SHENZHEN, CHINA – MARCH 09: View of high commercial and residential buildings on March 9, 2016 in Shenzhen, China. General economic slowdown continues in China while the property price and stock bubble faces risk. (Photo by Zhong Zhi/Getty Images)
Zhong Zhi | Getty Images News | Getty Images
Shares of most Hong Kong-listed Chinese property stocks surged to their highest levels in over a year, as China’s stimulus rally continues.
Shares of other real estate developers also saw significant gains. Shimao Group skyrocketed over 87% while Kaisa Group jumped 40.48%, both notching their highest prices in more than a year.
The wider Hang Seng Index added 6%, while the Hang Seng Mainland Properties Index surged over 14%. Mainland Chinese markets are closed for the Golden Week holiday.
The continued drag from the property sector will leave a sizable shortfall in demand behind, keeping growth below target.
Over the weekend, major cities in mainland China introduced easing measures to enhance homebuyer confidence, following a series of policy stimulus initiatives from the central bank last Tuesday.
Guangzhou’s city government announced that all restrictions on home purchases would be removed starting Monday. Shanghai’s reduction of the required tax-paying period also came into effect on Tuesday. Shenzhen has also relaxed purchasing restrictions, allowing buyers to purchase one more apartment in select districts.
While these measures will help stabilize the property market, lifting prices and reviving demand will be a tall order, Morgan Stanley wrote in a note published Wednesday.
“The continued drag from the property sector will leave a sizable shortfall in demand behind, keeping growth below target,” the investment bank’s Asia-Pacific economists wrote.
Chinese officials have ramped up support to alleviate financial pressures on households and stabilize the embattled real estate market. However, these previous initiatives have not resulted in significant turnarounds.
A MLB store in the Myeongdong shopping district in Seoul, South Korea, on Saturday, March 9, 2024.
Bloomberg | Bloomberg | Getty Images
SINGAPORE — Asia-Pacific markets opened lower Wednesday morning, following a poor start to the trading month on Wall Street that saw major indexes fall amid rising Middle East tensions.
Australia’s S&P/ASX 200 opened down 0.2%, while Japan’s Nikkei 225 started the trading day lower by 1.5%. South Korea’s Kospi fell 1% at the open, while the small-cap Kosdaq was down 0.8%.
Hong Kong’s Hang Seng index futures were at 20,768, lower than the HSI’s last close of 21,133.68. Markets in Mainland China were closed Wednesday and will remain closed for the rest of the week due to the Golden Week holiday.
Traders in Asia were assessing data on consumer inflation out of South Korea. The country’s consumer price index rose 1.6% in September from a year earlier, data showed Wednesday morning, missing expectations by economists polled by Reuters who expected a rate of 1.9%.
Israeli Prime Minister Benjamin Netanyahu said Iran’s missile attacks had failed and vowed retaliation. “Iran made a big mistake tonight — and it will pay for it,” he said, according to NBC News, adding “the regime in Iran does not understand our determination to defend ourselves and our determination to retaliate against our enemies.”
—CNBC’s Brian Evans and Alex Harring contributed to this report.
A man walks along The Bund during the passage of Typhoon Bebinca in Shanghai on September 16, 2024. The strongest storm to hit Shanghai in over 70 years made landfall on September 16, state media reported, with flights cancelled and highways closed as Typhoon Bebinca lashed the city with strong winds and torrential rains.
Hector Retamal | Afp | Getty Images
Asian markets opened mixed Monday, with Hong Kong stocks falling as investors assessed downbeat economic data from China, while several key markets were closed for holidays.
Hong Kong’s Hang Seng index fell 0.76% on open, after China released a slew of worrying economic data over the weekend, with August factory output, retail sales and investment numbers missing expectations. Urban jobless rate rose to a six-month high while year-on-year home prices fell at their fastest pace in nine years.
Investors also await the Federal Reserve’s policy meeting on Tuesday and Wednesday where the central bankers are expected to make their first interest rate cut since 2020
Markets in mainland China and South Korea were closed for Mid-Autumn festival. Japan markets were closed for Respect for the Aged Day.
Typhoon Bebinca has led to cancellation of hundreds of flights in China and Shanghai is expected to be hit by the strongest storm since 1949.
Asian investors also await a swath of key data and central bank decisions from the region.
Japan’s inflation is expected to tick higher in August, according to a Reuters poll, backing the case for the Bank of Japan to stay hawkish as the board sets its policy on Friday.
The Japanese yen strengthened Monday morning to trade at 140.49 against the greenback. If the yen holds these levels, the currency will close at its strongest in more than a year.
China is poised to set its one- and five-year loan prime rates on Friday. The one-year rate, which affects most new and outstanding loans, is currently at 3.35%, while the five-year rate, that influences the pricing of mortgages, is currently at 3.85%.
The sails of the Opera House are illuminated with projections on the opening night of Vivid Sydney 2023 in Sydney, Australia, on Friday, May 26, 2023.
Anadolu Agency | Anadolu Agency | Getty Images
Asia-Pacific markets are set to open higher on Friday, extending gains from Thursday as Wall Street’s tech rally continued.
In Asia, investors will react to August inflation figures out from India late Thursday, with showed that the consumer price index rose 3.65% year on year, rising from a five-year low. This was above July’s revised figure of 3.6% and also beat expectations of 3.5% from economists polled by Reuters.
