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Zhang Shidong

Srinivasan Iyer

Good day, traders
Hong Kong and mainland stocks fell for a second straight day as investors moved to the sidelines amid lingering concerns over the US-China trade deal that will be signed later tonight in Washington. 
Catch up on the day's action below.
And if you would like the Live Stocks Blog emailed to you each morning, click here. 
- Zhang Shidong in Shanghai and Srinivasan Iyer 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.
 


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An electronic board displays stock prices at a securities brokerage in Beijing. Photo: EPA-EFE

Business

Markets

Three companies make their debut in Hong Kong 
Software maker Kingsoft hits 52-week high rising for five consecutive sessions


Hong Kong and mainland stocks fell for a second straight day as investors moved to the sidelines amid lingering concerns over the US-China trade deal that will be signed later tonight in Washington.


Hong Kong Stock Exchange

A-shares

China stock market

Trade war

Investing

Live

Overnight markets/what futures foretell  -- Overnight in US markets, the S&P 500 and the Nasdaq both fell 0.2 per cent, while the Dow added 0.1 per cent  -- Hong Kong futures were 0.5 per cent higher, while the FTSE China A50 futures climbed 0.1 per cent   IPO debuts: Jiumaojiu International Holdings (9922 HK), CTR Holdings (1416 HK) and Beijing Enterprises Urban Resources Group (3718 HK) will start trading in Hong Kong today. Aupu Home Style (603551 CH) will debut in Shanghai.   Economic statistics/central bank action: The People’s Bank of China may release the December data on new lending and aggregate financing as early as today.   Corporate events: earnings, meetings, news conferences - nothing major   Later this week: The National Bureau of Statistics is expected to reveal a slew of China’s key economic data, including full-year economic growth.


Morning guidance

The Hang Seng Index rose 0.2 per cent to 28,931.66 at the open on Wednesday, as China and the US are expected to sign a tentative deal today to defuse trade tensions between the world’s two biggest economies. On the mainland, the Shanghai Composite Index slipped 0.1 per cent.
-- Zhang Shidong


Hong Kong stocks inch up at open

Beijing-Shanghai High Speed Railway (601816 CH), the operator of the rail link between China’s two biggest cities, will start trading on the Shanghai exchange tomorrow.
Its offer price of 4.88 yuan represents 23.39 times the company’s earnings, exceeding the cap of 23 times imposed by the securities regulator on most initial public offerings.
New shares trading on the main boards of the mainland’s exchanges are subjected to a maximum 44 per cent gain on the first day of trading.
-- Zhang Shidong


Beijing-Shanghai High Speed to debut tomorrow

Three companies started trading on the Hong Kong stock exchange today.
Shares of Jiumaojiu International Holdings (9922 HK) jumped 42.24 per cent to HK$9.40 from its IPO price of HK$6.60. The Guangzhou-based restaurant chain, known for its pickled-fish dish, operates 328 outlets in mainland China.
CTR Holdings (1416 HK), a Singapore-based construction engineering company, sank 38.057 per cent to HK$0.22 from its IPO price at HK$0.36.
Beijing Enterprises Urban Resources Group (3718 HK), a waste management firm, traded flat at HK$0.69.
-- Kathleen Magramo
 
Three companies, Jiumaojiu International Holdings (9922 HK), CTR Holdings (1416 HK) and Beijing Enterprises Urban Resources Group (3718 HK) started trading on the Hong Kong stock exchange on Wednesday.@SCMPNews @scmpbusiness pic.twitter.com/2f1wk8EXbY
  — Kathleen Magramo (@kathmaemagramo) January 15, 2020


Three IPOs make mixed debut

Muyuan Foodstuff (002714 CH) rose 2.3 per cent to 92.78 yuan in Shenzhen, after the pig-farming company said profit jumped by as much as 1,130 per cent year on year in 2019 because of rising pork prices.
-- Zhang Shidong


Pig-breeder Muyuan climbs most in week after earnings surge

Aupu Home Style (603551 CH), a Hangzhou-based maker of home appliances such as bathroom heating lamps and water heaters, jumped by the 44 per cent daily cap to 21.90 yuan on the first day of trading in Shanghai.
Gains in IPOs on the main board of the Shanghai and Shenzhen exchanges cannot exceed 44 per cent in debuts, according to the bourse rules.
-- Zhang Shidong


