This week, Hong Kong stocks saw a volatile trend, with the $HSI(HSI)$ dropping 3.47%, falling below the 25,000 mark.
Key News & Developments
Early in the week, China and the U.S. held the third round of trade talks in Switzerland. Both sides agreed to extend the negotiation deadline by 90 days, pushing it past the originally planned August 12th date.
However, U.S. Treasury Secretary noted that the final decision rests with President Trump. Chinese negotiator stated that both sides had "in-depth, candid, and constructive exchanges." He emphasized that China would continue to push for the suspension of tariffs and countermeasures.
On July 30, the Politburo of the Communist Party of China held a meeting to assess the current economic situation and set the direction for the second half of the year. The meeting emphasized deepening reforms, promoting technological innovation, and creating a unified national market.
On July 31, China’s National Bureau of Statistics released PMI data showing a dip in manufacturing activity, with the PMI for July falling to 49.3%, down 0.4 percentage points from June. This signals a slowdown in the economy.
Stock Market Performance
Despite strong earnings reports, previously popular sectors showed signs of weakness. For example, $LAOPU GOLD(06181)$ saw a significant drop of 9.74%, even after announcing impressive half-year earnings. Other consumer stocks like $POP MART(09992)$ and $MIXUE GROUP(02097)$ also faced setbacks.
The innovation-driven pharmaceutical stocks, which had been rising, also saw some pullbacks. With the broader market correction, it was no surprise that the Hang Seng Index also retreated.
Sector Performance
The comprehensive sector led the gains this week, and the financial and energy sectors struggled.
Southbound Funds saw a significant inflow, with net purchases amounting to HK$ 59 billion, marking a notable increase compared to previous months.
Major Events in Hong Kong Stocks This Week
1.The U.S. and EU reached a trade deal. China-U.S. trade talks continued.
2. $LAOPU GOLD(06181)$ reported revenues between HK$ 12-12.5 billion, up 241%-255% YoY.
3. $HENGRUI PHARMA(01276)$ entered a $12.5 billion licensing agreement with GSK.
4.A ceasefire was reached between Thailand and Cambodia.
5.Hong Kong’s exchange will lower minimum price fluctuation starting August 4.
6. $WUXI APPTEC(02359)$ ’s net profit for the first half of the year was CNY 8.56 billion, up 101.92% YoY.
7.A new policy will offer cash subsidies to children under 3, amounting to CNY 3,600 annually per child.
8. $STARPLUS LEGEND(06683)$ announced a partnership with Hangzhou Unitree Robotics.
9.National Medical Insurance meeting was held on innovative drugs and medical devices.
10. $LI AUTO-W(02015)$ launched its first fully electric SUV, the Li Auto i8.
11.Central Politburo Meeting discussed economic trends and announced the upcoming Fourth Plenary Session.
12. $CATL(03750)$ ’s net profit for the first half of 2023 increased by 33.02% YoY.
13.The Federal Reserve held interest rates steady, with some internal disagreement on future moves.
14.Prosus reduced its stake in $MEITUAN-W(03690)$ by approximately $250 million.
15. $AB&B BIO-TECH-B(02627)$ launched its IPO, attracting oversubscription by 446 times.
16.Manufacturing PMI for July came in at 49.3%, lower than expected.
17.U.S. announced new tariffs, ranging from 10% to 41%.
18.Companies like $NIO-SW(09866)$ $XPENG-W(09868)$ $LI AUTO-W(02015)$ reported significant growth in July deliveries, with Xpeng’s sales increasing by 229% YoY.
Four Stocks Worth Attention Among Top Trading HK Stocks This Week
Top 1: $MEITUAN-W(03690)$ : Prosus, Tencent’s major shareholder, quietly reduced its stake in Meituan by $250 million, which could continue in the coming weeks. The funds will be used to expand other e-commerce brands.
Top 6: $LI AUTO-W(02015)$ : Li Auto launched the Li Auto i8, its first fully electric SUV. It’s priced similarly to the Li Auto L8, but its crash tests have sparked some controversy.
Top 9: $LEADS BIOLABS-B(09887)$ : The biotech stock saw strong performance this week, hitting new highs as innovation stocks regained some momentum.
Top 10: $NIO-SW(09866)$ : NIO unveiled its L90 model, with CEO William Li confident that it will drive profitability in the fourth quarter.
Next Week's Hong Kong Stock Market Events
1.Next Thursday, China will release its July export and import data.
2.Next Saturday, China will publish its July Consumer Price Index (CPI), which had a 0.1% YoY decrease last month.
3.The Companies like $Advanced Micro Devices(AMD)$ $SMIC(00981)$ $HUA HONG SEMI(01347)$ are scheduled to report their earnings next week.
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