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Zhang Shidong

Azar Zaidi

Well, that was short-lived. The solid start Hong Kong and mainland Chinese stocks made to 2020 is already under pressure, after a US air strike that killed Iran’s top military commander. As a direct result of the geopolitical tensions in the Middle East, oil surged last week and is set for a bumpy week ahead. 
Among factors to watch closer to home, we have reported that a Chinese delegation will travel to Washington this month to sign the phase one deal.
And if you would like the Live Stocks Blog emailed to you each morning, click here. 
– Zhang Shidong in Shanghai 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.


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Stocks

Hong Kong, China stocks sink on risk-off mood amid Middle East tensions

Business

Markets

Gold mining firms advance as Shanghai Composite closes marginally lower
Hang Seng Index shed 0.79 per cent to close at 28,226.19


The Hang Seng Index shed 0.95 per cent on Monday, with only seven of its 50 constituents recording any gains. Meanwhile, the Shanghai Composite Index dipped 0.012 per cent to close at 3,083.41 points.


China stock market

Hong Kong stock exchange

Live

Overnight markets/ What futures foretell:  – On Friday trading in US markets, the S&P 500 index dropped 0.7 per cent, the Nasdaq and the Dow slipped 0.8 per cent  – Hong Kong futures were 0.5 per cent lower, while the FTSE China A50 futures fell 0.2 per centIPO debuts: QiaoYin Environmental Tech (002973 CH) will start trading on the Shenzhen exchange, while Wuhan Xingtu Xinke Electronics (688081 CH) and Beijing Bayi Space LCD Technology (688181 CH) will debut on the Star Market in Shanghai.Economic statistics/Central Bank action: Caixin China PMI is due at 9.45am on Monday.Corporate events, earnings, meetings, news conferences: nothing majorLater this week: The central bank will release December data on foreign reserves on Tuesday and the statistics bureau is expected to post inflation numbers on Thursday.   


Morning Guidance

HSBC (0005 HK) said on Monday that its Mong Kok building on Nathan Road would reopen after it was vandalised during the holiday period.
  The largest of the city’s three currency-issuing banks said its branch, premier centre, commercial service centre, business centre and global trade and receivables finance counter in the building had resumed service on Monday morning after being closed beginning on December 27.
  The branch is one of about a dozen locations of HSBC and its Hang Seng Bank subsidiary that were closed after they were damaged during a chaotic New Year’s Day protest in the city. HSBC’s Mong Kong branch and a Hang Seng Bank self-service centre have reopened, but the rest of the locations remain closed.     HSBC has been in the cross hairs of more radical anti-government protesters after a police crackdown in December on a crowdfunding platform operated by Spark Alliance, which raised money to post bail and assist arrested demonstrators. Police have arrested four people on suspicion of money laundering and frozen about HK$70 million (US$9 million) in assets held in the corporate account of the organisation.     On Friday, HSBC took the unprecedented step of suspending service on weekend nights and during public holidays at 19 automated teller machine (ATM) locations and express service centres in protest-hit parts of Hong Kong Island and Kowloon.
  “This is a precautionary measure to ensure the safety of customers who access the bank’s facilities,” the bank said at the time.  – Chad Bray


HSBC resumes services at Mong Kok building

Stocks in mainland China and Hong Kong drifted lower at the open on Monday, as geopolitical tensions in the Middle East put investors on edge. The Shanghai Composite Index dropped 0.1 per cent and the Hang Seng Index declined 0.5 per cent, tracking declines in other markets in Asia, as traders shifted out of risky assets for safe ones, such as gold, after the US killed a top Iranian military commander in an air strike last week. Oil-linked stocks rose after crude futures jumped following the attack, with China Oilfield Service (601808 CH) and Offshore Oil Engineering (600583 CH) gaining at least 3 per cent.
  – Zhang Shidong


