KGI Asia Commentary
HSI rose 119 points on Friday
The Hang Seng Index opened 250 points higher at 19,671 points on friday, it rose 119 points or 0.6% to 19,539 points. The H-Share Index rose 80 points or 1.2% to 6,732 points. The Hang Seng Technology Index rose 91 points or 2.1% to 4,497 points. The market's full-day turnover was HK$ 114.4 bn. Maoyan Entertainment (1896) jumped 17.1% to HK$10.16 after it issued a profit alert. In addition, medical platform stocks performed well, including YSB (9885) and Medlive (2192), which latter announced a positive profit alert, soared 6.2% and 10.5% respectively.
U.S. labor market cools, but remains somewhat resilient
The three major U.S. stock indexes all closed down on Friday. The Dow Jones index fell 150 points, or 0.43%, to 35,066 points; the Nasdaq index fell 50 points, or 0.36%, to 13,909 points; the S&P 500 index fell 24 points, a drop of It was 0.53 percent at 4,478 points. 84% of S&P 500 companies have reported earnings so far, and 80% of them have beaten expectations. Amazon's stock surged last week after it announced earnings that beat expectations and provided positive guidance. On the other hand, Apple Inc. announced after the market closed on Thursday that its revenue was lower than the same period last year, and its stock price fell for the week.
In addition to the earnings report, traders are closely followed with the non-farm payrolls data to gauge the strength of the labor market and the U.S. economy, and their implications for the Fed's monetary policy path. The number of non-farm payrolls increased by 187,000 in July, lower than market expectations of 200,000 and a 32-month low. But at the same time, the unemployment rate fell by 0.1 percentage point to 3.5% in July, and the average hourly wage increased by 0.4% month-on-month, 0.1 percentage point faster than market expectations. Overall, the U.S. labor market has cooled, but remains somewhat resilient.
People's Bank of China guides banks to cut personal housing loan rate
Last Friday, the People's Bank of China stated in a press conference that the RRR cuts, open market operations, medium-term lending facilities, and various structural monetary policy tools all have the aggregate effect of injecting liquidity. The current goal is to maintain a reasonable level of liquidity in the banking system. It is pointed out that in the future, it will continue to play a good role in the efficiency and guiding role of loan market quotation interest rate reform, and guide banks to adjust the interest rate of personal housing loans in an orderly manner. The decline in interest rate may help to boots the housing sales.
Hong Kong Stock Connect had a net outflow of HK$ 5.74 bn on Friday, of which Longfor (960) had the largest inflow of HK$200 mn; followed by China Construction Bank (939). Tracker Fund (2800) recorded the largest net outflow of HK$4.31 billion; followed by Hang Seng China Enterprises (2828).
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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