The Hong Kong market on the 10th rebounded for the first time in 6 days, with the Hang Seng Index composed of 82 major stocks being 37.13 points (0.22%) higher than the previous business day, and the mainland China stock index (formerly H share index) composed of mainland enterprise stocks rose 23.43 points (0.39%) to 6026.34 points. The trading price has shrunk to 107.3 billion 94.2 million Hong Kong dollars (133.6 billion 64.6 million Hong Kong dollars on the 9th).
A trend where purchases aimed at an autonomous backlash take precedence. The Hang Seng Index continued to fall for 5 days until the day before, and it had fallen to a low level for the first time in about 3 weeks. While the September US interest rate cut is clearly seen, the rebound in US stocks last night is also supporting it. However, the upper price is limited. China's economic concerns are smoldering. Regarding trade statistics for August announced during today's trading hours, while exports in US dollars rose 8.7% from the same month last year (forecast 6.6% increase), imports have declined to 0.5% (forecast 2.5% increase). Although the expansion of exports was a positive factor, there were concerns about weak domestic demand. (Asia Research Editorial Department)
Among the constituent stocks of the Hang Seng Index, the rise was noticeable, with an emerging EV (electric vehicle) manufacturer Ideal Auto (2015/HK) rising 6.3%, Alibaba Group HD (Alibaba: 9988/HK), the largest e-commerce company in China, rising 4.2%, and Zhou Taifu Jewelry (1929/HK), a major jewelry retail chain company, a 4.0% increase. The number of new cars sold by Ideal Steam has surpassed 0.01 million units for 9 consecutive weeks. Strong sales were viewed as evidence. Since Alibaba's shares were incorporated into the Stock Connect (mutual stock exchange between mainland China and Hong Kong) target from the 10th, an inflow of mainland money is expected.
33 brands have been newly adopted by Stock Connect. In addition to Alibaba, the artificial intelligence (AI) drug discovery company Quantum Farm (2228/HK) is 22.3% higher, the old gold jewelry manufacturing and sales company Osho Gold (6181/HK) is 12.0% higher, private coal supplier capacity development groups (1277/HK) are rising 8.2%, etc.
Emerging EVs are also expensive. In addition to Ideal Auto described above, Weilai Group (9866/HK) increased by 9.9% and Xiaopeng Motor (9868/HK) by 2.0%. For Weilai Group, a bullish sales forecast that exceeds analysts' expectations continues to be viewed as material.
Meanwhile, China's real estate sector has plummeted. The price of Shimao Group HD (813/HK) fell by 22.5%, Ocean Group HD (3377/HK) fell 15.9%, Xuhui (884/HK) fell 14.6%, and Gajiraku Group HD (3383/HK) fell 13.8%. The exclusion from Stock Connect eligibility has been disappointing. 33 stocks, mainly Chinese real estate stocks, were excluded.
Drug discovery support related services such as drug development contract organizations (CRO) are also cheap. Wuxi Yakming Kangde New Drug Development (2359/HK) declined by 10.4%, Yakming Joint Biotechnology (2268/HK) by 9.4%, Laikai Pharmaceutical (2105/HK) by 5.0%, and Yakming Biotechnology (2269/HK) by 3.9%. On the 9th local time, the US House of Representatives passed the “Biosecure Bill,” which restricts transactions between the US government and Chinese biotechnology companies (to be sent to the Senate in the future). The bill is expected to affect some CRO related companies.
Meanwhile, the mainland market rebounded for the first time in 3 days. The Shanghai Composite Index, which is the main indicator, closed at 2744.19 points, 0.28% higher than the previous day. Bank stocks are high. High-tech stocks, energy stocks, brewery stocks, infrastructure-related stocks, insurance stocks, etc. were also bought. On the other hand, pharmaceutical stocks are cheap. Real estate stocks, materials stocks, utility stocks, and automobile stocks were also sold.
Ashu Research Co., Ltd.
