Hong Kong Shares priced in bubble zone

[specuvestor]

China Evergrande Group’s astonishing share rally has resulted in the world’s most painful short trade this year. To add insult to injury, bearish investors are paying higher fees to get crushed.
Fees to borrow shares of the Hong Kong-listed Chinese developer for shorting have surged by more than five times since January to about 10 percent and have doubled since Evergrande started buying back shares in late March, according to Simon Colvin, a London-based analyst at IHS Markit Ltd. Evergrande shares available for lending have “nearly all been spoken for,” Colvin wrote in an email, resulting in higher borrowing costs.
Evergrande shares have more than tripled this year, hurting short-sellers and baffling even some of the most bullish stock analysts. Part of the sharp rally can be explained by Evergrande’s plan to raise money from strategic investors ahead of a planned backdoor listing on the mainland and speculation that the developer will benefit from rising home sales in smaller Chinese cities. A buyback spree has also propelled a 123 percent jump since late March -- when short interest started climbing from a low point.

-snip-

https://www.bloomberg.com/news/articles/...ande-bears

Evergrande, Fosun and HNA are enigmas of where their money comes from

[opmi]

$ From 姓共的。haha

[opmi]

http://hkm.appledaily.com/detail.php?gui...e=20170529

財經評論：
恒大最成功的投資

恒大（3333）股價5月開始暴升，至今累升近五成。股壇很少留意到在5月8日國務院網站的一條新聞，或正是玄機所在。
國務院稱，恒大集團在之前無償投入30億元（人民幣，下同）基礎上，未來再捐資80億元幫貴州省畢節市扶貧。恒大最成功的是「政治投資」，之前搞足球大獲成功，從此在資本市場可以打橫行，完全不怕爆煲。如果貴州扶貧成功，股價再翻幾番不在話下！
恒大在貴州扶貧投入的手筆驚人，已經遠遠大過足球，是另一項重大政治工程。除了上述的110億元出資外，恒大目前在貴州專職扶貧的員工達到2,108人，佔員工總數的2.4%。而且恒大要求，所有優秀員工必須輪流去貴州扶貧，「不破貧困誓不還」，常駐時間至少半年至一年。對於一間上市公司而言，完全難以想像。

恒大點解要在貴州搞咁大陣仗？年底中共召開十九大，在今年4月已舉行黨代表選舉，習近平以貴州黨代表省份參選，並全票當選。習近平喜歡足球，但恒大足球已大功告成，要取悅龍顏需另想新招。貴州是習近平的「選區」，恒大在此扶貧，政治收益一定大過足球。國務院5月8日新聞稿就表明，對恒大的心意中央已收到！

記者：黃尹華

[soros]

Evergrande shares (03333.HK) closed last Friday at $15.20 up $2.82 ( up 22% in one day.) Share Price/ Bookvalue = 4.2 times.

Total volume = 314 Mil shares and Day's Turnover was HKD $4.6 Bil. Someone had their rich finger on the BUY button or a mouse clicking on the BUY icon all day.

Is this situation what some may call a market re-rating ? Its definitely not value investing to spend $4.6 Bil buying up already overvalued shares.

[opmi]

Maybe first show of CCP affiliation when Evergrande allowed to go after Vanke.

[soros]

Kaisa also up. Is it a Guangdong thing since all 3 do business mainly in the Pearl River Delta??

Some Guangdong  property shares did OK :

Evergrande ( 03333.HK) :           + 22.8%
Country Garden ( 02007.HK)  :     + 9.4%
Agile  ( 03383.HK ) :                     + 5.1%
Kaisa  ( 01638.HK) :                     + 3.1%
KWG   ( 01813.HK) :                    + 2.5%
Hopson ( 00754.HK ) :                 + 2.3%.

