Inside Bar (Bearish)
|Bid||440.33 x 900|
|Ask||442.86 x 800|
|Day's Range||437.59 - 443.70|
|52 Week Range||209.01 - 449.22|
|Beta (5Y Monthly)||0.74|
|PE Ratio (TTM)||66.22|
|Forward Dividend & Yield||4.64 (1.05%)|
|Ex-Dividend Date||Jun 11, 2020|
|1y Target Est||N/A|
(Bloomberg) -- Oil pared losses to trade near $40 a barrel before U.S. government data that’s forecast to show gasoline stockpiles increased.U.S. gasoline supplies expanded by 1 million barrels last week, according to a Bloomberg survey before industry figures expected later Tuesday. That was offset by the dollar easing some of its earlier gains. Crude has struggled to break far beyond $41 a barrel since early June, with volatility hitting its lowest level in four months, a stark contrast from the wild fluctuations seen in prices earlier this year.The cap to any further gains in prices comes as rising coronavirus cases have forced major fuel-consuming states in America’s south to reimpose measures such as shutting bars and banning indoor dining, with lockdowns also re-emerging in other corners of the globe. Prices have been sandwiched into a range by unprecedented supply cuts from OPEC and its allies, though the measures are set to wind down next month and producers are yet to decide on whether to extend the curbs.See also: Venezuela’s Fuel Shortage Returns After Iranian Cargoes Dry Up“With rising coronavirus cases reported from all over the world and with global oil production expected to rise soon one cannot help but think the medium-term peak is not far away,” said PVM Oil Associates analyst Tamas Varga.Consumption of gasoline in America fell by nearly 420,000 barrels a day over the last week, RBC analysts including Mike Tran said. Nationwide stockpiles of the fuel rose for a second week, according to the Bloomberg survey, which would see inventories at the highest level in a month. Supplies of distillates, a category that includes diesel, increased by 500,000 barrels. Official government data is due Wednesday.It “certainly feels as if there is a risk that the demand recovery will be flatter,” said Paul Horsnell, head of commodities research at Standard Chartered Plc. “The accumulated inventory excess is going to hang over things for a while.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Sina Corp., a Chinese social media company, has received a take-private proposal for $41 a share from an entity led by its chairman.The company said in a statement Monday that New Wave MMXV Ltd., the anglicized name of Sina, submitted a preliminary non-binding proposal letter dated Monday for a “going private” transaction. New Wave is controlled by Charles Chao, chairman and chief executive officer of Sina, according to the statement.At $41, the U.S.-listed company would be valued at about $2.7 billion, an 11.8% premium on its last closing price on Thursday.Sina operates Weibo, a Chinese equivalent of Twitter. The firm was among the first wave of Chinese internet companies to seek listings internationally at the beginning of the century. It went public on the Nasdaq in 2000, with its shares rising 174% since then. The S&P 500 Index rose 116% during the same period.With the encouragement of China’s government and to be closer to their customers, some U.S.-listed Chinese companies have reversed course and sought homecomings via Hong Kong listings in the past year. That includes Alibaba Group Holding Ltd., JD.com Inc. and NetEase Inc.Chao controls 13.5% of Sina’s ordinary shares, according to a filing. Sina said in its statement that New Wave and its beneficiaries control 58% of the voting power in the company. The acquisition, to be financed by a combination of debt and equity, will be evaluated by a special committee set up by Sina’s board, according to the statementAn investor group backed by private equity firms Warburg Pincus and General Atlantic offered in June to take private 58.com Inc., a Chinese online bulletin board akin to Craigslist, in a deal valuing the company at about $8.7 billion.Sina shares jumped as much as 10.8% on Monday after the announcement disclosing the offer. They closed at $40.54 in New York.(Updates with closing share price in eighth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
European stocks rose on Monday, as signs of economic progress offset worries about growing coronavirus cases in the U.S. as well as India.
Shares of Youdao (NYSE: DAO) gained 66.9% in June, according to data from S&P Global Market Intelligence. NetEase issued new common stock and also had its public debut on the SEHK on June 11, and its valuation climbed roughly 8.4% last month. Youdao posted much bigger gains than NetEase, but its stock movement trends tracked closely in line with those of its parent company.
