News Stream – Asia and Australia Markets

(Bloomberg) -- Most Asian stocks slipped Tuesday along with U.S. and European equity futures as investors weighed the impact of the recent climb in bond yields and a Chinese official’s warning about asset bubbles. The dollar rose. Shares in China and Hong Kong led the regional decline. S&P 500 and Nasdaq 100 futures turned lower. China is “very worried” about bubbles in overseas financial markets, China Banking and Insurance Regulatory Commission Chairman Guo Shuqing said at a briefing. Treasury yields were steady.Guo also said he’s worried about risks in China’s property sector, sparking fresh concerns about further tightening in the world’s second-biggest economy.Oil retreated to trade just below $60 a barrel ahead of a key OPEC+ meeting this week. Metals including copper, silver and gold slid. In Australia, bond yields rose after the central bank left its asset purchase plan unchanged.Investors continue to debate whether many markets are over-extended following huge stimulus injections to counter the impact of the pandemic. The prospect of faster inflation as the world economy recovers has led to concerns that monetary policy may have to be tightened sooner than expected. That’s pushed up sovereign bond yields this year.“There’s lot of uncertainty, a lot of risks being built in, that’s why you’re seeing a bit of skittishness,” said Lorraine Tan, Morningstar director of Asia equity research. “The positive tailwind for the market is still going to be the global economic recovery.”On the virus front, global cases rose for the first time in almost two months in the past week, the World Health Organization said, citing countries easing restrictions, people letting their guard down and variants spreading.Bitcoin rallied after a volatile weekend session as Citigroup Inc. laid out a case for the digital asset to play a bigger role in the global financial system.There are some key events to watch this week:U.S. Federal Reserve Beige Book is due Wednesday.OPEC+ meeting on output Thursday.U.S. factory orders, initial jobless claims and durable goods orders are due Thursday.The February U.S. employment report on Friday will provide an update on the speed and direction of the nation’s labor market recovery.These are some of the main moves in markets:StocksS&P 500 futures fell 0.4% as of 5:45 a.m. in London. The S&P 500 Index surged 2.4%.Japan’s Topix index was down 0.6%.Australia’s S&P/ASX 200 index fell 0.4%.South Korea’s Kospi index rose 0.7%.Hong Kong’s Hang Seng Index fell 1.2%.Shanghai Composite Index fell 1.4%.Euro Stoxx 50 futures lost 0.3%.CurrenciesThe yen traded at 106.85 per dollar.The offshore yuan was at 6.4814 per dollar, down 0.2%.The Bloomberg Dollar Spot Index rose 0.2%.The euro was at $1.2020, down 0.2%.BondsThe yield on 10-year Treasuries held at 1.41%.Australia’s 10-year bond yield rose five basis points to 1.72%.CommoditiesWest Texas Intermediate crude declined 1.4% to $59.77 a barrel.Gold dipped 0.7% to $1,713 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Asian stock markets were mixed Tuesday after Wall Street rose as a wave of investor concern about possible higher interest rates receded.

