KGI Asia Commentary

Hang Seng Index fell 184 points on Monday

After HSI opened 5 points lower, it once fell 201 points.  The index fell 184 points or 1.1% to close at 16,155 today; the HSCEI fell 73 points or 1.3% to close at 5,484; the HSTECH fell 89 points or 2.7% to close at 3,253. The total daily turnover of the market was HK$82.09bn. The CIH said that the average daily transaction area of first-hand housing during the Spring Festival holiday fell by about 27% yoy. Mainland property sector generally fell, with the decline ranging from 4.0% to 6.3%. Domestic demand stocks were weak today, with Li Ning (2331) falling 8.6%, becoming the worst-performing blue-chip stock.

Germany may follow Japan in technical recession

Amid high interest rates and continued weak demand for goods, Germany, as a global industrial and export power, might fall into a technical recession. The Bundesbank said in a monthly report on Monday that the German economy may shrink slightly in the first quarter of this year due to many external challenges, including weak external demand and sluggish consumer spending. Considering that inflation in the European Union is still at a high level, real GDP is more likely to regress after deducting the price deflator, which is similar with case in Japan earlier. As long as PMI and unemployment have not deteriorated significantly, investors may not need to worry too much about the technical recession caused by inflation.

Yesterday was the anniversary of Washington's birthday in the United States, and the U.S. stock market was closed for the day.

Hainan Province reduces first-time housing down payment ratio again in less than four months

Earlier, the CIH announced new residential sales figures during the Lunar New Year period. The transaction volume of second-hand properties increased significantly. However, the 25 tracking cities were still sluggish during the New year holiday. The average daily transaction area of new properties fell by 27% compared with the same period last year. As the real estate downtrend has yet to bottom out, some provinces and cities have stepped up measures to rescue the market. For example, Hainan Province announced that it has once again lowered the minimum down payment ratio for first-time housing from 25% to 20%. It only took less than four months for it to lower the down payment again.

The net inflow of Hong Kong Stock Connect on Monday was HK$4.27bn, of which CNOOC (0883) had the largest inflow, reaching HK$616mn; followed by China Mobile (0941). HSBC Holdings (0005) recorded the largest net outflow of HK$114mn; followed by Tencent (0700).