Australia’s S&P/ASX 200 is set to rise and breach its all-time closing high of 8,114.7, with futures standing at 8,115 compared to from its last close of 8,075.7.
Japan’s Nikkei 225 could go either way based off futures data, with the contract in Chicago at 36,945 and its counterpart in Osaka at 36,660 compared to the previous close of 36,833.27.
Hong Kong Hang Seng index futures were at 17,294, higher than the HSI’s last close of 17,240.
Futures for mainland China’s CSI 300 stood at 3,176, just slightly higher than the index’s last close, a near six-year low of 3,172.47 on Thursday.
Thursday saw the last major data point for the U.S. economy before the Federal Reserve meeting next week, as the country’s producer price index rose 0.2% month on month, in line with expectations from Dow Jones. On a year-on-year basis, headline PPI rose 1.7%.
—CNBC’s Pia Singh, Jeff Cox and Sarah Min contributed to this report.
New models of the Apple iPhone 16 are displayed after Apple’s “It’s Glowtime” event in Cupertino, California, September 9, 2024.
Nic Coury | AFP | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
Export growth in China China’s exports in August rose 8.7% year on year, in U.S. dollar terms, beating Reuters’ estimates of a 6.5% rise. Exports to the EU grew 13% from a year earlier, the most among China’s major trading partners, according to CNBC calculations of official data. Imports growth at 0.5% fell short of analysts’ expectations.
New iPhones Apple unveiled lots of new products on Monday night. Highlights: the iPhone 16 Pro and Pro Max get larger screens, while their non-pro siblings finally get the Pro’s “action” button; the freshly redesigned Apple Watch Series 10; AirPods 4 earbuds. Apple’s AI features will launch in beta on the new iPhones — investors will monitor if they push up flagging iPhone sales.
$400 million hit to Goldman Goldman Sachs will post a roughly $400 million pretax hit to its third-quarter results, said CEO David Solomon at a conference on Monday, as the bank winds down its ill-fated foray into consumer banking. Those ventures include Goldman’s GM Card business and a separate portfolio of loans.
[PRO] Stocks to ride out shaky September September is historically the worst month for stocks. It’s the only month during which markets fell for four consecutive years. The volatility we’ve experienced at the start of the month seems to continue this unwelcome trend. Still, there are some steady stocks investors can consider to ride out September’s roller coaster.
Maybe all it takes are shiny new things to lift our mood and take our minds off recession fears.
I’m jesting — but just partially.
Apple on Monday launched sleek new iPhones, watches and earphones. The excitement of the event and the prospect of having something look forward to may have lifted market sentiment.
Detractors who think that’s a far-fetched assertion should remember Apple dominates more than half of smartphone shipments in the U.S., according to Counterpoint Research. Further, a 2023 Bloomberg survey found 79% of Gen Zers prefer iPhones over other smartphones, implying that Apple’s market share could grow more as that demographic gains earning power.
True, post-event, Apple shares just crawled up 0.04%. But, as CNBC’s Kelly Evans points out, the Cupertino-headquartered company’s stock tends to fall after product announcements.
This reversal of the trend offers a glimmer of hope that Apple’s plans to integrate AI into its phones will rejuvenate iPhone sales, which have been slumping amid increased competition from Chinese brands.
And when the S&P 500’s biggest constituent is experiencing favorable winds, other stocks will also benefit from its slipstream.
Apart from Apple’s announcement, there wasn’t any other material news that would have impacted markets.
Of course, Apple’s event is not the sole reason markets rose yesterday. Last week’s broad sell-off presents investors with opportunities to pick up stocks at a relatively cheaper price, which would induce a rebound rally.
That said, the consumer and producer price index reports coming out Wednesday and Thursday, respectively, are concrete pieces of data that have the potential to affect markets dramatically.
They’ll also let us know if we can afford those shiny new things that Apple’s dangling in front of us.
– CNBC’s Pia Singh and Lisa Kailai Han contributed to this story.
JD.com set up an Innovative Retail division that houses its grocery business 7Fresh.
Bloomberg | Bloomberg | Getty Images
Hong Kong-listed shares of Chinese online retailer JD.com climbed 1.2% on Wednesday, outperforming the decline on the Hang Seng index after the firm announced a $5 billion buyback late Tuesday.
U.S. listed shares of the firm rose 2.24% on Tuesday after the announcement. Both JD.com’s Hong Kong and U.S. shares have dropped about 20% year to date.
In comparison, Hong Kong’s benchmark Hang Seng index was down about 0.82% Wednesday, but is up about 4% for the year so far.
The announcement is JD.com’s second buyback this year, after announcing a $3 billion buyback in March.
In response to the move, Chelsey Tam, senior equity analyst at Morningstar, said that the decision to announce the share buyback is “not surprising.” She explained, “It is a common theme in China when share prices and growth are low.”
China’s e-commerce sector has been dogged by a slow domestic economy.
Earlier this month, Alibaba’s second-quarter results missed expectations on both the top and bottom lines. On Monday, Temu-owner Pinduoduo saw its worst ever session after its second-quarter results missed both revenue and earnings per share expectations.
The momentum in Japan markets were largely driven by the country’s technology and financial sector.
