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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%.

The euro gave up all gains against the dollar, and US retail sales were better than expected

Oct 26, 2021 11:05

After climbing to the daily top near 1.1620 on Friday (October 15), the EUR/USD encountered some selling pressure and gave up all the intraday gains, and now it has fallen back to the area below 1.1600 before the weekend.


The euro against the dollar is still restricted to the 1.1620 area


The lack of follow-up to the earlier bullish attempts in the 1.1620 area forced the EURUSD to give up its initial gains and return to around 1.1600.

At the same time, the U.S. dollar remained in a rising range slightly higher than 94.00. Prior to this, US retail sales in September increased by 0.7% month-on-month, and sales other than automobiles increased by 0.8% month-on-month. Both figures were better than expected.

Further US data showed that export prices rose 0.1% month-on-month and import prices rose 0.4% last month. In addition, the New York Fed Index fell to 19.8 this month (previously 34.3).

European reports show that as of September, France's final CPI rose 2.2% year-on-year, while Italy's CPI rose 2.5% over the same period. In addition, the Eurozone trade surplus suddenly shrank to 4.8 billion euros in August.

The level to watch for the euro against the dollar


So far, the euro has remained flat against the US dollar at 1.1597, and is facing the next upward resistance of 1.1624 (week high on October 14), followed by 1.1640 (week high on October 4), and finally 1.1719 (50-day moving average) ).

On the other hand, if it falls below 1.1576 (10-day moving average), the target price will be 1.1524 (the lowest price on October 12, 2021), and then 1.1495 (the highest price on March 9, 2020).

(Daily chart of the euro against the dollar)