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

Yujing Liu

Azar Zaidi

Good morning from a gloomy Hong Kong, where the day’s agenda looks set to be dominated by news of the human-to-human spread in mainland China of the Wuhan pneumonia coronavirus. Trading in Hong Kong was already subdued on Monday, with stocks lacking momentum post the US-China phase one trade deal.
The mainland markets, ironically, posted a strong start to a week shortened by the Lunar New Year holiday, which starts on Friday. The American markets were shut for Martin Luther King Jr Day on Monday, so the main impetus is expected to be news coming out from mainland China.
Join us as we track all the day’s big headlines, particularly those about pharmaceutical, airline and consumer stocks, as well as tourism companies, casinos and film producers. 
And if you would like the Live Stocks Blog emailed to you each morning, click here. 
– Yujing Liu and Azar Zaidi 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.


Hong Kong stocks slide after posting biggest gain in 5 weeks

Beijing and foreign investors need each other in the long run

Hong Kong stocks stage largest rally in 5 weeks; hopes rise for new stimulus from Beijing

Hong Kong aims to revive IPOs with speedy approvals for mainland Chinese firms

China stock market

Hong Kong market weighed down by Wuhan pneumonia, suffers worst fall in over five months

Business

Markets

Shanghai Composite falls most in over two months
Australia reports first suspected Wuhan virus case, death toll rises to four in China
 


The Hang Seng Index declined by more than 800 points on Tuesday, falling by the most in a day since August 5. On the mainland, the Shanghai Composite fell 1.4 per cent, its biggest daily loss since November 11, the Shenzhen Component fell 1.5 per cent and the ChiNext Index shed 0.8 per cent.


Stocks

Hong Kong Stock Exchange

Coronavirus pandemic

Coronavirus pandemic: All stories

Live

Overnight markets/ what futures foretell:  – The US market was closed on Monday for a public holiday. Its major indices surged to record highs on Friday.  – The Hang Seng Index futures were flat on Tuesday morning. The China A50 futures were 0.2 per cent lower.IPO debuts: Shares of Chinese Internet of Things (IoT) services provider Willfar Information Technology (688100 SH) will be traded in Shanghai for the first time. In Hong Kong, Infinity Logistics and Transport Ventures (1442 HK), Zhongguancun Science-Tech Leasing (1601 HK) and product designing firm GHW International (9933 HK) will go public.Economic statistics/ central bank action: China’s ministry of commerce to hold press conference at 10am on 2019 work progress.


Morning Guidance

Jacobson Pharma (2633 HK) said in a voluntary announcement filed with the Hong Kong stock exchange on Monday that it proposed to spin-off and separately list its branded health care business on the Hong Kong bourse’s main board. This will help it expand this business on a separate platform from its existing generic drugs business. The spun off unit will remain a subsidiary after its listing. Jacobson said it would submit the proposal “in due course”. The proposed new unit will cover its proprietary Chinese medicines and branded health and wellness products, such as diagnostic kits and health supplements. The detailed terms of the spin-off listing are still being determined.
Chongqing Rural Commercial Bank (3618 HK) said it will form a consumer finance joint venture with Xiaomi Communications, an indirectly wholly-owned unit of Hong Kong-listed smartphone and mobile technology giant Xiaomi Corporation. The joint venture, which has been approved by the banking regulator, will see the bank inject 450 million yuan (US$65.5 million) for a 30 per cent stake, while Xiaomi Communications will invest 750 million yuan for a 50 per cent stake. The remaining 20 per cent will be held by three other companies, it said in a Chinese language filing with the Hong Kong stock exchange on Monday. “The investment will not have any implications to our capital adequacy and other financial ratios,” it said.
– Georgina Lee   


Overnight filings

A new coronavirus strain that has led to hundreds of infections and three deaths in China was transmittable between humans, a senior health official said.
  “We expect the number of infected cases will increase over the Lunar New Year travel period,” said Zhong Nanshan, director of the State Key Laboratory of Respiratory Disease.
  Chinese president Xi Jinping has called on officials to stop the disease. State broadcaster CCTV quoted Xi as saying that the virus must be “resolutely contained” and “the safety of people’s lives and their physical health should be given top priority”.   
Read the full story here.


