HK Stock Market Move | CHINAHONGQIAO (01378) rose more than 5% in early trading, Fed rate cuts boost non-ferrous metals, stable profits in alumina business and aluminum price elasticity help performance in the second half of the year.

CHINAHONGQIAO (01378) rose more than 5% in early trading, up 4.98% to HK$10.54 as of the time of writing, with a turnover of HK$1.79 billion. On the news front, on September 18, the Federal Reserve announced a 50 basis point cut in the federal funds rate target range to 4.75%-5%, the first rate cut by the Fed since 2020. Guotai Junan Securities pointed out that the global monetary environment is shifting from tight to loose in 2024, and the non-ferrous metal sector may see excess returns as the domestic economy gradually recovers. Furthermore, Morgan Stanley recently stated that CHINAHONGQIAO's aluminum oxide business is still a stable contributor to profits and the flexibility of aluminum prices should help performance in the second half of the year. On one hand, with tight domestic bauxite supply and low aluminum smelter inventory levels, aluminum oxide prices remain high; on the other hand, the company's aluminum business will benefit from integrated operations, falling coal prices, and lower hydropower electricity prices during the flood season in Yunnan Province, and will enjoy flexible profits in the current fluctuating aluminum price environment.