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Gigi Choy

Deb Price

Happy Friday, traders!
It's been another volatile week! Catch up on the day's news below!
And, hey, are you getting your Live Stocks Blog every morning via email? You can! Don't miss out on our coverage of Hong Kong and mainland markets each trading day! If you would like the Live Stocks Blog emailed to you each morning, click here. If you need to reach the stocks team, email deb.price@scmp.com.
-- Gigi Choy 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


Hong Kong, China stocks climb after big US market surge on policy steps against coronavirus

People line up to enter a Costco supermarket restricting customer flows amid the novel coronavirus outbreak in San Francisco Bay Area in the US on March 16, 2020. Photo: Xinhua


Business

Fed Chairman Powell says rebound in US economy could come in second half of year
Macau casinos take another hit 


Fed Chairman Powell says rebound in US economy could come in second half of year and vows more 'ammunition' for economy, if needed.


Stocks

China stock market

Hang Seng Index

Tencent

Coronavirus pandemic: All stories

Live

Federal Reserve chairman Jerome Powell, vowing to do whatever it takes on NBC’s Today Show, said the US economy could rebound in the second quarter of the year. The Fed has lowered its key benchmark to near zero and launched unlimited bond buying.
“We’re not going to run out of ammunition. That doesn’t happen,” Powell said.
“There is nothing fundamentally wrong with our economy,” Powell said. “We start in a very strong position. This is not something wrong with the economy.”
The US House could pass a US$2 trillion stimulus package as early as tonight, Hong Kong time. President Trump says he will sign it “immediately.”
-- Deb Price 


‘We’re not going to run out of ammunition,’ says US Fed chief Powell

On the US record level of unemployment claims -- more than 3 million:
“Jobless claims were horrible, and there’s no way to sugar coat that, but the market never lives in the present. The Fed’s bazookas appear to be filtering through, and that’s a massive positive the market is running with,” said Stephen Innes, chief global market strategist at currency trading platform AxiCorp.
  “By their policy design, the US dollar is starting to back off its rush, and most importantly, Signposts targeted by Fed policies have begun to show signs of less stress.
“So, while the jobless claims were gloomy, investors like what they see as the Fed bazookas shots appear to be hitting their targets,” Innes wrote in a fresh note. 
-- Deb Price   


‘Fed bazookas’ hitting targets, says Stephen Innes

Tokyo’s Nikkei 225, which jumped 8 per cent on Wednesday and fell 4.5 per cent on Thursday, up 2.5 per cent.  Seoul’s Kospi gained 2.7 per cent after its 1 per cent decrease on Thursday and a 5.9 per cent jump on Wednesday. The tech-heavy Kosdaq, which shot up 5.3 per cent on Wednesday and gained 2.2 per cent on Thursday, went up 3.8 per cent.  Australia’s S&P/ASX200, fell 0.4 per cent, after its 5.5 per cent increase on Wednesday and 2.3 per cent acceleration on Thursday.  New Zealand’s S&P/NZX50, which shot up 4 per cent on Wednesday and gained an additional 4 per cent on Thursday, gained 2.5 per cent.
-- Gigi Choy


Asia-Pacific markets mixed

Overnight markets/what futures foretell
-- Overnight, the S&P 500 closed 6.2 per cent higher, and the Dow Jones rose 6.4 per cent. The Nasdaq jumped 5.6 per cent. Europe’s Stoxx 50 Index gained 1.7 per cent.
-- Hong Kong’s Hang Seng’s futures rose 2.5 per cent, while the FTSE China A50 futures gained 1.3 per cent.
IPO debuts: C-Link Squared (1463 HK). Ucap Cloud Information Technology (688228 CH) and IAT Automobile Technology Co Ltd (300825 CH) .
Economic statistics: China's 4Q F Balance of Payments Current Account Balance at 9am to 3pm Hong Kong Time, China's February Industrial Profits year to date year-on-year at 9.30 Hong Kong Time and Bloomberg's March China Economic Survey at 10am Hong Kong Time.
Central bank action: Nothing major scheduled
Corporate events, earnings, meetings, news conferences: Earnings in Hong Kong include Bank of China (3988 HK), Bocom (3328 HK), China Galaxy Securities (6881 HK), China Resources Cement (1313 HK), China Resources Gas (1193 HK), China Shenhua (1088 HK), Citic (267 HK), Country Garden (2007 HK), Guangdong Invest (270 HK), Logan Property (3380 HK), PICC Group (1339 HK) and PICC P&C (2328 HK). Earnings in the mainland include Everbright Bank (601818 CH), Merchants Securities (600999 CH), GF Securities (000776 CH), ICBC (601398 CH), Orient Securities (600958 CH), Seazen Holdings Co Ltd (601155 CH), Shanghai Airport (600009 CH), Shenwan Hongyuan (000166 CH), Yonyou Network (600588 CH) and ZTE (000063 CH). Credit Suisse (2628 HK) is hosting its 23rd Annual Asian Investment Conference.


