KGI Asia Commentary

HSI rose 396 points on Monday

HSI closed at 21,388, up 396 points or 1.9%. HSTECH closed at 4,570, up 139 points or 3.2%. HSCEI rose 142 points, or 2.0%, to 7,286. Market turnover was HK$156.4bn. Heavyweight stock Alibaba (9988) said that the shareholder structure of Ant Group has changed. Although it once again stated that it has no intention of launching a listing procedure, Alibaba’s stock price still rose 8.7% today. Other Chinese technology stocks also performed well. Tencent (0700) and Baidu (9888) rose 3.6% and 3.2% respectively.

nflation expectations fall, recession may finally be "self-fulfilling"

U.S. consumers’ expected inflation continue to fall. The latest survey by the Federal Reserve Bank of New York shows that U.S. consumers’ 1 year expected inflation fell to 5% in December 2022, the lowest level in a year and a half since July 2021. While expectations for higher inflation have relaxed, consumers will now focus on the risk of a recession this year, with a one-year forecast for household spending falling a percentage point to 5.9%, the lowest level since last January. Almost 70% of the U.S. GDP come from private consumption. If the U.S. consumers reduce personal expenditure, it will eventually be transmitted to the real economy. Then, the economic recession will finally be "realized"

The three major U.S. stock indexes had different directions. The Nasdaq was the best performer, up 66 points or 0.63% to 10,635, while the S&P 500 fell 2 points or 0.08% to 3,892. the Dow Jones fell 112 points or 0.34%. Reported at 33,517.

Transactions in Chinese property market weaken again, need to focus on the changes after Lunar New Year

After Chinese Government launched a series of measures to rescue the property market, some market transaction data have been released. China Index Academy released the transaction volume of various cities in the past week. Overall cities’ transactions turned to a decrease from WoW%, while the first-tier cities increased YoY% and WoW%. Except for Shanghai, which rose sharply by 1.5x, Beijing, Ningbo and other places all fell slightly by 0.4% on a weekly basis. The decline in transactions in second-tier cities was even more pronounced, down nearly 60% week-on-week. Generally, before Lunar New Year, the transactions will drop significantly. Investors could focus on the of transactions after Lunar New Year. If the transactions maintain an upward trend in the next few months, it reflects that the market sentiment has been improving.

Hong Kong Stock Connect had a net outflow of HK$1.23bn on Monday, of which HKEX (0388) had the largest net inflow of HK$243mn, followed by WuXi Biologics (2269). Xiaomi (1810) recorded the largest net outflow of HK$408mn; followed by CCB (0939).