Hong Kong/China Market

Transcription

1 Hong Kong/China Market Technical Strategy The HSI appears to have run out of steam amid dipping below the 10-day MA Indices Latest Chg. Pts HSI 23, HSI Future 23, DJIA 20, S&P 500 2,364-6 NASDAQ 5, H-share 10, Red-chip 3, Shanghai Comp 3, Shenzhen Comp 2, The formation of the double-top pattern does not bode well for trading as well. Hong Kong Market Review Sentiment remains weak. Despite the DJIA rising 12 days in a row, the local bourse has continued to edge down in recent sessions. The HSI opened 27 points higher to but soon dipped into red again. The benchmark index closed 14 points lower half day. Selling pressure intensified after lunch break and blue-chips came under pressure. At close the HSI declined 184 points, or 0.77%, to on a turnover volume of HKD73bn. Pare back on blue chips. Investors chose to cash in on big-cap blue chips, probably betting that the market rally started after the CNY holiday could have come to an end. HSBC (005.HK) dropped 0.79% to HKD62.5/share, and Stanchart (2888.HK) retreated 1.47% to HKD70.1/share. AIA (1299.HK) moved down 2.09% to HKD49.05/share and China Mobile (941.HK) lost 1.09% to HKD85.6/share. Exceptional gain. Hung Hing Printing (450.HK) jumped 25% to HKD1.65/share following the company announced that it would dispose of the entire stake of a subsidiary in Shenzhen. And the company would realize exceptional gain amounted to HKD900m due to the disposal. Hung Hing closed the day up 14.26% to HKD1.52/share.

2 Economic News U.S. economy slowed in fourth quarter despite robust consumer spending. The U.S. economy expanded at a slower pace in the fourth quarter, as previously reported, and appeared to remain on a moderate growth path as President Donald Trump took office with a promise to reinvigorate manufacturing and protect jobs. Trump has pledged to boost annual economic growth to 4 percent through a mix of infrastructure spending, sweeping tax cuts and deregulation. He is expected to outline part of his program in a speech to Congress on Tuesday night. Gross domestic product rose at a 1.9 percent annual rate in the fourth quarter, the Commerce Department said in its second estimate, as downward revisions to business and government investment offset robust consumer spending. (Reuters) U.S. home prices rise faster than expected in December. U.S. single-family home prices accelerated at a faster pace than expected in December on the back of a low inventory of housing stock, a survey showed on Tuesday. The S&P CoreLogic Case-Shiller composite index of 20 metropolitan areas rose 5.6 percent in December on a year-over-year basis, up from a downwardly adjusted 5.2 percent climb in November. December's result topped the estimate of a 5.3 percent increase from a Reuters poll of economists. "Home prices continue to advance, with the national average rising faster than at any time in the last two-and-a-half years," said David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. (Reuters) Business, unions ramp up campaign for U.S. infrastructure spending. Business groups and unions are bulking up lobbying budgets and coordinating efforts to put pressure on Congress not to let President Donald Trump s infrastructure spending plans fall through the cracks on Capitol Hill. The more time goes on, the more frustration will build up if it doesn t come around quick enough, said Sean McGarvey, president of North America's Building Trades Unions. McGarvey and Terry O Sullivan, the president of laborers union LiUNA, met with Trump in January and spoke about infrastructure. I felt coming out of that conversation the president s desire to move quickly on it, McGarvey said. But, he added, a crowded agenda in Congress might be putting a little bit of a reality check on it. (Reuters) U.S. oil output fell 91,000 bpd in Dec to million bpd: EIA. U.S. oil production in December fell 91,000 barrels per day to million bpd, according to data from the U.S. Energy Information Administration released on Tuesday. Oil companies pared activity onshore, with production in North Dakota falling 17.6 percent and Texas down 5.8 percent from a year earlier. Offshore, oil production rose, climbing 7.7 percent to million barrels a day in the offshore Gulf of Mexico. Oil markets have been closely tracking U.S. crude output, which is seen as a potential wildcard that could offset OPEC efforts to rebalance the market after a two-year supply glut. (Reuters)

