By Wan Yongqiang (Director of Zhitong Financial Research Center)
US stocks closed higher last Friday (December 15). The three major stock indexes all hit record closing highs, technology stocks pushed the NASDAQ up 1.17%, and the probability that the Republican tax reform bill will be approved continues to strengthen. The Dow Jones Industrial Average closed 143.08 points, or 0.58%, to 24651.74 points. The Nasdaq Composite Index closed up 80.06 points, or 1.17%, to 6936.58 points. The S&P 500 closed up 23.80 points, or 0.90%, to 2675.81 points.
The Hang Seng Index opened slightly higher in early trading on Monday (December 18), with intraday fluctuations rising and rising further in the afternoon, with a low of 28,821 points, a high of 29143 points, and a range amplitude of 322 points. By the close, the Hang Seng Index rose 0.7% to 29,050 points, with a market turnover of 92,084 billion dollars.
Follow news such as the US tax reform and the Central Economic Work Conference
Hong Kong stocks rebounded on Monday, spurred by a sharp rise in US stocks last Friday.Market bulls mainly hope that the US tax reform will be implemented smoothly.Looking at it so far, progress is quite smooth. The US Republican Party announced the final tax plan last Friday. Two Republican senators who are opposed to this said that they will support this tax bill after compromising. Both the Senate and the House of Representatives plan to vote on the bill before the end of Wednesday. The House of Representatives may vote for the first time on Tuesday, and the Senate will follow up the vote on Tuesday or Wednesday. Investors need to keep a close eye on relevant follow-up developments.
In addition, there are two major events,First, the 2018 Central Economic Work Conference was officially held on Monday.The focus of market attention is on whether to downplay the GDP growth target, how to improve the quality of economic development, how to continue to deepen reforms in various fields, how to prevent and mitigate financial risks, etc. If related topics are beneficial to the market, it is expected to boost investor confidence.
Second, after a lapse of 24 years, the Hong Kong stock market will usher in a major reform of the listing system.There are three main specific changes: a. Acceptance of different rights in the same shares; b. Relaxation of listing restrictions for biotechnology companies; c. Relaxation of restrictions on Hong Kong as a secondary listing channel. The expected minimum market value of companies with different voting power structures must reach 10 billion yuan. If the market value falls below 40 billion yuan, they must pass the higher revenue test of recording 1 billion yuan in revenue in the full fiscal year before listing. If a company with no income applies for listing in accordance with the applicable section for biotechnology companies added to the “Main Board Rules”, it is expected that the minimum market value will reach 1.5 billion yuan.
If the Hong Kong Stock Exchange's reform measures are successfully introduced, it will surely bring significant benefits to the Hong Kong stock market.Accepting different rights of the same shares is expected to accept companies such as Ant Financial to Hong Kong, while easing listing restrictions on biotech companies will attract a large number of mainland-related entrepreneurial companies to enter the Hong Kong market, because it is very difficult for mainland companies to do A-share IPOs. Stock listings can be digested for at least 5 years, and the Hong Kong market can be easily listed as long as the relevant conditions are met. It is expected that the Hong Kong stock market in 2018 will usher in a lot of fresh blood, which is conducive to expanding the depth and breadth of Hong Kong stocks and attracting more capital to participate, further enhancing the international influence of the Hong Kong market.
The oil, gas, and black period sectors rose significantly
Judging from the market, the rising varieties are mainly based on the concept of price increase:
First, in the oil and gas sector, there was a demonstration effect of CIMC Anrico (03899), and other varieties have begun to follow suit, such as Kunlun Energy (00135), United Energy Group (00467), Sinopec Guande (00934), Beijing Gas Blue Sky (06828), etc. The shortage of natural gas continues to spur the sector's upward movement.
2. There was a sharp rise in black futures, which directly stimulated the strengthening of individual coal stocks, such as Yanzhou Coal (01171), Shougang Resources (00639), and China's Shenhua (01088), focusing on the Yanzhou coal industry (01171). The company announced the acquisition of 65% of Yankuang Group's financial shares from Yankuang Group. On December 15, 2017, all prerequisites under the Yankuang Group financial equity transfer agreement were met. Yankuang Group Finance has become a non-wholly owned subsidiary within the scope of the company's consolidated statements. The stock is very close to its high of 8.43 yuan during the year, and there is hope that it will break through the market.
In addition, Zhitong's gold stock performed well in December. For example, Xinyi Glass (00868) rose 4.33%, Hysan Industrial (00014) rose 3.71%, and China Communications Services (00552) rose 2.79%. Sustainable attention.
Bulls are not strong and wary of the continued decline of broken varieties
The individual stock that showed outstanding performance on Monday was the Hong Kong Stock Exchange (00388), which rose 4.24%. The Hong Kong stock market will usher in major system reforms next year. This is a direct positive stimulus. However, the specific implementation is at least in the second quarter of 2018. Therefore, in the short term, it is still only speculating on a subject. Whether it can continue to rise depends on how the annual report actually grows.
Although the general market has risen quite a bit, there are quite a few varieties that are in a state of decline, and the decline is still quite large. For example, technology ones: 5G concept central communication (00763), Changfei optical fiber cable (06869); Apple industry chain Xinli International (00732), Qiutai Technology (01478), Shunyu Optics (02382); and the automobile category Zhengtong Automobile (01728), etc. The main factors behind the decline include poor performance expectations, policy shocks, and profit take-back pressure. In particular, some varieties that have just broken their positions need to be extra careful about the continued decline that follows.
At this stage,The focus is still on risk prevention. As long as bearish energy is still being released, it is hard to say that the market is stable. Moreover, judging from the sharp contraction in volume energy, the bulls are not strong, unless the next increase in trading volume can keep up.