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Yujing Liu

Deb Price

The risk-on sentiment cooled today in Hong Kong and Shanghai markets. Catch up on the action below.
Please send questions you'd like answered to deb.price@scmp.com .
-- Yujing Liu and Deb Price in Hong Kong


Hong Kong and mainland China stocks finish year with world-leading gains

China’s Zhipu AI launches US$560 million share sale as Hong Kong’s IPO tech race heats up

Hong Kong stocks inch up on last full trading day of year as yuan eclipses 31-month high

Insilico Medicine leads 6 Hong Kong IPOs, capping banner year for fundraising

Stocks

Stocks Blog: It wasn't easy, but Shanghai and Hong Kong eke out small gains

A pedestrian walks past the Bund Bull statue in Shanghai, China, on Wednesday, Oct. 24, 2018. Photo: Bloomberg 


Is ‘Iron Lady’ Dong Mingzhu’s Gree Electric facing an ownership shake-up? Air con giant plans partial stake transfer

Chairwoman of Gree Electric Appliances, Dong Mingzhu, commonly known as ‘Iron Lady’. Photo: Cissy Zhou

Business

Markets

Hemp craze spreads to Hong Kong
Foreigners can buy hot Han's Laser again


China economy

Live

Here's what we are watching this morning:
Overnight markets/ What futures foretell
 -- Overnight in US markets, S&P 500 gained 1.16 per cent, Nasdaq gained 1.29 per cent, and the Dow Jones Industrial Average gained 1.27 per cent.
-- Hong Kong futures are up 0.2 per cent, while the China A50 futures are flat.
IPO debuts:
None to note.

Economic statistics/Central Bank action:
None to note.
Corporate events: earnings, meetings, news conferences
-- HKEX holds its 6th Annual RMB Fixed Income & Currency Conference 2019 from 8:30am until 6pm in Hong Kong
Later: Vice Premier Liu He, China’s chief trade negotiator, will meet this week with US officials in Washington over the trade war.
Good reads: Laura He looks at whether "Iron Lady" Dong Mingzhu’s Gree Electric is facing an ownership shake-up.


Morning guidance 

Movements in China’s A-shares and the renminbi exchange rate have been highly synchronised since the beginning of this year, and Citic Securities say the currency could provide more strength to the stocks.
The onshore yuan has strengthened 2.4 per cent since the beginning of 2019 to 6.71 per US dollar.
In the latest evidence, stocks rallied on Friday and Monday while onshore yuan also gained, analysts led by Ming Ming said in a report dated today.
The correlation is a result of common factors including rising market sentiment and risk appetite, as well as positive changes in China’s monetary policies, they said.
The analysts forecast the yuan will consolidate between 6.6 to 6.8 a US dollar in the short term, and Chinese stocks will benefit if the currency remains strong.
-- Yijing Liu


Yuan strength could boost stocks, Citic says

Mainland China and Hong Kong stocks seesawed in early trading, struggling for a direction after two sessions of huge rallying.
The Shanghai Composite Index was trading 0.3 per cent higher, at 3178.65, before swinging between gains and losses.
The Hang Seng Index also pared early gains of 0.5 per cent to 0.3 per cent, at 29,654.58.
-- Yujing Liu 


Markets searching for direction in early trading 

Shares of CStone Pharmaceuticals (2616 HK), a producer of immuno-oncology drugs for treating cancer, rose as much as 4.4 per cent to an intraday high of HK$16.56 in Hong Kong, after both Goldman Sachs and Morgan Stanley raised their recommendations on the stock to "buy" and "overweight."
That's the biggest intraday jump in two weeks.
-- Eugene Tang 


CStone Pharmaceuticals jumps on ratings boost

Tencent Holdings opened up 1.37 per cent at HK$370, after it said it would offer notes to certain professional investors internationally, to increase its medium-term note programme from US$10 billion to US$20 billion. Proceeds are to be used for general corporate purposes.
Moody’s issued a stable rating. “The proposed notes will further enhance Tencent’s already strong liquidity position, and enable it to sustain steady growth in revenue and cash flow,” said Lina Choi, a Moody’s senior vice president, and lead analyst for Tencent.
Tencent also plans to raise around US$5 billion through bond sales on Wednesday, according to Bloomberg, which cited familiar sources. The internet giant has hired Deustche Bank, HSBC, Goldman Sachs and Morgan Stanley to arrange a series of global investor calls, starting on Tuesday.
Tencent is the biggest stock on Hong Kong’s Hang Seng Index, with a 9.9 per cent weighting.
-- Louise Moon


Tencent climbs at opening

Shares of Zhejiang Sanmei Chemical Industry (603379), a producer of industrial fluorine, jumped by their 44 per cent daily limit when they traded for the first time in Shanghai, rising to 46.70 yuan from their initial public offer price of 32.43 yuan.
-- Eugene Tang


