Hong Kong stocks started in December this year
According to traditional experience, the market usually rises at the end of the year. The HSI has risen by an average of 0.9% in the past 20 years. However, the investment community believes that the macro haze has not disappeared, and it is too early to look forward to the rising tide at the end of the year. Two major events determine the direction of the market: (1) the progress of trade negotiations, and (2) the turbulent situation in Hong Kong.
After the HSI slumped, the external rally was not considered strong. The overall performance of the blue-chip American Depositary Receipts (ADR) was equivalent to the Hang Seng Index opening about 9 points lower, or about 26336 points. However, the official PMI announced by the mainland on Saturday is now a surprise. After six months, it will be above the prosperity and decline line again, which may lead to a short-term rebound in Hong Kong stocks.
DBS: Narrow range, strong stocks should make profits
In general, Li Zhenhao, a senior investment strategist at the DBS Hong Kong Investment Director’s Office (North Asia), pointed out that although Hong Kong stocks fell sharply on Friday, the good and bad factors were not prominent, and there is no special incentive for (further) dilution in the market outlook. It is unlikely that the HSI will fall significantly (the bottom of the ascending track formed by the HSI since August is at the level of approximately 26,100 points). Similarly, the motives of friends to promote the market are not strong, so once it rebounds to the 27000 level See greater resistance.
Li Zhenhao expects that the broad market may be listed in a narrow range like last month. If investors have taken the lead in buying strong stocks such as domestic demand, domestic housing, and medicine in mid-October, they can cash in on the annual fund settlement and make a profit together. The buyer does not need to rush to buy the goods.
Franklin: China and the United States take a chance
In fact, the news of Hong Kong shares signing the Hong Kong Bill of Rights and Democracy in the United States last Friday, and the early profit of funds, plunged more than 500 points. Zhou Wenhui, vice president and fund manager of Franklin Templeton’s Multi-Asset Solution Team, analyzed that the signing of the Hong Kong Bill of Rights and Democracy means that the United States will strengthen its monitoring of the situation in Hong Kong, while Beijing and the Hong Kong government have recently reacted strongly, which may increase Sino-US trade negotiations Describes whether the opportunity for an agreement between the two countries is “only half and half.”
Zhou Wenhui emphasized that the direct impact of the above bill on Hong Kong is not serious (see the separate article-“Foreign Banks: Short-term impact of human rights law is limited”), but whether Hong Kong stocks can rise before the end of the year still depends on China. Whether the United States can reach a trade agreement, its funds are still light-weight Hong Kong stocks in the market outlook or continued fluctuations.
Goldman Sachs: Valuation of Hong Kong companies has reflected current difficulties
The resurgence of local demonstrations during the weekend may bring renewed selling pressure on local stocks that have already stabilized. Timothy Moe, Chief Strategy Analyst, Goldman Sachs Asia Pacific, said that Hong Kong’s corporate profits are still under pressure, but the stock valuation has roughly reflected the current difficulties, such as the NAV (net asset value) discount of the local real estate sector is nearly 50 %, Which is about 2 standard deviations lower than the average of the past 10 years. Therefore, the bank ’s Hong Kong stocks are not considered very pessimistic, and they still give the MSCI Hong Kong Index a “synchronous with the market” rating that reflects the trend of local stocks.
The Hang Seng Index closed at 26,346 points on Friday, and it fell 248 points or 0.9% throughout the week.