Doctoregg | Moment | Getty Images
Japan’s major indexes gained more than 2% on Tuesday as markets resumed trading after a holiday.
The benchmark Nikkei 225 jumped 2.72% higher and breached 36,000 for the first time since Aug. 2. The broader Topix gained 2.25%.
The momentum was largely driven by the country’s technology and financial sectors, with Rakuten Group and Trend Micro leaping more than 8% and 6%, respectively.
The country’s parliament plans to hold a special session next week to discuss the Bank of Japan’s decision to raise interest rates last month, Reuters reported, citing government sources.
South Korea’s Kospi dipped 0.2%, while the small-cap Kosdaq lost 1.57%.
Wages in Australia rose 0.8% in the quarter ended June, the slowest pace since the same quarter a year earlier, compared with estimates of a 0.9% rise. Wages rose 4.1% on an annual basis.
Hong Kong’s Hang Seng index kicked off the trading day with a 0.4% gain, while mainland China’s CSI 300 opened 0.06% higher.
In Southeast Asia, Singapore reported its economy grew 2.9% in the second quarter from a year ago, in line with the advance gross domestic product estimate released in July. The Ministry of Trade and Industry cited strength in the wholesale trade, finance and insurance as well as the information and communication sectors. The city-state also said it sees 2024 GDP growth of 2% to 3%, versus its previous forecast of 1% to 3%.
U.S. markets grappled with a choppy session overnight as investors braced for key inflation data.
The S&P 500 concluded the day flat at 5,344.39, while the tech-heavy Nasdaq Composite climbed 0.21% to close at 16,780.61, led by shares of Nvidia soaring 4%. On the flipside, the Dow Jones Industrial Average fell 140 points or 0.36% to conclude at 39,357.01.
Traders await Wednesday’s consumer price index for July, a key indicator of the health of the U.S. economy. Investors will analyze the data for indications the Federal Reserve can begin cutting rates in September.
—CNBC’s Brian Evans and Tanaya Macheel contributed to this report.
An electronic stock board displayed inside the Kabuto One building in Tokyo, Japan, on Thursday, June 27, 2024.
Bloomberg | Bloomberg | Getty Images
Japan’s Nikkei 225 nosedived almost 5% on Friday, with most Asia-Pacific markets lower after a sell-off on Wall Street overnight.
The Nikkei extended its 2.62% slide on Thursday to lead losses in the region and reach its lowest level since February. The Topix also plunged more than 5%.
Some heavyweight names that are seeing losses include Softbank Group, which tumbled over 7%. Trading houses Mitsui and Marubeni saw losses of over 9% and 7%, respectively.
Japanese government bond yields fell, with the yield on the benchmark 10-year JGB falling below the 1% mark and hitting it lowest level since June 20.
South Korea’s Kospi tumbled 2.6%, while the small-cap Kosdaq plunged 2.56%.
However, K-pop stocks were a bright spot for the market. Shares of three of the four listed K-pop companies defied the broader sell-off to climb on Friday, led by Hybe after the firm announced its new business strategy on Thursday after market hours.
Australia’s S&P/ASX 200 was down 2.02% , retreating from its all-time high achieved on Thursday.
Hong Kong’s Hang Seng index futures were at 17,047, lower than the HSI’s last close of 17,304.96.
Separately, South Korea’s inflation numbers for July came in slightly higher than expected, with the country’s consumer price index climbing 2.6% year on year, compared to the 2.5% expected by economists polled by Reuters.
The gloomy sentiment in Asia markets comes after a sell-off on Wall Street in Thursday’s trading session, which saw all three major U.S. indexes plunge on recession fears.
The Russell 2000 index, the small-cap benchmark that has rallied lately, dropped 3%.
In the U.S., fresh data stoked fears over a possible recession and apprehensions that the Federal Reserve could be too late in cutting interest rates.
Initial jobless claims rose the most since August 2023. The ISM manufacturing index, a barometer of factory activity in the U.S., came in at 46.8%, worse than expected and signaling economic contraction.
After these data, the 10-year Treasury yield dropped below 4% for the first time since February.
—CNBC’s Pia Singh and Samantha Subin contributed to this report.
Cherry trees in bloom near the Nippon Budokan in Tokyo, Japan, on Sunday, April 7, 2024.
Bloomberg | Bloomberg | Getty Images
Asia-Pacific markets rose on Wednesday after the Dow Jones Industrial Average and the S&P 500 closed at record highs overnight as traders become increasingly bullish on interest rate cuts.
Japan’s Nikkei 225 rose 0.23%, while the Topix was up 0.44% after the Reuters Tankan survey showed an increase in business optimism among large Japanese manufacturers.
The manufacturing index was at +11, up from +6 in the previous month. However, confidence among non-manufacturers dipped from +31 to +27.
Separately, Japanese authorities likely intervened in the currency market last Thursday and Friday, spending a total of 6 trillion yen ($37.9 billion) over the two days, according to Reuters.
The yen is currently at 158.3 against the U.S. dollar. The currency weakened to 161.82 last Wednesday before strengthening to as much as 157.41 the following day.
Australia’s S&P/ASX 200 gained 0.29%, just shy of its all time high of 8,037.3 points.
South Korea’s Kospi was trading close to the flatline, and the small-cap Kosdaq climbed 0.14%.
