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Daniel Ren

Deb Price

Good day, traders -- 
The Hang Seng snapped a two-day losing streak, while the Shanghai Composite Index extended losses into a third day.
Catch up on the action below.
And if you would like to receive the Live Stocks Blog each morning via email, shoot Deb an email at deb.price@scmp.com.
-- Daniel Ren in Shanghai and Deb Price in Hong Kong 
  
 


Stocks Blog: Hang Seng breaks two-day losing streak, with banks and property stocks rising on rate cuts

PetroChina said its quarterly profit fell 58 per cent. Above, a worker checks PetroChina pipelines in Sichuan province. Photo: Reuters

Business

Markets

Shanghai declines for third straight day
Real estate developer Xinhu Zhongbao surges to the 10 per cent daily


China manufacturing slumps for sixth straight month; Shanghai declines for third straight day.


Stocks

China markets

PetroChina

HSBC

Kweichow Moutai

Tencent

Meituan

Live

Net income increased 44 per cent from a year earlier to 10.5 billion yuan (US$1.5 billion) for the first nine months, Citic Securities (600030 CH) said in an exchange statement.
Sales rose 20 per cent, it said.
-- Zhang Shidong   


China’s biggest brokerage Citic posts profit increase

Net income for China’s biggest oil producer dropped 58 per cent from a year earlier to 8.83 billion yuan (US$1.25 billion) in the third quarter based on the international accounting standard, according to an exchange statement.
Profit for the first nine months fell 23 per cent to 37.3 billion yuan, because of falling crude prices, increased supply and overcapacity, the statement said.
It trades in Shanghai (601857 CH) and Hong Kong (857 HK). 
-- Zhang Shidong   


PetroChina’s quarterly profit drops 58 per cent

Profit at SAIC Motor (600104 CH) dropped by 25 per cent from a year earlier to 20.8 billion yuan (US$2.9 billion) in the third quarter, the automaker said in an exchange filing, as sluggish demand took its toll.
-- Zhang Shidong   


SAIC’s quarterly net income falls by a quarter

China Southern Airlines (600029 CH) plans to raise as much as 16.8 billion yuan (US$2.38 billion) selling no more than 2.45 billion yuan-denominated A shares to its controlling shareholder China Southern Air Holding, the carrier said in an exchange statement. 
It also plans to sell as many as 612.4 million H shares for HK$3.5 billion (US$446.4 million) to an affiliate, the statement said. The proceeds will be used to buy airplanes, repay debts and replenish working capital, and the offering is still pending approvals by the securities and aviation regulators, it said. 
In a separate statement, China Southern said profit for the first nine months fell 2.3 per cent from a year earlier to 4.1 billion yuan.
-- Zhang Shidong


China Southern Airlines plans private placements

Here's what we are watching this morning:
US Monday markets/ What futures foretell
--The S&P 500 rose 0.33 per cent, the Nasdaq added 0.33 per cent and the Dow Jones Industrial Average gained 0.43 per cent.  -- Hong Kong futures ended 0.16 cent lower, while the FTSE China A50 futures dipped 0.53 per cent
IPO debuts: Beijing Seeyon Internet Software (688369 CH), Shenzhen JPT Opto-electronics (688025 CH), YCIH Green High-Performance Concrete (1847 HK), CMGE Technology Group (302 HK)
Economic statistics/Central Bank action: Full meeting of Communist Party’s Central Committee, known as a plenum, concludes today.


Morning guidance 

China’s manufacturing sector continued to dwell in the doldrums in October, with sentiment among factory operators remaining in negative territory for the sixth month in a row.
The manufacturing purchasing managers’ index (PMI), released by the National Bureau of Statistics (NBS) on Thursday, stood at 49.3 in October, down from 49.8 in September and below the expectation in a Bloomberg survey of analysts for an unchanged reading.
The October figure was the lowest since hitting 49.2 in February.
The official PMI is a gauge of sentiment among larger and state-owned factory operators, with 50 being the line between expansion and contraction in sector activity. In the survey, manufacturers are asked to give a view on business issues such as export orders, purchasing, production and logistics.
Read full story here. 


