KGI Asia Commentary

Hang Seng Index fell 101 points on Thursday

The Hang Seng Index opened 97 points higher at 18,580 point, the index gain expanded to 185 points, but fell 101 points, or 0.5%, to 18,382 points at market close. The H-Share index fell 24 points, to 6,332 point. The Hang Seng Technology Index It fell 16 points or 0.4% to 4,179 points, with the market turnover was HK$ 136.5 bn. Ganfeng Lithium (1772)'s Mexican subsidiary's nine lithium mine concessions were cancelled, and its stock price fell 6.6%. In addition, Mengniu (2319)'s share price rose 5.6% after announcing its results, making it the best-performing blue chip stock.

August non-agricultural payroll is higher than expected, but unemployment rate and wage growth slow down

U.S. stock indexes had mixed trends on Friday. The Dow Jones index rose 116 points, or 0.33%, to 34,838 point. The Nasdaq index fell 3 points, or 0.02%, to 14,032 point. The S&P 500 index rose 8 points, or 0.18% at 4,516 point. Last week, the Nasdaq had was the best performer, with weekly performance of rose 3.25%.

In terms of economic data, the non-farm payrolls data that the market is paying attention to is higher than market expectations. After seasonal adjustment, the number of U.S. non-farm payrolls increased by 187,000 in August, which was higher than the 170,000 expected by economists surveyed, but at the same time, the report revised the number of non-agricultural payroll in June significantly downward from 185,000 to 80,000; the number of new non-farm employment in July was revised downward from 187,000 to 157,000. In addition, the unemployment rate increased by 0.3 percentage points to 3.8% in August, a new high since February last year. The average salary increased by 0.2% month-on-month, which was lower than the previous value of 0.4%, indicating that labor market conditions have eased and wages have increased. The pace was slower than expected, reducing pressure on the Fed to raise interest rates. That could bolster expectations that the Fed won't raise rates this month.

The People's Bank of China cuts the lower limit of down payment and stock mortgage interest rates

The People's Bank of China, together with the State Administration of Financial Supervision and Administration, announced a notice to optimize housing credit policies. In the notice, it mainly targets two measures. The first is to reduce the down payment ratio, the first home and second home will not be less than 20% and 30% respectively, and will no longer be subject to purchase restrictions; the second is to promote the reduction of existing mortgage interest rates. The first and second homes must not be less than LPR-20 basis points and LPR+20 basis points respectively. The measures will help reduce interest costs for existing mortgage borrowers. Part of the interest cost savings is expected to be converted into deposits, but overall it can be used for consumption. The idle funds may increase, which might help improve the effectiveness of subsequent consumption promotion policies.

The market was closed for one day due to a typhoon last Friday. The net inflow of Hong Kong Stock Connect on Thursday was HK$ 2.831 bn. Among them, CNOOC (883) had the largest inflow, reaching HK$ 328 mn Hong Kong dollars, followed by Meituan (3690). Tencent (700) recorded the largest net outflow of HK$497 mn, followed by PetroChina (857).