China, Hong Kong stocks open lower on risk-off mood

Zhejiang Sanhua Intelligent Controls (002050 CH) and other Chinese suppliers of Tesla jumped after the US maker of electric cars cut prices of its Model 3 vehicles in China to compete with domestic rivals. The price of a Model 3 with a standard-range battery pack was cut by 9 per cent to 323,800 yuan (US$46,500), Tesla said last week. After the Chinese government’s 25,000-yuan subsidy, this model starts from 299,050 yuan, putting Tesla at an advantage over NIO’s electric SUVs priced at 358,000 yuan, and Xpeng Motor’s P7 at 240,000 yuan. Demand for the Model 3 will far exceed supply in the Chinese market this year and sales will exceed more than 300,000 units, Citic Securities said in a note on Monday. Zhejiang Sanhua surged 9.7 per cent to 19.77 yuan, Ningbo Joyson Electronic (600699 CH) climbed 6.6 per cent to 18.91 yuan and Contemporary Amperex Technology (300750 CH) added 3 per cent to 112.80.
  – Zhang Shidong


Tesla’s Chinese suppliers rise on Model 3 price cut

QiaoYin Environmental Tech (002973 CH) surged by 44 per cent – the maximum allowed for mainland China-traded initial public offering shares on their debut – to 8.27 yuan in Shenzhen. Wuhan Xingtu Xinke Electronics (688081 CH) and Beijing Bayi Space LCD Technology (688181 CH), which began trading on the Star Market in Shanghai, jumped 94 per cent and 44 per cent, respectively. New shares on the Star Market have on limits on how much they can rise or fall on the first day of trading.
  – Zhang Shidong


All of Monday’s IPOs surge on mainland exchanges

Chinese carriers retreat after the killing of a top Iranian military official by the US boosted crude oil futures to their highest level since April. China’s three biggest airlines were among the top five worst-performing stocks on the CSI 300 Index over concerns about rising costs. Air China (601111 CH) declined 3.7 per cent to 9.14 yuan, China Eastern Airlines (600115 CH) fell 3.2 per cent to 5.50 yuan and China Southern Airlines (600029 CH) retreated 3.3 per cent to 6.94 yuan.
– Zhang Shidong



Chinese airlines tumble as crude nears eight-month high

China National Offshore Oil Corporation (CNOOC) (0883 HK) jumped 3.02 per cent to HK$13.64 on Monday. The stock performance of China’s third-largest national oil company is on track after it launched a growth strategy at the start of the year, according to Peter Shao, an analyst at Guotai Junan Securities.     “For the past three quarters, CNOOC has been on track in terms of production increases,” Shao said. “Domestic oil production’s growth potential has been diminishing in the past few years, so the company is focusing on overseas growth, notably in Africa, the Middle East and Latin America.
  “The rise in oil prices is in its favour, especially amid eased tensions between China and the US on trade, and the escalation of geopolitical tensions in the Middle East,” Shao said. “The effects of the escalation in Middle East [tensions] are still very opaque.”
  PetroChina (0857 HK) also rose 2.46 per cent to HK$4.14, while Sinopec (0386 HK) rose 1.26 per cent to HK$4.83.
– Kathleen Magramo


Chinese oil-linked stocks rise in Hong Kong

Chinalin Securities (002945 CH) shed 5.3 per cent to 14.01 yuan in Shenzhen after it received a notice from the China Securities Regulatory Commission that will limit expansion of business for three months because of mismanagement at its subsidiaries. The stock is the worst performer on the CSI 300 Index so far on Monday. The brokerage said in a separate statement that its net income for 2019 probably increased by more than 30 per cent from a year earlier.
– Zhang Shidong


Chinalin Securities falls most in two weeks on regulatory penalty

Investors can now subscribe to the initial public offering shares of Beijing-Shanghai High Speed Railway (601816 CH), the operator of rail links between mainland China’s two biggest cities, in Shanghai. The offer price of 4.88 yuan apiece implies 23.39 times the company’s earnings, higher than a cap of 23 times set by the regulator for most of the mainland’s IPOs. The company said last month that it would cut the size of its listing by 17 per cent, which could still raise about 30 billion yuan (US$4.3 billion) in mainland China’s biggest flotation since 2015.
– Zhang Shidong


