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Yujing Liu

Srinivasan Iyer

Merry Christmas, traders!
China stocks seesawed before ending mostly higher on Wednesday.
Catch up on the day's action below.
BTW, if you would like the Live Stocks Blog emailed to you each morning, click here. 
-- Yujing Liu and Srinivasan Iyer 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.
  


China stock markets close mostly higher led by gains in chip makers

An electronic board shows stock prices at a securities brokerage house in Beijing. Photo: EPA-EFE

Business

Markets

While the Shanghai Composite Index closed flat, the Shenzhen Component Index and ChiNext Index rose 0.4 per cent and 0.8 per cent, respectively
Chicken farmer Fujian Sunner jumps on fat dividend payout plan 


Chip makers extended a two-day rally on renewed optimism over state fund support, while liquor makers fell on concerns over food safety and high valuation.


Stocks

China stock market

A-shares

Investing

Live

Here's what we are watching this morning:
Overnight markets/What futures foretell  -- US indices ended almost flat on Tuesday, after a half-day trading session ahead of Christmas Day. The S&P 500 inched lower by less than 0.1 per cent, the Nasdaq Composite added 0.1 per cent, and the Dow Jones Industrial dropped 0.1 per cent.  -- The Hang Seng Index Futures edged up 0.1 per cent, while the China A50 futures were little changed.
IPO debuts:  -- None to note.
Economic statistics/Central Bank action:  -- None to note.
Corporate events:  -- None to note.


Morning guidance

Ping An Insurance (Group) (2318 HK), the nation’s largest insurer in terms of market capitalisation, has named Xie Yonglin as its new president as of December 24. He replaces Ren Huichuan.
The appointment has been approved by the board and the China Banking and Insurance Regulatory Commission. 
Ping An rose 0.2 per cent to close at HK$91.3 on Tuesday.
-- Enoch Yiu


Ping An Insurance names new president

CEC International Holdings (759 HK), which operates the popular local snack chain 759 Store, reported a net profit of HK$5.07 million (US$651,030) for the six months ending October, an increase of 254 per cent compared to HK$1.43 million a year earlier. 
Earning per share stood at 76 HK cents, compared with 21 HK cents a year earlier. 
The improved result came as result of better cost control, closure of loss-making shops and disposal of a company-owned property for HK$4.33 million during the period under review.  
The company’s share price closed unchanged at 41 HK cents on Tuesday.
-- Enoch Yiu


759 Store operator reports jump in profit 

The State Council, China’s cabinet, on Tuesday evening announced a slew of measures to ensure a stable employment environment and support small businesses.
The measures range from increasing government spending on infrastructure to subsidies for workers who sign up for further vocational training, according to an official document.
Banks should also strengthen their financial support to private companies and smaller firms, especially those in the manufacturing industry, the document says.
-- Yujing Liu


Beijing vows to keep employment stable

In the latest confirmation of an initial resolution to the US-China trade war, President Donald Trump said he and his Chinese counterpart Xi Jinping will have a ceremony to sign the “phase one” trade deal.
“We will be having a signing ceremony, yes,” Trump told reporters. “We will ultimately, yes, when we get together. And we’ll be having a quicker signing because we want to get it done. The deal is done, it’s just being translated right now.”
It is not clear when the signing will take place.
Full story here 
-- Yujing Liu


Trump and Xi to hold signing ceremony for trade deal

The Shanghai Composite Index dipped 0.1 per cent to 2,979.56 at the market open.
The Shenzhen Component Index added less than 0.1 per cent, while the ChiNext Index of start-ups was little changed.
-- Yujing Liu


China markets mixed at open

The yuan will benefit from a de-escalation of US-China trade tensions but is vulnerable to possible volatility in cross-border capital flows, a former Chinese foreign currency regulator told the China Business News, Reuters reported on Wednesday.
The interim deal reached by Washington and Beijing means trade frictions have ameliorated, reducing uncertainty and boosting market confidence in the yuan, the newspaper said, citing Guan Tao, a former official at the State Administration of Foreign Exchange.
Guan warned, however, that a slow recovery in global growth and lofty asset prices could cause global market fluctuations, which in turn could bring wild swings in cross-border capital flows that impact expectations regarding the yuan.
Guan expected China to use both macroeconomic and structural monetary policy tools to counter an economic slowdown next year, China Business News reported.
But China should learn lessons from Japan’s experience and refrain from using strong stimulus, which could result in asset price bubbles and long-term economic stagnation, Guan was quoted as saying.