Morning guidance

The Hang Seng Index opened 1.6 per cent higher at 23,724.84.
The high turnover stock Tencent (700 HK) rose 1.7 per cent to HK$388.20.
  Meanwhile, e-commerce giant Alibaba (9988 HK), which owns the South China Morning Post, gained 2.2 per cent to HK$184.90.
  Insurers Ping An (2318 HK) increased 1.8 per cent to HK$77.35 and AIA (1299 HK) is up 2 per cent to HK$68.95.
--Gigi Choy


Hang Seng Index up at open

The Shanghai Composite rose 0.8 per cent at the open to 2786.03 and the CSI 300 of large caps rose 1 per cent to 3734.38.
The Shenzhen Component Index increased 1.1 per cent to 10269.80, while the tech-focused ChiNext Index in Shenzhen jumped 1.4 per cent to 1946.80.
Apple AirPod maker Luxshare Precision Industry (002475 CH) rose 1.5 per cent to 37.91 yuan in Shenzhen.
The world’s most valuable liquor distiller Kweichow Moutai (600519 CH) increased 1.8 per cent to 1,083.80 yuan in Shanghai.
-- Gigi Choy


Mainland markets open higher

China Citic Bank (998 HK) reported a net profit of 48.02 billion yuan, 7.9 per cent higher than last year.
The state-owned lender said net operating income was up 13.3 per cent in 2019, fetching 187.88 billion yuan on 127.27 billion yuan in net interest income, according to its annual results filed to the Hong Kong Stock Exchange late Thursday.
Ratio of non-performing loans was 1.65 per cent in 2019, down 0.12 percentage point as compared to that in 2018.  China Citic Bank plans to deliver a dividend of 0.239 per share.
It gained 0.8 per cent to HK$3.77.
-- Pearl Liu    


China Citic Bank rises after results

Air China (753 HK) was down 0.4 per cent to HK$5.25. Its stock in Shanghai (601111 CH) shed 0.7 per cent to 6.83 yuan.
China Eastern Airlines (670 HK) (600115 CH) gained 0.4 per cent to HK$2.81 but fell 1.2 per cent to 4.22 yuan in Shanghai, while China Southern Air (1055 HK) (600029 CH) shed 0.3 per cent to HK$3.41 and dropped 0.7 per cent to 5.33 yuan in Shanghai.
Meanwhile Hong Kong’s flag carrier Cathay Pacific Airways (293 HK) fell 0.1 per cent to HK$8.30.
China's aviation regulator cut the number of international flights in and out of the country in a move to limit the rising number of imported coronavirus cases.
The measures will take effect on Sunday.
China also banned most foreigners with valid visas from entering the country starting at midnight on Friday. Exceptions were made for diplomats and dignitaries.
-- Gigi Choy


Airlines mixed, with China capping flights in and out of the country

Chinese officials need to carefully design and manage prepaid voucher programmes aimed at boosting consumer spending in order to cushion the coronavirus slump, according to Bank of America analysts.
"Local governments need to strike a balance between potential benefits from a voucher program [versus] additional fiscal pressure," the bank said in a note.
Despite applauding the local initiatives, China’s central government has rejected the idea of a nationwide handout as outlandish. Instead, it has pumped money into the banking system, its state-owned sectors and its massive bureaucratic apparatus to bolster the economy.
-- Gigi Choy


Direct handouts from local governments in China need to ‘strike a balance’, Bank of America analysts say

C-Link Squared (1463 HK) shot up 58.7 per cent from an initial offering price at HK$0.63.
It is now trading at HK$1.
The company is a Malaysian-based outsourced document management services provider and related software application and enterprise software solutions developer.
Their customers are mainly companies from the banking, insurance and retail industries, which are mostly located in Malaysia.C-Link Squared plans to build a Tier 3 standard compliant data centre in order to cope with the additional hardware required for its operation.
-- Gigi Choy


