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

[winston]

G Sachs Notes Massive Buying of CN Stocks by Hedge Funds on Tue, Fastest Pace in 9 Mths

Goldman Sachs reported that its hedge fund clients on Tuesday (25 July) made net purchases of Chinese stocks at the fastest pace in nine months, driven by the Chinese government's recent economic stimulus policies.

HSI surged more than 700 points on the day, while the three major A-share indices closed up between 2.1% and 2.5% for the day.

Goldman noted that hedge funds bought and shorted Chinese stocks at a ratio of 3.5 to 1 on Tuesday, with buying of A-shares denominated in RMB dominating, followed by Hong Kong-listed Chinese stocks. The amount of ADRs bought was relatively small.

Among the 11 sectors tracked by Goldman, hedge funds made net purchases in 9 sectors, including consumer discretionary, consumer staples, financials, raw materials and industrials, while only healthcare and utilities did not record a net purchase.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

China Tech Stocks on Brink of Bull Market on Stimulus Hopes

by Catherine Ngai and Charlotte Yang

Market sentiment is improving with clearly supportive rhetoric from the government over the past week.

Even with structural growth concerns, the Politburo readout suggests that “the policy put has been activated” and that the window is open for a tactical bounce.

Hedge fund clients net bought Chinese stocks at the fastest clip in nine months after the meeting.

Source: Bloomberg

https://finance.yahoo.com/news/hong-kon ... 58802.html

[winston]

China’s Stock Rally Holds Promise as Bullish Indicators Emerge

Broad Participation
There is broad participation in the recent rebound, with almost 60% of the members of the blue-chip CSI 300 Index and over half of the CSI Smallcap 500 Index trading above their 200-day moving average.

Turnover of stocks in the financial hub jumped to HK$182.6 billion ($23.4 billion) on Monday, the most since Jan. 30,

Halt In EPS Cuts

Buying Spree

Overseas investors bought a net 9.3 billion yuan ($1.3 billion) of onshore equities via trading links with Hong Kong on Monday, after scooping up the most shares since January last week. T

Source: Bloomberg

https://finance.yahoo.com/news/china-st ... 10404.html

[winston]

Hong Kong stocks slide after Morgan Stanley downgrades China to equal-weight from overweight

Morgan Stanley downgrades its China recommendation to equal-weight from overweight, citing its local government debt, property situation and geopolitics

The Caixin/S&P Global services purchasing managers’ index for July was higher than the June reading and was in expansionary territory for the seventh straight month

by Jiaxing Li

Source: SCMP

https://www.scmp.com/business/markets/a ... vices-data

[winston]

Multiple US Hedge Funds Slash Stakes in CN ADR Firms Incl. Alibaba Last Quarter

Serval US hedge funds reduced their shareholding in Chinese ADR firms over the past quarter, Reuters cited filings submitted by those funds to the US Securities and Exchange Commission.

Specifically, Tiger Global shed about 12% of its stake in JD.com (JD.US) , reducing the total worth of the stake from USD1.1 billion to USD719 million.

Coatue, managed by a former employee of Tiger Global, slashed its shareholding in firms including Alibaba (BABA.US), JD.com and LI AUTO-W (02015.HK). Its stake in Alibaba, in particular, was cut by roughly 90% on a QoQ basis.

D1 Capital sold 1.7 million Alibaba shares.

Moore Capital disposed an over USD200 million stake in Alibaba.

Scion Asset Management also exited its positions in Alibaba and JD.com.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

CN Law Firms Reportedly Revising IPO Prospectuses to Wash Down CN Risk

Reuters, citing sources, reported that Chinese law firms are rushing to comply with new mainland guidance by revising the wording of some listing prospectuses already filed and those yet to submit applications, downplaying negative descriptions of China-related business risks in companies' offshore listing documents.

The move followed rumours that China's regulator ordered mainland law firms at a closed-door meeting last month to refrain from mentioning negative descriptions of China's policies or its business and legal environment in their prospectuses, or else the listings would not be approved.

It is learnt that the law firms are changing their wording from "Covid Lockdown" in the prospectuses to just "Covid Pandemic", and avoiding references to travel and business restrictions during the pandemic.

Chinese lawyers are also suggesting to stop referring to "foreign exchange control" in some of the IPO applications, and instead use more neutral wording such as "foreign exchange management".

At least two IPO applications are now revising their descriptions of how China is changing its policies, the sources said.

HKEX (00388.HK) has also previously amended its listing rules to remove the requirement for a chapter on China risk factors, which came into effect on 1 August.

HKEX responded on Tuesday (15 Aug) that all listing applicants from all jurisdictions are required under the listing rules to disclose all material risks, including jurisdictional risks, and claimed that this requirement has not changed.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[behappyalways]

China’s abrupt trading tax cut forces Hong Kong into hard choice
https://www.theedgesingapore.com/news/m ... ard-choice

[behappyalways]

#Chinese #property developers slump in HK amid worsening market sentiment on Evergrande news, Moody's downgrade, etc.
https://twitter.com/YuanTalks/status/17 ... 9699833237

[winston]

Zhang Kun, China’s biggest fund manager, raised bets on liquor distillers, sold tech giants Tencent, Meituan in third quarter

E Fund Management’s Zhang bet on companies he considers best equipped in their industries to navigate the turmoil roiling capital markets

His fund returned 1.6 per cent last quarter, while the CSI 300 Index fell 4 per cent and the Hang Seng Index lost 5.9 per cent

by Zhang Shidong

Source: SCMP

https://www.scmp.com/business/china-bus ... nt-meituan

[winston]

CICC Expects H Shrs to Have 10-15% Upside in 2024, Calls for Allocations to 3 Major Lines

CICC released a research report on the outlook of Hong Kong's stock market in 2024.

The weakness of Hong Kong stocks has continued for nearly 3 years, and the rebound that was highly expected at the beginning of 2023 did not last.

The market hit new lows instead in 3Q23, which illustrates at least 2 points.

On one hand, a simple low valuation and a high risk premium can cause a rebound, but it is not a reason for it to be sustained or reversed.

On the other, a slowing of external disturbances such as US debt interest rates and geopolitical situations, can also contribute to the rebound, but the stamina depends on the endogenous growth.

The quick rebound in the beginning of 2019 and the beginning of 2023 turned into a shock, which is also related to the fact that growth has not been able to sustain in a timely manner.

Based on the assumptions of gradual policy advancement and a gradual fall in US bond rates, CICC believed that Hong Kong stocks are in a gradual bottoming process, with room for a 10% to 15% upside in the base case in 2024.

After the recovery is completed and before the introduction of more "symptomatic" policies, CICC suggested that companies should still adopt the "get a good deal" strategy to deal with the possible market adjustment, and continue to follow the "dumb-bell" structure of both offense and defense, allocating to 3 main lines:-
1. Long-term dividend capability (telecom, energy and utilities)
2. High-end technology upgrading (technological hardware, semiconductors and biotech) and
3. Development of mid-end advantageous industries to overseas (construction machinery, automobiles and parts, new energy and photovoltaic, some products and brand consumption, etc.).

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN