【True Insight Hong Kong Stock Masters】Hong Kong stocks hover around 20,000 points, Zijin Mining's performance improves

Hong Kong Stock Market Trends and Analysis

U.S. stocks stabilized after an initial decline on Tuesday. The market was dragged down early by the IMF's downgrade of global economic growth forecasts and rising U.S. Treasury yields, but gradually recovered from lows, with the three major indices closing mixed. The dollar fluctuated positively, the 10-year Treasury yield rose to 4.2%, gold prices continued to strengthen, and oil prices also rebounded. Hong Kong ADRs were generally higher, suggesting a higher open for the local market. Mainland stocks rebounded after an early decline yesterday, with the Shanghai Composite Index rising 0.5% and trading volume remaining active. Hong Kong stocks were range-bound yesterday, with no clear direction as investors awaited Q3 earnings and the U.S. presidential election results, leading to reduced trading interest and lower overall volume. The market is expected to remain range-bound in the short term, fluctuating between 20,000 and 21,000 points.

Sector News

The company recently reported Q3 earnings under Chinese accounting standards, with revenue reaching RMB 79.98 billion, up 7.1% YoY. Net profit attributable to shareholders was RMB 9.273 billion, up 58.2%, driven by increased mineral production, effective cost control, and higher metal prices. For the first nine months, revenue totaled RMB 230.396 billion, up 2.4%, while net profit attributable to shareholders rose 50.7% to RMB 24.357 billion. Some investment banks expect China's appliance and auto trade-in programs to significantly boost short-term demand for copper, aluminum, lithium, and steel, benefiting upstream companies. Zijin Mining recently acquired a 100% stake in Ghana's Akyem gold mine project for $1 billion, helping it achieve its 2028 production target. With rising output and optimistic metal prices, Zijin's profit outlook remains strong.

(The author is an SFC-licensed professional and holds no positions in the mentioned stocks.)

Investment Director, Grand Vision Asset Management, CFA, Kwok Ka Yiu

Date: Wednesday, October 23, 2024