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Gigi Choy

Deb Price

Kathleen Magramo

Good morning traders --
Hong Kong stocks rallied on optimism lockdowns may be working. China markets were closed today.
Catch up on the action 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, Deb Price and Kathleen Magramo in Hong Kong 
Note: Information in this blog is on an "as is" basis and not a solicitation or offer to buy or sell any securities or otherwise; and is not investment/professional advice or services in this regard.  It is subject to our T&C.  SCMP (as defined in T&C) shall not be liable for any loss, damage and costs relating to any investments in securities or otherwise in this connection

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Hong Kong stocks see big gains as daily deaths decline in US, other coronavirus hotspots

A medical worker in protective clothing moves the body of a deceased patient to a refrigerated overflow morgue outside the Wyckoff Heights Medical Center in Brooklyn, New York, U.S., on April 3, 2020. Photo: Bloomberg 

Business


Galaxy Entertainment, Sands China jump in change in luck 
Chinese telecom, Hong Kong utilities and new economy are hot sectors



New economy stocks like Ali Health and Ping An Good Doctor are on fire today. HSBC rises after its three-day tumble last week. China markets closed for holiday.


Hong Kong stock market

Live

Here's what we are watching this morning:
US Friday markets/ What futures foretell
--The S&P 500 fell 1.5 per cent, the Nasdaq dropped 1.5 per cent and the Dow Jones Industrial Average shed 1.7 per cent.
-- Hong Kong futures slipped 0.5 per cent while the FTSE China A50 futures rose 1.1 per cent
IPO debuts: None to note
Economic statistics: None to note
Central Bank action: None to note
Earnings: No major earnings scheduled

 



Morning guidance

China’s WH Group (288 HK) stocks have been trading at a valuation discount due to investors' concern on its high exposure to commodity price and high gearing, according to Jefferies.
  The world’s largest pork producer and owner of Smithfield Foods of Virginia reported 31 per cent recurring net profit growth in 2019 within a volatile market, with record high pork prices in China increasing the value of US exports, driving the company's resilient China packaged meat margin.
Jefferies said this indicates that WH Group is more like a branded business rather than a commodity business, which can easily be substituted for one another.
WH Group management expect a year-on-year stable margin in 2020, with continued sales and profit growth in Europe.
Jefferies believes the stock is undervalued and kept its "buy" rating for WH Group with a target price of HK$10.80.
-- Gigi Choy


World’s top pork processor WH Group shares ‘undervalued’, Jefferies analysts say

South Korea’s Kospi Index jumped 2.3 per cent. The tech-heavy Kosdaq rose 2.3 per cent. A government report on Wednesday showed exports slipping more than expected by 0.2 per cent in March from a year earlier.
Tokyo’s Nikkei 225 shot up 2.5 per cent.
Japan will give 200,000 yen (US$1,850) to each eligible household over the coronavirus, Kyodo reported. Prime Minister Shinzo Abe said Friday that he will roll out a stimulus package this week to help the economy, which was already near a recession, according to Reuters.
Abe has resisted calls to declare the world’s third-largest economy in a state of emergency.
Australia’s S&P/ASX200 rose 2.5 per cent after losing 1.7 per cent on Friday. The country’s stocks have been especially volatile as it faces its worst recession in 90 years.
New Zealand’s S&P/NZX50 slid 2 per cent.
Singapore’s Straits Times Index rose 1.2 per cent. The city-state will close schools and most workplaces this week, its strictest measures yet to to contain the new coronavirus.
Prime Minister Lee Hsien Loong said on Friday that more support for households and businesses was on the way, with new stimulus measures announced by Deputy Prime Minister Heng Swee Keat in parliament today.
-- Gigi Choy

 



Asia-Pacific markets mostly up

Oil futures fell after the Organization of the Petroleum Exporting Countries (OPEC) delayed its meeting originally scheduled for Monday.
Top crude oil exporters Russia and Saudia Arabia want the US to join in the discussion but US President Donald Trump has shown little interest in joining.
International benchmark Brent crude futures were down 4.5 per cent this morning and US West Texas Intermediate (WTI) crude futures fell 5.9 per cent. 
Last week, oil surged as Saudi Arabia called a meeting between OPEC and its allies, known as OPEC+, signalling hopes on a production cut.
However, crude oil prices have fallen 50 per cent year to date, as the economic impact of the coronavirus pandemic has sapped demand exacerbated by the reluctance of oil producers to cut output.
-- Kathleen Magramo


