20231204-浙商国际金融控股-港股市场策略周报_22页

Market Performance:
This week, Hong Kong's stock market experienced sharp declines due to poor third-quarter earnings, dragging down market sentiment. Key indices closed with significant losses: the Hong Kong SSEC dropped by -372%, HKH fell -415%, and HSTECH witnessed a -482% decline. All industry sectors were down, led byPROPERTY and CONSUMER cyclic, TECHNOLOGY, and NECESSARY consumption sectors, though ENERGY, MATERIALS, and TELECOMMUNICATIONS were relatively better performing with minor losses.

Valuation:
The Shanghai Composite 5-year PE decreased to the 341st percentile, placing the market in the value range. Notably, the risk premium rose to 699, indicating reduced attractiveness compared to US Treasuries, despite overall valuation stability.

Fundamentals:
Economic indicators suggest a fragile recovery. October industrial profits grew 27% YoY (though declining from prior growth rates), and November PMIs (both manufacturing and services) were below expectations (-0.1pp for manufacturing and -0.4pp overall), underscoring a "weak recovery" scenario. Ongoing policy support, such as financing measures for private enterprises and consumption stimulation, is anticipated to sustain economic momentum.

Funding and Macroeconomic Trends:
With US economic data showing cooling trends (e.g., easing PCE inflation, rising unemployment claims), market expectations for Federal Reserve policy are shifting toward possible pausing of further rate hikes or imminent cuts, particularly starting from March next year. This may improve capital inflows and fund liquidity to Hong Kong.

Outlook and Recommendations:
The outlook remains cautious, with fundamentals expected to stay weak ex-display by policy measures and funding enhancements. Investors are advised to maintain a diversified portfolio, focusing on sectors like CONSUMER policy-benefited (e.g., retail, services), SECURITIES, INSURANCE, and TMT; core consumption and healthcare for liquidity sensitivity; and high-performing sectors like GOLD, ELECTRONIC, and PHARMACEUTICAL for potential upside.