On the other hand, the beginning of 2023 is imminent. After a year of low economic growth, the mainland has started intensive deployment, hoping to have a new situation in the new year. I believe this will also be an important stabilizing force for Hong Kong shares in the future.
Cars, houses and pensions have become three major discoveries
Last week, the Chinese and US governments released important news: first, the US central bank held interest rate discussions, followed by a meeting on the general direction of the economy on the continent. In terms of importance, the domestic media revealed that the central government held a very unusual meeting, this is the first central economic work conference after the 20th National Congress, in which there are still many new ideas and measures worth attention .
As for China’s economic situation this year, the Central Economic Work Conference described it as internal and external problems. Facing the triple pressure of shrinking demand, supply shocks and weakening expectations, it stressed that China’s economic resilience is strong, and the most important thing is not to lose confidence. It is useless to talk only about the concept, the most important thing is how to do it? The central government proposes three major steps forward: housing, cars and pensions, but at the same time it is necessary “to increase the income of urban and rural residents through multiple channels”.
During the meeting, the leaders talked about the auto industry in the mainland and believed that the auto industry is a bright spot in China’s economy, especially the new energy vehicles. China has really come to the forefront of the world .Both production and sales are booming, and a large number of them are exported abroad.
Many people in the automotive industry have noticed this, but few people have noticed that it’s retirement. The leaders stressed that China is vigorously developing home care for the elderly, which means that various services in the community must keep up, and they propose to turn the sunset problem into a sunrise industry. This is both a livelihood and a business opportunity.
Another big concern raised at the meeting is that real estate needs a soft landing. The policy still insists that “housing is for life, not speculation”, but it is clearly stated that the real estate sector should be promoted to smoothly transition to a new development model.
The platform’s new mission is good for science and technology stocks
In addition to automobiles and real estate, the third bright spot mentioned at the meeting is that platform companies have new tasks and need to vigorously develop the digital economy and improve the level of normalized supervision. It supports platform businesses to showcase their talents in driving development, creating jobs and competing internationally. In recent years, the platform companies have faced great pressure, and the market value has dropped appallingly, and the market is full of doubts. Now that the storm has passed, the central government is very clear: to support you, you must not only lead development, but also create jobs and, most importantly, show your talent in international competition. It was directly pointed out during the meeting that such a positive statement is important positive news for Tencent, Ali, JD.com, Meituan, Byte, Didi and many other companies.
Shares of tech dotcoms have fallen more than risen in the past year. Even though the recent rebound has rebounded a lot, they are still discounted by their high levels. If there is a more stable trading environment in the future, this sector will certainly be beneficial. Under the weight effect, it will be beneficial to The Hang Seng Index also has a significant push-up effect.
Another point that greatly worries the market is the need to pay close attention to the private economy, emphasizing the importance of the private economy. At the meeting, it was also proposed to implement the requirements for equal treatment of state-owned and private enterprises from the point of view of the system and law, and to encourage and support the private economy from the point of view of politics and opinion publish.
Finally, it is about reiterating the need to open up to the outside world and show new ways to actively promote adherence to high-level economic and trade agreements such as the Comprehensive and Progressive Transpacific Partnership Agreement (CPTPP) and the Digital Agreement of economic partnership and actively compare the relevant rules, regulations, management, standards, and deepen reforms in related national fields. During the meeting it was pointed out that the predecessor of the CPTPP was the TPP actively promoted by Obama, which included Vietnam but not China. Unexpectedly, after Trump came to power, he threw the TPP in the trash. The US withdrew on its own and stopped playing free trade agreements with mutual tariff exemption. Other countries had no choice but to transform and create a CPTPP without the United States. Now, China is actively applying to join the CPTPP and needs to compare the relevant rules to force domestic reforms.
US stocks fall for 3 consecutive days amid fears of a high-interest-rate recession
The comprehensive and in-depth direction of the Central Economic Conference will have an impact on the overall pattern of the stock market. Hong Kong stocks failed to reflect these messages last week, mainly due to the acceleration of the Mainland’s epidemic prevention and control easing and the US interest rate rally.
The US Federal Reserve maintained a hawkish tone and US stocks fell for several days: the Hang Seng index closed at 19,450 points, the state index at 6,634 points and the KCI at 4,149 points. The market turnover was 136 billion yuan. For one week, the Hang Seng Index fell 450 points, the H-Share Index fell 200 points;
Last week, the top three stocks with the biggest losses include: Country Garden (2007) with a cumulative loss of 17%; Ali Health (0241) with a cumulative loss of 14%; Longfor (960) with a cumulative loss of 13%. , of which two companies are insiders. Among stocks with cumulative gains, only Orient Overseas International (316) gained more than 10%.
Hit by pressure from the Federal Reserve and released data showing the economy slowing more than expected, three major US stock indexes fell for 3 consecutive trading days on Friday, including the once-slow Dow by almost 550 points, finally closing at 32920 with a loss of 281 points. On a full-week basis, the three major indexes were all down for two consecutive weeks: the Dow was down nearly 1.7%, the Nasdaq was down 2.7%, and the S&P 500 was down nearly 2.1%.
If you look at the Central Economic Work Conference on the continent in conjunction with the news from Hong Kong and the United States, it is almost a given that US growth will slow down next year. start a new situation after the 20th National Congress and prepare for a complete restart. Many of these plans focus on domestic demand. Exports no longer depend only on the United States, but are aimed at the global market. This strategy can reduce the influence of the United States, and is also a way to address the constraints of the United States on China in the economy and other fields. Will global funds answer to the big two? The adjustment and implementation of industrial strategies will have a direct impact on Hong Kong A-shares and shares.
The beneficiary sector can wait for the opportunity to buy short
Recently, the Mainland has vigorously adjusted its epidemic control strategy, and it is reported that China and Hong Kong will have the opportunity to clear customs in the early new year. Judging by the timetable for the central government to deliver a combined punch to restart growth this time, this is a general policy to implement the policy as soon as possible so that there is a new active situation from early 2023. The mainland it will create a new atmosphere from the automotive market, the real estate market and the platform economy, and the demand will be quite large.
Domestic real estate stocks benefited from the news last Friday, which was only a partial response, with other effects expected to unfold gradually in the future. In the near term, the market could feel the impact of large cumulative gains and tightening US interest rates. Investors should carefully study the different impacts after inception and wait for opportunities to absorb stocks that could benefit.
Jin Riku
