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Louise Moon

Deb Price

Welcome to the stocks blog.
Check in with us all day as we offer live coverage of the mainland and Hong Kong markets, and insight from experts on what's hot -- and what's not.
Please send questions you'd like answered to deb.price@scmp.com .
-- Louise Moon and Deb Price in Hong Kong 
 


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Stocks

Stocks Blog: Mainland, Hong Kong markets take painful tumble

Grizzly Bear makes it clear to take its threat seriously in Valdez, Alaska. Photo: Alamy


An investor walks past a screen showing stock market figures at a securities company in Hangzhou in China's Zhejiang province on June 19, 2018. Photo: Agence France-Presse


Hong Kong’s first-quarter IPOs generate biggest returns in four years as bull market builds up

The Hong Kong Exchanges and Clearing Limited’s Connect Hall is shown in Central. Photo: Sam Tsang

Business

Markets

Hang Seng suffers worst drop in more than two weeks
JAC Motors surges on news Volkswagen may buy stake in EV project


Interested in investing in China and Hong Kong markets, but not sure how to start? Join us each day as we explain the action and give you insights from experts about where they think markets are headed. 


China stock market

Hong Kong stock exchange

China economy

Live

Here's what we are watching this morning:
Overnight markets/ What futures foretell
-- Overnight in US markets, S&P 500 rose 0.35 per cent,  Nasdaq was up 0.69 per cent, and the Dow Jones Industrial Average inched up 0.03 per cent.
-- -- Hong Kong futures are up 0.1 per cent to 30,150, while the China A50 futures are also up 0.55 per cent to 13,835.67.
IPO debuts:
None
Economic statistics/Central Bank action:
-- China Consumer Price Index and Producer Price Index.
Corporate events: earnings, meetings, news conferences
None to note.
Good reads: Zheng Yangpeng looks at what China's step to ease residency restrictions means for the property sector. He also has a fascinating story on Soho China winning a libel suit against a Chinese blogger who claimed one of its projects has bad feng shui that is bad for tenants. Also, Zhang Shidong reports that Hong Kong's IPOs generated the biggest returns in four years.
 


Morning guidance 

Hong Kong's Hang Seng reversed yesterday's losses to open up 0.1 per cent, or 29.31 points, to 30,148.87, following the S&P500 ,which rebounded from its first loss in nine days.
In the mainland, the Shanghai Composite started down 0.01 per cent, or 0.38 points, to 3,241.55, while the CSI 300 of large caps lost 0.05 per cent, or 2.39 points, to 4,083.46.
-- Louise Moon 


Hang Seng opens up, Chinese markets down 

China's March consumer price index (CPI) rose 2.3 per cent, in line with a poll of economists by Bloomberg, according to data released this morning. Its March producer prices also rose 0.4 per cent, again in line with estimates.
Consumer price inflation gained 2.3 per cent year-on-year, a large increase on February's figure, when consumer prices rose by 1.5 per cent.
China's producer price inflation (PPI) rose 0.4 per cent, also in line with economists' forecasts, and an increased on February's figures of a 0.1 per cent increase, which had skirted dangerously close to deflationary territory.
-- Louise Moon 


China inflation in line with Bloomberg poll

Tencent (700 HK) shot up to above HK$400 -- its highest level since June-- on the heels of news one of its games was among 40 approved by Chinese regulators. 
It settled back down, up 1.9 per cent at HK$396.  
According to Chinese media, it is a shooting game.  It is not clear what its English name is yet, but the game's Chinese name 和平精英 would translate to roughly "Peace Elite".
Bloomberg Intelligence notes that the Chinese Internet giant's sales surged 20 per cent sequentially in March, "largely due to the release of Perfect World, which became the company's second-highest grossing game, narrowly behind Honour of Kings."
Bloomberg Intelligence said that the two games accounted for nearly 45 per cent of Tencent's March sales. 
Of analysts tracked by Bloomberg, 54 have a buy on Tencent, six a hold and none a sell.
Tencent has risen in three consecutive trading sessions. 
Overnight in the US, where it trades as TCEHY, it shot up 3.62 per cent.
-- Deb Price and Louise Moon 
 


