Market Review
Headline News
China Market
1. Establishment of a Special Task Force to Enhance Stock Market Liquidity in Hong Kong
The task force will comprehensively review internal and external factors affecting market liquidity, including listing systems, market structures, and trading mechanisms. It will also propose concrete suggestions to enhance the competitiveness of Hong Kong's stock market, promote its sustainable development, and how to market Hong Kong's stock market to issuers and investors in key markets.
2. "Wolf of Wall Street" Betting on Chinese Real Estate
Yesterday, the real estate sector on Hong Kong stock exchange saw a significant surge, with transaction data revealing net purchases by several foreign brokerage firms in the Chinese real estate stocks, suggesting that the "Wolves of Wall Street" are seizing opportunities to buy at a low. Exchange data showed JPMorgan quickly bought 170 million shares of Country Garden ahead of the real estate policy adjustments. Besides purchasing stocks and bonds in the secondary market, foreign investments are also inclined toward acquiring real estate assets in prime locations of first and second-tier cities.
3. Several Banks Indicate Imminent Reductions in Existing Home Loan Rates
Recently, state-owned and commercial banks listed, such as China Merchants Bank, CITIC, Huaxia, Construction Bank, and Agricultural Bank, have revealed their attitudes and preparations for reducing the interest rates on existing home loans. An assistant president at China Merchants Bank mentioned that the central bank's shift from "encouraging and supporting" to "guiding" directly indicates that the reduction of existing home loan interest rates is inevitable. The bank has prepared accordingly, although the final plan is yet to be announced.
Overseas Market
1. US Job Openings Drop Unexpectedly to Over Two-Year Low
Data from the U.S. Department of Labor shows that job openings in July fell to a more than two-year low, indicating a more balanced labor market which could help suppress upward pressure on inflation. Specifically, the number of job openings in July was 8.827 million, falling below nine million for the first time since March 2021. The number of voluntary quits also dropped by 253,000, reaching a new low since February 2021. The quit rate fell to 2.3%, the lowest since early 2021.
2. US 20-city House Price Index Rises for the Fourth Consecutive Month
The seasonally adjusted house price index for 20 major cities in the US rose for the fourth consecutive month in June. Since the beginning of the year, the national composite house price index in the US has increased by 4.7%, higher than the historical median annual increase. Although the gain in house prices might be mitigated by rising mortgage rates or overall economic softening, recent real estate market data indicates that US house prices have bottomed out and are beginning to recover.
3. Japan's Economic White Paper Mentions "Inflation" for the First Time in 50 Years
In its latest annual economic white paper, the Japanese government has highlighted the progress made in eliminating deflation over the past 25 years, indicating that the opportunity to end deflation is approaching. The subtitle of this year's economic white paper is "Inflation and Wages Begin to Move," marking the first mention of "inflation" in nearly 50 years. Financial markets are closely watching when and if Prime Minister Fumio Kishida will announce the official end to deflation.
4. The United States to Provide Additional Military Aid to Ukraine
The United States announced a new military aid package for Ukraine, including additional mine-clearing equipment, anti-aircraft missiles, artillery ammunition, HIMARS rocket systems, and more than three million rounds of light weapons ammunition. Since Russia's invasion of Ukraine in February 2022, the United States has provided over $43 billion in military assistance to Ukraine.