(Bloomberg) -- Hangzhou Wahaha Group Co., one of China’s biggest drink makers, is weighing an initial public offering that could raise more than $1 billion, according to people with knowledge of the matter.A listing could come as soon as next year, the people said, asking not to be identified as the matter is private. The beverage company is working with an adviser on preparations for the share sale, and has been considering Hong Kong among potential listing venues though no final decision has been made, they said.Founded in 1987 by entrepreneur Zong Qinghou, Wahaha has grown into a food and beverage giant with products ranging from bottled water, yogurt drinks and juice to instant noodles. The company has 80 production bases and employs about 30,000 workers, according to its website. Its products are available in more than 30 countries including Canada, Singapore and the U.S., the website said.Wahaha, which literally means a “laughing child” in Chinese, has signaled its intention for a listing last year as competition in China’s food and beverage market intensified. A listing would be “the right choice” and provide Wahaha with more resources, Kelly Zong, the founder’s daughter and an executive at the company, said in an interview with the 21st Century Herald in 2019. She didn’t provide details on preparations and timing.The company joins fellow Hangzhou-based beverage firm Nongfu Spring Co. in seeking a first-time share offering. The bottled water company filed for its Hong Kong IPO in late April and plans to raise about $1 billion, people with knowledge of the matter told Bloomberg News earlier.Chinese companies have become the force behind a surge in share sales in Hong Kong after a slow first quarter. JD.com Inc. and NetEase Inc. last month raised $7 billion through second listings in the financial hub. In the first half of this year, the tech companies accounted for almost two-thirds of the city’s total fundraisings via first-time share sales, according to data compiled by Bloomberg.READ MORE: Asia Share Sales Double in Second Quarter Amid Retreat From U.S.Preparations for Wahaha’s offering are at an early stage and details including size and timing could change, the people added. A representative for Hangzhou Wahaha Group said they hadn’t received any relevant information regarding an IPO.(Updates with IPO data in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- China’s tycoons are flooding Hong Kong’s exchange with $20 billion worth of new listings.While the city’s rich are preparing for a worst-case scenario amid a controversial national-security law, major mainland billionaires are coming in. The latest to do so: William Ding of NetEase Inc. and JD.com Inc.’s Richard Liu, whose companies completed secondary listings there last month. They follow Jack Ma, whose Alibaba Group Holding Ltd. stock issuance in November was the city’s largest since 2010.Together, the three moguls’ firms have raised $20 billion from share sales in the former British colony, and that may be just the start of a new wave of listings by mainlanders.“Chinese billionaires’ tech companies are helping the capital market in Hong Kong for a pivotal change and secure its Asia financial hub status,” said Edward Au, managing director of the southern region at Deloitte China. “The city’s stock exchange is also trying to make it a more appealing destination for new-economy companies.”The national-security law that was approved on Tuesday is threatening to erode Hong Kong’s judicial independence from the mainland, a key part of the city’s appeal to international companies and investors. The U.S. has already started to make it harder to export sensitive American technology to Hong Kong, and the House of Representatives passed a bill imposing sanctions on banks that do business with Chinese officials involved in cracking down on pro-democracy protesters.While Chinese billionaires have myriad reasons for pursuing listings there -- including a less welcoming political environment in the U.S. -- their choice of the city over alternatives on the mainland may help ease concerns that the former British colony risks losing its status as a financial center.Chinese tech tycoons with companies trading in the city now have a combined net worth of $182 billion, more than the 10 richest people in Hong Kong, according to the Bloomberg Billionaires Index. For them, Hong Kong is becoming increasingly appealing as Chinese companies listed in the U.S. face growing scrutiny and potential delistings following an accounting scandal at Luckin Coffee Inc. and mounting tensions between the world’s two largest economies.JD.com and NetEase have raised a combined $7 billion with their secondary listings last month -- almost two-thirds of the total for Hong Kong in the first half of the year, according to data compiled by Bloomberg. Deloitte expects that as many as six Chinese companies currently traded in the U.S. will choose the city for a second listing by year-end. Robin Li’s Baidu Inc. is among those weighing that option.The city eased listing rules in 2018 to attract companies such as smartphone maker Xiaomi Corp. and Meituan Dianping, China’s largest on-demand food delivery service. The move could eventually reshape the composition of the benchmark Hang Seng Index, according to Deloitte’s Au. In May, the index manager announced new criteria to allow companies such as Alibaba to be included in the gauge.“The influx of these companies will greatly increase the representation of new-economy companies in Hong Kong, adding vibrancy and diversity to the market,” said Louis Lau, partner at KPMG China’s capital markets advisory group. “The continued listing of mega-sized Chinese firms also reinforces Hong Kong’s position as Asia’s financial hub.”(Updates with new U.S. bill in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
In the streets of Hong Kong, activists protest against China's new security law. Hong Kong markets will benefit from more listings by Chinese companies, more mainland money, and more financial links with the world's second-biggest economy, traders and analysts say, despite legislation some fear will erode the city's freedoms. Beijing unveiled the law on Tuesday, and Hong Kong police made their first arrests of protesters under the legislation on Wednesday.
British Foreign Secretary Dominic Raab reprimanded HSBC and other banks on Wednesday for supporting China's new security law, saying the rights of Hong Kong should not be sacrificed for bankers' bonuses. Senior British and U.S. politicians criticised HSBC and Standard Chartered last month after the banks backed China's national security law for the territory. "On HSBC and banks, I've been very clear in relation with HSBC and ... all of the banks: the rights and the freedoms and our responsibilities in this country to the people of Hong Kong should not be sacrificed on the altar of bankers' bonuses," Raab told parliament.