3 Market News Dow breaks 12-day record streak ahead of Trump speech; retail down. U.S. stocks slipped on Tuesday and the Dow snapped a 12- day streak of record closes as investors awaited President Donald Trump's address to Congress, while a disappointing outlook from Target (TGT.N) dragged down retailers. All three major indexes posted gains, however, for the month of February, with the S&P 500 up 3.7 percent. Stocks have risen sharply in the wake of the Nov. 8 election, bolstered by Trump's promises of tax reform, infrastructure spending and reduced regulations, and investors are looking for more specifics on how he may achieve those promises. (Reuters) Oil prices slip as rising U.S. supplies offset OPEC cuts. Oil prices slipped on Tuesday but kept trading in a tight range, as concerns about rising U.S. crude inventories ahead of data overshadowed OPEC production cuts. U.S. crude stockpiles have risen for seven straight weeks. Forecasts for another weekly build, this time of 3.1 million barrels last week, fueled worries that demand growth may not be sufficient to soak up the global crude oil glut. U.S. West Texas Intermediate crude futures settled down 4 cents, or 0.1 percent, at $54.01 a barrel and Brent crude fell 34 cents, or 0.6 percent, to $55.59 a barrel. (Reuters) Dollar steadies before Trump speech to Congress. The dollar retraced earlier weakness to be little changed on Tuesday as investors awaited U.S. President Donald Trump's speech to Congress for fresh indications of his economic plans and as portfolios were rebalanced for month-end. Investors were wary that Trump may disappoint those who expect greater detail on how he will reform the tax code as he focuses on domestic issues. Price moves were muted as investors rebalanced portfolios for the end of the month and were hesitant to take new positions before Trump s speech. (Reuters) OPEC compliance with oil curbs rises to 94 percent in February: Reuters survey. OPEC has cut its oil output for a second month in February, a Reuters survey found on Tuesday, allowing the exporter group to boost already strong compliance with agreed supply curbs on the back of a steep reduction by Saudi Arabia. The Organization of the Petroleum Exporting Countries is cutting its output by about 1.2 million barrels per day (bpd) from Jan. 1 - the first such deal since 2008 to get rid of a glut. Non-OPEC countries pledged to cut about half as much. Previous OPEC cuts have been mired in mass cheating by its members, making strong compliance by OPEC this time a positive surprise for the market, with prices trading above $55 per barrel -- up from $35 a year ago. (Reuters) Exclusive: Saudi Arabia wants oil prices to rise to around $60 in sources. Saudi Arabia wants crude oil prices to rise to around $60 a barrel this year, five sources from OPEC countries and the oil industry said. This is the level the OPEC heavyweight and its Gulf allies - the United Arab Emirates, Kuwait and Qatar - believe would encourage investment in new fields but not lead to a jump in U.S. shale output, the sources said. The Organization of the Petroleum Exporting Countries, Russia and other producers pledged last year to cut production by about 1.8 million barrels per day (bpd) from Jan. 1. The first cut in eight years is intended to boost prices and get rid of a supply glut. (Reuters)

4 Company Announcements Sinolife Utd (03332) expects 35% drop in '16 profit. Nanjing Sinolife United Company (03332) expects an approximate 35% decrease in its profit for the year ended 31 December 2016 compared with that for (infocast news) L'sea Resources (00195) expects net profit for '16. L'sea Resources International (00195) expects a net profit for the year ended 31 December 2016, as compared to a net loss for (infocast news) Sinolife Utd (03332) expects 35% drop in '16 profit. Nanjing Sinolife United Company (03332) expects an approximate 35% decrease in its profit for the year ended 31 December 2016 compared with that for (infocast news) Guoco Group (00053) 1H profit $3.052B, up 21%; div $1. Net profit: HK$3.052B, up 20.70% YoY Basic EPS: HK$9.39 Dividend per share proposed: HK$1.00. (infocast news) Xinyi Glass (00868) '16 profit up 52%; div $0.23. Net profit: HK$3.213B, up 52.07% YoY Basic EPS: HK cents Final dividend per share proposed: HK cents. (infocast news) Xinyi Solar (00968) '16 profit up 65%; div $0.06. Net profit: HK$1.986B, up 64.70% YoY Basic EPS: HK cents Final dividend per share proposed: HK 6 cents. (infocast news) L & M Chemical (00746) '16 profit down 20%; div $0.04. Net profit: HK$ M, down 19.83% YoY Basic EPS: HK 26.2 cents Final dividend per share proposed: HK 4.0 cents. (infocast news) Lee & Man Paper (02314) '16 profit up 23%; div $0.11. Net profit: HK$2.863B, up 22.78% YoY Basic EPS: HK cents Final dividend per share proposed: HK 11 cents. (infocast news) DCH Holdings (01828) '16 profit down 10%; div $ Net profit: HK$511M, down 10.35% YoY Basic EPS: HK$ Final dividend per share proposed: HK$ (infocast news)

5 Today s Sector Focus The Ministry of Finance of the PRC s Anti-monopoly Bureau has issued a no-objection statement for the parent company of CNBM (3323.HK) to acquire Sinoma (1893.HK). Meanwhile, cement prices have continued to rise even during a low season after the CNY. The cement sector benefited from these short-term catalysts and related shares gained yesterday. Anhui Conch (0914.HK) Has had a strong run after breaking through HKD23.2/share. But turnover dwindled in recent sessions. Struggled to retake the 10-day MA at HKD26.92/share. Sinoma (1893.HK) Rallied on strong turnover volume since Feb17. Expect to meet a resistance at HKD2.7/share.

6 CNBM (3323.HK) Rising momentum is strong after having broken through a key resistance at HKD4.5/share. Trading above all major MAs is a good sign. Hang Seng Composite Sectors Sector Index Day (%) Week (%) MTD (%) YTD (%) Hang Seng Index (HSI) 23, Hang Seng Composite 3, HSCI Utilities 6, HSCI Industrial Goods 1, HSCI Materials 6, HSCI Conglomerates 2, HSCI Telecommunication 1, HSCI Property & Construction 3, HSCI Info Technology 7, HSCI Consumer Goods 4, HSCI Financials 3, HSCI Services 3, HSCI Energy 8, HS Mainland 100 6, HS China Enterprises 10, HS China H-Financial 16, HS China Affiliated Corps 3, HS HK 35 2, HS HK Large Cap 1, HS HK MidCap 4, HS HK Small Cap 2, Source: Bloomberg

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