|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||42.45 - 42.65|
|52 Week Range||36.88 - 51.24|
|Beta (3Y Monthly)||1.28|
|PE Ratio (TTM)||31.44|
|Forward Dividend & Yield||0.26 (0.60%)|
|1y Target Est||51.49|
Nov.19 -- Ken Wong, Asian equity portfolio specialist at Eastspring Investments, talks about Alibaba Group Holding Ltd.'s Hong Kong stock offering, and the implications for Tencent Holdings Ltd. He speaks with David Ingles and Tom Mackenzie on "Bloomberg Markets: China Open."
BOOKWATCH Investors have learned that the market value of a firm goes beyond tangible earnings. Indeed, reported earnings, cash flow, and profitability have been found to predict about 50% of a firm’s market value.
South African e-commerce giant Naspers reported a 48% slump in half-year profit on Friday, at the better end of its guidance range after a previously-flagged drop in gains on investments at China's Tencent. Founded more than 100 years ago, Naspers has transformed itself from a newspaper publisher into an empire worth almost $70 billion, with its 31% stake in Tencent the jewel in its crown. Naspers said earlier this week its profits could fall by up to 53.6% after a reduction in fair value gains on investments held by Tencent from $1.4 billion in 2018 to $400 million this year.
Moody's Investors Service has assigned a Ba3 senior unsecured rating to the proposed notes to be issued by Wanda Properties Overseas Limited, a wholly owned subsidiary of Wanda Commercial Properties (Hong Kong) Co. Limited (Wanda HK, Ba3 stable). The proposed notes will be guaranteed by Wanda HK, which is a wholly-owned subsidiary of Dalian Wanda Commercial Management Group Co., Ltd. (DWCM, Ba1 stable, together: the Dalian Wanda Group). In addition, the proposed notes will also be supported by a deed of equity interest purchase undertaking and a keepwell deed between DWCM, Wanda HK, Wanda Properties Overseas Limited and the bond trustee.
(Bloomberg) -- The founder of China food-delivery giant Meituan Dianping is having a very good year.As his business has grown, Chief Executive Officer Wang Xing’s net worth doubled this year through Thursday’s close to $6.7 billion, according to Bloomberg Billionaires Index. That figure is likely to top $7 billion as Meituan’s stock surged Friday, following a strong earnings report.Shares climbed as much as 13%, the most intraday since its IPO last year, and traded 8% higher at 11:45 a.m. Meituan reported quarterly revenue that increased 44% to 27.5 billion yuan ($3.9 billion) in the three months ended September, compared with the 26 billion yuan average of analysts’ estimates. Net income hit 1.33 billion yuan, including gains from investments, while analysts projected a 502 million yuan loss.Backed by Tencent Holdings Ltd., Meituan is investing heavily in a plethora of online services from food delivery to travel, competing directly against Alibaba Group Holding Ltd. CEO Wang is trying to sustain a robust pace of growth by expanding into newer arenas such as ride-hailing, restaurant management and online groceries. That ambitious expansion has helped Meituan overtake the likes of Baidu Inc. to become China’s third largest publicly traded tech company.On a conference call after the earnings, executives said they will continue to invest in new areas like hotel booking and grocery services. The goal is to create a one-stop app for services, similar to the platforms Alibaba and Amazon.com Inc. have built for products.What Bloomberg Intelligence SaysMeituan is seizing order share across segments. Growth in hotel room nights outpaced the industry and Meituan wants to expand into high-end facilities next year.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.While Meituan has tightened its belt with less-profitable areas such as bike-sharing, it’s spending at a rapid clip to fend off Alibaba’s Ele.me in meal delivery and Fliggy in travel, an enormous outlay that’s compressing margins. Sustaining growth has also become a stiffer challenge as Chinese economic growth threatens to slide beneath 6%. Longer-term, Wang envisions a super-app modeled on Tencent’s own WeChat, extending a raft of everyday services such as payments to an increasingly wealthy populace.Meituan’s stock has more than doubled in 2019 -- easily outpacing Alibaba and Tencent -- as investors bet on its ability to safeguard its share of China’s fastest-growing internet services.\--With assistance from Pei Yi Mak and Venus Feng.To contact the reporter on this story: Zheping Huang in Hong Kong at email@example.comTo contact the editors responsible for this story: Peter Elstrom at firstname.lastname@example.org, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. While the U.S-China trade war rages on, the tensions are exposing growing rifts between China and Silicon Valley.Leading venture capitalists and startup founders expressed concern over their governments’ fierce differences and the potential fallout. Among the dangers are a decline in cross-border investment, disruption in the supply chain and decreased collaboration in fields like artificial intelligence, wireless technology and cancer research.Signs of trouble are emerging in everything from venture capital to movie-making. Fundraising for dollar-based venture capital funds in China is down 75%, estimates Qiming Venture Partners’ founding partner Gary Rieschel. Olivia Hao, an executive at Beijing-based film production startup Baozou, said it is increasingly hard to make investments or buy other companies in the U.S.“Before, people were impressed when we said we had screenwriters from Hollywood,” said Hao on Wednesday on the sidelines of the Bloomberg New Economy Forum in Beijing. “Now people say, why aren’t you using more Chinese creators.”China and the U.S. are edging closer to a trade deal but the deteriorating situation in Hong Kong and the U.S. bill on the city’s special status threaten to stall negotiations.The fight to rule the technology sector is at the heart of China-U.S. tensions. Over the last few decades, the two countries have woven together a world-spanning supply chain that helped create innovation like Apple Inc.’s iPhone and propel industries like AI and robotics.American money has flowed into China, lending the capital essential in creating many of the countries’ top technology companies like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Chinese and American engineers have traversed both countries, driving innovation at startups and large companies alike. All of that is under the microscope now that the U.S. is clamping down on Chinese investment in the U.S. and scrutinizing the capital flows between the two countries.“Foreign capital remains the primary provider of early stage risk capital in China,” Rieschel said, adding that “82% of venture capital goes to the U.S. and China, these two countries have to work together in areas like AI.”Increasingly, American tech companies, venture capitalists and startups face a narrow choice on how to deal with China: Either take the country at face value and decide that as a rational business, profits matter more than any kind of moral high ground, or make a conscious decision to stop pursuing business in a country that will require you to adhere to its viewpoints inside -- and outside -- its borders.There are signs that Silicon Valley, which long avoided politics and courted a close relationship with China, is now starting to turn. U.S. venture capital companies and startups are refusing Chinese limited partners and investors. There are suspicions around Chinese startups in the fields of semiconductors, artificial intelligence and robotics who want to do business in the U.S., or try to attract funds from American venture capitalists.A number of Chinese startups also are souring on the view that Silicon Valley is the bastion of innovation.“Of course it will take years for China to catch up on deep tech like chips, but when it comes to areas like logistics and retail, China is moving much faster,” said Spencer Deng, founder of startup Dorabot, which is based in Shenzhen but has offices in Atlanta. “In the last three years, can you name one new innovation that came from Silicon Valley?” he said.Dorabot is working with companies like Walmart Inc. and United Parcel Service Inc. on automated technology.China is also taking steps to reduce its dependency in key areas of technology including in chips. “China’s semiconductor industry is catching up, they will be competitors in the global stage, and it provides a great place for us to invest,” said Neil Shen, managing and founding partner of Sequoia Capital China.The country’s ambition for its semiconductor industry grew in recent years as it spends more on importing chipsets than oil each year. Beijing has injected tens of billions of dollars into its young chip sector to build mega factories and attract top talent as the China attempts to reboot its economy with advanced manufacturing.Note: The New Economy Forum is being organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News.