(Bloomberg) -- Tencent Holdings Ltd.’s $40 billion surge this week and the recent ascent of Pinduoduo Inc. have reshuffled the ranking of China’s richest people.The country’s largest game developer has surpassed Alibaba Group Holding Ltd. as Asia’s most-valuable company, with its shares rising above HK$500 in intraday trading Wednesday for the first time. Pinduoduo, a Groupon-like shopping app also known as PDD, has more than doubled this year.The rallies have propelled the wealth of their founders, with an added twist: Tencent’s Pony Ma, worth $50 billion, has surpassed Jack Ma’s $48 billion fortune, becoming China’s richest person. And Colin Huang of PDD, whose net worth stands at $43 billion, has squeezed real estate mogul Hui Ka Yan of China Evergrande Group out of the top three earlier this year, according to the Bloomberg Billionaires Index.The coronavirus pandemic has accelerated the digitization of the workplace and changed consumers’ habits, boosting shares of many internet companies. Now tech tycoons are dominating the ranks of China’s richest people. They occupy four of the top five spots: Ding Lei of Tencent peer NetEase Inc. follows China Evergrande’s Hui.‘Perform Strongly’Tencent has come a long way since hitting a low in 2018, when China froze the approval process for new games. Since then, the stock has almost doubled, and last month the tech giant reported a 26% jump in first-quarter revenue.“Tencent’s online games segment will probably perform strongly through the Covid-19 pandemic, and most of its other businesses are relatively unscathed,” said Vey-Sern Ling, a Bloomberg Intelligence analyst.That has been a boon for Pony Ma, 48, who owns a 7% stake in the company and pocketed about $757 million from selling some 14.6 million of his Tencent shares this year, data complied by Bloomberg show.The native of China’s southern Guangdong province studied computer science at Shenzhen University and was a software developer at a supplier of telecom services and products before co-founding Tencent with four others in the late 1990s. At the time, the company focused on instant-messaging services.It has been a long comeback for Pony Ma. He overtook real estate tycoon Wang Jianlin as China’s second-richest person in 2013 and topped Baidu Inc.’s Robin Li as the wealthiest in early 2014. Later that year, Alibaba went public in the U.S., catapulting Jack Ma’s fortune.Bloomberg Intelligence’s Ling notes, however, that Tencent’s jump this year has lagged behind some internet peers, especially those in e-commerce, games and online entertainment. Just consider: Tencent shares have climbed 31% in 2020, while PDD’s American depositary receipts have more than doubled. Alibaba, meanwhile, has advanced just 6.9%.(Updates with Alibaba shares in last paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The Bank of Thailand held its benchmark interest rate at an all-time low to support an economy it now sees contracting more than 8% this year, the worst on record.The central bank kept its policy rate at 0.5% on Wednesday in a unanimous decision, in line with the forecasts of all but four of the 26 economists in a Bloomberg survey.Policy makers revised down their growth forecast sharply, predicting an 8.1% contraction for this year, compared with a previous projection of a 5.3% decline. The coronavirus pandemic has devastated two of the economy’s main growth drivers, tourism and trade, with a slow recovery seen.With interest rates close to zero, the central bank is slowly running out of conventional policy space to support the economy. Officials have said they are studying unconventional steps, such as asset purchases and some form of yield curve control.“While the decision to hold rates unchanged came as no surprise, the sharp downward revisions to growth and inflation forecasts highlight the extent of pressure on the economy,” said Mitul Kotecha, a senior emerging markets strategist at TD Securities in Singapore.Some of the additional forecasts outlined by the central bank on Wednesday:Gross domestic product is seen rebounding to 5% next year, higher than the 3% forecast in MarchConsumer prices will probably contract 1.7% this year compared with a previous projection of -1%; core inflation is seen at 0%Exports will probably plunge 10.3% this year versus a previous forecast of -8.8%Tourist arrivals in 2020 will probably reach 8 million, down from an earlier projection of 15 million“BoT’s new forecasts signal slower economic recovery, leaving room for further rate cuts,” said Tim Leelahaphan, an economist at Standard Chartered Plc in Bangkok. “We forecast a 25 basis point cut in the third quarter.”With the virus outbreak easing, the government has begun lifting lockdown restrictions and reopening parts of the economy, giving a boost to local demand. Export demand remains weak though, with data on Wednesday showing a 22.5% plunge in shipments in May from a year earlier, the biggest drop since 2009.The currency is also emerging as a concern for policy makers worried that the strong baht will further undercut the fragile economy. The baht has gained more than 6% against the dollar in the past three months, making it the best performer in Asia after Indonesia’s rupiah.The monetary policy committee is “concerned about the strengthening baht which affects the economic recovery,” Titanun Mallikamas, an assistant governor, told reporters in Bangkok. “They see the need to monitor the baht closely and assess the need for additional measures if needed.”Thailand’s benchmark SET Index reversed its gain, falling 0.2% as of 2:52 p.m. in Bangkok. The baht extended its advance, rising 0.4% against the dollar.TD Securities’ Kotecha said the central bank will likely deliver more currency measures in the weeks ahead.“However, it is notable that the baht has so far ignored such measures and it will be a challenge to prevent further appreciation,” he said.The Bank of Thailand is facing a leadership transition with current Governor Veerathai Santiprabhob planning to leave his post after completing his five-year term in September. A selection committee is considering applications from four candidates, including from two current deputy governors, according to local media reports.(Updates with new GDP forecasts starting from first paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- China has penalized 10 of the country’s most popular livestreaming apps, suspending some of their operations in a renewed crackdown on fast-growing services backed by Tencent Holdings Ltd. and ByteDance Ltd.Regulators singled out ByteDance’s Xigua and three apps run by Tencent-backed firms -- Bilibili Inc., Huya Inc. and DouYu International Holdings Ltd. -- among those subject to punishments ranging from halting new user sign-ups to suspending content updates for “main channels,” the Cyberspace Administration of China said in a notice posted Tuesday. The watchdog said those services must rectify vulgar and other problematic content and that it’s blacklisted selected live-streaming hosts, without elaborating. NetEase Inc.’s CC Live and Baidu Inc.’s Quanmin were also among those named.Beijing is intensifying scrutiny over the country’s internet giants as they deepen forays into content and user contingents grow into the hundreds of millions. Livestreaming in particular has burgeoned in past years as platforms from Bilibili to DouYu become vibrant social media forums that penetrate well beyond cities and into the countryside, enabling an explosion of communications that’s proven increasingly difficult to monitor. That in turn has fostered a growing cohort of online influencers with followings in the millions.It’s unclear what the content suspensions encompass. Both Huya and DouYu, which divide content into channels like games or entertainment, posted in the main recommendation section of their apps that they have “suspended updates” since Tuesday, without elaborating. Representatives for Baidu, Bilibili, ByteDance, Huya, NetEase and DouYu didn’t immediately respond to requests for comment.Read more: The Billion-Dollar Race to Become China’s Amazon TwitchThe migration of viewership online during the pandemic has only accelerated the phenomenon. The regulators said Tuesday the punishments came after they conducted examinations of a total of 31 major streaming platforms.China’s top state broadcaster recently criticized Huya for hosting gaming ads in a channel offering free online courses for homebound students. In response, the company shut its learning page and offered refunds to minors who spent their parents’ money on games, the app said in a statement.In April, Chinese regulators suspended key channels in Baidu’s flagship mobile app, citing vulgar content. That two-week punishment could reduce revenue from its core search and feed business in the June quarter by close to 2%, according to an estimate by Jefferies analyst Thomas Chong.