Hong Kong/China Market

Transcription

1 Hong Kong/China Market Technical Strategy The EUR depreciated against the USD after a short-lived rebound in late Sep18 Indices Latest Chg. Pts HSI 24, HSI Future 25, DJIA 24, S&P 500 2, NASDAQ 7, H-share 10, Red-chip 4, Shanghai Comp 2,604 1 Shenzhen Comp 1,293-4 The EUR has been plagued by worries over Italy budget turmoil and slow progress for Brexit. Hong Kong Market Review Struggled at lows. The rout of the US major markets has spread to the other parts of the world. The local bourse tracked the weak finishes and opened 483 points lower. The index once lost as much as 595 points. Selling pressure eased slightly in the afternoon and bargain hunting appeared for the A share markets which provided some support to the local bourse. With the stabilization of Europe bourses and Dow Jones futures, the index closed down 255 points to while turnover increased slightly to HKD106.5bn. Technology shares collapse along with NASDAQ. That the US technology gauge index slumped 4.4% on Wednesday has struck the shaky sentiment towards tech shares. Tencent (0700.HK) slipped 2.47% to HKD269/share. AAC Tech (2018.HK) and Sunny Optical (2382.HK) both slashed more than 7% to HKD59/share and HKD72.45/share, respectively. Cathay Pacific (0293.HK) plunged 3.76% to HKD10.22/share after the company admitted the data breach exposed 9 million of air passengers personal data.

2 Economic News Still accommodative, Fed must keep hiking U.S. rates -Mester. The Federal Reserve is still stimulating an economy that is growing well above potential, so it should keep raising interest rates even while it anticipates potential shocks, Cleveland Fed President Loretta Mester said on Thursday. You re going to have to think about what the shocks are going forward. I think we are still accommodative, so we should be bringing interest rates up, she told reporters. But, Mester added, You don t want to pre-commit to a path. (Reuters) U.S. business spending on equipment cooling; goods trade deficit rises. U.S. business spending on equipment appeared to have remained slow in September and the goods trade deficit widened further as rising imports outpaced a rebound in exports, suggesting economic growth moderated in the third quarter. But the growth pace in the last quarter was probably solid, with other data on Thursday showing gains in both wholesale and retail inventories last month. A tightening labor market, which is steadily lifting wage growth, is also supporting the economy. (Reuters) Market drop nowhere near harming U.S. economy: Fed's Mester. The recent cratering of stock markets is nowhere near severe enough to rattle confidence and significantly hurt U.S. business and consumer spending, a Fed official said on Thursday, in the latest unruffled message from the U.S. central bank. In a speech, Loretta Mester, president of the Cleveland Fed, reinforced the U.S. central bank s steady-as-she-goes expectation to keep gradually raising interest rates in the face of a nearly month-long fall in major U.S. equity indexes, which has been driven by worries over the effects of U.S. tariffs and a slowdown in China. (Reuters)

3 Market News Wall St. rebounds after upbeat earnings, bargain hunting. U.S. stocks jumped on Thursday, giving the Nasdaq its biggest daily gain since March, as Microsoft s upbeat earnings spurred a rebound in technology names and investors snapped up oversold shares. The Nasdaq rose 3 percent, a day after it confirmed a correction and registered its biggest decline since The Dow and S&P 500 both moved back in positive territory for the year. Microsoft (MSFT.O) jumped 5.8 percent after it beat consensus estimates for revenue and profit. That, along with gains in chipmakers, helped technology stocks.splrct rise 2.89 percent. (Reuters) Amazon's holiday season sales outlook misses views; shares sink. Amazon.com Inc (AMZN.O) forecast holiday season sales and profit that missed Wall Street targets on Thursday, projecting revenue growth that would be the slowest in years, sending shares of the world s largest online retailer down 8 percent in after-hours trade. Amazon s third-quarter sales lagged estimates as well. Analysts said international results were disappointing and online competition was increasing. The company blamed accounting changes and cautioned that it was being conservative with its outlook. (Reuters) Tesla third-quarter profit quiets critics, shares surge. Tesla Inc shares jumped on Thursday as Wall Street analysts said the company had turned a corner with profitable third quarter results and might not now need to raise outside capital. Rising 12 percent at one point in early trading, the move in shares added as much as $6 billion to Tesla s market value, capping a tumultuous few months for the company and its billionaire chief executive, Elon Musk. Tesla shares hit a record in August but sank back as Musk was sued by shortsellers and U.S. regulators for tweeting, and then swiftly abandoning, a plan to take the company private. (Reuters)

4 Company Announcements ZTE (00763) expects RMB B loss for '18. ZTE Corporation (00763) has warned that it expects a net loss of RMB billion for the year of compared to a net profit of RMB4.568 billion for 2017, and a basic loss per share of RMB for (Infocast News) Shenzhen Express (00548) Q1-3 profit RMB1.521B, up 30%. Shenzhen Expressway Company (00548) announced that for the nine months ended 30 September 2018, it recorded a net profit of RMB1.521 billion, up 30.43% on year, and a basic earnings per share of RMB (Infocast News) Livzon Pharma (01513): '18 profit to fall %. Livzon Pharmaceutical Group (01513) expects its net profit for the year of 2018 to decrease by % on year to RMB1,128-1,251 million, or increase by % on year to RMB943-1,066 million after deducting extraordinary gain or loss. (Infocast News)

5 Today s Sector Focus Major banks in Guangzhou, Beijing, Hanzhou, and Foshan have reportedly reverted to lower mortgage rates since the beginning of Oct18. Market anticipates that the stance of Beijing towards the property market could be changing which could benefit the real estate sector. Related shares outperformed yesterday. Longfor Group (0960.HK) Retaking the 10-day MA improves trading outlook. Large white candle indicates decent momentum. Sunac (1918.HK) Selling pressure has shown signs of abating. HKD20/share is an important support.

6 Country Garden (2007.HK) Struggled to defend the HKD8/share support. But weak turnover could be a negative sign.

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