\--With assistance from Gao Yuan.To contact Bloomberg News staff for this story: Shelly Banjo in Hong Kong at email@example.comTo contact the editors responsible for this story: Peter Elstrom at firstname.lastname@example.org, Colum Murphy, James MaygerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Alibaba Group Holding Ltd. has raised about HK$88 billion ($11.2 billion) in its Hong Kong share sale, marking the biggest equity offering in the financial hub since 2010.The company confirmed that it has priced 500 million new shares at HK$176 each in a statement on Wednesday. The price represents a 2.9% discount to the last close of Alibaba’s American depository shares in New York, with each equal to eight ordinary shares of the internet company. This Hong Kong share sale is also one of the largest globally this year.The mega share sale comes as Hong Kong’s economy has been hurt by months of increasingly violent protests and growing anti-China sentiment. Alibaba’s return will please Chinese officials who’ve watched many of the country’s largest private firms flock overseas for capital. With a Hong Kong listing in sight, Alibaba will challenge Tencent Holdings Ltd. for the title of the largest listed corporation in the city.Why Now, and Why Hong Kong, for Alibaba’s Share Sale?: QuickTakeAlibaba has allocated more shares for individual investors, raising the ratio to 10% from 2.5% of the total offering, people familiar with the matter said, who asked not to be identified as the details are private. The company has an over-allotment option to sell an additional 75 million shares.The firm is planning to have its shares start trading Nov. 26 on the Hong Kong exchange under the ticker 9988. Eight is an auspicious number in Chinese culture.Hong Kong is no stranger to Alibaba as the tech giant once listed its business-to-business platform in the city in 2007. Shares of Alibaba.com tripled at debut on overwhelmingly strong investor demand for technology companies. The enthusiasm didn’t last and the stock plunged later. Alibaba took the platform private in 2012 at HK$13.5 each, which was the IPO offer price five years earlier.In 2014, Alibaba listed its shares in New York in the biggest ever initial public offering. After losing some of China’s brightest technology stars, Hong Kong started looking into allowing dual-class shares. Last year, the city’s bourse introduced new rules to accommodate the structure. The efforts to lure Alibaba went all the way to the top of Hong Kong’s government, with Chief Executive Carrie Lam exhorting billionaire Jack Ma to consider a share sale in the financial hub.A listing in Hong Kong brings Alibaba closer to its home market as well as Chinese investors. The company could become eligible for trading via the two links with China, which allows investors on the other side of the border to buy and sell shares listed in the former British colony.Read: Alibaba Won’t Join Hong Kong’s Stock Benchmark Any Time SoonAlibaba is “hopeful to be eligible in the future,” its head of investor relations Rob Lin said on an investor call last week.“The key element as to why this listing here in Hong Kong could be an advantage is the stock connect,” Ken Wong, a Hong Kong-based Asian equity portfolio specialist at Eastspring Investments Hong Kong Ltd., said on Bloomberg Television. “Once Alibaba’s in the stock connect, you have a lot of mainland Chinese investors who can finally start to invest in Alibaba.”Credit Suisse Group AG and China International Capital Corp. are the joint sponsors of the share sale. Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley are also arranging the deal.\--With assistance from Julia Fioretti.To contact the reporters on this story: Carol Zhong in Hong Kong at email@example.com;Lulu Yilun Chen in Hong Kong at firstname.lastname@example.org;Crystal Tse in New York at email@example.comTo contact the editors responsible for this story: Fion Li at firstname.lastname@example.org, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Good day, traders -- The US Senate followed the House in passing legislation supporting Hong Kong protesters. The legislation now goes to US President Donald Trump at a high-stakes moment in US-China talks over a partial trade deal. Please help us improve our blog by taking this quick -- under 2 minutes! -- survey. Your feedback will really help us make the blog better for you!\-- Georgina Lee and Deb Price in Hong KongMorning guidance Here's what we are watching this morning:Overnight markets/ What futures foretellIPO debuts: Shenzhen Qingyi Photomask Ltd (688138 CH) Economic data: From China, November one-year and five year loan prime rateEarnings: Nothing major Hang Seng Index to underperform mainland's onshore, offshore stocks, Morgan Stanley saysHong Kong's Hang Seng Index is likely to underperform any other key gauge tracking China's onshore and offshore stocks in 2020, as the fallout from the months-long political unrest hits growth and corporate earnings, according to Morgan Stanley.The benchmark of 50 stocks trading in the city may finish next year at 27,500, analysts led by Jonathan Garner at the US investment bank wrote in their 2020 strategy report for Asia's emerging markets. That implies a 1.5 per cent gain from its close on Tuesday. In comparison, the year-end targets for the CSI 300 Index of mainland-traded stocks, the MSCI China Index of Chinese companies trading on both onshore and offshore markets and the Hang Seng China Enterprises Index will see gains of at least 6 per cent from current levels."Key sectors in Hang Seng with sizeable exposure to Hong Kong's local economy such as financials and properties will also continue to suffer in 2020," the report said.Read full story by stocks reporter Zhang Shidong here. China selfie-editing app Meitu completes steps to acquire controlling stake in Dajie NetMeitu (1357 HK), one of China's selfie-editing apps, has completed the acquisition of a controlling stake in Dajie Net Investment Holdings.According to the Meitu's off-trading hours filing, it has satisfied all the conditions for the acquisition of 57.09 per cent of Dajie, a social networking and job search platform, including the payment of HK$395.5 million (US$50.5 million) by allotment and issue of 85,739,105 consideration share and the remaining HK$52.5 million in cash. The acquisition will allow Meitu, which enhances users' selfies, to further expand its reach and hold to the young set of technologically-savvy and digital native Chinese. On Tuesday, Meitu's shares closed 3.145 per cent higher to HK$1.64China Energy Engineering unit secures US$523 million contract in southern African country of LesothoA unit of China Energy Engineering (3996 HK), one of China's biggest power plant designers and builders, has secured a US$523-million contract with the Southern African country of Lesotho for the construction of a special economic zone project. The project, will be helmed by Gezhouba Group International Engineering, a subsidiary of China Gezhouba Group, which is a unit of China Energy Engineering. The project is located in Mafeiteng area of Lesotho, which is 80 kilometres from the capital Maseru.The project comprises a light industrial, agricultural, pharmaceutical processing park with an area of about 60,000 square metres, including processing plants, warehouses, office areas, logistics facilities, ancillary living facilities, water supply and electricity facilities. On Tuesday, shares of China Energy Engineering, based in Beijing and the flagship unit of state-owned Energy China Group (3996 HK), closed unchanged at HK$0.79 apiece. \-- Cheryl ArcibalTse Sui Luen Jewellery International looking for ways to counter plunge in net profit amid protests, trade warRead full story by Snow Xia here. Hong Kong and China stocks open lowerThe Hang Seng Index slid 0.6 per cent, to 26,936.79.The CSI 300, which tracks blue chips listed on Shenzhen and Shanghai, dropped 0.2 per cent, to 3,940.13, while the Shanghai Composite Index lost 0.2 per cent to 2,928.11.The Hang Seng has surged 2.9 per cent over the past two days, in part due to the ongoing mega-IPO of Alibaba whose secondary listing in Hong Kong is reportedly receiving enthusiastic response from institutional investors. Alibaba will start trading on the main board on November 26.HKEX (388 HK), the city's bourse operator, lost 2.3 per cent, to HK$246, after Spanish newspaper Cinco Dias reported that it is one of the bidders for the Spanish exchange BME, owner of the Madrid stock exchange. This comes after its failed attempt to buy the London Stock Exchange in October.In China, the National Interbank Funding Centre will announce the November 1-year and 5-year loan prime rates (LPR) for NovemberIntroduced in August to replace the benchmark lending rate, the LPR is the average of the 18 reporting banks' lending rate to their highest quality borrowers. The rate on the 1-year fixing now stands at 4.2 per cent, after two cuts in August and September, while the five-year is at 4.85 per cent, with no cut so far.In Shanghai, liquor distiller Kweichow Moutai (600519 CH) slid 0.2 per cent to 1230 yuan; Ping An Insurance (601318 CH) lost 0.4 per cent to 88.58 yuan.\-- Georgina Lee GCL-Poly Energy Holdings rises after tumble TuesdayShares of GCL-Poly Energy Holdings (3800 HK) -- one of China's largest solar panels materials producers -- and its solar farms development subsidiary GCL New Energy Holdings (451 HK) are starting off with different assessments by traders after their plunge Tuesday. GCL-Poly Energy rose nearly 2 per cent to 26 HK cents in early morning trading, while GCL New Energy fell 0.9 per cent to 21 Hong Kong cents.They tumbled Tuesday after the subsidiary said a preliminary agreement inked in June this year for GCL-Poly to sell a 51 per cent stake of GCL New Energy to China Huaneng Group -- the nation's largest power producer -- has been terminated. Instead, the pair has entered into a preliminary agreement for GCL New Energy's solar farms to be sold to China Huaneng. GCL-Poly owns 62.3 per cent of GCL New Energy. Both companies are highly indebted and in need of new capital to retire existing debts. Jiangsu province-based GCL-Poly Tuesday closed 5.6 per cent lower at 25.5 HK cents while GCL New Energy closed down 6.4 per cent at 22 HK cents. After the market closed, GCL-Poly chairman Zhu Gongshan told a teleconference with investors and analysts that the reason for a change in the proposed transaction with China Huaneng is because a takeover of GCL New Energy by China Huaneng will entail a long approval process by multiple central government departments, while a bulk asset sale by GCL New Energy to China Huaneng will be much simpler and quicker to implement. He declined to divulge the number and generation capacity of the solar farms to be sold, as the sale terms are being negotiated. The change in transaction format means the deal size will like be "much smaller than originally planned", Daiwa Capital Markets' analysts said in a note on Tuesday. "As the GCL New Energy assets [will] continue to remain on GCL-Poly's balance sheet ... [the latter] may still face great financial burden from [the debt of] both GCN New Energy and itself," they wrote.Zhu also said during the conference that China Huaneng also intends to provide a bridge loan to help GCL-Poly refinance its debt, so that it will not risk defaulting on them when they become mature. The amount and interest rate of the bridge loan is under negotiation. GCL-Poly has some US$600 million of due for repayment mid 2021, he added.Shenzhen Qingyi Photomask surges in debut on China's Star board Shenzhen Wingyi Photomask (688138 CH), which debuted on the science and technology innovation Star board in Shanghai, doubled its share price minutes after market open, to 20.22 yuan, compared to its offer price at 8.78 yuan.The Shenzhen-based company makes photomask, which is a high precision plate engraved with microcircuit made of a glass plate. It is used in micro-electronic manufacturing such as integrated circuit chips and flat panel display.