U.S. stocks have been doing well for several days, but Hong Kong stocks have no share, because Washington has made moves to attack the mainland without stopping, and Hong Kong stocks with close ties to the mainland are equally low. Following Washington’s continuous efforts to hunt down the mainland in the chip industry, US President Joe Biden signed an executive order during the holiday in Hong Kong, requiring pharmaceutical companies to reduce their dependence on China. As soon as the news came out, pharmaceutical stocks plummeted, and the industry analyzed the impact on the sector one following another.
Manufacturing returns to support employment
As the United States prepares to “eat its own medicine”, some analysts say that it will take several years from the construction of a factory to its completion, and pharmaceutical factories still have business to do during this transitional period. If you look at it from a distance, this time Biden’s establishment of a local factory is a step for him to break away from the mainland supply chain, and the trend of “hemisphericization” is becoming more and more obvious. From the perspective of energy structure, China, India and Indonesia are now likely to become buyers of Russian oil. These three are large developing countries and account for half of the world’s population. Under this pattern, Russian oil basically has no worries regarding buyers. , in addition to the diversion of energy supply, Russia also promotes de-dollarization.
On the other hand, Russia and Ukraine have made a mark in Europe, but their impact on the United States is limited. Washington has much room to continue to make moves to Beijing. After tightening the chip industry, it will promote the return of the pharmaceutical industry on the grounds of national security. Biotechnology is another option in the future. In a high value-added development industry, the United States has learned the lessons of the information technology industry, tightened the mainland’s water sources in advance, and took the initiative in strategy. In the future, other industries cannot be ruled out.
Although it will take several years for the US to intervene in the pharmaceutical industry, the ripple effect will occur immediately. One of the things that cannot be ignored is that US pharmaceutical companies should increase investment in the US, which is one of the ways to boost local demand. The localization of production under the “hemisphericalization” is equivalent to increasing employment opportunities. As a result, the United States is heading towards the three-high state of high inflation, high employment and high interest rates, just like a developing country. In the past, the United States engaged in technology networking and virtual economy, and the mainland engaged in manufacturing and exporting. Now the United States has turned from fiction into reality, strengthening local production, and promoting Americans to use American products on the grounds of national security to maintain domestic demand. Regardless of whether this “single-food” strategy will be successful in the end, the side effect during the investment period is that US interest rates may fall as quickly as expected, which will have an impact on the global capital flow and investment market, and it is worth closely watching the future development.
The U.S. stock market has been doing well for several days. It was expected that Hong Kong stocks would be “excited” following the Mid-Autumn Festival. The new executive order on biotechnology that Biden is regarding to sign is undoubtedly suffocating. The index closed at 19,326 points, down 35 points; the HSCEI rose 4 points to close at 6,633 points; the KSE closed at 4,069 points, down 8 points, with a market turnover of 94.9 billion yuan.
Biotechnology stocks were the first to bear the brunt. WuXi Biologics (2269) plunged 20% to close at 53.4 yuan, being the worst performing HSI constituent; WuXi PharmaTech (2359) tumbled 17% to close at 68.75 yuan; Asymchem (6821) Inserted 12%, to close at 90.85 yuan; Tiger Medical (3347) plunged 10% to close at 69.1 yuan; Kanglong Chemical (3759) fell 15% to close at 42.15 yuan.
China wants to expand the domestic market
China has a large market under the hemisphericization, and domestic stocks are less affected. WH Group (288) rose 4% to close at 5.42 yuan, being the best performing HSI constituent; Haidilao (6862) rose 3.6% to close at 5.42 yuan. 17.5 yuan; Anta Sports (2020) rose 3.6% to close at 95.85 yuan. The new model of NIO (9866), whose main market is in the mainland, was well received by major players such as CITIC and Credit Suisse. NIO’s stock price surged 17% to close at 168.2 yuan, the best performing stock on the KSE Index.
Other good sectors include gambling and Apple stocks. The public bidding for Macau gaming licenses will close today. Sands China (1928) President Wang Yingwei revealed in an interview with Macau media that he is confident of obtaining Macau gaming franchise rights in the next 10 years. MGM (2282) surged 7% to close at 4.24 yuan; SJM (880) also rose 6% to close at 2.8 yuan. Before the renewal of the Macau gambling license, there was news that the government would significantly increase the spiciness. However, due to the epidemic, Macau’s tourism and entertainment industry has experienced the most bleak situation since its return. After a round of elimination, many junket operators have been eliminated, and the gaming industry has re-started. I believe that this industry still has something to do in the future, but following the mainland has restrained the high-rollers from going to Australia, it is necessary to pay attention to the high growth of this industry.
Apple concept stocks mainly benefited from the reported good pre-sale of the iPhone 14 series. After Apple rose 3.9% in the US stock market the next night, Apple concept stocks were also stimulated to improve. Sunny Optical (2382) rose 2% to close at 104.1 yuan; Cowell Electronics (1415) rose 5% to close at 17.56 yuan; BYD Electronics (285) rose 6% to close at 25.15 yuan; Tongda Group (698) rose 4%, To close at 0.116 yuan.
Jin Riku