KGI Asia Commentary
Hang Seng Index rose 57 points on last thursday
Last Friday and yesterday were public holidays. Hong Kong stock market was closed. The Hang Seng Index rose 57 points or 0.3% to 20,331 last Thursday; the HSCEI rose 18 points or 0.3% to 6,894; the HSTECH rose 4 points or 0.1% to 4,238. The total daily turnover of the market was HK$101.7bn. Chip stocks performed well that day, with SMIC (0981) and Hua Hong Semiconductor (1347) up 7.7% and 3.6% respectively. Gold related also bucked the trend and rose, Zhaojin Mining (1818) and Zijin Mining (2899) rose 4% and 5.3% respectively.
March US nonfarm payroll below consensus; bankruptcy case of US SME hit a new high
The U.S. labor market continued to slow down. The number of non-farm payrolls increased by 236,000 in March, lower than market consensus of 238,000. It was also a three consecutive months of decline. In March, there was a sharp credit contraction triggered by US regional bank crisis. The cooling of the labor market was expected. After rising interest rates and tightening credit due to uncertain prospects, the bankruptcy filings of private enterprises in 2023 will far exceed the highest recorded in the early stage of the epidemic. The moving average of private bankruptcy filings was 73% higher than in June 2020. The Fed is currently more focused on the labor market, so if the labor market can keep cooling down, the Fed may start to pause interest rate hikes in the future.
The three major U.S. stock indexes performed differently. The DJIA rose 101 points, or 0.3%, to close at 33,586 points; the S&P 500 rose 4 points, or 0.1%, to 4,109 points; the Nasdaq composite fell 3 points, or 0.03%, to close at 12,084 points.
March contracted sales of China property sector was mixed
More listed private developers announced their March contracted sales. Among key real estate developers, only Longfor (0960) recorded an annual sales growth of nearly 40%. And other private enterprises, such as Shimao (0813), Sunac (1918) and Agile (3383), etc., their sales have recorded an annual decline ranging from 4% to 60%. Meanwhile, one of the biggest SOE, COLI (0688) recorded sales of about RMb43bn yuan in March, an increase of nearly 90% YoY. It reflected that the overall Chinese property sector is still far from being close to the level before 2021.
Hong Kong Stock Connect had a net inflow of HK$3.89bn last Thursday, of which SenseTime (0020) had the largest net inflow of HK$1.25bn, followed by SMIC (0981). Tencent (0700) recorded the largest net outflow of HK$302mn, followed by Kuaishou (1024).
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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