Hong Kong/China Market

Transcription

1 Hong Kong/China Market Technical Strategy Qinhuangdao 5500kcal thermal coal price struck yearly highs in recent sessions Indices Latest Chg. Pts HSI 32, HSI Future 32, DJIA 26, S&P 500 2, NASDAQ 7, H-share 13, Red-chip 4, Shanghai Comp 3, Shenzhen Comp 1, Breaking through a tough resistance at Rmb735/mt is a bullish signal. Retaking all major MAs also bodes well for its trading outlook. Hong Kong Market Review Pared early gains. The HSI opened 181 points higher on the start of the week, after the US markets chalked up new highs again on Friday. But rising momentum in the local bourse did not sustain and the HSI closed half-day down 11 points to Selling pressure increased after lunch break and the HSI moved up and down around the point mark in the afternoon session. At close, the benchmark index retreated 187 points, or 0.56%, to points on a turnover volume of HKD191bn. Mainland banks resilient. Funds continue to flow in mainland bank shares, which generally outperformed the mass market and inched up. CCB (939.HK) gained 0.77% to HKD9.12/share and ICBC (1398.HK) moved up 1.36% to HKD7.44/share. BOC (3988.HK) stayed unchanged at HKD4.8/share. PSBC (1658.HK) put on 5.03% to HKD5.22/share, despite the bank reportedly involved in a case of fund embezzlement. Oil shares mixed. International crude price rose to a 3-year high but oil shares were mixed. Petrochina (857.HK) gained 1.56% to HKD6.48/share, but CNOOC (883.HK) declined 0.47% to HKD12.68/share.

2 Economic News U.S. consumer spending rises; savings drop to 10-year low. U.S. consumer spending rose solidly in December as demand for goods and services increased, but the gain came at the expense of savings, which dropped to a 10-year low in a troubling sign for future consumption and economic growth. Rising household wealth due to record gains on the U.S. stock market as well as higher home prices likely made Americans more confident to dip into their savings to fund purchases, economists said. Savings are now at levels last seen in December 2007, when the economy slipped into recession. (Reuters) U.S. budget deficit to top $1-trillion in 2019: budget experts. As the U.S. Congress limps toward the likely passage next week of another stopgap spending bill to avert a government shutdown, a Washington think tank has estimated the federal budget deficit is on track to blow through $1 trillion in If it does, it would be the first time since 2012 the U.S. economy will have to support a deficit so large, highlighting a basic shift for the Republican Party, which has traditionally prided itself on fiscal conservatism. The Committee for a Responsible Federal Budget, a Washington fiscal watchdog, said the red ink may rise in fiscal 2019 to $1.12 trillion. If current policies continue, it said, the deficit could top a record-setting $2 trillion by (Reuters) Mexico's economy minister says NAFTA on right track. Mexican Economy Minister Ildefonso Guajardo said on Monday that negotiators from the United States, Canada and Mexico have made enough progress in the talks to revamp NAFTA to be able to conclude the negotiations soon. For the next round, we will still have substantial challenges to overcome. Yet the progress made so far puts us on the right track to create landing zones to conclude the negotiation soon, said Guajardo. (Reuters) Oil settles lower after dollar strengthens, rising U.S. output. Oil prices settled lower on Monday, pressured by a strengthening dollar and rising U.S. crude output, but prices remained on track for the biggest January increase in five years. Brent crude futures LCOc1 for March delivery settled down $1.06, or 1.5 percent, at $69.46 a barrel, after rallying to a session high of $ U.S. West Texas Intermediate (WTI) crude futures CLc1 fell 58 cents, or 0.9 percent, to close at $65.56 a barrel. (Reuters)

