Weekly | Tencent in Trouble, Huge Capital Inflows, Big Events Ahead!
This week, Hong Kong stocks took a hit, with the $HSI(HSI)$ falling 3.52%, reaching its lowest point since September 25 last year.
Sector Performance and Upcoming Big Events
On Tuesday, the U.S. Department of Defense added $TENCENT(00700)$ to its list of Chinese military companies (1260H list). Despite Tencent’s statement saying it’s not a military firm and will resolve the misunderstanding, its stock kept dropping, dragging down the entire Hong Kong market.
On Thursday, China’s National Bureau of Statistics released December CPI and PPI data. CPI rose 0.1%, the lowest growth in 9 months. PPI fell 2.3%, marking its 27th consecutive month of contraction, though the decline was the smallest in four months.
This weighed heavily on Hong Kong and A-shares, with the market sentiment turning negative.
By sectors, Materials saw a slight increase, but real estate and energy stocks led the decline.
Southbound funds recorded a net inflow of HK$48.9 billion, the highest in recent times.
Next week, U.S. earnings season kicks off, with major tech companies to report. A miss on earnings could trigger a big selloff in U.S. stocks and spill over to Hong Kong. Additionally, China will release key economic data, which could significantly affect the market.
Major Events in Hong Kong Stocks This Week
1. In December 2024, Caixin China services PMI rose to 52.2, the highest since June 2024;
2. $WUXI BIO(02269)$ & $Merck(MRK)$ Deal: Merck to acquire WuXi BIO’s vaccine factory in Ireland for $500 million.
3. $TENCENT(00700)$ on U.S. Military List: U.S. Department of Defense added Tencent to its military company list.
4. China’s Gold Reserves: End of December gold reserves at 73.29 million ounces, continuing to increase for two months.
5. CES 2024: The annual Consumer Electronics Show held in Las Vegas, U.S.
6. $XPENG-W(09868)$ Flying Car Preorders: Over 3,000 preorders for its “flying car”.
7. Government Subsidies for Digital Products: China announces new subsidies for mobile phones and other digital devices.
8. $BILIBILI-W(09626)$ wins rights to broadcast the Chinese New Year gala.
9. Price War in 2025 Cars: According to China Passenger Car Association, 2025 will see fierce car price competition.
10. $TENCENT(00700)$ reduces its stake in $WEIMOB INC(02013)$ from 8.39% to 2.94%.
11. $SUNAC(01918)$ faces liquidation petition in Hong Kong.
12. “Chinese Lego” $BLOKS(00325)$ ’s stock surged 41% on its first day of trading.
13. December CPI Data: China’s consumer prices rose 0.1% YoY.
Four Stocks Worth Attention Among Top Trading HK Stocks This Week
Top2: $TENCENT(00700)$. The price dropped sharply after being listed as a Chinese military company by U.S. Department of Defense.
Top4: $BLOKS(00325)$. The “Chinese Lego” company saw a 41% jump on its IPO. The financing subscription multiple reached an astonishing 6035.54 times, with about HK $878.654 billion financing subscription
Top6: $WEIMOB INC(02013)$. The stock dropped sharply after Tencent reduced its stake, its stake fell to 2.94% from 8.39% .
Top8: $SUNAC(01918)$. Shares plummeted after a liquidation petition was filed.
Next Week's Hong Kong Stock Market Events
1. Next Monday, China Customs will release export data for December, expected to grow by 7.3% YoY.
2. Next Wednesday, the US will release December CPI, which is expected to be 2.9%;
3. Next Friday, China will release economic data such as retail sales of consumer goods in December, industrial added value, and GDP in the fourth quarter.
4. Next Thursday, the US stock market into the earnings season, banks, $Taiwan Semiconductor Manufacturing(TSM)$ and other companies will be the first to release earnings, is expected to have a greater impact on the US stock market, Hong Kong stocks may affected!
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