HK-Listed Semiconductor Stocks with Bullish Momentum

Hong Kong stocks continued to rebound on last Friday. After opening 109 points higher, Hang Seng Index (HIS) fell 78 points. Dragged by technology stocks, HSI struggled throughout the day and closed at 20,201 points, up 27 points, with a turnover of HKD85.1 billion. For the whole week, the Tech index outperformed the HSI, with the HSI up 45 points or 0.22%; the Tech index up 84 points or 1.94%; the HSCEI up 17 points. The impact of unfinished buildings in the mainland China has continued to haunt. Country Garden Services (6098.HKG) and Country Garden (2007.HKG) fell by 16% and 11% for the whole week.

Semiconductor Stocks Perform

Last Thursday, Alibaba (9988.HKG)  released its quarterly results  and the result beat expectations. The share price of Alibaba was still hit by revised forecast Citigroup research with a 2% and 4% cut in its FY2023 and 2024 revenue. Alibaba bucked the trend and led the decline in the Tech stocks sector. Alibaba fell 2.2% to close at HKD92.9, the worst performing stock in the tech Index. In addition, Reuters quoted sources as saying that Tencent (700.HKG) plans to increase its stake in game maker Ubisoft at a price of 100 euros per share to become a major shareholder. However, Tencent still bucked the market and fell 1.4% to close at HKD307.6; NetEase (9999.HKG) fell 1% to close at HKD137.9.

Regarding the recent passing of the US CHIP Act, most analysts are of the views that this shall  accelerate development of China’s semiconductor industry chain, and are optimistic about the accelerated import of upstream equipment and material companies due to the expansion of local wafer fabs. As a result of the said Act, semiconductor stocks have been on an uptrend lately with SMIC (981.HKG) rose 7.1%; Hua Hong Semiconductor (1347.HKG) surged 13.4%, being the best performing stock in the Tech sector; ASMPT Pacific Technology (522.HKG) rose 6.1%.

The HK stock market is expected to be shrouded by cautious mood with wait-and-see approach. Hang Seng Index shall be hovering in the range of 20,000 points to 20,500 points in the short term. Why? With the increased interest rate in Hong Kong and hence the cost of borrowing increases, which makes the current market sentiment unfavourable, and the transaction amount is expected to be tapering.

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