Investment Daily Note Summary
Core Content Overview
This document provides a detailed summary of the investment landscape, focusing on the Hong Kong and global markets, including key indices, stock performance, sector analysis, valuations, market data, and specific stock recommendations. It highlights the impact of macroeconomic factors such as interest rates, exchange rates, and commodity prices, along with the performance of stocks listed on both the A-share and H-share markets.
Main Points and Key Information
Market Highlights
- PBOC Policy: Starting 25th January, the PBOC introduced required reserve rules for offshore RMB transactions, which may increase inter-bank RMB interest rates and reduce speculation, thereby stabilizing the RMB exchange rate and potentially improving equities market sentiment.
- EU and U.S. Sanctions on Iran: The lifting of economic sanctions against Iran may lead to an increase in global crude supply, putting downward pressure on oil-related stocks.
- Market Performance:
- Hang Seng Index (HSI): Closed at 19,520, down 1.5%.
- HSCEI: Closed at 8,236, down 2.6%.
- Shanghai Composite: Down 3.5%.
- Shenzhen Composite: Down 3.4%.
- Global Indices: US stocks, including DJIA, S&P 500, and Nasdaq Composite, closed sharply lower due to falling oil prices and weak manufacturing data. The FTSE 100 and DAX also saw declines.
External Market Conditions
- Oil Prices: Plunged to 12-year lows, with New York crude oil futures at $29.42 per barrel, down $1.78.
- Gold Prices: Rose due to capital flows as investors hedge against oil price declines, settling at $1,090.7 per ounce, up $17.10.
- ADR Impact: ADRs dropped, effectively putting HSI down 428 points, closing at 19,092.
- Hong Kong Market Turnover:
- HSI: HK$23.4bn, down 5.05%.
- HSCCI: HK$4.8bn, down 2.78%.
- HSCEI: HK$13.6bn, up 2.15%.
- Main Board: HK$73.7bn, down 2.35%.
Yesterday's Hong Kong Equities
- New Loans in China: New loans grew by RMB597.8bn in December 2015, less than expected, leading to continued losses in Hong Kong stocks.
- HSI: Fell over 300 points to a day's low before closing at 19,520, down 296 points.
- HSCEI: Dropped 223 points to 8,236.
- Property Stocks: Sino Land and Sun Hung Kai Properties fell 2.7% and 2.2% respectively.
- Oil Stocks: Sinopec, CNOOC, and PetroChina declined by 4.5%, 3.0%, and 2.2% respectively.
Stock in Focus
Tianneng Power (819.HK)
- Key Metrics:
- Last Close: HK$5.33
- Entry: HK$5.00
- Target: HK$7.00
- Stop-loss: HK$4.60
- Performance: YTD change of -18.4%, 1M change of -22.2%, 3M change of 0.4%, 12M change of 180.5%.
- Market Cap: HK$6.10bn
- 3M Average Daily Volume: 7.35mn shares
- FY1 Forward P/E: 9.4x
- Valuation: P/B of 1.75x, below sector average of 2.03x. ROE of 13.2% (2014), forward PEG of 0.8x.
- Reason for Buy: Strong growth in new energy vehicle production and sales, favorable conditions for the sector, and potential spin-off of its lithium battery subsidiary, which could increase valuation and results.
Today's Top Picks
- NNK (3773.HK):
- Last Trading Day Closing Price: HK$1.45
- Purchase Price: Current
- Target Price: HK$1.74
- Stop-loss Price: HK$1.37
- Reason: Expected share price rally with increased turnover.
- Asian Capital H (8295.HK):
- Last Trading Day Closing Price: HK$0.99
- Purchase Price: Current
- Target Price: HK$1.13
- Stop-loss Price: HK$0.94
- Reason: Anticipated full-year after-tax profit turning positive, suggesting a potential small bet.
