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EAST ASIA SECURITIES COMPANY LIMITED
9/F, 10 Des Voeux Road Central, Hong Kong.
Dealing: 2308 8200 Research: 3608 8098 Facsimile: 3608 6113
HONG KONG RESEARCH
Weekly Report
th
12 June 2015
Restricted circulation
Analyst: Carmen Wong
US rate hike and political vote in HK clouding the market
HSI Weekly Movement
500
29,000
450
28,500
27,281
27,260 27,316
26,990
26,688
26,908
+21
+0.1%
27,500
HS Red Chip Index
5,050
5,101
-51
-1.0%
27,000
HS China Enterprises Index
13,984
13,915
+69
+0.5%
HS Hong Kong 35 Index
2,986
3,016
-30
-1.0%
HS Mainland 100 Index
8,499
8,504
-5
-0.1%
Growth Enterprise Index
804
813
-9
-1.1%
Avg Daily Turnover
(HK$ bn )
143.6
163.1
-20
-12.0%
39,947
53,648
36,060
15,101
39,613
55,163
36,413
15,148
+334
-1,515
-353
-47
+0.8%
-2.7%
-1.0%
-0.3%
250
26,000
158.46 151.09
25,500
144.13
124.30 131.53
25,000
24,500
100
24,000
50
23,500
0
23,000
5-Jun
Mon
Tue
Turnover
Wed
Thu
%
27,260
26,500
150
05/6/2015 Change
27,281
300
166.90
12/6/2015
Hang Seng Index
28,000
350
200
Week ended
Fri
Hang Seng Index
Hang Seng Index
400
Turnover (HK$ bn)
Weekly Market Statistics
Sectoral Indices
Finance
Utilities
Properties
Comm & Ind
Review & Outlook of Market Performance
Although Hong Kong stock market started the week with a positive tone, shares plunged on Tuesday and
Wednesday, amid concerns over possible US interest rate hike in the coming months as well as fears of MERS
(Middle East Respiratory Syndrome) spreading in Hong Kong. Besides, investor appetite was curbed by a
political vote in Hong Kong on next Wednesday for the Chief Executive election in 2017. Shares rebounded later
this week, as the Centre for Health Protection of Hong Kong clarified no confirmed case of MERS was found in
Hong Kong. Over the week, the HSI edged up by 0.1% w-o-w to 27,281, while the HSCEI climbed 0.5% w-o-w.
The daily average Mainboard turnover reduced to HK$143.6 billion, down from HK$163.1 billion in the previous
week.
The Chinese banking sector broadly outperformed the market, led by Bank of Communications (3328.HK; +5.5%
w-o-w). Shares were cheered, as news reported the mixed-ownership reform plan of BoCom would be approved
within two weeks at the earliest. Also BoCom was said to be having talks to introduce Fosun Group and Tencent
as investors. Meanwhile, the primary market started to heat up, as a number of companies are set to be listed in
the local bourse by end of this month, including Legend Holdings, the parent of Lenovo Group (0992) as well as
Red Star Macalline Group , the largest home improvement and furnishings mall in China.
On the economic front, China’s consumer inflation unexpectedly eased from 1.5% y-o-y in April to 1.2% y-o-y in
May (vs. consensus of +1.3% y-o-y), whereas the producer price index stayed unchanged at a negative 4.6% yo-y. Fixed asset investment for the first 5 months this year merely grew 11.4% y-o-y (April: +12.0% y-o-y), its
slowest pace in nearly 15 years, although growth in retail sales (+10.1% y-o-y, same as consensus) and factory
output (+6.1% y-o-y vs. consensus of +6.0% y-o-y) steadied in May.
For the coming week, Hong Kong stocks are expected to remain volatile, ahead of the Legislative Council vote
on the political reform package in Hong Kong and the Federal Open Market Committee meeting in the US.
Shares may see further downside, in the event of more signs of MERS spreading in the territory. The HSI may
find its near-term support level at around 26,800 points.
This report has been prepared solely for information purposes and we, East Asia Securities Company Limited are not
soliciting any action based upon it. Neither this document nor its contents shall be construed as an offer, invitation,
advertisement, inducement or representation of any kind or form whatsoever. This document is based upon
information, which we consider reliable, but accuracy and completeness are not guaranteed. Opinions expressed
herein are subject to change without notice. At the time of preparing this report, we have no position in securities of
the company or companies mentioned herein, while other Bank of East Asia Group companies may from time to time
have interests in securities of the company or companies mentioned herein.
