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

[behappyalways]

科網股發威　市值漲千億
騰訊飆2%　領恒指重上28000
https://hk.finance.appledaily.com/finan ... 2/20610929

[winston]

Alpha Picks: March Conviction Calls

We highlight our analysts’ high conviction calls for March – China Gas (384 HK), China Mengniu Dairy (2319 HK), Shandong Gold (1787 HK), and Sun Hung Kai Properties (16 HK).

We add Great Wall Motor (2333 HK) and Q Tech (1478 HK) to our SELL list. Maintain SELL on BYD (1211 HK).

Source: UOBKH

https://research.uobkayhian.com/content ... 8d389a4a8e

[behappyalways]

Hong Kong loses 3 tech IPOs to Shanghai
https://www.theedgesingapore.com/hong-k ... s-shanghai

[winston]

Hong Kong Market Overview

The Hang Seng Index is expected to trade at 27,500 - 27,900 today

US delays Huawei ban for 90 days. Tension between US and China relieved slightly.

Hong Kong stock market failed to keep upward in the afternoon trading period. Hang Seng Index dropped 130 points to 27,657. H-share Index rose 1 point to 10,634.

Market turnover was HK$95.5 billion.

President Xi Jinping visits rare-earth plant. China Rare Earth(769) jumped more than one time.

U.S. officials confirmed late Monday they will provide some suppliers and customers of China’s telecom giant Huawei Technologies a 90-day reprieve from export blacklist, triggered US stock market to rebound on Tuesday. Of which, US technology stocks led the rebound.

The Dow and the Nasdaq closed 197 points (to 25,877) and 83 points (to 7,786) higher respectively.

On the other hand, market risk averse attitude slightly eased, funds flow away from US treasury market, 10 Year US Treasury yield rose 2 basis points to 2.43%.

China US trade war seems stalled, while China might prepare for a long term trade war.

Hang Seng Index fell below 250 days SMA(27,948), short term support is at 27,400.

Investors focus will eye on the Fed minutes to be released in the near term, as well as the US and Europe PMI data.

Technical Analysis

The Hang Seng Index opened lowered on Tuesday. It once rebounded but was capped at 250 Day SMA(27,948) and finally closed lower with a cross-star pattern.

Besides, 9 Day RSI further fell to 24.0, showed signs of oversold.

The Hang Seng Index technical trend has turned weak. Hang Seng Index first support is is 27,400 (50% retreated from the peak), while second support is 27,000,.

On the other hand, first resistance shifted downward to 250 Day SMA(27,948), while second resistance is at 100 Day SMA(28,230).

Source: KGI

[winston]

High earnings 'will propel HSI to 31,000'

by Avery Chen

HSBC Private Banking forecasts Hang Seng Index will climb to 31,000 points at the end of this year, supported by better-than-expected corporate earnings growth with earnings structure of mainland companies focusing on domestic demand.

The forecast came as the Hang Seng Index recovered from 250 point drop to close just 65 points lower at 27,288 after US President Donald Trump said there was a "very good chance" of clinching a trade deal with China.

Banking stocks overall were under pressure, after regulators revealed that they would assume control of Baoshang Bank for one year because of "serious" credit risks. China's first government takeover of a bank in more than two decades has underscored the potential for increased stress at regional lenders that piled into off-book financing in recent years.

The first phase of the MSCI index's A-share inclusion will start after the market closes today, indicating the weight of A share will increase from 5 percent to 10 percent from tomorrow.

HSBC Private Banking's end-2019 targets for the MSCI China, Hang Seng China Enterprises Index and CSI 300 Index are 94, 12,500 and 4,500 respectively.

It expects that the United States will not have to reduce interest rates this year due to low unemployment rates, low inflation and solid economic growth in 2019, but it projects two interest rate cuts in September and December next year.

In the event of the imposition of a 25 percent tariff on an additional US$325 billion (HKD$2.5 trillion) of Chinese exports to the US, China's 2019 GDP growth could be reduced by 1.2 percentage points if no additional stimulus is introduced, and the US GDP will reduce about 0.3 percentage points, the bank says.