3 Market News Dow, S&P 500 suffer worst one-day fall in five months as Apple drags. Wall Street pulled back from record highs on Monday, with the Dow and the S&P 500 indexes marking their biggest one-day percentage declines in about five months, weighed down by a slide in Apple shares. Shares of Apple (AAPL.O) fell 2.1 percent on news that the company will halve production of its $999 iphone X smartphone. The company is due to report earnings on Thursday. The S&P technology index.splrct fell 0.9 percent and was the biggest drag on the benchmark index following Wall Street s strongest four-week run since The Cboe Volatility Index.VIX, the most widely followed barometer of expected near-term volatility for U.S. stocks, closed up 2.76 points, or nearly 25 percent, at 13.84, its highest close since Aug. 18. (Reuters) Global stocks slip as Treasury yields hit three-year highs. Global equity markets eased on Monday and U.S. Treasury yields surged to more than three-year highs after remarks by a European Central Bank official added to expectations that central banks globally will reduce stimulus as the economic outlook improves. U.S. stocks fell on news that Apple (AAPL.O) will halve the production target for its flagship iphone X this quarter. The report from Nikkei added to growing concerns about weak sales of the $999 phone ahead of Apple s quarterly results slated for Thursday. Apple shares fell 1.9 percent and were the biggest weight on the benchmark S&P 500 index. (Reuters) U.S. telco shares fall on 5G network reports despite skepticism. Shares in the biggest U.S. communications companies slipped on Monday after reports President Donald Trump s national security team is considering building its own 5G high-speed wireless network. While investors fled, regulators and analysts scorned the proposal, which is being considered as a way to counter the threat of China spying on U.S. phone calls, according to U.S. media reports. (Reuters)

4 Company Announcements Future World FH (00572): '17 pre-tax profit rises 291%. Future World Financial Holdings (00572) expects HK$500 million pre-tax profit for the year of 2017, representing an increase of 291% compared to that for (Infocast News) CIMC (02039): '17 profit up % to RMB B. China International Marine Containers (02039) expects its net profit attributable to the shareholders and other equity holders of the company for the year of 2017 to increase % on year to RMB billion. The basic EPS for 2017 is estimated to be RMB (Infocast News) Yanzhou Coal's '17 profit up % as restated. Yanzhou Coal Mining (01171) expects its net profit attributable to shareholders of the company for the year of 2017 would increase by % compared to the net profit of RMB2.065 billion for (Infocast News) China Shenhua (01088): '17 profit rises 92% to RMB47.9B. China Shenhua Energy (01088) expects its profit attributable to the equity holders of the company for the year of 2017 to increase 92% on year to RMB47.9 billion. (Infocast News) Road King Infra (01098): '17 profit rises at least 75%. Road King Infrastructure (01098) expects an increase of not less than 75% in consolidated net profit for the year of 2017 compared to the consolidated net profit of HK$1.374 billion for (Infocast News)

5 Today s Sector Focus Power usage in the mainland has been strong throughout winter time this year and thermal coal inventories have reportedly fallen below alarming levels in some northern provinces. Mainland coal miners are expected to benefit from rising coal prices, and they outperformed yesterday. China Shenhua (1088.HK) Rising momentum has strengthened since the start of the year. Trading above all major MAs is a positive signal. Yanzhou Coal (1171.HK) Moved up on strong turnover. But Yanzhou Coal is now overbought.

6 China Coal (1898.HK) Staged a strong comeback after hitting the HKD3.3/share support. Breaching the HKD4.2/share resistance bodes well for trading. Hang Seng Composite Sectors Sector Index Day (%) Week (%) MTD (%) YTD (%) Hang Seng Index (HSI) 32, Hang Seng Composite 4, HSCI Utilities 7, HSCI Industrial Goods 1, HSCI Materials 7, HSCI Conglomerates 2, HSCI Telecommunication 1, HSCI Property & Construction 4, HSCI Info Technology 15, HSCI Consumer Goods 6, HSCI Financials 4, HSCI Services 4, HSCI Energy 10, HS Mainland , HS China Enterprises 13, HS China H-Financial 21, HS China Affiliated Corps 4, HS HK 35 3, HS HK Large Cap 2, HS HK MidCap 5, HS HK Small Cap 2, Source: Bloomberg

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