HK Index Daily Preview 21 October 2020 Contract Settlement Prices Contract Settlement Change (Nominal) Change (Percentage) Mini-Hang Seng Index OCT 20 24,502 -47 -0.19% Mini-Hang Seng China Enterprises Index OCT 20 9,961 -6.00 -0.06% Summary: Hong Kong stocks struggled for fresh catalysts on Tuesday to sustain a three-week rally as a government report showed further weakness in the local employment market. Most equity markets in Asia-Pacific region retreated after a sell-off in US stocks overnight. The Hang Seng Index laboured to a 0.1 per cent gain at 24,569.54, having traded between gains and losses. Alibaba Group Holding climbed 0.7 per cent after breaching the HK$300 mark for the first time since its November debut, as its affiliate Ant Group won approval for its stock offering from the bourse operator. Major stock gauges in mainland China rose. The CSI300 index, which tracks the biggest companies on Shanghai and Shenzhen bourses, closed 0.8 per cent higher to 4,793.47, arresting a 1.7 per cent slide in the past four trading days. The Shanghai Composite Index added 0.5 per cent, and the Shenzhen tech board ChiNext jumped more than 1 per cent. Benchmarks in Japan and Australia declined by 0.4 per cent and 0.7 per cent respectively, while South Korea’s Kospi rose by 0.5 per cent. A deadlock in US stimulus talks pummeled US equities overnight, with the S&P 500 Index losing 1.6 per cent, the most since September 23, according to Bloomberg data. Oil companies weighed on the market amid concerns about more global oil supply from OPEC members. CNOOC shed 1.8 per cent and Sinopec lost 1.3 per cent. Bank of China dropped 1.6 per cent while Sun Hung Kai Properties eased 0.5 per cent. In China, carmakers chalked up big gains after the National Development and Reform Commission said Beijing will facilitate the upgrading of vehicle consumption. BYD rose 9.3 per cent in Shenzhen and 9 per cent in Hong Kong. Beer stocks also rallied. Fujian Yanjing HuiQuan Brewery surged by the daily cap of 10 per cent. Hong Kong’s unemployment rate rose more than expected to a seasonally-adjusted 6.4 per cent in September, versus 6.1 per cent in August. A separate report on Monday showed tourist arrivals slumped 99.7 per cent in September from a year earlier. Before today, The Hang Seng Index has risen 5.5 per cent, fuelled by hot money inflows in anticipation of Ant Group blockbuster stock offerings in Shanghai and Hong Kong. The rally over the past three weeks has been the longest stretch since January. Ride-hailing firm Didi Chuxing, backed by Alibaba, Softbank and Tencent Holdings, has started initial talks on its IPO too, Reuters reported. HK Index Daily Preview 21 October 2020 Alibaba hit an intraday high of HK$300.40 after the Hong Kong Exchanges and Clearing approved the listing application by Ant Group. The rise has added to the fortune of Jack Ma who tops Chinese billionaires in the latest list published by Hurun Report. (Source: South China Morning Post) Technical Analysis Mini-Hang Seng Index OCT 20 Mini Hang Seng close recorded marginal loss after engaged in a choppy trading session. The long shadows from the latest 2 candlesticks indicate uncertainty and hesitation from both bull and bear to charge with aggression. On the daily chart, the bullish pattern of an inverted head and shoulders in the making was spotted while the technical background continues to witness improvement. HK Index Daily Preview 21 October 2020 Daily Charts Mini-Hang Seng Index OCT 20 (Source: Reuters) Mini-Hang Seng China Enterprises Index OCT 20 (Source: Reuters) Disclaimer: This document has been prepared for general circulation based on information obtained from sources believed to be reliable but we do not make any representations as to its accuracy or completeness. Any recommendation contained in this document does not have regard to the specific investment objectives, financial background and the particular needs of any person who may read this document. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement and assessment by addressees in relation to any investment decision. Kenanga Futures Sdn Bhd accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or any solicitations of an offer to buy or sell any securities/underlying securities. Kenanga Futures Sdn Bhd and its associates, their directors, and/or employees may have positions in, and may effect transactions in securities/underlying securities mentioned herein from time to time in the open market or otherwise, and may receive brokerage fees or act as principal or agent in dealings with respect to these companies. .
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