Oil futures fall, OPEC+ meeting delayed 

The Hang Seng Index gained 1 per cent to 23,472.10.
  HSBC (5 HK) rose 0.8 per cent to HK$38.20, while Standard Chartered jumped 2.9 per cent to HK$39.45. Both suffered steep falls last week after announcing they were cancelling their dividends on Wednesday.
Index heavyweight Tencent (700 HK) rose 0.8 per cent to HK$379.40.
Insurers Ping An (2318 HK) went up 0.5 per cent to HK$75.35 and AIA (1299 HK) gained 1 per cent to HK$70.95.
  Meanwhile, e-commerce giant Alibaba (9988 HK), which owns the South China Morning Post, jumped 1.4 per cent to HK$186.30.
  -- Gigi Choy


Hong Kong opens up, HSBC and Standard Chartered gain

Oil stocks were mixed after the OPEC+ meeting was postponed to Thursday from Monday.
CNOOC (883 HK), China’s dominant offshore oil and natural gas producer, gained 1.2 per cent to HK$8.66.
PetroChina (857 HK), the nation's largest oil and gas producer, climbed 2.1 per cent to HK$2.95.
Meanwhile, Sinopec (386 HK), the country’s biggest oil refinery, stayed flat at HK$2.89.
-- Kathleen Magramo


Oil-linked stocks mixed in Hong Kong

New economy stocks are mixed, including Maoyan Entertainment (1896 HK), which fell 1.6 per cent to HK$8.83, and Ali Health (241 HK), which rose 1 per cent to HK$14.48.
  Ping An Good Doctor (1833 HK) jumped 1 per cent to HK$82.20.
Chinese smartphone and home appliance maker Xiaomi (1810 HK) slid 0.6 per cent to HK$10.20.
NetDragon Websoft (777 HK), a Chinese online gaming company offering online learning products, went up 0.6 per cent to HK$19.38.
Meanwhile, Kingsoft (3888 HK), a software company with cloud and business management services, increased 1.7 per cent to HK$23.80.
-- Gigi Choy


Hong Kong’s new economy stocks mixed

Tokyo's Nikkei 225 shot up in early trading after reports said the Japanese government intends to declare a state of emergency this week to contain the spread of the new coronavirus.
Japanese Prime Minister Shinzo Abe will declare a state of emergency as early as Tuesday and is likely to announce his plans today, the Yomiuri newspaper reported.
The move will target big cities such Tokyo and Osaka, a government official told the Associated Press.
Japan’s biggest-ever stimulus package worth 60 trillion yen (US$550 billion) may also be announced Tuesday, according to Bloomberg.
The country has reported more than 3,000 domestic coronavirus infections and at least 70 deaths.
-- Gigi Choy


Japan set to declare a state of emergency as coronavirus cases surge

Recovery from the economic fallout of the coronavirus pandemic may not improve in the next six months, said financial secretary Paul Chan Mo-po, adding that the government will offer “comprehensive” aid to protect businesses and jobs across all sectors as the outbreak’s impact hits the economy. 
“Based on the current situation, businesses and individuals should expect that the economic situation may not improve in the next six months,” Chan wrote in his Sunday blog.
Chan emphasised “virtually all industries” in Hong Kong have taken a hard hit from the global pandemic and called on landlords to take on more “social responsibility” to reduce rents in order for businesses to survive.
Hong Kong’s key sectors have hit record lows. Retail sales have plunged 44 percent  year-on-year in February while visitor arrivals plummeted 96.4 per cent over the same period, according to the latest official figures.
Meanwhile, the city continues to deal with rising coronavirus cases. The Centre for Health Protection reported 28 new cases of Covid-19 on Sunday, bringing the total tally in Hong Kong to 890 cases. Four people have died.
-- Kathleen Magramo


Hong Kong’s recovery may take six months: Paul Chan, financial secretary

Macau casino operator shares are mostly down, as authorities further tighten travel restrictions in a bid to curb the rise of coronavirus infections.
  The bus service between Macau and Hong Kong has been suspended starting today, ending the last public transport that had been connecting the two special administrative regions. Ferry services were halted last month.
  Gambling revenue in the world's biggest gambling hub fell 79.7 per in March year-on-year to 5.3 billion patacas (US$664 million), according to government figures.
Galaxy Entertainment (27 HK) rose 1 per cent to HK$41.40, while Sands China (1928 HK) fell 1.6 per cent to HK$26.85.
MGM China (2282 HK) slid 1.5 per cent to HK$7.35.
  Melco International (200 HK) plunged 2.7 per cent to HK$10.74. Wynn Macau (1128 HK) dropped 0.7 per cent to HK$11.38.
  Macau has reported at least 44 coronavirus cases and no deaths.
  -- Gigi Choy


