On the fifth day of the Lunar New Year, the first trading day after the Hong Kong stock festival got off to a good start.
Hong Kong stocks are off to a good start in the Year of the Dragon -
On February 14, the first trading day of the Year of the Dragon, coinciding with the fifth day of the Lunar New Year, the three major indexes of Hong Kong stocks opened low and went high, and the Hang Seng Technology Index once expanded its decline to 2%, and then rose nearly 5%, and the three major indexes of Hong Kong stocks fluctuated and rose simultaneously.
At the close, Hong Kong's Hang Seng Index rose 0.84% to 15,879.38 points, the Hang Seng Tech Index rose 2.26% to 3,197.87 points, and the Hang Seng China Enterprises Index rose 1.5% to 5,386.31 points.
Technology & Consumer Sector Leads Gains //
Technology stocks rose strongly, with Xpeng Motors up nearly 8%, China Literature Group and Oriental Selection up nearly 7%, Meituan up more than 5%, and JD.com Group up more than 3%.
The performance of large consumption is good, Weilong Delicious rose by more than 12%, China Duty Free rose by more than 5%, and Nongfu Spring, China Resources Beer, and Tsingtao Beer followed suit.
Hong Kong bank stocks higher //
Hong Kong bank stocks rose, China Merchants Bank rose more than 5%, Postal Savings Bank, Agricultural Bank of China, Jiangxi Bank, China CITIC Bank, etc. rose more than 1%.
Hong Kong stock CRO sector fell collectively -
Hong Kong stocks WuXi fell sharply, WuXi AppTec fell 18.62%, and WuXi Biologics fell more than 9%.
In terms of news, on February 13, WuXi AppTec announced that the company does not have a human genomics business, and its existing businesses will not collect human genome data.
In addition, WuXi Biologics announced that the company is not a subsidiary of Wuxi AppTec New Drug Development Co., Ltd., and the relevant statements in the letter are untrue.
What to expect from Hong Kong stocks in the Year of the Dragon? -
Stepping into the Year of the Dragon, the Hang Seng Index Company said that in the past 55 years, the Hang Seng Index Company has recorded an average return of 14% during the four Dragon years, ranking 7th among the 12 zodiac signs. What's more, this double-digit increase is not just due to a year or two of extremely high returns. In fact, the Hang Seng Index has recorded positive returns in the past four Dragon Years, ranging from a low of 0.5% to a maximum of 33.4%. It is worth noting that in the most recent Year of the Dragon (2012), the Hang Seng Index recorded a 15% increase in the year, driven by the easing of monetary policies by the world's major central banks.
CICC concludes that the current environment for Hong Kong stocks presents three characteristics: First, compared with historical levels, valuations and investment sentiment are at a low level, and the risk premium is high, which provides conditions for a rebound. Second, the domestic growth momentum is still relatively weak, and more "symptomatic" policy support is needed. Third, the recent policy strength is still insufficient.
"We have repeatedly stressed that in the current macro environment, timely and symptomatic policies, especially substantial fiscal stimulus, remain indispensable and critical to reversing the credit cycle," CICC said. Estimates show that if the broad fiscal deficit pulse in 2024 is flat or positive compared with 2023, it will correspond to a net increase in fiscal deficit of about 3 trillion yuan.
Zheshang International believes that coupled with the overly optimistic interest rate cut expectations in the early stage of the U.S. correction, the capital of Hong Kong stocks has also begun to come under pressure, which has undoubtedly brought the valuation of Hong Kong stocks to a historical low. As of the end of January, the PE (TTM) of the Hang Seng Composite Index was 8.31, down from 9.01 at the end of the previous month, the five-year PE valuation quantile of the Hang Seng Composite Index was around 1.95%, and the market was in the value range, and from the perspective of risk premium, the market risk premium of the Hang Seng Composite Index rose from 7.22 at the end of December to 7.98 at the end of January. The investment cost performance of the Hong Kong stock market, which is at a low valuation, relative to US bonds, is gradually emerging.
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