22 September 2018

Airlines take off despite bleak market sentiment

Hong Kong’s benchmark Hang Seng Index on Thursday closed 120 points or 0.51 percent lower at 23,580 points as concerns over possible tapering of stimulus measures in the United States and easing manufacturing activity in China dampened investor sentiment.

The Hang Seng China Enterprises Index, the main gauge for H shares, slipped 0.91 percent to 11,333, while the Shanghai Composite Index barely moved, ending 0.04 percent lower at 2,205 points.

According to the minutes of the latest US Federal Reserve meeting, officials felt they could decide to start scaling back the quantitative easing program in the next few meetings amid improved economic data. 

Meanwhile, the HSBC flash Purchasing Managers’ Index for November missed expectations. The reading fell to 50.4 from a seven-month high of 50.9 in October, suggesting China’s manufacturing activity continued to expand but at a slower pace.

Insurance, banking and property stocks fell as a result.

Despite the selling pressure, several sectors finished the day at the other end of the spectrum.

Airline stocks soared on hopes the renminbi will appreciate after the People’s Bank of China governor Zhou Xiaochuan {周小川} revealed plans to widen the currency’s trading band.

The big three carriers — Air China (00753.HK), China Eastern Airlines (00670.HK) and China Southern Airlines (01055.HK) — rose for the second day. Air China was the best performer, gaining 9.7 percent at the close, while its two peers were also up more than 9 percent. Hong Kong flag carrier Cathay Pacific Airways (00293.HK) climbed more than 3 percent, making it the best performer among the blue chips.

Coal plays glowed after the Bohai Rim Steam Coal Price Index surged 28 yuan per ton this month. Yanzhou Coal Mining (01171.HK) rallied 5.3 percent while China Coal Energy (01898.HK) was up 3 percent.

Milan Station (01150.HK) jumped 81 percent after the second-hand handbags retailer said its controlling shareholder was in talks over a possible stake sale.

Baby products manufacturer Prince Frog (01259.HK) resumed trading after a month-long suspension. The company issued a statement refuting the allegations made by US short-seller Glaucus Research. The assurances, however, did not seem to work as the counter plunged more than 22 percent.

– Contact the writer at [email protected]




EJI Weekly Newsletter

Please click here to unsubscribe