Macau casinos stocks mostly down as HK-Macau bus service is suspended

It is trading ahead to 23.431.43, led by utilities and commerce and industry. Of the Hang Seng’s 50 constituent members, 41 are showing gains.
After tumbling for three straight days last week after announcing it was cancelling its dividend, HSBC (5 HK) rose 2.4 per cent to HK$38.80.
Meanwhile, new economy stocks are advancing.
Ali Health (241 HK) shot up 6.6 per cent, Ping An Good Doctor (1833 HK) jumped 5 per cent, and Meituan Dianping (3690 HK) gained 1.2 per cent. 
-- Deb Price 


Hang Seng extends gains, rising 0.8 per cent; HSBC, new economy stocks rising

The Hang Seng gained 1.1 per cent to close the morning session at 23,493.21.
HSBC (5 HK) gained 2.2 per cent to HK$38.75 and Standard Chartered (2888 HK) jumped 3.1 per cent to HK$39.55. Both suffered steep falls last week after announcing they were cancelling their dividends on Wednesday.
  Tencent (700 HK) rose 0.7 per cent to HK$379.20, while Alibaba (9988 HK) went up 1.8 per cent to HK$187.
Insurers Ping An (2318 HK) rose 0.7 per cent to HK$75.55 and AIA (1299 HK) is down 0.6 per cent to HK$69.80.
-- Gigi Choy


Hong Kong up at midday break

Hong Kong stocks are extending gains in afternoon trading, on glimmers of hope in lockdowns and other global efforts against the coronavirus.
Ali Health (241 HK) shot up 7 per cent, Ping An Good Doctor (1833 HK) jumped 3.8 per cent, food delivery giant Meituan Dianping (3690 HK) gained 2.1 per cent.
Meanwhile, Tencent (700 HK) rose 1.5 per cent and Alibaba (9988 HK) climbed 2.8 per cent.
Among battered casinos, Galaxy Entertainment (27 HK) jumped 5.4 per cent. 
-- Deb Price


Hang Seng shoots up 2.2 per cent to 23,746.38

Australia’s ASX 200 shot up 4.3 per cent, Japan’s Nikkei 225 jumped 4.2 per cent, South Korea’s Kospi advanced 3.8 per cent, and the Kosdaq increased 3.9 per cent.
Meanwhile, Singapore’s Straits Times Index rose 3.6 per cent.
Bucking the trend was New Zealand’s S&P/NZX50, which slid 1.7 per cent.
-- Gigi Choy


Asia-Pacific stock rally gaining pace

China Eastern (670 HK)  rose 1.1 per cent to HK$2.66.
China Southern (1055 HK)  fell 0.2 per cent to HK$3.28.
Air China (753 HK) increased 0.2 per cent to HK$4.86.
Meanwhile, Hong Kong’s flag carrier Cathay Pacific Airways (293 HK) stayed flat at HK$8.19. The airline has cut its flights by 97 per cent.
-- Gigi Choy


Chinese airlines, Cathay Pacific shares mixed

“More and more people have turned optimistic, as they believe cases appear to be peaking in Europe and the US, and that OPEC and Russia are very close to a deal of a production halt,” said Alan Li, portfolio manager at Atta Capital. 
“Those trends may further boost market sentiment. And people are looking at those sectors which will be benefit from the world stepping back to normal,” Li said.
The Hang Seng has gained 2.1 per cent, led by utilities. Hot sectors include new economy, with Ping An Good Doctor (1833 HK) shooting up 4 per cent and Ali Health (241 HK) jumping 5.5 per cent.  
-- Deb Price   


Bargain hunters looking for stocks that will do well in ‘normal’ world, says Alan Li

Singapore’s Finance Minister Heng Swee Keat announced the city-state's third stimulus package in less than two months to cushion the impact of the coronavirus pandemic.
  The latest measure, worth US$3.55 billion, took the country's total virus-related fiscal spending to a total of US$42 billion, or 12 per cent of GDP.
This amounts to a total drawdown of US$14.5 billion from the national reserves.
Heng – who is deputy prime minister and the presumptive successor to Prime Minister Lee Hsien Loong - said in parliament that the fresh measures would save jobs and help businesses resume operations quickly after the pandemic is contained.
Read full story here.
-- Gigi Choy   