Tencent shoots up after new game approval

The US and China have agreed on an enforcement mechanism to make sure both countries live up to the terms of a trade deal, which is still being worked on, US Treasury Secretary Steve Mnuchin told CNBC on overnight.
“We’ve agreed that both sides will establish enforcement offices that will deal with the ongoing matters. So this is something that both sides are taking very seriously,” he said.
President Trump, meanwhile, has said a trade deal is near following meetings in both Beijing and Washington.
-- Louise Moon 


US-China agree on enforcement mechanism for trade deal in the works

Wisdom Education (6068 HK) was trading 0.9 per cent up at HK$4.40, after being rated a new buy by Yuanta Securities, with a price target of HK$5.40.
Of the analysts tracked by Bloomberg covering the educational service provider in mainland China and Hong Kong, 23 rate it a buy, four a hold and none a sell.
-- Deb Price
 


Wisdom Education trading up after 'buy' rating

Maoyan Entertainment (1896 HK) fell 0.7 percent to HK$16.48, not getting a boost from Zhongtai Securities initiating coverage with a buy recommendation. 
Analysts tracked by Bloomberg are bullish on the company, which focuses on online entertainment ticketing and other services in mainland China. All seven tracking it call it a buy, with a consensus 12-month target price of HK$25.30, or 52 per cent above its Wednesday close.
-- Deb Price
 


Maoyan Entertainment gets 'buy' recommendation but trading down

Galaxy Entertainment (27 HK) was trading down 2.5 per cent at HK$58.90, after Credit Suisse cut it to neutral from outperform.
The Macau casino and hotel operator's price target was set at HK$67.50. 
It has been trading on an uphill path since October 30, when it was at HK$40.75.
-- Deb Price 
 


Casino operator Galaxy drops 2.5 per cent after downgrade

Regal Hotels International (0078.HK) has agreed to buy a property in London for GBP22 million (HK$226.9 million) to develop and renovate it into a hotel, according to a late night filing on the stock exchange.
The stock lost 0.6 per cent to HK$4.94 on the news in morning trading.
Regal’s parent company Century City (355.HK) gained 1.45 per cent to HK$0.70.
-- Louise Moon 


Regal Hotels to buy London property, slips in early trading 

Shares of China Life Insurance fell, after a block of 6 million shares of the country's largest life insurer changed hands in Hong Kong at HK$21.525 per share, according to stock exchange data.
The average number of China Life shares that traded every day in the last year was 10 million shares. The company's stock dropped as much as 2 per cent in Hong Kong to HK$21.15.
On the Shanghai exchange, China Life's yuan-denominated A shares rose as much as 1.4 per cent to 29.48 yuan.
-- Eugene Tang


China Life falls after a block of 6 million shares changes hands

A little happy bragging here about one of our ace markets reporters: Liu Yujing won Citi's 2019 Journalistic Excellence Award and its Newcomer of the Year for her story about a Chinese farm raising cockroaches for medicines.
Blog readers know her for her insightful contributions. But few know how far she is willing to go for a great story -- she actually ate a deep-fried cockroach.
-- Stocks bloggers
 


Markets reporter turns cockroaches into Citi's 2019 Journalism Award

China’s consumer price inflation rose sharply in March, as the country struggles to contain the impact of an African swine fever epidemic that has sent pork prices soaring, reports Finbarr Bermingham.
Consumer price inflation (CPI) rose 2.3 per cent year-on-year, a large increase on February’s figure, when consumer prices rose by 1.5 per cent.
African swine fever along with refined oil price adjustments were the main drivers behind the rise in CPI, he reports.
Full story here. 


