According to the Smart Finance App's report, the US June CPI data boosted expectations of a rate cut in September, helping the three major indexes of Hong Kong stocks to strengthen again today. The Hang Seng Index successfully climbed above the 18,000 level and closed up 2.59% or 461.05 points at 18,293.38 points, with a total daily turnover of HKD 119.432 billion; the Hang Seng Mainland China Enterprises Index rose 2.52% to 6,532.63 points; the Hang Seng Technology Index rose 2.32% to 3,782.08 points. Looking at the whole week, the Hang Seng Index rose by 2.77%, the Hang Seng China Enterprises Index rose by 2.36%, and the Hang Seng Tech Index rose by 5.15%.
Anxin International pointed out that the inflation data released by the US last night was encouraging, but US stocks did not benefit from the good inflation data. Looking ahead, judging from the phenomenon of 'sector rotation' in US stocks last night and the warming of rate cut expectations, funds may also rotate to lagging Hong Kong stocks. Guotai Junan believes that with the decrease in economic policy uncertainty and the determination of the overseas interest rate cut trend, Hong Kong stocks will shake upward.
Blue chip performance
Longfor Group (00960) led the blue chips. At the close, it rose by 8.39% to HKD 11.52, with a turnover of HKD 0.171 billion, and contributed 3.44 points to the Hang Seng Index. In the first half of this year, Longfor delivered a total of 121 projects in 43 cities across the country, approximately 0.05 million units of quality residences, and 20% of the projects achieved delivery one month in advance. BOCOM International pointed out that the real estate market has entered a period of policy effect realization. In the short term, under the situation of frequent relaxation of policies, there may be trading opportunities to be greeted with reassessment.
As for other blue-chip stocks, Henderson Land (00012) rose 7.59% to HKD 23.4, contributing 3.92 points to the Hang Seng Index; Li Ning (02331) rose 7.42% to HKD 16.22, contributing 4.23 points to the Hang Seng Index; China Resources Power (00836) fell 2.61% to HKD 22.4, dragging down the Hang Seng Index by 1.86 points; and OOIL (00316) fell 1.12% to HKD 115, dragging down the Hang Seng Index by 0.28 points.
Hot sectors
On the market, most large technology stocks rose, with Meituan and JD rising nearly 5%, and Alibaba closing up nearly 4%. The 'Olympic effect' is expected to catalyze the consumption of sports shoes and clothing; the performance of sporting goods stocks is strong; the real estate market has entered a period of policy effect realization, and mainland real estate stocks were strong all day; benefited from the expectation of Fed rate cuts, most Hong Kong property stocks rose; pork concept stocks, dining stocks, pharmaceutical stocks, mainland banking stocks, etc. all rose. On the other side, Hamas' preliminary ceasefire proposal caused shipping stocks to continue to fall; gold stocks soared after opening high but then slumped; semiconductors, Apple concept stocks, electric power stocks, and others were weak.
1. Mainland real estate stocks were strong all day. At the close, Shimao Group (00813) rose 14.29% to HKD 0.8; Seazen Holdings (01030) rose 9.35% to HKD 1.52; Longfor Group (00960) rose 8.39% to HKD 11.52; Agile Group (03383) rose 7.84% to HKD 0.55.
The China Index Academy recently released the ranking of China's real estate companies' delivery scale for the first half of 2024. The list shows that 15 companies delivered more than 0.02 million units, and 8 companies, such as Country Garden, Greenland Holdings, Vanke, China Overseas Property, Greentown China, Sunac and Seazen, delivered more than 0.05 million units, with the top-ranked Country Garden delivering a scale of up to 0.1545 million units. The top ten real estate companies in terms of delivery scale delivered more than 0.676 million units in total. Founder Securities pointed out that the "517 new policy" clarifies the central government's determination to stabilize the real estate market. After various levels of cities speeded up their follow-up, the effect of policy release has been reflected in the transaction end. Looking forward to the future, with the goal of maintaining stable housing transactions in a critical moment, it is urgent to issue multi-faceted policies to protect this, and the new round of policy release has begun. The real estate market is bullish.
2. Pharmaceutical stocks continued to rise. At the close, CanSino Biologics-B (02162) rose 5.85% to HKD 34.4; Innocare (09969) rose 5.2% to HKD 5.06; Akeso (09926) rose 4.96% to HKD 40.2; and Genscript Bio (01548) rose 4.38% to HKD 10.
The June CPI in the USA slowed down unexpectedly, with a probability of a rate cut in September approaching 90%. Pacific Securities pointed out that in the future, as the Fed's interest rate cycle comes to an end, gradually easing liquidity is expected to bring investment and financing back on track, and overseas demand will improve before domestic demand. In addition, the Implementation Plan for the Full Chain Support for the Development of Innovative Drugs, which was introduced recently, released positive signals. Soochow Securities believes that specific terms are expected to be implemented soon, and with multiple catalytic factors such as the ESMO conference, WCLC conference, medical insurance negotiations, and expectations of innovative drugs going abroad, the innovative drug sector is expected to strengthen in the second half of the year, as it is at a historical low.
