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Gigi Choy

Deb Price

Louise Moon

Good day, traders --
So, we are having another volatile week, with markets down here Monday, up Tuesday and Wednesday, and back down today.
Catch up on the day's action below.
And, hey, are you getting your Live Stocks Blog every morning via email? You can! Don't miss out on our coverage of Hong Kong and mainland markets each trading day! If you would like the Live Stocks Blog emailed to you each morning, click here. If you need to reach the stocks team, email deb.price@scmp.com .
-- Louise Moon, Gigi Choy and Deb Price 
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, China stocks slide as traders assess upheaval of deadly coronavirus 

Passengers in protective suits are seen before they check in at Suvarnabhumi Airport in Bangkok on March 24, 2020. Photo: Reuters 

Business

US Senate passes US$2 trillion stimulus bill over virus -- heads to US House
Singapore's quarterly GDP dreadful


Spain now joins Italy in having more coronavirus deaths than China. Analysts say a bottom has not been reached in Hong Kong, which saw back-to-back daily gains on Wednesday for the first time in five weeks. 


Stocks

China stock market

Hang Seng Index

Coronavirus pandemic

Live

“Ultimately, all roads lead back to the fact investors need conclusive evidence of coronavirus infection curves flattening, bringing an end to lockdowns insight before pressing that buy button with some conviction,” said Stephen Innes, chief global market strategist at currency trading platform AxiCorp. 
“Sure, the US Congress has agreed on a stimulus package worth more than $2 trillion, supporting oil prices and broader markets. While this is good news, but since it’s impossible to gauge the ultimate economic impact of the Covid-19 pandemic for weeks, possibly months, and until that point, the sustainability of any rally in oil or equity markets is questionable. And suggests the current high level of volatility will likely extend,” he added.
The timing of the stimulus bill passage isn’t clear.
China -- where the outbreak of the virus began -- has the only major stock markets that are not in bear territory. It is returning to something akin to normalcy, with transportation being restored in epicentre Hubei province, after unprecedented lockdowns to reduce the spread of the virus.
The global death toll topped 20,000, with Spain, with 3,434 reported deaths, now surpassing the China. 
-- Deb Price   


Investors need to see infection rates flatten, says analyst Stephen Innes

Café de Coral (341 HK), Hong Kong’s major fast-food chain operator, said it will stop all dine-in services at night in a bid to promote social distancing and help curb the spread of the coronavirus.
  The fast-food giant said that its casual dining brands, including Café de Coral, Super Super Congee & Noodles, Mixian Sense and Oliver’s Super Sandwiches, will stop dine-in services after 6:30 pm for two weeks from March 27.
The move follows McDonald’s decision to suspend dine-in services at all stores in the city on Tuesday as confirmed cases in Hong Kong have increased rapidly in the past week.
-- Pearl Liu   


Cafe de Coral stopping dine-in services at night over virus

China Life Insurance (2628 HK) reported a 411.5 per cent increase in net profit to 58.3 billion yuan in 2019.
The major insurance provider in China said the increase was on back of higher premiums and a higher fair value gain.
Net premiums earned rose 5.3 per cent to 560.28 billion yuan.
The company made a fair-value gain of 19.25 billion yuan, compared with a loss in 2018.
“The global economic growth has continued to slow down and is still at the stage of in-depth adjustments following the international financial crisis…. The outbreak of COVID-19 in early 2020 will have an impact on the Company’s business in the short term,” the company said citing headwinds in 2020.
-- Pearl Liu   


China Life Insurance reports huge increase in net profit

Overnight markets/what futures foretell
-- Overnight, the S&P 500 closed 1.1 per cent higher, and the Dow Jones rose 2.4 per cent. The Nasdaq lost 0.5 per cent. Europe’s Stoxx 50 Index gained 3.1 per cent.
-- Hong Kong’s Hang Seng’s futures fell 1.6 per cent, while the FTSE China A50 futures lost 1.2 per cent.
IPO debuts: Hunan Nucien Pharmaceutical (688189 CH) trading debut
Economic statistics/central bank action: Hong Kong reports year on year export and import data for February at 4:30pm
Corporate events, earnings, meetings, news conferences: Earnings in Hong Kong include: Citic Bank (998 HK), China Overseas Land (688 HK), China Resources Land (1109 HK), Chongqing Rural Bank (3618 HK), CSC Financial (6066 HK), Haier Electronics (1169 HK), Hengan International (1044 HK), PetroChina (857 HK), Sunac China (1918 HK), Weichai Power (2338 HK) and Wuxi Biologics (2269 HK).Earnings in the mainland include Changchun High & New Technology (000661 CH), Gigadevice Semi (603986 CH), Haitong Securities (600837 CH), SDIC Capital (600061 CH) and Yunnan Baiyao (000538 CH).


