KGI Asia Commentary

Hang Seng Index fell 363 points on Friday

The Hang Seng Index opened 118 points lower last Friday, at 16,745 points, and fell 363 points, or 2.2%, to 16,499 points throughout the day; the China National Index fell 148 points, or 2.5%, to 5,757 points; the Hang Seng Technology Index fell 127 points, or 3.5%. It was quoted at 3,456 points. The total daily turnover of the market was HK$135.6 billion. CK (1113)'s net profit fell 20% and its final dividend dropped 12.4% year-on-year. Its stock price fell 10.7%. Orient Overseas (316)'s net profit and dividends fell sharply, and its stock price fell 16.7%. In addition, Li Auto (2015) also fell 10%.

The three major U.S. stock indexes were mixed

U.S. stocks closed with mixed on Friday. The Dow Jones index fell 305.47 points, or 0.77%, to 39475.90 points; the Nasdaq index rose 26.98 points, or 0.16%, to 16428.82 points; the S&P 500 index fell 7.35 points, It fell 0.14% to 5234.18 points. Last week, the Dow rose 1.96% for the week, the Nasdaq rose 2.85%, and the S&P 500 rose 2.29%.

Last week, the market focused on the prospect of the Federal Reserve cutting interest rates. After the dot plot showed a full-year interest rate cut of 75 basis points, the market continued to have different voices. When chairing the "Fed Listens" event on Friday, Federal Reserve Chairman Powell pointed out that policymaking cannot rely solely on economic data, but also needs to listen to the opinions of individuals and businesses in order to formulate good policies. In fact, expectations for interest rate trends are constantly changing. For example, Atlanta Federal Reserve Bank President Raphael Bostic recently even believed that there will only be one interest rate cut this year, which is more hawkish than his statement last month that he expected twice for the rate cut. Different officials will make statement in the future, and the market's interest rate cut expectations may change accordingly.

Premier Li Qiang delivered a speech at the China Development Forum

Premier Li Qiang attended the China Development Forum in Beijing and delivered a keynote speech, pointing out that the fundamentals of China's long-term economic growth have not changed and that China will continue to focus on expanding domestic demand and accelerating the development of new productive forces. It reiterated that it will promote the construction of a unified national market, promote large-scale equipment updates and the replacement of durable consumer goods. At the same time, other aspects such as technological innovation, upgrading of traditional industries and emerging industries are also one of China's development directions.

Hong Kong Stock Connect saw a net inflow of HK$14.5 billion on Friday, of which Tracker Fund (2800) had the largest inflow, reaching HK$3.55 billion; followed by Hang Seng China Enterprises (2828). Semiconductor Manufacturing International Corporation (981) recorded the largest net outflow of HK$179 million, followed by Innovent Biologics (1801).