victorysecurities_gaojuan
Gao Juan, Victory Securities

Translated by Andrew Vanburen from a Chinese-language piece in Sinafinance by Gao Juan of Victory Securities

ANYTHING ADDING BUOYANCY to the Hong Kong market these days is likely to be immediately counteracted by bourse ballast.

Upside drivers are being weighed down by bad news on the macro front.

I began writing this piece saying Hong Kong’s benchmark Hang Seng Composite Index would fluctuate in a narrow range between 20,100 and 20,400.

So when the most watched barometer of Hong Kong equities jumped nearly a full percent on Friday to close at over 20,700, I considered changing my tune, but I feel it is still valid.

On Friday, Hong Kong shares began on a downtrend.

zhanglan_xingqi
Restaurant chain South Beauty founder Zhang Lan is hardly bearish on Hong Kong, aiming to tap the IPO market for expansion funds.  Photo: xingqi

As the afternoon session dragged on, PMI numbers trickled in on China’s lower-than-expected factory orders which of course set off alarm bells in Shanghai, Shenzhen and here in Hong Kong.

The resultant A-share slump hit shares in Hong Kong in the post-lunch session, causing a considerable intra-day net loss for the benchmark Index.

This erased much of the good will from several healthy enough interim earnings reports.

The benchmark Hang Seng Index lost 1.20% on Friday to finish at 20,591.

Despite the depressing trading day in directional terms, some sector plays were obvious winners including public works which added 0.32%.

But financial sector plays lost 0.96%, industrial counters (-1.52%) and property developers (-1.90%).

The recent drumbeat of support from Beijing in the form of some 158 billion usd in stimulus money for public works projects is chiefly responsible for the slight rise in related stocks on Thursday.

Another factor adding tremendous inflammability to benchmark index volatility is the rapidly shifting global oil price of late.

Thanks to the heavy weighting of dual-listed PRC-based petrochemical behemoths like Sinopec, Petrochina and other downstream processors, the 10% fluctuation one-week in global crude prices thanks to the Mideast political and protest-driven mayhem has played havoc with China’s energy listcos in Hong Kong.

hs9_4
Hong Kong shares have struggled to break out of a slump



And the significant stimulus package in Beijing last week followed by even larger such economic spurs from Tokyo and Washington – all representing the world’s top three economies – have done little to bring a semblance of stability and sanity to market-driven bourse bolstering inputs.

Therefore, it is harder than ever to predict the direction of major capital market indices at a time when governments are stepping in regularly to proactively spur on bourses when natural economic forces are sitting on the sidelines cowering.

See also:

BUYER’S MARKET? 12 Consumer Plays Eyeing HK IPOs

SPILLED MILK: China Mengniu In Yet Another Outrageous Scandal

XTEP: Overperforming In Overcrowded, Overstocked PRC Sportswear

TWO LEFT FEET: China Sneaker Play Li Ning Sees Dire Year

You may also be interested in:


You have no rights to post comments

Counter NameLastChange
AEM Holdings3.280-0.020
Avi-Tech Electronics0.250-0.005
Best World1.680-
Broadway Ind0.0920.002
China Sunsine0.3950.005
ComfortDelGro1.3000.010
Delfi Limited1.1300.010
Food Empire1.090-
Fortress Minerals0.3100.010
Geo Energy Res0.280-
GSS Energy0.028-
Hong Leong Finance2.4800.010
Hongkong Land (USD)3.190-
InnoTek0.4150.010
ISDN Holdings0.330-0.005
ISOTeam0.040-
IX Biopharma0.043-
Jiutian Chemical0.0260.001
KSH Holdings0.290-
Leader Env0.0530.003
Medtecs Intl0.1400.004
Nordic Group0.400-
Oxley Holdings0.100-
REX International0.166-0.002
Riverstone0.610-0.015
Sinostar PEC0.135-
Southern Alliance Mining0.670-0.005
Straco Corp.0.470-0.015
Sunpower Group0.240-
The Trendlines0.0910.001
Totm Technologies0.038-
Uni-Asia Group0.905-0.030
Wilmar Intl3.6200.010
Yangzijiang Shipbldg1.4900.040
 

We have 322 guests and no members online

rss_2 NextInsight - Latest News