Daily Investment Strategy
Recommended Stock：CMB（3968）
The PBOC’s 3Q24 report flagged exchange rates and net interest margins as limits to further rate cuts. We expect 2024 rate cuts with reserve requirement reductions to boost liquidity, with narrower margin declines. Lower deposit rates may drive funds from term deposits to higher-yield investments, benefiting leaders like China Merchants Bank (CMB). Management forecasts stronger growth in 2025 social financing and loans, supporting CMB. With 55% of its 3Q portfolio in retail loans, CMB is well-placed to gain from stimulus and improving demand. Target price: $43.
JOLTS job openings higher than expected
As a measure of labor demand, U.S. job openings rose to 7.74 million in October from 7.37 million in September, exceeding expectations of 7.5 million. Better-than-expected employment data showed the health of the labor market ahead of the November non-farm payrolls report due Friday. The market is paying attention to Federal Reserve Chairman Powell's speech on Wednesday. While markets have so far maintained expectations for a rate cut in December, the long-term outlook is more uncertain, especially when it comes to inflation under the Trump administration.
Hong Kong Stock Connect had a net inflow of HK$0.29bn on Tuesday of which Alibaba (9988) had the largest net inflow, reaching HK$0.058bn; followed by Everest Med (1952). Tracker Fund (2800) recorded the largest net outflow at HK$1.34bn, followed by Meituan (3690).
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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