\-- Georgia Lee Mobile game developers' gains continue in Shenzhen, bucking downtrend of China marketsSeveral stocks extended their gains from previoussessionsand hit the 10 per cent up limit again today.Their surge came amid expectations for more on-demand cloud gaming to emerge from leaders in the cloud computing field, such as Tencent (700 HK) and Alibaba (which lists next Tuesday in Hong Kong), now that 5G has been launched in China. Tencent has already launched its cloud gaming solution this year. The frenzy was also fuelled this week by Google's launch on Tuesday of its own cloud gaming service called Stadia.Investors are betting that cloud gaming, which streams games directly to a user's handheld device without the need for a console, will open up more opportunities for online game developers.The 10-percent gainers include Huawei Culture (002502 CH), to 4.21 yuan; Dalian Zeus Entertainment (002354 CH), to 3.05 yuan; Zhejiang Juli Culture Development (002247 CH) to 3.23 yuan; and Kingnet Network (002517 CH), which is available through the Stock Connect, to 3.09 yuan.China 1-year loan prime rate for November cut to 4.15 per cent, 5-year unchangedThe National Interbank Funding Centre published the November 1-year and 5-year loan prime rates (LPR). The 1-year rate was cut by a small 5 basis points, to 4.15 per cent from 4.2 per cent. It's the third cut this year, after the 1-year rate was reduced by 11bp in August and September.The 5-year LPR, a rate often used in mortgage lending in China, was not changed.Introduced in August to replace the benchmark lending rate, the LPR is the average of the 18 reporting banks' lending rate to their highest quality borrowers. It is used to price loans to both individuals and businesses.The Shanghai Composite Index was down 0.2 per cent at 2,928.76, while the CSI 300 lost 0.2 per cent at 3,938.15.\-- Georgina Lee Hang Seng weighed down by profit taking, rush in orders for Alibaba stock, says analyst Kenny Tang Blame the Hang Seng's decline in the morning session on profit taking and investors piling their money into orders for Alibaba, the Chinese e-commerce giant whose secondary listing debuts in Hong Kong next Tuesday. (Alibaba owns the South China Morning Post.)"There is some profit taking pressure," said Kenny Tang Sing-hing, chief executive of Royston Securities."And also the Dow Jones retreated from its high level. So I think it is quite reasonable for the Hang Seng to have some profit taking. And now money is locked into the Alibaba IPO, so the buying interest may have slowed down," he added.The Hang Seng declined 0.5 per cent to 26,949.04. Read about the latest on Alibaba's stock offering -- the world's biggest IPO this year -- in this article by Enoch Yiu and Peggy Sito.NavInfo surges to 5-week high on new collaboration with Huawei on autonomous vehiclesNavInfo (002405 CH) jumped 8.8 per cent to 16.2 yuan after announcing it will provide Huawei with its map test verification service that will be part of Huawei's self-driving car testing and verification process. The jump marked a five-week high for Navinfo, which develops navigation software and digital map software. It also is involved in chip manufacturing and vehicle networking technology.Navinfo said Tuesday night that it will tailor make map data products and services for Huawei. It did not give any financial details of the collaboration.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) -- Yeahka Ltd., a Chinese payment technology services provider, is planning to raise about $300 million in an initial public offering in Hong Kong, according to people with knowledge of the matter.The company aims to seek a listing hearing as soon as February after it filed an application with the city’s bourse on Nov. 12, the people said, who asked not to be identified as the discussions are private.Tencent Holdings Ltd. became one of Yeahka’s shareholders in 2012, a year after the payment platform was founded, according to its preliminary prospectus. It also counts Japan’s Recruit Holdings and venture capital firm Greycroft Partners among its investors. Liu Yingqi, Yeahka’s chairman and co-founder, was the general manager of TenPay, Tencent’s payment infrastructure platform.Yeahka is China’s second-largest non-bank independent QR code payment service provider, with about 12% of market share in 2018, according to the prospectus, citing data by Oliver Wyman. Yeahka had about 4.8 million active payment service customers as of June 30.Details of the offering, including timeline and size, could still change as deliberations continue, the people said. Representatives for Yeahka and Tencent didn’t immediately respond to requests for comment.CLSA Ltd., Nomura Holdings Inc. and ABC International Holdings Ltd. are the joint sponsors of the deal, according to the prospectus.\--With assistance from Zheping Huang.To contact the reporter on this story: Carol Zhong in Hong Kong at email@example.comTo contact the editors responsible for this story: Fion Li at firstname.lastname@example.org, Jonas BergmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Billionaire Jack Ma’s Ant Financial Services Group said it may apply for a virtual banking license in Singapore, a move that would add a heavyweight contender to the race.“We are actively looking into this opportunity,“ Hangzhou, China-based Ant Financial said in an emailed response to questions from Bloomberg News.The Monetary Authority of Singapore is offering as many as five digital banking permits to non-banks in a bid to open up the industry to new competitors. A successful entry by Ant Financial would pit China’s largest online financial company against traditional incumbents DBS Group Holdings Ltd. and Oversea-Chinese Banking Corp. in the growing market for digital banking in Southeast Asia.While Ant didn’t disclose whether it will seek a retail or wholesale license, it will be easier for the Chinese firm to meet the conditions for the latter.Singapore’s efforts to open up the banking industry to technology companies comes on the heels of a similar move in Hong Kong, where Ant and Chinese competitors including Tencent Holdings Ltd. obtained licenses earlier this year. “The recent licensing of several China ‘Big Tech’ banks in Hong Kong represents the formal entry of such players into the international financial system,” said James Lloyd, the Asia-Pacific financial-technology lead for consulting firm EY. “It seems probable that Singapore will follow in this regard,” he said, while pointing out that foreign applicants have more room to maneuver with a digital wholesale bank rather than a full-services one.There are up to two licenses on offer for full digital banks, which can serve all kinds of customers and require S$1.5 billion ($1.1 billion) in capital as well as local control. Another three would be for wholesale banks, which foreign firms can run and have a capital threshold of S$100 million.Why Asia’s Banking Hubs Are Making Virtual a Reality: QuickTakeOCBC, Southeast Asia’s second-largest lender, has agreed to join peer-to-peer lender Validus Capital Pte. and Temasek Holdings Pte’s venture capital arm to seek a wholesale license before the year-end application deadline. DBS, which operates a digital bank in India and Indonesia, hasn’t expressed any intention to seek a license.Southeast Asia’s digital lending market is expected to more than quadruple to $110 billion by 2025, according to a report by Bain & Co., Google and Temasek Holdings Pte.Ant SME Services (Hong Kong) Ltd. unit received a permit from the Hong Kong Monetary Authority in May to operate a virtual bank in the Chinese territory.Ant’s payments app Alipay and its local e-wallet partners had about 900 million annual active users in China and 1.2 billion globally as of June, according to Bloomberg Intelligence.(Updates with consultant’s comment in the sixth paragraph)To contact the reporters on this story: Chanyaporn Chanjaroen in Singapore at email@example.com;Lulu Yilun Chen in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Marcus Wright at email@example.com, Russell WardFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Welcome to a fresh week, traders --The excitement is building about the Alibaba secondary listing in Hong Kong next week. We'll keep you up on how it's impacting the market. (The South China Morning Post is owned by Alibaba.)We'll keep you up on on all the main news and moves in mainland and Hong Kong markets.Please help us improve our blog by taking this quick -- under 2 minutes! -- survey. Your feedback will really help us make the blog better for you!Also, if you would like the Live Stocks Blog emailed to you each morning, shoot Deb a message at firstname.lastname@example.org.