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Xie Yu

Azar Zaidi

The US-China trade war is expected to determine how markets in Hong Kong and mainland China kick off the week once again, before mainland markets go on holiday between October 1-7. 
Overnight, Nasdaq was cracking down on initial public offerings by small Chinese companies by tightening restrictions and slowing down their approval, according to regulatory filings, corporate executives and investment bankers, amid calls to de-list Chinese companies. 
Additionally, Hong Kong will be braced for any fallout from one of the more violent days of clashes between protesters and police, as the city’s anti-government protests enter their fourth month.
Join us, Xie Yu and Azar Zaidi in Hong Kong, as we track the day’s developments in the special administrative region and mainland Chinese markets.
If you would like to receive the Stocks Blog each trading day via email, shoot a message to deb.price@scmp.com and she will add you to the list.


Stocks Blog: Hang Seng edges up, most debuting Hong Kong, mainland China stocks rise

Business

Markets

Shares of Budweiser Brewing rise by more than 4.4 per cent in Hong Kong
In Shanghai, Beijing Hotgen Biotech rises 140.6 per cent on the Star Market, Hillstone Networks rises 112.7 per cent, Shenzhen Transsion Holdings rises 64.4 per cent


Budweiser Brewing Company APAC rises more than 4 per cent on its trading debut. The company’s CEO, Jan Craps, said Budweiser was very optimistic about the bright future of Hong Kong “as one of the most important financial centres in Asia”.


Stocks

China stock market

Hong Kong Stock Exchange

Live

Overnight markets/ What futures foretell:
– FTSE A50 is down by 0.05 per cent, while the Hang Seng Index futures is down by 0.74 per cent to 25.796.
– Hong Kong futures were 0.1 per cent higher, while the FTSE China A50 futures climbed 0.5 per centIPO debuts:
In Hong Kong, Beer manufacturer Budweiser Brewing Company APAC (1876 HK), Hong Kong-based financial services provider LFG Investment Holdings (3938 HK) and Malaysian civil and structural works contractor TBK & Sons Holdings (1960 HK) will start trading on Hong Kong’s stock market today. In Shanghai, three companies, including Hillstone Networks (688030 CH), Beijing Hotgen Biotech (688068 CH), and Shenzhen Transsion Holdings (688036 CH) are due to give their stock debut on Shanghai’s Star Market.Economic statistics/Central Bank action: 
China will release official PMI at 9am MondayCorporate events, earnings, meetings, news conferences:
– nothing major


Morning guidance

Cosco Shipping Energy Transportation (1138 HK), an oil transport unit of China’s ocean shipping giant Cosco Shipping Holdings, said it will resume trading on Monday after a temporary suspension in share trading on Thursday. It said in a filing to the Hong Kong stock exchange on Sunday that the trading suspension had resulted from a need to verify if it was among companies blacklisted by the US.
On Wednesday, the US blacklisted several Chinese companies, including two Cosco units, Cosco Shipping Tanker (Dalian) and Cosco Shipping Tanker (Dalian) Seaman & Ship Management, for allegedly transporting Iranian crude oil. Cosco Shipping Energy’s yuan-denominated A shares will also restart trading on Monday.
– Daniel Ren 


Cosco Shipping Energy Transportation shares to resume trading

Drug maker Shanghai Junshi Biosciences (1877 HK) has filed an application with the Shanghai Stock Exchange for a share offering that could raise 2.7 billion yuan (US$379 million) on Star Market, China’s Nasdaq-style technology board. The company completed an IPO in Hong Kong at the end of 2018, raising HK$2.94 billion (US$375 million). It is also traded on the New Third Board market, mainland China’s over-the-counter technology start-up board. 
– Daniel Ren 


Junshi Biosciences seeks fundraising on Star Market

National Bureau of Statistics has announced that the official PMI stood at 49.8 for September, up by 0.3 percentage points over August, and exceeded a polled result of 49.5 put out by Reuters.
Read the full story here.
– Xie Yu


PMI rises, exceeds analysts' forecast

In Hong Kong, the Hang Seng Index opened 150.3 points, or 0.58 per cent, lower at 25,804.5. In mainland China, the Shanghai Stock Exchange was 0.07 per cent lower at 2930, the Shenzhen Component Index was up 0.01 per cent to 9549.8, and the ChiNext was 0.02 per cent lower at 1647.5.
– Xie Yu


Hong Kong opens lower, mixed on mainland

Beer manufacturer Budweiser Brewing Company APAC (1876 HK) started trading on Hong Kong’s mainboard today.The US$5 billion IPO is the world’s second-biggest sale of the year after Uber Technologies@SCMPNews @HKEXGroup pic.twitter.com/Q8gM3B9xNy
— Holly Chik (@hollycwchik) September 30, 2019