Hong Kong’s Hang Seng index futures were at 17,843, higher than the HSI’s last close of 17,727.98.
Singapore’s non-oil domestic exports slipped more than expected in June, marking a fifth straight month of declines. They fell 8.7% year on year compared to a 1.2% decline expected by economists polled by Reuters.
On a month-on-month basis, Singapore’s non-oil domestic unexpectedly dropped 0.4%, compared with a expectations of a 4.1% growth.
Overnight, the Dow blue-chip index gained 1.85%, closing at 40,954.48, while the broad-based S&P 500 added 0.64% to wrap the day at 5,667.20. The Nasdaq Composite rose 0.20%.
A block of industrial factories sits among newer apartment buildings along a canal in Tokyo, Japan.
Photo By Michael Russell | Moment | Getty Images
Asia-Pacific markets opened higher on Wednesday, after U.S. Federal Reserve Chair Jerome Powell noted progress on inflation, but reiterated patience on cutting rates at a central banking forum.
Traders in Asia await June business activity data from India, Japan and China which is set for release later in the day.
Japan’s Nikkei 225 was up 0.45% extending its run above the 40,000 mark, while the broad-based Topix was up 0.11%.
South Korea’s Kospi started the morning up 0.50%, while the Kosdaq Index rose 0.8%.
Australia’s S&P/ASX 200 opened up 0.17% in early trade.
Hong Kong Hang Seng index futures were at 17,764, lower than the HSI’s last close of 17,769.14.
Sydney Harbour taking in the Harbour Bridge, Opera House and ferries at sunrise during the COVID-19 pandemic on April 20, 2020 in Sydney, Australia.
James D. Morgan | Getty Images News | Getty Images
Asia-Pacific markets mostly rose Wednesday as investors anticipate Australia’s inflation numbers for May and Singapore’s May manufacturing output data.
Australia’s core inflation rate is expected to come in at 3.8% in May, according to a Reuters poll of economists. This is higher than the 3.6% recorded in April.
Should inflation come in higher than expected and spur the Reserve Bank of Australia to raise rates, it would be the first major Asia-Pacific central bank to do so in an environment where investors are waiting for rate cuts, barring Japan. RBA Governor Michelle Bullock recently revealed the central bank discussed hiking rates at its last meeting.
The RBA has two inflation readings to consider — June 26 and July 31— before its next meeting on Aug. 6.
Singapore’s May factory output will also be released Wednesday, with a Reuters poll of economists predicting a 2% year-on-year growth rate, as compared to a 1.6% decline recorded in April.
Japan’s Nikkei 225 gained 0.50% in morning trade while the broad-based Topix was up marginally. South Korea’s Kospi gained 0.16% while the small-cap Kosdaq traded close to the flatline.
Hong Kong Hang Seng index futures were at 17,958, lower than the HSI’s last close of 18,072.9.
Overnight in the U.S., the Dow Jones Industrial Average declined, shedding 0.76% and closing at 39,112.16. Led by an Nvidia rebound, the broad market S&P 500 added 0.39% while the Nasdaq Composite advanced 1.26%, with both indexes ending three-day losing streaks.
— CNBC’s Hakyung Kim and Samantha Subin contributed to this report.
Visitors are looking at a BYD DM-i electric car at the 2024 Beijing International Automotive Exhibition in Beijing, China, on May 3, 2024. (Photo by Costfoto/NurPhoto via Getty Images)
Nurphoto | Nurphoto | Getty Images
Shares of Chinese electric vehicle makers mostly surged on Thursday after the European Union announced higher tariffs of up to 38% on Chinese EVs a day earlier.
Chinese EV-maker BYD, which was the top gainer on the Hang Seng Index, jumped 8% during morning trade but pared some gains to trade at about 6% in the afternoon. Geely was up about 4% initially, while counterparts Nio and Li Auto saw their shares climb about 1.5%. State-backed SAIC was down 1.5% in later afternoon trade.
Citi analysts said the EU’s additional tariffs were “generally benign,” while one analyst from Morningstar pointed out that the additional duties were “modest” in comparison to U.S. hikes on Chinese EVs last month.
BYD vs Geely
On Wednesday, the EU said it would impose extra tariffs on Chinese EV players with a large footprint in Europe. BYD will be subject to additional tariffs of 17.4%, Geely will get an extra 20% duty. SAIC will have to pay additional duties of 38.1% – the highest among the three. This is on top of the standard 10% duty already imposed on imported EVs.
All three manufacturers were sampled in the EU probe, which is ongoing.
Other Chinese EV firms, which cooperated in the investigation but have not been sampled, would be subjected to 21% in extra tariffs while those which did not cooperate in the investigation would face 38.1% in additional duties, the commission said.
The punitive tariffs could be impactful for the EV sector, but would not derail China’s ongoing recovery.
The EU said in a statement it has provisionally concluded that Chinese EV makers benefits from “unfair subsidization,” which resulted in “threat of economic injury” to EU’s EV industry.
“The move is modest compared with the stiff 100% tariffs on Chinese EV imports into the U.S., hiked from 25% last month, by the Joe Biden administration and the 25% provisional duties are in line with market expectations of 20%-25%, in our view,” said Vincent Sun, equity analyst at Morningstar, in a Wednesday note.
