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China Stock Turmoil 2015
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The Hang Seng Index closed at 21,251.57 points, down 5.17 per cent or 1,158.05 points. The H-shares index closed at 9,602.29, down 5.89 per cent or 592.76 points. Photo: Nora Tam

Live | China Markets Live - Shanghai ends at 6-month low, Shenzhen down 7 per cent and Hong Kong off 5 per cent at close

Shanghai index gains for 2015 erased, market trading in negative territory

Welcome to the SCMP's live markets blog. The intense volatility of recent weeks has every chance of remaining the core underlying theme of activity. Investors are increasingly focused the broader question of how this episode might affect the wider economy as many suspect the equity bubble has yet to fully deflate. We'll bring you the key levels, trading statements, price action and other developments as they happen.

 

4:25pm: For story on "Bloody Monday" on China's equity markets and closing numbers, click here.

4:18pm: The Hang Seng Index closed at 21,251.57 points, down 5.17 per cent or 1,158.05 points. The H-shares index closed at 9,602.29, down 5.89 per cent or 592.76 points.

4:13pm: The carefully chosen portfolio by BNP Paribas of Chinese stocks has failed to hold up to the market rout, according to a compilation of their performance made by the SCMP.

Out of some 24 stocks in the French bank’s China basket, only six have outperformed the benchmark Hang Seng Index since July 9 when the report was published. Two others have traded in line with the Hang Seng.

The majority, or 16 of them, have retreated between 13 per cent to over 20 per cent over the last seven weeks.

For more on story, click here. 

The most resilient stock is Shenzhen International Group, a logistics firm, which gained almost 1 per cent when others in the portfolio are falling.

The biggest losers are Ping An Insurance, KWG Property and NYSE-listed online retailer Vipshop Holdings, all of which have fallen over 20 per cent. 

3:45pm: For story on global contagion impact of Chinese stock rout, click here.
3:37pm: For more on Chinese stocks ending in another rout, with Shanghai finishing at a 6-month low, click here. 

3:30pm: Mainland China today recorded 8,149 million yuan of net money inflows from Hong Kong through the Shanghai–Hong Kong Stock Connect, the biggest of its kind in two weeks.

3:00pm: The Hang Seng Index trades to 21,277.65 points, down 5.05 per cent or 1,131.97 points. The H-shares index stands at 9,531.13, down 6.51 per cent or 663.92 points.

2:38pm: In Shanghai, state-owned large caps Petrochina and China Life Insurance rebounded in volatile afternoon trading, helping narrowing some of the benchmark Shanghai Composite Index’s earlier losses. 

Petrochina traded at 9.99 yuan, down 0.5 per cent while China Life Insurance stands at 23.15 yuan, down 1.53 per cent.  

2:18pm: The Hang Seng Index improves slightly to 21,354.44 points, but still down 4.71 per cent or 1,055.18 points. The H-shares index stands at 9,590.63, down 5.93 per cent or 604.42 points. 

2:18pm: The Shanghai Composite Index has recovered a little to 3,241.06 points, down 7.60 per cent or 266.68 points. The CSI 300 large cap index continues to trade poorly at 3,289.51, down 8.36 per cent or 300.03 points.

2:18pm: The Shenzhen Composite Index is stable at 1,882.81, down 7.68 per cent or 156.58 points. The ChiNext is also steady at 2,153.44, down 8.05 per cent or 188.52 points.

2:17pm: For SCMP's midday stock report, please click here.

2:06pm: Hong Kong’s Growth Enterprise Market (GEM), on which 64 SME stocks are listed, is trading at 431.12 points today, down 13.27 per cent or 65.98 points.

2:05pm: Taiwan’s Executive Yuan, the de facto cabinet on the island, is in discussions to order its national stabilisation fund and other major mutual funds to buy shares in an effort put a floor under its plunging stock market, China Times newspaper reports.  

