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Yujing Liu

Azar Zaidi

The looming December 15 deadline for a trade deal between the United States and China could limit any upside in Hong Kong and China stocks, with no specific plan yet in place. US equities rallied on Friday on better-than-expected jobs data, but last week was a bit of a roller-coaster for stocks amid conflicting signs on progress in negotiations between the world’s two largest economies.
Central banks will also be in the spotlight this week, with policy meetings at the Federal Reserve and the European Central Bank possibly offering clues to what lies ahead in 2020, in terms of monetary easing.
Please help us improve our blog by taking this quick – under 2 minutes! – survey. Your feedback will really help us make the blog better for you!
Also, 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.


Hang Seng, China stocks trapped in range-bound trading amid caution over trade deal

Business

Markets

Swiss asset manager Pictet Wealth Management foresees gloomy 2020 for US dollar
Chinese oil-related stocks gain on establishment of new state pipeline group


The looming December 15 deadline for a trade deal between the US and China could limit any upside in Hong Kong and China stocks, with no specific plan yet in place. US equities rallied on Friday on better-than-expected jobs data, but last week was a bit of a roller-coaster for stocks amid conflicting signs on progress in negotiations between the world’s two largest economies.


Stocks

China stock market

Hong Kong Stock Exchange

Live

Overnight markets/ What futures foretell:  – The US market advanced broadly on Friday on the back of strong jobs data. The S&P 500 added 0.9 per cent, the Nasdaq Composite rose 1 per cent, and the Dow Jones Industrial Average was 1.2 per cent higher.  – The Hang Seng Index Futures are 0.1 per cent higher, while the China A50 futures are little changed.IPO debuts:  – Trading by shares of medical equipment producer Beijing Balance Medical Technology (688198 SH) and cloud computing firm Jiangsu Eazytec Co (688258 SH) will begin on Shanghai’s Star Market today.
Economic statistics/Central Bank action:  – China will announce November money supply data at 4pm.Corporate events:  – None to note.


Morning guidance

Postal Savings Bank of China (1658 HK), China’s biggest bank by number of branches, will make its trading debut on the Shanghai Stock Exchange on Tuesday after raising 28.45 billion yuan (US$4.04 billion) in a secondary listing. The proceeds of the A-share listing could increase to 32.7 billion yuan if a greenshoe option is exercised within 30 days of the listing.  – Daniel Ren


Postal Savings Bank shares to begin trading on Tuesday

BYD (002594), China’s top electric car maker, reported a 62.7 per cent slump in the sales of new-energy vehicles in November from a year ago, as a result of reductions in government cash subsidies. The company sold 11,220 new-energy vehicles last month, it said in a statement on Saturday. November was a fifth consecutive month of sales declines at the carmaker since Beijing slashed subsidies by up to 60 per cent. For the first 11 months of this year, it sold 216,407 such vehicles on aggregate, up 7.6 per cent year on year.  – Daniel Ren


BYD says new-energy vehicle sales plunge by 62.7 per cent

Gree Electric Appliances Inc of Zhuhai (000651 SZ), China’s air-conditioner producing giant, received a higher target price of 78 yuan – an increase of 10 per cent from its previous target – from Chinese investment bank CICC. The company introduced greater discounts in November and stimulated demand, driving up market share, according to a CICC report. Gree closed 0.2 per cent higher 62.39 yuan on Friday.  – Yujing Liu


Air-con giant Gree given thumbs-up by CICC

Nomad Technologies (8645 HK) debuted on the GEM board of the Hong Kong stock exchange on Monday. Its share price rose to HK$0.41 from an offering price of HK$0.4. The stock was oversubscribed 147.6 times. The company, a Malaysian internet management service provider, was ranked fifth by revenue in the sector in Malaysia, with a market share of 1.3 per cent, last year, according to Frost & Sullivan.  – Snow Xia
 
