The Wagner mercenary organization accused the Russian Ministry of Defense of mutiny and returned to Moscow. The large-scale "parade" challenged the Russian government. Although it has little impact on the performance of the stock market, its importance can be compared with the August 19 incident in the Soviet Union in 1991. Therefore, the rebellion of the Wagnerian leader Prigozhin added more uncertainties to the future war between Russia and Ukraine. Now that the Russian army is facing the Ukrainian counterattack on the Ukrainian front, the behavior of the Wagner Group has created a certain gap in the former defense line, and the Ukrainian side is more determined to resist. However, the influence on politics is more importance than the war relatively. 

As far as Putin is concerned, there is no doubt that his governance prestige has been significantly shaken, but the overall handling is quite successful. The rebellion quickly subsided, and there are not many defectors. Moreover, the Wagner Group will be officially incorporated into the Russian military system, which shows that Putin can still exercise effective control over the top government and its position is still stable. The big losers in this battle must be Prigozin himself and Russian Defense Minister Shoigu. They are expected to gradually fade out of Russian politics. Putin must "solve the Ukrainian issue" as soon as possible, otherwise his status will be affected if it continues to be delayed. For Putin, now is an important time to test his political mind. The Wagner Group has passed the first hurdle. Will he abandon the strategy of resolving the "Ukrainian issue" by force in the future? Therefore, investors can wait and see if this mutiny incident may represent the dawn of the Ukraine issue. 

In the United States, the debt ceiling issue was once again "finally nothing happened", which drove the performance of US stocks in June, and all major indexes rise with advantage of this good news. However, the three major indexes continued to fall for a week at the end of the month, which seems to be a short-term adjustment of overvaluation. Even the shock in Russia did not bring a positive impact on the market. The general trend of US stocks is still quite strong, but the strength of the market is clear and the trend of AI concept stocks has weakened recently. However, the trend of regional bank stocks is far behind the market. It is obvious that the market lacks confidence in the relevant sectors, and it is not appropriate to be too optimistic about the overall economy. In the market outlook, the Nasdaq will still outperform the market, while the Dow, S&P and Nasdaq take 34,650, 4,600, and 14,500 as important resistances. If the index approaches the relevant position, you can consider taking a profit and leaving the market. 

The Hang Seng Index continued to fluctuate at a low level. Although it reached to the 20,000-point mark again in the middle of last month, reaching a high of 20,155, it immediately "returned to its original" and only reported 18,862.74 at the time of writing, which is similar to the Hang Seng Index in the same period last month. Under the premise of high interest rates on bank deposits, the cost of funds has increased, and the market’s expectations for stock returns are not optimistic enough, so they will choose time deposits or other investment products. In addition, the progress of Hong Kong’s “return to normal” is obviously lagging behind, and it is difficult for the stock market to perform well. At the same time, the economic sentiment is not positive in the mainland. The consumption data of the Dragon Boat Festival is lower than expected. The renminbi continued to fall, the US dollar continued to rise against the renminbi and broke through the 7.2 mark, and the export figures were not satisfactory. Goldman Sachs and S&P downgraded the full-year economic growth forecast of mainland to 5.4% and 5.2% respectively. The market expects that a new economic policy will be introduced at the end of July, and the stock market may have short-term benefits at that time. 

GCL Technology (3800), which was promoted last month, went from low to high. After taking into account its full-year dividends, the stock price roughly returned to the position of 1.8 dollars, which was similar to the stock price at the end of last month.

The short-term trend is still slightly optimistic so you can continue to hold. As for this month, I recommend China Tower (0788). Last year, the company's annual net profit increased by 20% to 8.787 billion dollars. In the first quarter of this year, its net profit increased by 15% to 2.506 billion dollars. EBIDTA was 16.112 billion dollars, which is an increase of 2.7% year-on-year. 

The group expects capital expenditure in 2023 to increase by 22% year-on-year to RMB 32 billion, which shows that the company is still quite optimistic about its development under the current economic conditions. It is expected that 5G indoor coverage will reach the current coverage level of 4G by the end of 2025. Coupled with the demand for technological innovation in cloud computing, China Tower is one of the few companies that can maintain steady growth under the current negative economic conditions in the mainland. The current historical price-to-earnings ratio is 15.25 times, and the interest rate is 4.26%. The stock price has not fallen below 0.85 dollars this year. Therefore, the current price has not fallen much. There is still a chance to rise to 1 dollar in the third quarter.

Kay Ho (CE No.: ANV293)

Acer King Capital Hong Kong Limited

Statement: The author is a licensee of the 1st, 4th, and 9th types of licenses of Securities and Futures Commission, SFC. Acer King securities Limited and Acer King Capital Hong Kong Limited were invited to contribute articles in Hantec Group's monthly newsletter as an independent third party. The writing does not represent the position of Hantec Group. As the author does not personally hold the above-mentioned shares, investors should exercise caution when buying or selling relevant securities and investment instruments.