The island’s benchmark Taiwan Stock Exchange Weighted Index in the morning plunged the most to its lowest level since 2012 before paring some of its losses in afternoon trading. 

1:33pm: The Hang Seng Index slides further to 21,297.81 points, down 4.96 per cent or 1,111.81 points. The H-shares index trades at 9,520.26, down 6.62 per cent or 674.79 points. 

1:33pm: The Shanghai Composite Index trades at 3,208.02 points, down 8.54 per cent or 299.72 points. The CSI 300 goes to 3,276.25, down 8.73 per cent or 313.29 points. 

1:33pm: The Shenzhen Composite Index trades at 1,882.62, down 7.69 per cent or 156.77 points. The ChiNext trades at 2,153.31, down 8.05 per cent or 188.64 points.

1:30pm: The only H-share to have made a gain in Hong Kong is Anhui Expressway, up 0.32 per cent to HK$6.20 on the back of a 7.5 per cent net profit increase to 467 million yuan.

Zhejiang Expressway, Huayu Expressway and Shenzhen Expressway, which also released interim results, are down between 5 and 10 per cent.

1:03pm: The Hang Seng Index starts the afternoon at 21,369.70 points, down 4.64 per cent or 1,039.92 points. The China Enterprises Index of H-shares has dropped to 9,516.49, down 6.66 per cent or 678.56 points.

1:03pm: The Shanghai Composite Index trades at 3,211.20 points, down 8.45 per cent or 296.54 points. The CSI 300 of large-cap stocks is at 3,282.67, down 8.56 per cent or 307.43 points. 

1:03pm: The Shenzhen Composite Index has dropped to 1,883.09, down 7.66 per cent or 156.31 points. The emerging tech-focused ChiNext Price Index is at 2,153.22, down 8.06 per cent or 188.74 points.

12:41pm: Onshore yuan trades at 6.3971 to the dollar by midday, weaker from the previous close at 6.3887. 

Offshore yuan trades at 6.4683 to the dollar by midday, weaker from the previous close at 6.4544. 

12:21pm: The Hang Seng Index (orange) and H-shares index (purple) at midday today, including the drop from Friday's closing to today's opening. Click to enlarge.

12:09pm: Fitch Ratings weighs on mainland property developers’ bond issue activites: 

“Chinese property developers' issuance in the onshore bond market will continue to increase in 2H15, regulations and market conditions permitting, while offshore high-yield Chinese property bond issuance is likely to contract further in the short term.

Lower-rated Chinese property developers, especially those in the 'B' rating category on the international rating scale, reap the biggest cost advantage from issuing debt in the domestic bond market and may be more active in China's onshore bond market in 2H15 as they tap the abundance of idle liquidity. The cost gap between onshore and offshore markets could widen further if the US Federal Reserve raises its benchmark rates towards end-2015.

However, China's corporate bond market is at an early stage of development; its depth and track record has yet to become comparable to that of the offshore market and the risk of regulatory interventions is higher.”

12:09pm: The Hang Seng Index closed at midday at 21,369.7, down 4.64 per cent or 1,039.92 points. The China Enterprises Index (H-share index), which track Hong Kong listed Chinese companies, closed at 9,516.49, down by 6.66 per cent or 678.56 points. 

11:57am: China indices at midday today, including the drop from Friday's closing to today's opening: the Shanghai Composite (orange), Shenzhen Composite (green), CSI300 (purple) and ChiNext (blue). Click to enlarge.

11:40am: The Shanghai Composite Index closed the morning session at 3,211.2 points, down 8.45 per cent, or 296.54 points. The CSI300 index of Shanghai-Shenzhen large cap stocks finished the morning trades at 3,282.11, down 8.57 per cent or 307.43 points. 

11:40am: The Shenzhen Composite closed the morning session at 1,884.26, down 7.61 per cent, or 155.13 points. The NASDAQ-style ChiNext Price Index slides 8.04 per cent, or 188.34 points to trade at 2,153.62.