Nomad Technologies (8645 HK) debut on the GEM of Hong Kong Stock Exchange. @SCMPNews @scmpbusiness pic.twitter.com/AYV0nIdy2K
— Snow Xia (@SnowXia05) December 9, 2019


Malaysian internet firm Nomad Technologies debuts in Hong Kong 

Anta Sports (2020 HK) expects at least a 45 per cent increase in net profit for the financial year ending December 31, compared with the 4.1 billion yuan (US$583 million) recorded in the same period last year, it said in a filing to the stock exchange on Friday evening. Its revenue will be more than 35 per cent higher than last year, due to strong growth in sales at Anta branded products and other brands under its name, such as Fila.
Investment Holdings Company Longfor Group Holdings (0960 HK) announced it sold 21 billion yuan worth of property, across 1.2 million square metres, in a filing to the stock exchange on Friday evening. The majority of sales were in the Yangtze River Delta Area, taking 7.4 billion yuan, followed by Western China in second place.
Module camera maker Q Technology (1478 HK) said the sales volume of its camera modules rose 66 per cent in November when compared with the same month last year, to 42 million units. Its sales volume of fingerprint recognition modules also rose, by 21 per cent to 12 million units. In a filing to the stock exchange, the technology company did not specify which company they were sold to. The results come as smartphone sales are set to fall 3.2 per cent in 2019, the largest decline in the history of the category, according to research firm Gartner.
Cafe de Coral (0341 HK) reported a 35 per cent decline in net profit for the first half of the year, to HK$149.7 million (US$19.1 million), when compared with last year, in a filing to the stock exchange on Friday evening. It said the loss was due to “weak revenue growth of business segments in Hong Kong amid the challenging market environment”. The owner of restaurants like Spaghetti House and Super Sandwiches said it had been hit by weak market sentiment, which it expects to take time to improve. Though it did not directly mention the protests, many Hong Kong restaurants have been hit by the resulting lack of tourism and consumer spending. “The Group is focusing on implementing short term and longer term measures to control costs and drive efficiency to protect margins,” it said.
– Louise Moon   


Overnight filings

China’s liquor making industry will be driven by premiumisation and consolidation, as the sector’s expansion is set to slow in 2020, after a stunning 29 per cent annual growth over the past three years, Jeffries said in its first report on the sector. The American investment bank expected sector winners in the long term to be Jiangsu Yanghe Brewery (002304 SZ), Kweichow Moutai (600519 SH) and Wuliangye Yibin (000858 SZ), whom it rated as “buy”. Jefferies rated Luzhou Laojiao (000568 SZ) as “hold”, as it could enjoy less benefit from channel expansion, according to the report.
– Yujing Liu


Jefferies bullish on Chinese liquor stocks

Major Chinese benchmarks diverged in early trading after opening with a small gain. The Shanghai Composite Index rose by as much as 0.2 per cent before declining by 0.2 per cent. It is trading 0.1 per cent lower at 2,910.28. The Shenzhen Component Index gained 0.1 per cent at 9,883.4. The ChiNext Index of start-ups lost 0.1 per cent. In Hong Kong, the Hang Seng Index dropped 0.2 per cent to 26,449.80 after opening at a slight profit.
– Yujing Liu


China, Hong Kong markets mixed after opening in green

Major Chinese developer R&F Properties (2777 HK) jumped after reporting a pickup in contract sales.The Guangzhou-based developer soared by as much as 11.5 per cent, on the back of a 6 per cent rise in contract sales to 120.4 billion yuan (US$17.1 billion) between January and November from the same period last year. The stock is traded 7.2 per cent higher at HK$13.48 currently.
– Yujing Liu   


Real estate firm R&F gains on sales growth

Jiangsu Zijin Rural Commercial Bank (601860 SH), which is based in eastern China, has plunged by as much as 9.8 per cent in early trading. It is not immediately clear what triggered the declines. The stock has soared by 85 per cent since it went public in January. A lock-up period for a total of 2.2 billion shares, amounting to 60 per cent of the overall stake, will expire on January 3.
– Yujing Liu


