Hong Kong stocks rebounded along with the mainland market, new loans fell short of expectations
Hong Kong Stock Market Trends and Analysis
U.S. stocks performed well last Friday, with the market opening lower but rebounding repeatedly. Both the Dow Jones Industrial Average and the S&P 500 hit record closing highs. The U.S. dollar weakened, and the yield on the 10-year Treasury note fell to 4.08%. Gold prices reached another all-time high, while oil prices fluctuated downward. Hong Kong-listed depositary receipts were generally weak, and the market is expected to open lower in early trading. Mainland stocks rebounded after an initial decline last Friday, with the Shanghai Composite Index opening lower but closing up 2.9%. Trading volume in both Shanghai and Shenzhen markets increased significantly. Hong Kong stocks followed the mainland's rebound last Friday, with the index hovering around the 20,000-point level in early trading before gradually rising to near 20,900 points. The upward momentum eased toward the close, but overall trading volume also increased. Investors reacted positively to the People's Bank of China's official launch of swap facilitation operations, and with expectations for more favorable policies, the index is expected to hold steady above the 20,200-point level, with resistance near 21,200 points.
Industry News
The People's Bank of China recently announced that new loans in the first nine months of this year totaled 16.02 trillion yuan, with September's new loans at 1.59 trillion yuan, below market expectations. By sector, household loans increased by 1.94 trillion yuan in the first nine months, including 402.4 billion yuan in short-term loans and 1.54 trillion yuan in medium- and long-term loans. Loans to enterprises and institutions rose by 13.46 trillion yuan, including 2.83 trillion yuan in short-term loans, 9.66 trillion yuan in medium- and long-term loans, and 828.3 billion yuan in bill financing. Loans to non-bank financial institutions increased by 188.7 billion yuan. At the end of September, the outstanding balance of yuan-denominated loans was 253.61 trillion yuan, up 8.1% year-on-year. The broad money supply (M2) balance was 309.48 trillion yuan, up 6.8% year-on-year. The narrow money supply (M1) balance was 62.82 trillion yuan, down 7.4%. The balance of currency in circulation (M0) was 12.18 trillion yuan, up 11.5%. In the first nine months, yuan-denominated deposits increased by 16.62 trillion yuan, including 11.85 trillion yuan in household deposits and a decrease of 2.11 trillion yuan in non-financial corporate deposits. In the first nine months, the cumulative increase in social financing was 25.66 trillion yuan, down 3.68 trillion yuan year-on-year. Of this, yuan-denominated loans to the real economy increased by 15.39 trillion yuan, down 4.13 trillion yuan year-on-year. Foreign currency loans to the real economy, converted into yuan, decreased by 206.3 billion yuan, down 69.8 billion yuan year-on-year. The lower-than-expected new loan data reflects continued caution among businesses and individuals regarding economic prospects. With incremental policies taking effect, the PBOC's interest rate cuts will stimulate credit demand, while reserve requirement cuts and bank capital replenishment arrangements will encourage lending. The data is expected to improve in the fourth quarter.
(The author is a licensed person with the Securities and Futures Commission and does not hold the aforementioned stocks.)
Investment Director, Convoy Asset Management, CFA, Kwok Ka Yiu
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