Citi analysts on Thursday said the tariff hike is “generally benign” compared to their estimates of 25% to 30%. “The punitive tariffs could be impactful for the EV sector, but would not derail China’s ongoing recovery,” said Citi.
The additional duties come after the EU launched a probe in October. The duties are currently provisional, but will be introduced from July 4 in the event that discussions with Chinese authorities do not result in a resolution, the commission said in a statement. Definitive measures will be placed within four months of the imposition of provisional duties, the bloc said.
In response to the provisional duties, China said Wednesday the move was “blatant protectionism that will create and escalate trade frictions.” A spokesperson for the Ministry of Commerce said Beijing was “deeply concerned and strongly dissatisfied” with the development as it “disrupts and distorts” the global EV industry.
Joseph Webster, senior fellow at the Atlantic Council’s Global Energy Center, said the EU “seems to be warning” Chinese state-backed SAIC to build a production facility within Europe, or else face tariffs.
“China’s SAIC group received the maximum tariff rate of 38.1 percent. The automaker has a limited footprint on the continent, and it has yet to select a site for its first European production facility, despite nearly a year of consideration,” said Webster in a Wednesday report.
“Both BYD and Geely have substantial investments in Europe,” Webster said.
Setting up local factories could be “the ultimate solution” for China’s original equipment manufacturers in the long run, Nomura analysts said Thursday, adding that these companies have started to seek overseas expansion “in order to better fit into the global auto market.”
China’s reaction is the next thing to look out for, analysts said, with possible retaliation from Beijing.
Citi said China “looks set to retaliate but not escalate,” as the “benign” tariffs could bring “contained retaliation.”
“The key here will be how China reacts to this, and then also how the EU reacts to some of these requests [from] companies like Tesla to reconsider the tariffs,” said Paul Triolo, partner for China and technology policy lead at Albright Stonebridge Group.
“The danger is getting into sort of a tit-for-tat tariff battle here. Nobody seems to want this,” Triolo told CNBC’s “Street Signs Asia” on Thursday, adding that the Commission may “show some flexibility, as they did in making this decision.”
Customers use automated teller machines (ATM) at an HSBC Holdings Plc bank branch at night in Hong Kong, China, on Saturday, Feb 16, 2019.
Anthony Kwan | Bloomberg | Getty Images
HSBC‘s full-year 2023 pretax profit missed analysts’ estimates on Wednesday, hit by impairment costs linked to the lender’s stake in a Chinese bank, sinking its London-listed shares as much as 7%.
Europe’s largest bank by assets saw its pre-tax profit climb about 78% to a record $30.3 billion in 2023 from a year ago, according to its statement released Wednesday during the mid-day trading break in Hong Kong. That missed median estimates of $34.06 billion from analysts tracked by LSEG.
Chief Executive Noel Quinn also announced an additional share buyback of up to $2 billion to be completed ahead of the bank’s next quarterly earnings report. HSBC also said it would consider offering a special dividend of 21 cents per share in the first half of 2024 after it completes the sale of its Canada business.
With the highest full-year dividend per share since 2008 and three share buy-backs in 2023 totaling $7 billion, Quinn said the bank returned $19 billion to shareholders last year.
Quinn’s remuneration doubled to $10.6 million in 2023 from $5.6 million the year before, boosted in part by variable long-term incentives since his appointment in 2020.
HSBC suffered a “valuation adjustment” of $3 billion on its 19% stake in China’s Bank of Communications, Quinn said. In an interview with CNBC following the earnings release, he said this is “a technical accounting adjustment” and “not a reflection” on BoComm.
This write-down was among the items that plunged the bank’s fourth-quarter pretax profit by 80% to $1 billion from a year earlier.
HSBC’s Hong Kong shares reversed gains of about 1% after trading resumed, falling as much as 5%. The benchmark Hang Seng Index was up about 2%. Shares in London were down around 7% in early deals, set for their biggest one-day drop since 2020, according to Reuters.
HSBC shares
Here are the other highlights of the bank’s full year 2023 financial report card:
Revenue for 2023 increased by 30% to $66.1 billion, compared with the median LSEG forecast for about $66 billion.
Net interest margin, a measure of lending profitability, was 1.66% â compared with 1.48% in 2022.
Common equity tier 1 ratio â which measures the bank’s capital in relation to its assets â was 14.8%, compared with 14.2% in 2022.
Basic earnings per share was $1.15, compared with the median LSEG forecast for $1.28 in 2023 and 75 cents for 2022.
Dividend per ordinary share was 61 cents â the highest since 2008 â compared with 32 cents in 2022.
HSBC, which has a second home in Hong Kong, said it was focusing on the fastest growing parts of Asia, a continent where the bank makes most of its profits.
In an earnings briefing to investors and analysts, the bank said it has completed the sale of its businesses in France, Oman, Greece and New Zealand, and was in the process of exiting Russia, Canada, Mauritius and Armenia.
The bank flagged two key macroeconomic trends: declining interest rates as inflation ebbs â a development that could eat into its interest income; and a continued reconfiguration of global supply chains and trade.
“International expansion remains a core strategy for corporates and institutions seeking to develop and expand, especially the mid-market corporates that HSBC is very well-positioned to serve. Rather than de-globalizing, we are seeing the world re-globalize, as supply chains change and intraregional trade flows increase,” Quinn said in the earnings statement.