But  Sunac (based in  Tianjin )   gained + 10.4 %

And Longfor (based in   Beijing )  gained  +9.4 %

[soros]

China property stocks risen into the bubble zone at 2 Jun 2017 :

Evergrande ( 03333.HK ) $14.28 ( NAV = $3.59)
Country Garden ( 02007.HK) $9.40 ( NAV = $3.6)
Sunac ( 01918.HK) $13.20 ( NAV = $6.70 )

China property stocks still in the valuebuddie zone :

Shimao ( 00813.HK) $13.54 ( NAV = $17.14 )
Sino-Ocean ( 03377.HK) $3.89 ( NAV = $6.50)
Agile ( 03383.HK) $7.22 ( NAV = $10.01)
KWG ( 01813.HK) $6.16 ( NAV= $8.70)
Yue Xiu Property $1.37 ( NAV = $2.74)

[specuvestor]

As expected.... stright after Anbang... but Evergrande is amazingly resilient. $6b bond issue first day trading down 5% "only"

(Bloomberg) -- China’s banking regulator asked some banks to provide information on overseas loans made to Dalian Wanda Group Co., HNA Group Co., Fosun International Inc., Anbang Insurance Group Co. and the owner of Italian soccer team AC Milan, according to people familiar with the matter.
The people didn’t provide a reason for the request from the China Banking Regulatory Commission. Caixin reported earlier Thursday that the CBRC requested checks on the companies in mid-June, without saying where it got the information.
Zhiqing Liu, a deputy director at the CBRC, declined to comment specifically on the companies at a briefing in Beijing, while saying that the regulator is concerned with systemic risks posed by big companies. Large firms can transmit risks across the system, including to banks, Liu said.
The companies targeted belong to a cohort of Chinese firms that have grown increasingly acquisitive in recent years, at the forefront of a multi-billion dollar buying spree spanning the globe. The latest move comes amid a government clampdown on overseas purchases to help protect the yuan from depreciating further, and follows an investigation into one of the nation’s most prolific dealmakers.
Anbang’s Chairman Wu Xiaohui was detained earlier this month for undisclosed reasons, among the highest-profile executives to be ensnared in an insurance industry crackdown on escalating risks. Wu faces questions in a probe that includes looking into the sources of funding for Anbang’s acquisitions overseas, possible market manipulation by insurers, and “economic crimes,” people familiar with the matter have said. The investigation doesn’t mean Wu is accused of any crime or will face charges, they said.
Shares Tumble
Shares of billionaire Guo Guangchang’s Fosun and related companies tumbled in Hong Kong and Shanghai, mirroring a similar rout at units of Wanda. Fosun International fell as much as 9.6 percent in Hong Kong. Shanghai Fosun Pharmaceutical Group Co.’s Hong Kong-listed stock dropped as much as 7.8 percent, while its Shanghai shares declined as much as 8.9 percent.
Wanda Film Holding Co. tumbled as much as 10 percent in Shenzhen, its biggest loss since January 2016, before its shares were suspended from trading. Wanda Properties International Co.’s 2024 notes plunged as much as 10.7 cents on the dollar to 101 cents in morning trading in Hong Kong, the biggest drop on record, according to Bloomberg-compiled data.
Representatives at Wanda, Fosun and AC Milan declined to comment, while other companies couldn’t immediately be reached.
The five groups have announced about $61 billion of overseas acquisitions over the past three years, accounting for 14 percent of all Chinese outbound purchases during the period, data compiled by Bloomberg show.
HNA has announced more than $30 billion in asset purchases since last year, according to data compiled by Bloomberg, ranging from from stakes in hotel operator Hilton Worldwide Holdings Inc. to asset manager SkyBridge Capital and Deutsche Bank AG. Wanda has spent more than $10 billion, including the purchase of Hollywood film producer Legendary Entertainment, since 2016. Fosun, which owns stakes in Club Med and Cirque du Soleil Inc., has also been pursuing billions of dollars of assets overseas.

China Evergrande Group’s astonishing share rally has resulted in the world’s most painful short trade this year. To add insult to injury, bearish investors are paying higher fees to get crushed.
Fees to borrow shares of the Hong Kong-listed Chinese developer for shorting have surged by more than five times since January to about 10 percent and have doubled since Evergrande started buying back shares in late March, according to Simon Colvin, a London-based analyst at IHS Markit Ltd. Evergrande shares available for lending have “nearly all been spoken for,” Colvin wrote in an email, resulting in higher borrowing costs.
Evergrande shares have more than tripled this year, hurting short-sellers and baffling even some of the most bullish stock analysts. Part of the sharp rally can be explained by Evergrande’s plan to raise money from strategic investors ahead of a planned backdoor listing on the mainland and speculation that the developer will benefit from rising home sales in smaller Chinese cities. A buyback spree has also propelled a 123 percent jump since late March -- when short interest started climbing from a low point.