\--- Georgina Lee and Deb Price 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. Morning guidance Here's what we are watching this morning:Friday US markets/ What futures foretell\--The S&P; 500 rose 0.8 per cent, the Nasdaq climbed 0.7 per cent and the Dow Jones Industrial Average rose 0.8 per cent. \-- Hong Kong futures are up 0.3 per cent, the A50 are up 0.06 per centIPO debuts: Beijing Compass Technology Development (300803 CH), Beijing Kingsoft Office Software (688111 CH)Economic statistics/Central Bank action: October foreign direct investment in China Stock Connect had a tough start but, at 5 years old, is deemed a great successRead full story here on the Stock Connect. Hong Kong records worst weekend home sales since June amid protestsHong Kong residential property sales on Sunday recorded their worst performance since the social unrest started in June after buyers stayed away amid intensifying protests.Two weeks earlier, on November 2 and 3, only 35 per cent of 435 units offered by five developers found buyers.Read full story here. Tencent, AAC Technologies gain in rising Hang Seng The Hang Seng rose 0.5 per cent to 26,454.53, despite a Sunday of intense clashes between protesters and police. Tencent (700 HK) rose 0.5 per cent to HK$321.60, after being weighed down last week when its third quarter revenue and profit missed estimates. The other two heavyweights on the benchmark gained.AIA (1299 HK), the giant insurer and financial service provider, rose 1.4 per cent to HK$78.10, while HSBC (5 HK) climbed 0.3 per cent to HK$57.90.Apple supplier AAC Technologies (2018 HK) rose 0.7 per cent to HK$51.55.Meanwhile, BeiGene (6160HK), which got a big boost last week when it announced the US Food and Drug Administration had given it accelerated approval for its blood cancer drug, fell 1.8 per cent to HK$123.China benchmarks dip slightly lower after PBOC's weekend report expressing slowdown concernThe CSI 300, which tracks blue chips listed on Shanghai and Shenzhen, edged down less than 0.1 per cent after market opened, at 3,874.44.The Shanghai Composite Index also slipped down by the same fraction, at 2,889.55.China's central bank is expected to lower the loan prime rate (LPR) this week, the third time since the benchmark was introduced in August. LPR is a rate that captures the average of the 18 reporting banks' lending rate to the highest quality borrowers, and is used by banks in pricing new loans to households and businesses.On Saturday, the People's Bank of China said In its third quarter monetary policy report that it would "increase counter-cyclical adjustment" to ward off downward pressure on the economy, as GDP growth in the third quarter recorded the slowest rate in nearly three decades, at 6 per cent. The PBOC also renewed its concern about inflation risks, Bloomberg reported.The central bank has lowered the one-year LPR by 11 basis points through two cuts in August and September; while it left the 5-year LPR unchanged.\-- Georgina Lee Beijing Kingsoft Office Software surges on Star tech board trading debutBeijing Kingsoft Office Software (688111 CH) tripled in its debut on China's science and technology innovation board, the Nasdaq-style, tech-heavy market in Shanghai also dubbed the Star board.It rose to 139 yuan, up 203 per cent minutes after market opened, with a total 1.6 billion yuan turnover.The company, which was spun out from Hong Kong-listed Kingsoft Corp. (3888 HK), priced its IPO share offering at 45.86 yuan. In Hong Kong, Kingsoft (3888 HK) was up 1.3 per cent at HK$19.2.\-- Georgina Lee King Fook Holdings leads losses among jewellery and watch stocks Retailers continue to see their shares battered, as Sunday protests in Hong Kong erupted into fierce battles. Among jewellery and watch retailers , 23 stocks were down, four unchanged and only two posting gains, according to a gauge by Etnet.Chow Sang Sang (116) rose 0.1 to HK$8.95 and Chow Tai Fook (1929 HK) inched up by the same to HK$6.73.Luk Fook Holdings (590 HK) slipped 0.2 per cent to HK$20.45.King Fook Holdings (280 HK) was the top loser in the jewellery and watches sector, falling 4.6 per cent to HK$0.31.Retailers have seen their foot traffic plunge as mainland Chinese tourists stay away from the city and locals go out less due to the traffic disruptions and fear caused by the demonstrations.Chinese securities watchdog pushes 'H' share reformChina Securities Regulatory Commission's announcement on Friday that it would remove a limit on the public float of mainland companies listed in Hong Kong -- the so called "full circulation" reform of H shares -- would enable domestic unlisted shares of these mainland companies to be coverted into H shares for listing and trading on the Hong Kong bourse.These shares include those held by domestic shareholders prior to the stock listing, and those held by foreign shareholders. It applies to qualified companies already listed or planning for an IPO in Hong Kong.According to investment bank research cited by mainland media China Business Network, the reform is expected to enable issuers of 160 H shares, which are shares issued by mainland-incorporated enterprises that are listed and traded in Hong Kong, to fully convert their unlisted shares.The Hang Seng China Enterprise Index, or H share index, was up 0.8 per cent at 10,503.9. The Hang Seng bluechip index was up about 1 per cent at 26,575.81.Foldable screen makers surge in China after Huawei finally debuts foldable phone Mate XAfter much anticipation and several delays, Huawei's foldable Mate X 5G phone went on sale last weekend, becoming the second smartphone featuring a foldable screen after Samsung Galaxy Fold.The phone is powered by Huawei's Kirin 980 processor, although costing a jaw dropping 16,999 yuan (US$2,427). Currently the phone is available only on its own e-commerce site, Vmall. It is unclear if the Chinese tech giant will sell it to other countries amid the scrutiny on Huawei by several foreign governments.Shares linked to makers of flexible OLED (organic light-emitting diode), which is used in foldable phones, and other related technology in the supply chain surged to the daily 10-per cent up limit.These include Guangdong Senssun Weighing Apparatus Group (002870 CH), at 25.32 yuan; Dongguan Eontec (300328 CH) , at 12.89 yuan; NBTM New Materials Group (600114 CH) at 6.95 yuan; Shenzhen TXD Technology (002845 CH) rose 7.5 per cent at 18.58 yuan.Here's a vieo about this emerging sector of foldable phones. Hong Kong Airport Authority offers no relief to protest-battered airlinesThe Airport Authority in Hong Kong has rejected pleas for relief measures from a group of airlines who wrote to the authority asking for waivers of airport fees and charges.Hong Kong's anti-government protest intensified over the weekend as rioters occupied university campuses and continued violent, arson-filled standoffs with the police into Monday. The protests, now in their sixth month, have depressed passenger traffic in what has been one of the busiest airports in Asia.In September alone, Hong Kong Airport passenger traffic fell by 710,000 to 4.85 million, compared to 5.56 million in the same month last year. There were 802,000 fewer travellers using the airport in October, some 13 per cent down compared with the same month last year.There were 74.5 million travellers who used HKIA last year. This year's figure is likely to fall by 2 million, according to the airport operator's estimates.Cathay Pacific (293 HK), the city's flagship airline, climbed 0.3 per cent at HK$9.85 in a rising market. China Eastern Airlines (670 HK) declined 1 per cent to HK$4; China Southern (1055 HK) fell 1 per cent at HK$4.95.Read Danny Lee's story here. Beijing Compass Technology Development surges to first-day up limit in Shenzhen debutBeijing Compass Technology Development (300803 CH) shot up on its first rose to the first-day trading up limit at 44 per cent, at 9 yuan, on its debut on ChiNext board of the Shenzhen stock exchange.A total of 927,300 yuan turnover was recorded.Its offer price was at 6.25 yuan. The company develops investment software and solutions for securities, foreign exchange trading and analysis.\-- Georgina Lee Hang Seng gets boost as partial trade deal seems close, says Francis LunThe Hang Seng is having a solid morning, climbing 1.5 per cent to 26,627.97. "The US stock market was at a new high, and a trade deal between the US and China will be reached soon," Lun said of what is driving investor sentiment.The US and China had "constructive discussions" over the major concerns of two sides, after the representatives had a phone call on Saturday, Chinese state-owned Xinhua News reported, citing China's Ministry of Commerce."Plus, Alibaba is going public in Hong Kong, which is good news. So Hong Kong stocks are particularly good today."The world e-commerce giant Alibaba will be listed on Hong Kong's stock exchange on November 26.Property stocks are getting a boost today from the latest Centa-City Leading Index showing property prices rose 1.5 per cent last week, which was the second week in a row, on the heels of interest rate cuts. "Because of the latest report, Hong Kong property prices not only did not fall but rose a little bit. What a miracle," said Francis Lun Sheung-nim, chief executive of GEO Securities.The property stocks such as Henderson Land Development (12 HK) rose 1.6 per cent to HK$37.40, Sun Hung Kai Properties (16 HK) climbed 2 per cent to HK$109.60, and New World Development (17 HK) rose 1.5 per cent to HK$10.58.Sun Hung Kai, Wharf REIC rallySun Hung Kai Properties (16 HK), which ended its previous three straight days of losses, has climbed 2.4 per cent to HK$110. Wharf REIC (1997 HK), a leading retail property landlord with shopping malls in key tourist and commercial districts hit hard by the ongoing protest, also rose, by 3.3 per cent to HK$43.4.On Sunday, residential property sales showed poor performance, as only four out of 144 units at Chinachem Group's Sol City development in protest hot spot Yuen Long were sold as of 6pm, according to agents. This came a full day of intense, violent stand-off between protesters and police at a university city campus in Tsim Sha Tsui.However, some analysts said so long as there is no end game in sight on how the protest will end, property developers with sizable shopping malls portfolios in Hong Kong will continue to be weighed down by the political unrest.Battle for share of China's liquor market