The bank is targeting a mid-teens return on tangible equity for 2024, which was about 14.5% last year.
HSBC said it will be focusing on an expansion of non-interest income revenue sources via its wealth and transaction banking business. It is expecting banking non interest income of at least $41 billion in financial year 2024.
HSBC said it’s cautious about the loan growth outlook for the first half of 2024 amid economic uncertainty, expecting a mid-single digit annual percentage growth over the medium to long term.
A securities business hall in Fuyang, China, in December 2023.
Costfoto | Nurphoto | Getty Images
China is considering a rescue package backed by offshore money to stave off a slump in its struggling stock markets, according to Bloomberg News.
The report, citing people familiar with the matter, said Chinese authorities are aiming to get about 2 trillion yuan ($278 billion), primarily through offshore accounts of Chinese state-owned companies to help stabilize the market by purchasing stocks onshore through Hong Kong markets.
According to Bloomberg, Chinese policymakers have also put aside 300 billion yuan of local funds that would be used to invest into onshore shares through state-owned financial firms China Securities Finance Corp. or Central Huijin Investment Ltd.
Mainland China’s CSI 300 index slid 11.4% last year, clocking its third straight year of falls. Hong Kong’s Hang Seng index fell nearly 14% in 2023, making it the worst performing major Asian stock market.
The Bloomberg report comes a day after Chinese Premier Li Qiang said during a state council meeting the country will be rolling out measures to stabilize its stock markets.
“We must take more powerful and effective measures to stabilize the market and confidence,” Li said, according to state media.
“It is necessary to enhance the consistency of macro policy orientations, strengthen innovation and coordination of policy tools, consolidate and enhance the positive economic recovery, and promote the stable and healthy development of the capital market.”
No further details were released at the Monday meeting, and there was no indication about how much money will be mobilized or when the measures will kick in.
China previously pointed that it has not relied on to stimulus so far.
“In promoting economic development, we did not resort to massive stimulus. We did not seek short-term growth while accumulating long-term risks,” Li said in a speech last week at the World Economic Forum in Davos, Switzerland. “Rather, we focused on strengthening the internal drivers.”
Pedestrians walk towards the Chhatrapati Shivaji Terminus train station at dusk in Mumbai, India, on Wednesday, Oct. 4, 2023.
Bloomberg | Bloomberg | Getty Images
India’s stock market value has overtaken Hong Kong’s to become the seventh largest in the world as optimism about the country’s economic prospects grow.
As of the end of November, the total market capitalization of the National Stock Exchange of India was $3.989 trillion versus Hong Kong’s $3.984 trillion, according to data from the World Federation of Exchanges.
India’s Nifty 50 index reached another record high on Monday. It has jumped nearly 16% so far this year and is headed for its eighth straight year of gains. In contrast, Hong Kong’s benchmark Hang Seng index has plunged 18% year to date.
India has been a standout market this year in the Asia-Pacific region. Increased liquidity, more domestic participation and improving dynamics in the global macro environment in the form of falling U.S. Treasury yields have all boosted the country’s stock markets.
The world’s most populous country also heads into general elections next year, which analysts predict could be another victory for the ruling nationalist Bharatiya Janata Party.
“For the general election, opinion polls and recent state elections indicate that the incumbent BJP-led government may secure a decisive win, which could trigger a bull run in the first three to four months of the year on expectations of policy continuity,” HSBC strategists said in a client note.
HSBC said banks, health care and energy are the best positioned sectors for next year.
Sectors such as autos, retailers, real estate and telecoms are also relatively well positioned for 2024, while fast-moving consumer goods, utilities and chemicals are among those HSBC categorized as unfavorable.
In early November, the Hong Kong government said it expects the economy to grow 3.2% in 2023, trimming its GDP growth outlook from the 4% to 5% forecast in August.
The city’s government has warned that increasing geopolitical tensions and tight financial conditions continue to weigh on investments, exports of goods and consumption sentiment. Consumer confidence has also suffered in Hong Kong.
“Hong Kong’s economy is poised for a soft landing in 2024 as annual real GDP growth moderates to around 2% from 2023’s 3.5%,” said economists at DBS.
“Central to this recovery is mainland tourism revival, fortifying retail and catering sectors.”
China has set a growth target of 5% for 2023. Its third quarter-GDP came in at 4.9%, lifting hopes that the world’s second-largest economy will meet or even exceed expectations.
Moody’s Investors Service on Tuesday cut the outlook on China’s debt to negative from stable citing expectations that the national government will have to step in to rescue regional and local governments.
Moody’s kept China’s long-term rating at A1.
“The change to a negative outlook reflects rising evidence that financial support will be provided by the government and wider public sector to financially-stressed regional and local governments and state-owned enterprises, posing broad downside risks to China’s fiscal, economic and institutional strength,” said the note from the rating agency, which last month cut the outlook on the U.S.
China’s property troubles mean that regional and local governments face a loss of land sale revenue, which accounted for 37% of their revenue in 2022 outside of central government transfers. Moody’s says regions that relied most heavily on land sales won’t be able to offset that revenue loss from other sources.