(Updates with regulators’ comment in the fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Apple Inc. will start removing thousands of mobile games lacking government approval from its App Store in China next month, closing a loophole that the likes of Rockstar Games have relied on for years.Developers and publishers in China have been told that their iOS games will need licenses to continue operating from July, according to people familiar with the matter. The decision ends the unofficial practice of allowing games to be published while awaiting authorization from the country’s slow-moving regulators.This has until now allowed games such as Grand Theft Auto, whose gory depictions of violence are unlikely to ever pass muster with Chinese censors, to be available within the country’s borders. China’s regulators require all games that are either paid or offer in-app purchases to submit for review and obtain a license before publication, and major Android app stores have enforced such rules since 2016. But unapproved games have flourished on Apple’s iPhone platform.It’s unclear why Apple -- a target of numerous regulatory clampdowns in the past -- hasn’t moved as swiftly as other app stores in China, which are owned and operated by local mobile giants like Alibaba Group Holding Ltd. and Xiaomi Corp.The latest approvals process took effect in 2019 amid confusion among industry players about the speed with which Beijing, known for months-long content reviews that may or may not lead to a monetization license, would process requests. For its part, Apple has begun ramping up oversight of its Chinese app store, removing two podcast apps earlier this month at China’s request.Back in February, Apple reminded iOS developers in the country to obtain licenses for their titles by June 30. But it was only after prolonged uncertainty about enforcement that the iPhone maker explicitly told publishers that any unlicensed games after the deadline will be banned and removed from the local App Store, according to the people, who asked not to be identified because the matter is not public.There’s no telling how long it will take to remove all unlicensed games once the change comes into effect. Chinese gaming blog Gamelook earlier reported Apple’s upcoming enforcement.An Apple representative declined to comment.China accounted for about a fifth of the $61 billion in digital goods and services sold via Apple’s App Store in 2019, making it the largest market after the U.S., the Analysis Group estimates. Apple takes a 30% cut from the majority of such transactions.There are roughly 60,000 games on China’s iOS App Store that are either paid or contain in-app purchases, and at least a third of them don’t have a license, according to an estimate by AppInChina, which helps companies localize and publish their apps in the country.“These companies will suddenly lose all revenue from what is typically their second-largest market after the U.S.,” said AppInChina Chief Executive Officer Rich Bishop. His firm received three times its usual volume of enquiries about game licenses over the past week, he added.Apple’s new effort highlights the Chinese government’s tightening grip on gaming. Citing concerns about the proliferation of addiction among minors and the dissemination of offensive content, regulators now adopt a much stricter and slower review process than before they temporarily halted all approvals in 2018.While big local players like Tencent Holdings Ltd. and NetEase Inc. have adapted their existing cash cows and can respond to censors’ demands in the development of new games, smaller developers and publishers lack the same resources. Many of them have started attaching a single license to multiple games with similar gameplay, logos or heroes, though the government is aware of the practice and cracking down on it as well.Imported games are under particularly tight scrutiny, and the App Store loophole served as a last resort for getting some of them distributed in China. Plague Inc., which mimics the spread of an epidemic, had topped the download charts on China’s App Store for weeks during the country’s Covid-19 lockdown. But the unlicensed title was pulled in March after Chinese regulators deemed it to have “illegal” content, according to its developers.Neither of the remaining options for small game developers appears particularly enticing. They could switch their revenue model to in-app advertising, which is not covered by the same approval process. Or they can team up with big publishers like Tencent to obtain licenses, though that would involve giving up some measure of autonomy, while Tencent itself is more interested in well-known franchises.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- GDS Holdings Ltd., a Chinese data center company traded on the Nasdaq, is considering selling shares in Hong Kong as early as this year, following in the steps of U.S.-listed Chinese firms like NetEase Inc. and JD.com Inc., according to people with knowledge of the matter.GDS is working with investment banks on the potential transaction, which could raise about $1 billion for the Shanghai-based firm, the people said, asking not to be identified because the matter is private. Deliberations are preliminary and both the timing and size of the deal could still change, the people said.A representative for GDS declined to comment on the matter.Founded in 2001, GDS develops and operates data centers in major Chinese cities such as Beijing, Shanghai and Guangzhou, according to its website. Its customers include internet companies, financial institutions, telecommunications carriers and IT services providers as well as other local and multinational firms.The company debuted in the U.S. in 2016. Its shares have risen nearly 46% this year, giving it a market value of about $11.4 billion.A secondary listing in Hong Kong would see GDS follow the blockbuster deals of e-commerce giant JD.com and NetEase, China’s second largest gaming company. Last week, JD.com, which is also listed on the Nasdaq, raised $3.9 billion in its Hong Kong equity sale. NetEase Inc. raised $2.7 billion in its Hong Kong offering earlier this month.The listings are a positive sign for Hong Kong, coming after China passed a national security law for the city that critics fear could jeopardize its status as a global financial hub. They follow Alibaba Group Holding Ltd.’s $13 billion stock sale in Hong Kong last year, which was hailed as a homecoming for Chinese companies listed overseas.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Tesla Inc Chief Executive Officer Elon Musk has sold one of his homes in the Bel-Air area of Los Angeles for $29 million, the Wall Street Journal reported on Friday, citing public records. Musk bought the house for $17 million in 2012 from Mitchell Julis, co-founder of hedge fund Canyon Capital Advisors, according to the report. Musk still owns other properties in the area, the WSJ report said.
