KGI Asia Commentary
HSI rose 462 points on Monday
The Hang Seng Index opened 210 points higher and then expanded its gains, the index closed at 18,844 points for today, up 462 points or 2.5%. The HSTECH reported at 4,305, up 125 points or 3.0%. The HSCEI rose 201 points or 3.2% to 6,533. The market turnover was HK$152.7bn. The market is looking forward to the policy restriction can be released in the core cities. The share prices of Chinese property stocks, such as Longfor (0960), China Resources Land (1109) and China Overseas (0688) all rose by more than 8%. It was reported that Country Garden (2007)'s domestic bond extension plan had received enough votes to pass, and the company's stock price rose 14.6% today. Meanwhile, BYD (1211) sold more than 270,000 new energy vehicles in August, a YoY increase of 57% and its stock price rose 3.1%.
Sentix investor confidence index in September fell short of consensus
While markets worried about when the U.S. will be in recession, the EU may happen sooner. The Eurozone investor confidence index deteriorated in September, falling to -21.5 from the previous value of -18.9, which was worse than market consensus of -19.6. Germany's investor confidence index deteriorated to -33.1 for the fifth consecutive month. Considering China is its second largest exporter, who faced economic significant downward pressure, German production industry should have a damage.
The U.S. stock market was closed yesterday for the Labor Day holiday.
Second-hand housing transactions in Shenzhen last week fell 3.9% WoW
An easing of mortgage curbs just implemented in Shenzhen did not immediately stimulate transactions in the past week. According to the data released by the Real Estate Intermediary Association, Shenzhen recorded 641 second-hand houses last week, a weekly decrease of 3.9%. Volume even fell back. The association pointed out that the decline in trading volume last week was due to weather factors, but also believed that it would take time for the demand to turn into actual transactions. We believe that to reverse the market's downward expectations, what the government can do is a series of policies to make potential investors think that the property market has bottomed out.
Hong Kong Stock Connect had a net inflow of HK$4.3bn on Monday. Among them, Tracker Fund (2800) had the largest inflow, reaching HK$845mn; followed by CNOOC (0883). Meituan (3690) recorded the largest net outflow of HK$594mn, 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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