China manufacturing slumps for sixth straight month

Hong Kong’s monetary authority cut its base lending rate for the third time in as many months in lockstep with the US Federal Reserve, as the world’s central banks loosen financial taps to avert the global economy’s descent into recession.
The city’s base lending rate will be reduced by 25 basis points to 2 per cent effective immediately, the Hong Kong Monetary Authority (HKMA) announced on its website, matching the overnight cut of the same amount by the US Fed.
“A more accommodative monetary stance will give Hong Kong’s economy some support,” said DBS Bank's managing director Tommy Ong, before the widely expected rate cut was made.
Hong Kong’s monetary policy has been conducted in lockstep with US moves ever since the city’s currency was pegged to the US dollar in 1983 under the currency board system, in a link that ensures the stability of the local dollar. The joining at the hips of Hong Kong’s interest rates with America’s cost of funds has led to unintended consequences for the city’s economy, curtailing the HKMA’s ability to use monetary policy as a tool to curb inflation, or asset prices.
Read full story by Enoch Yiu here. 


Hong Kong cuts key interest rate after US move

The Hang Seng Index is ahead in early trading, rising 0.3 per cent to 26,734.41.
Here's how several companies in the spotlight have started off the day:
PetroChina (857 HK) fell nearly 3 per cent to HK$3.89after reporting its quarterly profit dropped 58 per cent. 
HSBC (5 HK) rose 0.4 per cent to HK$59.45.
WH Group (288 HK) slipped 0.1 per cent to HK$8.46, after five straight day of gains.
BYD (1211 HK) continued to fall after it reported Wednesday that its third quarter profit plunged 89 per cent. It was down 0.7 per cent at HK$37.15.
Meituan Dianping (3690 HK) inched up 0.1 per cent to HK$94.10, while smartphone maker Xiaomi (1810 HK) fell 0.7 per cent to HK$8.73, on track for its third straight day of losses.
The two stocks began trading for the first time on the Stock Connect on Monday.   
-- Deb Price    


HSBC rises, PetroChina sees big fall in Hong Kong 

The Shanghai Composite inched up 0.05 per cent to 2,941.
Here's how some stocks heavily traded by northbound investors are starting the day: 
-- Kweichow Moutai (600519 CH) gained 0.6 per cent to 1,191 yuan.
-- Ping An Insurance (601318 CH) rose 0.1 per cent to 88.05 yuan.
-- Jiangsu Hengrui Medicine (600276 CH) rose 0.8 per cent to 90.90 yuan.
-- Shanghai International Airport (600009 CH) fell 1.2 per cent to 76.75 yuan.
-- Deb Price    


Kweichow Moutai, Jiangsu Hengrui Medicine gain in rising Shanghai 

YCIH Green High-Performance Concrete (1847 HK), a Yunnan province-based concrete products maker, tumbled 20.8 per cent to HK$2.66 on its trading debut in Hong Kong.
Its shares opened at HK$2.66, 70 HK cents lower than the offering price of HK$3.36.
The company raised HK$364 million in the Hong Kong IPO while its retail tranche was 17.5 times oversubscribed.
-- Daniel Ren


Yunnan concrete producer makes a woeful debut

The quarter-point rate cut by the US Fed was "the least surprising part" of the central bank's Federal Open Market Committee (FOMC) meeting, said JPMorgan Asset Management's Asia chief market strategist Tai Hui.
"The bigger surprise was the immediate positive reaction by US stocks and Treasury markets," he said. "When market risk appetite is positive, the Fed pausing can also be seen as an endorsement that the economy is still in good shape and no additional stimulus is needed."
“Following the rate cut, we think insurance has been delivered to markets and the Fed’s policy path now depends on the evolution of US economic data and US-China trade relations," said Goldman Sachs Asset Management's co-head of global fixed income portfolio management Mike Sewell. "Third quarter GDP suggests that growth is ‘good enough’ with consumers driving growth while business investment and trade remain soft." 
On Chile cancelling Apec leaders summit: "The fact that Chile has cancelled the mid-November APEC Summit should not be a deal breaker for the US and China to reach a truce," JPMorgan's Hui said.
"If the two sides were genuinely willing to reach an interim deal before mid-December, when the next scheduled hike in tariff on Chinese exports is due to take place, they will find a venue to get the deal done.”
"The tone of US-China negotiations appears to have improved with the US suspending a planned tariff increase this month, but we think uncertainty over trade policy will be a continuing headwind for business investment," Goldman Sachs' Sewell said.
-- Eugene Tang 