Morning guidance

Seoul’s Kospi is down 0.02 per cent, after its 5.9 per cent jump on Wednesday. The tech-heavy Kosdaq, which shot up 5.3 per cent on Wednesday, rose 2.02 per cent.
Tokyo’s Nikkei 225, which jumped 8 per cent on Wednesday, down 3.3 per cent.
Australia’s S&P/ASX200, rose 0.4 per cent, after its 5.5 per cent increase on Wednesday.
New Zealand’s S&P/NZX50, which shot up 7.2 per cent Tuesday and rose 1.7 per cent on Wednesday, jumped 3.9 per cent.
Meanwhile, Singapore’s Straits Times Index fell 2.2 per cent, after it rose 6 per cent on Wednesday.
-- Gigi Choy


Asia-Pacific markets mixed

The Shanghai Composite and the CSI 300 both shed 0.8 per cent at the open, to 2,758.21 and 3,692.31 respectively.
The indexes had risen for two straight sessions.
Markets across Asia were mixed, taking lead from mixed morning sessions across Asia and a rally by the US’ S&P 500 that fizzled to end up just 1 per cent overnight.
-- Louise Moon


Mainland markets open lower, after two straight days of gains

The Hang Seng Index opened 1.1 per cent lower at 23,273.31.
Tencent (700 HK) rose 0.2 per cent to HK$380.80, while Alibaba (9988 HK) gained 0.1 per cent to HK$179.80.
Insurers Ping An (2318 HK) fell 0.4 per cent to HK$75.45 and AIA (1299 HK) is down 1.4 per cent to HK$67.15.
-- Gigi Choy


Hang Seng Index down at open

Singapore’s gross domestic product fell an annualised 10.6 per cent in the first quarter, compared to the previous three months.
It is far worse than the average forecast of a 8.2 per cent decline, by economists surveyed by Bloomberg, and the biggest contraction since 2010.When compared to a year ago, the economy was down 2.2 per cent in the biggest drop since the 2009 financial crisis.Singapore is the first Asian economy to publish GDP data, and shows what others can expect as the outbreak of coronavirus hits economic activity.
“As the global Covid-19 situation is still evolving rapidly, there remains a significant degree of uncertainty over the severity and duration of the global  outbreak, and the trajectory of the global economic recovery once the outbreak has been contained,” the Ministry of Trade and Industry (MTI) said in a statement.”The balance of risks, however, is tilted to the downside.”
The government now expects the economy to contract up to 4 per cent in 2020, worse than previous predictions of an up to 1.5 per cent fall.
MTI said it expects worsening impacts from the coronavirus outbreak -- like the spread to more countries, Singapore’s tightened border controls and safe-distancing measures – to hit retail, food and beverage sectors.
The Singapore Straits Index is down 2.2 per cent.
-- Louise Moon


Singapore looks set for deep recession following fall in Q1 GDP

Hang Seng losses deepen: down 1.5 per cent to 23,180.08.

The Japanese government is preparing to spend at least US$137 billion to offset the impact of the coronavirus pandemic, according to Reuters.
Finance ministry officials say the government will be forced to issue more bonds to fund stimulus measures, which is adding to an already bloated public debt.
Some officials warn that further spending could strain the industrial world's heaviest debt burden, more than twice the size of its ¥551 trillion economy, and cause a run on Japanese assets and erode the yen’s value in the long-run.
  “A strong yen is a problem, but now we’re more worried about a weakening of the yen. If we do something wrong [in managing our finances], that could cause a yen free fall,” a senior finance ministry official told Reuters. “If we end up issuing huge amounts of debt, market sentiment could change abruptly. That would be problematic,” he said on condition of anonymity due to the sensitivity of the matter.
  -- Gigi Choy


