Market Summary
Core Content
This document provides a comprehensive overview of the Hong Kong and Chinese stock markets, including key market indicators, technical analysis, sector performance, and economic calendar events. It also highlights the performance of specific stocks and investment recommendations.
Major Market Indicators (3 Jan - 4 Jan)
| Indicator |
4 Jan |
3 Jan |
2 Jan |
| Mkt. Turn. (mn) |
131,800 |
130,800 |
126,800 |
| HSI |
30,736 |
30,560 |
30,515 |
| HSI Change |
+175 |
+45 |
+596 |
| HSI Turn. (bn) |
54.12 |
47.55 |
50.65 |
| HSCEI |
12,203 |
12,088 |
12,068 |
| HSCEI Change |
+114 |
+20 |
+359 |
| HSCEI Turn. (bn) |
30.86 |
28.22 |
28.98 |
- The Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) both showed positive movement over the past three trading days.
- The HSI closed at 30,736 points, up 175 points, while the HSCEI closed at 12,203 points, up 114 points.
- Market turnover increased, with the HSI turnover reaching HK$131.8 billion on 4 Jan.
- Oil and technology stocks led the market to hit a 10-year high, while Chinese banking stocks saw capital inflow.
Technical Analysis
Hang Seng Index (HSI)
- HSI has been increasing for eight consecutive trading days.
- The index is above the 10-day moving average (DMA) at 29,863 points.
- The MACD bullish gap is expanding.
- The 14-day RSI is at 73.64, indicating overbought conditions.
- First support level at 30,200 points, next at 30,000 points.
- First resistance at 31,000 points, next at 31,500 points.
Hang Seng China Enterprises Index (HSCEI)
- HSCEI is above the 10-day DMA at 11,767 points.
- 14-day RSI is at 70.12, indicating a positive trend.
- First support level at 12,000 points, next at 11,500 points.
- First resistance at 12,500 points, next at 12,250 points.
Oil Sector
- Oil prices rose to a 3-year high, reaching $62 per barrel for US oil and $68 per barrel for Brent oil.
- The rise is attributed to concerns over supply disruptions in Iran and a drop in US crude inventories.
- Oil stocks advanced 3-5%.
- PetroChina (0857) and CNOOC (0883) are highlighted as major state-owned oil stocks with higher exposure to upstream operations.
- PetroChina's share price may benefit more from the oil price rally due to higher earnings sensitivity.
- Oilfield service companies also saw strong performance due to increased demand expectations.
- Analysts suggest that oilfield service stocks are more suitable for speculative buying rather than long-term investment.
China Overseas Grand Oceans (0081)
- Contract sales for November were HK$2.6 billion, with a GFA of 234,400 sqm.
- Accumulated sales for the first 11 months of 2017 were HK$34.2 billion, up 57% year-on-year.
- Net profit for the first half of 2017 increased by 13% to HK$7.12 billion.
- Gross margin rose to 20.9%, driven by high-margin projects.
- The company has a cash reserve of HK$20.5 billion, with 97.3% in RMB.
- Net debt ratio is at 44.2%, which is relatively low compared to peers.
- The estimated NAV is HK$12.7, and the current price is trading at 64% of NAV.
- Analysts target a price of HK$5.3 for 2018-2019 with a CAGR of 30%.
Automotive Sector
- The Vehicle Inventory Index for December was 47.7%, down 2.1 points from November.
- The index has remained below the alert level for 5 consecutive months.
- Auto dealers anticipate a decline in demand in January due to the phasing out of tax incentives.
- Zhongsheng (0881), a major auto dealer, reported a 1.2x increase in profit to RMB1.36 billion in 1H17.
- The company is expected to benefit from the launch of 10 new car models by Mercedes-Benz and Lexus, and from expanding its distribution network.
- The projected P/E ratio is 9.9x, which is considered attractive compared to peers.
- Analysts recommend accumulating shares for long-term investment.