Unexplained plunge in small Chinese bank

Chinese electronic parts manufacturer Shenzhen Everwin Precision Technology (300115 SZ) gained after revealing it was supplying components for 5G smartphones. The stock rose 3.5 per cent to 18.51 yuan, after it said it was already providing parts, including radio frequency connectors, to certain manufacturers on an online investor relation platform.
– Yujing Liu


Chinese electronics maker boosted by 5G components

China said on Monday it had set up a new state-owned oil and gas pipeline group, in a long-planned restructuring move aimed at enhancing energy supply amid rising demand. Hong Kong-listed oil firms advanced on the news. PetroChina (857 HK) gained 1.7 per cent to HK$3.64, while Sinopec Corp (386 HK) rose 1.6 per cent to HK$4.42. China National Offshore Oil Corporation (883 HK) increased 0.5 per cent to HK$11.36.
– Yujing Liu


Oil-related stocks gain on set up of new state pipeline group

Swiss private bank Pictet Wealth Management said it was bearish on the US dollar. “We believe the US dollar is likely to weaken in 2020, given the decline in growth and rate differentials that have played in its favour up to recently,” it said in a note on Monday. “We think moderation in global growth and elevated political and economic uncertainty will support defensive currencies like the yen and Swiss franc as well as gold.” Pictet remained neutral on global equities overall, as an array of factors, from the US elections to trade tensions and a spillover of manufacturing weakness to consumer spending, were expected to increase volatility.
– Yujing Liu


Pictet foresees gloomy 2020 for US dollar

Hong Kong saw another major rally on Sunday, as the anti-government movement stretched into its sixth month with no end in sight. As many as 800,000 people – estimated by organiser the Civil Human Rights Front – marched through the city’s core business and commercial districts, from Causeway Bay to Central, on Sunday afternoon. The march was largely peaceful until nightfall, when some radicals hurled petrol bombs.  Read a full story here.
– Yujing Liu   


800,000-strong march marks six months of anti-government protests

Chinese pharmaceuticals declined broadly on Monday, as investors turned cautious after gaining spectacular returns from star drugmakers this year. Jiangsu Hengrui Medicine (600276 SH), China’s largest pharmaceutical firm, dropped by 3.8 per cent to 83.8 yuan, after disclosing four executives planned to reduce their shareholding in the firm by no more than 626,000 shares, or 0.01 per cent of the overall stake. The stock has soared by a jaw-dropping 91 per cent so far this year. Changchun High & New Tech Industry (000661 SZ) tumbled by 4.5 per cent to 426 yuan and Beijing Strong Biotechnologies (300406 SZ) declined by 6.4 per cent to 16.7 yuan.
– Yujing Liu
 



High-flying Chinese pharmaceuticals fall back

China markets seesawed before ending the morning session little changed. Profits at steel firms cancelled out declines at pharmaceuticals. The Shanghai Composite Index swung between gains and losses of 0.3 per cent, before closing almost unchanged at 2,911.26. The Shenzhen Component Index was merely 1.93 points lower, while the ChiNext Index of start-ups declined 0.4 per cent.
  Steel firms led the advance. A gauge of 32 related companies listed in Shanghai and Shenzhen rose 1.9 per cent on the back of rising steel prices.
  Pharmaceuticals suffered a sell-off after a stunning run-up this year. A gauge of 252 drug makers declined by 0.5 per cent.
– Yujing Liu


China benchmarks little changed after choppy morning session

In Hong Kong, the Hang Seng Index ended the morning session little changed at 26,504.76. The biggest mover on the benchmark was HSBC Holdings (0005 HK), which gained 0.8 per cent to HK$57.9. Insurer AIA Group (1299 HK) contributed the largest loss on the index, dropping 0.6 per cent to HK$77.5.
– Yujing Liu