to intensify, Jefferies reports Competition in China's liquor market will intensify, with super premium brands gaining share, according to a new Jefferies report citing a liquor expert who is a distributor in southern China. "The expert is bullish on super premium liquor brands (retail price higher than Rmb600/bottle). Helped by their strong branding, super premium brands will continue to raise their retail prices, move up product mix, and deliver positive volume growth. The category is currently at Rmb120bn sales size and the expert forecasts it to achieve 20-25% growth next year," Jefferies writes."The expert expects competition to intensify between mid-high end liquor (retail price at Rmb300-600/bottle). Particularly, national mid-high end brands will see intensified competition with regional liquor leaders. Total demand for the segment will continue to expand, helped by consumers' trading up from low end; however, due to higher base, total growth might slow down in near term. The category is currently at Rmb50bn sales size and the expert forecasts it to achieve 20-25% growth next year," the analysts write.Liquor and beer stocks in China are posting losses today, according to a gauge by Xuanubao, falling 0.7 per cent and 1.2 per cent respectively. Kweichow Moutai (600519 CH) slipped 0.2 per cent to HK$1,222.96.Sofa maker Man Wah Holdings surges to over 15-month high after Citi upgradeShares of the sofa and mattress product maker rose to an over 15-month high, after Citi raised its target price to HK$6.80, saying the stock continues to remain on its China mid-cap top pick list, Bloomberg reported.The upgrade was driven by expected earning recovery in the fiscal year of 2021, due to a successful ramp up of its Vietnam factory, analyst Eric Lau wrote in a note. The new target price points to a 30 per cent upside from its close on last Friday.Man Wah (1999 HK) has shot up 8.6 per cent to HK$5.69, its highest price since end of July 2018.\-- Georgina Lee 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) -- Tencent Holdings Ltd. is in talks with potential co-investors for its proposed bid for a minority stake in Universal Music Group from Vivendi SA, according to people with knowledge of the matter.Hillhouse Capital and Singapore’s sovereign wealth fund GIC Pte. are among potential investors that the Chinese tech giant has approached, the people said, asking not to be identified because the matter is private. Tencent plans to lead the consortium for the 10% stake in UMG with a goal to carry out the purchase within the next few months, the people said.The Chinese tech giant is weighing to raise about 1 billion euros ($1.1 billion) in debt to help fund the deal, while the rest will likely be funded in equity, the people said.Vivendi said in August that it’s in talks to sell 10% of UMG to Tencent in a deal that values the world’s biggest music company at 30 billion euros. The Chinese tech firm has a one-year call option to acquire an additional 10% at the same price and terms. Vivendi also plans to sell an additional minority stake in UMG to other potential partners.Enlisting minority investors would help Tencent share the costs and risks of buying as much as 20% of UMG, the people said. No final decision has been made as talks are still ongoing and could fall apart, the people said.A representative for Tencent didn’t respond to requests for comment, while representatives for Hillhouse, GIC and Vivendi declined to comment. Shares of Tencent rose as much as 2.1% in Hong Kong morning trading on Monday, while the city’s benchmark index climbed 1.4%.Tencent could bring Universal Music closer to consumers in Asian markets that are relatively underserved by the world’s major music labels. The Chinese company could help promote Universal’s stable of artists, which include Drake, Taylor Swift and U2, and identify talent in new markets.Read: Tencent Music Dives as Watchdog Probes Its Record-Label TiesThe possibility that U.S. authorities may block the deal “cannot be completely ruled out given the nationality” of Tencent, Oddo BHF, a broker, said in October. That said, Oddo attributed “low probability to this outcome” given that music and entertainment aren’t critical sectors.Later that month, Vivendi Chief Executive Officer Arnaud de Puyfontaine said the company doesn’t have a problem “at this stage” with potential U.S. scrutiny of the potential deal with Tencent.(Updates to add Tencent shares in sixth paragraph.)\--With assistance from Lulu Yilun Chen, Angelina Rascouet, Elffie Chew and Edwin Chan.To contact the reporters on this story: Manuel Baigorri in Hong Kong at email@example.com;Cathy Chan in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Fion Li at email@example.com, Jake Lloyd-SmithFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Hong Kong is doing everything it can to ensure Alibaba Group Holding Ltd.'s listing is a roaring success. That's turning the $12 billion mega-sale into a hot item — if you can get your hands on the shares.Alibaba will initially offer only 2.5% of the offering to individual investors, a quarter of the allocation specified in Hong Kong’s listing rules and half the 5% level typically allowed for sales valued at more than HK$10 billion ($1.3 billion). The retail portion may be increased to as much as 10% depending on the level of demand, though that’s still well below the 50% that the listing rules require for the most heavily subscribed offers.The effect of squeezing down the retail offering may be to increase the perceived rarity value of Alibaba shares, magnifying the buzz around what may be Hong Kong’s biggest share sale since 2010. For example, an allocation that is barely covered at 10% would be four times subscribed at 2.5% with the same level of demand.Hong Kong Exchanges & Clearing Ltd. has done its utmost to accommodate Alibaba, introducing rules that allow dual-class shares after resisting change for a decade — and losing the company’s $25 billion initial public offering to New York in 2014. The word “waiver” appears 80 times in Alibaba’s prospectus.With Hong Kong’s economy and markets rocked by protests, there’s much riding on a successful sale. After the listing, HKEX will be home to Asia’s two largest technology companies in Alibaba and Tencent Holdings Ltd. That could help the exchange attract more tech plays such as Southeast Asian ride-hailing giants Grab Holdings Inc. and Gojek.There are reasons to expect Alibaba’s Hong Kong stock to do well. Many mainland Chinese investors will get their first chance to buy shares of the country’s most valuable corporation, once Alibaba is included in the “stock connect” trading pipes that link Hong Kong with the Shanghai and Shenzhen exchanges. Capital controls prevent Chinese investors from easily accessing overseas stock markets, meaning that only those with money parked outside the mainland can trade Alibaba’s U.S. stock. And Chinese technology companies often attract higher valuations on local exchanges than overseas.Alibaba is at the forefront of China’s digital and consumer economies, with its Taobao and Tmall sites continuing to thrive as weakening growth prompts more people to seek bargains online. The company reported record sales for its Singles’ Day shopping festival on Nov. 11 and posted a 40% surge in September-quarter revenue. Its New York-traded stock had risen 33% this year as of Thursday’s close, and 54 of 55 analysts tracked by Bloomberg rate the stock a buy (the other is a hold).Institutions are sure to support the sale, encouraged by expectations of a wall of Chinese money joining them. Demand will come from Asian funds that have overlooked Alibaba previously because they want to trade in their own time zone. Hedge funds also sense opportunity. An expected price gap between Alibaba’s New York and Hong Kong shares is fueling a colossal arbitrage trade, Fox Hu and Carol Zhong of Bloomberg News reported Nov. 14. Alibaba will raise as much as $13.4 billion if an over-allotment option is exercised. The institutional offering will be priced on Nov. 20.In a possible fillip for retail demand, the offering will be Hong Kong’s first fully paperless listing, according to Reuters. Whether by accident or design, that means individuals won’t have to line up at banks or brokerages to obtain application forms — a potential deterrent given the unrest. Even the numbers associated with the listing are auspicious. Alibaba has capped the per-share price for individual investors at HK$188 apiece — double eight is particularly lucky in Chinese. And the company will trade under the stock code 9988, which sounds like “forever prosperous.” It looks like no one is leaving anything to chance. To contact the author of this story: Nisha Gopalan 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.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