African swine fever epidemic behind sharp March rise in China inflation

MGM China was up 1.3 per cent to HK$17.22 after Morgan Stanley said the casino operator may report the highest first quarter growth among peers, and is likely to outperform over the next 30 days, helped by its Cotai casino.
Melco’s growth, meanwhile, is likely to grow flat or likely down, according to Morgan Stanley’s note, and SJM and Galaxy Entertainment may drop on weaker VIP volume. Galaxy is also weighed down by a smoking ban and disruption over construction.
Melco International slipped 0.1 per cent to HK$19.88, SJM Holdings lost 1.75 per cent to HK$9.50 and Galaxy was down 3.64 per cent to HK$58.20.
-- Louise Moon 


MGM China up on Morgan Stanley expectations of first quarter growth 

Sunflower Pharmaceutical fell 0.38 per cent to 17.79 yuan in morning trading, after crashing down 5.3 per cent at Wednesday’s close on media reports of a murder investigation of its former chairman who is a large stakeholder.
The Harbin-based maker of kids’ medicine said the police investigation into its former chairman, Guan Yanbin, will have no impact on operations, in response to a regulatory letter from the Shenzhen stock exchange. Guan resigned on January 1, for age-related reasons, and his two daughters took over his role. He still holds an 11.4 per cent stake in the company.
On Wednesday, state media reported Guan had been arrested for the suspected murder of his ex-wife, Zhang Xiaolan. According to state-backed news The Paper, police in northern Heilongjiang arrested Guan on January 29 for intentional homicide, and the case is on-going.
The company had not made any announcement of Guan's arrest. 
At the time, the National Business Daily reported that when the couple divorced over a year ago, she transferred her CNY63 million (US$9.4 million) holdings in the firm to him.
-- Louise Moon


Sunflower Pharmaceutical slips amid police murder investigation of ex-chairman

The companies trading China’s ChiNext gauge of start-ups probably posted a 0.9 per cent increase in first-quarter profits, compared with a 59 per cent decline for the whole 2018, analysts led by Lin Limei at Shenwan Hongyuan Group wrote in a note today.
The estimates were calculated based on the earnings forecasts issued by ChiNext companies for the three-month period.
Bigger companies had faster growth than small ones, with those with market caps worth at least 50 billion yuan (US$7.5 billion) posting an average growth rate of 58 per cent, the report said. Companies engaged in new-energy, telecom, computer and biotechnology industries led the earnings growth, it said.
The ChiNext index has jumped 37 per cent this year, among the best-performing major Chinese equity benchmarks, after falling 29 per cent in 2018 due to massive impairment in goodwill value.
-- Zhang Shidong


ChinNext earnings see big turnaround, study details

Japan’s telecommunications companies were formally allocated 5G spectrum by regulators on Wednesday ahead of the launch of high-speed wireless services next spring, with conditions that effectively prevent carriers from using equipment supplied by Chinese vendors, Reuters reports.
The condition -- “take sufficient cybersecurity measures including responding to supply chain risk” -- effectively prevents the telecom providers from using network equipment from China’s Huawei Technologies and ZTE Corp, and follows a de facto ban implemented last year on Japanese government purchases from the manufacturers, Reuters says.
Read full story here. 


Japan allocates 5G, with 'not welcome' mat for China vendors: Reuters

The Securities and Futures Commission criticized the father-in-law of the chairman of property investment company Hopewell Holdings (0054 HK), for breaching deadline restrictions and disclosure obligations under takeovers code, according to a statement on the watchdog’s website.
The stock was unchanged at HK$38.60 in morning trading.
The statement said Kwok Tse Wah sold 40,000 shares in Hopewell the day after it announced a privitisation plan in December of last year, and failed to publicly announce within the set time limit. He is the father of Ivy Wu, the wife of chairman Gordon Wu.
According to Bloomberg, Kwok has accepted the breach and agreed to disciplinary action to be taken against him.
-- Louise Moon 


