Title: Hong Kong Stock Market Update: Hong Kong to Promote RMB Counters in Stock Connect, China Southern Airlines Returns to Profit
Date: October 30, 2023
Source: Reuters
Hong Kong, the world‘s largest offshore RMB business center, plans to boost the inclusion of RMB counters in Southbound Hong Kong and promote RMB-denominated transactions of Hong Kong stocks, according to Lee Ka-chiu, the Chief Executive of the Hong Kong Special Administrative Region. This move aims to further strengthen Hong Kong’s position as a hub for RMB transactions and enhance the types of RMB investment products available to investors.
Meanwhile, at the 20th Anniversary Global Annual Meeting of the International Financial Forum, held in Guangzhou, the “IFF 2023 Global Finance and Development Report” was released. The report predicts that the monetary tightening cycle in most countries will likely end in 2024. However, tight monetary and financial conditions will persist, restricting demand growth and limiting the pace of the global recovery. Developed economies are projected to grow by 1.3% in 2024, while developing economies are expected to grow by 4.3%. The US economy is forecasted to grow by 2% in 2023 and slow to 1.2% in 2024, while China’s economy is expected to grow by 5.2% and 5% respectively in 2023 and 2024.
In other news, the US Department of Transportation announced that Chinese airlines will be allowed to operate a total of 35 scheduled direct passenger flights per week between China and the United States starting from November 9. This decision may lead to an increase in weekly flights between the two countries to 70 if US airlines respond in a reciprocal manner.
Turning to corporate updates, China Southern Airlines reported a significant turnaround in its financial performance in the first three quarters. The airline generated approximately 119.491 billion yuan in revenue, a year-on-year increase of 70.31%, while turning a net loss of approximately 1.32 billion yuan into a profit. The resumption of production and increased passenger revenue contributed to the revenue growth.
Other notable company updates include China Eastern Airlines, which saw a 138.60% year-on-year increase in revenue, reaching 85.538 billion yuan in the first three quarters. However, the airline still recorded a net loss of 2.607 billion yuan, representing a narrowing of losses compared to the previous year.
In the banking sector, the Industrial and Commercial Bank of China reported a 6.61% decrease in quarterly revenue, amounting to 194.616 billion yuan, while posting a marginal net profit increase of 0.03%, reaching 94.929 billion yuan. Postal Savings Bank reported a 1.24% increase in revenue, with net profit reaching 75.766 billion yuan, and China Merchants Bank recorded a 1.74% decrease in revenue but a 6.52% year-on-year increase in net profit.
Several other companies from various sectors, including insurance, cement, and automotive industries, also provided updates on their financial performance in the given period.
Amid these developments, the Hang Seng Index strengthened, rising 2.08% to close at 17,398.73 points, with the Technology Index and State-owned Enterprises Index also posting gains.
Overall, these updates reflect the continued efforts to enhance Hong Kong’s position as an offshore RMB business center and suggest positive momentum in the airline and financial sectors.