Japan’s planned stimulus package may lead to a currency free-fall eventually, policymakers fear: Reuters

Property stocks are mixed.
China Resources Land (1109 HK) lost 3.3 per cent to HK$30.90, China Overseas (688 HK) dropped 2.5 per cent, Longfor Group (960 HK) shed 2.2 per cent and Country Garden (2007 HK) fell 1.2 per cent to HK$8.7.
Others including Wharf Holdings (4 HK), Hang Lung Group (10 HK), Hysan Development (14 HK) and Wheelock (20 HK) saw gains, ranging from 0.8 per cent to 1.6 per cent.
-- Louise Moon


Property stocks mixed in Hong Kong

Global investor confidence decreased in March to 74.5, down four points from February’s reading of 78.5, due to concerns over the coronavirus, according to State Street Global Markets.
A reading of 100 means investors are neutral, not increasing or decreasing their long-term allocations to risk assets.
Asia was the only region to rise in confidence, by 8.7 points to 94.5.
North America fell 2.9 points to 67.8, as investors waited for fiscal and monetary response. Europe dropped 15 points to 95.6 – as cases grew – pushing it below the mark of 100 for the first time since August.
“As the concerns over Covid-19 moved from China to Europe, the investor confidence index has reflected this shift,” said Lee Ferridge, head of multi-asset strategy, Americas, State Street Global Markets.
The index analyses the buying and selling patterns – not opinions – of institutional investors, to assess risk appetite.
-- Louise Moon


Global investor confidence falls

Macau casino stocks are down.
Sands China (1928 HK) declined 0.8 per cent to HK$30.05, while Galaxy Entertainment (27 HK) fell 0.7 per cent to HK$44.85.
-- Gigi Choy


Macau casino stocks fall with new travel restrictions in effect

China Eastern (670 HK) (600115 CH) shot up 4 per cent to HK$2.86 and fell 0.5 per cent to 4.28 yuan in Shanghai.
China Southern (1055 HK) (600029 CH) jumped 3.6 per cent to HK$3.44 and dropped 0.9 per cent to 5.37 yuan in Shanghai.
Air China (753 HK) (601111 CH) climbed 1.5 per cent to HK$5.32 and dropped 0.3 per cent to 6.90 yuan in Shanghai.
Meanwhile, Hong Kong’s flag carrier Cathay Pacific Airways (293 HK) gained 1 per cent to HK$8.52.
But airlines globally are struggling due to a sharp fall in travel demand.
The International Air Transport Association (IATA) said on Tuesday that the airline industry could take a US$252 billion hit from the coronavirus pandemic.
-- Gigi Choy


Airline shares rose in Hong Kong but fell in the mainland

The Shanghai Composite slid 0.2 per cent to 2,776.64 at the lunch break.
The CSI 300 of large caps fell 5.9 per cent to 3,716.67.
Apple AirPod maker Luxshare Precision Industry (002475 CH) dropped 1.7 per cent to 38.29 yuan in Shenzhen.
The world’s most valuable liquor distiller Kweichow Moutai (600519 CH) was 0.1 per cent higher to 1,081 yuan in Shanghai.
  -- Gigi Choy


Chinese markets down at lunch break

It now heads for expected approval by US House and then signature by US President Donald Trump.
-- Deb Price


US Senate approves US$2 trillion bill to battle coronavirus upheaval

The city’s benchmark is at 23,527.82, with 23 of its constituent members posting gains.
All sub indexes are down, led by financials.
Tencent (700 HK) has gained 1.2 per cent to HK$384.60.
Meanwhile, Alibaba (9988 HK), another high turnover stock, is picking up. The e-commerce giant and owner of the South China Morning Post rose 1.3 per cent to HK$182.10.
AAC Tech (2018 HK) shot up 6 per cent to HK$42.60.
New economy stocks were gaining, including Maoyan Entertainment (1896 HK), which advanced 2.7 per cent to HK$10.12, and Ali Health (241 HK) shot up 4.9 per cent.
-- Deb Price 


