KGI Asia Commentary
HSI rose 402 points on Friday
The Hang Seng Index opened 77 points lower on Friday. After opening at 17,578, it tested the August low and found support. It rose 402 points or 2.3% throughout the day to 18,057 points; the H-Share Index rose 163 points or 2.7% to 6,262 points; Hang Seng Technology The index rose 142 points, or 3.7%, to 3,991 points. The total daily turnover of the market was HK$101.8 bn. Technology stocks led the gains, with Alibaba (9988) rising 3.9% to HK$85.9, and Tencent (700) rising 3.5% to HK$313. Automobile stocks also performed well, with BYD (1211), Li Auto (2015) and Xpeng (9868) rising 3.2%, 4% and 5.5% respectively.
Car factory workers continued to strike
The market is paying attention to the Federal Reserve's policy stance and the development of the U.S. auto workers' strike. Last Friday, the Dow Jones index fell 106 points, or 0.31%, to 33,964 points; the Nasdaq index fell 12 points, or 0.09%, to 13,212 points; The S&P 500 index fell 10 points, or 0.23%, to 4,320 points. After the Federal Reserve announced its interest rate decision and policy last week, the dollar and U.S. Treasuries climbed, putting pressure on major stock indexes. In addition, economic data released this week showed that the U.S. labor market remains tight, raising concerns that the Federal Reserve will stick to its tightening policy.
On the issue of factory worker strikes, only Ford Motor Co. has agreed to an improved profit-sharing. Ford agreed to convert temporary employees with at least a 90-day employment period to permanent employees upon approval and also agreed to restore cost-of-living allowance (COLA). In addition, other car factories have not reached an agreement, and in terms of the scale of the strike, about 5,600 workers from the other three major car factories will join the original 13,000 striking workers.
Relaxation of mortgage guarantees for off-the-plan properties
In the past few months, Hong Kong real estate transactions have been sluggish, with the CCL index last reporting at 158.85, down 0.64% week-on-week. On Friday, in response to another move in the Hong Kong property market, the mortgage insurance company announced that it would revise the mortgage insurance plan for pre-construction residential properties. The mortgage insurance percentage for eligible pre-construction properties with a value of less than 30 million will be relaxed, and the percentage of mortgage insurance for properties with a value of less than 10 million will be 90%. The measures only target first-hand off-plan properties and have not been relaxed in the financial stress test. They will have limited help for the overall Hong Kong property market development.
Hong Kong Stock Connect saw a net outflow of HK$4.2 bn on Friday, of which Tencent (700) had the largest inflow, reaching HK$569 mn; followed by Meituan (3690). Tracker Fund (2800) recorded the largest net outflow of HK$5.23 bn; followed by CSOP Hang Seng Technology (3033).
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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