On the 22nd, the Hong Kong market continued to decline with the Hang Seng Index, consisting of major 82 constituent stocks, dropping by 371.14 points (1.89%) to 19,229.97, and the Mainland China A-shares Index (formerly H-share Index) composed of mainland Chinese stocks falling by 147.84 points (2.10%) to 6,887.05. Trading volume expanded to 157.9 billion 83 million Hong Kong dollars (on the 21st it was 119.2 billion 67.9 million Hong Kong dollars).
There is a continuing cautious stance among investors. Concerns are arising from U.S.-China tensions, the depreciation of the Renminbi, and escalating conflict between Ukraine and Russia. In the foreign exchange market on the 22nd, the offshore Renminbi against the U.S. dollar has been at its weakest level since late July. Despite positive movements in the index due to expectations of Chinese economic measures, it turned downward later in the morning and further widened its losses. (Asia Research Editing Team)
In the constituent stocks of the Hang Seng Index, there were noticeable declines, with Baidu Group (9888/HK), the largest Chinese internet search engine, dropping by 8.6%, China's largest life insurance company, China Life Insurance (2628/HK) down by 7.1%, and Semiconductor Manufacturing International Corporation (SMIC: 981/HK), China's largest chipmaker, falling by 6.7%. Baidu's earnings disappointed as its performance for the July-September quarter saw a 19% decrease in adjusted net profit due to decreased advertising revenue.
In terms of sectors, financial stocks such as insurance, securities, and banks in China saw declines. Apart from China Life Insurance, New China Life Insurance (1336/HK) dropped by 7.8%, China Pacific Insurance Group (2601/HK) by 4.7%, China Galaxy Securities (6881/HK) by 6.2%, China Merchants Securities (6099/HK) by 4.9%, China Minsheng Bank (1988/HK) by 2.3%, and ICBC (1398/HK) by 1.9% each.
On the other hand, smartphone component and assembly-related stocks performed well. AAC Technologies HD (2018/HK) rose by 7.9%, O-Film Tech (1478/HK) by 4.0%, Sunny Optical Tech (2382/HK) by 2.2%, and BYD Electronics (BYD Elec: 285/HK) by 4.3% each.
Additionally, Xiaomi Group (1810/HK) saw a 1.4% increase. At one point, there was a scene where it rose as high as 6.0%. With a strong performance in the electric vehicle (EV) business, it is reported that the company plans to introduce its second model car to the market as early as February-March next year.
The mainland market fell for the fourth consecutive day. The key index, the Shanghai Composite Index, ended the trading day with a significant decline of 3.06% to 3,267.19 points. The decline was led by financial stocks. Consumer-related stocks, material stocks, infrastructure-related stocks, high-tech stocks, and utility stocks were also sold off. On the other hand, airline stocks performed well and a part of the real estate sector saw buying interest.
Asia Research Co., Ltd.