Watchdog criticizes father-in-law of Hopewell chairman over disclosure

Sunny Optical’s handset camera module shipments for March missed expectations, according to Jefferies. The stock was down 3.8 per cent to HK$103.90 in morning trading.
Shipments were up 14.3 per cent year-on-year to a total of 28.6 million pieces, according to a filing on the Hong Kong stock exchange. This was a 1.5 per cent rise compared to the month before.
According to a note by Jefferies, Sunny should have a strong April with new model launches.
-- Louise Moon


Sunny Optical trading down as March shipments miss expectations

China would be the big winner if the United Kingdom leaves the European Union without a deal, a new study by the United Nations Conference on Trade and Development says, reports Frank Tang. 
A no-deal Brexit would boost Chinese exports to the UK by US$10 billion, or 17 per cent of its current exports to the country, Tang writes.
Full story here.


China economy would gain on a no-deal Brexit, UN study says 

Shenwan Hongyuan (000166.SZ), China’s sixth largest brokerage by market value, is seeking to raise up to HK$9.8 billion (US$1.3 billion) in a Hong Kong listing, reported Bloomberg.
The Chinese stock was down 1.41 per cent in morning trading.
The company is offering 2.5 billion shares at HK$3.63 to HK$3.93, and aims to price the offering on April 18, before beginning trading on April 26. It will use proceeds to develop its securities and international business, and make investments.
The offer has attracted 13 cornerstone investors who agreed to subscribe for a total of around US$829 million of stock, about 69 per cent of the base offering at the mid-point pricing.
ICBC (601398.SS) has agreed to invest US$300 million and was down 0.35 per cent in trading, while private Huaxia Life Insurance has agreed to US$100 million. China Life Insurance and China Reinsurance are also investors, according to Bloomberg.
-- Louise Moon 


Shenwan Hongyuan seeking to raise US$1.3 billion in Hong Kong listing

Hong Kong shares of Chinese sportswear giant Xtep are down 3.1 per cent to HK$5.02, the lowest since the end of February, after clarifying recent reports of a potential acquisition agreement to say it has not made any decisions or agreements on acquisitions, according to a stock exchange filing late on Wednesday.
The Fujian-grown company noted its envisioned transformation from a single brand to a multi-brand portfolio group, and will continue to explore potential merger and acquisition opportunities.
-- Louise Moon 


Chinese sportswear giant Xtep falls after saying it has no deal planned

It's been a tough morning for local traders.
The Hang Seng fell 0.92 per cent in morning trading, continuing Wednesday’s fall and making it on track for its biggest daily loss since March 25.
In the mainland, the Shanghai Composite Index was down 1.4 per cent while the CSI 300 of large caps lost 1.98 per cent, both in reverse from Wednesday gains.
-- Louise Moon and Deb Price


Hang Seng, mainland benchmarks down at midday break

Sunny Optical Technology Group (2382 HK) is the top laggard on the Hang Seng, trading down 4 per cent at HK$103.40.
Others struggling behind it as Galaxy Entertainment (27 HK), down 3.1 per cent at HK$58.50, and AAC Technologies Holdings (2018 HK), down 3 per cent at HK$52.20.
Meanwhile, Tencent Holdings (700 HK) gave up some of its morning gains, and is trading up 1.2 per cent at HK$393.60. It hit HK$400 in the morning, but still it is trading at an eight-month high. On July 9 last year, it closed at HK$395.96.
While it is the heavyweight, it couldn't hold up the Hang Seng Index, which is trading down 0.78 per cent. Communication services was the bright sector on a gloomy trading day. The index is on track to having its second day of losses and its worst performance since March 25, when it fell 2 per cent.
Geely Automobile Holdings (175 HK) managed to break into gains, and is trading up 0.5 per cent at HK$17.78.
--Deb Price


