HK - Market Direction 01 (Jan 12 - Jul 15)

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<Research Report>DBS Vickers expects HSCEI to hit 14,200 at end-2015; gives top ten BUY list

In the latest research report, DBS Vickers believes there is still upside for A-shares in 1H15, however, the momentum may lose in mid-2015 when policy expectations tighten.

Its 2015 year end targets for Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) are 25,700 and 14,200, respectively.

Stocks in the research house's top ten Buy list are shown as follows:

Stock / Target Price (HK$)
ANHUI CONCH (00914.HK) / 35
CCB (00939.HK) / 7.72
C FIBER OPTIC (03777.HK) / 3.9
CM BANK (03968.HK) / 22.3
COUNTRY GARDEN (02007.HK) / 4.76
CHINA RES LAND (01109.HK) / 23
CGS (06881.HK) / N.A.
HAIER ELEC (01169.HK) / 27.51
VALUE PARTNERS (00806.HK) / 6.88
WASION GROUP (03393.HK) / 9.2

Source: AAStocks Financial News

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G Sachs Asia Pacific 2015 winners & laggards list (Table)

Goldman Sachs unveiled the equities strategy for Asia Pacific region, with a list of winners and turnaround laggards as follows:

"Winners" / Potential Return
HKEX (00388.HK) / +11%
CHINA COMM CONS (01800.HK) / +37%
CMS (00867.HK) / +24%
HAITONG SEC (06837.HK) / +20%
TSMC / +13%
State Bank of India / +20%

Turnaround laggards / Potential Return
CHINA CINDA (01359.HK) / +14%
GCL-POLY ENERGY (03800.HK) / +77%
Singapore - Global Logistic Properties / +36%

Source" AAStocks Financial News

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These stocks now trade at better-than-2009 prices

by Dr. Steve Sjuggerud

Source: True Wealth

http://thecrux.com/these-stocks-now-tra ... 09-prices/

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The Hang Seng will soon catch up with other markets as its valuations are lower.

The chance of getting to 26,000 to 27,000 in the next half is not remote.

Keep holding insurance, mainland banks, telecom and SAR property shares

Source: The Standard HK

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Citi expects CN developers, insurers, banks & brokers to benefit most from RRR cut

Citigroup reiterated its positive stance on MSCI China and CSI300, with target at 78 and 3,700 respectively, representing upside of 15% and 9%.

The target price has factored in single-digit valuation re-rating from policy easing.

The research house believed that property, insurance, banks and brokers will be the largest beneficiaries, while energy, telecom and staples will benefit the least.

PING AN (02318.HK) 0.000 (0.000%) Short selling $155.13M; Ratio 6.676% ,
CPIC (02601.HK) -0.200 (-0.532%) Short selling $53.97M; Ratio 11.212% ,
CHINA RES LAND (01109.HK) +0.680 (+3.448%) Short selling $43.48M; Ratio 8.726% ,
CM BANK (03968.HK) +0.340 (+1.954%) Short selling $40.26M; Ratio 5.389% ,
BANK OF CHINA (03988.HK) +0.070 (+1.617%) Short selling $82.15M; Ratio 4.133% ,
CGS (06881.HK) -0.010 (-0.116%) Short selling $20.91M; Ratio 6.721% ,
HAITONG SEC (06837.HK) +0.180 (+1.049%) Short selling $18.90M; Ratio 3.077% ,
CHINA RAIL CONS (01186.HK) -0.200 (-2.286%) Short selling $17.65M; Ratio 11.904% and
DATANG POWER (00991.HK) -0.400 (-9.732%) Short selling $60.38M; Ratio 17.194% remained as top picks.

Source: AAStocks Financial News

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[b]G Sachs: RRR cuts positive for China financials, especially brokers & insurers[/b]

Goldman Sachs, in the latest research report, expected that the People's Bank of China (PBOC)'s required reserve ratio (RRR) cut could release approximately RMB600 billion in liquidity, and act as a positive step to modestly lower interbank rates and corporate funding costs.

Nevertheless, the research house said the advantage of RRR cut will not be as large as that of rate cuts, given that bond and discount bill financing only account for about 25%-30% of the total social financing.

BCQ (01963.HK) -0.030 (-0.478%) Short selling $1.65M; Ratio 8.911% and CQRC BANK (03618.HK) +0.090 (+1.952%) Short selling $3.18M; Ratio 3.065% are expected to benefit the most since both of them are qualified for additional 0.5 ppts RRR cut.

In addition, Goldman Sachs believed China financials, especially brokers and mainland insurers, could become the biggest beneficiaries.

Among banks, the research house preferred H to A shares, due to their more attractive valuation.

