|Day's Range||26,309.34 - 26,475.19|
|52 Week Range||24,896.87 - 30,280.12|
Good day, traders --Well, more twists and turns in the US-China trade deal story.Bloomberg, citing unnamed sources, reports that the two sides are moving closer to a phase-one deal despite tensions over Hong Kong and Xinjiang. December 15 is when the next set of US tariffs are scheduled to begin.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
TOKYO/HONG KONG, Dec 5 (Reuters) - Stock markets in Asia inched up on Thursday on the possibility that China and the United States may soon seal a "phase one" deal to end their 17-month trade war, but conflicting messages from U.S. President Donald Trump kept a lid on the advance. European shares are set to follow with a slightly firmer open, with the pan-regional Euro Stoxx 50 futures and London's FTSE futures rising 0.1% in early trade.
in local elections, dislodging their pro-Beijing rivals and delivering a decisive thumbs down to the city’s chief executive Carrie Lam and China’s President Xi Jinping. The elections followed almost six months of anti-government protests in the Asian finance hub that have left the city’s Hang Seng index up just 0.8 per cent this year, versus a nearly 28 per cent rise for China’s CSI 300.
A number of leading Wall Street banks are advising clients to make heavy bets on Hong Kong stocks, urging them to look again at a market that has been hammered by months of political tumult. On Wednesday, the IMF predicted Hong Kong’s economy would contract 1.2 per cent this year and grow just 1 per cent in 2020 in comparison with a 3 per cent expansion in 2018. Companies listed in the index derive much of their revenue from mainland China, meaning they would benefit from a “phase one” trade deal between the Washington and Beijing.
(Bloomberg) -- Alibaba Group Holding Ltd.’s landmark $11 billion share sale and listing in Hong Kong on Nov. 26 was galvanized by expectations the Chinese e-commerce giant will attract a vast pool of capital from its home country. But some investors caution against unrealistic expectations, especially by mainland investors, and highlight certain restrictions that still govern -- and potentially curtail -- trading activity in Alibaba’s Hong Kong shares.The company’s sheer size and the unprecedented nature of its secondary listing (the primary listing is still in New York) and unique management structure present challenges for investors hoping to gauge everything from Alibaba’s inclusion in indexes -- crucial because they direct the flow of capital from tracker funds -- to its listing status.Here’s what we know.1\. Will Alibaba get added to the Hang Seng Index?Not right now. Alibaba will be added to Hang Seng Composite Index on Dec. 9, but it isn’t qualified to join the benchmark Hang Seng Index or the Hang Seng China Enterprise Index because they comprise only primary listings and corporations without so-called weighted voting rights (WVR).Membership of the 50-member Hang Seng is coveted by corporations because it could trigger billions of dollars of inflows from funds tracking the 50-year-old gauge. Hang Seng Indexes Co. plans a consultation in the first quarter to discuss issues including whether firms with weighted voting rights, like Alibaba, should be eligible for the HSI. Any conclusions should be published by May, Daniel Wong, its head of research and analytics, said in a statement. Even if the index compiler decides to overhaul its rules, the required process means it may not be until late 2020 before Alibaba could join the major Hang Seng benchmarks.Representatives for HKEx and Alibaba declined to comment.Read more: Why Now, and Why Hong Kong, for Alibaba’s Share Sale?: QuickTake2\. Will Alibaba be included in the stock connect program?Maybe, but a lot hinges on policy makers. China doesn’t spell out criteria or qualifications for joining the program, which allows mainland investors to buy stocks listed in Hong Kong. Unlike the HSI, the program isn’t limited to primary listings. It does require review by the China Securities Regulatory Commission, the stock market watchdog.The first companies in stock connect with weighted voting rights were Meituan Dianping and Xiaomi Corp., which mainland investors got access to in late October through the program. That’s after similarly structured Chinese firms started listing in July on Shanghai’s new tech-focused Star board. Many investors expect Beijing to ultimately allow Alibaba’s Hong Kong shares to trade through the stock link with the city as well.But it may not necessarily be in China’s best interest to do so. That’s because other U.S.