Sunny Optical leading losers on struggling Hang Seng

Swire Properties announced the completed disposal of 100 per cent of interest in Cityplaza Three and Cityplaza Four Properties during afternoon trading. The deals were first announced in June and November.
Swire Properties (1972.HK) is trading lower by 0.61 per cent to HK$32.50, and Swire Pacific (0087.HK) lower by 0.64 per cent to HK$15.64 in a down market.
The two office towers are in Hong Kong’s eastern Quarry Bay and went for HK$15 million, according to a previous company announcement.
-- Louise Moon 


Swire Properties trading down as it announces complete disposal of two properties

Shares of some companies related to investment holding company China Create Capital are falling in Hong Kong after 43 of its executives were arrested in Shenzhen.
In a notice, police said the company is a “mafia-style gang” involved in illegal fundraising, harassment, blackmail, illegal detention of people and the possession of firearms.
The arrests are the latest in a government crackdown on crime and corruption in the country’s financial system and capital markets.
Of the publicly traded companies that China Create has stakes in, Hebei Construction (1727.HK) lost 7.23 per cent, Shandong International Trust (1697.HK) fell 1.53 per cent and Bank of Gansu (2139.HK) dropped 0.88 per cent.
-- Louise Moon 


Shares tied to Chinese 'mafia-style gang' company fall in Hong Kong 

Companies linked to space telescopes and optical lenses jumped after scientists released the first-ever image of a black hole, reported Bloomberg.
Phenix Optical (600071 SS) surged by the daily limit of 10 per cent to its highest level since June, Zhejiang Southeast Space Frame (002135 SZ) shot up 10 per cent, before flattening gains to 3.43 per cent, and Shanghai Moons’ Electric Co (603728 SS) climbed over 4 per cent before again calming to a 0.14 gain.
-- Louise Moon


Black hole photo boosts telescope and lens companies

The technology sector was the only area up in the Hang Seng during late afternoon trading, led by Tencent (700 HK).
The gaming giant shot to its highest level since June in early trading, after one of its games was among the 40 approved by Chinese regulators.
Tencent sustained momentum in the afternoon and was up 1.75 per cent.
-- Louise Moon


Tencent sustains rise in down market day 

Mainland markets closed down, with the Shanghai Composite Index and CSI 300 hitting their biggest daily declines since March 25.
Shanghai lost 1.6 per cent to 3,189.96, while the CSI shed 2.16 per cent to 3,997.58.
Among sectors, utilities was the only one that ended up, still only by 0.24 per cent.
-- Louise Moon


Shanghai posts biggest daily decline since March 25

JAC Motors (600418.SS) surged by the daily limit of 10 per cent for a second day in Shanghai, after Wednesday’s news that German Volkswagen may purchase a big stake in its Chinese electric vehicle joint venture.
-- Louise Moon


JAC Motors surges on news Volkswagen may buy stake in EV project

The Hang Seng Index closed down 0.93 per cent to 29,839.45, suffering its worst fall in more than two weeks.
It dipped back below the 30,000 mark, having breached the level for the first time since June on Monday.
-- Louise Moon 


Hang Seng suffers worst drop in more than two weeks

More details on Sunflower Pharmaceutical, which saw its shares dragged down by reports its ex-chairman had been arrested on murder charges.
Sunflower said the case was still under investigation and only concerned Guan’s families, and company management as well as business operations were in order and stable, Zhang Shidong reports.
The statement also said that Sunflower’s 2018 annual report that was released in March had a section highlighting that Guan was taken into judicial control because of causing a bodily injury to someone in a personal spat.
The stock plummeted 10 per cent – that daily limit in China – in just 12 minutes on Wednesday.
Read full story here.
 



Stocks Blog: Mainland, Hong Kong markets take painful tumble

Hang Seng suffers worst drop in more than two weeks JAC Motors surges on news Volkswagen may buy stake in EV project

Hang Seng suffers worst drop in more than two weeks

JAC Motors surges on news Volkswagen may buy stake in EV project