C-Link Squared stock comes out with a bang in Hong Kong

Asia’s third-largest economy unveiled an economic stimulus package worth US$22.6 billion on Thursday to cushion the impact of the coronavirus pandemic.
The government will provide direct cash transfers and food security measures to help poor people hit by the nationwide lockdown.
Prime Minister Narendra Modi ordered a three-week "total lockdown" across the country, telling 1.3 billion Indians to stay at home in a drastic move to curb the spread of the deadly coronavirus.
-- Gigi Choy


India pledges US$23 billion stimulus to help the poor

CK Life Sciences International Holdings (775 HK) soared 36 per cent to HK$1.06 after saying it is introducing test kits to help Hong Kong’s hospitals and laboratories speed up their diagnosis of coronavirus infections.
It is the pharmaceutical unit of one of Hong Kong’s largest conglomerates.
Read full story here. 
-- Deb Price


CK Life Sciences soars on virus test kits

Hang Seng ahead 0.9 per cent; Shanghai gains 1 per cent

New economy stocks are gaining in Hong Kong.
Maoyan Entertainment (1896 HK), China’s top movie ticketing app, jumped 4.1 per cent to HK$10.38.
  Ping An Good Doctor (1833 HK), China’s leading online health care platform, rose 3.8 per cent to HK$71.
  ZhongAn Online P&C Insurance (6060 HK), which focuses on insurance related to health, airline, and autos, gained 3 per cent to HK$25.95.
-- Deb Price


Maoyan, Ping An Good Doctor among new economy stocks gaining

Edward Moya, senior market analyst at OANDA, expects the global market rally to fade. In the US, the Dow saw its biggest three-session rally since 1931.
“Investors have been comforted that the recent global fiscal and monetary stimulus efforts make this an ideal opportunity for scaling back into stocks,” Moya wrote in a fresh note.  He said the rally isn’t sustainable because the US virus situation is turning grim.  
“The US has more cases than either China or Italy and concerns are growing that the virus spread is about to accelerate across the country.  New York City is the key epicenter in the US and concerns are high that hospital systems are going to be overwhelmed a lot sooner as the number of patients hospitalized is skyrocketing,  
“Unfortunately, the virus spread will intensify into developing nations and the massive fiscal stimulus will fall short in preventing permanent damage to the economy.  It is hard to go against Fed and friends, but this economic downturn could be much worse than what many initially were hoping for,” he wrote in a fresh note. 
-- Deb Price    


Market rally will fade, predicts analyst Moya

Concerns are growing about the impact of the coronavirus on the world’s drug and medical device supply chain.
Already, India,the world's largest supplier of generic drugs, has halted the export of ventilators, sanitisers and personal protection equipment.
India has also banned the export of an antimalarial drug that has been tried with some success against the new coronavirus, but the American Society of Health-System Pharmacists (ASHP), which maintains a list of drug shortages, said hydroxychloroquine is in short supply.
  The Pharmaceuticals Export Promotion Council of India, however, said there was no shortage of hydroxychloroquine but that companies were acutely short of staff to run operations, Bloomberg reports.
Indian Prime Minister Narendra Modi this week ordered a 21-day lockdown to protect the world's second-most populous country from the fast-spreading virus.
  Health experts around the globe are racing to find treatments and preventive vaccines for the highly contagious, sometimes deadly respiratory illness caused by the new coronavirus.
Separately, drug manufacturers in China, the backbone of the world's drug supply, may have cut production by almost 40 per cent early this year due to the coronavirus outbreak there, according to a Bloomberg report.
-- Gigi Choy


Coronavirus wrecks havoc on global drug supply chains

The Shanghai Composite rose 1.4 per cent to 2,803.99 at the lunch break.
The CSI 300 of large caps jumped 1.6 per cent to 3,757.10.
The Shenzhen Component Index increased 1.1 per cent to 10,269.02, while the tech-focused ChiNext Index in Shenzhen increased 0.4 per cent to 1934.77.
Apple AirPod maker Luxshare Precision Industry (002475 CH) rose 1.9 per cent to 38.06 yuan in Shenzhen.
The world’s most valuable liquor distiller Kweichow Moutai (600519 CH) was 2.2 per cent higher to 1,088 yuan in Shanghai.
-- Gigi Choy


Chinese markets up at lunch break

Beijing-based IAT Automobile Technology (300825 CH) surged 44 per cent from 6.14 yuan to 8.84 yuan, hitting the upside limit for new IPOs on the Shenzhen main board.
It has designed and developed cars for almost every major Chinese automaker.
-- Gigi Choy


IAT Automobile Technology rises 44 per cent on debut

Of its 50 constituents, 39 have gains. All sub-sectors of the Hang Seng are ahead, led by properties.


