KGI Asia Commentary

2024.08.20 10:00

Hang Seng Index rose 139 points on Monday

The Hang Seng Index closed at 17,569 points for the day, up 139 points or 0.8%. The Hang Seng Technology Index reported at 3,517 points, up 58 points or 1.7%. The HSCEI Index rose 63 points, or 1.0%, to 6,225 points. The market turnover was HK$94.4billion.

The S&P 500 and Nasdaq Composite Index rose for eight consecutive trading days

The S&P 500 climbed on Monday as worries about an economic recession continued to ease, the Federal Reserve will release minutes of its July meeting, and Fed Chairman Jerome Powell is expected to deliver keynote speeches at the Jackson Hole central bank symposium on Friday and provide clues to future monetary policy. The Dow Jones Industrial Average rose 236 points, or 0.6%, the S&P 500 rose 1%, and the Nasdaq Composite rose 1.4%. Advanced Micro Devices shares rose more than 4% after the company said it planned to acquire server maker ZT Systems for $4.9 billion to expand its artificial intelligence chip and hardware product portfolio. HP shares fell more than 3% as Morgan Stanley downgraded the PC maker to overweight from overweight on concerns that demand may slow in the second half of the year. Earnings season continues this week, with retailer Target and home improvement chain Lowe's expected to report this week.

Fed minutes and Jackson Hole meeting take center stage

Now, with hopes growing for an imminent rate cut, investors are looking for insight into where rates are headed. They will be watching Federal Reserve Chairman Jerome Powell's speech on Friday at the central bank’s symposium in Jackson Hole. Ahead of that, traders will parse the minutes from the Federal Reserve's most recent meeting on Wednesday. Powell's speech is expected to pave the way for a rate cut in September, with consensus currently betting on a 25 basis point cut.

Hong Kong Stock Connect had a net outflow of HK6.1bn on Monday of which China Mobile (941) had the largest net inflow, reaching HK$0.13bn; followed by CCB (939). Tracker Fund (2800) recorded the largest net outflow at HK$5.05bn, followed by CSOP HS TECH (3033).

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China State Construction
03311

The Group’s results registered steady growth with newly signed contracts amounted to HKD125,130mn, representing a yoy increase of 29.2%. The unaudited revenue amounted to HKD61,755mn, increase 12.1% yoy. The profit attributable to the shareholders increased by12.7% to HKD5,465mn. The Board declared the distribution of an interim dividend of HK33 cents per share for the year of 2024, translating to a dividend payout ratio of about 30.4%, an increase of 1.8 percentage points compared to the same period last year. In terms of HK and Macau Markets, the Group fully leveraged its rich experience in construction and its advantages in construction technology, and formed a consortium with the French Veolia Group to successfully win the bid for the West New Territories Landfill Extension (“WENTX”). The total contract amount of the project reached HKD61.1bn (with the Group’s attributable contract value of approximately HKD42.8 bn), making it the largest engineering project in the history of the Group. Meanwhile, for the Chinese Mainland Market, the Group continues to promote the application of MiC technology. Considering the steady growth of the company's performance, MiC continues to promote business growth, and the opportunities brought by the development of the northern metropolitan area, the investment value of China State Construction remains. Target price: $12.3; Stop- Loss price: $10.6.

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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