Hong Kong market almost unchanged at noon

Shares of China Evergrande Group (3333 HK) rose by as much as 3.8 per cent to HK$20.45, its highest intraday level in a month, after the property developer and electric vehicle maker announced a record dividend payout in fiscal 2018. The company will pay 1.42 yuan per share, or 18.7 billion yuan (US$2.7 billion) in total, enriching its 78 per cent owner and chairman Hui Ka-yan to the tune of US$2 billion. 
– Eugene Tang


Shares of China Evergrande rise on record dividend payout

“The whole focus of the market now is the ‘Phase One’ trade deal between the US and China,” said Stanley Chan, director of research at Emperor Securities. The Hong Kong market, which lacks a clear driver amid a gloomy economic outlook on both sides of the border, could drop to an even lower level if the two countries fail to struck a deal, he said.
  Chan recommended investors wait until Sunday, when the US will have to decide whether to impose scheduled extra tariffs on Chinese goods, to make any significant move.
  If a deal is reached, the Chinese yuan could strengthen and benefit sectors such as Chinese financials, property developers and aviation stocks, he said. Meanwhile, the 800,000-strong anti-government march in Hong Kong is having little impact on the market, Chan added.
– Yujing Liu


Traders should wait for ‘Phase One’ deal, Emperor Securities says

Two new stocks on Shanghai’s Star Market skyrocketed on Monday. Shares of medical equipment producer Beijing Balance Medical Technology (688198 SH) climbed 54 per cent to 36.47 yuan, while cloud computing firm Jiangsu Eazytec Co (688258 SH) soared by 115 per cent to 57 yuan.
– Yujing Liu


Star Market debutants soar on first day of trading

Suzhou HYC Technology (688001 SZ), a supplier of display and touch testing equipment, surged by the daily maximum of 20 per cent on the Star Market in Shanghai, after it emerged it would be the first stock listed on the new technology board to acquire another company listed on the board. It plans to acquire an electronics assembling equipment maker for 1.2 billion yuan (US$170.5 million), according to an exchange filing on Friday night. Suzhou HYC was also the first company to IPO on the newly-established board.
– Yujing Liu


First Star Market M&A deal boosts stock

Geely Automobile (0175 HK), the Hong Kong-listed unit of the Chinese owner of Volvo Cars, declined as investors pocketed profits after a positive November sales report. The company posted a 1 per cent rise in year-on-year car sales volume in November, which also represents a 10 per cent jump from October, in an exchange filing on Friday after market close. This represented a rare sign of growth amid an overall slumping car market in China. The stock has advanced by about 40 per cent since an August low. Geely is trading 2.3 per cent lower at HK$15.
– Yujing Liu


Investors sell on positive November sales at Geely

The Shanghai Composite Index rose 0.1 per cent, or 2.47 points, to close at 2,914.48, while the Shenzhen Component Index closed 2.35 points lower at 9,876.27.
  A gauge of 44 steel companies compiled by Citic Securities, however, rose 2.3 per cent. The highly cyclical sector is benefiting from a fresh round of price hikes, as infrastructure projects across China are expected to increase, as part of the government’s efforts to shore up its slowing economy.
Meanwhile, a subindex of 295 drug makers declined by 1.5 per cent.
– Yujing Liu


China markets finish little moved

Chinese telecoms equipment maker Coolpad Group (2369 HK) skyrocketed by 60 per cent to close at HK$0.26, on the back of media reports that the company planned to turn annual losses into profits starting next year. The company could avoid an annual loss this year, Chinese media Sina Finance reported, quoting from a speech its chief executive, Liang Rui, gave at an employees’ meeting. The company will also venture into developing smart wearable products, Liang is reported to have said.
– Yujing Liu


CEO comments on reversing losses send Coolpad soaring

The Hong Kong benchmark closed a mere 0.01 per cent, or 3.64 points, lower at 26,494.73. Gains by property developers cancelled out losses at financial companies. Developer China Overseas Land and Investment (688 HK) rose 2 per cent to HK$27.75, while insurer AIA Group (1299 HK) declined 0.4 per cent to HK$77.75.
– Yujing Liu