It has been a challenging year for many American chipmakers, but you'd never know it from the performance of Advanced Micro Devices (NASDAQ:AMD). Despite being the underdog in the fiercely competitive CPU and GPU markets, despite the collapse last fall of the crypto currency market and despite the trade war between the U.S. and China, AMD stock has been a top performer in 2019.Source: Joseph GTK / Shutterstock.com After another 2.21% pop to close at $38.35 on Thursday -- its highest level in 13 years -- Advanced Micro Devices stock is now up nearly 108% for the year.However, if you haven't yet got in on the AMD action, now probably isn't the time to do so.InvestorPlace - Stock Market News, Stock Advice & Trading Tips AMD Stock Pops on EPYC Server NewsAdvanced Micro Devices has been making real progress against Intel (NASDAQ:INTC) in the PC processor market. In Q3, the company hit one third of the global marketshare for computer CPUs for the first time in 12 years. AMD also scored a symbolic victory over Intel when Microsoft (NASDAQ:MSFT) announced it was using a custom AMD Ryzen chip in its new 15-inch Surface Laptop 3.But what triggered this week's pop in AMD stock was on the server front -- another area where AMD is making inroads against Intel's domination. * 10 Cheap Stocks to Buy Under $10 On Nov. 12, it was announced that Chinese internet giant Tencent (OTCMKTS:TCEHY) is now using AMD EPYC servers for its cloud services. The move to the AMD servers will reportedly save Tencent big money. AMD says that the EPYC servers deployed at Tencent are 50% more energy efficient under maximum load, while delivering overall performance gains of 35%. With 1.1 million servers already in operation and rapid growth, the Tencent announcement has been enough to propel the price of AMD stock over 5% since the news hit. What Does 2020 Look Like for AMD?A lot of things have been going AMD's way in 2019, helping the company to bounce back from last year's crypto-collapse shock. When the bottom of that market fell out, AMD stock dropped 47% in just five weeks. However, a repeat of 2019's triple-digit growth doesn't seem likely. In fact, among the 33 analysts polled by CNN Business, the consensus for this high-flying tech stock is "hold" with a median 12-month price target of $35 -- a downside of 8.7%. Why the pessimism?First, that massive growth in AMD's stock price in 2019 has in large part been recovery from the spectacular collapse last year. With AMD performing so well this year, continued growth will be tougher to justify.Intel will make that job more difficult for AMD. Advanced Micro Devices has gained marketshare against Intel because of compelling chip design; however, Intel has also suffered chip shortages this year that has led to some PC manufacturers choosing AMD instead. Intel announced it is ramping up production capacity by 25% in 2020 to address that shortfall. In addition, Intel's new 10nm chips are now shipping in volume. * 7 Troubled Dividend Stocks With Yields Too Good to Be True In other words, AMD was able to take full advantage of Intel's weaknesses in 2019, but next year, the battle for PC processor supremacy is expected to be a tougher one. Intel is also set to play spoiler in the graphics card market. AMD has been wresting marketshare from Nvidia (NASDAQ:NVDA) in 2019. In the third quarter, the company shipped more video cards than Nvidia for the first time since 2014. Nvidia is fighting back with new "Super" versions of its card and price-cutting, so expect 2020 to see an epic battle between the two. Intel comes into play in 2020 because for the first time, the company will release a discrete graphics card -- the Intel Xe.That means next year, AMD will be taking on both Nvidia and Intel in the battle for graphic card marketshare. This year has been a great year for Advanced Micro Devices. If you bought AMD stock after the 2018 disaster, you are sitting on a very nice gain. But the factors that helped propel AMD this year won't necessarily be in play next year, and a re-invigorated Intel is set to make things tougher for Advanced Micro Devices on multiple fronts.So don't buy AMD stock now expecting next year to be a repeat performance.As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Silver and Gold Stocks to Buy That Offer Contrarian Upside * 7 Earnings Reports to Watch Next Week * 5 Online Retail Stocks to Buy on the Dip The post Have the Gains in Advanced Micro Devices Stock Reached Their Limit? appeared first on InvestorPlace.
(Bloomberg) -- Chinese social media goliath Tencent Holdings said on Friday it’d entered into an agreement to buy almost 10% of Sumo Group Plc, causing the latter’s shares to surge the most since its listing less than two years ago.It was another sign for Sumo’s home city of Sheffield, in the north of England, that software could help replace steel. Sheffield once had the moniker Steel City when the U.K. was making nearly half of the world’s supply of the metal. But now China accounts for half, and Britain almost none.Sumo’s current headquarters are nestled on a riverbank between a 250 year-old steel foundry, Sheffield Forgemasters, and the Meadowhall shopping mall, where locals earlier this month sheltered overnight after flooding devastated the region.The company is not the first software or technology company to come out of the the city. PlusNet, once a popular and publicly-traded internet service provider, was founded in Sheffield and was acquired by BT Group Plc in 2007 where it still operates alongside BT brands such as EE.Sheffield is home to AIM-listed WANdisco Plc. Originally founded in Silicon Valley in 2005, it shifted its headquarters to Sheffield in 2009. The Angel CoFund, a government-backed venture capital fund, is also based in the city.It’s not the first time Tencent has invested in a U.K. gaming either, having taken a minority stake in Frontier Developments in 2017.Sumo, founded in 2003, is best known for its work on games such as Microsoft Corp.’s Forza Horizon racing series, Warner Bros.’ Hitman 2, and developing LittleBigPlanet 3 for Sony Corp.’s PlayStation consoles and Sonic & All-Stars Racing Transformed. According to a statement Friday, the company has 10 studios in three countries. Its website states that it employs more than 600 people.“What does Tencent see in Sumo? We guess good content,” said Ken Rumph, an analyst at Jefferies, in a research note. “We think Tencent is supporting the strong development talents of the studio that may be able to deliver high quality contents appealing to Western gamers.”Sumo shares rose as much as 21% in trading in London Friday, reaching 186 pence.To contact the reporter on this story: Nate Lanxon in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Giles Turner at email@example.com, Kasper ViitaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Happy Friday, traders!Today, protest disruptions have lessened, though an elderly man hit on the head with a brick has died and two others -- including the man set on fire and a 15-year old boy reportedly hit on the head by tear gas canisters -- remain in critical condition.Traders are going back into Hong Kong stocks, looking for bargains.We will keep you up on the latest news and moves in mainland and Hong Kong markets.Please help us improve our blog by taking this quick -- under 2 minutes! -- survey. Your feedback will really help us make the blog better for you!Also, if you would like the Live Stocks Blog emailed to you each morning, shoot Deb a message at firstname.lastname@example.org.\-- Zhang Shidong in Shanghai and Deb Price 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. 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.Morning guidance * Overnight markets/ What futures foretell\-- Overnight in US markets, the S&P; 500 gained 0.1 per cent, the Nasdaq fell less than 0.1 per cent, and the Dow Industrials was little changed\-- Hong Kong futures were 0.5 per cent higher, while the FTSE China A50 futures climbed 0.4 per cent* IPO debuts: Sinic Holdings (Group) (2103 HK), China Pengfei Group (3348 CH) and Best Linking Group Holdings (8617 HK) will start trading in Hong Kong today.Suntar Environmental Technology (688101 CH) and Novoray (688300 CH) will debut in the Start Board in Shanghai, while BSM Chemical (300796 CH) will begin its first day of trading in Shenzhen.* Economic statistics/Central Bank action: China's October home prices will be due at 9:30am today.*Corporate events: earnings, meetings, news conferences\-- nothing majorChina Merchants Securities boosts target price of Tencent, maintains 'buy' ratingTencent (700 HK) is getting a mixed report card after its profit and revenue misses on Wednesday after market close.Here are two new ones:China Merchants Securities (Hong Kong) increased the target price of Tencent to HK$422 from HK$392 and maintained a "buy" rating on the stock.Mizuho Securities USA reduced the target price to HK$325 from HK$335, and maintained its "neutral" rating.Tencent fell 2.3 per cent to HK$319.80 on Thursday after its results. Alibaba picks auspicious numbers for its Hong Kong listingAlibaba Group Holding has picked auspicious numbers for both its stock code and set the offer price for retail investors in its sale of new shares in Hong Kong, after receiving overwhelming response for the global tranche of its US$13.86 billion secondary listing, according to investment bankers and sources familiar with the plan.The shares will be offered at no more than HK$188 (US$24) each, according to sources, declining to be identified for discussing matters that have not been announced. This is 3.3 per cent higher than the November 12 closing price of Alibaba's New York-traded depositary receipts after allowing for a one-for-eight split, based on Alibaba's filing to the Securities and Exchange Commission on Tuesday.The stock's code on the Hong Kong stock exchange is 9988, which rhymes with "prosperity forever." The numbers eight and nine are considered auspicious in both Cantonese and Mandarin Chinese.Read full story here by Peggy Sito and Enoch Yiu EV maker BYD sees its US plans stuck as anti-China sentiment growsBYD - a Shenzhen-based electric vehicle maker whose name is short for Build Your Dreams - opened its US bus factory in Lancaster, California, in 2013. Six years later, those dreams risk becoming nightmares as anti-China sentiment in Washington grows.The way BYD (1211 HK; 002594 CH) sees it, it's been a model corporate citizen. It has invested US$250 million in a small American community; created 800 unionised manufacturing jobs; built environmentally friendly products; and followed "Buy America" requirements by sourcing 70 per cent of its components from US companies."If BYD was a Danish company, we'd be held up as an example of what the US wants us to do," said Zachary Kahn, the company's US director of government relations. "We've come in, manufacturing in the US for the benefit of union labour and the community.But the way critics see it, BYD is a tool of the Chinese Communist Party that's gaming a free-market system, poised to spy on bus riders and activate kill switches remotely to block intersections, spewing chaos.Read full story by Mark Magnier here. Hua Medicine says it is confident it will get marketing approval for diabetes drugHua Medicine (2552 HK), whose shares have shed more than 40 per cent this week after the interim clinical trial results of a diabetes drug did not meet investors' expectations, said it was confident of receiving marketing approval from Chinese regulators."The results were good ... [as] some investors are probably not well-informed of the trial requirements and the advantages of the drug over existing products on the market," chief financial officer George Lin Chien Cheng said on Thursday. "On top of that, they were concerned about the implications of [China's] ongoing price cutting of generic drugs via mandatory government hospital bulk tenders."Lin attributed the high reading to the fact that this was the first time that a novel diabetes drug has gone through phase three trial in China, where regulators have yet to set guidelines for such trials but have demanded that patients be subject to doctors' check-up every four weeks.The patients, mostly recruited from rural areas and who had not previously been prescribed diabetes drugs, were also told to watch their carbohydrate intake and encouraged to exercise more as diabetes patients are normally told.Read full story by Eric Ng here. Beijing-Shanghai High-Speed Railway operator's IPO gets green lightBeijing-Shanghai High-Speed Railway operator's initial public offering got the green light from China's top securities watchdog.The China Securities Regulation Commission said that it has approved the application of Beijing-Shanghai High-Speed Railway Company to float on the Shanghai Stock Exchange, according to a notice on November 14.The rail company will offer up to 7.557 billion shares, according to the filing, and all proceeds will be used to buy a 65 per cent stake of Beijing Fuzhou Railway Passenger Dedicated Line Anhui Company for 50 billion yuan in that would be the largest fundraising exercise on the mainland in more than nine years. In another words, China State Railway Group, which owns a 50 per cent stake in the high-speed operator through its investment arm, wants to use its share of the profits to shore up less profitable lines.Beijing-Shanghai High-Speed Railway, which operates the 1,300 km line, reported its net profit hit about 10.25 billion yuan in 2018, up more than 13 per cent from 2017, according to its prospectus on October 22.Tencent gains on rising Hang Seng The Hang Seng perked up this morning, rising 0.6 per cent to 26,492.76, after falling two straight days on escalating violence.Tencent (700 HK), Thursday's top loser with a decline of 2.3 per cent, rose 0.4 per cent to HK$321. The drop came after its third quarter revenue and profit missed estimates. A raft of new ratings have been coming out for the Chinese Internet giant. The other two heavyweights on the benchmark were mixed.AIA (1299 HK), the giant insurer and financial service provider, rose 1.3 per cent to HK$77.40, while HSBC (5 HK) dropped 0.9 per cent to HK$57.85.Apple supplier AAC Technologies (2018 HK) continued to rise, climbing 1.8 per cent to HK$51.20. It was the top percentage gainer on Thursday, rising 3.7 per cent to HK$50.30. Bank of Communications (3328 HK), whose Central branch's front window was smashed, on Wednesday, rose 0.2 per cent to HK$5.2.China's stocks drift lower at open, head for weekly lossThe Shanghai Composite Index slipped 0.1 per cent to 2,906.20 at the open today, extending its weekly loss to 2 per cent.Pig and chicken-breeding stocks such as Muyuan Foodstuff (002714 CH) and Shandong Minhe Animal Husbandry (002234 CH) led the decline on concern rising pork and chicken prices will deter consumers and hurt sales.\-- Zhang Shidong3 IPOs in Hong Kong start off flat Sinic Holdings (Group) Company Limited (2103 HK) and China PengFei Group Limited (3348 HK) started trading on the main board of Hong Kong Stock Exchange, and Best Linking Group Holdings Limited (8617 HK) debuted on the GEM board.Sinic's share price opened flat, at the offering price of HK$ 3.98. The shares were undersubscribed by 74 per cent.The property developer Sinic was ranked by the China Real Estate Index System as the 31st among the top 100 property developers in China in terms of comprehensive property development ability.Shares of China PengFei Group opened flat, at the offering price of HK$ 1.58. The shares were oversubscribed by 26.72 times.As the largest supplier of rotary kilns, which are used to produce industrial materials such as cement, lime and metals in China and globally, China PengFei Group had revenue in 2018 that accounted for 22 per cent of the Chinese market and 13.3 per cent of global market, according to a Frost & Sullivan market research report. Apart from rotary kilns, PengFei also provides tube mills, roller presses, vertical mills, separators, and ancillary machinery.Shares of Best Linking's share price also was flat, at the offering price of HK$ 0.55. The shares were oversubscribed by 61.67 times.Best Linking manufactures slewing ring, which is an essential component of large machinery for construction, wind engines, military, and robots. According to the Industry Report, it was ranked fifth among the slewing ring manufacturers in China in 2018 in terms of sales revenue to overseas markets, with a market share of 1.3 per cent.Sinic Holdings (Group) Company Limited (2103 HK) and China PengFei Group Limited (3348 HK) debut on the main board of Hong Kong stock exchange, and Best Linking Group Holdings Limited (8617 HK) debut on the GEM board today. @scmpbusiness @SCMPNews pic.twitter.com/NrzgH3hdEl\-- Snow Xia (@SnowXia05) November 15, 2019\-- Snow XiaStar board debutants surge in ShanghaiTwo listings surged on their first day of trading on the Science and Technology Innovation Board, or the Star market, in Shanghai today.Novoray (688300 CH), a maker of crystalline silica powder used in integrated circuits, surged by as much as 65 per cent from the IPO offer price before trading up 52 per cent recently to 41.50 yuan.Suntar Environmental Technology (688101 CH) jumped by as much as 40 per cent and the stock recently traded at 23.98 yuan, an increase of 31 per cent from the offer price.Meanwhile, BSM Chemical (300796 CH) rallied by 44 per cent to 20.52 yuan in Shenzhen.New listings on the Star market have no restrictions on daily price movements in the first week of trading, while those on the main board are subjected to a 44 per cent gain in debut and then can go up or down no more than 10 per cent in a day.\-- Zhang ShidongAAC Technologies jumps after announcing US-dollar denominated 'refinancing and development' plan AAC Technologies (2018 HK) jumped nearly 4 to HK$52.30 after announcing it will issue US dollar-denominated notes for "refinancing and development" of its business.It is the top gainer in morning trading on the Hang Seng Index.It is the second day of gains for the Apple supplier, which made its announcement this morning in an exchange filing.It was the top gainer Thursday on the Hang Seng Thursday, rising 3.7 per cent.BeiGene soars after lymphoma drug gets FDA accelerated approvalBeiGene (6160 HK) soared 7.7 per cent to HK$126.40 , after announcing its lymphoma drug Brukinsa has received accelerated approval by the US Food and Drug Administration."BRUKINSA is the first BeiGene-discovered product to be approved, an important milestone toward the Company's goal of transforming treatment for cancer patients around the world," BeiGene said in its announcement posted at the stock exchange.The drug is would treat mantle cell lymphoma (MCL) -- an aggressive blood cancer -- in adult patients who have received at least one prior therapy. "We are working to improve outcomes for people with cancer worldwide and this approval brings us closer to realizing our mission of bringing the highest quality therapies to patients globally," said John V. Oyler, chairman and co-founder, and CEO of BeiGene."The approval of BRUKINSA as a second line therapy represents an important advancement for the treatment of mantle cell lymphoma," said Meghan Gutierrez, CEO for the Lymphoma Research Foundation. "Expanded treatment options can transform the patient experience and provide hope to people living with a mantle cell diagnosis." Huobi Technologies continues its runHuobi Tech (1611 HK) continued its run in early trading, rising 3.2 per cent to HK$6.14.On Thursday, it announced in an exchange filing that its name has been officially changed from Pantronics.Since the Huobi cryptocurrency exchange announced on September 10 it would change the name of the Hong-listed Pantronics it acquired earlier, it has skyrocketed.Meanwhile, Singapore-based Grandshores Technology (1647 HK), which operates construction and blockchain business, fell 1.4 per cent to HK$73, giving up early gains in thin trading.Chinese pig-feeding stocks fizzleThe stellar run of China's pig-farming stocks seems to have run out of steam.They are leading the pack of decliners today, with Muyuan Foodstuff (002714 CH) and Hunan New Wellful (600975 CH) falling at least 3.5 per cent.Several theories could explain the reversal, from the release of more frozen pork into the market to demand being dented by high-flying prices.Pork prices registered second consecutive week-on-weekly declines as of last week, the Securities Times reported, citing the agricultural minister.Chicken-farming companies also fell: Shandong Yisheng Livestock and Poultry Breeding (002458 CH) and Shandong Minhe Animal Husbandry (002234 CH) retreated at least 4 per cent.\-- Deb PriceTencent sees two more lowered price targets Internet giant Tencent (700 HK) is being reevaluated by analysts, following its profit and revenue miss on Wednesday after market close.Here are a few of the latest:ABC International lowered its 12-month target price on Tencent to HK$328 from HK$360, while maintaining its "hold" rating.CCB International Securities trimmed its price target to HK$400 from HK$410, while keeping its "outperform" rating.Tencent has see-sawed in morning trading. It is now ahead 0.1 per cent to HK$320.20.Calm returns to China's marketsPrice swings on Chinese stocks, known for its wild volatility, are dropping.The 100-day volatility on the Shanghai Composite Index slipped to its lowest level since February 2018, while the 30-day gauge also dropped to that low, according to Bloomberg data.The Shanghai Composite has been stuck in a 100 plus-point range over the past two months, as stocks sway between the prospects of a trade deal and more policy easing and angst about the worsening economic outlook.The market may soon choose a direction to break the ice, according to Xun Yugen, a strategist at Haitong Securities in Shanghai.Stocks will trend up as earnings growth may have already troughed in the third quarter, he said.