Reuters and staff reporter
China Graphite (2237) and Semiconductor Manufacturing International Corporation (0981) rose yesterday in Hong Kong after China banned exports of critical materials to the US and warned companies to be wary of buying US chips.
Chinese companies should be wary of buying US chips as they are "no longer safe" and buy locally instead, four of the country's top industry associations said in a rare coordinated response to Washington's curbs on Chinese chipmakers.
China on Tuesday banned exports to the US of the critical minerals gallium, germanium and antimony that have widespread military applications, escalating trade tensions the day after Washington's latest crackdown on China's chip sector.
China Graphite surged 20.55 percent yesterday, and SMIC rose 1.15 percent. The benchmark Hang Seng Index barely moved.
KGI Securities forecasts that the Hang Seng Index could rise to 23,200 points next year. The broker favors three key investment themes, including sectors benefiting from new central government policies, companies with low sensitivity to geopolitical risks, and sectors actively expanding their overseas business.
Meanwhile, the yuan rebounded from a more than one-year low, with the onshore rate ending at 7.2688 against the US dollar, up by 103 pips from the previous day.
Brokerage Nomura expects the yuan to depreciate when the US raises tariffs early next year, and based on the 2018-2019 situation, the offshore yuan could reach or exceed the 7.6 level by the end of next May.
The HSI could rise to 23,200 points next year, says KGI Securities. SING TAO