Moody’s estimates one-third of state-owned enterprises debt — some 40% of GDP — has an interest coverage below 1, which indicates weak debt sustainability. “While not all [state-owned enterprises] are likely to need direct government support, even a moderate proportion doing so over the medium term would represent a significant crystallization of contingent liabilities for the sovereign, increasing the costs of financial support and diminishing fiscal strength,” said Moody’s.
In a rough day for Chinese stocks, the Hang Seng HK:HSI
fell 1.9%, and the Shanghai Composite CN:SHCOMP
dropped 1.7%.
Courier handing over package asking female customer to do electronic signature, delivering, receiving, efficiency
10’000 Hours | Digitalvision | Getty Images
Shares of Indonesia’s J&T Express fell 1.33% when it went public on Friday.
The logistics service provider traded at 11.84 Hong Kong dollars ($1.51) on Friday morning, after opening at HK$12.
The HK$3.92 billion ($500 million) IPO is the second largest listing in Hong Kong this year, after premium Chinese liquor company ZJLD Group. The Chinese “baijiu” maker, backed by KKR, plunged nearly 18% on their first day of trading on April 27.
Investors include Chinese tech giant Tencent, U.S.-based venture capital firm Sequoia, Chinese private equity firm Boyu, SF Express and Singapore’s sovereign wealth fund Temasek.
J&T Express is listing in an uncertain economic environment, characterized by hiking inflation, high interest rates and ongoing conflict such as the Israel-Hamas war and Ukraine invasion.
“In the third quarter of 2023, global IPO activities remained sluggish due to macroeconomic and geopolitical uncertainties. Hong Kong’s global IPO ranking dropped to eighth following a historically slow third quarter,” said KPMG in a report published on Oct. 9.
“The Hong Kong market has not recovered as much as we would like,” Irene Chu, partner at KPMG China, told CNBC, highlighting that the third quarter “continued to be very soft.”
J&T had initially aimed to raise at least $1 billion in the IPO but halved the target amount on weak investor demand, according to Reuters.
Companies that want to go public have “become more realistic” in their pricing, said Ringo Choi, Asia-Pacific IPO leader at EY. “The IPO pricing is dropping significantly by more than 50% or even 70%.”
China is J&T’s largest market, where it delivered nearly 83% of its total parcels last year, serving the likes ecommerce giants like Pinduoduo and Alibaba’s Taobao and Tmall. It held a 10.9% market share by parcel volume in 2022, the company said in its prospectus, citing Frost & Sullivan.
In May, it acquired China-based Fengwang Express for 1.18 billon yuan from largest domestic player SF Express, building on its acquisition of express delivery business from Chinese logistics firm Best in late 2021.
The Indonesian logistics provider delivered a total of more than 14.5 billion parcels in 2022 across China and Southeast Asia, up from 11.5 billion in 2020. In Southeast Asia, it is the largest operator with a 22.5% market share in terms of parcel volume, based on Frost & Sullivan data. Alibaba-owned Lazada, GoTo’s e-commerce arm Tokopedia and Sea Limited‘s Shopee, are among its customers, the prospectus showed.
Read more about tech and crypto from CNBC Pro
It posted a net profit of $1.57 billion in 2022 but went into the red in the first six months of this year Net losses came in at $666.8 million, due to gross losses from operations in China and new market expansion in 2022, among others.
“In the long term, to continue to realize our revenue potential and achieve profitability, we plan to further grow our parcel volume and market share, maintain a flexible pricing strategy, control costs, narrow gross loss and improve gross margin, and enhance operating leverage,” said J&T in its prospectus.
Analysts warn that TikTok Shop’s ban in Indonesia, which disallows social media platforms from facilitating e-commerce purchases, could impact J&T Express.
TikTok Shop is the e-commerce feature of popular short-video app TikTok.
“There is some sharp short-term pain for J&T in Indonesia because of the TikTok Shop ban, as J&T was (profitably) carrying the majority of the TikTok Shop’s millions of orders a day in Indonesia prior to the ban,” said Momentum Works in a Oct. 17 blog post.
J&T Express acknowledged in its filing that “there remain significant uncertainties” on how the new rules would impact different e-commerce and social media platforms in Indonesia, “some of which are our customers.”
But the company said it will not be adversely impacted as the revenue from social e-commerce platforms in Indonesia “remained immaterial” to the business.
In 2022 and the first six months of this year, revenue from social e-commerce platforms in Indonesia contributed only 4% and 6% to the company’s revenue respectively, said J&T.
“We believe that although [the new e-commerce regulation] may have an impact on our customer composition in Indonesia in the near term, this new regulation will not have a material adverse effect on our business operations and financial performance in the long term.”
A clerk of ICBC bank counts Chinese 100 yuan at its branch in Beijing.
Kim Kyung-Hoon | Reuters
BEIJING — Chinese authorities late Tuesday announced one of the biggest changes to the national budget in years, along with the issuance of 1 trillion yuan in ($137 billion) in government bonds.
But state media made it clear that whopping amount would be focused on reconstruction of areas hit hard by natural disasters — such as this summer’s historic floods — and for catastrophe prevention.
“The sheer amount of 1 trillion is not that significant, certainly not a game changer,” Larry Hu, chief China economist at Macquarie, said in an email. “But it’s still a modest positive surprise, as it’s not anticipated by the market.”
The Hang Seng Index climbed more than 2% in morning trade Wednesday, and back above the psychologically key 17,000 level. Major mainland China stock indexes were up broadly.
