KGI Asia Commentary
Hang Seng Index rose 216 points on Tuesday
The Hang Seng Index rose 216 points or 1.1% to 19,784 on Tuesday. HSTECH rose 38 points or 0.9% to 4,144 and HSCEI rose 81 points or 1.2% to 6,729. Daily market turnover was HK$106.1bn.
Stocks end lower as high yields weigh on tech stocks
Technology names continued to be pressured by rising U.S. Treasury yields. The Nasdaq fell 0.45% to close at 11,716.08. The S&P 500 fell 0.16% to close at 3,971.27. The Dow Jones Industrial Average fell 37.83 points, or 0.12%, to end at 32,394.25. Apple, Meta Platforms, Alphabet and Microsoft ended the day lower, with the latter under regulatory scrutiny. Germany's antitrust watchdog said on Tuesday it was investigating Microsoft to determine whether the tech giant's market power warranted an investigation into potential anticompetitive behavior. However, gains in the energy sector partially offset losses in the broader market, with Occidental Petroleum, Valero Energy Corporation and Phillips 66 leading gains. Buffett increased his stake in OXY to 23.6%, according to a regulatory filing. In other news, LYFT pared gains to close around 8% lower after David Risher, who was named new chief executive and will take the helm on April 1, ruled out a sale of the company. Lyft is not for sale and will focus on its ride-sharing business, David Risher said. On the earnings front, Walgreens Boots Alliance rose 2.7% after the company reported quarterly results that topped Wall Street expectations.
Alibaba to reorganize into six separate business groups with potential for IPOs
On Tuesday, Alibaba announced its plans to restructure the company into six separate business groups, each with the possibility of going public in the future. The six business groups are Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics, Global Digital Commerce Group, and Digital Media and Entertainment Group. Alibaba (BABA) rose than 14%, as market believe the reorganization has the potential to unlock the sum-of-the-parts (SOTP) valuation of different business segments, and provide investors with greater value.
Hong Kong Stock Connect had a net inflow of HK$2.89bn on Tuesday, of which Tencent (700) had the largest net inflow, reaching HK$0.9bn; followed by Meituan (3690). Lenovo (992) recorded the largest net outflow at HK$0.06bn, followed by SMIC (981).
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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