Wuhan virus: Human-to-human transmission confirmed

Citadel Securities, a unit of US hedge fund Citadel, has paid 670 million yuan (US$98 million) to China’s securities regulator in a settlement over investigations into an alleged breach of trading rules, according to a statement by the China Securities Regulatory Commission (CSRC) on Monday. The investigations stemmed from China’s market crash in 2015, during which the regulator banned Citadel’s account from trading, as it cracked down on “malicious short-selling” that it blamed for the market rout.
  The CSRC has dropped investigations into Citadel and four other brokerages that served it after the settlement, according to the statement. “Citadel Securities has worked closely with the CSRC through the reconciliation process to reach this agreement,” the firm said in an emailed statement. 
– Yujing Liu


Citadel Securities in US$98 million settlement with Chinese securities watchdog

Infinity Logistics and Transport Ventures (1442 HK) opened 8.1 per cent higher at HK$0.34 from a listing price of HK$0.31. The Malaysian logistics firm has a strong presence in Southeast Asia, with plans of expansion in China.
  GHW International (9933 HK) fell 13.7 per cent to HK$0.44 against an IPO price of HK$0.51. The company supplies polyurethanes, animal nutrition chemicals and other pharmaceutical chemicals.
  Shares of Zhongguancun Science-Tech Leasing (1601 HK) fell by 4.6 per cent to HK$1.45 from an IPO price of HK$1.5. The Beijing-based company leases office space in science and industrial estates to technology companies.
– Kathleen Magramo
Three companies, GHW International (9933 HK), Infinity Logistics and Transport Ventures (1442 HK) and Zhongguancun Science-Tech Leasing (1601 HK) start trading on the Hong Kong stock exchange today.@SCMPNews @scmpbusiness pic.twitter.com/PM9sk1B2Sz
— Kathleen Magramo (@kathmaemagramo) January 21, 2020


Three companies debut on Hong Kong exchange

Shares of Haidilao International Holding (6862 HK), China’s biggest hotpot chain, plunged by as much as 6.9 per cent in early trading in Hong Kong, on concerns that the spread of a new coronavirus strain in the country will weaken demand over the Lunar New Year holiday. Supermarket operator Sun Art Retail Group (6808 HK) also fell by 5.3 per cent.
– Yujing Liu


Chinese consumer companies decline in Hong Kong on Wuhan pneumonia fears

The Shanghai Composite Index failed to hold on to its Monday gains and declined by 0.9 per cent to 3,069.89. The Shenzhen Component Index dropped 0.7 per cent, while the ChiNext Index of start-ups in Shenzhen dipped 0.1 per cent.
  In Hong Kong, the Hang Seng Index has dropped by 1.5 per cent to 28,351.48.
– Yujing Liu


China, Hong Kong markets widen losses in early trading

Shopping malls will be affected the most by the outbreak of the Wuhan pneumonia virus, while supermarkets and fast-food chains the least, according to a report by Jefferies consumer analysts Anne Ling and Kerith Chen published on Tuesday.
  “Assuming Sars’ impact in Hong Kong as the worse-case scenario, we note the following: High-traffic areas, or tourist centric stores, will be impacted. For example, cosmetic chains, shopping malls and restaurants. Fast food and supermarket spaces are least affected in terms of sales, especially supermarkets. However, share prices of these companies were still be impacted as investors incorporate country risk to their share price,” the report said.
  “The recovery can be very fast once the outbreak is under control. Hong Kong is very small and very compact. Thus, any news will impact all consumers significantly and quickly. China is very big, thus at this stage only consumer sentiment in the affected cities is negatively impacted.”
  The plunge in supermarket chain Sun Art Retail Group (6808 HK) was “unwarranted”, the analysts wrote. Shares of Sun Art declined by 6.3 per cent on Monday, and were traded 6.2 per cent lower at HK$9.15 on Tuesday morning.
  “Should the current outbreak turn out to be as bad as Sars [severe acute respiratory syndrome] in Hong Kong, retail sales in affected cities will also be affected. But once the outbreak is under control, the recovery should be fast,” the analysts said.
– Yujing Liu


