Investment Daily Note Summary
Core Content Overview
This document provides a comprehensive summary of the Hong Kong and global financial markets, including indices, stock performance, sector analysis, valuations, and external market conditions. It also highlights specific stocks of interest, dividend potential, and market trends for the period.
Main Market Indices
| Index |
Close |
Daily Change (%) |
YTD Change (%) |
| Hang Seng Index (HSI) |
20,436 |
1.3 |
-6.7 |
| HSCEI |
8,571 |
0.4 |
-11.3 |
| Shanghai Comp |
2,932 |
0.7 |
17.2 |
| Shenzhen Comp |
1,973 |
0.2 |
14.5 |
- The HSI and HSCEI have shown positive daily movements, but both have declined significantly year-to-date.
- The DJIA, S&P 500, and Nasdaq Composite have also seen positive daily changes, though the Nasdaq had a negative YTD change.
Market Turnover
| Index |
Turnover (HK$bn) |
Daily Change (%) |
| HSI |
24.3 |
-5.73% |
| HSCCI |
3.2 |
-3.90% |
| HSCEI |
11.5 |
-8.21% |
| Main Board |
63.6 |
-3.44% |
- The overall market turnover has declined, with the HSI showing the most significant drop.
External Market Conditions
- The Fed's rate hike probabilities have dropped to 0% due to Brexit uncertainties, with a potential rate cut this year.
- Local property stocks and REITs are expected to benefit from this scenario.
- Energy and Banking sectors have rebounded, and US stocks rose for two consecutive days.
- Oil prices surged as US domestic crude supplies dropped for 6 consecutive weeks.
- ADR prices effectively pushed the HSI up 201 points.
Stock in Focus: SITOY GROUP HOLD (1023.HK)
| Metric |
Value |
| Last Close |
HK$3.03 |
| Entry Price |
HK$2.88 |
| Target Price |
HK$3.30 |
| Stop-loss Price |
HK$2.59 |
| YTD/1M/3M/12M % Change |
-6.5%/6.3%/24.2%/-41.2% |
| Market Cap |
HK$3.03bn |
| FY1 Forward P/E |
7.8 |
- SITOY is a high dividend stock with a strong brand presence in luxury and travel goods.
- It has a competitive edge due to its in-house R&D and design capabilities.
- Despite a slowing global retail market, it is expanding its online platform.
- Its China revenue accounts for only 10%, indicating potential for growth.
- It has a stable dividend capacity, with an average payout ratio over 50% and a projected dividend yield of 7%.
Today's Top Picks
-
China Goldjoy (1282)
- Reason: Strong price rally with increased turnover.
- Target: HK$0.95
- Stop-loss: HK$0.82
-
Chi Assurance (8090)
- Reason: Price showed support on 150-day MA.
- Target: HK$1.06
- Stop-loss: HK$0.90
Sector Performance
Best Performing Sectors (1D)
| Sector |
Daily Change (%) |
5D Change (%) |
1M Change (%) |
| Gas |
2.2% |
-0.4% |
0.5% |
| Sports Accessories |
2.1% |
2.9% |
1.3% |
| Local Property |
1.8% |
0.4% |
1.2% |
| Chinese Telecoms |
1.8% |
-1.9% |
-4.5% |
| Infrastructure |
1.7% |
-2.7% |
-4.6% |
| Toll Road |
1.7% |
-1.6% |
-0.2% |
| Building Materials |
1.7% |
-0.8% |
-2.1% |
| Environmental and New Energy |
1.6% |
-0.5% |
-1.1% |
Major Stocks in Best Performing Sectors
- Gas: China Gas (384), Beijing Enterprises (392), ENN Energy (2688)
- Sports Accessories: 361 Degrees (1361), Xstep Int'l (1368), Peak Sport (1968)
- Local Property: CK Hutchison (1), Henderson Land (12), SHK Prop (16)
- Chinese Telecoms: China Telecom (728), China Unicom (762), China Mobile (941)
- Infrastructure: China Railway (390), China Railway Cons. (1186), CSR Corp. (1766)
- Toll Road: Sichuan Express (107), Jiangsu Express (177), Shenzhen Express (548)
- Building Materials: Shanshui Cement (691), Anhui Conch (914), China Res Cement (1313)
Forward P/E and Valuations
| Index |
FY16E P/E |
Long-term Avg. Fwd. P/E |
Deviation from Avg. (%) |
FY1 EPS Growth (%) |
FY2 EPS Growth (%) |
| Hang Seng Index |
11.3 |
11.0 |
2.8 |
-9.9 |
10.1 |
| HSCEI |
7.3 |
7.9 |
-8.2 |
-7.8 |
8.8 |
| Shanghai Comp |
13.5 |
10.7 |
25.3 |
20.1 |
13.3 |
| S&P 500 |
17.6 |
15.3 |
15.3 |
8.7 |
13.4 |
- The Hang Seng Index and HSCEI are currently above their long-term average P/E.
- The Shanghai Composite is significantly above its long-term average.
