KGI Asia Commentary

HSI fell 376 points on Friday

The Hang Seng Index opened 117 points lower on Friday, opening at 18,209 points, and the full-day decline extended to 376 points, or 2.05%, to close at 17,951 points; the China Enterprises Index fell 145 points, or 2.3%, to 6,147 points; the Hang Seng Technology Index fell 151 points, or 3.6% at 4,007 points. The market turnover was HK$106.4 bn. Evergrande Property (6666) and Evergrande Automobile (708) fell 9.1% and 16% respectively. Longfor (960) fell 3.8% to HK$16.54 after the results announcement.

U.S. consumer sentiment forecasts continue to fall

The Dow rose 25.83 points, or 0.07%, to 34,501 point ; the Nasdaq fell 26 points, or 0.20%, to 13,291 point; the S&P 500 fell 0.65 point, or 0.01%, to 4,370 point. All three major U.S. stock indexes recorded losses this week. The Dow fell 2.2% for the week, its biggest weekly drop since March. In fact, on Thursday, the Dow closed below its 50-day moving average for the first time since June 1, which was seen by investors as a bearish signal. The market has pointed out that investors are reflecting on the optimism since July. Although the economy will still grow, the market is concerned about the continued high yields of long-term government bonds. Plus, the minutes of the Federal Reserve's July monetary policy meeting released on Wednesday dampened hopes that the Fed had finished raising interest rates.

With 10-year Treasury yields at levels not seen since the financial crisis, cooling risk appetite weighed on growth stocks. In the coming week, the game about the Fed's policy outlook will continue to affect the market trend, and whether the uncertainty disturbance can be weakened will become a point of view.

The People's Bank of China and multiple departments discuss the follow-up financial stimulus plan

Last Friday, the People's Bank of China, the State Administration of Financial Supervision and the China Securities Regulatory Commission held a video conference, including exchanges, domestic banks and China Life. The meeting mainly studied the implementation of financial support for the development of the real economy and the prevention and resolution of financial risks. Such as increasing the intensity of loans and adjusting and optimizing the real estate credit policy and so on.

Hong Kong Stock Connect had a net outflow of HK$ 4.09 bn on Friday, of which CNOOC (883) had the largest inflow of HK$457 mn; followed by Tencent Holdings (0700). Tracker Fund (2800) recorded the largest net outflow of HK$4.89 bn; followed by Hang Seng China Enterprises (2828).