Yuan to gain from US-China deal but vulnerable, says former forex regulator

Chinese lithium battery maker Eve Energy (300014 SZ) tumbled by as much as 7 per cent in early trading, as investors booked profit after the company forecast a jump in annual profit of as much as 185 per cent.
Eve Energy, which supplies electronic cigarette makers and wearable electronics producers, has soared 230 per cent so far this year, driven by expectations of rapid earnings growth.
The company said in an exchange filing on Tuesday night that it expects to record an annual profit of 1.63 billion yuan (US$232 million), an increase of 185 per cent year on year.
-- Yujing Liu


Investors pocket gains in battery maker after profit forecast

Gigadevice Semiconductor Beijing (603986 SH), a maker of memory devices, jumped by the daily 10 per cent limit to an all-time high of 214.92 yuan.
The shares had fallen 7 per cent on Monday after a state-led, semiconductor-focused fund – also known as the “Big Fund” – said it would cut its stake in the firm.
Rattled investors have since digested the move and took the opportunity to buy the dip on Gigadevice.
Several brokerages also published bullish reports on the semiconductor sector on Tuesday, arguing China’s long-term strategy to reduce reliance on imported chips means huge opportunities for homegrown chip makers.
Shares of Gigadevice have skyrocketed 246 per cent this year.
-- Yujing Liu


Chip maker reaches new high on renewed optimism over state fund support

Railway operator Beijing-Shanghai High Speed Railway officially kicked off its initial public offering in Shanghai by releasing a prospectus.
This could be China’s largest IPO in years, based on the company’s huge profit of 13.3 billion yuan (US$1.9 billion) recorded in the first three quarters of this year.
The operator runs a 1,300km line that connects Beijing and Shanghai in four and a half hours, which is one of the busiest and most profitable sections of China’s high-speed railway network.
The company will issue half of the new shares to cornerstone investors, including strategic partners, large financial institutions and funds with a focus on infrastructure, it said in the prospectus issued today.
Retail investors will be able to subscribe to the shares from January 6.
-- Yujing Liu


Railway operator kicks off mega listing

Investors taking profit in Eve Energy, a battery supplier to electronic cigarettes, after a stunning run-up this year

Semiconductor stocks are set to rally for a second straight day, as investors continued betting on China’s increasing state investment in the cutting-edge field to compete with global tech powers.
A gauge tracking 67 chip-related stocks advanced 4.6 per cent, with four stocks including Gigadevice Semiconductor Beijing (603986 SH) and Goke Microelectronics (300672 SZ) surging by the 10 per cent daily limit.
The gauge, compiled by data provider Wind, has returned a spectacular 88 per cent gain so far this year.
Investors turned bullish today on speculation that the US$29 billion state-led China National Integrated Circuit Industry Investment Fund will expand its shareholding in semiconductor stocks soon to lend further support to the industry, against the backdrop of an intensifying race among nations to become the world's tech superpower.
-- Yujing Liu


Chip makers advance

Chinese producers of the fiery liquor baijiu continued to decline after a small rebound on Tuesday, as a controversy brews over whether one firm added artificial sweetener to some of its products.
Authorities in the southern province of Hunan on Tuesday carried out a quality test on Jiugui Liquor’s (000799 SZ) products, which has been accused by a dealer of mixing an  additive restricted in baijiu.
Hunan-based Jiugui Liquor has denied the claim and accused the dealer of intending to extort money.
The results of the test will come out later this week, the authorities said, according to reports by local media.
Shares of the distiller fell 2.7 per cent to 34.64 yuan by lunch break. The stock has lost 12 per cent of its value since the controversy broke out over the weekend.
-- Yujing Liu
 


Liquor makers weaken as additive controversy clouds industry

China markets recouped losses in early trading and turned up by lunch break.
The Shanghai Composite Index ended the morning session little changed at 2,982.12.
The more tech-heavy Shenzhen Component Index rose 0.5 per cent, and the ChiNext Index of start-ups climbed 0.9 per cent.
A strong rally in semiconductor stocks lifted up the markets, while liquor makers bucked the trend.
-- Yujing Liu


China stocks recover early losses, powered by semiconductors

Chinese chicken producer Fujian Sunner Development (002299 SZ) soared after announcing a meaty dividend payout plan.
The company plans to pay a dividend of 15 yuan per 10 shares, amounting to 1.86 billion yuan (US$266 million) in total, according to a stock exchange filing on Tuesday night. This represents a big jump from the 10 yuan for every 10 shares it paid out last year.
The shares jumped by as much as 6.2 per cent to a one-month intraday high of 25 yuan, before paring some of the gains to 3.8 per cent in the latest trading.
-- Yujing Liu


Fat dividend payout boosts chicken farmer

China stocks seesawed before ending mostly higher on Wednesday, with semiconductor stocks extending a two-day rally on renewed optimism over state fund support, while liquor makers weakened on concerns over food safety and high valuation.
The Shanghai Composite Index closed almost unchanged at 2,981.88, after swinging between gains and losses throughout the day.
The more tech-heavy Shenzhen Component Index added 0.4 per cent, while the ChiNext Index of start-ups gained 0.8 per cent.
“As traditional sectors such as real estate have entered a downward cycle, the market has been looking for new growth spots among technology and computer stocks,” said Yang Xiaolei, a Shanghai-based independent market analyst.
“Now the government policy is clearly supportive of homegrown technology shares ... so the enthusiasm over semiconductors is likely to continue into next year, making such stocks one of the most important sectors to look at in the first quarter,” he said.
-- Yujing Liu


China markets close mostly higher