Budweiser Brewing Company APAC starts trading in Hong Kong 

Analysts at Moody’s Investors Service said in a report on Monday that most high-yield property developers could withstand a hypothetical depreciation of about 10 per cent in the yuan, with only a slight weakening in key credit metrics.
“The developers’ strong revenue and earnings over the next 12-18 months will provide a buffer against the negative effect of a depreciation of the renminbi against the US dollar, while the portion of debt denominated in renminbi also remains far larger than foreign currency debt,” Danny Chan, a Moody’s Assistant Vice President and Analyst, said.– Xie Yu


Chinese property developers can withstand 10 per cent drop in yuan: Moody's


Budweiser Brewing Company APAC (1876 HK) rose more than 2 per cent on its trading debut on Monday. A US$5 billion offering priced the Asia-Pacific unit of Anheuser-Busch InBev at HK$27. Budweiser shares were trading at HK$27.65 in early morning trading in Hong Kong.
“We’ve seen very solid demand for our stock,” Jan Craps, the company’s chief executive, said. “It is a challenging time in Hong Kong, but we are … very optimistic about the bright future of Hong Kong as one of the most important financial centres in Asia.”
– Holly Chik and Chad Bray
 


Budweiser rises more than 2 per cent on trading debut 

Credit conditions in Asia-Pacific are expected to be bumpy, said two reports issued by S&P Global Ratings on Monday. Official interest rates are expected to be lower or kept the same. China’s economic slowdown and the US-China trade war are dampening consumer and lender sentiment. In turn, this is pressing down on revenue and profit growth, intensifying refinancing risk, one of the reports said. Specifically, China’s economic slowdown, intensified competition and higher costs are weighing on automobiles, electronics and retail.
– Xie Yu


Trade tensions to rumble Asia-Pacific credit system: S&P

Retailers and transport companies are dragging on the Hang Seng Index. Daphne International Holdings (210 HK), a mainland China-based shoe maker, tumbled by 33.7 per cent to 19.9 HK cents. Tristate Holdings (458 HK), a manufacturer and retailer of garments, lost 7.36 per cent to HK$1.5. 
– Xie Yu


 Retailers, transport companies drag on Hang Seng Index

The Hong Kong stock exchange will be closed on Tuesday because of the National Day holiday. Northbound and southbound trading on the stock connects will be suspended until Monday, as the Shenzhen and Shanghai stock exchanges will be on holiday from October 1- 7 during mainland China’s National Day “golden week”.
Trading services and the stock connects will resume on October 8.
– Holly Chik


Hong Kong markets closed on Tuesday for National Day

“People were worried about the damage caused by a more aggressive stance by the Trump administration against listed Chinese firms this morning. But when the markets opened it seemed not as bad as we expected … after all, delisting Chinese firms will be very difficult and also a double-edged sword,” said Kevin Leung, executive director of investment strategy at Hong Kong-based brokerage Haitong International.
“With mainland China poised to go on a week-long holiday for National Day, the markets are going to be relatively quiet this week,” he said.
 
Leung added that any surprise upside in sectors such as retail, property or Macau gaming during the golden week holiday could lift the Hong Kong market.
– Xie Yu


Mainland markets mostly unaffected by US stance on delisting of Chinese firms

Index heavyweights have lifted the Hang Seng Index into positive territory – the gauge has risen 0.13 per cent to 25,987.6. Bourse operator Hong Kong Exchanges and Clearing (388 HK) rose 2.2 per cent to HK$231.8, China Unicom (762 HK) rose 2.2 per cent to HK$8.4 and PetroChina (857 HK) was up by 2 per cent to HK$4. The latter was boosted by news of the discovery of new shale gas reserves totalling 740.97 billion cubic metres in west China’s Sichuan basin.
– Xie Yu


Index heavyweights lift Hang Seng into positive territory

Technology companies are leading the losses on mainland China’s A-share market. Espressif Systems (Shanghai) (688018 CH), a semiconductor manufacturer, tumbled by 16.4 per cent on the Star Market to 148 yuan. Montage Technology (688008 CH), an electronic manufacturer listed on the Star Market, fell 9.2 per cent to 62 yuan. The Technology-heavy ChiNext index in Shenzhen was down by 0.8 per cent to 1,634.4. The Shanghai Composite Index was down by 0.3 per cent to 2,923.2.
– Xie Yu


Technology firms weigh on mainland Chinese stocks

The A-share market closed lower at the midday break. The Shanghai Composite was 0.4 per cent lower at 2,920.5. The Shenzhen Component Index was lower by 0.6 per cent at 9,489.5. The ChiNext was down by 0.8 per cent to 1,634.3. The technology, finance and distillery sectors led the falls amid fears of delisting of Chinese firms by US authorities.
– Xie Yu