To hear some tell it, bigger is always better on Wall Street.After all, when Amazon.com (AMZN) is worth $1.2 trillion and boasts a dominant market share in both e-commerce and cloud computing - two megatrends that aren't disappearing anytime soon - why bother with the little guys?But those monitoring only mega-caps when seeking out the best stocks to buy might have failed to notice under-the-radar picks with more modest market values that have led the market's rally since March. As proof, consider that the small-cap Russell 2000 is up 44% since it bottomed out March 18, compared with about 39% for the blue-chip S&P; 500 off its March 23 lows.If you're looking to outperform the market in 2020, then, you have to look beyond the usual suspects. Not only are larger stocks as a group lagging behind their smaller brethren lately, but a more fundamental fact is that most index funds are weighted toward larger companies by design; Amazon, Apple (AAPL) and Facebook (FB) currently represent about 15% of the entire S&P; 500\. The remaining 85% is split among 497 other components!Whether you're looking for bigger returns or simply better diversification, here are 19 of the best stocks you've never heard of. SEE ALSO: 50 Top Stock Picks That Billionaires Love
(Bloomberg) -- Alibaba Group Holding Ltd. and JD.com Inc. handled record sales of $136 billion during the country’s biggest online shopping gala of the post-pandemic era, suggesting China’s nascent consumer spending recovery has legs.The twin e-commerce giants put nationwide consumption to its first major test since the pandemic with the annual “6.18” summer extravaganza that concluded Thursday. Transactions across JD’s online platforms during the 18-day marathon leapt 34% to 269.2 billion yuan ($38 billion), a faster pace than in 2019. And Alibaba said it handled 698.2 billion yuan during its own campaign, without a year-earlier comparison. JD’s shares stood largely unchanged after rising 3.5% in their Hong Kong debut.China’s largest retailers counted on pent-up demand during the event -- created by JD to commemorate its June 18 founding anniversary -- to make up for lost sales during a coronavirus-stricken March quarter. Global brands and smaller merchants alike stocked up on goods for months in anticipation of an online bargain spree surpassed only by the Nov. 11 Singles’ Day in scale. The final tally underscored how hundreds of millions of shoppers remain willing to spend after the world’s No. 2 economy contracted for the first time in decades, especially given huge discounts as Covid-19 shifted buying to the internet.“The strong GMV at 6.18 will help to dispel market anxiety about virus-related disruptions,” Bloomberg Intelligence analyst Vey-Sern Ling said. “Chinese e-commerce platforms will probably deliver strong 2Q sales and profit recovery due to pent-up consumer demand and an accelerated shift to digital consumption channels driven by the virus.”This year’s deals-fest culminated with the biggest bargains Thursday and featured more generous subsidies than ever before, as well as an unprecedented cohort of live-streaming personalities. Competition also intensified with the likes of ByteDance Ltd. and Kuaishou -- whose video app now sells JD goods -- vying for buyers.“Chinese and foreign brands had sluggish sales due to the pandemic, and 6.18 has become their most important opportunity in the first half,” JD Retail Chief Executive Officer Xu Lei said in an interview with Bloomberg Television. For discretionary items like home appliances, “we’ve seen a recovery in consumption.”Read more: Chinese Shoppers Can Go Out Again. Online Buys Show They Won’tChinese retail suffered a record collapse in the first three months of 2020. While it’s on the mend, latest data shows private consumption still sluggish, dashing hopes of a V-shaped recovery as people head back to work. The picture is complicated by the fact that Covid-19 has kept people away from stores and shifted an unknown proportion of retail activity online, propping up online purchases.JD has projected revenue growth of 20% to 30% this quarter. Xu -- widely viewed as the front-runner to succeed billionaire founder Richard Liu -- says JD is on track to meet that goal and isn’t threatened by competitors encroaching upon its turf, like in consumer gadgets.“I don’t dance with them, I dance with users,” he said.Signs had grown this month that China’s e-commerce giants were on track for record sums as measured by gross merchandise value, or total value of goods sold. During the first ten hours of its 6.18 campaign, Alibaba’s Tmall business-to-consumer marketplace logged sales 50% higher than during the same period last year, after participating brands doubled. JD has said sales of imports like HP laptops and Dyson hairdryers soared, while it’s selling more fresh produce in smaller cities.Read more: JD’s Outlook Beats After E-Commerce Surges in China LockdownInitiated in 2014 as a riposte to Alibaba’s Singles’ Day, 6.18 has become yet another annual ritual for e-commerce companies and their offline partners from Walmart Inc. to Suning.com Co. Beyond headline figures, it’s less clear how much it contributes to the bottom line given the enormous discounting involved.“The result is good as far as growth is concerned, but in terms of margins, all the players will see the consequences,” said Steven Zhu, analyst at Pacific Epoch. “It’s just what I call paid-GMV for all the platforms. It’s the time that people have to have a good number after the coronavirus, so they just do it at whatever the cost.”Alibaba, along with brands on its platforms, committed cash and other coupons worth a total of 14 billion yuan, according to the company. JD said it offered 10 billion yuan in subsidies.