The Renminbi exchange rate has weakened, and the Hang Seng Index continues to decline today (21st). The overnight S&P 500 index fell 0.3%, while the Dow and Nasdaq rose 0.8% and fell 0.8% respectively. At the time of writing, the yield on 10-year Treasury bonds in the United States fell to 4.232 basis points, and the US dollar index rose to 105.72. The latest futures prices for the Dow and the Nasdaq fell 39 and 0.2%, respectively. The spot Renminbi fell 8 points to a new seven-month low of 7.2613 against the US dollar. The Shanghai Composite Index fell 7 points or 0.24% to close at 2,998 points for the whole day, the Shenzhen Component Index fell 0.04%, and the turnover of the Shanghai and Shenzhen stock markets totaled approximately 619.6 billion yuan.
The Hang Seng Index opened low and then fell sharply, once hitting a low of 17,968 points, down 306 points or 1.7% for the day, and closed at 18,028 points; the H share index fell 116 points or 1.8%, and closed at 6,439 points; and the Hang Seng Tech Index fell 66 points or 1.8%, to close at 3,701 points. The total trading volume of the stock market for the whole day was HKD 129.076 billion. The net inflow of southbound trading of Shanghai and Shenzhen-Hong Kong Stock Connect was RMB 3.695 billion and RMB 2.852 billion respectively. Samsonite (00020.HK) raised nearly HKD 2 billion in net proceeds from a 9.1% discounted rights issue, and its stock price rebounded by 3% to HKD 1.36 per share.
The Hang Seng Index rose 86 points or 0.5% this week, the H share index rose 65 points or 1% this week, and the Hang Seng Tech Index fell 6 points or 0.2% this week. Recently, the media reported that China New Holding, a state-owned enterprise under the State-owned Assets Supervision and Administration Commission of the State Council, announced on its official website that its subsidiary, China New Investment, subscribed to China Securities, the first batch of SZSE ChiNext-listed state-owned enterprises dividend ETFs issued by Guangfa, Southern, Invesco, Changcheng and other fund companies. The news caused stocks related to the 'China Securities, New Economy and State-owned Enterprises' concept to rise.
Shares of Samsonite rebounded, while Hang Seng Bank fell.
Chinese financial stocks retreated, with Agricultural Bank (01288.HK), China Merchants Bank (03968.HK), Bank of China (03988.HK), Bank of Communications (03328.HK), and Ping An Insurance (02318.HK) all falling by 1.6% to 2.3% for the day. In addition, Hang Seng Bank (00011.HK) fell 4.5%. Fitch Ratings warned that Hang Seng Bank's declining net interest margin, negative loan growth, and the provisions made for the deterioration of Hong Kong's macro economy could pose a downside risk to its 2024 performance. It maintains a "hold" rating with a target price of HKD 100.
Fitch predicts that Hang Seng's net interest spread for the 2024 fiscal year may be flat or slightly narrowed compared to the 2023 fiscal year. The bank predicts that the net interest margin for the first half of the year will record 2.33%, which means a decrease of 18 basis points every six months, and the provision for bad debt will increase. The net interest margin for the second half of the year is expected to further narrow to 2.25%. At the same time, the bank expects loans in the first half of the year to decrease by 5% every six months, and to moderately recover by 2% to 3% in the second half of the year. Following last year's 7% decline in loan balances, Hang Seng's loan growth may continue to be suppressed in the face of actively reducing risk and sluggish loan demand.
Shares of photovoltaic companies continued to be under pressure. Xinyi Solar (00968.HK) and GCL Tech (03800.HK) fell 5.4% and 4.6%, respectively. Xinyi Solar is the blue chip with the largest decline. Daiwa issued a report stating that as of June 20, the average selling prices of 3.2 mm and 2.0 mm processed photovoltaic (PV) glass products, which are produced by Guangdong province glass enterprises, fell from RMB 24.5 to 24 yuan per square meter and from RMB 16 to 15.5-16 yuan per square meter, respectively. The bank has a "neutral" view of the Chinese solar industry.
The broad market turned weak today, with the rise-fall ratio of mainboard stocks at 13:30 (15:28 the previous day), and 1,252 stocks fell (a decline of 2.5%). Today, only one constituent stock in the Hang Seng Index rose, while 79 constituent stocks fell, with a ratio of 1:96 (compared with the previous day's 20:78); short selling of HKD 23.697 billion was recorded for the day and represented 20.142% of the turnover of tradable shares (compared with 19.216% on the previous day). Shares of Xinyi Solar (00968.HK) and GCL Tech (03800.HK) fell 5.4% and 4.6%, respectively. The news of China New Holding, a state-owned enterprise under the State-owned Assets Supervision and Administration Commission of the State Council, subscribing to China Securities, the first batch of SZSE ChiNext-listed state-owned enterprises dividend ETFs issued by Guangfa, Southern, Invesco, Changcheng and other fund companies, caused stocks related to the 'China Securities, New Economy and State-owned Enterprises' concept to rise.
Shares of photovoltaic companies, Xinyi Solar (00968.HK) and GCL Tech (03800.HK) fell 5.4% and 4.6%, respectively. Xinyi Solar is the blue chip with the largest decline. Daiwa issued a report stating that as of June 20, the average selling prices of 3.2 mm and 2.0 mm processed photovoltaic (PV) glass products, which are produced by Guangdong province glass enterprises, fell from RMB 24.5 to 24 yuan per square meter and from RMB 16 to 15.5-16 yuan per square meter, respectively. The bank has a "neutral" view of the Chinese solar industry.