Weekly Market Summary

💡1. China’s improving consumer and factory-gate inflation outlook will leave more room for easing monetary policy in the coming months, with next week’s headline growth rate figures set to confirm the anticipated slowdown. China’s producer price index (PPI) rose by 10.3 per cent in December, down from a rise of 12.9 per cent in November, according to NBS. China’s producer price index (PPI) rose by 10.3 per cent in December, down from a rise of 12.9 per cent in November. For all of 2021, China’s CPI grew by 0.9 per cent, according to the NBS, down from a rise of 2.5 per cent in 2020, after Beijing set a 2021 CPI growth target of around 3 per cent. China’s PPI grew by 8.1 per cent in 2021, the NBS added.

💡2. Asset managers have commented how Hong Kong markets will go this year. According to BNP Paribas to look for structural reforms even as policy tightening rolls on. Though Hong Kong markets left many investors crestfallen last year, there is no need for pessimism after the sell-off in recent months according to Haitong International and Soochow Securities. While Schroders believe it will be a difficult year for Chinese internet sector. Tencent is going to have several tough quarters coming; it is still performing slightly better than expected for gaming. But a lot of increasing negative factors for online ads according to Blue Lotus Capital.

💡3. The property management units of struggling Chinese developers will engage in more mergers and acquisition and it will jump as much as 30 percent to generate much-needed cash year on year, says CGS-CMBI Securities. The total value of deals more than quadrupled last year from 2020, as distressed developers rushed to free up cash to pay maturing debt. Companies with liquidity problems rushed to dispose of their property management units as financing and refinancing channels were restricted amid the slump in sales and strict government policies in China. At least 150 such M&A deals were struck last year at a total value of 40 billion yuan (US$6.3 billion), with the number of large transactions rising, according to data from CRIC. Country Garden Services’ 10-billion-yuan acquisition of R&F Property Services was the largest single deal in the sector’s history.

💡4. Standard Chartered agreed to buy RBC Investor Services Trust, expanding its reach into the Mandatory Provident Fund (MPF) trustee business. The deal will allow SCB to tap the growing retirement businesses where the population is ageing rapidly. RBC, an indirect subsidiary of Royal Bank of Canada, is one of the 13 MPF trustees that manage pension funds in the city. SCB sold its MPF businesses to Manulife in 2015 and formed a 15-year MPF distribution. This will help members save as much as HK$40 billion over 10 years.

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One of the must-ask interview questions for banking and finance is: “Have you read any news recently?”, with the follow-up questions: “How would you link this news to the market and what investment suggestions would you give to your clients based on this news?” 

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Showing your market sense and ability to provide feasible investment ideas would help to differentiate you from other candidates. Therefore, apart from the weekly news update / investment insights, we have also generated this Weekly Market Summary for you to have a quick understanding of the market development and tips to answer some hot discussion topics. Take a look of the summary and WhatsApp us in the group if you have questions.