzhen Component Index dropped 0.5 per cent, and the ChiNext Index was 0.6 per cent lower.
Semiconductors led the decline, as investors were rattled by China’s state-backed fund to reduce stakes in three chip makers. Liquor makers were also a drag on the market, as losses in scandal-hit Jiugui Liquor (000799 SZ) spread to other industry players.
-- Yujing Liu


Chinese markets slide, with Shanghai dropping below 3,000

Traders in Hong Kong are turning cautious ahead of the Christmas holiday.
The Hang Seng Index swung between small gains and losses, before ending the morning session 0.1 per cent higher at 27,889.12.
China Construction Bank (939 HK), one of the country’s largest lenders, contributed the most gains to the benchmark with a 0.6 per cent gain to HK$6.66.
-- Yujing Liu


Hong Kong market inches up

Giantec Semiconductor (688123 CH), the sole IPO to debut on the mainland today, climbed 145 per cent.
Its shares opened at 88.9 yuan, 167.4 per cent higher than its offering price of 33.25 yuan.
They are currently trading at 81.34 yuan.  
The semiconductor firm raised 727 million yuan from its IPO on the Star Market, the mainland’s Nasdaq-style board.
-- Daniel Ren


Chip firm soars 145 per cent on Star Market debut

The National People’s Congress, China’s top legislature, started reviewing a draft of the amended Securities Law on Monday, which could provide legal grounds for the registration-based initial public offering system.
The amended version was submitted to the standing committee of the NPC for a fourth time since April 2015.
If the amendments are approved, it would help deepen the mainland capital market’s reform by giving market forces a full say in deciding the value of a company launching an IPO.
-- Daniel Ren


Fourth reading on amended Securities Law

In Hong Kong, there will be only morning session trading on Tuesday, and there will be no trading on Wednesday, which is Christmas Day, and Thursday, which is also a public holiday. Friday trading will be as usual.
In the mainland, markets are open all week.
Regarding the trading link between the mainland and Hong Kong known as the Stock Connect:
Northbound trading to mainland exchanges will be closed on Tuesday, Wednesday and Thursday.
Southbound trading to the Hong Kong exchange is closed on December 25 and December 26.   


This week’s holiday trading schedule 

China’s securities regulator has punished four brokerages for failing to exercise due diligence in their stock-pledged repo businesses.
LC Securities has been barred from offering stock-pledged repo business to clients for the next nine months, according to a circular issued by the China Securities Regulatory Commission on the weekend.
Three other brokerages – Shengang Securities, Guosheng Securities and Hwabao Securities – were also ordered to suspend their business for three months.
A stock-pledged repo transaction involves a repo seller pledging stock assets as collateral to the repo buyer, who lends money at a certain interest rate for short periods.
-- Daniel Ren


CSRC punishes four brokerages

Shares of Tianjin FAW Xiali Automobile (927 CH), which is controlled by state-owned vehicle manufacturing giant FAW Group, surged 9.9 per cent after trading resumed following a 12-day suspension.
FAW Xiali jumped 0.36 yuan to close at 3.98 yuan.
Trading in the shares of the carmaker was halted on December 6 after it announced that it would undergo a restructuring.
The company said carmaking assets would be removed from the listed shell to allow China Railway Material Group to engineer a backdoor listing.
-- Daniel Ren


FAW Xiali soars after 12-day trading suspension

China stocks dropped below a psychologically significant threshold, with chip companies leading the declines after a state-owned investment fund announced plans to reduce holdings in them.
The Shanghai Composite Index slid 1.4 per cent to 2,962.75, dropping below the 3,000-point level for the first time since December 17.
About 1,350 Shanghai-listed stocks fell, nearly eight times the number of stocks that rose.
Three semiconductor stocks fell as the China Integrated Circuit Industry Investment Fund said it would cut stakes in them.
Gigadevice Semiconductor (603986 CH) shed 6.7 per cent to 182.3 yuan.
Shenzhen Goodix Technology (603160 CH) lost 5.1 per cent to 194.4 yuan.
Hunan Goke Microelectronics (300672 CH) sank 10 per cent to 39.56 yuan.
-- Daniel Ren


Shanghai Composite ends below key 3,000 level

The Hang Seng Index edged up by 0.1 per cent to 27,906.41, with trading volume low ahead of the Christmas holiday.
Turnover on the mainboard stood at HK$66 billion, much lower than the daily average of HK$80 billion in November.
Social media and gaming giant Tencent Holdings (700 HK) contributed the largest gains to the benchmark, rising 0.7 per cent to HK$377.8, its highest closing price since May.
After six months of range-bound trading, shares of one of the most popular blue chip stocks in Hong Kong have climbed by 14 per cent since the beginning of this month on the back of improved market sentiment over easing US-China trade tensions.
-- Yujing Liu 


Hang Seng closes up, with Tencent at new seven-month high

Hang Seng Index rises on back of gains in gaming giant Tencent Holdings

Shanghai Composite closes 3,000 level for the first time since December 17 Turnover falls in Hong Kong ahead of Christmas holiday

Shanghai Composite closes 3,000 level for the first time since December 17

Turnover falls in Hong Kong ahead of Christmas holiday