Daily Investment Strategy

2023.09.06 09:00

HSI fell 387 points on Tuesday

The Hang Seng Index fell 387 points or 2.1% to 18,456 on Tuesday. HSTECH fell 111 points or 2.6% to 4,193 and HSCEI fell 136 points or 2.1% to 6,396. Daily market turnover was HK$101.5bn.

Dow ends lower as Treasury yields surge

The Dow ended lower on Tuesday, dragged down by rising U.S. Treasury yields, but gains in energy stocks capped losses as oil prices climbed after major producers agreed to extend oil production cuts. The Dow Jones Industrial Average fell 0.6% to 195 points, the Nasdaq fell 0.1% and the S&P 500 fell 0.4%. Energy stocks rose more than 1% after Saudi Arabia detailed plans to extend production cuts until the end of 2023, while Russia said it would extend a 300,000 barrels per day export cut until the end of this year. On the other hand, Airbnb and Blackstone Group were in rally mode, with both stocks set to be added to the S&P 500 on September 18.

 

Fed Governor Christopher Waller agrees the central bank can ‘proceed carefully’ on interest rates

Federal Reserve Governor Christopher Waller said on Tuesday that the latest round of economic data will buy the Fed some time to decide whether it needs to raise interest rates further to control inflation. Waller is generally considered one of the more hawkish members of the FOMC. While he was encouraged by recent reports on price trends, he said they also showed the Fed's ability to keep interest rates on hold until it is sure inflation is under control. According to CME Group tracking of futures pricing, the possibility that the Federal Reserve will not raise interest rates at its September 19-20 meeting is almost certain. However, there is more than 40% chance of a rate hike from October to November, indicating some uncertainty.

 

Hong Kong Stock Connect had a net inflow of HK$11.9bn on Tuesday, of which Tracker Fund (2800) had the largest net inflow, reaching HK$5.8bn; followed by CSOP HS TECH (3033). SMIC (981) recorded the largest net outflow at HK$0.68bn, followed by Li Auto (2015).

Recommended Stocks
Capture the moment and trade with KGI Asia's insights
Stocks
Recommended
Stocks
Recommended

China Mobile’s 1H23 operating revenue was RMB530.7bn, or growth of 6.8% yoy. Of this, the telecommunications services revenue accounted for RMB452.2bn, an increase of 6.1% yoy. China Mobile is steadily advancing its transition from traditional to new growth drivers, with a continuously rising share of revenue contribution from digital transformation. This has underscored the value contribution of digital transformation as its “second curve” of revenue growth. The digital transformation revenue contributed 84.1% to the incremental telecommunications services revenue and was the strongest driver of revenue growth. Profit attributable to equity shareholders was RMB76.2bn, an increase of 8.4% yoy. EBITDA was RMB183.5bn, an increase of 5.5% yoy. The 2023 interim dividend amounted to HKD2.43 per share, representing an increase of 10.5% yoy. Full-year profit to be distributed in cash in 2023 will increase to 70% or above of the profit attributable to equity shareholders of the Company for the year. With a visible earning growth and dividend policy, China Mobile is an attractive defensive pick.  Target price: $76; Stop- Loss price: $62.

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.

Subscribe to KGI Market Insights Reports
Outperform market and make the best investment decisions