11:35am: UBS: 

“Worries that the world economy is losing momentum caused many investors to seek safety in government bonds and money markets. Investors should brace for further volatility.

But we expect this bout of risk aversion to pass, with equities in developed markets resuming their upward trend. We also believe central banks stand ready to provide support if sentiment worsens further. 

The primary catalyst for the market angst towards the end of last week was the release of data showing China’s manufacturing sector shrinking at its fastest pace since 2009. Investors have been on high alert for signs of ebbing Chinese growth since the nation’s central bank announced a depreciation of the currency earlier this month. 

In addition, Greece made an unwelcome return to the headlines when Prime Minister Alexis Tsipras called a snap election, which is likely to be held next month. 

Last week’s economic data was not bad enough to change our fundamental outlook for global growth. The manufacturing side of the Chinese economy has been struggling for some time and the construction sector has been hit by oversupply and soft demand.

We are not expecting conditions to worsen in China. Rather we believe that momentum will gradually pick up towards year-end as accumulated easing measures begin to take effect. That said, China has the capacity and willingness to enact more policy measures.”

11:32am: The Hang Seng Index trades at 21,381.94, down 4.59 per cent or 1,027.68points. The China Enterprises Index (H-share index), which track Hong Kong listed Chinese companies, trades at 9,532.28, down by 5.5 per cent or 662.77 points. 

11:22am: In Shanghai, the biggest index movers are in the financial and energy counters. 

After Brent oil prices dropped 2.55 per cent to US$45.46, Sinopec is down 8.21 per cent, taking 5.67 points off the Shanghai Composite, while PetroChina has dropped 9 per cent costing the index a whopping 18.66 points. 

Industrial & Commercial Bank of China is taking 13.64 points off the index, followed by Agricultural Bank of China’s 9.48 points. Bank of China and China Life are both around negative 6 points.

11:13am: Hong Kong dollar is trading at 7.7534 against the US dollar, near upper end of the currency peg. Euro/dlr strengthened by 0.80 per cent at 1.1477. Dlr/yen at 120.86, weaker by 0.97 per cent. Pound/dlr weaker by 0.08 per cent to 1.5682. Australian dollar to US dollar weaker by 1.31 per cent to 0.7220.

11:11am: The Hang Seng Index trades at 21,508.32, down 4.02 per cent or 901.3 points. The China Enterprises Index (H-share index), which track Hong Kong listed Chinese companies, trades at 9,648.2, down by 5.36 per cent or 546.85 points. 

11:11am: The Shanghai Composite Index trades at 3,225.42 points, weaker by 8.05 per cent, or 282.32 points. The CSI300 index of Shanghai-Shenzhen large cap stocks trades at 3,301.16, down 8.03 per cent or 288.38 points. 

11:11am: The Shenzhen Composite Index trades at 1,889.06, down 7.37 per cent or 150.34 points. The ChiNext Price Index slides 7.91 per cent, or 185.17 points to trade 2,156.78.

11:05am: Shares at joint-stock and city lenders came under fire Monday morning in Shanghai and Shenzhen.

Shenzhen-listed Ping An Bank tumbled 8.7 per cent to 10.5 yuan. Shares at Bank of Ningbo, also listed in Shenzhen, fell 9.08 per cent to 11.01 yuan. In Shanghai, Hua Xia Bank was down by 8.47 per cent to 9.18 yuan. China Citic Bank fell 8.84 per cent to 6.18 yuan.

11:01am: GF Securities announced its interim results after Friday closing, boasting a 325 per cent revenue increase and 485 per cent profit increase over first half 2014. Its share price has lost 10.38 per cent to HK$11.92 today as the selloff hits securities traders hard.  

Bank of Chongqing has slid 5.82 per cent to HK$5.66 after releasing its interim results, featuring a 10.3 per cent improvement in net profit to 1.837 billion yuan.

