Daily Investment Strategy
Hang Seng Index rose 40 points on Friday
On the last trading day of 2022, the Hang Seng Index rose 40 points to 19,781. The market turnover was HK$87bn. Junshi Biotech (1877)'s drug VV116 was accused by a medical journal of being as effective as the covid-19 vaccine developed by Pfizer. The stock price rose 20.6% to HK$48.5.
U.S. December Chicago PMI rebounds to 22.9 but remains in contraction zone
The U.S. Chicago PMI in December ended a three-month losing streak, rising from 37.2 to 44.9, far better than market consensus of 40. Below 50 still indicated that the U.S. manufacturing industry was under contraction. Manufacturing is suffering from slowing demand amid a weakening global economy and grappling with a backlog of unfilled orders from the pandemic. In terms of US market, the three major US indexes all fell across the board. The Dow Jones Industrial Average fell 73 points to 33,147 points, down 0.22%. The S&P 500 fell 9 points, or 0.25%, to 3,839, and the Nasdaq Composite lost 11 points, or 0.11%, to 10,466.
The December PMI in the Mainland fell MoM, and the January PMI may not rebound
After the outbreak of the epidemic in December, Chinese economy continued to weaken. The surge in the number of infections caused the manufacturing industry to face more severe supply chain disruptions and suspension of production. Dec PMI was 47.0, lower than market consensus of 48.0. It recorded a new low since March 2020. The non-manufacturing business activity index dropped even more significantly, to 41.6, down 5.1 percentage points from the previous month. With the exponential rise in the number of infected cases across the country and the early lunar New Year at the end of January this year, there is a greater chance that the PMI figures will be still under pressure in January.
Hong Kong Stock Connect had a net inflow of HK$2.01bn last Friday, of which Tencent Holdings (700) had the largest net inflow of HK$763mn; followed by China Mobile (0941). Hang Seng China Enterprises (2828) recorded the largest net outflow of HK$287mn; followed by China Telecom (0728).
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.
The materials contained herein are provided by KGI Asia Limited ("KGI") for information only. While such materials are based on or derived from sources believed to be reliable, KGI makes no representation or warranty (express or implied) as to their accuracy or reliability. Neither the information nor the opinions expressed herein constitute, or are to be construed as, an offer or invitation or solicitation of an offer to buy or sell any securities or investments. KGI and its officers, employees, agents and affiliates may have interests in the securities or investments covered herein and accept no liability whatsoever for any loss or consequence whatsoever (whether direct or indirect) resulting from any use of or reliance by you on such materials.