\-- Zhang ShidongTraders are bargain shopping among Hong Kong battered stocks, says analyst Alan LiTraders are doing some bargain hunting this morning, says Alan Li, portfolio manager at Atta Capital."Worry on curfew and cancellation of district election has been relieved. People are starting to bottom fish Hong Kong-related stocks," he said. "But it is not easy for the rebound to go further, as there is still uncertainty on protest action during weekend," he cautioned.Hua Medicine soars after reassurances by management about diabetes drugHua Medicine (2552 HK) rebounded 21.4 percent in morning trading to HK$5 after a 40 per cent plunge over the previous three days, after management said it was confident it will receive marketing approval for its diabetes drug from Chinese regulators.Investors were concerned about trial results that showed a high level for a placebo. The patients, mostly recruited from rural areas and who had not previously been prescribed diabetes drugs, were also told to watch their carbohydrate intake and encouraged to exercise more as diabetes patients are normally told, he said.Full story here on Li's presentation.\-- Eric Ng
(Bloomberg) -- Alibaba Group Holding Ltd. priced the retail portion of its Hong Kong share sale Friday, issuing an appeal to individual investors in a city in the throes of recession after months of violent pro-democracy protests.The largest Chinese e-commerce company capped the 12.5 million shares available to individual investors at HK$188 apiece -- an auspicious number in Chinese culture -- making it the most expensive first-time share sale in Hong Kong. Alibaba said it may price the remainder of its 500 million-share offering above that ceiling, signaling that it aims to raise at least $12 billion in what would be one of the world’s largest sales of stock this year. The company will price the rest of its international offering by Nov. 20.Asia’s largest corporation is proceeding with what could be Hong Kong’s biggest share sale since 2010. Slated for late November, it’ll be the Chinese e-commerce juggernaut’s official Asian coming-out party -- half a decade after snubbing the financial hub for a record Wall Street debut. Alibaba’s return hands a much-needed victory to a city wracked by protests since the summer, and will please Chinese officials who’ve watched many of the country’s largest private corporations flock overseas for capital. If the deal goes through, Alibaba will challenge Tencent Holdings Ltd. for the title of the largest Hong Kong-listed corporation.“The listing in Hong Kong will allow more of the company’s users and stakeholders in the Alibaba digital economy across Asia to invest and participate in Alibaba’s growth,” the company said. “During this time of ongoing change, we continue to believe that the future of Hong Kong remains bright,” Daniel Zhang, chief executive officer of Alibaba, said in a letter to investors.Read more: Alibaba Is Taking Orders for $11 Billion Hong Kong ListingListing closer to home has been a long-time dream of billionaire Alibaba co-founder Jack Ma’s. A successful Hong Kong share sale could help finance a costly war of subsidies with Meituan Dianping in food delivery and travel, and divert investor cash from rivals like Meituan and WeChat operator Tencent. It will also be a feather in the cap for Zhang, who took over as chairman from Ma in September. The former accountant is now spearheading the company’s expansion beyond Asia but also into adjacent markets from cloud computing to entertainment, logistics and physical retail.What Bloomberg Intelligence SaysAlibaba’s secondary listing in Hong Kong could lead to a shake up of the Hang Seng Index, the city’s main stock benchmark. The 50-member index is heavy on financial stocks, when comparing weights to other leading equity indexes in the world. Meanwhile, IT, industrials and consumer discretionary stocks are severely underrepresented.\- Steven Lam, analystClick here for the researchA marquee name like Alibaba’s could draw investors and boost trading liquidity for Hong Kong Exchanges & Clearing Ltd., which just incurred its biggest profit slump in more than three years. For Hong Kong, it’s bit of welcome news following half a year of often violent protests that have at times paralyzed the city and its service industry. Efforts to court Alibaba emanated from the very top, with Chief Executive Carrie Lam herself exhorting Ma to consider a listing in the city.Alibaba has considered a Hong Kong listing for a long time, Michael Yao, head of corporate finance at Alibaba, said on a call with investors this week. The deal size hasn’t changed as a result of the protests, he added.(Updates with details of price per share comparison in second paragraph)\--With assistance from Zhen Hao Toh.To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at email@example.com;Alistair Barr in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Advanced Micro Devices Inc. (AMD) jumped 81 cents to $37.52 on 67 million shares traded Wednesday. Amarin Corp. PLC (AMRN) followed through on Wednesday, up 55 cents to $21.49 after popping 23% on Tuesday. An FDA advisory committee is scheduled to meet today to help decide the fate of the company’s fish-derived cardiovascular drug.
Burberry said it will open a so-called "social retail" store in Shenzhen in China's technology hub powered by Tencent technology in the first half of next year that will blend retail and social media to create digital and physical spaces aimed at attracting customers. Few other details were given.
(Bloomberg Opinion) -- Burberry Group Plc’s last catwalk show in September, where models strutted in front of giant space-age speakers, was called Evolution.That’s just what the group delivered on Thursday. Sales held up despite the ongoing disruption in Hong Kong. And Burberry maintained its guidance for the current financial year for broadly stable sales and operating margin.That’s a relief for shareholders who had feared the turmoil would derail Burberry’s nascent turnaround under new designer Riccardo Tisci. The shares rose as much as 9%.That reaction looks overdone.Hong Kong is having an impact on Burberry. First-half sales there declined by a percentage in the double digits. The group estimated that the region now accounts for about 5% of total sales, compared with 8% previously.There will also be an impact on the gross margin — the difference between the price that retailers buy and sell their stock. The group had expected this to decline by 1 percentage point as it invested in product quality and cleared items that were designed before Tisci’s arrival. The turmoil in Hong Kong, which has hit tourist spending and forced Burberry to temporarily close stores, will mean that gross margins decline by 1.5 percentage points.However, this should be offset by factors including cost savings, with the company forecasting efficiencies of 120 million pounds ($154 million) by the end of this financial year.Burberry says it’s factoring an ongoing decline in Hong Kong into its expectations. But the violence there appears to be escalating. That doesn’t bode well for the coming months, and particularly the run up to the crucial Chinese New Year period. And let’s not forget the risks to Chinese demand from simmering trade tensions and worries about a U.S. recession next year. Tisci’s designs do appear to be gaining traction. Same store sales rose by 4% in the first quarter, but this accelerated to 5% in the three months to Sept. 28, commendable given the situation in Hong Kong. The company’s hoping to generate more demand for its fashions in China by teaming up with internet giant Tencent Holdings Ltd. to experiment with creating new stores that connect consumers online lives to their physical retail experience.As well as finding favor with young Chinese shoppers, Burberry says its new styles, particularly menswear, are appealing to domestic U.K. customers. That’s crucial in developing a broad-based recovery.But sales of accessories fell 5% excluding currency movements in the first half. Burberry blamed that on a lack of demand for the old styles, with a vast improvement in the appetite for Tisci’s designs.Yet bags is a key area where Burberry must win, and it’s seems increasingly clear that reviving this category will take time.What’s more, as I have noted, while Tisci’s designs are adorning celebrities, there doesn’t seem to be the buzz around Burberry as in the early stages of Gucci’s turnaround. The Italian designer’s new products represent about 70% of the range in stores now. That will increase to 80% by the end of March, which will provide a better read of his success.Before Thursday’s update, Burberry shares had sold off since July, although they recovered over the past month, as rival luxury groups posted resilient third-quarter sales.Still on a price-to-earnings basis, they trade at about 23 times, compared with about 24 times for the Bloomberg Intelligence luxury peer group.Until the group demonstrates that Tisci can deliver a revolution at the British luxury brand, that discount looks deserved.To contact the author of this story: Andrea Felsted at firstname.lastname@example.orgTo contact the editor responsible for this story: Melissa Pozsgay at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Tencent (TCEHY) reports weak third-quarter 2019 earnings due to a slowing economy, and weakness in media advertising and computer games revenues.