Hang Seng is flat at break; Tencent, AAC Tech among gainers

Federal Reserve Chairman Jerome Powell will make a rare televised interview appearance on the NBC Today show at 7.05 pm Hong Kong Time or 7.05 am Eastern Time, according to an advisory released by the Fed.
This comes as the US central bank rolled out unprecedented measures to bolster investor confidence amid the coronavirus pandemic.
It will mark the Fed chief’s first public remarks since he held an unusual Sunday press briefing by teleconference on March 15.
-- Gigi Choy


Fed Chair Powell to make rare TV interview appearance

Tokyo’s Nikkei 225, which jumped 8 per cent on Wednesday, is down 3.1 per cent.
Seoul’s Kospi is up 1.1 per cent, after its 5.9 per cent jump on Wednesday. The tech-heavy Kosdaq, which shot up 5.3 per cent on Wednesday, rose 4.5 per cent.  Australia’s S&P/ASX200, rose 3 per cent, after its 5.5 per cent increase on Wednesday.
  New Zealand’s S&P/NZX50, which shot up 7.2 per cent on Tuesday and rose 4 per cent on Wednesday, jumped 4.2 per cent.
Meanwhile, Singapore’s Straits Times Index fell 0.2 per cent.
-- Gigi Choy


Asia markets mixed

China's largest fertiliser maker Sinofert (297 HK) posted a 33.9 per cent year-on-year increase in net profit to 616 million yuan.
It recommended a final dividend of HK$0.02 per share.
The company's revenue for 2019 was nearly 23 billion yuan, slightly below that of 2018.
"In 2020, China’s fertiliser industry still faces the severe situation of excess capacity and oversupply. Industry consolidation and reshuffling will be intensified, with various fertilizer enterprises facing the question of 'to be or not to be' ," it said in a filing to the Hong Kong stock exchange.
"The Group will continue to focus on business transformation and upgrading, follow the trend of agricultural supply-side reform and the rapidly changing fertiliser industry, take root in modern agriculture, streamline the operational structure and renovate our business model so as to achieve stable and sustainable growth."
-- Gigi Choy


Sinofert announces mixed results

China’s largest sanitary napkins and baby diapers producer Hengan International (1044 HK) posted a 9.6 per cent increase in revenue for 2019, to 22.5 billion yuan when compared to 2018, and a 2.8 per cent increase in net profit to 3.9 billion yuan over the same period. It declared a 1.25 yuan per share final dividend for the year.
The company currently sells its products in 51 countries and regions, with 74 direct partnerships with major clients or distributors.
"Looking ahead to 2020, the global economic environment remains complicated and volatile. In the light of lingering uncertainties over the China-US trade friction, softening Chinese yuan and coronavirus epidemic, the Group will closely monitor the impact of external factors on the prices of imported wood pulp and petrochemical products," it said in a filing to the Hong Kong stock exchange.
"The Group expects the wood pulp prices to stay at the low levels in the first half of 2020, which will ease the cost pressure on the company and help further improve the gross profit margin."
  -- Gigi Choy


Hengan International’s revenue rises

Hang Seng falls 0.6 per cent after lunch break

Singamas Container Holdings (716 HK) posted a net income decline from a profit of US$73.3 million in 2018 to a loss of US$110.8 million in 2019, and a substantial drop in revenue by 60.6 per cent to US$712 million over the same period. It is not declaring a final dividend for the year.
  The company attributed its performance to the "very substantial disposal" of several companies under the Group and intense competition for new dry freight containers driving down the average selling price of such containers.
  "As we gear towards the manufacturing of specialised containers, our manufacturing capacity for dry freight containers will invariably be affected ... To mitigate this impact, we will shift our customer focus from traditional shipping and leasing companies to container trading companies that require higher flexibility and production requirements," it said in a filing to the Hong Kong stock exchange.
The stock was flat at HK$0.55.
-- Gigi Choy


Singamas Container Holdings reports substantial losses

Mengniu Dairy reported 14.6 per cent year-on-year sales growth and 19.5 year-on-year operating profit growth, in-line with Jefferies' forecasts.
But the investment bank expects the coronavirus pandemic to have a negative impact on the company's 1H20 results. Still, Jefferies gave Mengniu Dairy a buy rating with a target price of HK$37.80.
Mengniu Dairy (2319 HK) fell 1.7 per cent to HK$26.50.
-- Gigi Choy


