內銀股造淡，工行(01398.HK)跌2.1%收4.69元、中行(03988.HK)下滑1.8%收3.77元、交行(03328.HK)及郵儲銀行(01658.HK)股價各走低1.9%及2.5%。After the Hang Seng Index surged 725 points or 3.6% last Friday (18th), it fluctuated downward today (21st). The market is focusing on the quarterly performance of US stock companies, with the Dow and Nasdaq rising 0.1% and 0.6% respectively last Friday. At the time of writing this article, the yield on US 2-year bonds rose to 3.97%, the yield on US 10-year bonds rose to 4.097%, the US dollar index was at 103.64, Dow futures rose 31 points or 0.07%, and Nasdaq futures fell 0.17%. The Shanghai Composite Index rose 6 points or 0.2% to close at 3,268 points for the day. The Shenzhen Component Index rose by 1.1%, while the combined trading volume of Shanghai and Shenzhen exceeded 2.18 trillion yuan.
The Hang Seng Index opened low with a 73-point drop, then rose by 41 points in the early stage, briefly reaching 20,845 points before turning downwards. It fell 381 points at one point to a low of 20,423 points, ending the day with a 325-point or 1.6% decline to close at 20,478 points. The HSI Index fell by 131 points or 1.8% to close at 7,340 points, and the Hang Seng Tech Index dropped by 108 points or 2.4% to close at 4,491 points. The total trading volume for the day in the market was 195.563 billion yuan. China Traditional Medicine (00570.HK) within the healthcare sector saw its privatization proposal by Guangzhou Pharmaceutical Group and CDB failed, resulting in a 35.1% drop in stock price.
The People's Bank of China cuts the Loan Prime Rate, leading to a decline in stocks of China mainland banks.
China mainland banking stocks were weak, with ICBC (01398.HK) falling by 2.1% to close at 4.69 yuan, BOC (03988.HK) declining by 1.8% to close at 3.77 yuan, CCB (03328.HK) and PSBC (01658.HK) each saw their stock prices decrease by 1.9% and 2.5%, respectively.
The Loan Prime Rate (LPR) in the mainland's loan market for October is out: LPR for loans with a term of over 5 years decreased to 3.6%, slightly more than the market's expected rate of 3.65%, down from 3.85% last month. 1-year LPR decreased to 3.1%, slightly more than the market's expected rate of 3.15%, down from 3.35% last month. According to local media estimates, for a 30-year loan of 1 million yuan with equal payments, this LPR decrease of 25 basis points will reduce the monthly payment by 141.5 yuan, accumulating to a decrease of 0.051 million yuan over 30 years.
Minsheng Securities stated that although the significant LPR cut was expected, the extent of the cut exceeded previous expectations, showing the strong commitment and intensity of monetary policy to support the economy. A large decrease in the LPR at one time may mean that mainland commercial banks will quickly implement measures to supplement their capital. Based on the asset-liability situation of commercial banks as of the first half of 2024, the bank calculated that if the 1-year and 5-year LPR decreases by 10 basis points, it would correspond to a narrowing of net interest margin by about 5 and 1 basis points, respectively. With this LPR decreasing by 25 basis points, the expected narrowing of net interest margin is about 15 basis points. As the net interest margin of banks already decreased by 15 basis points in the first half of this year, coupled with the lowered loan rates for existing mortgages, the impact of this round of monetary easing on the net interest margin of mainland banks is significant. This requires urgent measures to supplement commercial banks' capital, expected to be implemented as soon as November.
Over a thousand stocks fell, especially network technology stocks.
The Hong Kong stock market turned weak today, with the ratio of risers to fallers in the main board stocks at 15 to 29 (compared to the previous day of 38 to 10). There were 1,245 declining stocks (a decrease of 2.9%). Among the Hang Seng Index component stocks, 13 rose today, while 68 fell, resulting in a ratio of 16 to 83 (compared to the previous day of 98 to 2). The market recorded 20.938 billion in short selling, accounting for 12.34% of the total trading volume of 169.673 billion for shortable stocks (compared to 11.075% the previous day).
Network technology stocks declined, with Tencent (00700.HK), Alibaba-W (09988.HK), Meituan-W (03690.HK), JD.com-SW (09618.HK), and Baidu-SW (09888.HK) falling by 2.3% to 2.7%, while Kuaishou-W (01024.HK) and Netease-S (09999.HK) dropped by 3.2% and 3.9%.
International credit rating agency Fitch Ratings stated that it confirmed Tencent's long-term foreign currency and local currency issuer default rating (IDR) as well as senior unsecured ratings as 'A+', with a 'negative' outlook. Fitch mentioned that this is an affirmation of Tencent, expecting its operational performance to remain solid even in the challenging mainland macroeconomic environment, characterized by strong EBITDA growth, profit margins, and free cash flow (FCF) generation. The agency expects Tencent to maintain a conservative capital structure.
