Turnover (HK$ bn) Hang Seng Index EAST ASIA SECURITIES COMPANY LIMITED 9/F, 10 Des Voeux Road Central, Hong Kong. Dealing: 2308 8200 Research: 3608 8098 Facsimile: 3608 6113 HONG KONG RESEARCH Restricted circulation Weekly Report Analyst: Kelvin Li 20 th April 2018 500 450 400 350 300 250 200 150 100 50 0 30,808 HSI continued to suffer from US-China trade tension HSI Weekly Movement 30,316 30,063 30,284 30,708 30,418 96.96 107.65 117.19 117.57 114.93 99.29 13-Apr Mon Tue Wed Thu Fri 32,000 31,500 31,000 30,500 30,000 29,500 29,000 28,500 28,000 27,500 27,000 26,500 26,000 Weekly Market Statistics Week ended 20/4/2018 13/4/2018 Change % Hang Seng Index 30,418 30,808-390 -1.3% HS Red Chip Index 4,439 40,031-35,593-88.9% HS China Enterprises Index 12,054 12,261-207 -1.7% HS Hong Kong 35 Index 3,357 3,383-26 -0.8% HS Mainland 100 Index 9,142 9,353-211 -2.3% Growth Enterprise Index 247 250-3 -1.1% Avg Daily Turnover 111.3 116.9-6 -4.8% (HK$ bn ) Sectoral Indices Finance 42,052 42,496-444 -1.0% Utilities 55,126 55,075 +51 +0.1% Properties 40,132 41,136-1,004-2.4% Comm & Ind 18,282 18,538-255 -1.4% Turnover Hang Seng Index Review & Outlook of Market Performance The local bourse continued to suffer from the deepening US-China trade tension and weak HK dollars. Nonetheless, the Hang Seng Index managed to hold ground above the 30,000 level, as gains in the PRC oil trio lent support after crude oil prices surged to three-year highs. Over the week, the HSI fell 390.05 points or 1.27% to close at 30,418.33, while the HSCEI dropped 1.69% to 12,054.23. The average daily Mainboard turnover amounted to HK$111.3 billion, little changed from HK$116.9 billion in the previous week. Concerns over the Sino-US trade war exaggerated early in the week, after the US said to activate a seven-year ban on all purchases by ZTE (#763) from US companies amid its violation of sanction settlement terms. Trading in ZTE A & H shares had been halted since Tuesday. Share prices of handset components plays like AAC Tech (#2018) (-15.5% w-o-w) and Sunny Optical (#2382) (-8.7%) also tumbled, as investors worried that the counters would be negatively affected by the trade drama, too. In contrast, chipmakers like SMIC (#981) (+6.81%) rallied, as investors speculated China would speed up development of the domestic semiconductor industry. Meanwhile, the PRC automakers also fell this week, as investors worried the gradual open-up of the domestic automobile industry may lead to severe competition. On the economic front, data showed the economic growth in China remained stable with its GDP up by 6.8% in 1Q18 (4Q17: +6.8%). For the coming week, investors would turn their focus on corporate earnings, as most of the Chinese enterprises will release their first-quarter results next week (ahead of the Labour Day holiday break the week after). Exporters are expected to outperform in the near term, while the PRC banks and insurers as well as the oil trio should continue lending support to the blue-chip index. This report has been prepared solely for information purposes and we, East Asia Securities Company Limited are not soliciting any action based upon it. Neither this document nor its contents shall be construed as an offer, invitation, advertisement, inducement or representation of any kind or form whatsoever. This document is based upon information, which we consider reliable, but accuracy and completeness are not guaranteed. Opinions expressed herein are subject to change without notice. At the time of preparing this report, we have no position in securities of the company or companies mentioned herein, while other Bank of East Asia Group companies may from time to time have interests in securities of the company or companies mentioned herein.
