KGI Asia Commentary

Hang Seng Index fell 351 points on Friday

Hong Kong stocks opened 140 points lower on Friday, at 17,771 points. The day decline further expanded to 351 points, or 1.9%, to 17,559 points. The H-Share Index fell 129 points, or 2.1%, to 6,041 points; the Hang Seng Technology Index fell 92 points, or 2.2%, to 4,024 points. The total daily turnover of the market was HK$88.1 billion. Chow Tai Fook (1929), whose stock price was under pressure, fell 10.8% to HK$10.7. In addition, as the market digested the news of Chinese property developer, Country Garden (2007) and Longfor (960) fell 7.6% and 2.4%.

Money flow to technology stocks

U.S. stocks closed mixed on Friday. The Dow Jones closed up 117 points, or 0.33%, at 35,390 points; the Nasdaq fell 15 points, or 0.11%, to 14,251 points; the S&P 500 rose 3 points or 0.06%, reported at 4,559 points. The Dow rose 1.27% last week, recording its fourth consecutive week of gains for the first time since April. The S&P 500 rose 1% and the Nasdaq rose 0.89%. The three major U.S. stock indexes all recorded gains for a fourth consecutive week. Overall, the continuous rise in U.S. stocks was driven by the fact that U.S. Treasury bond yields hit multi-month lows this week.

Treasury yields fell as investors saw signs that inflation was cooling and bet the Federal Reserve was done raising interest rates. According to LSEG data, U.S. stock funds continue to have capital inflows. In the week ending November 22, U.S. stock funds had a net inflow of US$6.27 billion, the third consecutive week of net inflows, while the technology sector recorded the largest inflow of US$2.29 billion.

In addition, U.S. economic data was released last Friday. The U.S. S&P manufacturing PMI initial value in November was 49.4, which was expected to be 49.8 and the previous value was 50. The initial value of the U.S. S&P Services PMI in November was 50.8, compared with the expectation of 50.4 and the previous value of 50.6. The initial value of the U.S. S&P Composite PMI in November was 50.7, which was expected to be 50.4 and the previous value was 50.7.

China Construction Bank had a meeting with real estate companies

After last week’s with numbers of real estate news, such as Shenzhen’s relaxation of the down payment ratio for second homes and the news that the central government intends to launch a “white list” of real estate companies, which will benefit the subsequent financing of real estate companies, chinese media reported last Friday that China Construction Bank convened Six real estate, Vanke, Longfor, Midea Real Estate, Xincheng Development, Binjiang Group and Dahua Group in Beijing, held symposiums to understand the current capital needs of real estate companies. Although there are currently no details on financing terms, but considering the recent measures and news related to Chinese property developer, it is expected that the financial support and enthusiasm for real estate companies will be significantly improved in the future.

Hong Kong Stock Connect saw a net inflow of HK$8.73 billion on Friday. Among them, Tracker Fund (2800) had the largest inflow, reaching HK$5.07 billion; followed by Hang Seng China Enterprises (2828). Tencent Holdings (700) recorded the largest net outflow of HK$436 million, followed by WuXi Biologics (2269).