3. The mainland banking sector performed impressively. As of the close, CM Bank (03968) rose 4.71% to HKD 35.6; Agricultural Bank of China (01288) rose 2.96% to HKD 3.48; Industrial and Commercial Bank of China (01398) rose 2.75% to HKD 4.48; Bank of China (03988) rose 2.57% to HKD 3.59.
According to announcements from several listed banks, 12 banks including Bank of Communications, Postal Savings Bank of China, China Construction Bank, and CM Bank will distribute A-share cash dividends exceeding CNY 130 billion this week. Overall, 41 listed banks with dividend plans are expected to complete distribution mostly in June and July. Based on previously disclosed annual report data, the six state-owned banks' dividend amount will amount to as much as CNY 413.341 billion this year.
Huafu Securities pointed out that there are three driving factors for the banking sector's performance since this year. First is the spread of the dividend yield stock selection logic within the sector, with the high dividend yield strategy from state-owned banks spreading to small and medium-sized banks. Second is real estate policy relaxation. Third is the slowdown of the decline in banks' net interest margin and expectations of the underlying fundamentals being just around the corner. Looking ahead, the banking sector will need to test the effectiveness of previous policies and the trend of future fundamental movements.
4. Shipping stocks continue their decline. As of the close, COSCO Ship Engy (01138) fell 3.72% to HKD 9.07; COSCO Shipping Holdings (01919) fell 3.52% to HKD 11.5; COSCO Shipping Development (02866) fell 1.96% to HKD 1; OOIL (00316) fell 1.12% to HKD 115.
On July 11, the main August contract and the sub-main October contract of the Europe-Asia route of the shipping futures both opened and dropped, while multiple contracts fell by the limit. Daiwa Research pointed out that the Hamas ceasefire will enable the Middle East situation to improve in the short term. If this situation is achieved, shipping prices may recover to the level before the Red Sea route was blocked. Due to the fact that the share prices of shipping stocks have always been supported by the sharp rise in freight rates, although shipping prices may not immediately decline, the latest expected developments will still be a great pressure on the share prices of shipping enterprises. Investors are expected to take profits and leave, with COSCO Shipping Holdings, OOIL, and SITC being further under pressure.
5. Golden industrial concept soared but fell back. As of the close, SD Gold (01787) fell 2.59% to HKD 16.54; Chinagoldintl (02099) fell 2% to HKD 51.45; Zijin Mining Group (02899) fell 0.23% to HKD 17.58.
Yesterday evening, the CPI data for June was released in the USA. The overall and core CPI were both significantly lower than market expectations, and after the data was released, interest rate futures completely priced in a rate cut in September. Overnight, gold and silver rose in the short term, with the spot gold price breaking through the level of USD 2400/ounce, the first time since May 22. Stimulated by this news, golden industrial concept stocks opened sharply higher, but then fell sharply, with SD Gold leading the decline among other stocks in the sector.
SD Gold announced yesterday that the net profit attributable to owners of the parent company is expected to be between CNY 1.25 billion and CNY 1.45 billion in the first half of 2024, an increase of 42.07% to 64.81% year-on-year. Morgan Stanley pointed out that after excluding one-time effects, the core net profit will increase by 45% to 68% year-on-year to reach RMB 1.28-1.48 billion, which means that the second-quarter profit will be between RMB 0.55-0.75 billion, remaining the same year-on-year or experiencing a decline, which is disappointing.
Popular fluctuating stocks
1. CKI Holdings (01038) rose significantly. As of the close, it rose 6.37% to HKD 49.25.
CKI Holdings issued a statement that the company occasionally considers and evaluates different strategic opportunities to create the greatest value for shareholders. One of the opportunities currently under consideration is a potential secondary and additional listing of the company's shares on overseas stock exchanges (such as the London Stock Exchange) without raising any capital.
2. Sunny Optical (02382) rose against the trend, with a rise of 3.84% to HKD 50.05 at the close.
Lyon believes that during the first half of this year, the shipment volume of Sunny Optical Technology's main mobile phone and in-car products remained stable, and the product mix and gross margin of the mobile phone camera module business, which is highly sensitive to profits, have both improved. The company is looking forward to stable mid-term performance and is expected to announce profits.
Aluminum Corporation of China (02600) announced earnings surprise, closing up 3.77% at HKD 5.5.
According to a research report released by Citigroup, the company predicts that its mid-year net profit will reach RMB 6.5 billion to 7.3 billion, a year-on-year increase of 90% to 114%, which is 72% to 81% of the bank's annual forecast and 71% to 80% of the market's general expectation, surpassing expectations. The rating is "buy", with a target price of HKD 7.88.