Shanghai Comp and Hang Seng Up as Market Projects More Stimulus to Follow

shanghai hang seng


Reportedly due to CPI lower than projected, at 2.3% vs. projected 2.4% & below target of 2.5%, giving room for more easing expectations, the Hang Seng & CSI rose. The HSEIC index, up 1.17% saw a rise in 38 of its 40 constituents, with the cement majors CNBM, HK 03323, and Anhui Conch, HK 00914 showing outsize gains of 8.4% an 4.4%, respectively.  Given the horrible operating losses of these two thanks to rampant over- supply of cement and cutthroat competition, it would appear to be a short-lived bounce. Dong Feng, HK 00489, one of the big 3 China autos, also rose 4.6% apparently thanks to stimulus hopes, with no news and car sales in China at a much muted level in 2015 compared to prior years. China Vanke HK 02202 , also on this index, as its A shares continued to be suspended, showed an increase of 4%.  (See my earlier report on ownership battle.)

Latest filings showed Security firms diverging – 1st quarter limited performance reports, compared to 2015, showed Haitong dropping over 34% while Citic Group continued to grow:

Haitong Citic


As is usual with quarterly updates for these companies, no explanations or comparisons were given.

Also in filings – Huishang Bank, HK  03698, extended its proposal to issue new A shares as the original proposal approached expiration. (Orig. May 13, 2015 – shares have since declined from 4.05 hkd to 3.82 hkd.)

Shanghai Fosun Pharma, HK 02196, announced a renewable bond issuance approval to a maximum of 6 Billion rmb primarily for working capital and principal and interest payments.

China Eastern Air, HK 00670, going for yet another round of super-short term notes, 4th tranche 2016, 3 billion rmb, 259 day maturity, 2.5% interest.  Proceeds to refinance existing bank loans. Nothing new on the progress of the  “non-public issuance of A-shares”, approved by CSRC on 1/8/2016. That new share proposal totalled 2.3Billion shares, about a 17% increase in combined A and H shares after including the H shares sale to Delta, NYX DAL.

Troubled developer Kaisa Group, HK 01638, announced a further delay in filing its 2015 annual and semi-annual reports.  The stock has been suspended since March of 2015 & restructuring efforts have been ongoing with no final resolution.

Cement giant CNBM, hk  03323, announced continued interest in tabloid worthy  Shanshui Cement , HK 691,  with suspended H shares since 5/2015, thanks to disputed management hijacking, record stealing, dueling interests, police inquiries and more.

More “non-public issuance of A-Shares”.  China International Marine Containers, CIMC, HK 02039, plans to issue about 386Mill shares to raise maximum of 6B rmb for various projects including financial leasing company and working capital along with property development and investment.  Proposed buyers are the usual unnamed 10 lucky investors with a 12-month lock-up.  Shares would increase by about 13%.




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