KGI Asia Commentary

2024.02.02 09:00

Hang Seng Index rose 81 points on Thursday

The Hang Seng Index rose 81 points or 0.5% to 15,566 on Thursday. HSTECH rose 60 points or 2.0% to 3,065 and HSCEI rose 29 points or 0.6% to 5,223. Daily market turnover was HK$94.9bn.

Dow resumes record run as dip buyers pile into tech

The Dow closed higher on Thursday, hitting a new high, as a Federal Reserve-led sell-off the day before attracted dip buying in technology stocks ahead of non-farm payrolls data due on Friday. The Dow Jones Industrial Average rose 369 points, or 1%, to close at 38,519.84 points, a record high. The S&P 500 rose 1.2% and the Nasdaq gained 1.3%. Shares of Amazon and Facebook parent Meta Platforms surged in after-hours trading Thursday after the company reported quarterly results that topped Wall Street expectations. Semiconductor stocks edged higher, but Qualcomm shares fell nearly 5%, curbing gains in the sector as investors worried about a maturing 5G smartphone market and declining market share, which weighed on the stock market. Fitness company Peloton Interactive reported a poor outlook for revenue and free cash flow, sending its shares down 24%. Royal Caribbean Cruises gave up early gains to end just below flat even as it reported quarterly results and guidance that beat Wall Street expectations on strong demand for cruise vacations. Merck reported better-than-expected fourth-quarter results and strong sales of its cancer immunotherapy Keytruda, now the world's largest-selling prescription drug. The company's stock price rose more than 4%.

Jobless claims rise

In the week ended January 27, initial jobless claims rose to 224,000 in the week ended Jan. 27, higher than the upwardly revised 215,000, the highest level since mid-November last year. The next day, the United States will release non-farm payroll data, which is expected to show a decline in the number of new jobs created last month.

Hong Kong Stock Connect had a net outflow of HK$1.34bn on Thursday, of which CNOOC (883) had the largest net inflow, reaching HK$0.19bn; followed by Shenhua (1088). Tencent (700) recorded the largest net outflow at HK$0.40bn, followed by Meituan (3690).

Recommended Stocks

Capture the moment and trade with KGI Asia's insights

Stocks

Recommended

Stocks

Recommended

Trip.com
09961

Ctrip reported that the number of New Year's holiday travel bookings in Mainland China surged 168% year-on-year, while the number of outbound travel orders leapfrogged 388%. In terms of travel spending in high-end resort hotels and self-booked tours, the average per capita spending of tourists soared by varying degrees. As a recap of Trip.com's 3Q23 result, its quarter revenue was RMB13.75bn, up 99.4% yoy and 22.1% qoq. Adjusted net profit was RMB4.89bn, up 3.7 times yoy and 42.6% qoq. The third quarter spans the summer vacation period, which is the traditional peak tourism season, therefore recorded strong growth. Domestic tourism business continues to recover, with domestic hotel bookings increased by more than 70% compared to the pre- covid level for the same period in 2019. The outbound hotel and air reservations recovered to around 80% of the pre-COVID level for the same period in 2019, rising from the 60% in the previous quarter, and recorded a faster- than- peers recovery rate. As international flights gradually resume, Trip.com will continue to benefit from the industry recovery. Recent platform data shows that both domestic and foreign travel demand remains resilient. Trip.com's travel booking growth in the Asia-Pacific region is likely to be led by Singapore, Macau, Hong Kong and South Korea, as data shows the number of flights to these destinations is recovering faster than the overall average. Target price: $320; Stop- Loss price: $260.

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.

The materials contained herein are provided by KGI Asia Limited ("KGI") for information only. While such materials are based on or derived from sources believed to be reliable, KGI makes no representation or warranty (express or implied) as to their accuracy or reliability. Neither the information nor the opinions expressed herein constitute, or are to be construed as, an offer or invitation or solicitation of an offer to buy or sell any securities or investments. KGI and its officers, employees, agents and affiliates may have interests in the securities or investments covered herein and accept no liability whatsoever for any loss or consequence whatsoever (whether direct or indirect) resulting from any use of or reliance by you on such materials.