Sector Performance Overview
- Best Performing Sectors (1D):
- HK Telecoms: 0.3%
- Logistics: 0.2%
- REITs: 0.1%
- Worst Performing Sectors (1D):
- Gaming: -1.5%
- Brokerages: -1.6%
- HK Consumer Group: -1.6%
- Major Stocks in Best Performing Sectors:
- HK Telecoms: HutchTel HK (215), Smartone (315), HKT-SS (6823)
- Logistics: Kerry Log Net (636), SITC (1308)
- REITs: Yuexiu REIT (405), Fortune REIT (778), Prosperity REIT (808), etc.
Forward P/E and Valuations of Major Indices
| Index |
FY16E P/E |
Long-term Avg. Fwd. P/E |
Deviation from Avg. (%) |
FY1 EPS Growth (%) |
FY2 EPS Growth (%) |
| Hang Seng Index |
9.7 |
11.0 |
-11.1 |
-11.4 |
10.3 |
| HSCEI |
6.3 |
7.9 |
-20.9 |
-2.6 |
9.5 |
| Shanghai Comp |
11.7 |
10.7 |
8.9 |
30.9 |
13.1 |
| S&P 500 |
15.3 |
15.3 |
0.0 |
9.8 |
12.8 |
Market Data
Best and Worst Performers (Previous Day)
- Best:
- BEIJING CAP AI-H (694.HK): 4.0% up
- WANDA HOTEL DEV (169.HK): 3.9% up
- NORTH MINING SHA (433.HK): 3.3% up
- PACIFIC TEXTILE (1382.HK): 3.3% up
- HENGDELI (3389.HK): 3.1% up
- Worst:
HSCI Volume Filter
- Top Stocks by Volume Increase:
- SFCE (1165.HK): 262.8% increase
- YANCHANG PETRO (346.HK): 160.5% increase
- WISDOM SPORTS GR (1661.HK): 19.4% increase
- etc.
Most Short Sold Stocks
- Top Short Sellers:
- COSMO LADY CHINA (2298.HK): 65.7% of total shortsell turnover
- HONG KG CHINA GS (3.HK): 58.4% of own turnover
- MTR CORP (66.HK): 57.9% of own turnover
- ASM PACIFIC (522.HK): 57.7% of own turnover
- ORIENT OVERSEAS (350.HK): 56.5% of own turnover
Interest Rates, Exchange Rates, and Commodities
Interest Rates
| Rate |
Latest (%) |
5D Change (bps) |
1M Change (bps) |
YTD Change (bps) |
y-y % Change |
| U.S. 2-year |
0.8500 |
-8.17 |
-10.22 |
-19.77 |
36.65 |
| U.S. 10-year |
2.0347 |
-14.07 |
-16.93 |
-23.47 |
19.79 |
| U.S. 30-year |
2.8140 |
-15.42 |
-10.80 |
-20.18 |
36.09 |
| HK 1-month HIBOR |
0.2280 |
0.31 |
0.26 |
0.69 |
-0.46 |
| HK 3-month HIBOR |
0.4150 |
1.94 |
2.43 |
2.14 |
2.86 |
| SH 1-month HIBOR |
2.8990 |
-10.00 |
17.80 |
-10.30 |
-189.80 |
| SH 3-month HIBOR |
3.0080 |
-5.90 |
-4.30 |
-7.72 |
-188.60 |
Exchange Rates
| Currency Pair |
Latest |
5D % Chg |
1M % Chg |
YTD % Chg |
y-y % Chg |
| USD Dollar Index |
98.9050 |
0.2 |
0.2 |
0.3 |
6.9 |
| USD/HKD |
7.7967 |
-0.4 |
-0.6 |
-0.6 |
-0.6 |
| EUR/USD |