Singapore unveils third coronnavirus stimulus package

Russia and Saudi Arabia are "very, very close" to a deal on oil production cuts, Russia's sovereign wealth fund chief told CNBC.
"I think the whole makret understands that this deal is important and it will bring lots of stability, so much important stability to the market, and we are very close,” Kirill Dmitriev, CEO of the Russian Direct Investment Fund said.
Opec and its allies were expected to discuss reductions in oil output on Monday. The virtual meeting has been postponed until Thursday.
-- Gigi Choy


Russia and Saudi Arabia ‘very, very close’ to an oil deal, Russia’s sovereign wealth fund chief told CNBC

The Chinese internet ecosystem of fun, convenience and health is expected to emerge even stronger in the “after-the-virus” world. And with related stocks now trading at bargain-basement prices, it’s time for aggressive investors to start selectively shopping, analysts say.
Lockdowns, work- and school-at-home orders, and coronavirus fears have focused consumers more than ever on their smartphones and other digital devices. Gradually, new habits and mindsets shaped by the pandemic will point toward which companies and their stocks will outperform.
“People should pick companies that can survive or excel in this new environment,” said Alex Wong, director of asset management at Ample Capital, who sees a “polarisation” in Hong Kong-listed stocks, with investors dumping traditional retail and travel for internet-connected stocks.
Technology stocks listed in Hong Kong and mainland China will benefit from a rise in demand for e-commerce, cloud services and the fifth-generation mobile network. Internet giants Tencent and Alibaba, which between them dominate everything from e-commerce to fin tech and cloud services in China, should do well, analysts say. So, should Kingdee International Software Group, which provides cloud services to businesses, they add. (Alibaba owns the South China Morning Post.)
Read full story here by the stocks team. 


‘After-the-virus’ stocks screaming ‘buy,’ analysts say

Shares of Macau casino operators gained, as hopes lockdowns are working lifted sentiment that the coronavirus pandemic can ultimately be defeated.
Galaxy Entertainment (27 HK) rose 3.9 per cent to HK$42.60, while Sands China (1928 HK) jumped 2 per cent to HK$27.85.
  MGM China (2282 HK) gained 2.1 per cent to HK$7.62.
  Melco International (200 HK) increased 2.5 per cent to HK$11.32. Wynn Macau (1128 HK) shot up 3 per cent to HK$11.80.
Gaming revenue has plunged in Macau due to travel restrictions to the city, the only place in China where gambling is legal.
-- Gigi Choy


Macau casino stocks jump on hopes lockdowns can work against virus

The Hong Kong stock market will be closed on Friday and next Monday for the Easter holiday. There will be no northbound and southbound trading on the Stock Connect.
-- Gigi Choy


Hong Kong market, Stock Connect to be closed Friday, Monday for holiday

The Hang Seng Index closed ahead by 2.2 per cent at 23,749.12.
HSBC (5 HK) rose 2.8 per cent to HK$38.95, while Standard Chartered (2888 HK) shot up 4.3 per cent to HK$40. Both suffered steep falls after announcing they were cancelling their dividends last Wednesday.
  Index heavyweight Tencent (700 HK) rose 1.3 per cent to HK$381.40.
Insurers Ping An (2318 HK) and AIA (1299 HK) both increased 0.9 per cent to HK$75.70 and HK$70.85, respectively.
  Meanwhile, e-commerce giant Alibaba (9988 HK), which owns the South China Morning Post, gained 2.7 per cent to HK$188.60.
-- Gigi Choy


Hang Seng closes up 2.2 per cent; HSBC, Standard Chartered see strong gains

Retail stocks are mixed with the sector hard-hit by months of often-violent anti-government protest and now by coronavirus-related travel restrictions and social distancing rules.
The city's February retail sales plummeted a record 44 per cent year-on-year, official data last week showed.
Sogo Department store operator Lifestyle International (1212 HK) slid 0.5 per cent to HK$6.21.
Jewellery retailer Chow Tai Fook (1929 HK) shot up 4.2 per cent to HK$5.40, while Sa Sa International (178 HK) rose 0.9 per cent to HK$1.13.
Cosmetic retailer Bonjour (653 HK) fell 1.8 per cent to HK$0.11.
-- Gigi Choy