US stocks' immediate positive reaction to rate cut was 'bigger surprise,' says JPMorgan Asset Management analyst

Chinese mobile game giant CMGE (302 HK) started trading on the main board of Hong Kong’s stock exchange today. The shares were oversubscribed by more than 500 times before debut.
The shares slipped 0.7 per cent to HK$2.81 at the open from the public offering price of HK$ 2.83. But they are trading at HK$3.11 now, rising 10.7 per cent from the open. 
CMGE is raising HK$ 1.17 billion in the IPO.
CMGE was ranked as the Global Top 50 Publisher by Apple. Since 2012, CGME has launched popular games such as New Legend of Sword and Fairy, the Heaven Sword and Dragon Saber and Eternal Myth. Last year, CGME generated about 1.6 billion yuan.
China’s mobile game market revenue has been growing rapidly from 15 billion yuan in 2013 to 160 billion yuan in 2018 (with the compound annual growth rate of 11.7 per cent), and the annual revenue was predicted to reach 218 billion yuan by the end of 2021, according to the data think tank Analysys.
The data also shows that the domestic mobile game market will slow down in the next two years. As China tightened regulations on games in 2018, Chinese mobile game companies started to turn to the global market for financing.
CMGE Technology Group Limited (302) and YCIH Green High-Performance Concrete Company (1847) started trading on the main board of Hong Kong’s stock exchange today. @SCMPNews @scmpbusiness @HKEXGroup pic.twitter.com/fUXuBusLxq
  — Snow Xia (@SnowXia05) October 31, 2019
 
-- Snow Xia 


Chinese mobile game giant CMGE bangs the gong in Hong Kong -- and rises 

A Hong Kong biopharma company and the world’s largest supplier of rotary kilns used to make construction materials have unveiled plans to tap up to HK$1.95 billion (US$250 million) from the city’s stock market to fund their business plans.
SinoMab BioScience is aiming to raise up to HK$1.75 billion by selling 182.1 million shares at HK$7.6 to HK$9.6 each, while China PengFei Group aims to raise up to HK$197.5 million by selling 125 million shares between HK$1.05 and HK$1.58 each.
The pair has joined a string of other companies to launch initial public offerings in the city, at a time when its economy – especially tourism and hospitality related sectors – has been battered by nearly five months of anti-government protests.
Their fundraising plans come after Hong Kong regained its top position in the global IPO ranking league table in this year’s third-quarter, edging out Nasdaq and New York Stock Exchange in first-time share sales.
Read full story by Eric Ng and Snow Xia here. 


Two firms set to raise up to US$250 million in Hong Kong IPOs

Two IPO debutants on the mainland’s Nasdaq-style Star Market soared, buoyed by investors’ confidence in their growth prospects.
Beijing Seeyon Internet Software (688369 CH) jumped 56.6 per cent to 77.32 yuan from its offering price of 49.39 yuan in morning trading.
Shenzhen JPT Opto-electronics (688025 CH) climbed 38.4 per cent from its IPO price of 43.86 yuan to 60.71 yuan.
The rosy start by the two mainland technology firms was in a stark contrast to the two IPOs weak debut in Hong Kong as both companies -- CMGE (302 HK) and YCIH Green High-Performance Concrete (1847 HK) -- dropped when trading opened, although CMGE turned up.
-- Daniel Ren


Two Star Market debutants soar 

Shares of Chongqing Rural Commercial Bank (601077 CH) fell for the second consecutive day as its shares tumbled 8 per cent to 7.74 yuan in morning trading, following a 10 per cent plunge on Wednesday.
The first rural lender to have conducted a dual listing in Hong Kong and the mainland jumped 27 per cent during its A-share debut on Monday.
Its mainland-listed shares are now trading at a 104 per cent premium to the H shares (3618 HK).
-- Daniel Ren 