By Gina Lee

(Bloomberg) -- Hang Seng Indexes Co. will boost the members of its Hong Kong stock benchmark to 80 and cap the weighting of any one company as it implements the biggest changes to the gauge’s 51-year-old history, in a bid to embrace the new economy.The wide-ranging overhauls to the Hang Seng Index include increasing the number of constituents from 52 and limit a stock’s weighting to 8%, the firm said in a statement on Monday. The revamp also shortens the listing history requirement for a company to be included into the gauge. Implementation of the changes will begin as early as its May index review and go through mid-2022.The HSI, which in 2020 lagged global peers by the most in decades, has been moving away from being filled with financial and property stocks in recent years at a time when China’s tech giants hold growing sway. In 2019, the information technology sector overtook financials as the index’s largest industry by market value, according to a December consultation paper detailing proposed changes to the benchmark.The new weighting limit of 8%, down from a maximum of 10%, will apply to all members and will also be applied to the Hang Seng China Enterprises Index, effective from the index rebalancing in June. The benchmark currently caps secondary listings or shares with unequal voting rights at 5%.“This is expected to help reduce the volatility of the HSI,” said Jingyi Pan, a market strategist at IG Asia in Singapore. “Immediately, those above 8% in terms of weighting - Tencent, AIA, HSBC - comes to mind with selling pressure expected under the changes.”The announcement follows a record buying frenzy from mainland traders that sent the stock gauge past the 30,000 point level in January for the first time since May 2019, led by heavyweights like Tencent Holdings Ltd. and Hong Kong Exchanges & Clearing Ltd.READ: Alibaba Among Stocks to Benefit From HSI Reform: Street WrapThe Asian financial hub has become a preferred venue the past several years for a wave of Chinese megacaps to sell shares. Kuaishou Technology, backed by Tencent, surged 161% on its debut last month in the world’s biggest internet initial public offering since Uber Technologies Inc. The HSI revamp will also shorten the listing history requirement to three months for new companies effective May.In addition, Hang Seng Indexes will ensure 20 to 25 of constituents in the benchmark are classified as Hong Kong firms, a number that will be evaluated every two years. The proportion of mainland companies in the index by market value was 79% in 2020, it said in December’s paper.On Friday, the company said it would add Alibaba Health Information Technology Ltd., Haidilao International Holding Ltd. and Longfor Group Holdings Ltd., expanding the benchmark to 55 members from 52 effective March 15.(Changes first two paragraphs, adds quote. A previous version of this story corrected month of Kuaishou’s debut in second last paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Hang Seng Indexes, which compiles Hong Kong's benchmark index, said on Monday that the number of constituent stocks of the Hang Seng Index will rise to 80 by mid 2022, before ultimately rising to 100. The overhaul, the biggest in the index's 52-year history, reflects the changes in Hong Kong's role as a financial centre. The reforms follow the conclusion of a consultation period in January, which showed strong support for an increase in the number of constituent stocks, as this will improve the benchmark Hang Seng Index's overall coverage and achieve a more reasonable representation for each industry. The expansion is intended to ensure that the index, the benchmark of the world's third-largest stock market, truly reflects the drastic changes in the local market, which has seen a wave of listings by big technology and pre-revenue biotechnology companies following a reform by bourse operator Hong Kong Exchanges and Clearing in April 2018. In its current guise, the Hang Seng Index continues to be dominated by financial companies and is viewed as outdated. Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China. The stocks to be included as part of the latest reforms will only been known when the quarterly review takes place in May. The benchmark currently has 55 constituents, following the addition of three stocks after a quarterly review last week. It did not remove any stocks. It added three stocks in a review in November as well, and removed one. "Over the next year, Hang Seng Indexes is likely to add more stocks from among new economy companies, health care firms and US-listed mainland Chinese technology giants that have a secondary listing in Hong Kong," said Tom Chan Pak-lam, the chairman of industry body Institute of Securities Dealers. Following the increase in its constituent stocks to 80, the Hang Seng Index will cover 71 per cent of the total market capitalisation of Hong Kong, up from 56.6 per cent currently. It will also cover 66 per cent of market turnover, up from 50 per cent now, Hang Seng Indexes said on Monday. "The new enhancements to the HSI will further increase its representation and make the index more balanced and diversified," said Anita Mo, the company's chief executive. Hang Seng Index, the benchmark, was launched in 1969. It was initially calculated by Hang Seng Bank, before Hang Seng Indexes was set up in 1986. The index started out with 33 constituent stocks, and expanded to 38 in 2006 with the first inclusion of H shares. The following year, the index compiler announced it would gradually expand to 50 constituent stocks, which was only achieved in December 2012. In May last year, the company agreed to add companies with multiple voting rights to the benchmark, which led to the inclusion of Alibaba Group Holding, which owns this newspaper, smartphone maker Xiaomi and online food delivery firm Meituan. Moreover, the share of the total market capitalisation of the Hong Kong stock market represented by the companies that are included in the benchmark has decreased, from 65 per cent in 2016 to 56.7 per cent as of December last year. The Hong Kong stock market's total market capitalisation grew 458 per cent from HK$8.2 trillion (US$1.1 trillion) in 2005 to HK$45.6 trillion in 2020. Over this period, the proportion of mainland Chinese companies listed in the city rose from 41.6 per cent to 79 per cent, according to Hang Seng Indexes' consultation paper. The company will also proceed with a proposed cap on the weighting of stocks at 8 per cent, lower than the current limit of 10 per cent. Only two stocks - insurer AIA and Chinese social media giant Tencent Holdings - currently have a weighting of 10 per cent and face a cut. The influence that Alibaba, Xiaomi and Meituan enjoy will, on the other hand, increase, after their weighting rises to the new limit. They were included in the benchmark with a weighting of 5 per cent each. As part of the revamp, Hang Seng Indexes will also insure that between 20 and 25 Hong Kong companies are among the constituent stocks, so as to prevent their representation from falling as more Chinese companies are added to the benchmark. The index currently has 24 Hong Kong firms and 28 Chinese companies. The latest reforms also shorten the time required for companies to become a constituent stock. According to the overhauled rules, they will only be required to have been listed for three months - down from the current requirement of two years - before they can be added to the index. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.

Asian shares rose Monday on hopes for President Joe Biden's stimulus package and bargain-hunting after sell offs last week.

