【True Insight Hong Kong Stock Masters】Hong Kong stocks opened lower affected by fluctuations in U.S. stocks, with favorable policies in the mainland market supporting stable development.

Hong Kong Stock Market Trends and Analysis

U.S. stocks showed mixed performance last Friday. Tesla continued to perform well after its earnings report, boosting tech stocks, with the Nasdaq hitting a new high at one point. However, persistently high bond yields dampened market sentiment, resulting in mixed closes for the three major indices. The U.S. dollar strengthened, and the 10-year Treasury yield rose to 4.24%. Gold prices initially fell but stabilized later, while oil prices rebounded, reversing recent declines. Hong Kong-listed pre-market securities were generally weak, suggesting a lower opening for the main market. Mainland stocks performed well last Friday, with the Shanghai Composite Index opening lower but closing up 0.6%, and trading volume increased in both Shanghai and Shenzhen. Hong Kong stocks continued to trade in a narrow range, hovering around the 10-day moving average, with overall trading volume declining. Investors are focused on corporate earnings and awaiting the U.S. presidential election results, keeping the market in a short-term range-bound state, with the index fluctuating between 20,200 and 21,200 points.

Industry News

The People's Bank of China recently launched the Securities, Funds, and Insurance Companies Swap Facility (SFISF), with the first batch of central bank bills now listed. These bills have a five-year term and a coupon rate of 1.8%. Currently, 20 securities and fund companies are approved to participate in the swap facility, with initial applications exceeding 200 billion yuan. The central bank will initiate operations based on participant demand to support stable capital market development. The China Securities Regulatory Commission (CSRC) subsequently announced approval for 20 securities and fund companies, including CITIC Securities and China International Capital Corporation (CICC), to conduct swap facility operations. It emphasized the need for compliance and risk management to ensure market stability. The launch of the swap facility is expected to boost market liquidity, benefiting brokers and insurers' profit outlooks.

(The author is a licensed person with the CSRC and holds no positions in the mentioned stocks.)

Investment Director, Convoy Asset Management, CFA Kwok Ka Yiu