Chongqing rural lender continues to fall

HSBC (5 HK), the largest of the city’s three currency issuing banks, announced its first interest rate cut in 11 years.
The step followed cuts in the benchmark rate by the Hong Kong Monetary Authority and the US Federal Reserve.
HSBC gained 1.3 per cent to HK$59.95 in early trading.
-- Deb Price 


HSBC cuts interest rate for first time in 11 years

Shares of Chongqing Changan Automobile (000625 CH) remained flat in morning trading after the Chinese joint venture partner of Ford Motor said its third-quarter loss narrowed.
The car maker posted losses of 421 million yuan for the three months ended September, compared to 446 million yuan a year ago.
Its shares ended at 7.14 yuan in the morning, unchanged from Tuesday’s close.
It was the fifth straight quarter that Changan reported losses.
-- Daniel Ren


Changan Automobile reports narrower losses

Hong Kong's monetary policy easing prompted HSBC, the largest of the city's banks, to cut its interest rate for the first time since 2008.
The moves boosted the Hang Seng Index, pushing the stocks of property developers to rise across the board.
Hang Lung Properties (101 HK), one of the city's largest builders of shopping centres, rose by as much as 2.6 per cent to an intraday high of HK$17.52. Sun Hung Kai Properties (16 HK), the city's largest listed developer by value, rose 2.5 per cent to HK$119.50.
"It is a surprise to see HSBC cutting its interest rates," said Knight Frank's executive director Thomas Lam. "Other banks will follow HSBC's move to reduce their rates. Low interest rates will provide a support to the property market."
Property prices are expected to rise by 1 per cent to 2 per cent this year, before declining by about 5 per cent next year due to increasing supply, he said.
-- Enoch Yiu


Property stocks jump on rate cuts by Hong Kong Monetary Authority, HSBC 

The Hang Seng's solid 1 per cent morning gain was driven by optimism that the US-China trade war will be resolved, strong results from iPhone maker Apple in the US, and a Reuters story citing unnamed sources reported that Chinese e-commerce giant Alibaba plans to list in Hong Kong as early as November, says Kenny Tang, chief executive of Royston Securities Limited.
The US-listed Alibaba, which owns the South China Morning Post, declined to comment on the Reuters story. Reuters, which reported Alibaba wants to raise as much as US$15 billion in the Hong Kong IPO, pointed out that such a listing by Alibaba would boost Hong Kong’s status as a major capital markets hub.
“As Alibaba is going to be listed in Hong Kong, this helps the market sentiment,” Tang said.
Tech-related stocks were among winners in the morning session. Sunny Optical (2382 HK) rose 8 per cent to HK$127.60, Tencent (700 HK) rose 1.5 per cent to HK$321, and AAC Tech, (2018 HK) jumped nearly 4 per cent to HK$51.25.
Tang said investors are also excited by the rate cut by the US Federal Reserve, and followed by the Hong Kong Monetary Authority.
“As Hong Kong’s GDP growth slows down in the recession, this [rate cut] will help the Hong Kong market," Tang said. "The property sector will benefit the most. The government has already loosed the mortgage requirement, which will improve the property market.”
-- Snow Xia


Apple results, trade war, Alibaba story driving up Hang Seng, says analyst Kenny Tang

Shares of Gree Electric Appliances (000651 CH), China’s largest air-conditioner maker, recovered morning losses in afternoon trading despite reporting a profit drop for the third quarter.
Gree opened at 58.01 yuan in the morning, down 1.1 per cent, after it said on Wednesday evening that underlying profits between July and September decreased 6.2 per cent to 8.17 billion yuan.
Shares rebounded in the afternoon to 59.09 yuan, up 0.7 per cent from Wednesday's close.
On Monday, state-owned Zhuhai Gree Group, controlled by Zhuhai government, agreed to sell its 15 per cent stake of the listed company to Zhuhai Mingjun Investment Partnership, a unit of Hillhouse.
-- Daniel Ren 


