Hong Kong Stock Market Closing (08.05) | Hang Seng Index fell by 1.46%, the market continues to be under pressure, while gaming stocks and Hong Kong property stocks rose against the trend

According to the Wisdom Financial APP, the combination of recession trading and the continuous appreciation of the Japanese Yen has triggered a panic-driven global stock market downturn. The three major indexes of the Hong Kong stock market once again fell today, with the afternoon decline further widening. The Hang Seng Index fell by 1.46% or 247.15 points to 16698.36 points at the close, with a total daily turnover of 135.015 billion Hong Kong dollars; the Hang Seng China Enterprises Index fell by 1.64% to 5876.64 points; and the Hang Seng Tech Index fell by 1.36% to 3339.42 points.

CICC pointed out that the "recession narrative" and volatility in the external market will inevitably bring about turbulence in the short term. However, the bank does not believe that the United States is currently facing imminent and systemic recession risks. Therefore, after the current volatility gradually stabilizes, the more certain expectations of interest rate cuts are expected to bring about effective liquidity easing, which will also help support the performance of Hong Kong stocks.

Performance of Blue Chip Stocks

The Wharf REIC (01997) led the blue chips. At the close, it rose by 6.22% to 19.8 Hong Kong dollars, with a turnover of 131 million Hong Kong dollars, contributing 3.16 points to the Hang Seng Index. The latest data from Midland Realty shows that the transaction volume of the top ten estates in Hong Kong increased by 83% over the weekend, reaching a new high in 14 weeks. Midland Realty analysis believes that the market generally expects a high probability of a rate cut in the United States next month, reigniting the property atmosphere and attracting many long-awaited buyers back into the market.

In other blue chip stocks, New World Development (00017) rose by 5.34% to 7.49 Hong Kong dollars, contributing 0.82 points to the Hang Seng Index; Henderson Land Development (00016) rose by 3.93% to 70.15 Hong Kong dollars, contributing 5.59 points to the Hang Seng Index; CNOOC (00883) fell by 6.37% to 19.1 Hong Kong dollars, dragging down the Hang Seng Index by 32.72 points; Sunny Optical Technology (02382) fell by 5.72% to 39.55 Hong Kong dollars, dragging down the Hang Seng Index by 2.71 points.

Hot Sectors

On the market, large-cap tech stocks showed mixed performance, with Bilibili rising by over 3%, Meituan rising by over 2%, while Alibaba, Tencent, and others fell. Macau set a new record for single-day inbound and outbound tourist numbers, leading to a rise in gaming stocks against the market trend. The reignition of the rate cut expectation boosted the property atmosphere, with the transaction volume of the top ten estates in Hong Kong increasing by 80% over the weekend, leading to mostly positive performance of Hong Kong property stocks. Beer stocks, dairy stocks, and some pharmaceutical stocks performed well. On the other hand, facing a sell-off, cryptocurrency ETFs plummeted across the board; market concerns about global economic recession led to a continuous decline in international oil prices, dragging down oil stocks; Warren Buffett reduced his Apple holdings by nearly half, leading to a continued decline in Apple concept stocks; chip stocks, coal stocks, shipping stocks, non-ferrous metal stocks, and bank stocks all fell.

1. Gaming stocks led the gains. At the close, Sands China (01928) rose by 3.76% to 14.9 Hong Kong dollars; MGM China (02282) rose by 3.74% to 11.64 Hong Kong dollars; Galaxy Entertainment (00027) rose by 2.24% to 32 Hong Kong dollars.

On August 4th, the Macau Public Security Police Force announced that on August 3rd, the total number of inbound and outbound tourists in Macau reached a historical high of 717,197 people; as of August 3rd, the total number of inbound tourists to Macau this year exceeded 20 million, reaching this number two months ahead of last year. Citigroup released a research report stating that Macau's gaming revenue in July was 18.595 billion Macau dollars, slightly below expectations Due to August being typically the peak season for visitors to Macau, it is still optimistically expected that the gambling revenue in August will reach MOP 20 billion.

2. Cryptocurrency ETFs plummet across the board. As of the close, Bosera Ethereum (03009) fell by 25.35% to HKD 18.29; Huaxia Ethereum (03046) fell by 25.26% to HKD 5.74; Harvest Ethereum (03179) fell by 25.03% to HKD 5.78.

