Market Review
Key News
Chinese Market
1. China's Three Departments Further Reduce Financial Market Related Taxes and Fees
The Ministry of Finance, the State Taxation Administration, and the China Securities Regulatory Commission have announced that individual investors on the mainland investing in Hong Kong Stock Exchange-listed stocks through the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect, as well as those trading Hong Kong fund shares through mutual fund recognition, will continue to be exempt from personal income tax on the gains from these transfers. Previously, the Shanghai Stock Exchange, the Shenzhen Stock Exchange, and the Beijing Stock Exchange had already reduced the securities transaction stamp duty rate.
2. Unusual Fluctuations in the Foreign Exchange Market
The one-year swap points of USD-CNH began to significantly rise, moving straight from around -2100 points up to -1600 points, indicating a rapid increase in the financing cost of the offshore Renminbi. As a result, the exchange rate of the offshore Renminbi (CNH) against the US dollar returned to the 7.30 level.
3. Hong Kong and Macau Ban the Import of Water Products from Certain Regions of Japan
The governments of the Hong Kong Special Administrative Region and the Macao Special Administrative Region announced that, starting from the 24th, the import of fresh live food, animal-origin foods, sea salt, and seaweed, including vegetables, fruits, milk and dairy products, aquatic products and their derivatives, meat and meat products, and poultry eggs from 10 regions including Tokyo, Fukushima, Chiba, Tochigi, Ibaraki, Gunma, and Miyagi, is prohibited.
Overseas Markets
1. Fitch Places American Savings Bank (ASB) on Negative Watch
Fitch Ratings has placed American Savings Bank (ASB) on negative watch, following similar downgrades by Moody's and Standard & Poor's to other American banks. With this, all three major international rating agencies have adopted the same stance towards the US banking sector.
2. Federal Reserve Officials Warn That Economic Growth Supports Further Rate Hikes
Thomas Barkin, President of the Federal Reserve Bank of Richmond and holding voting rights at next year's Federal Open Market Committee (FOMC) meetings, suggested that the Federal Reserve cannot be complacent about the downward trend in inflation after continued rate hikes. It cannot rule out the possibility that the economy will start to grow faster again, with inflation continuing to rise or remaining high, forcing further rate hikes.
3. US Existing Home Sales and Inventory Both Reach Multi-Year Lows
Data from the National Association of Realtors (NAR) shows that July's existing home sales in the US are the lowest for July since 2010 (see below). July’s existing home supply fell to a 24-year low for the month, and July housing inventory hit its lowest level since 1999.
4. Global Semiconductor Industry Investment Decreases for the First Time in Four Years
The "winter" for semiconductors has turned out to be longer than the market expected. While it was initially anticipated that the second quarter of this year would mark the cyclical bottom for the semiconductors industry, reality has once again disappointed. Data indicates that after summarizing the equipment investment plans of the world’s ten major semiconductor manufacturers from the US, Europe, South Korea, and Japan, it is expected that investment by these ten semiconductor firms in 2023 will decrease 16% year-on-year to $122 billion. This is not only the first decline in four years but also the largest decrease in the past decade.