Both Hong Kong and mainland Chinese stocks have fallen so far this year amid China’s lackluster recovery from the pandemic.
“We believe the economic impact of this RMB1.0trn in additional [central government bonds] should not be overstated, especially in the near term,” Nomura’s chief China economist Ting Lu said in a note.
He said he doesn’t expect much of the funds to be used until next year, or even in the next two or three years. That’s because most of the natural disasters this year hit China’s northern region over the summer, and the country is now heading toward the winter months, he said.
Chinese state media said the 1 trillion yuan in central government issuance is set to be transferred to local governments in two parts, half for this year and half for next year.
“The overall size of the additional funding does not appear to be sizeable relative to the local government’s funding base,” said Rain Yin, associate director at S&P Global Ratings.
“It is roughly around 5% of transfer revenues or 2% of total revenues for the local governments,” Yin said. “However, this funding could be crucial and meaningful in supporting selective provinces, especially in regions that have suffered from disasters and have needed to resort to more borrowings to support local economic recovery and development.”
The economy remains on track for Beijing’s target of around 5% growth this year, but that’s below more optimistic forecasts at the start of 2023. The International Monetary Fund this month also cut its forecast for China’s growth in 2024 to 4.2%.
“In our view, more efficient ways to add central government spending include: (1) supporting the completion of new homes that were pre-sold by developers and (2) stepping up infrastructure spending in cities with rising populations,” Nomura’s Lu said.
S&P Global Ratings said in a separate report Monday that if real estate sales drop dramatically next year, real gross domestic product growth will fall to 2.9% in 2024. The firm currently predicts a more modest 5% decline in property sales next year — after an anticipated 10% to 15% drop this year.
After easing a crackdown on property developers’ high reliance on debt for growth, Beijing has focused on ensuring the delivery of apartments, which are typically sold ahead of completion in China.
About 80% of residential sales in 2023 were of homes still under construction, S&P Global Ratings said in a report this month.
But Ricky Tsang, S&P Global Ratings’ director of corporate ratings, said last week that the closest his team could get to understanding progress on completed properties is that the value of pre-sold homes at risk of non-delivery is 3 trillion yuan.
“These developers, they’re also struggling with their debt restructuring. They’re struggling with asset sales,” Tsang said in a phone interview.
“More or less they are having some progress,” he said. “But delay or one or two players, they will have a delivery problem. That’s not a big surprise.”
“According to [People’s Bank of China] data, the central government’s outstanding debt is currently about RMB27trn, while we estimate local governments owe an exceptional balance of RMB87trn, including both explicit and hidden debt,” Nomura’s Lu said.
“The property market collapse and the continued contraction in land sales revenue has exacerbated debt pressures on local governments, which has prompted Beijing to roll out a raft of measures to reduce the debt risks of local governments,” he said.
“Note a special program has already been started since October, allowing local governments to issue special refinancing bonds to swap their outstanding hidden debt. As of 24 October, 24 provincial governments have issued over RMB1.0trn in special refinancing bonds.”
Goldman Sachs analysts estimated the early issuance could be as much as 2.7 trillion yuan, based on prior government practice.
“Given this year’s special bond quota has been largely used up, policymakers do need to add additional local government debt quota to avoid a fiscal cliff,” Macquarie’s Hu said.
“Overall, I think fiscal policy has turned more supportive since this August. It’s a major shift from the conservative fiscal stance earlier this year.”
Tuesday’s announcements come ahead of widely expected central government meetings in coming weeks about financial regulation and economic policy.
Among major government personnel changes announced Tuesday, Chinese state media said Lan Fo’an would replace Liu Kun as Minister of Finance.
“With the new finance minister and PBoC governor in place, fiscal policy execution will likely become more effective ahead, and fiscal-monetary policy coordination could also improve,” Xiangrong Yu, chief China economist at Citi, said in a note.
He noted the severity of recent natural disasters doesn’t compare with the recent pandemic or the Sichuan earthquake in 2008, indicating that Beijing’s decision to issue 1 trillion yuan in debt means “the intention to boost growth and confidence was evident.”
“In light of the renewed policy push, we perhaps need to take the risk scenario of keeping the 2024 GDP target ~5% seriously vs. the ~4.5% commonly assumed,” Yu said.
All of Country Garden‘s offshore debt could potentially be in default if the Chinese property developer fails to make a $15 million coupon payment on Tuesday, which marks the end of a 30-day grace period.
The embattled real estate giant warned last week it may not be able to make all its offshore repayments, including those issued in U.S. dollar notes.
Once China’s largest real estate developer, Country Garden narrowly avoided default in early September after it managed to pay $22.5 million in bond coupon payments. Its creditors voted to extend repayments on six onshore bonds by three years.
Country Garden vs. Hang Seng Index
The founding family of Country Garden reportedly provided the company with an interest-free loan of $300 million, Reuters reported Friday, saying the family was trying to sell another jet to raise money.
If the Country Garden fails to make the repayment on Tuesday, it would become the latest casualty among many large Chinese real estate developers that have defaulted on their debt.
Chinese property giants including Evergrande and Country Garden have been hit by debt problems, hurting consumer confidence in the sector.
Shares of Country Garden rose 1.37% in early trade, tracking a 0.86% rise in the broader Hang Seng Index.