Household appliance maker Aupu surges by daily cap on debut

Chow Tai Fook Jewellery Group (1929 HK) fell 0.2 per cent to HK$8.48 in early trading, after the company said it plans to close up to 15 of its Hong Kong stores by the end of its next financial year in March 2021. The company said it does not plan to renew leases of some of the stores. The decision by Hong Kong’s biggest jewellery retailer comes as the months-long protests in Hong Kong has weighed on sales amid a slump in tourists from the mainland. 
-- Iris Ouyang


Chow Tai Fook falls as it announces store closure plans

The People’s Bank of China injected a total of 400 billion yuan (US$58 billion) into the banking system via the open-market operation today.
The move is aimed at maintaining adequate liquidity to meet demand for cash in the run-up to the Lunar New Year, it said in a statement. Some 300 billion yuan of the liquidity injection was in the form of one-year medium-term lending facility, and the rest through the 14-day reverse purchase agreement.
-- Zhang Shidong


PBOC pumps 400 billion yuan into financial system

Selling continued on the mainland and Hong Kong markets today, as concerns over the trade deal remain. The Trump administration has said that it will not lift some tariffs on Chinese goods until after the presidential election and Washington is working on rules that will block more sales to Chinese telecoms juggernaut Huawei Technologies.
The Shanghai Composite Index dropped 0.5 per cent and the Hang Seng Index lost 0.7 per cent.
-- Zhang Shidong


China and Hong Kong stocks slide on lingering trade concern

Lithium battery producers experienced big drops today, following an overall adjustment in Chinese stocks after gains in recent days.
Liaoning Shidai Wanheng (600241 CH) slid 9.9 per cent to 4.8 yuan, Youngy (2192 CH) declined 6.8 to 25.28 yuan, while Shandong Fengyuan Chemical fell 7 per cent to 13.48 yuan.
-- Iris Ouyang


Broad decline in lithium battery makers

Chinese conglomerate Fosun International (656 HK) is exploring options including a potential sale for its German insurance business Frankfurter Leben Holding, Bloomberg reported quoting people with knowledge of the matter.
Fosun has held talks with potential advisers about options for Frankfurter Leben, which is a specialised consolidator of life-insurance portfolios, according to the people. 
No final decisions have been made, and Fosun could still decide to keep the business, the people said. A representative for Fosun declined to comment.
Shares of Fosun International fell 0.5 per cent to HK$11.96.


Fosun explores options for German insurance business

Jiangsu Bioperfectus Technologies (688399 CH) has had a roller coaster morning so far.
The shares fell 0.3 per cent before rising as much as 2.4 per cent after the company said in a filing to the Shanghai stock exchange today that it had developed a test kit for the new coronavirus detected in China.
The company said that the kit is a scientific research product and not for treatment, adding that it was not a new business that would affect its income and profit in the current period.
The provider of in vitro diagnostic devices that are used for infectious disease detection and cancer screening listed on Shanghai’s Star Market in December.  
-- Iris Ouyang


Jiangsu Bioperfectus develops kit for new China coronavirus

Shenzhen Sunyes Electronic Manufacturing Holding (002388 CH) and other Chinese companies that supply components to Huawei Technologies retreated after Reuters reported that the US would block more technology sales to the Chinese telecom giant.
Sunyes Electronics, which derives 42 per cent of its sales from Huawei, dropped 1.5 per cent to 7.50 yuan. Sunwoda Electronic (300207 CH) lost 2.2 per cent to 23.24 yuan and Shenzhen Zowee Tech (002369 CH) fell 1.6 per cent to 9.84 yuan. Huawei contributes at least 29 per cent of the revenues to the two companies, according to Bloomberg data.
The US Commerce Department was drafting a rule that would block exports to Huawei, if US components make up more than 10 per cent of products values, the report said. The rule would be issued in weeks without a chance for public comment, it said.
-- Zhang Shidong


Huawei suppliers slide on report of more US blocks

An almost 60 per cent jump in shares of Xinhuanet (603888 CH), the news portal of China’s state-run Xinhua news agency, over the past three weeks has promoted its biggest shareholder to reduce its stake.
China News Development Shenzhen and China Economic Info Service, the parties acting in concert with Xinhua, plan to sell no more than 10.4 million shares, or a 2.01 per cent stake, in the listed company in the following six months, according to an exchange statement. Xinhua and the two parties control about 64 per cent of the listed unit.
Shares of Xinhuanet surged by the 10 per cent daily limit for a third day to 32.32 yuan in Shanghai today.
-- Zhang Shidong 