Zhejiang Sanmei Chemical surges to limit on debut trading in Shanghai

China International Capital Corporation (CICC, 3908 HK) declined by as much as 2 per cent on the back of a Bloomberg report that private equity firm TPG had sold most of its stake in the company for HK$2.38 billion to pocket a 40 per cent gain.
The largest investment of China pared the losses to 0.7 per cent at HK$18.8 in the latest trading. The stock has advanced 29 per cent since the beginning of this year, outperforming the Hong Kong benchmark, which has risen 15 per cent.
-- Yujing Liu 


China International Capital drops on report of sale of stake 

The northbound trading volume of the Stock Connect programs, combining Shanghai and Shenzhen, surged to a historical high of 1.2 trillion yuan (US$179 million) in March, data from Wind shows.
To put it into context, the monthly turnover volume in Hong Kong’s markets was only HK$1.8 trillion (US$229) in February, according to the latest official data.
-- Yujing Liu 



Foreign trading of A-shares breaks record in March

China’s central bank asked police to launch an investigation into a rumour widely circulated over the weekend that it would cut the reserve requirement ratio (RRR) for banks.
The People’s Bank of China denied late on Friday it would reduce the amount banks are required to hold in cash, which would inject hundreds of billions of dollars of liquidity into the banking system.
Whoever fabricated the rumour should be punished, said an editorial in the Financial News, a newspaper run by the central bank. The piece was retweeted by the official account of the central bank on Chinese social media Weibo.
-- Yujing Liu 
 


China's central bank goes all out to deny rumour of RRR cut 

As hard as China’s central bank tries to kill it, the market expectation of more monetary easing is not dying out.
A reserve requirement ratio (RRR) cut in April is very likely as massive tax payments and the expiring medium-term lending facility are set to increase liquidity pressures, according to a report by Northeast Securities released on Sunday.
“The central bank’s denying of rumours [of a RRR cut] does not mean it won’t do it, but it just needs dominate in shaping market expectations of liquidity levels,” analysts at New Times Securities wrote.
-- Yujing Liu 


China's central bank can't seem to shut off RRR cut speculation

Gome Retail Holdings (493 HK), one of China's largest appliance retailers, rose for the second day in Hong Kong, advancing by as much as 1.3 per cent to HK$0.78 after reports in the Chinese media that its founder and former chairman Huang Guangyu would be released from prison.
Trading in Gome's shares had surged in the last four trading days, jumping 600-fold on Monday to 576.8 million shares, more than 10 times the daily transacted average over the past 12 months.
In a statement to the Hong Kong exchange, the Beijing-based retailer said it had no information on its founder's release.
Huang, China's wealthiest man of 2005 according to Forbes, was jailed for 14 years in 2010 for bribery and other charges.
-- Eugene Tang


Gome Retail keeps climbing on unconfirmed reports ex-founder will be released from prison 

Leshi Internet Information and Technology (300104 SZ), once the hottest stock on China’s start-up board with over 150 billion yuan (US$22 billion) in market cap, is now facing the fate of delisting as a result of its founder’s reckless business expansion.
The company founded by tech guru Jia Yueqing said in a filing to the Shenzhen Stock Exchange last night that it expected the total equity attributable to owners to be negative in 2018, and its listing will be suspended after auditors confirm it. The stock will be delisted if the company fails to meet the listing requirements in 2019.
Jia, who was once dubbed China’s Steve Jobs, has gone from a promising entrepreneur to a debt-laden exile within the span of a decade. He ventured from online video streaming – the main business area of Leshi – into films, electric cars and smartphones, and eventually burned up all the cash and has been blacklisted as a debt defaulter by Chinese authorities.
Leshi declined 6 per cent to 2.74 yuan.
-- Yujing Liu 
 


Leshi demise looms

Markets struggled for direction in morning trading, heading into the midday break clinging onto small gains.
The Hang Seng Index was up 0.1 percent, with casino and hotel operator Galaxy Entertainment Group (27 HK) the top mover, up 3.6 per cent.
The Shanghai Composite Index was up 0.41 per cent.
-- Deb Price


Benchmarks clinging onto small gains at midday break

Foreigners are again allowed to buy Han's Laser Technology through the Hong Kong-Shenzhen Stock Connect, Hong Kong's stock exchange operator confirmed.
On March 5, the hot stock had nearly hit China's 30 per cent cap on how much of a single stock foreigners can own, and regulators blocked more buying.  But foreign ownership has since dropped below 26 per cent.
Global index provider MSCI quickly removed Han's Laser from its China indexes, citing investability issues.
The maker of laser equipment used for cutting and welding in industrial and electronics products surged nearly 4 per cent to 44.60 yuan in early afternoon trading.
-- Laura He
 


