Hang Seng to New 2024 Highs on Property Support & Tech Earnings

  • BABA.us
    (${instrument.percentChange}%)
  • BIDU.us
    (${instrument.percentChange}%)
  • HKG33
    (${instrument.percentChange}%)
  • JD.us
    (${instrument.percentChange}%)

HKG33 Analysis

China's crucial property sector has been in distress following overxpansion, pandemic impact and government efforts to rein in excessive borrowing. Multiple developers have faced significant hardships and authorities have been trying to support the market. They announced further action today, in the form of lower interest rates and down payments for individual homebuyers. [1], [2]

This week also included quarterly results from Chinese tech and ecommerce giants that were mostly encouraging, with their Hong-Kong stocks posting weekly gains despite post-earnings volatility. JD.com shined with a 7% y/y increase in Q1 sales, as it focuses on lower prices and customer service [3]. Rival Alibaba registered an 86% profit slump, but its cloud business benefited from triple digits growth in Artificial Intelligence [4]. Baidu's revenues were stagnant and net income dropped on a yearly basis, but CEO Robin Li said he is "confident" that the firm's leading work on AI will deliver "sustained growth in revenue and profit in the long run" during the earnings call. [5]

These three companies also got a vote of confidence from Michael Burry, credited for predicting the 2008 US housing crash. His Scion Asset Management fund increased its US-listed Alibaba stocks by 67% q/q in Q1, rose his JD stash by 80% and also bought 40,000 shares of Baidu. [6]

HKG33 runs its fourth profitable month. after a poor start to the year and reached new 2024 highs this week, helped by Beijing housing support and mostly solid earnings. It now has the opportunity to tackle 20,376, although last year's peak (22,698) looks distant.

On the other hand, the Chinese economic recovery is bumpy with weak consumption and subdued manufacturing activities. Furthermore, Sino-Western relation are frail and US President Biden slapped new tariffs this week [7]. On the technical side, the advance looks stretched and we can see a pullback toward the EMA200 (at around 17,600). Daily closes below it would negate the bullish bias, but the downside appears well protected.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 16 May 2024 https://english.www.gov.cn/news/202405/17/content_WS66469c33c6d0868f4e8e72bb.html

2

Retrieved 16 May 2024 https://english.www.gov.cn/news/202405/17/content_WS664706bdc6d0868f4e8e7360.html

3

Retrieved 16 May 2024 https://ir.jd.com/news-releases/news-release-details/jdcom-announces-first-quarter-2024-results

4

Retrieved 16 May 2024 https://data.alibabagroup.com/ecms-files/1532295521/afdeaf9e-5dd7-4a18-8ff0-968a6807f09d/Alibaba Group Announces March Quarter 2024 and Fiscal Year 2024 Results.pdf

5

Retrieved 16 May 2024 https://ir.baidu.com/webcasts

6

Retrieved 16 May 2024 https://www.sec.gov/Archives/edgar/data/1649339/000090514824001390/xslForm13F_X02/informationtable.xml

7

Retrieved 15 Jun 2024 https://www.whitehouse.gov/briefing-room/statements-releases/2024/05/14/fact-sheet-president-biden-takes-action-to-protect-american-workers-and-businesses-from-chinas-unfair-trade-practices/

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}
Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.