KGI Asia Commentary
Hang Seng Index fell 606 points on last Friday
The Hang Seng Index opened 345 points lower today to 19,580 point. The trend continued to weaken throughout the day. It closed down 606 points, or 3%, to 19,320 point; The China Enterprises Index fell 204 points or 3.1% to 6,446 points; the Hang Seng Technology Index fell 149 points or 3.8% to 3,782 points. The total daily turnover of the market was HK$ 166.4 bn. JD.com (9618) slumped over 11% to HK$158.7 after the results. As for EV stocks, the market was worried about the impact of the price war. BYD (1211) fell 8%, and Geely (175) fell over 5%.
Regulators guarantee deposits for Silicon Valley bank depositors
Last weekend, the collapse of US bank Silicon Valley Bank (SIVB.US) sent shockwaves through the market. The collapse of Silicon Valley Bank is the largest bank failure since the 2008 financial crisis, causing bank stocks to plummet. Silicon Valley Bank also provided financing for a number of new technology companies, so the collapse of Silicon Valley Bank will make them face disaster. The U.S. Department of the Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) issued a joint statement stating that depositors' deposits are guaranteed. Funding will be provided to eligible thrifts for up to a year to ensure banks have the capacity to meet the needs of all depositors.
All three major U.S. indexes fell. The Dow fell 442.4 points, or 1.37%, to 31,812.5points, the fourth consecutive day of decline. The S&P 500 fell 65.6 points, or 1.67%, to 3,852.5; the Nasdaq fell 231.5 points, or 2.04%, to 11,108.7.
US Non-farm payrolls beat consensus
In addition to the Silicon Valley bank collapse crisis, another market focus is believed to be the U.S. February non-farm payrolls. the number of NPA was 311,000, which was higher than the expected 225,000. The January data was revised down from 517,000 to 504,000. Although the figures are higher than consensus, there is a significant drop in MoM basis. In addition, the unemployment rate in February also rose from 3.4% to 3.6%, and the hourly wages in February increased by 4.6% YoY, which was slightly lower than the expected 4.7%. This has become a point for the Fed to raise interest rates by only 25 basis points in March instead of 50 basis points.
Hong Kong Stock Connect had a net inflow of HK$1.33bn on Friday, of which Li Auto (2015) had the largest net inflow of HK$401mn; followed by Xpev Motors (9868). Xiaomi (1810) recorded the largest net outflow of HK$250mn; followed by BYD (1211).
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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