KGI Asia Commentary
HSI rose 148 points on Thursday
The Hang Seng Index opened 15 points lower and rose to 148 points, or 0.9%, at 16,541 in the last Thursday; the HSCEI rose 83 points, or 1.4%, to 5,811 points; the HSTECH rose 84 points, or 2.4%, to 3,477 points. The total daily turnover of the market was HK$117.2bn. Today's heavyweight technology stocks performed well, with Meituan (3690), Alibaba (9988) and Tencent (700) rising by 6.2%, 2.1% and 0.6%. Today, the best performer of Hang Seng Technology constituent stock was Zhongsheng Holdings (881), which rose 10.2%.
U.S. ISM manufacturing PMI surprisingly returned to expansion territory in March
The US ISM manufacturing PMI rose to 50.3 in March, higher than 47.8 in February and significantly better than the expected 48.5. It was the first time in a year and a half that it returned to an expansion territory. Manufacturing activity has re-expanded, with production rebounding sharply and new orders increasing, rebounding from 49.2 last month to 51.4; however, employment remains sluggish, staying below 50 for six consecutive months while the degree of index contraction has begun to narrow. The ISM Association stated that the significant improvement in U.S. manufacturing demand mainly reflects the following factors. First, the new orders index resumed expansion, and respondents commented less on "weakness"; second, the new export orders index expanded again; third, customer inventories The index contracted for the fourth consecutive month and remained at an appropriate level for future production.
The three major U.S. stock indexes performed in opposite directions. The Nasdaq composite rose 17 points, or 0.11%, to 16,396; the S&P 500 fell 10 points, or 0.2%, to close at 5,243; the DJIA fell 240 points, or 0.6%, to close at 39,566.
China’s March PMI rebounded beyond consensus and returned to expansion territory
China's official manufacturing PMI improved significantly in March, rising sharply from 49.1 last month to 1.7 percentage points to 50.2, returning to the expansion level above 50, ending five months of contraction and hitting a one-year high. From the perspective of enterprise scale, the three scales are all in the period of expansion. From the perspective of sub-indices, among the five sub-indices that make up the manufacturing PMI, the production index, new order index and supplier delivery time index are higher than 50. The new order index is 53.0, an increase of 4.0 percentage points from the previous month. It is the item with the largest increase, indicating that the level of prosperity in the manufacturing market has rebounded. PMI will rebound seasonally one month after the Spring Festival. the PMI in 2019 and March 2018 rebounded by 1.3 and 1.2 percentage points respectively, indicating that the rebound in mainland PMI this year went beyond seasonality.
The net inflow of Hong Kong Stock Connect last Thursday was HK$3.8bn. Among them, Tencent (0700) had the largest net inflow, reaching HK$1.38bn; followed by Xiaomi (1810). Meituan (3690) recorded the largest net outflow of HK$322mn; followed by China Mobile (0941).
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