Hang Seng up 1.2 per cent at break

Ucap Cloud Information Technology (688228 CH) shot up 62.8 per cent from 59.26 yuan to 96.45 yuan on the mainland's Nasdaq-style Star Market, also known as the Technology Innovation Board. There is no limit on debuts at the board.
  The big data and internet services company said it aimed to raise up to 994.6 million yuan in its initial Shanghai share offering.
-- Gigi Choy


Ucap Cloud Information Technology surges on debut

The Hang Seng is now up 0.5 per cent while the Shanghai Composite is ahead 0.9.
In China, infrastructure, ventilator and liquor stocks have gained more than 3 per cent each overall, according to gauges that track them.
In Hong Kong, property stocks are the top sector, seeing an overall gain of 1.9 per cent.
CK Hutchison Holdings (1 HK)  gained 6 per cent, while CK Asset (1113 HK) rose 4.5 per cent to HK$40.80, two of the top blue chip gainers.
Meanwhile, high-turnover Alibaba (9988 HK) has advanced 1.7 per cent to HK$184.
-- Deb Price


Hang Seng, Shanghai Composite gains narrowing

Aluminium products maker China Zhongwang (1333 HK) posted a 7.9 per cent decrease in revenue for 2019, to 23.58 billion yuan, when compared to 2018, and a 28.8 per cent fall in profit to 3.18 billion yuan over the same period.
It is the second largest industrial aluminium extruded product developer and manufacturer in the world and the largest in Asia and China.
"In 2019, the domestic and global environment remained complex and volatile with the rise of trade protectionism and frequent geopolitical events. The ongoing US-China trade war also cast a shadow on the global economy. However, China’s economic development is at the stage of industrialisation, and aluminium is still in demand in high-end and emerging markets. Driven by a series of favourable national macro policies, the operation of the aluminium industry is generally stable with improved market demand," it said in a filing to the Hong Kong stock exchange.
The stock plunged 8.1 per cent to HK$2.37.
-- Gigi Choy


China Zhongwang posts poor results, plunges

State-owned China Taiping Insurance (966 HK) posted a record high net profit of HK$9 billion, a 30.9 per cent increase when compared to 2018.
It proposed a final dividend HK$0.30 per share.
The company's life insurance business produced HK$13 billion in net operating profit, a 93.8 per cent gain year-on-year, which was mainly contributed by investment income and driven by new taxation policy.
"Covid-19 will inevitably hit the economy and society hard, especially the traditional agency distribution channels of life insurance companies. The decrease in agents’ face-to-face sales will affect the sales of protection insurance. However, it is especially at this time that future development shall be viewed in a comprehensive, dialectical and long-term perspective. Taken together, the fundamentals of China’s long-term economic improvement have not changed, and the impact of the epidemic is short-term and generally controllable. The epidemic will raise national insurance awareness and may help the long-term development of China’s life insurance industry," it said in a filing to the Hong Kong stock exchange.
Shares fell 4.6 per cent to HK$12.38.
-- Gigi Choy


China Taiping Insurance reports record high profit, but shares tumble

Global equity markets still haven’t hit a bottom, says Simon Powell, global head of thematic research at Jefferies. 
“I don’t think we are at a bottom yet, because I don’t think markets have completely digested the fact that this thing could cause a very, very significant reduction in global GDP. And I don’t think equity analysts have necessarily fully priced this is in yet in terms of earnings and outlook for almost all sectors in the global economy,” Powell said.
“We are in for a very turbulent 2020 ... Forget 2020 earnings for companies. It is now a question of whether they can survive with massively reduced demand for their services or products, and do they have the cash to keep going and can they retain their key employees.”
The global supply chain is in chaos, and that come after the trade war.
“When we come out of this, the world will be a different place,” he said.
He is concerned about a second wave of infections. And also that a generation of young workers may be partly disabled by the virus, which can do horrible damage to the lungs.
But he is optimistic over the long-term, because of the resilience and ingenuity of humankind, and the history of people overcoming pandemics. 
He suggests investors avoid energy and tourism-related sectors and instead look to consumer staples and companies with a lot of cash.
-- Deb Price    


Avoid energy, look to companies with a lot of cash, says Jefferies analyst Simon Powell