-listed Chinese firms -- among the country’s largest corporations, from JD.com Inc. to Baidu Inc. -- may be encouraged to follow in Alibaba’s footsteps and conduct their own secondary listings in Hong Kong, bypassing the Shanghai or Shenzhen bourses. That may run counter to Beijing’s longstanding ambitions of developing healthy, vibrant mainland exchanges, particularly as unrest grips Hong Kong.3\. Can Alibaba change its primary listing to Hong Kong?It’s possible -- thereby attracting investors with a preference for main listings, and at the same time scoring brownie points with some in Beijing who could view that as supporting China’s policy ambitions. Alibaba was given the green light to list in Hong Kong based on a new “Secondary Listing” rule, or Chapter 19C. It allows companies to conduct follow-on share offerings without complying with more stringent rules laid down by Hong Kong Exchanges & Clearing Ltd. governing first-time listees.Alibaba may enjoy special status in having more freedom to comply with Hong Kong listing requirements. Under rules laid out in a consultation paper in April last year, Chinese firms that went public before Dec. 15, 2017 don’t need to comply with “WVR” safeguards if they later switch their primary listing to Hong Kong. Alibaba, which debuted in New York in 2014, said in its Hong Kong listing prospectus it’s a “WVR” company similar to Meituan and Xiaomi.Meanwhile, Alibaba employs a fairly unique structure in which a group of partners have the right to nominate a majority of the firm’s board -- exerting outsized influence on Alibaba’s direction.In addition, Hong Kong listing rules say if trading volume there exceeds 55% of global turnover over an entire fiscal year, the stock has to adopt primary listing status in Hong Kong. HKEx gives such Chinese companies a year to comply. But with Hong Kong’s stock registration office listing just 23% of outstanding Alibaba shares as of Nov. 28, a majority of trading volume occurring there may be a tall order.\--With assistance from Paul Geitner and Fox Hu.To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Edwin Chan, Kevin KingsburyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Good day, traders --Hong Kong stocks slipped on growing concerns the trade deal may be delayed over US-China tensions. Meanwhile, China stocks gained.Check out the day's action below.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
The Australian share market suffered its worst day since mid-August on renewed fears over global trade uncertainty. The sell-off wiped on $50.8 billion in value from the market and was the largest single-day drop since a 187.8 point loss on August 15.
Asian shares fell on Tuesday after U.S. President Donald Trump stunned markets by imposing tariffs on imports from Brazil and Argentina, rekindling fears over global trade tensions, while weak U.S. factory data added to the investor gloom. Pan-region Euro Stoxx 50 futures were up 0.41% in early trades, while German DAX futures added 0.45% and FTSE futures gained 0.26%.
Donald Trump declared on Tuesday that he was prepared to wait until after the US election next year to reach a trade deal with China, fuelling global economic tensions and unnerving investors a day after the US stepped up a dispute with EU allies. Mr Trump said there was no deadline for the US-China talks, raising doubts about the prospects for resolving the dispute with Beijing.
Welcome to a fresh month, traders.November ended with a 2.1 per cent decline for the Hang Seng Index, and year to date the index is only up 1.9 per cent.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
A private survey on Monday showed China’s manufacturing activity expanded more than expected in November. Chinese state media said Sunday that Beijing wants a rollback of tariffs in the phase one trade deal that the two economic powerhouses are aiming to reach.
(Bloomberg Opinion) -- Hong Kong property companies, whose shares have been beaten down amid this year’s protests, are missing an opportunity to unlock value for shareholders. More should consider packaging their trophy assets into real estate investment trusts to release capital and improve the market’s view of their prospects.The Hang Seng Properties Index has slumped more than 17% from an April high as the unrest disrupted business, deterred home buyers and caused tourists and shoppers to stay away. The broader Hang Seng Index has lost 11%. Many real estate companies are trading at a steep discount to the value of their underlying assets.To understand why developers are trading at a discount, look at the ownership structure. Many are controlled by founding families, who are reluctant to part with their most prized properties. Take Hang Lung Properties Ltd., for example. Chairman Ronnie Chan owns more than half the company, which trades at a price-to-book ratio of 0.52 times.As a result of the reluctance to divest, companies end up acting essentially as landlords rather than developers, stunting the potential for growth. In effect, investors are participating in a bond-like structure by collecting rental income instead of achieving an equity-like return via property development and sales. Concern that Hong Kong is at the peak of a property cycle has also helped to depress valuations, with investors discounting developer shares to reflect the risk of a decline. Hang Lung’s price-to-book ratio has dropped from a peak of more than 1.8 times over the past decade as Hong Kong real estate prices surged.Spinning off rental properties into trusts, or REITs, could help to narrow the discount to net asset value. Such a maneuver would enable family-owned entities to retain control while generating capital from REIT offerings that could be redeployed into better-yielding projects. That in turn would raise return on equity, benefiting owners and investors. The parent company would enjoy higher