Stock Market Activity
Top 10 Most Actively Traded Stocks (SH-HK Connect Southbound)
| Stock Name |
Stock Code |
Buy Trades (RMB) |
Sell Trades (RMB) |
Turnover (RMB) |
| TENCENT |
700 |
505,630,020 |
239,655,980 |
745,286,000 |
| NCI |
1336 |
344,831,480 |
298,986,190 |
643,817,670 |
| CCB |
939 |
252,267,430 |
131,471,720 |
383,739,150 |
| CPIC |
2601 |
138,667,550 |
242,084,540 |
380,752,090 |
| SMIC |
981 |
166,376,040 |
199,198,804 |
365,574,844 |
| SINOPEC CORP |
386 |
259,995,180 |
60,023,000 |
320,018,180 |
| ICBC |
1398 |
217,248,290 |
57,521,250 |
274,769,540 |
| PING AN |
2318 |
70,485,700 |
191,276,125 |
261,761,825 |
| HKEX |
388 |
257,543,980 |
2,165,440 |
259,709,420 |
| CHINA TAIPING |
966 |
163,273,920 |
47,344,780 |
210,618,700 |
Top 10 Most Actively Traded Stocks (SZ-HK Connect Southbound)
| Stock Name |
Stock Code |
Buy Trades (RMB) |
Sell Trades (RMB) |
Turnover (RMB) |
| TENCENT |
700 |
210,726,360 |
191,341,720 |
402,068,080 |
| GENSCRIPT BIO |
1548 |
221,007,500 |
103,363,800 |
324,371,300 |
| SMIC |
981 |
84,222,740 |
61,038,300 |
145,261,040 |
| GOLDWIND |
2208 |
70,602,848 |
67,433,185 |
138,036,033 |
| ZTE |
763 |
45,386,020 |
72,694,250 |
118,080,270 |
| SINOPEC CORP |
386 |
96,253,580 |
12,002,800 |
108,256,380 |
| KINGSOFT |
3888 |
85,211,100 |
18,245,300 |
103,456,400 |
| SUNAC |
1918 |
44,349,100 |
58,196,050 |
102,545,150 |
| CHINA VANKE |
2202 |
62,384,910 |
39,725,735 |
102,110,645 |
Ten Short Sell Stocks
| Stock Name |
Code |
Short Sell (M) |
Turnover (B) |
Short Sell Ratio |
| TENCENT |
00700.HK |
863.44 |
11.97 |
7.22% |
| PING AN |
02318.HK |
380.29 |
4.83 |
7.87% |
| SUNNY OPTICAL |
02382.HK |
353.72 |
1.47 |
24.00% |
| AIA |
01299.HK |
336.74 |
1.52 |
22.18% |
| CNOOC |
00883.HK |
318.85 |
1.69 |
18.92% |
| SINOPEC CORP |
00386.HK |
307.25 |
1.78 |
17.29% |
| PETROCHINA |
00857.HK |
293.49 |
1.92 |
15.30% |
| CCB |
00939.HK |
283.33 |
4.79 |
5.91% |
| GEELY AUTO |
00175.HK |
265.81 |
1.39 |
19.15% |
| BANK OF CHINA |
03988.HK |
265.20 |
1.94 |
13.64% |
Economic Calendars
| Date |
Country |
Event |
Survey |
Prior |
| Mon |
H.K., China, Japan, U.S., U.K., France, Germany |
Market closed |
|
|
| Tue |
Japan |
Market closed |
|
|
|
China |
Dec. Caixin Manufacturing PMI |
50.7 |
50.8 |
| Wed |
Japan |
Market closed |
|
|
|
H.K. |
Nov. Retail Sales Value (YoY) |
4.2% |
3.9% |
|
U.S. |
Dec. ISM Manufacturing |
58.2 |
58.2 |
| Thu |
China |
Dec. Caixin Service PMI |
51.8 |
51.9 |
|
U.S. |
FOMC releases meeting minutes in December |
|
|
|
U.S. |
Initial Jobless Claims (Dec. 30) |
|
|
|
U.S. |
Continuing Claims (Dec. 23) |
|
|
| Fri |
Eurozone |
Dec. CPI (YoY) |
1.4% |
1.5% |
|
U.S. |
Dec. Unemployment Rate |
4.1% |
4.1% |
|
U.S. |
Dec. Change in Non-Farm Payrolls |
188K |
228K |
|
U.S. |
Dec. Average Hourly Wages (YoY) |
2.5% |
2.5% |
Disclaimer
- The report is for informational purposes only.
- KGI Asia Ltd. does not guarantee the accuracy or completeness of the information.
- No liability is accepted for any loss arising from the use of this report.
- This report is not an invitation or offer to buy or sell securities.
- Reproduction or publication without written consent is prohibited.