Global risk aversion sentiment has impacted the cryptocurrency market, with Bitcoin falling below $50,000 per coin during the day, dropping over 14%; Ethereum fell by over 26% at one point, breaking below $2,100. Some analysts attribute the sharp decline in cryptocurrencies to several factors: first, the escalating geopolitical tensions in the Middle East have significantly heightened market risk aversion sentiment; second, a series of key economic data recently released by the United States has been disappointing, raising concerns that the U.S. economy may be heading into a recession, which has also triggered a sell-off in U.S. and Japanese stocks; third, the increasing uncertainty surrounding the U.S. presidential election; fourth, the U.S. government may soon sell a batch of confiscated cryptocurrencies and the risk of oversupply of tokens returned to creditors through bankruptcy proceedings.

3. Apple concept stocks continue to decline. As of the close, Q Technology (01478) fell by 8.87% to HKD 3.8; Sunny Optical (02382) fell by 5.72% to HKD 39.55; GoerTek Electronics (01415) fell by 5.58% to HKD 19.12.

According to data released by Berkshire Hathaway on Saturday, the company reduced its Apple holdings by nearly half in the second quarter, with its stake value dropping from around $140 billion at the end of March to about $84 billion currently. Many analysts believe that this reduction is more for risk management needs rather than questioning Apple's long-term growth prospects. It is worth noting that at the annual shareholders meeting in May, Berkshire revealed that it had reduced its Apple holdings in the first quarter, with Buffett hinting to investors at the time that the reduction was related to tax considerations.

4. Oil stocks plummet significantly. As of the close, CNOOC (00883) fell by 6.37% to HKD 19.1; PetroChina (00857) fell by 5.43% to HKD 6.44; Sinopec (00386) fell by 2.79% to HKD 4.87.

Market concerns about a U.S. economic recession have put significant pressure on international oil prices. On August 2nd, the WTI crude oil front-month contract fell by 3%, hitting a near two-month low; the Shanghai crude oil futures front-month contract fell by over 5% in the night session, reaching a new low since February this year. Oil prices have fallen for four consecutive weeks, marking the longest weekly decline this year. CICC pointed out that the main reasons for the oil price retreat since July are concerns about a global economic recession, an increase in mid-term oil and gas supply after the U.S. election, and China's energy transition suppressing oil demand as a secondary factor. The bank expects that market recession expectations will continue to trade until late August. The bank pointed out that if OPEC+ maintains production levels in the fourth quarter, the oil price center is expected to remain at $80.

5. Several catering stocks issue profit warnings. As of the close, Ajisen (China) (00538) fell by 20.41% to HKD 0.78; Haidilao (00520) fell by 8.2% to HKD 1.12; Texhong International (09658) fell by 5.92% to HKD 11.44 Several catering stocks successively issued profit warnings, with Haidilao expecting to turn from profit to loss in the first half of the year, with a net loss of approximately RMB 260 million to 280 million. This is mainly due to the overall weak consumption environment in the market and consumption downgrading, as well as intense competition in the catering market leading to a low willingness for customers to dine in. Ajisen (China) expects to turn from profit to loss in the first half of the year, with a loss not exceeding RMB 20 million; Helen's Kitchen expects a year-on-year net profit decline of 53% to 57% in the first half of the year; Teahouse International expects to turn from profit to loss in the first half of the year, with a net loss of approximately USD 4 million to 5 million; previously, 9 Mao 9 expected a profit of not less than RMB 67 million in the first half of this year, a year-on-year decrease of not more than 69.8%.

Hot Stock Movements

1. China Reinsurance (01508) surged on high volume, closing up 13.46% at HKD 0.59.

China Reinsurance announced a profit increase, with a preliminary estimate showing that the net profit attributable to the parent company's shareholders for the six months ended June 30, 2024, is expected to increase by about 150% to 200% compared to the same period in 2023, reaching approximately RMB 2.012 billion. This is mainly due to the continuous improvement in the company's underwriting performance and the year-on-year growth in investment income.

2. Bilibili-W (09626) rose against the trend, closing up 3.18% at HKD 123.2.

A report from JP Morgan pointed out that Bilibili has been included in the positive catalyst observation list, and upcoming catalysts may drive the stock price to rebound from its current level. The bank expects that most players of the strategic game "Three Kingdoms: The World" will enter a new game season (the second season), which should drive the company's cash revenue growth; the company will release its performance soon, which should provide insights into the pace of operating surplus and deficit balance for the third quarter and the performance of "Three Kingdoms: The World".

3. Kingsoft Corporation (02342) issued a profit warning, closing down 12.79% at HKD 0.75.

Kingsoft Corporation announced that it expects a loss attributable to owners of the parent company of not more than HKD 160 million for the six months ended June 30, 2024, compared to a profit of approximately HKD 112 million in the same period last year. This is mainly attributed to the slowdown in global telecommunications operators' network capital project construction plans, leading to a decrease in the group's revenue and gross profit during the period; as well as losses from the fair value assessment of equity investments and a decrease in other income