10:55am: A selection of Asian equity indices:  

Taiwan: The benchmark Taiwan Stock Exchange Weighted Index plunged as much as 7.2 per cent, the biggest drop since 1990. 

Jakarta: The benchmark Jakarta Composite Index shed as much as 4.61 per cent, capping its biggest decline since August 2013. 

Australia: The benchmark S&P/ASX 200 index lost as much as 3.03 per cent, biggest fall since 2011.   

10:38am: Three Hong Kong stocks have turnover exceeding HK$1 billion so far today: Tencent Holdings, down 3.88 per cent to HK$126.50; Hong Kong Exchanges and Clearing, down 6 per cent to HK$180.20; and Ping An Insurance, down 6.70 per cent to HK$36.20.

10:36am: The Hang Seng Index trades at 21,595.94, down 3.63 per cent or 813.68 points. The China Enterprises Index (H-share index), which track Hong Kong listed Chinese companies, trades at 9,697.4, down by 4.88 per cent or 497.65 points. 

10:36am: The Shanghai Composite Index trades at 3,255.88 points, weaker by 7.18 per cent, or 251.86 points. The CSI300 index of Shanghai-Shenzhen large cap stocks trades at 3,332.45, down 7.16 per cent or 257.09 points. 

10:36am: The Shenzhen Composite Index trades at 1,902.92, down 6.69 per cent, or 136.47 points. The ChiNext Price Index slides 7.37 per cent or 172.53 points to trade at 2,169.42. 

10:15am: The Shanghai Composite index has now erased all its gains year to date. The index is now trading at 3,221.67, down 8.16 per cent for the day and down 0.02 per cent for 2015.

10:10am: The Hang Seng Index trades at 21,563, down 3.78 per cent or 846.62 points. The China Enterprises Index (H-share index), which track Hong Kong listed Chinese companies, trades at 9,703.89, down by 4.82 per cent or 491.16 points. 

10:10am: The Shanghai Composite Index trades at 3,268.38 points, weaken 6.82 per cent, or 239.86 points. The CSI300 index of Shanghai-Shenzhen large cap stocks trades at 3398.87, plunged 6.96 per cent or 249.67points. 

10:10am: The Shenzhen Composite Index trades at 1,901.12, down 6.78 per cent, or 138.27 points. The NASDAQ-style ChiNext Price Index slides 7.47 per cent, or 174.87 points to trade 2,167.08.

10:09am: In early Hong Kong trading, none of the 50 Hang Seng Index stocks and none of the 213 H-share companies are trading up. The top 20 stocks by turnover are all at least 2 per cent down, and nine are down more than 5 per cent.

10:00am: ING: 

"Bottom line: The intensified risk-off reinforces the China growth anxiety. We infer from last week’s double-barrel PBOC liquidity injection that capital outflows are big and may persist. There is nothing on the horizon but another round of the PBOC easing that could stem capital outflows. We believe a 50-100bp RRR cut is imminent.”

9:58am: Fund management firms have been targeted by the Chinese securities regulator in their probe into grey margin financing, financial magazine Caixin reports citing sources.

The regulators have visited a number of fund houses to investigate into grey margin financing, quant hedge trading and other programme trading practices, the magazine reports.   

9:56am: Onshore yuan trades at 6.3944 to the dollar, weaker from the previous close at 6.3887. 

9:56am: Offshore yuan trades at 6.4673 to the dollar, weaker from the previous close at 6.4544. 

9:51am: For story on opening of Chinese markets, click here.
9:51am: For story on opening of Hong Kong's Hang Seng Index, click here.

9:28am: The Hang Seng Index trades at 21,605.97 during the tender period of the pre-opening session, down 3.59  per cent or 803.65 points.

The China Enterprises Index (H-share index), which track Hong Kong listed Chinese companies, trades at 9,797.38 during the tender period of the pre-opening session, down by 3.9 per cent or 397.67 points. 

