KGI Asia Commentary
HSI fell 252 points on Monday
The Hang Seng Index opened 113 points lower and fell 181 points in the mid-day. The HSI fell further in the afternoon, closing at 17,930 today, down 252 points or 1.4%. The HSTECH reported at 3,987, down 90 points or 2.2%. The HSCEI fell 100 points, or 1.6%, to 6,209. The market turnover was HK$84.51bn. Chinese research institution pointed out that the transaction area in first-tier cities fell by 8.9% WoW last week, and Chinese property stocks generally fell. The share prices of Longfor (0960) and China Resources Land (1109) fell by 2.6% and 3.4% respectively. Sunac China (1918) is rumored to be spinning off its real estate projects in Hainan, and its stock price rose 6.9%.
Yellen remains confident amid auto industry strike crisis
Regarding whether the current U.S. auto industry strike will stimulate inflation again, U.S. Treasury Secretary Yellen said that it was still early to judge the impact of the U.S. auto industry strike on the economy, and she was confident that labor union and vehicle manufacturers will continue to negotiate to reach a solution. She believed that the current labor market was still in a healthy state. Given the small number of labors in the strikes, wage increases will have limited effect on pushing up inflation. Although the reduction in automobile supply provides resistance to slowing inflation, rising automobile inventories also make it more difficult for automakers to pass on costs to consumers.
All three major U.S. stock indexes recorded slight gains. The S&P 500 rose 3 points, or 0.07%, to close at 4,453 points; the DJIA rose 6 points, or 0.02%, to close at 34,624 points; and the Nasdaq Composite rose 1 point, or 0.01%, to close at 34,624 points. 13,710 points.
Shanghai’s building transactions are reflecting the divergence of recovery momentum
After the central government launched a series of policy for the property market, housing sales were currently in a relatively differentiated situation. According to mainland agency data, the transaction area of first-hand residential buildings in Shanghai last week was 86,800 square meters, a WoW increase of 53.3%. However, the overall transaction area of the Shanghai real estate market fell by 15.1% on a WoW, reflecting that the secondary market was still frozen, and investors were not willing to enter the market until the fundamentals changed.
Hong Kong Stock Connect saw a net inflow of HK$8.73bn on Monday. Among them, Tracker Fund (2800) had the largest net inflow, reaching HK$3.84bn; followed by Southern Hang Seng Technology (3033). Sunac China (1918) recorded the largest net outflow of HK$17mn.
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