A-share market lower at lunch amid US delisting fears 

The better-than-expected PMI largely locks GDP growth in at 6.1 per cent year on year for the third quarter, Citi said on Monday.
Despite broad-based improvements, the headline PMI remained in contractionary territory for a fifth month in a row, indicating that economic fundamentals are still weak, analysts at the bank said in a note, adding that they still did not expect a rebound in the fourth quarter.
They also said they did not expect a meaningful breakthrough in the US-China trade talks, which are set to resume on October 10.
“Even if there is a ceasefire, the damage is already partly done, because of elevated business uncertainties. The government will certainly step up fiscal and monetary efforts to boost domestic demand, which we believe can help stabilise, probably not accelerate, economic growth.”
– Xie Yu


Better-than-expected PMI locks in third-quarter GDP growth at 6.1 per cent: Citi

The Hong Kong market closed higher for lunch, supported by heavyweights in telecom and energy, as well as mainland Chinese property developers. The Hang Seng was up by 0.5 per cent to 26,088.88.
– Xie Yu


Hang Seng closes higher at lunch, boosted by telecoms, energy and Chinese developers 

Mainland Chinese manufacturer TCL Electronics Holding (1070 HK) confirmed that a part of the company was under investigation in the US for patent infringement. The company said the investigation followed a complaint filed by Global Foundries US with the International Trade Commission. TCL said the investigation would involve the upstream supplier’s integrated circuits technology.
It also said that based on a preliminary assessment, it believed the case would have a very limited effect on its operations. TCL Electronics was trading 2.9 per cent lower at HK$3.9.
– Xie Yu
 


TCL confirms part of firm under investigation in US for patent infringement

The A-share market rebounded after the lunch break. The Shanghai Composite crept back into positive territory, rising 0.03 per cent. The ChiNext rose 0.02 per cent. The Shenzhen Component Index was up by 0.02 per cent as well. Ship building, agriculture and oil and gas companies led the gains. Baoding Technology (2552 CH), a metal manufacturer, hit the daily limit and rose 9.99 per cent to 19.4 yuan. New Hope Liuhe (00876 CH), an animal feed producer, was up 6.4 per cent to 17.4 yuan. PetroChina (601857 CH) was up 1.8 per cent to 6.22 yuan in Shanghai.
– Xie Yu


Mainland China stocks creep back into positive territory

Shares of Budweiser Brewing Company APAC have jumped by more than 5 per cent in Hong Kong.
 
Read the full story here.


Budweiser Brewing jumps by more than 5 per cent

The A-share market has seesawed back into negative territory, with the Shanghai Composite down 0.7 per cent to 2,911.3, the Shenzhen Component Index down by 0.9 per cent to 9,461.8. and the ChiNext down by 1.1 per cent 1,630.2. 
Distillers, financial institutions and equipment makers are weighing on stocks. Kweichow Moutai (600519 CH) lost 1.9 per cent to 1151.5 yuan, Citic Securities (600030 CH) is down by 1.5 per cent to 22.7 yuan and Hikvision (002415 CH), China’s biggest surveillance equipment producer, is down by 2.3 per cent to 32.4 yuan.
– Xie Yu


 Mainland Chinese markets slide back into negative territory

The Shanghai Composite Index closed down 0.92 per cent at 2,905.19 on Monday, its lowest level since September 1, surrendering most of its gains for the month.
 
The Shenzhen Component Index closed lower by 1.1 per cent at 9,446.2. The technology-heavy ChiNext Index closed 1.2 per cent lower at 1627.55.
– Xie Yu


 Shanghai Composite hits one-month low, surrenders gains made in September

In Hong Kong, the benchmark Hang Seng Index closed 0.33 per cent higher at 26039.57. Budweiser Brewing (1876 HK), which debuted on its main board, closed 4.4 per cent higher at HK$28.2. Companies in the telecom services, energy and banking sectors strengthened on Monday, while semiconductor manufacturers, jewellery makers, watch dealers and retailers softened.
– Xie Yu


Budweiser closes higher as Hang Seng edges up in Hong Kong

Among the other stocks debuting in Hong Kong, local financial services provider LFG Investment Holdings (3938 HK) closed at HK$1.07, slumping 36 per cent from its IPO price. Malaysian civil and structural works contractor TBK & Sons Holdings (1960 HK), on the other hand, rose 60 per cent to HK$0.8.
In Shanghai, Beijing Hotgen Biotech (688068 CH) shot up to 70.89 yuan, rising 140.6 per cent on the Star Market. Hillstone Networks (688030 CH) jumped to 44.8 yuan, recording a 112.7 per cent increase, while Shenzhen Transsion Holdings (688036 CH) rose 64.4 per cent to 57.8 yuan.
– Holly Chik
