Market Insights: Feb 6th, 2024

Capital Market Dynamics:

• Market Insights: Feb 6th, 2024 Central Huijin Investment Ltd acknowledges the allocation value of the A-share market, has recently expanded the range of Exchange-Traded Funds (ETFs) it is increasing its holdings in, and will continue to step up its efforts.
• Influenced by strong economic data from the United States, Federal Reserve officials hinted that a rate cut before May is unlikely, leading to massive sell-offs in the U.S. Treasury market for two consecutive days. Yields on U.S. Treasuries across all maturities surged on Monday, with bond yields and prices moving inversely.
• Over the past two trading days, the yield on 10-year U.S. Treasuries has risen nearly 30 basis points, marking the largest two-day increase since June 2022.
• The three major A-share indices started lower but then oscillated upwards. Overall, there were more stocks declining than advancing, with over 3,300 companies experiencing a drop across the Shanghai, Shenzhen, and Beijing markets. Northbound funds net bought 1.772 billion, with a net inflow of 3.172 billion from major funds.
• Wall Street stocks declined, with the Dow Jones Index falling more than 270 points at close, while tech stocks outperformed the broader market.

Corporate News:

• Tesla garnered attention due to issues related to CEO Elon Musk's compensation package, with over 5,800 retail shareholders signing a letter in support of the compensation plan.
• "Global Economic Barometer" Caterpillar reported a 3% year-on-year increase in fourth-quarter sales to $17.07 billion, setting a record high.
• SAP has removed Tesla from its list of automotive suppliers due to issues including significant price volatility and delivery timings.
• WuXi AppTec has completed a 1 billion yuan buyback plan, cumulatively repurchasing 20.2754 million shares.

Financial Policy and Regulation:

• Hong Kong's Purchasing Managers' Index (PMI) for January was 49.9, down from 51.3 in December, indicating a stagnation in private sector economic growth, primarily due to weakening market demand.
• Deputy Chief Executive of the Hong Kong Monetary Authority, Howard Lee, stated that banks would not demand customers to make up the difference if the value of collateral changes, aiming to balance between bank credit risk management and supporting the real economy.