growth prospects through a relatively asset light model while the REIT provides a steady income stream.Income taxes are the primary obstacle to expansion of Hong Kong’s REIT market. At the moment, Hong Kong property trusts are taxed like corporations at 16.5%. Singapore, by contrasts, grants a tax exemption to REITs holding both domestic and foreign properties as long as they pay out 90% of their income in dividends. In 2014, Hong Kong’s Financial Services Development Council urged the city’s authorities to stimulate the REIT market by introducing a tax break, so far to no avail.That discrepancy has helped Singapore to maintain its lead over Hong Kong as a center for REITs. Singapore, which issued its first property trust in 2002, has 43 now with total assets of $112 billion. Hong Kong’s first listing was Link REIT in 2005. Nine more have followed since, bringing total assets to $67 billion. No new REITs have been issued in Hong Kong since 2013; by contrast, Singapore has seen 11 listings in the past five years.Share performance has also been superior in the Southeast Asian city-state. The S&P Singapore REIT index has returned 25% this year, compared with less than 4% for its Hong Kong equivalent. The valuation gap is stark: Singapore REITs trade at about 1.1 times book, versus 0.6 times for Hong Kong.That might suggest that Hong Kong property companies have little to gain by packaging assets into trusts. Besides the tax issue, the discount may reflect that most REIT listings in Hong Kong to date haven’t included companies’ highest-quality properties. In any case, there’s another solution for the city’s developers: List their REITs in Singapore. That might even sway Hong Kong authorities into reconsidering their stance. (Corrects the year of Link REIT’s listing to 2005 in the seventh paragraph.)To contact the author of this story: Ronald W. Chan at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Ronald W. Chan is the founder and CIO of Chartwell Capital in Hong Kong. He is the author of “The Value Investors” and “Behind the Berkshire Hathaway Curtain.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Investors are keeping a "cautious" eye on Hong Kong's financial markets heading into 2020 as the city's economy takes a battering from the US-China trade war and months of civil unrest.Benjamin Jones, senior multi-asset strategist at State Street in London, said stocks listed in the city are probably "destined for some volatility" in the coming months."It wouldn't be a market that I would be jumping into at the moment. Some people say, yes, it is cheap now. It has fallen an awful long way. Is this a buying opportunity? My view is no, because it's nigh on impossible to say what is going to happen on the political side right now. This has gone on far longer than many people had feared or expected."Anti-government protests since early June have turned into fiery battles with police in university campuses, dragging down the stock market and the economy. The Hang Seng Index's 2.5 per cent gain this year has trailed a 10 per cent to 29 per cent rally in major US, UK and mainland China bourses.The city's biggest stocks have cheapened with investors willing to pay 9.9 times for their earnings in 2020, and 9.2 times for 2021, according to Bloomberg data. The price-earnings multiple has dropped from 13.7 times in 2017 to 11.2 times this year. Citigroup warns employees to avoid danger in Hong Kong after banker arrestedThe economic effects may be spreading to other industries as more listed companies, ranging from newspaper publishers to Maserati importers, have warned the protests weighed on their bottom lines in the most recent quarter.The protests began in June over a controversial extradition bill that would have made it easier to send criminal suspects to China, but have evolved into a broader movement about issues ranging from income inequality to Beijing's influence over city affairs.Andrew Swan, head of global emerging markets equities at BlackRock, said the world's biggest asset manager remains "fairly cautious" about locally based listed companies in Hong Kong until they have a clear vision of how the situation will play out."It's a very difficult environment and, at this point, it's difficult to see what the resolution is," Swan said. Hong Kong banks, firms cautious on hiring as outlook remains uncertainOn Thursday, US President Donald Trump signed legislation into law that would potentially subject Hong Kong to diplomatic and economic sanctions if the city's autonomy from mainland China is undermined. Beijing has warned the US to avoid interfering in its internal affairs, raising the spectre of further escalation of the trade dispute.The move by the Trump administration came just days after pan-democrats won by a landslide in Hong Kong's district council elections in a blow to the city's pro-establishment camp. A period of extended calm has descended over the city since the results were announced.As of Wednesday's close , the Hang Seng Index was up 1.3 per cent from November 22, the last trading day before the weekend elections.The city's stock exchange also received a shot in the arm this week as Alibaba Group Holding's secondary listing began trading in Hong Kong and its shares were fast-tracked to join the benchmark Hang Sang Composite Index next month. The biggest listing globally this year, Alibaba's shares closed Wednesday at HK$193.20 in Hong Kong , up 9.8 per cent from its offering price. Why Alibaba chose Hong Kong as home for its second IPO"Entering into a period of stability would be a step in the right direction," said Tara Joseph, the president of the American Chamber of Commerce in Hong Kong. "However, it will take months to restore confidence in many aspects of the economy. The city's global reputation has been tarnished and we need to actively show that change is afoot to restore peace, security and a solution to the ills affecting society."This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