1.0920 |
0.6 |
0.5 |
0.6 |
-5.9 |
| USD/JPY |
117.05 |
0.6 |
3.7 |
2.6 |
0.4 |
| GBP/USD |
1.4262 |
-1.9 |
-4.2 |
-3.2 |
-5.6 |
| USD/CHF |
1.0016 |
0.0 |
-0.7 |
0.0 |
-12.1 |
| AUD/USD |
0.6855 |
-2.0 |
-4.5 |
-5.9 |
-16.5 |
| NZD/USD |
0.6435 |
-1.9 |
-4.4 |
-5.8 |
-17.3 |
| USD/CAD |
1.4578 |
-2.5 |
-4.3 |
-5.1 |
-18.1 |
| USD/CNY |
6.5812 |
-0.2 |
-1.5 |
-1.3 |
-5.4 |
| USD/CNH |
6.5832 |
0.0 |
-0.4 |
-0.2 |
-5.5 |
Precious Metals and Commodities
| Commodity |
Latest |
5D % Chg |
1M % Chg |
YTD % Chg |
y-y % Chg |
| CRB Index |
159.9 |
-5.1 |
-7.1 |
-9.2 |
-28.7 |
| Comex Gold |
1,090.9 |
-0.5 |
2.4 |
2.9 |
-14.6 |
| Comex Silver |
13.875 |
0.1 |
-1.6 |
0.5 |
-21.8 |
| Nymex WTI Crude |
28.84 |
-8.2 |
-17.0 |
-22.1 |
-40.8 |
| ICE Brent Crude |
28.25 |
-10.5 |
-23.4 |
-24.2 |
-43.7 |
| LME Copper |
4,331.00 |
-3.4 |
-5.1 |
-7.9 |
-23.1 |
| LME Aluminum |
1,473.00 |
-1.3 |
0.1 |
-2.3 |
-17.8 |
| CBT Wheat |
473.75 |
-1.0 |
-4.1 |
0.8 |
-11.1 |
| CBT Corn |
363.25 |
1.8 |
-3.7 |
1.3 |
-4.4 |
| CBT Soybean |
879.00 |
1.6 |
1.4 |
0.9 |
-11.3 |
A-Share Premium to H-Share
| Company |
H Share Code |
H Share Price (HK$) |
A Share Code |
A Share Price (RMB) |
A-Share Premium (%) |
| LUOYANG GLASS-H |
1108 |
3.88 |
600876 |
20.50 |
525.9 |
| SINOPEC OILFIE-H |
1033 |
1.74 |
600871 |
6.08 |
314.0 |
| HISENSE KELON -H |
921 |
3.24 |
000921 |
6.86 |
150.8 |
| SINOPEC SHANG-H |
338 |
2.86 |
600028 |
5.31 |
120.0 |
| PETROCHINA-H |
857 |
4.38 |
601857 |
7.34 |
98.5 |
| ZTE-H |
763 |
13.58 |
000063 |
14.99 |
30.8 |
Top 20 Most Traded ETFs
- HS H-SHARE ETF-H (2828.HK): Price HK$83.15, down 2.58% (1D), 6.89% (5D)
- ISHARES FTSE A50 (2823.HK): Price HK$9.01, down 2.91% (1D), 8.06% (5D)
- TRACKER FUND HK (2800.HK): Price HK$19.70, down 1.75% (1D), 4.83% (5D)
- CSOP FTSE CH-HKD (2822.HK): Price HK$10.80, down 2.88% (1D), 5.76% (5D)
- CHINAAMC 300-HKD (3188.HK): Price HK$37.10, down 3.26% (1D), 7.25% (5D)
- CSOP FTSE CH-RMB (82822.HK): Price HK$9.17, down 2.86% (1D), 7.00% (5D)
- CSI 300 CHINA (2827.HK): Price HK$28.00, down 2.44% (1D), 5.88% (5D)
- CHINAAMC 300-CNY (83188.HK): Price HK$31.50, down 3.23% (1D), 5.88% (5D)
This summary encapsulates the essential market data and analysis for investors, highlighting key trends, stock recommendations, and valuation insights.