It recommended to buy
HAITONG SEC (06837.HK) +0.180 (+1.049%) Short selling $18.90M; Ratio 3.077% ,
ABC (01288.HK) +0.070 (+1.852%) Short selling $36.35M; Ratio 3.011% H/A shares and
CHINA CINDA (01359.HK) -0.010 (-0.271%) Short selling $11.19M; Ratio 8.200% ,
all of which were rated at Conviction Buy.

In addition, ICBC (01398.HK) +0.100 (+1.795%) Short selling $284.90M; Ratio 11.592% H/A shares were rated at Buy.

Source: AAStocks Financial News

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C Suisse: CHINA CINDA, CPIC, ICBC & GOLDWIND selected as top picks after RRR cuts

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Best Stock Values In Hong Kong

Chinese shares traded in Hong Kong got dusted by their mainland counterparts in Shanghai last year. That’s about to change.

By ASSIF SHAMEEN

The year of the sheep should be better for mainland Chinese shares listed in Hong Kong and abroad than the year of the horse was.

A combination of easier monetary policy in Beijing and relatively cheap valuations in Hong Kong should overcome worries about China’s slowing growth rate, say several analysts and money managers.

“The lesson investors have learned in recent years is that you just can’t fight central banks,” says Vincent Chan, head of Chinese research at Credit Suisse in Hong Kong.

Money managers have a good blueprint to follow: Markets in the U.S., Japan, and Europe all rose sharply after their central banks became more aggressive trying to stimulate growth. Investors “don’t want to miss the boat in China,” says Nomura’s China strategist Wendy Liu. She thinks H-shares, mainland companies listed in Hong Kong and other bourses, including New York, could rise as much as 60% over three years.

Hong Kong could be the biggest beneficiary of easing by the Peoples Bank of China because it trailed other Chinese markets last year. “H-shares are cheap and have a lot of catching up to do,” says Chan.

Shanghai’s Composite A-share Index shot 56% higher last year, while Hong Kong’s benchmark Hang Seng Index gained just 7%, and its Hang Seng China Enterprises Index, which tracks Hong Kong’s H-shares like Bank of China (ticker: 3988.Hong Kong) and China Life (2628.Hong Kong), rose 20%.

At last week’s levels, H-shares, which are denominated in Hong Kong dollars, trade at about nine times forward earnings, well below the roughly 16 times enjoyed by Shanghai or Shenhzen-listed mainland A-shares.

The latter trade in renminbi. Despite the big price-earnings multiple gap, both A-share and H-share companies are growing at about the same rate, roughly 7%-8%. An added fillip for H-shares: a generous 5% dividend yield versus 3.5% for A-shares.

Chan says the A-shares rally was “momentum driven” in the wake of China’s initial easing. Even though mainland investors can now buy H-shares following last year’s Shanghai-Hong Kong Stock Connect cross-listing, very few actually do. “Eventually there will be arbitrage and the differential will narrow,” he says. Mainland Chinese investors will continue to chase A-shares until the momentum fades, he says.

U.S. investors can buy popular H-shares indexes like iShares China Large-Cap ETF (FXI) and SPDR S&P China ETF (GXC). Many H-shares like China Mobile (CHL) and PetroChina (PTR) are traded as ADRs in New York. In all there are 304 Chinese companies listed in the U.S. either as ADRs or over-the-counter in the Pink Sheets. Many are H-shares.

Beijing is doing its part to help, says Anthony Cragg, senior portfolio manager for the Wells Fargo Worldwide China Equity fund (WFCHNIU.Luxembourg), which has had positive returns in five of the last six years. The government has pushed through financial reforms like Stock Connect and changes in China’s spending and tax systems, abolished its one-child policy, and modified its household registration system to speed up urbanization.

“All the things China said it will do, they are delivering on,” says Cragg, who foresees high-teen returns for H-shares and Hong Kong-listed, China-focused stocks this year.

Even if China’s growth does falter this year, there’s a silver lining, says Credit Suisse’s Chan. “The more the economy slows, the more monetary policy easing we are going to see,” he says. And the more easing, the better for shares.

Source: Barron's

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We will continue to hear good news about oil, electric cars, nuclear power, railway building, telecoms, the Shanghai-Hong Kong Stock Connect, and the Shenzhen-Hong Kong stock link.

Any related shares can be accumulated on dips.

Source: Dr Check, The Standard HK

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Technically, the HSI needs to stay above 24,000 to keep the short-term uptrend.

But any dip below that will trigger more sell-offs to 23,000 and needs to create bargain-hunting opportunities.


Source: Dr. Check, The Standard HK