Plunge in China supermarket group ‘unwarranted’, Jefferies says

Companies linked with the production of medical masks surged in China, after officials confirmed the human-to-human transmission of the new Wuhan coronavirus. Tianjin Taida (000652 SZ), the biggest manufacturer of surgical mask materials in China, jumped by the daily limit of 10 per cent to 4.4 yuan. Shares of the company climbed by 10 per cent on Monday too. Mask maker Shanghai Dragon (600630 SH) also soared by 10 per cent to 9.04 yuan.
– Yujing Liu


Medical mask makers soar in China on virus outbreak

Chinese social-media and gaming giant Tencent Holdings (0700 HK) is on track to its biggest daily loss in two months, after chairman Pony Ma Huateng shed 5 million shares to pocket HK$2 billion.  The 48-year-old founder and chief executive of Tencent sold the shares over four trading days last week, according to filings with the stock exchange. He still holds 814.5 million shares, or 8.53 per cent of Tencent’s overall stake, after the sale.
  Shares of Tencent plunged by 2 per cent to HK$388 on Tuesday. If they maintain the loss, they will record their largest daily drop since November 14, when the share price declined by 2.3 per cent.
– Yujing Liu


Tencent on track for its biggest daily drop in two months

While the Wuhan pneumonia virus outbreak might increase Chinese people’s health care awareness, there is no health care company under the coverage of UBS that will directly benefit from it, analysts led by Stella Xing said in a report published on Tuesday.
  “Unfortunately, there is no drug or vaccine that can treat or prevent this newly recognised virus. Current treatment focuses on alleviating patients’ symptoms, such as reducing fever and delivering oxygen. In other words, no company under our coverage stands to directly benefit from the disease breakout.
  “However, we think the disease breakout could enhance the Chinese population’s health care awareness generally, and indirectly boost the vaccine or body check-up sector,” they said.
  The analysts see the illness’ implications on other sectors. “We observe people in China actively purchasing masks. In addition, we think individuals could choose to stay at home longer, avoid going to crowded public places and reduce travel plans.”
  The death rate of the Wuhan pneumonia virus was 1.5 per cent, compared with 9.2 per cent for Sars in 2003, the analysts said. Based on public information, the coronavirus outbreak “does not seem to be as severe as Sars and is much better controlled,” they added.
– Yujing Liu


Wuhan pneumonia outbreak will not benefit health care firms: UBS

A sharp fall in the Hang Seng Index in early trading on Tuesday was a result of investors stepping up profit taking in China-based consumer stocks, as concerns deepened over the outbreak of a new coronavirus strain, Kenny Wen, wealth management strategist at Hong Kong-based brokerage Everbright Sun Hung Kai, said.
  “As Lunar New Year draws near, people are worried about the pneumonia situation and [are selling] shares faster to pocket gains,” he said. Previously, the Hang Seng Index gained about 3,000 points – or 11 per cent – between a low on December 4 and a recent high on Friday. “The public’s attention towards the virus outbreak has increased significantly over the past 24 hours,” he said.
  This could be a healthy consolidation and represent buying opportunities for investors looking for a timing to catch up on the gains, he said. Wen recommended stocks in sectors such as 5G networks, property management and China consumption.
  The Hang Seng Index is unlikely to dip below 27,700 points, which is a firm support level, according to Wen. The direction of the market going forward will be clearer after the Lunar New Year holiday, he said.
  Meanwhile, the downgrading of Hong Kong’s rating by Moody’s Investors Service on Monday night will have little impact on the market, Wen said. The move was largely symbolic and would barely affect the borrowing costs of Hong Kong firms, he said.
– Yujing Liu


Wuhan outbreak accelerates profit taking ahead of holiday: Everbright Sun Hung Kai

The coronavirus outbreak in the central Chinese city of Wuhan has led to big swings in a number of sectors.
  Industries benefiting from the infectious disease include pharmaceutical stocks and makers of medical equipment such as surgical masks. In Hong Kong, traditional Chinese medicine maker Tong Ren Tang Technologies (1666 HK) led the advance with a 5.6 per cent surge to HK$8.24. In mainland China, a gauge tracking 254 drug makers rose 2.6 per cent, according to data provider Xuangubao. A total of 18 stocks jumped by the daily limit of 10 per cent, including antibiotic maker Shandong Lukang Pharmaceutical (600789 SH).
  On the other hand, consumer-related stocks have taken a heavy beating over concerns about weak spending during Lunar New Year. The stocks affected include airlines, restaurant chains, film producers, tourist attraction operators, the Macau casinos as well as supermarket owners. The Hong Kong-listed shares of Air China (0753 HK) plunged by 6.1 per cent to HK$6.81, ramen shop chain Ajisen China Holdings (0538 HK) declined by 5.9 per cent to HK$2.7, Macau casino operator MGM China Holdings (2282 HK) fell 5.8 per cent to HK$13, while beer maker Tsingtao Brewery (0168 HK) also dropped by 4.2 per cent.
– Yujing Liu


