Hong Kong

Hong Kong’s Hang Seng index was traded low on Monday morning. The index slipped by more than 0.67% after China’s exports, imports and Trade Balance data was released on Monday. Mainland Chinese stocks, Shanghai Composite and Shenzhen Component fell by 0.21% and 0.67% respectively. Other Asian-Pacific stocks like Japan’s Nikkei 225 edged 0.42% higher while Australia’s ASX 200 dropped by 0.16%.

China’s Financial Outlook

According to the National Bureau of Statistics of China, China’s exports fell in May. China’s exports came in at 27.9% from the previous 32.3%. It was weaker than the estimate forecast of 32.1%.

According to economists, the main reason for the strike in exports was the slowdown in export items related to semiconductor chips. Auto-processing products and parts, the biggest export items fell 4% YoY in terms of export value.

There is, however, strong global demand as more economies around the world opened. Overseas demand for Chinese goods remained strong as economies from US and UK emerged from lockdowns thus increasing customer spending.

Exports orders were directed to China after an increase in Coronavirus cases in India and Southeast Asia. The increase in the cases also fueled demand from India for Chinese made medical supplies.

China’s imports surged to 51.1% YoY from the previous 43.1%. Despite being weaker than the estimate forecast of 51.5%, this was the fastest growth rate since March 2010.

 The imports were boosted by higher commodity prices from last year as import volumes decreased on monthly. Imports of Copper ore and concentrate were up 54.5%t by value but only 6.4% by volume. Iron ore and concentrate imports were up 85.5% b y value but only 6% by volume.

Shipments from ports that process most electronics were affected by Covid-19. Most factories were also affected as some workers contracted the virus.

Hang Seng Movers

WH Group Ltd, a Chinese multinational meat and food processing company, was the best performer in the Hang Seng index. It was up by 7.86% on Monday morning. CNOOC and AAC Technologies were also among the top performers in the index with gains of 3.40% and 2.12% respectively.

Alibaba Health Information Technology Ltd fell by 5.39%. the investment holding company, was the worst performer in the Hang Seng index. Geely Automobile and Xiaomi lagged each declining by 4.94% and 4.06% respectively.

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