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

[winston]

Markets may extend rallies with more stimulus on cards

More stimulus expected from China's Two Sessions meetings.

Continuing strength of the Greater Bay Area's economy, which is now worth 13 trillion yuan (HK$14.3 trillion).

The Chinese People's Political Consultative Conference's annual plenary meeting will kick off today and last until Sunday.

The schedule of the National People's Congress meeting will be announced today.

UBS expects the upcoming NPC meeting will set a 5 percent economic growth target again and largely follow the policy stances set in the Central Economic Work conference last December.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... s-on-cards

[winston]

Several Global Funds Shift Gear to Buy on A-shrs & HK Shrs, Citing Cheap Valuation & Improved Earnings

A number of global funds have turned bullish on Chinese equities.

Skagen of Norway and Boston Partners of the US have both increased their holdings in A-shares and Hong Kong stocks on the back of cheap valuations, reflected financial and regulatory risks, and improved corporate earnings.

By the end of February, Skagen had increased its exposure to A-shares and Hong Kong stocks to 32% of its emerging markets portfolio, up from 28% in September, and above the 26% of the MSCI Emerging Markets Index.

This is the second time in 22 years that the fund has increased its exposure to A-shares.

For Boston Partners, A-shares and Hong Kong stocks accounted for 47.5% of its emerging markets portfolio at the end of February, double the proportion six months earlier.

The fund has added to its holdings in JD-SW (09618.HK) , which has good earnings momentum despite a dynamic P/E ratio of less than 10x.

Meanwhile, the fund is also betting on LONGFOR GROUP (00960.HK) , which it believes is undervalued for its non-residential properties.

Source: AAstocks.com

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

[winston]

G Sachs: Funds May be Offloading JP Shrs for HK Shrs

Many macro hedge funds started offloading Japanese stocks and covering their existing short positions in Hong Kong bourse, in light of the widening valuation gap between the Japanese and Hong Kong markets, Bloomberg cited a Goldman Sachs equity salesman's trading report.

However, Gilbert Wong, a strategist at Morgan Stanley, said the current trend is not fundamentally driven and is expected to be temporary, with such trades likely ending within a week.

Source: AAStocks Financial News

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

[winston]

China/HK equity strategy: Politburo meeting suggests measures to clear housing inventory, rate cuts

China convened Politburo meeting on Tuesday

The meeting
1) indicated that top leaders are satisfied with 1Q24 growth,
2) confirmed previous market speculation of shifting focus to clear property inventories,
3) hinted further cuts in interest rates/RRR,
4) reiterated top leaders’ support for a healthy capital mkt

Mkt reaction was subdued as the major surprise – the plan to clear home inventories – have been largely factored in.

Policymakers’ satisfaction on 1Q growth means few policy catalyst for stocks

Reiterated our FY24 HSI target of 19,500. We like internet, selected consumption names and high-dividend SOEs in oil and telecom sector

We reiterate our FY24 HSI target of 19,500, and prefer a basket of internet (Tencent, Trip.com), consumption (CR beer, Anta) and high-dividend SOE stocks (Sinopec, China Mobile). KE Holdings will benefit from potential supportive policy and turnaround of the physical market.

Source: DBS

https://www.dbs.com/insightsdirect/coun ... ecid=19334

[winston]

Global hedge funds chase Hong Kong stocks rally, UBS says

By Summer Zhen

Global hedge funds that use an equities long-short strategy are growing increasingly bullish on China, evidenced by the heavy pick-up in their purchases of Hong Kong-listed shares.

Most of the buying was focused on the technology and consumer discretionary sectors.

Some large global long-only funds appear to be adding to their China positions through Hong Kong stocks.

Source: Reuters

https://finance.yahoo.com/news/global-h ... 37696.html

[winston]

<Research>Citi: US Investors Agree CN Internet Offers Attractive Opportunities; Long Funds Turn from UW to OW CN Shrs

Citi Research noted that US investors broadly agreed that China's Internet sector offered a very attractive opportunity in light of improving shareholder returns and earnings quality, as well as undemanding valuation.

Citi said that in recent meetings with US investors, the main topics of discussion included the reasons for the recent rebound in China's Internet sector; latest China macro and companies’ underlying fundamentals; and shareholder return policy and valuation.

Related News: UBS Raises TENCENT (00700.HK) TP to $438; Overseas Game Recovery Overlooked

Specifically, selective long funds turned from underweight to overweight in Chinese stocks, spotted the broker, noting sector ownership stake leaned towards long funds with selected participation from hedge funds.

The most discussed stocks included:-
TENCENT (00700.HK) and NTES-S (09999.HK) (NTES.US),
BABA-SW (09988.HK) (BABA.US),
JD-SW (09618.HK) (JD.US),
Didi,
MEITUAN-W (03690.HK),
TRIP.COM-S (09961.HK) (TCOM.US) and
TME-SW (01698.HK).

Citi also saw strong interest in Sea Ltd. (SE.US) from long funds and hedge funds.

Source: AAStocks Financial News

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

[behappyalways]

Has Hong Kong's status been replaced? Are you crazy!

'24.05.07【豐富│東南西北龍鳳配】Pt.1 香港地位被取代？你有病吧！

https://m.youtube.com/watch?v=oJxxaz4g6o4

[winston]

These Stocks Are Rallying … and Still Offer 23% Upside Potential

by Brett Eversole

Hong Kong stocks recently rallied for 10 straight days. And according to history, they’re setting up for another 23% rally from here…

Investors have left China for dead. But now, prices are reversing in a big way.

History shows the gains can continue in Hong Kong stocks. And that makes this a part of the world you should consider owning today.

Source: DailyWealth.com

https://dailytradealert.com/2024/05/23/ ... potential/

[winston]

UBS maintains HSI target at 20,600

UBS is maintaining its target for the Hang Seng Index at 20,600 points for this year, with an upside of about 10 percent from current levels, mainly due to the rotation of global capital from the Japanese and Indian markets into Hong Kong and China,

The current rally in Hong Kong stocks can be sustained, mainly due to the revaluation of corporate earnings and the introduction of concrete policies in China, such as the mainland's cancellation of the 20 percent dividend tax on Hong Kong stock dividends for mainland investors,

Optimistic about technology and education stocks, along with select consumer areas such as beer and sports stocks, in addition to travel stocks such as Macau gaming stocks.

Foreign capital is showing signs of returning to Hong Kong stocks, driven by [b]improved confidence in mainland consumption and overall corporate earnings improvement, along with listed firms initiating stock buybacks and increasing dividends.

Source: The Standard

https://www.thestandard.com.hk/section- ... -at-20,600

[winston]

<Research>Haitong Int'l: 1st Wave Rally for HK Stocks Runs Its Course, Awaiting for Better Entry Point

The HSI soared 26.4% from 5 February to 20 May over a 4-month period, Haitong International released a research report saying.

During the uptrend in late April, Hong Kong stocks gradually transitioned from a liquidity-driven to a policy-driven market.

Supported by beating real estate policies, Chinese developer sector rose 27.8% from 22 April to 20 May, followed by the IT sector at a 28.8% gain.

However, it is difficult for real estate policies to beat expectations in the short term, as the subsequent first-tier real estate policies has not boosted the Chinese developer sector again.

Related News: UBS: AIA Won't Necessarily Incur More Losses From Rising Incidence of Critical Illness in CN

The first wave of gains of Hong Kong stocks was largely materialized, and suggested investors to wait for better entry point, Haitong International added.

Source: AAStocks Financial News

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