KGI Asia Commentary

2023.10.06 09:00

Hang Seng Index rose 18 points on Thursday

The Hang Seng Index rose 18 points or 0.1% to 17,213 on Thursday. HSTECH rose 5 points or 0.1% to 3,757 and HSCEI rose 5 points or 0.1% to 5,887. Daily market turnover was HK$47.0bn.

Dow flattened as investors brace for Friday's jobs report

The Dow Jones Industrial Average ended little changed on Thursday, with investors remaining concerned that interest rates will be higher for longer, ahead of Friday's jobs report. The jobs report will influence the Federal Reserve's decision on whether to raise interest rates next month. The Dow Jones Industrial Average was down 0.03% at 11 points, the Nasdaq was down 0.1% and the S&P 500 was down 0.1%. U.S. Treasury yields fell again on Thursday but remained at multi-year highs as investors were wary of resuming their rally and a stronger jobs report on Friday could signal the Federal Reserve has more work to do to keep the momentum going. Restrict economic growth. Rivian Automotive's shares fell 22% after it unveiled detailed plans to issue $1.5 billion in convertible bonds. Plans to raise market capital to support the upcoming R2 sports utility vehicle (SUV) are coming earlier than some expected.

The labor market continues to send mixed signals ahead of Friday's jobs report

Initial jobless claims for the week ended September 30 were 207,000, an increase of only 2,000 from the previous week. Economists' forecast was 210,000. The data added to the mixed picture in the labor market, including an unexpected rise in labor demand and slower private sector job growth so far this week. Friday's jobs report will shed further light on the state of the job market. The U.S. economy is expected to have created about 170,000 jobs last month, with wage growth likely to be 0.1% for the month but remaining steady in the 12 months to September.

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China Telecom
00728

Operating revenues of the Company in 1H23 amounted to RMB260.7bn, representing an increase of 7.6% yoy. Of which, service revenues grew 6.6% yoy to RMB236.0bn, remaining above the industry’s growth rate. EBITDA grew 5% yoy, and amounted to RMB73.3bn. Revenue from Industrial Digitalization service reached RMB68.8bn, representing an increase of 16.7% yoy, maintaining its rapid growth trend. Revenue from China Telecom Cloud reached RMB45.9bn, representing a yoy growth of 63.4%. The management expects cloud revenue growth to accelerate in the second half of the year, and maintains the target of a full-year revenue scale of RMB100bn. China Telecom declared an interim dividend of RMB0.1432 per share based on its 65% payout ratio, and that it will rise to over 70% by the end of 2023. Overall, the interim results are in line with expectations, and the dividend payout ratio is attractive, thus the investment value is still there. Target price: $5; Stop- Loss price: $3.6.

Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.

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