Daily Investment Strategy
Hang Seng Index fell 438 points on Monday
The Hang Seng Index opened 311 points lower and got further decline. It once dropped 574 points and fell as low as 21,085. HSI closed at 21,222, down 438 points or 2.0%. HSTECH closed at 4,464, down 169 points or 3.7%. HSCEI fell 197 points, or 2.7%, to 7, points. Market turnover was HK$136.0bn. China tech-stocks generally fell. Tencent (0700) and Alibaba (9988) lost 2.1% and 2.7% respectively. Only SenseTime (0020) rose 6.4%. The EV sector followed the market down, and NIO (9866) and Li Auto (2015) fell 5.4% and 3.2% respectively.
Yellen again denies high risk of U.S. recession
U.S. Treasury Secretary Yellen once again ease the economic recession once again. She said that if the United States provided half a million new job openings and unemployment rate remained the lowest in historical level, the United States would not have a recession. Such strong employment rate showed the economy still remained strong. The current market opinions are quite divided. Those who support the recession believe that the yield curve inversion (10-year Treasury yield - 2-year Treasury yield) is a leading indicator of recession. On the other hand, the opposite side stands that it is impossible to fall into recession under low unemployment. In any case, the uncertainty in 2023 is believed to not be as low as the previous year.
On Monday, the three major U.S. stock indexes continued to report losses. The Nasdaq index fell 119 points, or 1.0%, to 11,887. The S&P 500 fell 25 points, or 0.6%, to 4,111. The Dow Jones index fell 34 points, or 0.1%, to 33,891 points.
HKSAR’s Chief Executive visits Saudi Arabia and seeks to list Saudi Aramco in HKEx
Chief Executive John Lee Ka-chiu is visiting Saudi Arabia, and one of the itineraries is to meet with the chairman of Saudi Arabia's state-owned oil company, Saudi Aramco. They have discussed the possibility of Saudi Aramco listing in HKEx. As a state-owned oil producer, Saudi Aramco is the company with the highest annual revenue in the world. If Saudi Aramco can finally list in the Hong Kong market, it is believed that the HKEx can return to the top tier of IPO fundraising in 2023. Saudi Arabia is now starting to establish more trade agreements with China, and there is a solid possibility for Saudi Aramco to list in Hong Kong.
Hong Kong Stock Connect had a net inflow of HK$2.0bn on Monday, of which Tracker Fund (2800) had the largest net inflow of HK$3.08bn; followed by Hang Seng China Enterprises (2828). Meituan (3690) recorded the largest net outflow of HK$1.29bn; followed by HKEx (0388).
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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