Mengniu Dairy 2019 results in-line with Jefferies’ expecations

Daiwa Capital Markets upgraded its rating of AAC Technologies to “outperform” from “hold” but lowered its target price to HK$45 from HK$47.20.
AAC Technologies reported weak 4Q19 results and expects a tough 1Q20 due to the impact of the coronavirus pandemic.
However, Daiwa is optimistic on AAC Technologies' Android business, particularly in optics, and sees the segment’s gross margin reaching 40 per cent in 2H20 on scale benefits.
AAC Technologies (2018 HK) jumped 5.3 per cent to HK$42.35.
-- Gigi Choy


AAC Technologies upgraded to ‘outperform’ by Daiwa Capital

The Shanghai Composite slid 0.6 per cent to 2,764.91.
The Shenzhen Component Index fell 0.8 per cent to 10155.36, while the tech-focused ChiNext Index in Shenzhen declined 0.6 to 1927.28.
The CSI 300 of large caps fell 0.7 per cent to 3,698.05.
Apple AirPod maker Luxshare Precision Industry (002475 CH) tumbled 4.1 per cent to 37.35 yuan in Shenzhen.
The world’s most valuable liquor distiller Kweichow Moutai (600519 CH) declined 1.4 per cent to 1,064.92 yuan in Shanghai.
-- Gigi Choy


Chinese markets close down; Luxshare tumbles 4.1 per cent

Hong Kong has reported at least 410 infections and four deaths as the city continues to grapple with a recent spike in new cases, primarily imported by an influx of returning residents.
Mainland China announced 67 new infections, including 46 imported cases, and 6 fatalities, taking the country's total to 81,285 cases and 3,287 deaths. Hubei province, where the coroanvirus was first reported, did not have any new cases.
Japan reported a total of 1,313 domestic cases and 45 deaths, while South Korea recorded 9,241 infections and 131 fatalities.
India's tally climbed to 649 cases and 13 deaths. Meanwhile, Singapore has confirmed 631 infections and two deaths.
Australia reported 2,799 cases and 12 deaths, while New Zealand has 262 confirmed infections.
-- Gigi Choy


Asia-Pacific Covid-19 cases continue to rise

Singapore on Thursday unveiled a huge stimulus plan worth around S$48 billion (US$33.7 billion) to deal with the economic fallout of the 
Covid-19 pandemic, with the government tapping its vast reserves for only the second time in history to deal with what is likely to be a deep recession.
The pandemic has brought economic activity to a near standstill as nearly a third of humanity is currently in some form of lockdown as authorities scramble to minimise fatalities.
“Today, I will introduce measures worth over S$48 billion in this ‘Resilience Budget’, to deal decisively with the situation at hand,” Deputy Prime Minister and finance minister Heng Swee Keat said in an address to lawmakers in parliament. “This is a landmark package, and a necessary response to a unique situation.”
Read full story here. 


Singapore unveils big stimulus plan to fight coronavirus

India’s central bank and major lenders are considering shutting down most branches across the country to prevent tens of thousands of employees from getting infected with the coronavirus, according to Reuters.
India is still very much a cash society, and banks have been exempted from a three-week lockdown that began on Wednesday as they are considered an essential service.
CNN TV showed video of police beating people suspected to be in violation of the lockdown. India's 1.3 billion people can download an app to get permission to go out to buy necessities, CNN reported. The country has many poor, some of them living in cramped quarters with several family members and also an inadequate health care system.
India's total tally of coronavirus cases: 649 infections and 13 deaths.
-- Gigi Choy and Deb Price


Indian banks plan to shut down branches during world’s largest lockdown

The city’s benchmark fell 0.7 per cent to 23,352.34.
The high turnover stock Tencent (700 HK) has gained 0.5 per cent to HK$381.80.
Meanwhile, e-commerce giant Alibaba (9988 HK), which owns the South China Morning Post, rose 0.7 per cent to HK$180.90.
AAC Technologies (2018 HK) jumped 4.9 per cent to HK$42.15.
  New economy stocks gained, including Maoyan Entertainment (1896 HK), which advanced 1.2 per cent to HK$9.97, and Ali Health (241 HK), which shot up 5.9 per cent to HK$13.32.
-- Gigi Choy
