【Zhenzhuo Institution Viewpoint】Hong Kong stocks are expected to remain stable, industrial profit decline slows but still requires policy support
Hong Kong Stock Market Trends and Analysis
U.S. stocks showed mixed performance on Monday as the market focused on geopolitical developments. After opening higher, the market fluctuated and retreated, with the three major indices closing with mixed results. Tech stocks performed well, with the S&P 500 and Nasdaq hitting new all-time highs. The U.S. dollar strengthened, and the 10-year Treasury yield rose to 4.19%. Gold prices fluctuated weakly, while oil prices rebounded from lows. Hong Kong's pre-market securities were generally stable, suggesting a modestly higher opening. Mainland stocks rose yesterday, with the Shanghai Composite Index opening lower but closing up 1.1%. Trading volume in the Shanghai and Shenzhen markets also increased. Hong Kong stocks performed well, supported by better-than-expected manufacturing data from the mainland, with overall trading volume slightly higher. Positive external sentiment and expectations for further stimulus policies suggest the market may remain stable, with the index hovering between 19,000 and 20,000 points.
Industry News
The National Bureau of Statistics reported that large-scale industrial enterprises nationwide achieved a total profit of approximately 5.87 trillion yuan last month, a year-on-year decline of 4.3%. In October alone, profits of large-scale industrial enterprises fell by 10%. In the first 10 months, these enterprises generated operating revenue of 110.96 trillion yuan, up 1.9% year-on-year, with operating costs at 94.75 trillion yuan, up 2.3%. The operating profit margin was 5.29%, down 0.34 percentage points. By the end of October, total assets of large-scale industrial enterprises reached 176.74 trillion yuan, up 4.6% year-on-year, with total liabilities at 102.01 trillion yuan, up 4.5%, and total owner's equity at 74.73 trillion yuan, up 4.9%. The asset-liability ratio was 57.7%, down 0.1 percentage points. The National Bureau of Statistics noted that with the combined effects of existing policies and new stimulus measures, production at large-scale industrial enterprises stabilized, and the month-on-month decline in profits narrowed significantly. Most industries saw improved profitability compared to the previous month, with strong support from equipment manufacturing and high-tech manufacturing sectors. The decline in profits for raw material and consumer goods manufacturing narrowed significantly. Moving forward, continued policy implementation is needed to consolidate and enhance economic recovery and stabilize industrial profits. While the slowdown in overall industrial profit declines is encouraging, macroeconomic uncertainties remain, requiring further policy support.
(Note: The author is a licensed SFC professional and does not hold the aforementioned stocks.)
Guo Jiayao CFA, Business Development Director, Harbor Family Office
Date: Tuesday, December 3, 2024
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