KGI Asia Commentary
Hang Seng Index fell 170 points on Friday
The Hang Seng Index opened 84 points lower on Friday, at 18,028 points, and fell 170 points, or 0.9%, to 17,942 points for the day; the China National Index fell 47 points, or 0.7%, to 6,374 points; the Hang Seng Technology Index fell 31 points, or 0.8%, to 6,374 points; 3,707 points. The total daily turnover of the market was HK$116.2 billion. Mainland property stocks performed well last Friday, with Longfor (960) and China Resources Land (1109) rising 4% and 0.5% respectively. Chow Tai Fook (1929) announced a 21% increase in net profit for the year to the end of March, but the lack of a special dividend disappointed the market and its stock price fell 8.9%.
U.S. consumer confidence index continues to fall
U.S. stocks closed mixed on Friday, with the Nasdaq hitting record highs for five consecutive trading days. The Dow fell 57.61 points, or 0.15%, to 38589.49 points; the Nasdaq rose 21.32 points, or 0.12%, to 17688.88 points; the S&P 500 fell 2.10 points, or 0.04%, to 5431.64 points. Last week, the S&P 500 index fell 0.54%, the Nasdaq rose 3.24%, and the S&P 500 index rose 1.58%. The overall index performance is still driven by AI concept stocks and large technology stocks.
In terms of economic data, the preliminary value of the University of Michigan's consumer confidence index in the United States dropped from 69.1 to 65.6 in June, which was far lower than market expectations of 72. In addition, in terms of inflation expectations, prices will rise at an annual rate of 3.1% in the next five to ten years, slightly higher than the 3% expected in May. Consumer Inflation expectation remains at 3.3% over the next year, unchanged from the previous month's forecast. High inflation expectations may weaken market consumption. The economic environment of the consumer goods industry chain may continue to be under pressure, and investors will continue to favor AI related companies.
The People's Bank of China releases financial data
The People's Bank of China released a number of data last Friday. In May, M1 fell by 4.2% year-on-year due to a decrease in corporate demand deposits, while M2 maintained a positive growth of 7%, partly driven by the inflow of funds into wealth management products. In terms of social financing, May increased by RMB 513.2 billion year-on-year, mainly driven by government financing and corporate bond financing. However, RMB loans to entities increased by RMB 406.2 billion year-on-year. Residential loans increased year-on-year, while corporate loans increased by RMB 513.2 billion year-on-year, driven by bill financing.
Hong Kong Stock Connect saw a net inflow of HK$5.8 billion on Friday, of which Tracker Fund (2800) had the largest inflow, reaching HK$930 million; followed by China Mobile (941). Hong Kong Exchanges and Clearing (388) recorded the largest net outflow of HK$370 million, followed by Xiaomi (1810).
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