KGI Asia Commentary
Hang Seng Index fell 268 points on Friday
The Hang Seng Index opened 29 points lower and closed at 20,958 points. The index once turned up, but failed to maintain. It fell 268 points to 20,720 points throughout the day. The China Enterprises Index fell 99 points or 1.4% to 6,991 points; the Hang Seng Technology Index fell 109 points or 2.5% to 4,258 points. The market turnover of the whole day was HK$89.7 bn. ATMs fell more than 2%. Lenovo (992)'s third-quarter profit of the fiscal year fell 32%, and its stock price fell more than 3%. Meta media (0072) appointed Adrian Cheng as a non-executive director and co-chairman of the board of directors, and its stock price jumped nearly 80%.
More comment on higher rate peak from the officials
Following the release of data on traffic and retail sales last week, various officials and bank presidents have indicated that the United States may need to further raise interest rates in the future. Last Friday, Reserve Board Director Michelle Bowman said that the Reserve Board should continue to raise interest rates to bring down inflation that is still too high. Thomas Barkin, President of the Federal Reserve Bank of Richmond (Thomas Barkin), believes that US inflation has not declined significantly, so it is necessary for the Federal Reserve to continue to raise interest rates, but it can maintain a relatively small pace of interest rate hikes, raising interest rates by 0.25% each time. It is necessary to raise interest rates several times before inflation is expected to fall back to the bureau's target of 2%.
Given that the Fed is likely to stick to aggressive monetary policy to curb inflation, investors are worried that the future economy and stock market may be adversely affected by monetary policy. The best performance of U.S. stocks on Friday was the Dow rose 130 points or 0.4% to 33,826 points; the S&P fell 11 points or 0.3% to 4,079 points; the worst performance was the Nasdaq fell 68 points or 0.6% to 11,787 points.
China does not set additional thresholds and conditions for overseas listing
Approved by the State Council last Friday, the China Securities Regulatory Commission issued the relevant system rules for overseas listing filing management, which will be implemented from March 31, 2023. Since the implementation, no additional thresholds and conditions will be set for overseas listing; for overseas listing of enterprises with Variable Interest Entities (VIE) structure, the filing management will adhere to the principles of marketization and rule of law, and strengthen regulatory coordination. Companies that have already been listed overseas are considered existing companies and do not require immediate filing.
Hong Kong Stock Connect had a net outflow of HK$ 104 mn on Friday, among which Tracker Fund (2800) had the largest net inflow of HK$704 mn; followed by China Shenhua (1088). Tencent Holdings (700) recorded the largest net outflow of HK$990 mn, followed by WuXi Biologics (2269).
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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