(Bloomberg) -- Investors will soon discover if Hong Kong’s Hang Seng Index will undertake one of the biggest overhauls in its 51-year history, a move that would impact tens of billions of dollars in funds tracking the stock benchmark.On Monday, Hang Seng Indexes Co. will offer its conclusion after an industry consultation over proposed changes to the city’s stock benchmark, which if approved would increase the number of member constituents, cap weightings of individual companies and fast-track new listings. The announcement is expected shortly before a press briefing that starts at 4:30 p.m. local time.The city’s stock market is already undergoing change at a time when China’s tech giants hold growing sway, forcing the index compiler to act on a staid gauge overstuffed with banks and insurers. Hong Kong has become the preferred venue for a wave of Chinese megacaps to sell shares, including standouts like Kuaishou Technology, which surged 161% at its debut in early February after holding the world’s largest internet initial public offering since Uber Technologies Inc.The announcement will also come on the heels of a record buying frenzy from mainland traders that propelled the HSI past the 30,000 point level in January for the first time since May 2019, led by heavyweights like Tencent Holdings Ltd. and Hong Kong Exchanges & Clearing Ltd. If the wide-ranging changes are approved, analysts say that the HSI, which in 2020 lagged global peers by the most in decades, could have more room to run.READ: Alibaba Among Stocks to Benefit From HSI Reform: Street Wrap“The valuation of the index will be pushed higher as more new economy stocks are expected to join under the changes,” said Dickie Wong, executive director of research at Kingston Securities Ltd. “This could also make the index more volatile.”As part of the proposed changes, Hang Seng Indexes is looking at ensuring that a certain number of benchmark members are classified as Hong Kong firms, which could dilute the influence of some of the largest stocks. The portion of mainland companies in the index by market value was 79% in 2020, according to the December consultation paper.On Friday, Hang Seng Indexes added three companies to its index following its quarterly review, expanding the constituent count to 55 members from 52. The changes are effective March 15. The benchmark index was 1.3% higher as of 10:36 a.m. Monday in Hong Kong, with Meituan and Tencent Holdings Ltd. among leading gainers.Launched in 1969, the Hang Seng Index started out with 33 constituents, rising to 38 in 2007 when it began to include H-share firms. Last year, Hang Seng Indexes added dual class shares and secondary listings to its index in a major revamp, allowing Chinese giants like Alibaba Group Holding Ltd. into the city’s benchmark.(Updates with market moves)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Asia-Pacific stock indexes were pressured as risk assets lost their sheen after global bond yields firmed on expectations of economic expansion.

Japanese shares slumped on Friday, logging their biggest daily decline in nearly a year, after a spike in global bond yields spooked investors.

Alibaba Health Information Technology, mainland Chinese developer Longfor Group Holdings and hotpot chain Haidilao International Holding will become constituent stocks of the Hang Seng Index from next month, the complier announced just before it is expected to unveil a further major expansion on Monday. The addition of the three stocks to the index from March 15 will expand the number of constituents on Hong Kong's benchmark index from 52 to 55, according to a statement from Hang Seng Indexes on Friday evening. The index compiler proposed in December to increase its constituent stocks to between 65 and 80 to achieve a reasonable representation for each industry. Today's move has prompted analysts to believe the further expansion may be announced a soon as Monday, when the results of a consultation are due to be revealed. Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China. The compiler also wants the benchmark index to have at least 25 Hong Kong firms as constituent stocks to address concerns about a drop in the representation of local companies. A consultation on the proposals ended last month. "The Hang Seng Indexes intends to increase the number of blue chips for the longer term to allow more companies from different sectors to have more representation," said Kenny Ng Lai-yin, a securities strategist at Everbright Sun Hung Kai. Ng said the three new stocks set to become blue chips would get share price support, while JD.com, which had been widely expected to join the index, may face pressure in the short-term. The three additional stocks will have a combined weighting of 2.09 per cent in the Hang Seng Index, with Alibaba Health the biggest at 0.89 per cent, Longfar second at 0.62 per cent and Haidilao at 0.58 per cent. Alibaba Health has risen 13.5 per cent this year, while Longfor gained 1.3 per cent and Haidilao added 6.6 per cent. The Hang Seng Index rose 6.4 per cent over the same period. However, the three stocks have matched or outperformed the index over the past six and 12 months. The trio will add a combined market capitalisation of US$124.5 billion to the HSI family. After the March rebalancing, Chinese social media and online games giant Tencent Holdings and insurance juggernaut AIA will remain the most-heavily weighted stock, making up 10 per cent each of the index. Their weighting may well be cut down to 8 per cent according to a cap proposed by the index compiler. Hong Kong's benchmark stock index started out with 33 stocks when it first launched. The enlargement is seen as a result of the local markets growing much bigger, particularly after listing reforms in 2018 that allowed companies with weighted voting rights and biotech firms yet to turn a profit to list. These moves brought a wave of initial public offerings (IPOs) to the city. The amount of Hong Kong dollar deposits in the local banking system surged 18.6 per cent in January as a result of the hugely popular IPO of Kuaishou Technology, the video-sharing platform whose name means "quick hands" in Chinese. The listing drew subscriptions of 1,204 times the available retail tranche of shares on offer, totalling HK$1.28 trillion (US$164.8 billion). Hong Kong has already seen 15 IPOs in January, with around HK$12.6 billion of capital raised. Last year, 154 companies sold shares to the public for the first time, generating HK$398 billion of proceeds. The IPOs led Hong Kong dollar deposits 18.6 per cent higher in January to HK$8.67 trillion. Together with a 1 per cent increase in foreign deposits, the total deposits in Hong Kong at the end of January stood at HK$15.94 trillion, which is 9.8 per cent higher than a month earlier, the Hong Kong Monetary Authority (HKMA) said on Friday. Excluding IPO effects, total deposits would have increased by 3.2 per cent while Hong Kong dollar deposits would have jumped 5.3 per cent. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.