Gree Electric picks up 

Soho China (0410HK), one of China’s largest commercial property companies, is still not answering the big question about it out there: Is it selling most of its commercial property in China for as much as US$8 billion?
Bloomberg  reported Soho China is considering selling at least eight office towers in Beijing and Shanghai, citing people familiar with the matter.
In an exchange filing, Soho China acknowledged the buzz but left open what it is doing.
Soho China said in the morning that “it can confirm that it is not aware of any information relating to the sale of Group assets which would require to be announced.”
If SoHo China sells most of its mainland property, it would move from being a commercial property developer to an overseas investment operation.
The company’s shares have soared more than 18 per cent since Thursday, after reports by Bloomberg and other media, and closed at HK$2.71 when morning trading session ended.
Read the Bloomberg story here. 
-- Pearl Liu


Soho China coy on blockbuster story it is looking to sell most of its mainland property

Real estate developer Xinhu Zhongbao (600208 CH) surged to the 10 per cent daily trading cap in a four-day winning streak, bucking the downward trend of mainland’s blockchain stocks.
The company traded at 7.91 yuan in the afternoon, hitting the 10 per cent daily upper limit for the fourth consecutive day.
Blockchain stocks, driven by President Xi Jinping’s call for more investment and development of the technology, soared on Monday, before retreating in the following three days.
Xinhu was one of only two blockchain-themed stocks that jumped by 10 per cent today. The other was Jinlin Jinguan Electric (300510 CH)
-- Daniel Ren


Blockchain-related developer jumps to daily ceiling again

ESR Cayman (1821 HK), the Warburg Pincus-backed logistics real estate developer, said today that it priced its shares at HK$16.80 a share, the midpoint of its price range of initial range of HK$16.20 and HK$17.40.
The US$1.6 billion initial public offering of 751.7 million shares is the second biggest new listing in Hong Kong this year after Budweiser Brewing Company APAC’s US$5 billion offering in September (1876 HK).
ESR’s shares are expected to begin trading on the Hong Kong stock exchange on Friday.
The company said it plans to use net proceeds after underwriting fees and expenses of US$565.5 million to repay debt, redeem preference shares issued in 2016 and to develop additional logistics properties.
ESR is the latest company to revive its offering in recent weeks after delaying a planned listing this summer as months of protests and unrest weighed on Hong Kong’s economy and investor sentiment.
-- Chad Bray 


ESR Cayman prices shares at HK$16.80 a share

The Shanghai Composite Index slid for the third straight trading, declining 0.3 per cent to 2,929. 
More than twice as many stocks ended with losses as gains, with 1,070 seeing drops, 413 rising and 48 unchanged.
Eight stocks hit or nearly hit the 10 per cent upside limit, including real estate developer Xinhu Zhongbao (600208 CH), a blockchain stock that is one of the few continuing to rise after President Xi Jinping’s call for more investment and development of the technology.
Here's how some stocks heavily traded by northbound investors ended the day: 
-- Kweichow Moutai (600519 CH) slipped 0.3 per cent to 1,180.01 yuan.
-- Ping An Insurance (601318 CH) rose 0.2 per cent to 88.12 yuan.
-- Jiangsu Hengrui Medicine (600276 CH) rose 0.8 per cent to 90.88 yuan.
-- Shanghai International Airport (600009 CH) fell 1.8 per cent to 76.25 yuan.
-- Deb Price    


Shanghai declines for third straight day 

The Hang Seng Index snapped a two-day losing streak, gaining 0.9 per cent to finish at 26,906.72. 
AAC Technologies (2018), which derives nearly half of its revenue from Apple, shot up 3.5 per cent to HK$51 after Apple reported better than expected results overnight. 
Sunny Optical (2382 HK), which makes optical lenses, was the top percentage gainer on the Hang Seng, rose 7.4 per cent to HK$126.80.
PetroChina (857 HK) fell nearly nearly 4 per cent to HK$3.85 after reporting its quarterly profit dropped 58 per cent. 
HSBC (5 HK) rose 0.5 per cent to HK$59.50 after announcing it would cut its rates to take pressure off of small businesses. Standard Chartered (2888 HK) joined in that move, following lowering by the US Federal Reserve and the Hong Kong Monetary Authority, and rose 0.9 per cent to HK$71.90.
The rate moves boosted stock of property developers.
Hang Lung Properties (101 HK), one of the city's largest builders of shopping centres, rose 0.5 per cent to HK$19.66. Sun Hung Kai Properties (16 HK), the city's largest listed developer by value, rose 2 per cent to HK$118.90.
-- Deb Price 