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EAST ASIA SECURITIES COMPANY LIMITED
US & Regional Markets Weekly Update
Date
US
Dow Jones
US
NASDAQ
JAPAN
Nikkei Avg
SINGAPORE
STI
MALAYSIA
KLSE Index
BANGKOK
SET Index
TAIPEI
Weighted Index
12th June
5th June
18,039.37*
17,849.46
5,082.51*
5,068.46
20,407.08
20,460.90
3,351.97^
3,333.67
1,734.37^
1,745.33
1,507.89^
1,507.37
9,301.93
9,340.13
+0.52
+0.0%
-38.20
-0.4%
Change
+189.91
+14.05
-53.82
+18.30
-10.96
%
+1.1%
+0.3%
-0.3%
+0.5%
-0.6%
th
th
Remark: (*) closing as of 11 June 2015; (^) closing as at 17:00 of 12 June 2015
Major Changes in Index Constituent Stocks (Week ended 12th June 2015)
Hang Seng Index (HSI)
Stock
Stock Closing Price
Code @12/6/2015
W-O-W Change
Galaxy
Entertainment
00027
HK$33.75
Absolute
-HK$2.05
%
-5.7%
Cathay Pacific
00293
HK$18.48
-HK$1.06
-5.4%
Remarks / Comments
Deutsche
bank
maintained
its
“Underweight” rating on Macau gaming
sector, as the opening of Galaxy Macau
Phase 2 failed to boost the
performance of the sector. For the first
seven days of June, the average daily
gross gaming revenue was down 50%
y-o-y to MOP520 million per day.
The Security Bureau of Hong Kong has
issued a Red Outbound Travel Alert to
Korea in view of the outbreak of the
MERS. Shares of Cathay Pacific
tumbled, amid fears of MERS
spreading with suspected cases found
in Hong Kong this week.
Hang Seng China Enterprises Index (HSCEI)
Stock
CGN Power
Stock Closing Price
Code @12/6/2015
01816
HK$4.70
W-O-W Change
Absolute
-HK$0.72
%
-13.3%
Remarks / Comments
Its key competitor, China National
Nuclear Power, the second largest
nuclear power operator, was listed in
th
the Shanghai A-share market on 10
June. Nomura and Credit Suisse
recommended
"Reduce"
and
"Underperform"
rating
on
CGN
respectively on its stretched valuations.
Hang Seng China-Affiliated Corporations Index (HSCCI)
Stock
Lenovo Group
Stock Closing Price
Code @12/6/2015
00992
HK$11.42
W-O-W Change
Absolute
-HK$0.60
2
%
-5.0%
Remarks / Comments
Legend Group, the parent company of
Lenovo Group, is set to be listed in the
Hong Kong Stock Exchange later this
month, raising proceeds of US$2 billion
to US$ 3 billion.
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EAST ASIA SECURITIES COMPANY LIMITED
Summary of US Economic News
Indicator
Initial jobless claims – week ended 6
June 2015
Change/Index
th
+0.7% w-o-w
Retail sales – May 2015
+1.2% m-o-m
Comments
Initial jobless claims increased slightly more than
expected by 2,000 to a seasonally adjusted
279,000 (vs. consensus of 275,000) for the week
th
ended 6 June 2015. Yet, the level remained near
its 15-year low. The 4-week average rose 3,750 to
278,750.
Retail sales growth rebounded from a 0.2%
monthly gain in April to 1.2% m-o-m in May,
mainly boosted by increased sales of automobiles
and stronger consumption of gasoline. Excluding
these 2 components, retail sales rose 0.7% from
the previous month.
Forthcoming Important Announcements / Events
th
15 June 2015 (Monday)
th
16 June 2015 (Tuesday)
th
17 June 2015 (Wednesday)
th
18 June 2015 (Thursday)
th
19 June 2015 (Friday)
Gross National Income and External Primary Income Flows for
1Q15
Industrial Production – May 2015
Adobe Systems Inc – 2Q15 results
No important announcements/ events
Housing Starts – May 2015
FedEx Corp – 4Q15 results
Oracle Corp – 4Q15 results
No important announcements/ events
HK
:
US
:
HK
:
US
:
HK
:
US
:
HK
:
US
:
HK
:
FOMC Meeting Announcement
China Greenfresh Group Co., Ltd. (06183) – trading debut
Trade Involving Outward Processing in China for 1Q15
Volume and Price Statistics of External Merchandise Trade for
April 2015
Unemployment and Underemployment for March – May 2015
Consumer Price Index – May 2015
th
Initial jobless claims – week ended 13 June 2015
Pa Shun Pharmaceutical International (00574) – trading debut
US
:
No important announcements/ events
3
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EAST ASIA SECURITIES COMPANY LIMITED
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Bank of East Asia, Limited (“BEA”).
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certifies that (i) the views on the companies and securities mentioned in this report accurately reflect
his/her personal views; and (ii) no part of his/her compensation was, is, or will be, directly, or indirectly,
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This report has been prepared solely for information purposes and has no intention whatsoever to
solicit any action based upon it. Neither this report nor its contents shall be construed as an offer,
invitation, advertisement, inducement or representation of any kind or form whatsoever. This report is
based upon information, which East Asia Securities Company Limited considers reliable, but accuracy
or completeness is not guaranteed. The analysis or opinions expressed in this report only reflect the
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without notice. Any recommendation contained in this report does not have regard to the specific
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