US & Regional Markets Weekly Update Date US US JAPAN SINGAPORE MALAYSIA BANGKOK TAIPEI Dow Jones NASDAQ Nikkei Avg STI KLSE Index SET Index Weighted Index 20th April 24,644.89* 7,238.06* 21,778.74 3,566.24 1,887.75 1,799.22# 10,779.38 13th April 24,360.14 7,106.65 21,778.74 3,501.30 1,868.47 1,767.17 10,965.39 Change +284.75 +131.41 +0.00 +64.94 +19.28 +32.05-186.01 % +1.2% +1.8% +0.0% +1.9% +1.0% +1.8% -1.7% Remark: (*) closing as of 19 th April 2018; (#) closing as of 17:00 20 th April 2018 Major Changes in Index Constituent s (Week ended 20 th April 2018) Hang Seng Index (HSI) AAC Technologies 02018 HK$121.30 -HK$22.20-15.47% Handset components manufacturers were under pressure during the week, Sunny Optical 02382 HK$142.50 -HK$13.50-8.65% as fear for the US-China trade war heated up after the US said to start a 7- year ban on all purchases by ZTE from US companies. Hang Seng China Enterprises Index (HSCEI) PetroChina 00857 HK$5.87 +HK$0.17 +2.98% The PRC oil plays outperformed, as international crude oil prices surged to Sinopec Corp 00386 HK$7.50 +HK$0.10 +1.35% three-year highs amid rising geopolitical tension in Syria. Hang Seng China-Affiliated Corporations Index (HSCCI) Brilliance China 01114 HK$13.64 -HK$1.40-9.31% The PRC automakers underperformed during the week, as investors worried that competition in the domestic automobile industry may heat up after the Chinese government pledged to remove foreign ownership restriction in their respective joint ventures in five years. 2
Summary of US Economic News Indicator Change/Index Comments Retail sales Industrial production Initial jobless claims week ended 14 th April 2018 Index of leading economic indicators +0.6% +0.5% -1,000 +0.3% Retail sales grew 0.6% in March, reviving from a 0.1% decline in February and beating consensus forecast of a 0.4% rise. Industrial production grew 0.5% in March, slightly higher than market expectation of a 0.4% rise, as reviving utilities output lent support. Initial jobless claims slipped 1,000 to 232,000 last week, higher than consensus forecast of a fall to 230,000. Leading economic indicators expanded by 0.3% in March, in line with market expectation. Forthcoming Important Announcements / Events 23 rd April 2018 (Monday) HK : Consumer price index Bao Shen (08151) trading debut Chalco (02600) Q1 2018 results US : Alphabet Inc Q1 results Microsoft Q1 results 24 th April 2018 (Tuesday) HK : Conch Cement (00914) Q1 2018 results Datang Power (00991) Q1 2018 results GF Securities (01776) Q1 2018 results Great Wall Motors (02333) Q1 2018 results Huaneng Power (00902) Q1 2018 results WH Group (00288) Q1 2018 results Zijin Mining (02899) Q1 2018 results US : Consumer confidence index April 2018 New home sales 3M Q1 results Caterpillar Q1 results Coca Cola Q1 results 25 th April 2018 (Wednesday) HK : AEON Credit (00900) final results BBMG (02009) Q1 2018 results China Vanke (02202) Q1 2018 results Chongqing Iron (01053) Q1 2018 results Dalian Port (02880) Q1 2018 results Goldwind (02208) Q1 2018 results Guangshen Railway (00525) Q1 2018 results Shenzhen Expressway (00548) Q1 2018 results US : Baidu Q1 results Boeing Q1 results Facebook Q1 results Ford Motor Q1 results Qualcom Q1 results Sohu.Com Q1 results Twitter Q1 results Visa Q1 results 3
Forthcoming Important Announcements / Events 26 th April 2018 (Thursday) HK : External merchandise trade Air China (00753) Q1 2018 results China Construction Bank (00939) Q1 2018 results China Life (02628) Q1 2018 results China Longyuan Power (00916) Q1 2018 results China Overseas Land (00688) Q1 2018 results CITIC Bank (00998) Q1 2018 results COSCO SHIPPING Ports (01199) Q1 2018 results CRRC (01766) Q1 2018 results DFZQ (03958) Q1 2018 results GAC Group (02238) Q1 2018 results Haitong Securities (06837) Q1 2018 results HTSC (06886) Q1 2018 results NCI (01336) Q1 2018 results Ping An (02318) Q1 2018 results Sinopec Corp (00386) Q1 2018 results Sinopharm (01099) Q1 2018 results Vinda International (03331) Q1 2018 results US : Initial jobless claims week ended 21 st April 2018 Durable goods orders Amazon.com Q1 results General Motors Q1 results Inter Corp Q1 results Times Warner Q1 results 27 th April 2018 (Friday) HK : Tianjin Tianbao Energy (01671) trading debut Agricultural Bank of China (01288) Q1 2018 results Bank of China (03988) Q1 2018 results Bank of Communications (03328) Q1 2018 results BOC (Hong Kong) (02388) Q1 2018 results BYD Company (01211) Q1 2018 results China Communications Construction (01800) Q1 results China Everbright Bank (06818) Q1 2018 results China Merchants Bank (03968) Q1 2018 results China Oilfield Services (02883) Q1 2018 results China Railway Construction (01186) Q1 2018 results China Railway Group (00390) Q1 2018 results China Shenhua Energy (01088) Q1 2018 results China Telecom (00728) Q1 2018 results CITIC Securities (06030) Q1 2018 results CPIC (02601) Q1 2018 results CQRC Bank (03618) Q1 2018 results Fosun Pharmaceutical (02196) Q1 2018 results GTJA (02611) Q1 2018 results Guangdong Investment (00270) Q1 2018 results ICBC (01398) Q1 2018 results Minsheng Bank (00998) Q1 2018 results PetroChina (00857) Q1 2018 results PSBC (01658) Q1 2018 results Weichai Power (02338) Q1 2018 results Yanzhou Coal (01171) Q1 2018 results US : Gross domestic product Q1 2018 Consumer sentiment April 2018 Chervon Q1 results Exxon Mobil Q1 results Xerox Q1 results 4
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