KGI Asia Commentary

HSI fell 25 points on Monday

The Hang Seng Index opened 32 points higher before expanded to 113 points before turning down. It fell 25 points or 0.2% to close at 16,473; the HSCEI fell 3 points or 0.05% to close at 5,754; the HSTECH fell 18 points, or 0.5%, to close at 3,437. The total daily turnover of the market wasHK$112.71bn. The market expects Meituan (3690) to reduce “Bi-mall”’s losses this year, and its stock price rose 5.7% today. It was reported that Apple (AAPL.US) is discussing using Baidu's (9888) AI technology in domestic devices, and the latter's stock price rose 2.5%. China Hongqiao (1378) net profit increased by 32% last year, and its stock price rose by 13.4%.

Fed members are divided on interest rate cuts

Federal Reserve Board members are divided on the number of interest rate cuts this year. Federal Reserve Board Governor Lisa Cook and Atlanta Fed President Raphael Bostic take a more conservative stance, believing that the inflation targeting will always be fluctuated. Given the good momentum of the U.S. economy, inflation will only fall slowly. The caution is needed when considering loosening monetary policy. Chicago Fed President Austan Goolsbee believed that three interest rate cuts this year are reasonable, and the trend of falling inflation in the 2H24 is not expected to change. The economic figures are now also relatively mixed. PMI and job vacancies show that overall demand still exists, while retail sales have been worse than expected for two consecutive months.

All three major U.S. stock indexes recorded declines, with the DJIA falling 162 points or 0.41% to close at 39,313; the S&P 500 falling 15 points or 0.31% to close at 5,218; and the Nasdaq composite falling 44 points or 0.27% to close at 16,384.

Reducing car down payment in China is coming soon

According to Reuters, the Chinese government proposed to introduce policies to stimulate domestic demand, including policies to reduce the down payment ratio of auto loans. The government expects that this will help support automobile sales, increase the penetration rate of automobile finance, expand the automobile consumer market, and support the development of the automobile industry. The current minimum down payment ratio for new energy vehicle loans is 15%, and the minimum down payment ratio for gasoline vehicles is 20%. According to data from the Mainland Passenger Car Association, car sales rose 4% year-on-year in the first 10 days of March and fell 4% month-on-month, which may reflect many challenges in car sales this year.

Hong Kong Stock Connect recorded a net outflow of HK$6.34 bn on Monday. Among them, Xiaomi (1810) had the largest net inflow, reaching HK$370mn; followed by China Hongqiao (1378). Tracker Fund (2015) recorded the largest net outflow of HK$7.22bn; followed by HSCEI ETF (2828).