HK - Market Strategy 03 (Dec 17 - Dec 25)

[behappyalways]

China's government to take golden shares in Alibaba, Tencent
https://www.theedgesingapore.com/news/c ... ba-tencent

[behappyalways]

Beijing Gives Didi Green Light To Sign Up New Users, Signaling End Of Regulatory Crackdown
https://www.zerohedge.com/markets/beiji ... hinese-new

[winston]

CN Public Funds' Holdings in HK Stocks Reportedly Increase; Upbeat on Value Recovery Outlook

Over the fourth quarter of 2022, Chinese public funds' holdings in Hong Kong stocks expanded from 4.3% to 5.8%, China Securities Journal cited data from Huatai Securities.

The figure basically returned to the 4Q20 level but was still below the stock holdings of 8.6% in the first quarter of 2021, the report added.

Participants of the financial sector believed the H-share market may hail a recovery in both earnings and valuations in 2023, with the primary focus being placed on investment opportunities in sectors such as internet, electronics, telecommunications, pharmaceutical and consumption.

Related News: Income of People Out of Poverty in CN Climbs 14.3% in 2022

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... t-news/HK6

[winston]

Hang Seng Index could drop up to 18 per cent from Lunar New Year high as market fatigue sets in, China fund warns

The Hang Seng Index could retreat by 10 to 18 per cent from its January 27 high as current upswing runs out of steam, MegaTrust cautions

The benchmark, and several index leaders like Alibaba and Tencent, are ‘overbought’ based on their technical readings

by Jiaxing Li

Source: SCMP

https://www.scmp.com/business/china-bus ... ue-setting

[winston]

HK STRATEGY – THE BUDGET PROJECTS A SMALLER DEFICIT

The focus of the FY2023-24 Budget speech was mainly on the revival of the economy, development of new economic drivers and talent recruitment.

The planned budget deficit represents about 1.9% of GDP.

Although overall pandemic relief measures have been adjusted and scaled back, certain countercyclical measures with a focus on supporting consumer sentiment remain in place to support economic recovery, which could have modest positive impact on retail sector.

While real estate-related initiatives could potentially have a modest positive impact on the mass residential segment, we believe it is unlikely to be a sustainable catalyst in driving the re-rating of the sector.

Source: OCBC

[winston]

China/HK Market Strategy

How will HK market sail through rate hike and financial stress?

We see limited imminent impact from the developed markets (DMs) financial stress on HK/China financial sectors

The Chinese recovery story is expected to continue buttressing market performance

Given the recent consolidation of UST yields, rate-sensitive sectors, such as healthcare and IT, may benefit more

Source: DBS

https://www.dbs.com/insightsdirect/scre ... rtid=39820

[winston]

Tencent, Kweichow Moutai among top China fund manager’s stock picks after reopening and market rout

The US$8.3 billion E Fund Blue Chip Selected Mixed Fund had Tencent, Kweichow Moutai and Yili among its top 10 holdings as 2022 ended

China Merchants Bank expects annual retail sales to increase by 9 per cent, up from a 3.5 per cent increase in the January-February period

by Zhang Shidong

Source: SCMP

https://www.scmp.com/business/china-bus ... e=homepage

[winston]

STRATEGY – CHINA
Alpha Picks: April Conviction Calls

MSCI China Index rose 4.5% in March after policy support from the Fed and SNB prevented financial contagion.

Some investors also regard the resultant liquidity injection as a return to QE.

With expectations that the Chinese economy will show further improvement in April, we believe that Chinese equities will have a positive bias.

Hence, we add Alibaba, Anta, BYD, COLI, Shuanghuan Driveline, Tencent and Trip.com
to our BUY list and Weimob to our SELL list.

Source: UOBKH

https://research.uobkayhian.com/content ... 614ced31e7

[behappyalways]

China AI Stocks Plunge As State Media Warns Of "Valuation Bubble"
https://www.zerohedge.com/markets/china ... ion-bubble

[winston]

Stock-Connect Flow

Mainland China funds bought HK$1.3 billion (US$165.6 million) worth of Hong Kong-listed stocks through the Stock Connect on Thursday, taking the inflows this week to HK$4.3 billion.

They have been net buyers in 10 successive weeks, totalling about US$10 billion.

CNOOC, Meituan, WuXi Biologics and China Mobile were among the top targets.

Source: SCMP