Wuhan pneumonia virus: The winners and losers

The Shanghai Composite Index fell 1 per cent to 3,063.56 by the lunch break on Tuesday. The Shenzhen Component Index weakened by 1 per cent as well, while the ChiNext Index was down 0.5 per cent. Tourism-related stocks led the declines amid concerns about the Wuhan pneumonia coronavirus, with travel services provider Caisa Tosun Development (000796 SZ) falling 5.9 per cent to 8.37 yuan. Pharmaceuticals bucked the trend and gained.
– Yujing Liu


China stocks decline in morning trading

The Hang Seng Index plunged by 2.3 per cent to 28,136.04 by the lunch break on Tuesday, and was on track to recording its biggest daily loss since November 11.
  Blue-chip stocks declined broadly, after Moody’s Investors Service downgraded Hong Kong’s rating by one notch. The rating agency cited concerns about the government’s ability to govern effectively after seven months of protests.
  Weakness in insurer AIA Group (1299 HK) and gaming giant Tencent Holdings (700 HK) were the biggest drags on the benchmark. Shares of AIA declined by 3.3 per cent, while Tencent dropped 2.8 per cent.
– Yujing Liu


Hong Kong market on track to biggest loss in over two months

Airline operators declined broadly in China and Hong Kong amid concerns about the new coronavirus outbreak.Tianjin Airlines, based in the northern Chinese city of Tianjin, said it would waive flight cancellation fees for passengers having a fever flying between January 15 and February 29, in a social media post on the Twitter-like Weibo.
Separately, Beijing Youth Daily, the official newspaper of the city’s Communist Youth League committee, ran an opinion piece on Tuesday calling on airlines and railway operators to waive cancellation fees as part of efforts to combat the spreading disease.
  A gauge of seven airlines listed in Shanghai and Shenzhen declined by 1.7 per cent. In Hong Kong, Air China (0753 HK) led the declines with a 6.2 per cent drop.
– Yujing Liu



Airline stocks weaken on calls to waive cancellation fees

China’s property developers were among the biggest decliners in the stock market, with the Property Index falling by 2 per cent on the Shanghai Composite Index. Poly Developments and Holdings (600048 CH), one of China’s largest home builders, fell by as much as 3.2 per cent to an intraday low of 15.47 yuan, in the biggest intraday percentage drop in a month. Gemdale (600383 CH), a Shenzhen-based developer of residential and commercial property, fell by as much as 2.9 per cent to 13.45 yuan, its lowest intraday level since December 26.
  “We expect the physical property market in 2020 to keep on the current stable trend, with one, national sales volume to drop mildly by zero to 2 per cent with sales value largely flattish amid overall stable policy/credit environment, two, 5 per cent return on investment growth amid slower new starts, [and] three, land sales to recover on low inventory,” Stephen Cheung, property analyst at Jefferies’, said in a research note. “We believe mid-cap developers will continue to be key market consolidators, and [will] outperform with [greater than] 20 per cent sales growth.”
– Eugene Tang


Chinese property developers among biggest decliners

HSBC (5 HK), the city’s biggest bank, denied rumours that one of its employees had contracted the new coronavirus linked with the outbreak in Wuhan.     “We noticed social-media speculation that an HSBC employee has contracted Wuhan Pneumonia, which is a misunderstanding,” the bank said in a press statement. “We have been informed that an employee has been diagnosed with Type A influenza. The wellness of our employees is always a top priority for us. We have, therefore, conducted thorough cleaning and disinfection of the concerned location, HSBC Centre Level 15. All employees are encouraged to stay at home or see a doctor if they feel unwell in any way.”
– Eugene Tang