9:23am: No Shanghai listed A-share companies resume trading today while four companies suspended trading in their stock. The number of suspended companies in Shanghai is 101 on Monday, representing 9.43 per cent of the total.

In Shenzhen, fifteen listed companies say they will resume trading today, while four firms will suspend trading in their shares. Some 241 firms in Shenzhen are in voluntary suspension on Monday, accounting for about 13.93 per cent of total listed companies.

9:22am: Yuan's mid-price fix set higher by PBOC for 7th day in a row. For story, click here.

9:05am: Macquarie economists Larry Hu and Jerry Peng said the fear of a hard landing by China is overdone in a note to clients today. 

“We remain comfortable with our call in 2H outlook that China’s economy would have a U-shaped recovery from 2Q15 to 4Q15,( (GDP: 7.0 per cent, 6.8 per ent and 7.2 per cent in yoy terms).”  

“In our view, policy makers are serious about defending the 7 per cent GDP growth target for this year. As such, they could ramp up policy supports, particularly funding supply to major investment projects.

Meanwhile, with strong property sales since 2Q15, we also expect some modest improvement in property investment from 4Q15. In December, policy makers might adjust next year’s target even lower, probably to 6.5 per cent.”

9:00am: The Hang Seng Index futures spot August contract dropped 988 points or 4.39 per cent to 21,500 in the pre-opening session. 

8:55am: SG morning call:

"Greek President Prokopis Pavlopoulos will likely call for new elections. The recovery in euro area HICP is set to have stopped in August for the first time since January, on the back of lower energy prices. For the same reason, Japan's nationwide CPI excluding fresh food likely fell to -0.2 per cent year on year in July from +0.1 per cent year on year in June.

“Flash HICP inflation figures for August (Germany, Spain) are likely to show that lower gasoline prices have stopped the recovery in headline inflation for the first time since January. Business surveys are likely to soften in August amid concerns about China growth, although they will remain consistent with third quarter GDP growth close to 0.4 per cent quarter on quarter.”

Click on charts below to enlarge.

8:45am: Sinopharm Group, mainland China’s largest drug distributor, posted a 30.6 per cent year-on-year rise in net profit for the year’s first six months to 1.91 billion yuan.

Revenue grew 17.1 year-on-year to 111.06 billion yuan, due to growth in both wholesale distribution and retail pharmacy, the firm said in a filing today to Hong Kong’s stock market.

It said sales growth outperformed that of the industry average. Gross profit margin fell slightly to 8.23 per cent from 8.28 per cent in the year earlier period. Its share price fell 1.63 per cent year-to-date, outperforming a 5 per cent drop in the Hang Seng Index in the same period.   

8:38am: Jefferies report on stock connect between Hong Kong and Shanghai last week: 

“The trading volume of Shanghai A exchange averaged 582 billion yuan a day over the past week, down 8.7 per cent from the previous week. The  trading volume of Northbound trades averaged 2.1 billion yuan a day, slipping 3.0 per cent week on week. Overall net selling of 2.8 billion yuan (turned from a net buying of 778 million yuan in the previous week) was seen among Northbound trades for the week.

Kweichow Moutai topped the estimated net buy turnover for the week among Northbound trades and continued to lead since the Shanghai-HK connect launched. Wanhua Chemical, Dong Feng Electronic Tech, Shenyang Jinshan Energy and Shanghai Chengtou newly entered most active trades.”

8:30am: Ashley Madison and selling adultery. For more on story, click here.

8:21am: Goldman Sachs Global Macro Research:

"China's policymakers have had a very busy summer. After very weak growth in early 2015 and significant turmoil in Chinese financial markets this summer, they are working to restore stability and bring real GDP growth back to their “around 7 per cent” target for the year.

Their efforts appeared to gain traction with a meaningful improvement in June activity data, but renewed data disappointments in July and early August suggest further policy support is still needed.

Alternative indicators of Chinese economic activity have implied a sharper slowdown than the GDP data for some time, particularly in the goods sector and commodity-intensive industries.

