KGI Asia Commentary
Hang Seng Index rose 2 points on Wednesday
The Hang Seng Index opened 23 points lower, then rose 67 points and then fell 81 points. It rose 2 points to close at 16,251 today with 161 points trading range; the HSTECH was at 3,340, up 2 points or 0.1%; the HSCEI rose 5 points or 0.1% to 5,749. The market turnover was HK$99.19bn. Galaxy Entertainment (0027) was downgraded by major banks and fell 7.1% today. Heavyweight technology stocks generally fell, with Tencent (0700) and Alibaba (9988) falling 0.3% and 0.7% respectively.
The Fed may stop QT next year
The Federal Reserve may stop QT in 2025, according to a forecast from the New York Fed. The Federal Reserve's policy meeting last month began to discuss slowing down the pace of balance sheet reduction, but no decision was made. The Federal Reserve is currently reducing its holdings of Treasury bonds and mortgage-backed securities (MBS) at a rate of US$95bn per month. The market expected that the reduction of Treasury bond holdings will be reduced to US$30bn per month, while the rate of reduction of MBS holdings remains unchanged.
All three major U.S. stock indexes recorded declines. The Nasdaq composite fell 181 points, or 1.15%, to close at 15,683; the S&P 500 fell 29 points, or 0.58%, to close at 5,022; the DJIA fell 45 points, or 0.12%, to close at 37,753.
March Beige Book shows economic growth in most regions
The U.S. Federal Reserve released its economic survey report for March, commonly known as the "Beige Book." The report pointed out that overall economic activity in the U.S. expanded slightly. 10 of the 12 regional Federal Reserve Bank jurisdictions reported a slight increase in economic growth, while the other 2 said there were no significant change in economic conditions. In addition, the price sensitivity of U.S. consumers remains high, companies' ability to pass on costs has recently been greatly reduced, and profit margins have fallen. This may reveal that U.S. companies that are concentrated in the domestic market may experience a decline in gross profit margins in their 1Q24 results.
The net inflow of Hong Kong Stock Connect on Tuesday was HK$1.15bn. Among them, Tencent (0700) had the largest inflow, reaching HK$805mn; followed by China Mobile (0941). Tracker Fund (2800) recorded the largest net outflow of HK$5.06bn; followed by HSCEI ETF (2828).
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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