KGI Asia Commentary
HSI rose 82 points on Monday
The Hang Seng Index opened 67 points higher and expanded to 134 points. However, the rise fell back in the afternoon, rising 82 points or 0.4% to close at 19,636. The HSCEI rose 30 points or 0.4% to close at 6,964; the HSTECH rose 22 points, or 0.6%, to close at 4,135. The total daily turnover of the market was HK$156.5bn. The central government announced a series of policies to stimulate real estate last week, and most domestic real estate stocks took profits. Private companies such as Sunac (1918) or Agile (3383) fell between 3.8% and 11.7% today. During the quarterly review of the HSI, the Index will include BYD Electronics (0285) and exclude CGS (6098). Those stock prices rose 1.6% and fell 1.9% respectively.
Several Fed officials made "hawkish" remarks
There was no important economic data released on Monday, but yesterday Several Federal officers gave speeches that the current tightening monetary policy was appropriate. Barr, the Fed's vice chairman for financial supervision, was disappointed with the pace of inflation slowdown in the first quarter and said the current high interest rates would take more time to take effect. Cleveland Fed President Mester believed that she has supported three interest rate cuts this year in the past, but she did not think this was still appropriate considering that inflation is not cooling as fast as expected.
The three major U.S. stock indexes developed individually. The Nasdaq composite rose 108 points, or 0.65%, to close at 16,794; the S&P 500 rose 4 points, or 0.09%, to close at 5,308; the DJIA fell 196 points, or 0.49%, to close at 39,806.
The competition of the Chinese auto market is expected to remain unchanged in 2H24
The Chinese auto market experienced a fierce price competition in the 1H24, and market participants believed that the competition is not over in the 2H24. Zeng Qinghong, chairman of GAC Group (2238), believed that the Chinese auto market is expected to grow only slightly by 3% to 5% this year. With many brands competing for market share, the price war is expected to continue in the 2H24 and competition will remain very fierce. In addition, Li Auto (2015) released its company guidance yesterday, in which vehicle delivery volume was lower than consensus, which also reflects that the industry leader is still not optimistic about the market outlook.
The net inflow of Hong Kong Stock Connect on Monday was HK$2.49bn yuan. Among them, Bank of China (3988) had the largest inflow, reaching HK$793mn; followed by China Construction Bank (0939). Xiaomi (1810) recorded the largest net outflow of HK$634mn, followed by Meituan (3690).
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