“User growth and retention, and the digitization of brands and merchants are key considerations” when Alibaba pushes subsidies during promotions like 6.18, said Alibaba Vice President Mike Gu, who heads Tmall’s fashion and consumer goods businesses.Read more: Alibaba Drops After Projecting Slowing Growth in Uncertain TimesMore broadly, sales of fast-moving consumer goods on the Tmall and Taobao marketplaces in the June quarter have so far exceeded the pace of 2019’s final quarter, Gu said in an interview. Thanks to 6.18, apparel growth this month has also climbed back to pre-Covid-19 levels, he added.Live-streaming is also playing a bigger role during this year’s 6.18, at a time Covid-19 is fueling an unprecedented boom in online media. Alibaba’s Taobao Live championed the use of influencers to sell everything from lipstick to rockets, prompting rivals like JD and Pinduoduo Inc. to follow suit.Social media companies like TikTok-owner ByteDance and Tencent Holdings Ltd.-backed Kuaishou are jumping on the bandwagon. Their mini-video platforms in China have lured a long list of tech chieftains hawking products of their own to live-streaming fans: The latest was NetEase Inc.’s usually reclusive founder, William Ding. Last week, his debut on Kuaishou amassed 72 million yuan of sales in just four hours.“I’ve never eaten beef jerky as tasty as this in the last twenty years,” the billionaire said during the livestream.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- JD.com Inc. soared about 6% in its Thursday debut in Hong Kong, a solid start that underscores strong investor appetite for a growing line-up of Chinese tech giants seeking to list closer to home.The Chinese online retailer, which already has stock listed in the U.S., opened at HK$239 after raising $3.9 billion in its Hong Kong share sale. That’s after its shares changed hands in gray markets at a roughly 5% premium to its HK$226 listing price in the days prior.JD debuts as tensions between Washington and Beijing threaten to curtail Chinese companies’ access to U.S. capital markets, particularly after once high-flying Luckin Coffee Inc. crashed amid an accounting scandal. It’s a victory for Hong Kong, coming on the heels of Alibaba Group Holding Ltd.’s $13 billion share sale and the passing of a national security law that critics fear could jeopardize its status as a financial hub. Fellow internet giant NetEase Inc. gained 6% in its own Hong Kong coming-out party last week.“We hope investors from China and Asia can better understand JD’s concept, service and future development,” JD Retail Chief Executive Officer Xu Lei told Bloomberg Television. “Hong Kong is one of the freest economies in the world. We hope to have many mature institutional and individual investors share JD’s growth.”Read more: Alibaba, JD Test Virus Recovery With Online Sales ExtravaganzaJD and its rivals will now put China’s nascent consumer spending recovery to the test when they wrap up the country’s biggest online shopping gala of the post-pandemic era. China’s largest retailers are hoping the “6.18” or June 18 extravaganza that began this month unleashed pent-up demand, making up for lost sales during a coronavirus-stricken March quarter.Global brands and smaller merchants alike stocked up on goods for months in anticipation of the summer event, a bargains buffet surpassed only by the Nov. 11 Singles’ Day in scale. JD and Alibaba are expected to release final results of their haul after midnight.Longer term, the company will use the proceeds of the stock sale to continue building its logistics and delivery network, a key advantage during the pandemic because JD could better control shipping.“The process to build up a supply chain is very time consuming and cost consuming, but we want to make it better,” Xu said. “When we have better supply chain, it would bring in a better user experience.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Institutional investors are bidding for JD.com’s Hong Kong shares before this week’s debut at slightly more than the listing price.Some institutional investors have bid to buy the Chinese e-commerce company’s shares at between HK$226.10 to HK$237 apiece in gray market trading Wednesday, according to people familiar with the matter. That represents a premium of as much as 4.9% compared to the listing price of HK$226. Brokers quoted offers to sell the shares at between HK$239 and HK$245 each, the people said.JD.com, which went public on Nasdaq in 2014, is expected to start trading in Hong Kong on June 18. The stock rose 2.5% in U.S. trading on Tuesday. Traders will be able to short the stock immediately after its debut, as well as hedge with futures and options, according to the Hong Kong exchange operator.JD.com raised $3.9 billion last week selling 133 million new shares in Hong Kong in the second-biggest listing of the year, part of a wave of Chinese companies that are fleeing the U.S. and seeking secondary listings in the city.Last week, internet gaming company NetEase Inc. began trading in the city, with the Hong Kong-listed shares now up 4.1% from the offer price after an initial pop on its first day of trading. Prior to listing, it also drew a small premium on the gray market.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Chinese gaming giant NetEase on Monday announced a strategic partnership with Warner Bros Interactive Entertainment to develop a new "Lord of the Rings" mobile game, bolstering its pipeline following its secondary listing in Hong Kong. The new officially licensed strategy game, "The Lord of the Rings: Rise to War", is based on the hugely popular trilogy of books by J.R.R. Tolkien, NetEase said in a statement. NetEase, along with rival Tencent and other gaming firms, have seen games revenue soaring during the COVID-19 pandemic, as people spend more time on their handsets and computers in lockdowns aimed at slowing the spread of the disease.