In the region, Tokyo’s Nikkei 225 closed up 3.9 per cent.
Seoul’s Kospi gained 1.9 per cent, while the tech-heavy Kosdaq increased 1.2 per cent.
Australia’s S&P/ASX200, closed down 5.3 per cent. It has seen a lot of volatility this week: It plummeted 5.6 per cent on Monday, then rose 4.2 per cent Tuesday, shot up 5.5 per cent on Wednesday, and gained 2.3 per cent on Thursday.
New Zealand’s S&P/NZX50, which shot up 4 per cent on Wednesday and gained an additional 4 per cent on Thursday, slid 0.8 per cent.
-- Gigi Choy


The Shanghai Composite rose 0.3 per cent to 2,772.20.
The CSI 300 gauge of large caps listed in Shanghai and Shenzhen increased 0.3 per cent to 3,710.06.
The Shenzhen Component Index fell 0.5 per cent to 10,109.91, while the tech-focused ChiNext Index in Shenzhen slid 1.2 per cent to 1,903.88 despite gains earlier at lunch break.
Apple AirPod maker Luxshare Precision Industry (002475 CH) dropped 0.8 per cent to 37.05 yuan in Shenzhen. Liquor distiller Kweichow Moutai (600519 CH) was 0.1 per cent higher to 1,075.50 yuan in Shanghai.
-- Gigi Choy


China stocks end mixed

Asia's third-largest economy risks recession due to nationwide lockdown, Bloomberg Intelligence analyst says.
India's nationwide lockdown "completely upends" Bloomberg Intelligence's pre-virus forecast for growth recovery into a severe economic collapse ahead.
  "Our base case projection of 1.3 per cent GDP growth for next quarter, made as of March 20 [before the total lockdown was announced this week], now appears optimistic. In our view, the economy faces a serious risk of recession in the quarters ahead for the first time since it liberalised in the early 1990s," Bloomberg Intelligence economist Abhishek Gupta wrote in a note.
-- Gigi Choy 


India’s lockdown may push it into recession, says Bloomberg Intelligence

Macau casino operators are down on their luck, as travel restrictions continue to upend the world's biggest gambling hub.
Galaxy Entertainment (27 HK) tumbled 4.4 per cent to HK$42.35, while Sands China (1928 HK) dropped 2.5 per cent to HK$29.30.
MGM China (2282 HK) slid 4.3 per cent HK$7.83. Melco International (200 HK) fell 5.8 per cent to HK$11.60. Wynn Macau (1128 HK) dropped 3.5 per cent to HK$12.26.
China has not resumed a visa programme that allows all-important mainland tourists to go to the neighbouring city, a special administrative region. Meanwhile, Macau is restricting entry by non-residents as it tries to control spread of the coronavirus.
 -- Gigi Choy 


Macau casinos take yet another hit

As analysts debate when markets will -- or have -- hit a bottom, another discussion is back: When are you actually out of a bear and into a bull market?
A "bull market" is generally recognised as a rising stock market in which the price of an asset or security continues to go up for an extended period of time.
Most commentators and analysts consider a situation in which stock prices have risen by at least 20 per cent from their most recent low to be a "bull market".
The Dow Jones Industrial Average technically just clawed its way out of a "bear market", which is the opposite of a "bull market".
A market become a bear when the price of securities fall by over 20 per cent from recent highs. The Dow fell into bear territory just two weeks ago. So, that’s not extended.
China, where the coronavirus pandemic first broke out, is home to the world’s only two major stock markets that have not tumbled into bear territory, Shanghai and Shenzhen.
-- Gigi Choy


Bull? Bear? What just happened with the Dow Jones benchmark?

Hong Kong's benchmark finished up 0.6 per cent at 23,484.28.
The high turnover stock Tencent (700 HK) rose 0.2 per cent to HK$382.40.
Meanwhile, e-commerce giant Alibaba (9988 HK), which owns the South China Morning Post, increased 1.7 per cent to HK$183.90.
Insurers Ping An (2318 HK) slid 0.1 per cent to HK$75.90 and AIA (1299 HK) jumped 1.7 per cent to HK$68.75.
--Gigi Choy


Hang Seng Index closes with minimal gains

The Hang Seng Index closed up 0.6 per cent at 23,484.28, to finish with a weekly gain of 3 per cent. 
Friday’s performance was a tame ending to a volatile week.
The Hang Sang plunged 4.8 per cent on Monday, rose 4.5 per cent on Tuesday, gained  3.8 per cent on Wednesday, and slipped 0.7 per cent on Thursday. 
-- Gigi Choy
