Key points:
- $HSI(HSI)$ has risen for 3 consecutive months, check Top gaining HKEX stocks and investing ETFs List
- Factors for the rise of the $HSI(HSI)$ and 2023 Target outlooks from 3 top institutions
1. The $HSI(HSI)$ Rose 46% Since Nov 2022, Check top HKEX stocks and ETFs List
Hi Tigers, As of the close on January 13, the $HSI(HSI)$ hit a six-month high, and has maintained a sharp rise for since November 1st, 2022 as global funds buy and tech risk ebbs.
Technically, the $HSI(HSI)$ was successfully standing on the 200DMA(19,589) on January 3rd of 2023.
Since then, the media and the market all shouted, "The bull market for HKEX stocks is coming!"
HSI Stood on 200DMA Sucessfully on Jan 3rd, chart from Tiger Trade
According to statistics, in the 3 months from November 1 to January 13, among the HKEX stocks with a market value of more than HKD10 billion, 45 stocks rose higher than 100%, and the top 15 HKEX stocks all gained above 150% by percentage.
The TOP 15 lists are as follows:
Data from Wind，by Tiger Trade
$IA FIN LEASING(01563)$ , $MGM CHINA(02282)$ ,$BILIBILI-W(09626)$ , $WYNN MACAU(01128)$ ,$CG SERVICES(06098)$ ,$SUNAC SERVICES(01516)$ , $COUNTRY GARDEN(02007)$ , $TUYA-W(02391)$ , $HONGJIU FRUIT(06689)$ ,$China Edu Group(00839)$ , $Sun Art Retail(06808)$ ,$MELCO INT'L DEV(00200)$ ,$LONGFOR GROUP(00960)$ ,$WEIMOB INC(02013)$ ,$CHINA EAST EDU(00667)$
If you bought at low prices accurately at the end of October 2022, you will surely get decent returns.
If you haven't paid enough attention to the opportunities of HKEX stocks, welcome to actively add those high-quality stocks to your watch listFor investors who may not very familiar with the specific HKEX stocks, can learn more about the HK stocks investing ETFs from the chart below：
Data from Wind, by Tiger Trade
$CICCKRANECNET-U(09186)$ ,$SAMSUNGCDGN(02812)$, $ISHARESHSTECH-U(09067)$ , $ISHARES CHINA-U(09801)$ , $CSOP HS TECH(03033)$ ,$CAM HS TECH-U(09088)$ ,$ISHARESHSTECH(03067)$ , $WISE NEW ECON50(03182)$ ,$HSTECH ETF(03032)$ , $ICBCCSOPCHINA(03167)$ ,$EFUNDHSIESG(03039)$.
2.The reasons for the rise of HK stocks and the outlook from 3 TOP institutions
The factors for the rise in Hong Kong stocks can be considered from the following perspectives.
See from the Hong Kong stock market trends over the years, the HSI is mainly affected by the mainland China economy, U.S. dollar liquidity, and Sino-US relations. The mainland China economy determines the profitability of Hong Kong stocks, U.S. dollar liquidity determines interest rates and valuation levels, and Sino-U.S. relations affect the risk preference environment for Hong Kong stocks.
In the past 12 years, if any two or more of the three factors are positive, the Hong Kong stock market will rise for the whole year; if any two or more of the three factors are negative, the Hong Kong stock market will fall for the whole year.
- In 2022, the mainland economy was affected by the downturn of the real estate industry, the ravages of the pandemic, the pressure on consumption, and the weakening of overseas demand on the export side. The PMI index has been fluctuating near the dividing line of the prosperity.
- In terms of USD$USD Index(USDindex.FOREX)$ liquidity, troubled by the worst inflation in 40 years, the FED continues to raise interest rates, putting pressure on global asset prices.
- In terms of Sino-US relations, the turmoil in the auditing and supervision of Chinese concept stocks, the introduction of the "Inflation Redon Act" and the "Chip Technology Act", the conflict between China and the United States has intensified in terms of finance, technology and geopolitics.
Under the superposition of the three factors, Hong Kong stocks have continued to fall for more than 20 months from mid-February 2021 to the end of October 2022, and the duration has exceeded the previous decline cycle since the subprime mortgage crisis in 2008.
From the point of view of the decline, the largest drop in Hong Kong stocks this round reached 53.19%, surpassing the decline cycle brought about by the European debt crisis in 2011, the A-share stock market crash in 2015, and the Sino-US trade friction in 2018, second only to the down cycle of the subprime mortgage crisis in 2008.
Looking forward to 2023, the three factors are expected to usher in improvement:
- Under the optimization of pandemic prevention and control, the 'three arrows' liquidity package for real estate support, and the introduction of the "Strategic Planning Outline for Expanding Domestic Demand (2022-2035)" by CPC Central Committee, the mainland China's economy is expected to recover.
- In terms of U.S. dollar liquidity, the lower-than-expected U.S. CPI data in October and November strengthened the global market’s confidence in the arrival of an inflection point in U.S. inflation. If the pace of the Fed’s interest rate hikes in 2023 may gradually slow down, assuming that inflation can fall back to the target level and the unemployment rate rises significantly, the 2023Q4 Fed may even start the cycle of interest rate cuts ahead of schedule!
- In terms of Sino-US relations, the leaders of the two countries met at the G20 summit, and it is expected that Sino-US relations will run smoothly in the next period of time.
From HKEX.com
Many institutions feel positive and optimistic about HKEX stocks, they have also raised the target point of the HSI in 2023 as below:
1) Credit Suisse: The $HSI(HSI)$ target in 2023 is 23,800 points
Credit Suisse said that despite the recent rebound, the HSI is still at a low level for many years, and its valuation is still attractive. It is believed that the performance in 2023 will be positive. Investors will focus on post-pandemic recovery and policy effects. The latest target of the HSI is 23,800 points (a 10% more potential upside from Jan 13th).
Credit Suisse also expects that outperforming industries include Internet-related industries such as e-commerce, online games and entertainment, while those directly benefiting from customs clearance include dairy products, tourism, and aviation.
2) UBS: $HSI(HSI)$ target point is 22100, watch defensive and high dividend yield stocks
UBS earlier predicted that Hong Kong and the Mainland China are expected to be quarantine-free, and the United States may begin to cut interest rates in the third quarter of 2023, the weakening of the US dollar will lead to the return of funds. The target prices of HSI in the basic scenario are 22,100 points.
The bank also pointed out that the haze of the global economic recession will still dominate the market sentiment at the beginning of next year, so it prefers stocks with defensive and high dividend yields.
3) Morgan Stanley: Raised the $HSI(HSI)$ target to 21,200 in the middle of last month
Morgan Stanley, which has adjusted the HSI forecast several times, Under the basic scenario, the latest target price of HSI in December 2023 is raised from 18,200 points to 21,200 points, which is equivalent to 9.9 times the predicted price-earnings ratio in December 2023.
The most bullish point is 24,500 points, and the worst is 13,900 points. It is believed that the consumer sector will benefit most from the reopening policy.
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