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On April 2, DBS published a research report indicating that the recent share price of GCL Technology (03800.HK) is expected to largely follow the cyclical changes in polysilicon prices. In addition, the government may introduce policies to control production or even eliminate backward production capacity, which will become a catalyst for the share price. It is currently expected that GCL Technologys production will drop by 30% this year, and the average selling price of products is expected to increase by more than 10%, offsetting the impact of the decline in production. DBS maintains a buy rating on GCL Technology. Considering that the profit recovery is slower than expected, it lowered its profit forecast for this year from RMB 1 billion to RMB 61 million. It believes that the average selling price will rise and costs will fall, and the profit will rebound to RMB 1.7 billion next year. The target price is lowered from HK$1.35 to HK$1.3.On April 2, market research firm Omdia reported that the annual revenue of the semiconductor market surged by about 25% to $683 billion in 2024. This sharp growth was attributed to strong demand for AI-related chips, especially high-bandwidth memory (HBM) used in AI GPUs, which led to an annual growth rate of 74% in the memory field. After a challenging 2023, the rebound in memory helped boost the overall market. However, this record year masked an uneven performance across the industry. The data processing sector grew strongly, while other key sectors such as automotive, consumer and industrial semiconductors saw revenue declines in 2024. These struggles highlight the weak links in the originally booming market.On April 2, DBS published a research report indicating that the restructuring of Agile (03383.HK) is ongoing, and as a valuable overseas asset in which it holds 45% of the shares, A-Life (03319.HK) may be included in the overseas restructuring plan, and part of the outstanding overseas debts may be offset through credit enhancement or debt-to-equity swaps. Therefore, the restructuring of Agile will put pressure on the share price of A-Life in the near future. In addition, there is still uncertainty as to whether the uncollected receivables from third parties and related parties can be recovered. Considering the limited profit prospects, based on the downward revision of revenue and profit margin forecasts, DBS further lowered the profit forecast of A-Life for this year and next year by 21% to 25%, maintaining the hold rating, and the target price was raised from HK$2.6 to HK$3.Goldman Sachs Group Inc. expects the yen to climb to the bottom of the 140 range against the dollar this year as unease about U.S. economic growth and trade tariffs boost demand for the safest assets. Kamakshya Trivedi, head of global foreign exchange, interest rates and emerging market strategy at Goldman Sachs, said the yen would provide investors with the best currency hedging tool if the likelihood of a U.S. recession increases. Reaching the 140 level would mean a 7% increase from current levels, and the banks forecast is more optimistic than the median of 145 in the agencys survey of analysts. "The yen tends to perform best when U.S. real interest rates and U.S. stocks fall at the same time," Trivedi said.Hong Kong-listed auto stocks fluctuated upward, with Leapmotor (09863.HK) rising more than 9%, Geely Auto (00175.HK) rising nearly 5%, NIO (09866.HK) and Li Auto (02015.HK) both rising more than 1%.

Forecast for the price of gold: XAU/USD fluctuates around $1,810 as attention turns to Fed policy

Daniel Rogers

Dec 14, 2022 11:26

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In the Tokyo session, the spot price of gold (XAU/USD) is fluctuating around the $1,810.00 immediate support. The price of the precious metal dropped after hitting a new five-month high on Tuesday at $1,824.51. After the publication of a moderate inflation report for the month of November, the price of gold was given new life.

 

As prospects of a lesser rate hike by the Fed have grown due to a decrease in inflationary pressures, the US Dollar Index (DXY) is battling to maintain above the 104.00 level. Following the weak October inflation report, Fed policymakers were already calling for a slowdown in the rate of interest rate increases. Recent major slowdowns in inflation have increased the likelihood of changing the monetary policy to one that is less hawkish.

 

After a decrease in pricing pressures, the risk-appetite theme boosted the S&P 500. Futures for the 500-US stock basket are anticipated to increase in speed as recession concerns have diminished more. Additionally, the 10-year US Treasury yields are now close to 3.50 percent.

 

"The 50 basis points raise, which is commonly predicted for tomorrow's FOMC meeting, can be considered almost certain given today's data," states a Commerzbank note. We continue to believe that the Fed will cut back on the extent of the rate increases once more at the start of 2023, increasing rates by only 25 basis points in February and March.