KGI Asia Commentary
HSI rose 135 points on Friday
The Hang Seng Index opened 106 points higher at 18,154 points. Hang Seng Index closed at 18,183 points, up 135 points or 0.7%, on Friday. The Hang Seng Technology Index rose 19 points to 4,078. H-Share index rose 34 points to 6,309 point. Market turnover reached HK$118 bn. Yum China (9987) benefited from an upward revision of its full-year outlook and economic data, and its stock price rose by more than 4% today. However, mainland property-related stocks under selling pressure CG Services (6098) fell by 1.8%. Sino-Ocean Group (3377) fell by more than 12%.
Strikes at U.S. car companies continued
U.S. stock indexes closed down on Friday, with technology stocks suffering the deepest losses. The Dow Jones index fell 289 points, or 0.83%, to 34,618 points. The Nasdaq index fell 218 points, or 1.56%, to 13,708 point. The S&P 500 index fell 55 points, a decrease of 1.22%, to 4,450 points. Last week, the Dow rose 0.12%, the Nasdaq fell 0.39%, and the S&P 500 fell 0.16%.
The current strike issue among automakers in the United States continues to simmer, and a new labor agreement has not yet been reached. The management of the United Auto Workers (UAW) has decided to launch a 10-day strike. In addition, U.S. President Biden commented on the strike for the first time, believing that automakers have made record profits and should share the results fairly with workers.
In terms of economic data, the initial value of the University of Michigan's consumer confidence index in the United States in September was 67.7, which was lower than the expected 69. It was the second consecutive month of decline in the index. The survey reflected that the decline in living standards was mainly caused by rising food and natural gas prices. But on the other hand, Michigan's one-year inflation expectations have dropped significantly, from 3.5% in the previous month to 3.1%, which is also lower than the 3.5% expected by the market. The decline in short-term inflation may strengthen the U.S. monetary policy meeting next week is expecting a stable interest rates.
Retail and value-added industrial output beat expectations
Last Friday, the National Bureau of Statistics released the Retail Sales, value-added industrial output and Fixed Asset Investment data for August, in which total retail sales and value-added industrial output increased by 4.6% and 4.5% respectively year-on-year, both beats market expectations. However, private fixed asset investment still showed no improvement, and the decline further expanded by 0.2 percentage points from the first seven months to minus 0.7%. The overall fixed investment growth rate continued to fall back to 3.2%, which was lower than market expectations.
The net inflow of Hong Kong Stock Connect on Friday was HK$ 1.19 bn. Among them, China Mobile (941) had the largest inflow, reached HK$360 mn, followed by Innovent Biologics (1801). CNOOC (883) recorded the largest net outflow of HK$330 mn, followed by PetroChina (857).
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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