Subscription opens for Beijing-Shanghai High Speed Railway IPO

Chinese traders have brushed aside rising geopolitical tensions in the Middle East to lift the Shanghai Composite Index to its highest close since April. The benchmark had risen 0.6 per cent at the lunch break to 3,101.98, boosted by optimism about further easing of monetary policy by Beijing and the forthcoming signing of a phase one trade deal between Beijing and Washington. Oil-linked stocks and Chinese suppliers of Tesla are leading the pack of gainers. 
In Hong Kong, on the other hand, the Hang Seng Index fell 0.6 per cent.
– Zhang Shidong


China market defies declines in Asia to rise to eight-month high

The uptrend in Chinese stocks will probably continue, HSBC Jintrust Fund Management has said. Stocks will continue to be supported by monetary policy loosening at home and abroad, the phase one deal between the US and China, financial deleveraging and overseas inflows, the Shanghai-based firm said. “We continue to be bullish on Chinese stocks, and low valuation financial stocks will be one of the major investment themes,” said Min Liangchao, a strategist at the money manager.
– Zhang Shidong


China stocks have more room for upside, HSBC fund unit says

Jiangsu Lianhuan Pharmaceutical (600513 CH) and other Chinese makers of treatments for flu and antibiotics rose again on Monday, after the central Chinese city of Wuhan provided an update late on Sunday on an outbreak of pneumonia whose causes remain unknown. As of yesterday, 59 cases had been reported, seven of them in critical condition.  Jiangsu Lianhuan jumped 8.6 per cent to 8.82 yuan, rising 29 per cent over the past month. Shandong Lukang Pharmaceutical (600789 CH) added 1.8 per cent to 7.44 yuan and Guilin Layn Natural Ingredients (02166 CH) rose 0.7 per cent to 8.21 yuan. 
  The first case of pneumonia from Wuhan was reported on December 12.
– Zhang Shidong


Buoyed by Wuhan pneumonia cases, Chinese drug makers rise again

A risk-averse mood is sinking Hong Kong stocks, driving down the Hang Seng Index by 1.1 per cent and putting it on course for its lowest level in a month. Property stocks are the biggest drag on the benchmark, with Wharf Real Estate Investment (1997 HK) and Country Garden Holdings (2007 HK) falling by at least 2.9 per cent. 
  In mainland China, the Shanghai Composite Index has failed to hold onto gains, and has declined by 0.1 per cent.
  “Equity markets across the region will continue to remain under pressure,” said Jeffrey Halley, an analyst at Oanda in Singapore. “Haven assets remain solidly in demand across the board in Asia.”
– Zhang Shidong


Hong Kong stocks on course for biggest decline in week

The Hang Seng Index shed 0.79 per cent to close at 28,180.28 on Monday, with only seven of its 50 constituents recording any gains. The muted trading reflected the mood set by tensions in the Middle East, as well as the upcoming US-China trade deal, Louis Tse Ming-kwong, managing director of VC Asset Management, said.
  Hong Kong-listed drug makers reported the biggest declines, dropping to 10-day lows. Sino Biopharmaceutical (1177 HK) fell 3.70 per cent to HK$10.40 and CSPC Pharmaceutical Group (1093 HK) fell 4.32 per cent to HK$17.70.
  “The pharmaceutical market has calmed down after some Hong Kong-listed companies turned into blue chips over the past year, which is why now these stocks are being sold indiscriminately,” Tse said.
– Kathleen Magramo


Hang Seng Index closes lower after day of muted trading

The Shanghai Composite Index dipped 0.012 per cent to close at 3,083.41 points on Monday. Gold miners pocketed most of the gains, with Gansu Ronghua Industry Group (600311 CH) and Chifeng Jilong Gold Mining (600988 CH) both soaring by 10.08 per cent. Shandong Gold Mining (600547 CH) jumped by 9 per cent.
– Kathleen Magramo


Gold mining firms advance as Shanghai Composite closes marginally lower

Hong Kong, China stocks sink on risk-off mood amid Middle East tensions

Gold mining firms advance as Shanghai Composite closes marginally lower Hang Seng Index shed 0.79 per cent to close at 28,226.19

Gold mining firms advance as Shanghai Composite closes marginally lower

Hang Seng Index shed 0.79 per cent to close at 28,226.19