9月24日，国新办召开新闻发布会，一行一局一会联合发布政策。人民银行宣布，下调存款准备金率0.5个百分点，向金融市场提供长期流动性约1万亿元。7天逆回购操作利率下调0.2个百分点，并在年内择机下调存款准备金率0.25-0.5个百分点。Which individual stocks are most favored by investors as the Hong Kong stock nonferrous metals sector rises? What signal does the domestic copper price reaching a near two-month high indicate?
As a result of the macroeconomic bullish outlook due to the central bank's reserve requirement ratio and interest rate cuts, Hong Kong stocks surged today. The nonferrous metals sector, including the hot markets of lithium, copper, and aluminum, saw across-the-board gains.
As of the time of writing, Tianqi Lithium Corporation (09696.HK) and Ganfenglithium (01772.HK) both rose by over 7%, Jiangxi Copper (00358.HK) surged by more than 6%, Chinahongqiao (01378.HK), Cmoc Group Limited (03993.HK) both advanced over 5%, Aluminum Corporation of China (02600.HK), and Zijin Mining Group (02899.HK) followed the uptrend.
On September 24th, the State Council Information Office held a press conference where multiple departments jointly released policies. The People's Bank of China announced a 0.5 percentage point cut in the reserve requirement ratio, providing approximately 1 trillion yuan of long-term liquidity to the financial markets. The 7-day reverse repo operation rate was lowered by 0.2 percentage points, with plans to opportunistically reduce the deposit reserve ratio by 0.25-0.5 percentage points within the year.
Citic Securities previously analyzed that under the circumstances of the first 50bps rate cut by the Federal Reserve and the U.S. dollar entering a rate-cutting cycle, the flexibility of domestic monetary policy has increased. Amid a weak macro price signal, the necessity of bolstering domestic policies has also risen. In addition, there has been a significant improvement in expectations for the yuan exchange rate, with incremental policies expected to intensify.
It is worth noting that the recently more fundamentally sensitive copper price has already shown signs of warming before an upward trend. As of the time of writing, Shanghai copper futures rose by 1.79% to 76,760 yuan/ton, reaching a nearly two-month high.
Citic Securities stated that compared to the previous copper price cycle start in March, all factors currently have a more positive and clear potential impact on copper prices. Historical data confirms that the preventive rate cuts in the context of the resilience of the U.S. economy will boost copper prices, and a bullish resonance drive for copper prices can be expected from commodity attributes and financial properties.
According to the report by Haitong Int'l's Wang Zhaohua and Fang Yutao on September 23rd, domestic copper inventories have been continuously decreasing since July. As of the week ending on September 20th, domestic copper inventories fell sharply by 16.7% from the previous week, while overseas LME copper inventories also dropped by 2.6% compared to the previous period, indicating a boost in demand as well.
haitong int'l pointed out in the report on September 24th that macro bullish factors and improving demand jointly support the prices of industrial metals such as copper and aluminum, with the current tight spot market supporting aluminum prices. In addition, improving downstream consumption and the seasonal demand improvement in the "Golden September and Silver October" peak season are worth noting.
On the other hand, the low stock prices of energy metals such as lithium continue to squeeze industry supply, leading to increased uncertainty in new project production on the supply side, which is conducive to improving the supply and demand situation in the industry.
Overall, with the recent rate cuts by the Federal Reserve and domestically, nonferrous metals and other commodities, due to their higher sensitivity to liquidity, are also expected to outperform the Hong Kong stock market in the short term.