Foreigners allowed to buy hot Han's Laser again  

ASM Pacific Technology, a company that assembles machines for the semiconductor industry, rose by as much as 2.6 per cent to HK$91.50, the highest intraday level since August last year.
The company signed an agreement today to build a plant in Jiujiang city in Jiangxi province for its materials business.
“We are indeed proud to be working with the Jiujiang Municipal Government of Jiangxi to build this new manufacturing facility. China is fast becoming one of the world’s biggest semiconductor producers, driven largely by the huge domestic demand as well as emerging technologies such as artificial intelligence, virtual reality and Internet of Things," said ASM's executive director Stanley Tsui. "ASM is indeed proud and honoured to be here in China to support the industry and, be a partner to drive the growth.”
-- Eugene Tang


ASM Pacific jumps on new plant news

The exploding interest in industrial hemp-related stocks on the mainland is taking hold in Hong Kong too.
Healthcare company Meilleure Health International Industry (2327 HK) surged as much as 16 per cent after announcing a plan to place 360 million new shares to raise HK$326 million yuan for its expansion into the hemp industry.
The company, which sells anti-aging health products and develops property in Hong Kong and China, has entered into an agreement to place the shares at HK$0.91, or 16 per cent lower than Monday’s closing price, it said in a filing to the stock exchange.
Meilleure’s shares have soared 200 per cent since February, when it announced it invested in Yunnan Hansu, a Chinese company processes hemp extraction. It plans to increase its investment in developing drugs using the active ingredient from hemp with the proceeds. The stock is most recently trading up 9.3 per cent at HK$1.18.
-- Yujing Liu


Hemp craze spreads to Hong Kong

Mervyn Tang is the new head of ESG Research for Fitch Ratings' Sustainable Finance Group.
It's a new research team, and he will be based in Hong Kong.
This past September, Fitch Ratings signed onto the Principles for Responsible Investment, the world’s leading proponent of responsible investment backed by the United Nations. The goal of the pledge is to encourage companies to weigh how investment and other decisions impact the planet.
"The creation of a new dedicated research group for ESG is another significant step forward in Fitch's efforts to increase transparency and granularity in ESG credit risk analysis," Andrew Steel, managing director and Fitch Ratings' global group head of Sustainable Finance, said in an announcement.
Tang returned to Fitch Ratings in March after working at MSCI Inc. as head of fixed income in their ESG Research department. Previously at Fitch Ratings, he was a director in Fitch's Sovereign Group in Asia-Pacific.

-- Deb Price


Comings and Goings: Fitch Ratings picks Mervyn Tang as head of ESG Research

China Investment Corporation (CIC), the country’s sovereign wealth fund with over US$941 billion in assets, has named a new chairman after the post remained vacant for two years, according to several media reports.
Peng Chun, chairman of the Bank of Communications, was tapped to become CIC’s new chief, while Ju Weimin, currently the vice general manager of CIC, was promoted to be the general manager, Bloomberg and Chinese media including Caixin and Jiemian reported.
Tu Guangshao, the incumbent general manager, has been heading the company since the former chairman Ding Xuedong was promoted to the vice secretary of the State Council in February 2017.
-- Yujing Liu 


Comings and Goings: China's sovereign wealth fund names new chairman

Bears and bulls in China’s stock markets were locked in a wrestling match, following two days of rallying.
The Shanghai Composite Index swung between gains and losses and ended up 0.2 per cent higher at 3,176.82, failing to breach the 3,200 level.
The benchmark rose for a third consecutive session. Trading volume surged above 1 trillion yuan for the second day.
“The market has calmed down a little today” because of a lack of major news or policy announcement, said Stanley Chan, director of research at Emperor Securities.
In Hong Kong, early gains in the Hang Seng Index as a result of overnight US stocks rally faded during the day, with the benchmark closing 0.2 per cent higher at 29,624.67.
-- Yujing Liu 


China, Hong Kong stocks battle for an inch of gains

Foreign capital is likely to continue flooding into the A-share markets as valuation levels remain low, says Stanley Chan, director of research at Emperor Securities.
Northbound trading volume through Hong Kong’s Stock Connect program reached a historic high of 1.2 trillion yuan in March.
More inflow is likely to take place around the middle of 2019 as the index provider MSCI will increase the weighting of Chinese shares in steps, Chan said.
“Foreign capital is still very interested in A-shares,” he said. “There’s still a lot of room for the A-share markets to rise if we look at their valuation levels.”
-- Yujing Liu


Crystal Ball: Stanley Chan expects foreign money to flood into A-shares in middle of 2019

Stocks Blog: It wasn't easy, but Shanghai and Hong Kong eke out small gains

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;}Hemp craze spreads to Hong Kong Foreigners can buy hot Han's Laser again

Hemp craze spreads to Hong Kong

Foreigners can buy hot Han's Laser again