Happy Friday, traders, and we are at the last trading day of a drama-filled November --So investors remain cautiously optimistic that an interim trade deal can be worked out between the US and China. But US President Donald Trump's signing of legislation supporting Hong Kong protests sparked strong criticism from Beijing.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
(Bloomberg) -- Friday’s sudden tumble in Hong Kong stocks spread to the onshore market, with selling accelerating amid nervousness over a lack of clear triggers for the slump.The market was rife with speculation: health-care shares tumbled in Hong Kong when a document circulating on social media suggested Beijing could add dozens of new drugs to another round of procurement. Others said there was too much macro risk going into the weekend, with increasing uncertainty on the trade-war front. In onshore trading, the selling accelerated in the afternoon session as investors took profits in crowd favorites like Kweichow Moutai Co.The Hang Seng China Enterprises Index lost 2.5%, while the FTSE China A50 Index of onshore-listed large caps fell 1.3%. Hong Kong’s Hang Seng Index dropped 2% on volume that was 36% higher than the 30-day average. Some traders said Thursday’s U.S. holiday meant investors lacked cues in Friday’s Asian session.“There’s no obvious trigger” for Friday’s weakness, said Linus Yip, a Hong Kong-based strategist with First Shanghai Securities Ltd. He said continued uncertainty over the outcome of U.S.-China trade negotiations could be one factor weighing on sentiment.There’s persistent concern over how China may retaliate against a U.S. bill on Hong Kong signed by Trump this week. Beijing on Thursday reiterated its threat to take action, without elaborating. Chinese authorities have been known to make significant announcements late on Friday. Month-end maneuvering was also seen as a possible factor.Hong Kong stocks rose Monday after pro-democracy candidates swept the board in district council elections, putting pressure on the city’s government to address issues that have fueled months of protests. Days later, Trump signed a bill into law expressing support for Hong Kong’s protesters.Moutai fell 4% Friday, its biggest loss since Sept. 11. CSPC Pharmaceutical Group Ltd. and Tonghua Dongbao Pharmaceutical Co. almost 10%, among the biggest laggards on the MSCI China Index.To contact the reporter on this story: Cindy Wang in Taipei at firstname.lastname@example.orgTo contact the editors responsible for this story: Sofia Horta e Costa at email@example.com, Richard FrostFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Asian stocks fell on Friday as investors braced for retaliation by China after US president Donald Trump signed into law a bill backing Hong Kong’s anti-government demonstrators. In afternoon trading, Hong Kong’s benchmark Hang Seng index sank 2.1 per cent — its biggest fall in two weeks — and China’s CSI 300 of Shanghai- and Shenzhen-listed shares shed 1.3 per cent.
Thursday’s selling pressure was mild when compared to previous breaks in the stock market in reaction to potentially negative news about a breakdown in talks between the United States and China. The news creates uncertainty, which usually encourages investors to lighten up on risky positions. However, it’s probably not a deal breaker.
Good day traders --Lots of news to weigh.US President Donald Trump signed the Hong Kong Human Rights and Democracy Act, in support of the protesters, against the threats of Beijing and at a high-stakes moment in the US-China trade talks.China e-commerce giant Alibaba (9988 HK) is being put on a fast track and will be admitted into a broad version of Hong Kong's benchmark stock index on December 9.And China smartphone maker Xiaomi (1810 HK) posted its slowest-ever quarterly revenue growth.We'll keep you up on the latest moves and news in Hong Kong and mainland markets. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
The markets in China, Hong Kong, South Korea, and Singapore performed poorly on Thursday morning as China expressed displeasure over the U.S. passing the Hong Kong Human Rights and Democracy Act. The bill, that the House of Representatives and the Senate unanimously passed earlier, calls for the Secretary of State to make sure every year that Hong Kong remains sufficiently independent from Beijing for it to warrant a special trade status with the U.S. China has opposed the bill saying that the U.S. is attempting to interfere in its internal matters.
