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

[winston]

<Research>CICC: HK Stocks Still Have Comparative Advantage as HSI May Volatile at 18,000 Lv Before More Catalysts Emerge

The Hong Kong stock market fell again last week, and has retreated nearly 10% from its high, CICC released a Hong Kong stock strategy report saying.

The market rally since mid-April was mainly driven by the improvement in capital and risk appetite.

In the absence of any significant changes in the fundamentals, this fund nature and rebound-driven feature will cause the market to face certain pressure in profit-taking after short-term overbought.

Related News: CN May Power Generation of Industries Above Designated Scale Grows 2.3% YoY, Slower than Incline in Apr

Therefore, CICC has been advising investors since early May that the market has approached its first stage target, i.e. the HSI being around 19,000-20,000, and that the corresponding risk premium dropped to the level of the market high in early 2023.

CICC believed that the market will face some profit-taking pressure if there is no further impetus from the fall in the risk-free interest rate and a significant improvement in earnings.

Calculating from a top-down strategic perspective, CICC estimated a 4% earnings growth in 2024, which is below the current market consensus.

As a result, CICC believed that the market may volatile at the current level, i.e. the HSI printed at 18,000, until more catalysts emerge.

Source: AAStocks Financial News

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

[winston]

Hong Kong stocks will resume their rally soon as Beijing support lifts sentiment: analysts

A potential rate cut and more supportive measures expected to emerge from Beijing’s third plenum could all give the Hong Kong market the impetus it needs, say analysts and money managers

by Eric Jiang and Jiaxing Li

Hong Kong stocks could enjoy a better second half to the year following their recent decline, as global interest rates start to come down and more supportive measures in China provide a boost, analysts and money managers say.

A potential rate cut from the US Federal Reserve as early as the third quarter and more confidence-lifting measures expected to emerge from Beijing’s third plenum in July could all give the Hong Kong market the impetus it needs to resume the rally it achieved in the first five months of 2024, they said.

Source: SCMP

https://www.scmp.com/business/markets/a ... pe=section

[winston]

<Research>CCBI Expects HSI to Oscillate Between 17,500 - 18,000 in Short Term; Rebound May Restart in 3Q

CCBI released its HK Equity Strategy Data Monitor report for June, noting that the Hong Kong stock market has retreated over the past month, with HSI, HSCEi and HSTECH falling 2-3%.

Month-to-date, IT, energy and utilities were the best performers, rising 1-3%, while property and construction, consumer staples, raw materials and consumer discretionary were the worst performers, declining 4-6%.

Based on relative rotation graph analysis, energy and raw materials are the leading sectors that continue to strengthen.

Information technology is losing momentum in the near term, while utilities continue to strengthen and are poised to enter the leaders quadrant.

Shorts are gathering strength. The number of short-sold shares and the average short-selling turnover as a percentage of the total turnover of HSI constituents have both been on the rise in the last month.

Among the active stocks on the Shanghai-Shenzhen-Hong Kong Stock Connect, banks continue to be favoured.

CHINA MOBILE (00941.HK) received the most net purchasing among Southbound trading in the past month, with its share price elevating 1%.

TRACKER FUND (02800.HK) received the most net selling in the past month, with its shares dropping 2%.

CCBI commented that the market has been on a downtrend over the past month and is waiting for a policy catalyst, suggesting that consolidation may continue but there is still room for incremental policies.

The Lujiazui Forum and the upcoming Third Plenary Session of the 20th CCP Central Committee from 15 July may have a catalytic effect.

The broker believed HSI may oscillate between 17,500 and 18,000 in the short term, with a rebound expected in 3Q24.

Source: AAStocks Financial News

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

[winston]

<Research>CICC Expects HSI to Recover to Target Range of 19,000-20,000, Calls for Focus on 3 Major Directions

Hong Kong's stock market remained volatile last week, with a slight gain in 5-days MA, with certain support from rising expectations for interest rate cuts on weaker US economic data, CICC issued a Hong Kong stock strategy report saying.

For the HSI, CICC estimated that 19,000-20,000 is the first target range that can be reached only by risk appetite recovery.

The market may remain volatile until more catalysts emerge, but there is no need to be overly concerned during the callback process, as the HSI is supported at around 18,000.

In the 2H24 outlook, CICC recommended investors to focus on 3 directions, namely the overall return downtrend (stable return of high dividends and high buybacks, i.e., cash cow of abundant cash flow), partial leverage (policy support and technological growth that still has prosperity) and partial price hikes (natural monopoly segments, upstream and public utilities).

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

[winston]

HSI to hit 20,500 by year-end, says Citi

by Jamie Zhang

Citigroup has raised its forecast for the Hang Seng Index to 20,500 points by the end of 2024 on expected policy support and stronger consumption.

The investment bank also predicts the HSI will rise to 22,000 by the first half of 2025.

China equity strategist Pierre Lau said the upcoming third plenary session of the central committee this month is expected to usher in structural reforms, new initiatives for cross-border trade as well as reforms of state-owned enterprises.

The optimistic outlook amid news that as China is accelerating the construction of large wind power and photovoltaic plants to boost electricity supply, with consumption hitting a record high of 6,539 kWh per capita in 2023.

Citigroup maintained its estimate of China's economic growth at 5 percent this year.

Citigroup showed a preference for stocks benefitting from export growth and higher commodity prices. Its top picks are discount e-commerce giant PDD and semiconductor hardware and software provider ASMPT (0522).

Meanwhile, UBS expects the MSCI China Index to achieve high single-digit growth in the second half of the year, benefitting mainly from a recovery in consumption, exports and investment.

Source: The Standard

https://www.thestandard.com.hk/section- ... -says-Citi

[winston]

End of the e-commerce era, time to embrace AI, says Female Buffett

Hong Kong’s stock market has now bottomed out and it's worth an investment of one-third of the funds.

Hong Kong stocks will not be in bull market condition until 2026 - two main reasons being the heavy blows suffered by the Hong Kong market, which is undergoing a transformation, and concerns that geopolitical tensions may spread to the Asia-Pacific region.

There are still three types of assets to keep an eye on in the next two years:-
1. High-quality ETFs, especially those focused on AI
2. High-quality high-dividend Chinese stocks and
3. Gold.

Meanwhile, Liu said people should steer clear of tech stocks such as Tencent and Alibaba for now, which she said “the e-commerce era has already ended".

Getting on board with the AI and semiconductor trends. She believes that this trend will completely change all industry chains and can last for a sustainable period of 10 years.

Source: The Standard

https://www.thestandard.com.hk/breaking ... le-Buffett

[behappyalways]

60 More Chinese Stocks To Be Culled From MSCI Indexes
https://www.zerohedge.com/geopolitical/ ... ci-indexes

[winston]

Hang Seng Index 'needs $150b turnover to return to 19,000 mark'

by Melody Chen

Southbound funds remain a major source of support for Hong Kong stocks amid the lack of fund inflows from overseas.

Source: The Standard

https://www.thestandard.com.hk/section- ... ,000-mark'

[behappyalways]

Analysts have slashed Q3 sales forecasts for $BABA and $TCEHY
https://x.com/Mayhem4Markets/status/1827318320766259656

[winston]

HSI could jump 26pc if blue chips meet goals

Based on the August 30 data, the Hang Seng China Enterprises Index could also grow 26 percent to 7,962 points and the Hang Seng Tech Index by 34 percent to 4,767 points in 12 months. These are compared with 6,023 points and 3,496 closed respectively yesterday.

Source: The Standard

https://www.thestandard.com.hk/section- ... meet-goals