Hong Kong will have its own tech quartet as of next Thursday; Asian shares don't have the same euphoria as U.S. stocks (yet), and that's a good thing.
JD.com's public offering in Hong Kong was 179 times oversubscribed as retail investors rushed to join the latest "homecoming" of a Chinese tech giant, according to people familiar with the matter.It is the third high-profile secondary listing by a Chinese new economy company in the past eight months, following a US$12.9 billion listing by e-commerce giant Alibaba Group Holding in November and a US$2.7 billion listing this week by NetEase, the world's second-largest mobile games publisher. Alibaba is the parent company of the South China Morning Post.The institutional tranche was also multiple times oversubscribed across over 400 accounts, said the people, who declined to be named because the matter was not yet public. The top five investors accounted for about 40 per cent of the institutional tranche, the people said.The oversubscription of the Hong Kong retail tranche triggered the highest level of a clawback mechanism that increased the size of the local offering to 12 per cent of the overall global offer.The final pricing came as sentiment soured dramatically on Wall Street on Thursday.The Dow Jones Industrial Average fell 6.9 per cent and the S&P; 500 Index dropped 5.9 per cent as investors reacted negatively to a spike in coronavirus infections in parts of the United States that were among the first to reopen their economies. It was the worst single-day performance by the Dow since March.The benchmark Hang Seng Index in Hong Kong declined 1 per cent in midmorning trading on Friday, mirroring concerns about the surge in virus cases and a potentially longer period of recovery. US Federal Reserve chairman Jerome Powell said on Thursday the central bank would likely keep interest rates at zero through 2022 and the US could face a "long road" to full recovery.On Thursday, Beijing-headquartered JD.com priced its secondary listing in Hong Kong at HK$226 a share (US$29.16) after investors clamoured to participate in the offer. The Hong Kong share sale priced at a tight 3.9 per cent discount to JD.com's Nasdaq-traded shares' close at US$60.70 a share on Wednesday, the people said.Shares of JD.com are due to start trading in Hong Kong on June 18 and will be fully fungible with American depositary receipts (ADR) at a ratio of one ADS to two ordinary shares, according to a deal terms sheet.One of China's largest e-commerce sites, JD.com will raise about US$3.88 billion from the share sale, in what is poised to be the largest fundraising so far this year in the city, according to people familiar with the deal. If an overallotment option is fully exercised, then the size of the share sale could rise to US$4.46 billion.NetEase separately made its debut in Hong Kong on Thursday after raising US$2.7 billion this week. The company's shares surged 6 per cent on their first day of trading, but declined 1.3 per cent to HK$128.30 in midmorning trading on Friday.The "homecoming", as some analysts have dubbed recent moves by Chinese firms listed in the US to pursue secondary offerings closer to home in Hong Kong, comes amid rising US-China tensions.US politicians are dialling-up their demands to fence off Wall Street from Chinese companies as Washington and Beijing trade barbs over everything from the coronavirus pandemic to Hong Kong.The US Senate unanimously approved a bill requiring public audits of ADR listings by Chinese firms and stock analysts believe Sino-US financial links will fray further ahead of the 2020 US presidential election. To widen their funding options, some Chinese ADR companies are pursuing secondary listings in Hong Kong.More than 200 Chinese companies trade on US stock exchanges worth over US$1.2 trillion, Bloomberg data showed, of which 26 would potentially qualify for secondary listings in Hong Kong this year, according to China Renaissance.The overwhelming demand for JD.com's and Netease's shares underscores investors' belief that Big Tech is emerging from the coronavirus pandemic relatively unscathed.JD.com said last month that it had expanded its logistics network to support growth in online consumption as more traditional bricks-and-mortar merchants move online.JD.com's Hong Kong debut coincides with China's annual midyear 618 online shopping festival. This year's event will be the first major shopping event since the end of lockdowns in China after the containment of Covid-19, the disease caused by the coronavirus.Companies around the world have started to return to the capital markets in recent weeks, despite a global recession sparked by the coronavirus pandemic.JD.com's fundraising would be the second-largest globally after Beijing-Shanghai High Speed Railway netted US$4.4 billion during its initial public offering (IPO) back in January, according to data from Refinitiv.JD.com, founded by Richard Liu Qiangdong, launched its share sale on June 5 and was already oversubscribed by Monday. The offer was closed to new orders by Wednesday, the people said. International and Chinese long-only investors piled into the share sale and allocations are being decided on Thursday, the people said.The bookrunners on JD.com's share sale include Bank of America, UBS and CLSA.Richard Liu, founder and CEO of JD.com, celebrates the company's listing on Nasdaq, in May 2014. Photo: AP Photo alt=Richard Liu, founder and CEO of JD.com, celebrates the company's listing on Nasdaq, in May 2014. Photo: AP PhotoThe listings of JD.com and NetEase also add up to a vote of confidence in Hong Kong as a financial hub after months of anti-government protests and the economic fallout from the coronavirus pandemic, as well as concerns over a new national security law for the city proposed by Beijing.To compete with other financial hubs, the Hong Kong stock exchange changed its rules in April 2018 to make it easier for companies with dual classes of shares " a structure favoured by technology companies such as Facebook and Google " to seek IPOs as well as secondary listings in the city. The bourse is considering further rule changes to allow more companies with so-called weighted voting rights to more easily list in the city.The shake-up came after the Hong Kong stock exchange lost out to New York in a bid to host Alibaba's US$25 billion IPO in 2014.China Renaissance estimates that new economy stocks could account for 30 per cent to 35 per cent of Hong Kong's market capitalisation in the next five to 10 years, up from 26 per cent, leading to higher growth potential, raised valuations, and increasing turnover and sector diversity.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 © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
(Bloomberg Opinion) -- The two archrivals of Asian finance have competed so intensely for so long that it’s impossible to believe that Hong Kong’s fading autonomy and the resumption of anti-government protests isn’t filling Singapore with even a little bit of schadenfreude. It was a surprise, therefore, to see the Monetary Authority of Singapore rebut news reports that there had been large flows of deposits from Hong Kong. The MAS was responding to data that showed a near-fourfold jump in one corner of the Singapore banking system’s foreign-currency deposits over the past year:The central bank has a valid objection. The above chart only shows foreign-currency deposits in domestic banking units (DBUs). Include deposits in the the Asian currency units (ACUs), a fancy name for a different set of ledgers that the same banks use for their international business, and the fourfold growth turns out to be a 20% increase, to S$781 billion ($564 billion). Not exactly a deluge, though perhaps more than a puddle of rainwater on Singapore’s Orchard Road:There are plenty of reasons why deposits are rising, and not just in Singapore. Central banks everywhere are flooding lenders with liquidity to ease the pain of the coronavirus pandemic. Governments are putting money into people’s accounts, while cautious firms are stuffing theirs by drawing on previously unused working-capital lines.Besides, if deposits are fleeing Hong Kong, then banks in the territory must be feeling the pinch? That doesn’t seem to be the case: It was only in late May that China said that it would impose a national security law in Hong Kong. April data may not be capturing the gloom about Hong Kong’s future. Still, the immediate challenge for the special administrative region is capital inflows, which are forcing the monetary authority to buy billions of U.S. dollars to prevent the Hong Kong dollar from strengthening beyond 7.75, the outer boundary of the 7.75-7.85 range in which it is allowed to trade against the greenback. Money is pouring in because Hong Kong dollar interest rates are higher than U.S. dollar rates, and also because JD.com Inc., China’s No. 2 online retailer, is selling shares in the city in what’s likely to be the world’s second-biggest initial public offering this year.A few mainland companies that no longer feel welcome in U.S. capital markets won’t be Hong Kong’s ticket to perennial preeminence. However, if the territory does bleed deposits, will Singapore want them? The two-ledger system, the reason for confusion about capital inflows, has its roots in the rivalry. In 1968, when founding prime minister Lee Kuan Yew decided to turn his tin- and rubber-exporting port into an international financial center, he had no real advantage over Hong Kong, then a British colony. But the devaluation of the pound in 1967 created demand for dollars in Asia, and Singapore grabbed the chance with the help of Dick van Oenen, a Dutch currency trader at Bank of America. Hong Kong, reluctant to admit new banks, took almost a decade to catch up. It was hesitant initially to host an offshore finance hub because those, like casinos, are best left to places that don’t have much other activity to protect. Singapore insulated its domestic economy from instability thanks to the different domestic and international ledger units, which demarcated banks’ high-stakes global commerce from their more humdrum local franchise. For five years now, authorities have been planning to end the divide, and in January parliament approved the merger of the two accounts. Since regulatory scrutiny of financial intermediaries has gone up in all the major economies from which Singapore hosts its foreign banks, there’s little point in continuing with a dual-track system. Even so, this chart should give the authorities pause:From roughly similar levels in 1991, deposits in Singapore — across both the ledgers, and including all currencies — have risen to $1 trillion, while Hong Kong’s have exploded to $1.8 trillion because of its outsize role in securing capital for Chinese firms. Singapore may have the competence and confidence to ensure that banks can backstop their IOUs, with or without help from their home countries. But will the regulators be comfortable if the state investment firm Temasek Holdings Pte. — the largest shareholder of both London-based Standard Chartered Plc and homegrown DBS Group Holdings Ltd.— sees value in combining the two banks, an idea that’s been doing the rounds for the better part of two decades, though never seriously entertained? Such a merger would give Singapore an institution at least half as big by deposit size as HSBC Holdings Plc, the gorilla of Hong Kong banking:But size isn’t everything. Deposits come from loans, and too much credit causes “financialization.” It’s a term economists use to describe situations in which a society sacrifices other priorities — such as manufacturing competitiveness, affordable housing and less leveraged firms — for a mirage of affluence.Singapore’s planners know that unlike London, New York or Hong Kong, which sits at the mouth of China’s planned Greater Bay Area, their island nation doesn’t have a hinterland to accommodate the losers of financialization.Orbigood, a Singaporean exclamation for others getting their comeuppance, is best kept for its rival’s cramped housing and noxious air. Singapore wouldn’t really want deposits to rush in from Hong Kong. It might do more harm than good. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.