Hong Kong stocks are in a state of internal and external difficulties
The foreign currency has fallen below the “seven calculations” for the first time in 11 years and the Sino-US trade friction has deteriorated. There has been a major strike and a fierce police-civilian conflict in many districts. Under the suspicion of internal and external troubles, the Hang Seng Index plunged 767 points (2.85%) yesterday, closing at 26,151 points, hitting a new low in 7 months, and the biggest one-day drop in the past three months; the market turnover was 99.5 billion yuan. Hong Kong stocks fell by 1995 points (7.09%) for four consecutive trading days, and the market value evaporated by 2.2 trillion yuan. The political and economic situation in Hong Kong is worrying. The brokerage company Furui also downgraded the asset allocation of Hong Kong stocks to “modestly bearish”.
The Hang Seng Index did not reverse its disadvantage in the night, and it was reported to be 25587 points at 1:30 am, down 446 points and 564 points lower. The ADR Hong Kong stock market index was 25,672 points, which was 479 points lower than the Hong Kong market.
Real estate stocks are devastating
The political situation in Hong Kong has become more volatile and the investment climate has been greatly affected. The Hang Seng Index continued to be weak after opening 438 points lower. The Hong Kong government held a press conference at 10 o’clock yesterday. The market has been expected to ease the situation. At the beginning of the press conference, the decline of Hong Kong stocks once narrowed. However, the response of the Chief Executive was re-emphasized and the HSI fell sharply, dropping 832 points at most, closing at 26,151 points and plunging 767 points. The H-Share Index has a 10,000-point barrier and fell 266 points (2.58%) to close at 10081 points. The Hong Kong stock market sentiment was not good, but the unimpeded “North Water” flowed for 12 consecutive trading days. The net inflow of “Hong Kong Stock Connect” was 3.45 billion yuan yesterday, the most in the past two months.
The political instability has put pressure on the property market. Local property stocks have become the hardest hit areas. Xindi (00016) and Cheung Kong (01113) have fallen more than half. Heavyweight Tencent (00700) “U disk” was heavily under pressure and closed at a low of 340.6 yuan. Local retail stocks were also affected, Luk Fook (00590) fell 7.4%, and Salsa (00178) inserted 6.1%.
China’s financial stocks were under pressure. China Bank (03988) and China Construction Bank (00939) both fell more than 2.5%. China Life Insurance (02628) and Ping An Insurance (02318) fell 3.2% and 2.1% respectively. Capital inflows to gold stocks hedged, Shandong Gold (01787) and Zhaojin (01818) rose more than 6.7%.
Furui is bearish and calls for a reduction in the proportion of Hong Kong stocks
In its global asset allocation, brokerage Furui lowered the proportion of Hong Kong stocks to “modestly bearish”. In the report, Furui mentioned that investors are worried about the further deterioration of the political environment in Hong Kong. They are also worried that the Sino-US trade war will continue to heat up, which will cause the RMB to depreciate sharply. As a result, the exchange rate of the Hong Kong dollar will be under pressure, causing the Hong Kong dollar interest rate (HIBOR) to rise sharply. The bank believes that Hong Kong’s economy is continuing to slow down and its recent retail sales are not good. In the absence of local catalysts, Hong Kong stocks have “headwind” pressure.
Feng Shiwen, managing director of Changjiang Securities Asset Management (Hong Kong), believes that negative factors such as the depreciation of the renminbi and the local political situation continue to ferment, and the fundamentals of the Hong Kong stock market have not shown signs of bottoming out in the short term. He expects that the HSI may have to fall more than 500 to 600 points, which will attract investors to short-term speculation, but I believe that the technical rebound that will occur at that time will not be long-term. He suggested that investors should moderately reduce their holdings according to their risk tolerance.