KGI Asia Commentary

2023.01.06 09:00

Hang Seng Index rose 259 points on Friday

The Hang Seng Index rose 259 points or 1.2% to 21,052 on Friday. HSTECH rose 67 points or 1.5% to 4,494 and HSCEI rose 106 points or 1.5% to 7,172. Daily market turnover was HK$174.1bn.

Dow closes down more than 300 points as strong jobs data points to more rate hikes

U.S. stocks fell on Thursday after employment data showed the labor market remained strong despite the Federal Reserve raising interest rates to curb inflation. The Dow Jones Industrial Average fell 339.69 points, or 1.02%, to 32,930.08. The S&P 500 fell 1.16% to close at 3,808.10 and the Nasdaq Composite lost 1.47% to close at 10,305.24. Walgreens shares fell 8% after earnings showed a quarterly loss from a $5.2 billion opioid lawsuit settlement. Bed, Bath & Beyond (BBBY) fell 24.2% after saying it was short on cash and considering bankruptcy, and crypto bank Silvergate Capital (SI) plunged 42.9% after it disclosed a large number of customer withdrawals. Microsoft (MSFT) was the biggest drag on tech stocks for a second day in a row, a day after UBS raised concerns about slowing growth in the tech giant's cloud and office businesses. Meanwhile, shares in e-commerce giant Amazon fell more than 2% after the company confirmed plans to cut 18,000 jobs to save costs. The company warned in December of "further job cuts" in early 2023. On the economic data front, private employment rose more than expected in November and initial jobless claims fell, pointing to more rate hikes.

Numbers of U.S data released

In December, the increase in ADP private jobs rose to 235,000 from an upwardly revised 182,000 in November, far more than the expected 150,000. The Labor Department also announced that the number of initial jobless claims for the week ended December 31 decreased by 19,000 to 204,000, lower than the expected 225,000, and the number of continuing claims for the week ended December 24 also fell by 24,000 to 1.694 million, missing expectations of 1.728 million.

Hong Kong Stock Connect had a net inflow of HK$3.29bn on Thursday, of which Kuaishou (1024) had the largest net inflow, reaching HK$0.78bn; followed by China Mobile (941). Tencent (700) recorded the largest net outflow at HK$0.71bn, followed by Wuxi Bio (2269).

Recommended Stocks

Capture the moment and trade with KGI Asia's insights

Stocks

Recommended

Stocks

Recommended

Hansoh Pharma
03692

Hansoh Pharma has established a leading position in some of the largest and fastest-growing therapeutic areas in the PRC with significant unmet clinical needs, including oncology, anti-infectives, CNS diseases and metabolic diseases. The Group's innovative drugs continue to be approved. In 1H22, the sales revenue of innovative drugs amounted to approx. RMB2,321mn, representing an increase of approx. 84.8% compared to the corresponding period of the previous year, and the proportion of the total revenue of the Group increased from 28.5% for the corresponding period of the previous year to 52.3%. The company's goal is to have the revenue contribution from innovative drugs account for 80% by 2025. At present, the Group obtained marketing approval for a total of 6 new products, and 1 new drug is in the listing review stage. The group has a rich drug pipeline, and it is expected that the company's innovative drugs sales will maintain a relatively high growth in the future. Recently, the investment sentiment of Medical sector has improved. Investors can consider medical players that have competitive drug pipeline, which include Hanson Pharma. Target price: $20; Stop- Loss price: $15

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.