KGI Asia Commentary

Hang Seng Index rose 133 points on Tuesday

The Hang Seng Index opened 166 points higher at 17,806 points. The full-day gain narrowed slightly to 133 points, or 0.7%, to 17,773 points; the H-Share Index rose 43 points, or 0.7%, to 6,092 points; Hang Seng Technology index rose 24 points, or 0.6%, to 3,836 points. The total daily turnover of the market was HK$63.5 bn. Today, Country Garden (2007) needs to pay US$15 million in bond interest after the 30-day interest grace period ends, and its stock price remains unchanged. China National Building Materials (3323) issued a profit warning, and its stock price fell slightly by 0.2%.

U.S. business inventories rose 0.4% month-on-month in August, slightly beating consensus

U.S. companies' outlook on the market outlook may also turn positive. U.S. business inventories rose 0.4% MoM (seasonal adjusted) in August, slightly better than market consensus of a 0.3% rise. July's rise was 0.1%. Excluding automobiles, retail inventories rose 0.5% MoM in August, unchanged from the previous month, and below market consensus of a 0.6% increase. Among them, retail inventory grew the fastest, rising 1% MoM and 0.5% last month; manufacturing inventory increased 0.3% MoM. After deducting seasonal factors, the increase in product inventory reflects the company's expectation that sales will continue to perform well in the future.

The three major U.S. stock indexes had different trends. Among them, only DJIA rose 13 points or 0.04% to close at 33,997; while the S&P 500 closed flat at 4,373; the Nasdaq composite fell 34 points or 0.25% to close at 13,533.

U.S. retail sales increased 0.7% MoM in September, better than consensus

Although interest rates remain high, they still do not hinder the consumption momentum of American residents. Retail sales growth in September far exceeded consensus. Retail sales in September increased by 0.7% MoM, higher than market expectations of 0.3%; sales excluding automobiles increased by 0.6%, which was also much higher than the only 0.2% forecast. Among the items of retail sales, miscellaneous retail sales experienced the significantly growth, up 3% YoY. Online sales increased 1.1% MoM and 9.2% YoY, with only electronic appliances and clothing falling 0.8% this month.

Hong Kong Stock Connect saw a net inflow of HK$533mn on Friday, of which Meituan (3690) had the largest inflow, reaching HK$253mn; followed by Anta Sports (2020). Kuaishou (1024) recorded the largest net outflow of HK$267mn; followed by CNOOC (0883).