HSBC denies rumours that employee has Wuhan pneumonia

The fall in China stocks on Tuesday was “mainly the result of the impact of the new Wuhan coronavirus’ spreading”, said Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management.
  “Most sectors declined, apart from pharmaceuticals and stocks related to surgical masks,” he said.
  But China’s medical resources and capabilities are much more advanced than in 2003, when Sars (severe acute respiratory syndrome) broke out, and it’s unlikely that the new virus will create as serious an impact as Sars, he added.
– Yujing Liu
 
 
Defending Against China Coronavirus. (10/15)
  1.Wash hands with soap, warm water or alcohol-based hand sanitizer.
  2.Keep hands, fingers away from eyes, nose, mouth.
  3.Avoid close contact with sick.
  4. Wear a face mask. Like these folks at the Wuhan airport when I landed. pic.twitter.com/XwN1FX1pfX
  — Ramy Inocencio 英若明 (@RamyInocencio) January 20, 2020


Wuhan virus outbreak weighs on most sectors in China, fund manager says

Australian authorities have isolated a man showing symptoms of the coronavirus originating from Wuhan at his home, in the country’s first suspected case of the illness.
  Earlier, health authorities in the central Chinese city of Wuhan confirmed a fourth person had died from the virus infection. Fifteen medical staff in the city have also contracted the virus.
  Regions beyond Wuhan, Beijing and Guangdong province have also reported cases of the illness. Shanghai has confirmed two patients, while provinces including Zhejiang, Yunnan, Sichuan, Shandong and Guangxi have also reported suspected cases of the infection, according to local health authority statements.
– Yujing Liu


Australia reports first suspected Wuhan virus case, as death toll rises to four in China

Chinese home appliances maker Midea Group (000333 SZ) dropped by 3 per cent to 58.43 yuan after it became the first A-share stock this year to hit the 28 per cent cap on foreign ownership.
  Foreign investors together owned 1.95 billion shares in the industrial conglomerate as of Tuesday, through channels including the Stock Connect with Hong Kong, according to data from the Shenzhen Stock Exchange.
  Offshore investors are not allowed to buy Midea shares any more after they hit the limit, but are permitted to sell.
  China’s consumer stocks, including leading home appliances makers and distillers, are foreign investors’ favourites. Shares of Midea returned a stunning 62 per cent during 2019.
– Yujing Liu


Midea weakens after foreign buyers hit ownership limit

Wuhan Guide Infrared (002414 SZ), a maker of infrared cameras and thermal imaging systems, soared after train stations and the airport in Wuhan city, where a new coronavirus has infected hundreds, installed its equipment to identify passengers with symptoms of the illness. The company has supplied 53 of its latest body temperature testing products to train stations and the airport, local newspaper Securities Times reported. Its shares jumped by the 10 per cent daily limit to 32.1 yuan. The stock has risen 56 per cent so far this year.
– Yujing Liu



Wuhan-based maker of body temperature testing products jumps

The Shanghai Composite Index fell 1.4 per cent to close at 3,052.14 on Tuesday, recording its biggest daily loss since November 11. The Shenzhen Component Index fell 1.5 per cent and the ChiNext Index shed 0.8 per cent.
  Consumption and travel-related stocks declined broadly, as investors expected spending to soften during the Lunar New Year holiday because of the new coronavirus.
– Yujing Liu


Shanghai Composite falls most in over two months as Wuhan pneumonia fears deepen

The Hang Seng Index declined by 2.8 per cent – or 801.58 points – to close at 27,985.33 on Tuesday, falling by the most in a day since August 5.
  Blue-chip stocks suffered heavy losses as investors took profits ahead of Lunar New Year, which this year will be haunted by the outbreak of a new coronavirus in China. Gaming giant Tencent Holdings (0700 HK) plunged by 2.7 per cent to HK$385.4, while insurer AIA Group (1299 HK) softened 3.4 per cent to HK$81.85.
– Yujing Liu


Hong Kong market weighed down by Wuhan pneumonia, suffers worst fall in over five months

Shanghai Composite falls most in over two months Australia reports first suspected Wuhan virus case, death toll rises to four in China

Shanghai Composite falls most in over two months

Australia reports first suspected Wuhan virus case, death toll rises to four in China