KGI Asia Commentary

Hang Seng Index fell 18 points on Friday

The Hang Seng Index opened 53 points lower at 18,881. The Hang Seng Index fell 18 points to 18,916 points on friday; the H-Share Index dropped slightly by 2 points to 6,425 points; the Hang Seng Technology Index fell 22 points or 0.6% to 3,911 points. The market turnover was HK$ 81.1 bn. New energy auto stocks performed well, among which Xpeng (9868) surged 10% and NIO (9866) rose 4.8%, driven by strong orders for new models launched by Xpeng (9868). Lithium stocks also performed well. Ganfeng Lithium (1772) and Tianqi Lithium (9696) rose 2.8% and 5.3% respectively.

Yellen reiterates confidence in U.S. economy

Last Friday, the three major U.S. stock indexes closed higher. The Dow Jones index rose 285 points, or 0.84%, to 34,408 points; the Nasdaq index rose 196 points, or 1.45%, to 13,788 points; the S&P 500 index rose 54 points, or 1.23%, to 4,450 points. In terms of performance in the first half of the year, the Nasdaq index soared 31.73%, the S&P 500 index rose 15.51%, and the Dow Jones index rose more moderately at 3.8%.

In terms of economic data, the price index for personal consumption expenditures in May released last Friday rose 0.1% month-on-month, and the year-on-year index growth fell to 3.8%, the lowest year-on-year increase in more than two years. As for the core PCE price index excluding food and energy, it rose by 0.3% month-on-month and 4.6% year-on-year, indicating that the pressure on high underlying prices has hardly eased. In addition, on Friday, U.S. Treasury Secretary Yellen reiterated her optimism about the U.S. economy, saying that although some economic indicators are slowing, it is expected that the current strength of the labor market, as well as strong household and corporate balance sheets will be the source of economic strength.

Official Manufacturing PMI Released

The National Bureau of Statistics announced the PMI index for June. The manufacturing PMI index was 49, an increase of 0.2 percentage points from the previous month. Although still in the contraction range, the decline has slowed down compared with last month. The PMI of medium and large enterprises was 50.3, which remained at expansion range, 0.3 percentage points higher from the previous month, represent the expansion accelerated from the previous month. As for the non-manufacturing PMI, it was 53.2, maintaining the expansion range for six consecutive months.

Hong Kong Stock Connect had a net inflow of HK$ 1.66 bn on Friday. Among them, Tracker Fund (2800) had the largest inflow, reaching HK$480 million; followed by China Mobile (941). HSBC (0005) recorded the largest net outflow of HK$300 million; followed by Tencent (700).