Before we start a short service announcement — there will be no end-of-week news quiz tomorrow but it will be back next week. , defying calls from China to block the legislation and putting the territory’s special trade status at risk. The president ratified the Hong Kong Human Rights and Democracy Act after it was overwhelmingly passed by lawmakers, a rare example of bipartisan co-operation.
Last week, negative headlines dominated the news, leading to some light profit-taking in the stock market. This week, there haven’t been any negative comments, and the rally to record highs in the U.S. has resumed. However, there are some whispers over the lack of concrete evidence that progress is being made in the trade talks.
Write this city off at your peril. Hong Kong is still the financial capital of East Asia, and will remain so as long as the Chinese Communist Party refuses to ease its capital controls.
Good day, traders --"We're in the final throes of a very important deal. It's going very well," US President Donald Trump told reporters overnight. It was the latest signal that an initial trade deal may be coming. Trump didn't say what he intends to do with a bill supporting Hong Kong protesters that is awaiting his signature.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
(Bloomberg) -- Most mainland investors can still only watch gains in Alibaba Group Holding Ltd., as China’s most valuable listed company extends increases after its Hong Kong stock exchange debut.Fund mangers say the shares will be a must-have once they are included into the city’s trading links with the mainland, timing of which remains uncertain. The industry is unfazed the company’s U.S.-listed equity has nearly tripled in price since September 2014’s initial public offering, predicting that Chinese investors’ familiarity with the e-commerce firm will push Alibaba’s market valuation higher still.“It’s a unique and rare asset -- like Tencent and Meituan -- that can’t be found in mainland-listed stocks,” said Qu Shaohua, managing director at Acroguardian Investment Co. “Though we don’t own Alibaba shares yet, I think it’s important that we do once it becomes available through the stock connect -- at the right price.”The stock is eligible to join the Hang Seng Composite Index, of which many components can be traded through Chinese exchanges’ trading links with Hong Kong’s. But due to Alibaba’s unequal voting rights structure, its shares must trade for some seven months in Hong Kong and meet other requirements in areas like trading volume before being included into the stock connect, according to rules published by the Shanghai and Shenzhen stock exchanges.The mainland bourses didn’t immediately reply to faxes, calls and emails seeking comment on Alibaba’s eligibility for the stock links.Jiang Liangqing, a fund manager at Ruisen Capital Management in Beijing, has Alibaba high on his shopping list and expects other institutional investors to add the stock as an “essential part” of their portfolio, just like they did with Tencent Holdings Ltd. when its shares traded in the city became accessible to mainland investors a few years back.Alibaba finished up 3% on Wednesday at HK$193.2, after gaining 6.6% on its debut. The closing price was around 25 times projected earnings for the next 12 months, versus Tencent’s 26 times and Meituan Dianping’s 117 times.The company is not totally strange to Hong Kong’s stock market. Business-to-business marketplace Alibaba.com Ltd. was floated there in 2007, but Alibaba bought back the shares five years later at the IPO price.The parent company then went public in New York in 2014 after being turned down by Hong Kong. It has created more than $250 billion in wealth for investors since its IPO.Many mainland China traders say they are not fretting about missing out on the gains, instead projecting optimism that domestic investors -- who shop, order takeout and get groceries delivered through Alibaba’s services on a regular basis -- will give its Hong Kong stock a lofty valuation over time.“Mainlanders are going to go crazy over this one, when they can finally buy a piece of Alibaba with yuan,” said He Qi, a fund manager at Huatai Pinebridge Fund Management whose mandate includes Hong Kong shares.One of the latest Chinese technology firms to be eligible for trading by Chinese investors through the link with Hong Kong’s stock exchange, Meituan was the most net-purchased stock by mainland investors in the two weeks following its stock connect inclusion in late October, according to figures compiled by Bloomberg.To be sure, some traders aren’t in a rush to jump on the Alibaba bandwagon, highlighting risks such as China’s still-slowing economic growth.“Alibaba is faced with heightened competition, both on its home turf of e-commerce and in the booming short video realm,” added Wei Hai, chief investment officer at Jungle Gene Associates. The hedge fund holds a position in U.S. stocks.(Updates with stock close seventh paragraph.)\--With assistance from Jeanny Yu, Lujia Yu and Mengchen Lu.To contact Bloomberg News staff for this story: April Ma in Beijing at firstname.lastname@example.org;Ken Wang in Beijing at email@example.comTo contact the editors responsible for this story: Sofia Horta e Costa at firstname.lastname@example.org, Fran Wang, Kevin KingsburyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.