-snip-

https://www.bloomberg.com/news/articles/...ande-bears

Evergrande, Fosun and HNA are enigmas of where their money comes from

[specuvestor]

As usual I could have bought and sold before it crash and become an accidental millionaire. It is likely that I was able to short last friday as well seeing how ridiculous it was

Like real

That's why I can't even be bothered to participate and have disciplined myself as such. The fact that certain S-chip shouldn't exist or Yuzoo still trades clearly show the market is inefficient. I'll like to know how I die.

(Bloomberg) -- A string of Hong Kong stocks suddenly plunged Tuesday, with traders pointing to links between some of the companies and a brokerage that’s under regulatory investigation.
Seventeen firms tumbled by more than 40 percent at the close, losing a combined HK$47.8 billion ($6.1 billion) in market value. China Jicheng Holdings Ltd., an umbrella maker, and GreaterChina Professional Services Ltd. sank more 90 percent. Lerado Financial Group Co., whose shares were halted by Hong Kong’s securities regulator this month, has previously disclosed an investment in China Jicheng and an underwriter role on a GreaterChina share placement in 2015.

https://www.bloomberg.com/news/articles/...is-morning

^^Today Hengten back to HK$0.29, for HKD21.6b market cap. Those who believe in efficient or perfect markets doesn't go out often.

Thought I should just scribble down that last Year's HK IPO "Jaw-Drop award" probably goes to Luk Hing Entertainment 8052.hk

Issued at HKD0.21 and closed first day at HKD4.20, up 20X. Closed second day at HKD1.25, down -70% from previous close, but still up 6X from IPO price. Now trading HKD1.33, HKD2.4b market cap for a HKD125.5m FY2015 revenue, HKD11.6m income, making it 207XPE15.

Nope there's no typo there. It's times like this that I think SGX is not that bad (Ugly contest)

Other contenders are KW Nelson (8411.hk), CMon (8278.hk), Altus (8149.hk), Goal Forward (8240.hk) but they have come back to planet earth

But the HK IPO "Bubble Award" probably go to Luen Wong group (8217.hk) issued at HKD0.26 closed today HKD24.95 for HKD31b market at HKD10m FY16 profit, making a PE of 3100

OOH Holdings (8091.hk) and PF Group (8221.hk) probably are trying for the 2017 awards.

looks very like rampant price manipulation. With things like this happening it makes one wonder if there is any integrity at all in their financial system. Really like stock market == casino loh. get the IPO share is like kena JACKPOT.

"Another HK IPO Halted as Regulator Inspects Rocketing Debuts --

Market Talk Speed Apparel (8183.HK) delays its debut on Hong Kong's GEM board (a "buyers beware" second board for start-ups)
as the Securities and Futures Commission combats the wild roller coaster seen in trade for GEM stocks.

Speed Apparel says it needs more time to deal with the enquiries made by the regulators, says the HK-based knitwear maker.

This is the second such incident in five days; Bodibra Group (8297.HK) also delayed its debut on GEM on Monday for similar reasons.

Both issuers were seeking to list via the "all-placing method", which means few or no "genuine" public shareholders, which can see shares surge on debut.

Advertising display agent OOH (8091.HK) rocketed 29x on debuted on Jan 6.
,,,All those gains were wiped out in the next 5 days."

- Broker's notes

"China Jicheng (1027) -94%, GreaterChina Professional (8193) -93%, China investment & Finance (1226) -50% ..link to Lerado Financial which was suspended on 6 June ...
Major Hold (1389) -81%, GC Pro Serv(8193)-93%, CHINA PPT Inv(736) -57%, SEEC MEDIA (205)-56%, OPL(243) -57%, China E-Waller(802) -65%, CN Culture(745) -28%, AMCO United (630)-70%, Capital VS(2324) -61%, Time2U(1327) -41%"

[grubb]

kudos to David Webb. His enigma network (i think someone already shared this on VB, but worth sharing again) lists almost every single one of these stocks.

https://webb-site.com/articles/enigma.asp