Xinhuanet’s stellar run prompts biggest shareholder to cut stake

The Shanghai Composite Index fell 0.7 per cent to 3,086.33 at the break today, as technology stocks bore the brunt of a sell-off amid renewed concerns about the China-US trade tension.
Hong Kong’s Hang Seng Index also dropped 0.7 per cent towards the end of the morning session.
-- Zhang Shidong


China’s stock benchmark set for biggest loss in a week

Shenwan Hongyuan Group initiated the coverage of Fujian Cement (600802 CH) with a buy recommendation, citing strong demand for the building material in the company’s home province of Fujian.
The southeast province will start to build two high-speed railways, 10 motorways and three airports this year, the Shanghai-based brokerage said in a note today.
Fujian Cement is expected to reach a market cap of 5.3 billion yuan, implying a 36 per cent increase in its current market value, it said. The stock fell 2.4 per cent to 10.30 yuan today in Shanghai after rising 25 per cent over the past four days.
-- Zhang Shidong


Fujian Cement rated buy at Shenwan Hongyuan

Tencent Holdings (700 HK) continued its decline for a second session, as weak sentiment among investors dragged down tech stocks. The bellwether fell 0.9 per cent to HK$397.2.
It had touched an 18-month high of HK$406.4 on Monday.
Macquarie Group has set a target price for Tencent’s shares at HK$410 expecting continuous growth of its WeChat business.
-- Iris Ouyang


Tencent continues decline

Kingsoft (3888 HK) hit a 52-week high after rallying for five consecutive sessions. The shares were up 10.1 per cent at HK$23.90 in the latest trading.
Macquarie expects the stock to outperform, as the Beijing-based software company is likely to post strong growth with rapid client adoption.
Kingsoft is also hoping its newly launched blockchain business will become part of the ecosystem around the Chinese central bank’s digital currency.
Read story here
-- Kathleen Magramo


Kingsoft climbs to 52-week high

Blockchain related stocks were among the top gainers in afternoon trading, with the sector rising as much as much 2.63 per cent, according to Wind Information.
Cheney Tsoi, president of Asia Blockchain Society, told the Asian Financial Forum yesterday that central banks issuing digital currency will help promote the adoption of blockchain.
The People’s Bank of China has said that it plans to launch a sovereign digital currency, but those plans have been delayed. Genimous Technology (676 CH) rose close to its daily cap of 10 per cent to 11.26 yuan, while Beijing Certificate Authority (300579 CH) gained more than 6 per cent to 46.56 yuan.
-- Iris Ouyang


Blockchain stocks make impressive gains

Hygieia Group (1650 HK), which had planned to begin trading in Hong Kong today, has delayed its listing, the cleaning service provider said in an exchange statement.
The initial public offering will not proceed for the time being because the Hong Kong-based company needs more time to address the inquiries from the regulators, Hygieia said in a statement, without specifying.
Investors who have applied for the new shares will get refunds, the statement said.
-- Zhang Shidong


Hygieia halts IPO amid inquiries from regulators

The Shanghai Composite Index fell 0.5 per cent to 3,090.04 on Wednesday for a second day of declines.
While China’s delegates are in Washington to sign an official phase one trade agreement, traders were spooked by media reports that some of the current US tariffs will remain in place and the Trump administration plans to come up with a new rule to curb exports to Huawei Technologies.
-- Zhang Shidong


China’s stocks drop for second day on lingering trade concern

China will release 30,000 tonnes of frozen pork from its state reserves on Friday, according to Reuters, which cited a notice on the website of the China Merchandise Reserve Management Center on Wednesday.
The notice comes in the run-up to the week-long Lunar New Year holiday - China’s peak period for pork consumption - which starts on January 25.
Beijing has already released 190,000 tonnes of frozen pork from state reserves since early December to shore up supplies of the meat after the deadly African swine fever devastated the country’s pig herd.


China to release frozen pork reserves

The Hang Seng Index shed 0.4 per cent to 28,773.59 at the close today.
Alibaba Group Holding (9988 HK) fell from a record high, finishing 1.3 per cent lower at HK$220.80. B (883 HK) and pork processor WH Group (288 HK) were the worst performers on the Hang Seng, dropping at least 2.1 per cent.
-- Zhang Shidong


Hang Seng Index ends lower for a second day as concerns linger over US-China trade deal

Three companies make their debut in Hong Kong Software maker Kingsoft hits 52-week high rising for five consecutive sessions

Three companies make their debut in Hong Kong

Software maker Kingsoft hits 52-week high rising for five consecutive sessions