Best and Worst Performers
Best Performers
- LI & Fung Ltd (494.HK): 6.5% increase
- Honghua Group (196.HK): 6.3% increase
- CRTG (269.HK): 6.1% increase
- Trinity Ltd (891.HK): 5.1% increase
- Sa Sa Intl Hldgs (178.HK): 5.0% increase
Worst Performers
- Haitian Intl (1882.HK): -4.5% decrease
- Weichi Power-H (2338.HK): -3.9% decrease
- Zhaojin Mining-H (1818.HK): -3.8% decrease
- China Oilfield Services (2883.HK): -3.3% decrease
- China Oil and Gas (603.HK): -3.3% decrease
Most Short Sold Stocks
| Company |
Stock Code |
Price (HK$) |
1D Change (%) |
% of Total Shortsell Turnover |
% of Own Turnover |
FY1 P/E |
| OZNER Water |
2014.HK |
1.290 |
0.8 |
0.0 |
106.6 |
N/A |
| Parkson Retail |
3368.HK |
0.680 |
0.0 |
0.0 |
84.8 |
N/A |
| Swire Pacific-A |
19.HK |
86.150 |
-0.9 |
0.7 |
57.5 |
13.6 |
| Mengniu Dairy |
2319.HK |
13.040 |
1.3 |
0.7 |
57.3 |
17.8 |
| Jiangsu Express-H |
177.HK |
10.500 |
-2.3 |
0.4 |
55.1 |
15.3 |
- These stocks show high short-selling activity, which may indicate bearish sentiment.
Interest Rates and Exchange Rates
Interest Rates
| Market |
Latest (%) |
5D Change (bps) |
1M Change (bps) |
YTD Change (bps) |
y-y % Change |
| U.S. 2-year |
0.6289 |
-14.99 |
-27.97 |
-41.88 |
-1.38 |
| U.S. 10-year |
1.5036 |
-24.22 |
-34.74 |
-76.58 |
-84.95 |
| HK 1-month HIBOR |
0.2513 |
2.77 |
5.20 |
3.02 |
1.30 |
| HK 3-month HIBOR |
0.5652 |
3.52 |
4.75 |
17.16 |
17.78 |
| SH 1-month HIBOR |
2.8900 |
0.48 |
4.40 |
-11.20 |
-69.00 |
Exchange Rates
| Pair |
Latest |
5D % Change |
1M % Change |
YTD % Change |
y-y % Change |
| USD Dollar Index |
95.7000 |
2.3 |
-0.2 |
-3.0 |
0.2 |
| USD/HKD |
7.7584 |
0.0 |
0.2 |
-0.1 |
-0.1 |
| EUR/USD |
1.1114 |
-2.4 |
-0.1 |
2.4 |
-0.3 |
| USD/JPY |
102.79 |
3.3 |
7.7 |
16.8 |
19.2 |
| GBP/USD |
1.3439 |
-9.7 |
-7.2 |
-8.8 |
-14.5 |
| USD/CHF |
0.9797 |
-2.1 |
1.4 |
2.3 |
-4.5 |
| USD/CNY |
6.6367 |
-0.8 |
-0.8 |
-2.2 |
-6.5 |
| USD/CNH |
6.6546 |
-1.0 |
-1.0 |
-1.3 |
-6.7 |
Precious Metals and Commodities
| Commodity |
Latest |
5D % Change |
1M % Change |
YTD % Change |
y-y % Change |
| CRB Index |
194.6 |
1.5 |
4.6 |
10.5 |
-14.3 |
| Comex Gold |
1,318.5 |
4.4 |
8.5 |
24.4 |
12.5 |
| Comex Silver |
18.320 |
5.6 |
14.5 |
32.7 |
17.8 |
| Nymex WTI Crude |
49.51 |
-1.2 |
0.8 |
33.7 |
-16.7 |
| ICE Brent Crude |
50.13 |
-1.5 |
0.9 |
34.5 |
-21.2 |
A-share Premium to H-share
| Company |
H-share Code |
H-share Price (HK$) |
A-share Code |
A-share Price (RMB) |
A-share Premium to H-share (%) |
| LuoYang Glass-H |
1108 |
4.72 |
600876 |
27.19 |
573.4 |
| Huadian Power-H |
1071 |
3.58 |
600027 |
4.96 |
62.0 |
| China Shipping D |
1138 |
4.32 |
600026 |
5.93 |
60.5 |
| China Shipping-H |
2866 |
1.56 |
601866 |
3.99 |
199.0 |
| China Cosco HO-H |
1919 |
2.69 |
601919 |
5.14 |
123.4 |
| Sinopec Oilfie-H |
2883 |
5.88 |
601808 |
12.16 |
141.8 |
| China East Air-H |
670 |
3.91 |
600115 |
6.66 |
99.1 |
| China Pacific-H |
2601 |
4.65 |
601998 |
5.70 |
43.3 |
- The A-share premium is significantly higher than the H-share price, indicating potential value for investors.
Key Takeaways
- Market sentiment is influenced by Brexit-related factors, with a potential Fed rate cut.
- Local property and REITs may benefit from this.
- SITOY Group Hold is a high dividend stock with growth potential in the Chinese market.
- China Goldjoy and Chi Assurance are highlighted as top picks for today.
- The HSI and HSCEI are underperforming year-to-date but have positive daily changes.
- Energy and Banking sectors are rebounding, and oil prices are up due to US supply issues.
- Short-selling activity is high for several stocks, suggesting bearish sentiment.
- The A-share premium to H-share is significant, indicating potential value for investors.
