20180613-凯基证券亚洲-Investment_Daily_4页_203kb

Market Summary

Core Market Indicators

The Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) showed mixed performance in the recent trading period. On 12 June, the HSI closed at 31,103, up 39 points from the previous day, while the HSCEI closed at 12,206, up 34 points. Market turnover for the HSI was HK$87.7 billion on 12 June, indicating moderate trading activity. The HSI experienced a rebound on the chart, with a white candlestick on Tuesday, but the MACD histogram remained in positive territory with a narrowing spread, suggesting uncertainty.

Key technical indicators for the HSI include:

• 10-day moving average: 30,901
• 50-day moving average: 30,608
• 250-day moving average: 29,181
• 14-day RSI: 53.9
• Primary resistance: 31,593
• Primary support: 30,608

For the HSCEI:

• 10-day moving average: 12,151
• 50-day moving average: 12,147
• 250-day moving average: 11,690
• 14-day RSI: 50.9
• Primary resistance: 12,395
• Primary support: 11,941

Market Trends and Sentiment

Hong Kong equities recorded mild gains on Tuesday, with the HSI rising slightly and the HSCEI also showing a modest increase. However, the education sector remained strong, with several education stocks experiencing double-digit gains. The market showed a lack of momentum, as daily turnover remained low, and the overall sentiment was neutral due to the lack of significant news impacting the market.

China Res Cement (1313) issued a positive profit alert and placed shares, but its price slumped nearly 13%, which may have affected the overall market sentiment. Southbound fund inflow improved, indicating a positive signal for the market, but local blue chips dropped slightly in the US ADR market, suggesting mixed investor sentiment.

IPO Brief: Jiangxi Bank (1916)

Jiangxi Bank is a provincial city commercial bank in Jiangxi Province and is the only one of its kind. It ranked 22nd among all PRC city commercial banks in terms of total assets as of December 2016. The bank has a strong business network in Jiangxi, supported by branches in Guangzhou and Suzhou, and has established strategic cooperation agreements with numerous local governments and enterprises.

Jiangxi Bank's major businesses include corporate banking, retail banking, and financial markets. In 2017, corporate banking and retail banking accounted for 54.4% and 19.1% of the group's total income, respectively. The bank also allocated a significant portion of its assets to investment products, with standard investment products and non-standard credit assets totaling Rmb188 billion, or 50.9% of total assets. Trust Plans and Asset Management Plans accounted for 80.3% of the non-standard credit assets.

The IPO price range for Jiangxi Bank is HK$5.94 to HK$6.66, with a total share offer size of HK$6.95 to HK$7.79 billion. The historical price-to-book ratio is 1.01 to 1.10, which is higher than that of listed peers. The bank has engaged in cornerstone investments with several investors, subscribing to HK$3.86 billion of new shares, or 52-55% of the total offer. Analysts have a neutral view on the IPO due to the high exposure to Trust Plans and Asset Management Plans, which are under regulatory scrutiny.

Stock Connect Statistics

Stock Connect data shows that the top 10 most actively traded stocks on SH-HK and SZ-HK Connect include major players such as Tencent, SMIC, PICC Group, and China Res Cement. These stocks saw significant turnover and trading activity, with Tencent being the most actively traded on both sides. The combined Southbound balance was at 81.65 billion RMB, with a high percentage of the quota used, indicating strong investor activity.

Other Market Statistics

The top 10 most actively traded stocks in the local market included China Res Cement, Tencent, Ping An, and others. China Res Cement experienced a significant drop of -12.79%, while Tencent saw a slight decline of -0.38%. The ten short sell stocks also showed notable short sell activity, with Tencent and HSCEI ETF being the top performers in terms of short sell ratio.

Economic Calendar Highlights

Key economic events in the coming days include:

• Tuesday (Jun 12): US CPI YoY at 2.7%, Singapore's US-North Korea Summit
• Wednesday (Jun 13): US PPI YoY, Euro Zone Industrial Production SA MoM, China Retail Sales YoY at 9.6%, and China Industrial Production YoY at 7.0%
• Thursday (Jun 14): FOMC Rate Decision, Jun Initial Jobless Claims, May Continuing Jobless Claims, ECB Rate Decision
• Friday (Jun 15): Euro Zone Trade Balance SA, Japan BOJ Rate Decision, Hong Kong's Vitasoy Annual Result

Disclaimer

The information and opinions in this report are based on internal research and are subject to change. KGI Asia Ltd. does not make any representation or warranty regarding the accuracy or completeness of the information. This report is for informational purposes only and should not be construed as an invitation or offer to buy or sell securities. No liability is accepted for any use of this report.