Fan Cheuk-wan, chief market strategist, Asia, at HSBC Private Banking, says the bank trimmed its overweight allocation to Chinese equities by half but maintains a small overweight position due to the tailwind of Beijing's policy stimulus, continued structural reforms and strong earnings growth.

The bank forecasts the yuan will weaken to around 6.95 per dollar in the second and third quarter and stabilize towards 6.75 against if there is a moderation of trade tensions later this year.

It also expects global GDP to slow down to 2.4 percent this year and 2020 with the US and Chinese GDP growth falling to 2.4 percent and 6.6 percent in 2019, respectively. Hong Kong GDP is projected to slow down to 2.7 percent in 2019 and 2.5 percent in 2020.

Fan adds the bank believes the market leadership of the tech sector in the equity rally is not over.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 0528&sid=2

[winston]

C Suisse: HSI May Plateau around 27,000 in 2H19, if CN-US Trade Talks In Good Headway

Under base case, the US is not expected to impose further tariffs on Chinese goods in short run and is believed to partially and conditionally eliminate tariffs in later time, forecast Jack Siu, Asia Pacific Investment Strategist for Credit Suisse, at a press conference.

Against such backdrop, the US Fed may enact less rate cuts, which may result in position rotation to Chinese stocks from HSI defensive stocks.

Siu estimated HSI to move sideways in the latter half of the year in wake of the above scenario, jolting around 27,000-28,000.

Meanwhile, Chinese H shares may outshine HSI. Three-month target for HSCEI is 10,600, and target of SHCI is 3,100.

Source: AAStocks Financial News

[winston]

Five stocks in H-share index to be replaced

The Hang Seng Indexes Company said today after a review for the quarter ended June 28, five constituents of the Hang Seng China Enterprises Index, which tracks H-shares, will be replaced on September 9.

Want Want China Holdings (0151), Geely Automobile (0175), Fosun International (0656), China Taiping Insurance (0966) and Sunac China Holdings (1918) will be included, while Dongfeng Motor Group (0489), China Cinda Asset Management (1359), Guangzhou Automobile Group (2238), China Huarong Asset Management (2799) and Huatai Securities (6886) will be removed.

The total number of constituents is fixed at 50.

Source: The Standard

http://www.thestandard.com.hk/breaking- ... 0816&sid=2

[winston]

DBS: HK Protests to End by 4Q19 in Base Case; HSI End-19 Target 26,050

Hang Seng Index stayed indifferent as the protest started from June, whereas the recent plunge may be attributable to escalation in trade tussles and USD/RMB breaching above 7, said Dennis Lam, Hong Kong and China Equity Strategist at DBS, who assumed a trade deal not until US Election in 2020.

In the base scenario, Lam expected protests to come to an end by 4Q19, with public support fading away, where HSI target is set at 26,050 and 32,800 by end-19 and 2020.

In the worst scenario, Lam foresaw unfinished rallies with escalation of violence, where HSI target is set at 21,600-16,800 and 23,300-18,100 by end-19 and 2020.

Source: AAStocks Financial News

[winston]

Hang Seng seen diving 18pc

The benchmark Hang Seng Index could tumble to 21,500 points this year, according to Morgan Stanley, implying a retreat of 18 percent from yesterday's close.

The firm also said the city's economy would contract 0.3 percent this year, down from a forecast of 1 percent growth.

Street protests in the city, currently in their 11th week, have put pressure on the Hong Kong dollar peg and prompted a round of stimulus measures by the government to accelerate economic growth, and Hong Kong's interbank interest rates will turn increasingly volatile as investors continue to yank cash from the city's financial markets, said the institution, expecting that the Hong Kong dollar may test the weak end of its trading band with the greenback if the pace of outflows increases.

The HSI dipped 60 points to close at 26,231 yesterday.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 0821&sid=2

[winston]

Here are 10-stocks to buy if and when HK's protest ends

Source: SCMP

https://www.scmp.com/business/companies ... hong-kongs