More fundamentally, our past research on rapid debt buildups suggests that they result in lower growth, lower inflation, and lower interest rates over a multi-year time frame. All of these consequences are playing out in China's case and we think the story still has several chapters to go." 

Click on chart below to enlarge.

8:03am: Jinchuan Group International Resources, an overseas base-metals unit of the Gansu provincial government-owned Jinchuan Group, China's largest platinum producer and third-largest copper producer, posted a net loss of US$168.39 million in the year’s first six months, compared to a profit of US$786,000 in the same period last year.

The loss was due largely to US$259.8 million of impairment on mineral rights and exploration assets amid a fall in copper prices, according to its filing to Hong Kong’s bourse today.

Revenue fell 20.5 per cent to US$255.77 million, mainly due to an 11.6 per cent year-on-year fall in copper tonnage sold and a 15.4 per cent decline in the average selling price.  

7:50am: Bumpy road ahead for Chinese stocks. For more on story, click here.
7:30am: For roundup of action on Wall Street last Friday as it posted one of its worst weeks due to China growth fears, please click here.

7:30am: The movement of the Hang Seng Index (yellow) and H-shares index (purple) during the week of August 17 to August 21. Click to enlarge the chart.

7:30am: Movement of mainland China's stock markets from August 17 to August 21. Shanghai Composite Index (orange), Shenzhen Composite Index (green), CSI 300 (purple) and ChiNext (blue). Click to enlarge the chart.

7:30am: Bank of Chongqing (yellow) last Friday reported a net profit of 1.84 billion yuan for the first six months this year, up 10 per cent from year ago levels.

The company closed at HK$6.01 last Friday before the result announcement, down 3.38 per cent on the day. Its share price has traded in line with the Hang Seng Index (purple) over the last three months. Click to enlarge the chart.

7:30am: Top executives of China Shenhua Energy (yellow), the listed flagship of the nation’s largest coal producer Shenhua Group, will meet the media at 11:30 am today.

This came after the company late Friday announced a net profit at 13.07 billion yuan (HK$15.82 billion) for the fist six months of this year, down from 22.78 billion yuan as a result of lower coal prices and sales volume aimd an economic downturn.

The company closed at HK$13.84 on Friday before the announcement, down 2.12 per cent. Its share price outperformed the Hang Seng Index (purple) in May and early June but underperformed the index since mid-June. Click to enlarge the chart.

7:30am: Mainland China property developer Poly Property Group (yellow) will announce its interim result today. The company closed at HK$2.48 on Friday, down 2.75 per cent. Its share price underperformed the Hang Seng Index (purple) over the last three months. Click to enlarge the chart.  

7:30am: Gome Electrical Appliances (yellow), one of the largest home electrical appliance retailers in mainland China, will announce its interim result today. Top executives of the company will meet the media at 5:30pm.

The company closed at HK$1.25 on Friday, down 3.1 per cent. Its share price underperformed the Hang Seng Index (purple) the past three months. Click to enlarge the chart.

7:30am: State owned conglomerate Citic Group (yellow) will announce its interim result today. Top executives will meet the media at 2:30 pm.

The company closed at HK$13.92 on Friday, down 2.38 per cent. Its share price underperformed the Hang Seng Index (purple) from May to July but outperformed the index in August. Click to enlarge the chart.

7:30am: China Resources Land (yellow), the property development arm of China Resources Group, will announce its interim result today.

The company closed on Friday at HK$18.5, down 2.12 per cent. Its share price has outperformed the Hang Seng Index (purple) from May to July but underperformed the benchmark in August. Click on chart to enlarge.

7:30am: Onshore yuan closed on Friday at 6.3887, compared with the mid price fix at 6.3864. The onshore yuan weakened by 0.03 per cent this week.

Onshore yuan (CNY) and offshore yuan (CNH) one week graph from August 17 to 21. Click to enlarge the chart.

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