20160614-新鸿基金融集团-INVESTMENT_DAILY_NOTE_15页_2mb

Investment Daily Note Summary

Core Content Overview

This document provides a comprehensive overview of the Hong Kong and global markets, focusing on equity indices, market performance, upcoming results, stock recommendations, sector analysis, and valuation data.

Main Market Indices

• Hang Seng Index (HSI): Closed at 20,512, down 2.5% from the previous day, and down 6.4% year-to-date (YTD).
• HSCEI: Closed at 8,619, down 2.4% from the previous day, and down 10.8% YTD.
• Shanghai Composite: Closed at 2,833, down 3.2% from the previous day, and down 20.0% YTD.
• Shenzhen Composite: Closed at 1,827, down 4.8% from the previous day, and down 20.9% YTD.
• Other Indices: DJIA, S&P 500, Nasdaq Composite, FTSE 100, DAX, CAC 40, and Nikkei 225 also showed mixed performance with some down and some up.

Market Trends and Performance

• Market Up/Down Ratios: The proportion of rising and falling stocks in the past seven trading days is used to evaluate the market's performance.
• Brexit Impact: Heightened Brexit fears led to a significant drop in the HSI and HSCEI, with the HSI falling over 600 points before recovering slightly.
• Top Performers: TCL Communication Technology (2618.HK) was a standout performer, rising 28.5% in one day and showing strong gains in the past week and month.
• Worst Performers: Several stocks, such as PW Medtech Group (1358.HK) and Universal Health (2211.HK), experienced significant declines.

Key Market Events and Outlook

• MSCI Decision: MSCI will announce on 15 June 2016 whether to add China's domestic equities to its global benchmark indices.
• OPEC Outlook: OPEC forecasts a more balanced oil market in the second half of the year due to rising demand and falling production in Nigeria and Canada.
• Interest Rates and Commodities: The U.S. interest rates showed declines, while gold prices rose due to global uncertainties. Oil prices also dropped slightly.

Stock in Focus: RUSAL (486.HK)

• Key Metrics:
  • Last Close: HK$2.29
  • Entry: HK$2.25
  • Target: HK$2.50
  • Stop-loss: HK$2.13
• Performance: YTD change is -3.4%, with a 12-month change of -45.2%.
• Valuation: FY1 Forward P/E is 6.3, and the EV/EBITDA ratio is 9.5x, below its five-year average.
• Analysis: RUSAL is the world's second-largest aluminium producer. The company is well-positioned to benefit from a stable or lower RUB due to its 80% revenue from outside Russia. Improved supply and demand in the aluminium market are expected to boost its share price.

Today's Top Picks

1. Zijin Mining (2899)

   • Last Trading Day Closing: HK$2.30
   • Target Price: HK$2.56
   • Stop-loss Price: HK$2.15
   • Reason: Precious metal stocks are expected to benefit from global risk aversion.

2. Hengshi Mining (1370)

   • Last Trading Day Closing: HK$2.30
   • Target Price: HK$2.50
   • Stop-loss Price: HK$2.08
   • Reason: The stock price showed support on the 20-day moving average, and RSI rose above 50.

Sector Performance

• Best Performing Sectors:

  • Handset and related accessories: 1.7% (1D), 0.6% (5D), 11.7% (1M)
  • Other Metals: 0.0% (1D), 3.1% (5D), 1.2% (1M)
  • REITs: -0.6% (1D), 1.8% (5D), 4.2% (1M)
  • Gas: -1.4% (1D), -0.3% (5D), 3.8% (1M)
  • Department Store: -1.5% (1D), -2.1% (5D), -6.8% (1M)

• Top Stocks in Best Performing Sectors:

  • Handset and related accessories: Tongda Group (698), AAC Tech (2018), Sunny Optical (2382), Coolpad Group (2369), TCL Comm (2618)
  • Other Metals: Jiangxi Copper (358), CMOC (3993), Zhaojin Mining (1818), Zijin Mining (2899)

Valuations and Earnings Growth

Market Data Highlights

• Top Performers (1D): TCL Communication Technology (2618.HK) at 28.5%.
• Worst Performers (1D): PW Medtech Group (1358.HK) at -7.1%.
• High Volume Stocks: TCL Communication Technology (2618.HK) with a 1,198.4% increase in volume.
• Most Short Sold Stocks: Huishang Bank-H (3698.HK), Chow Tai Fook JE (1929.HK), Bank East Asia (23.HK), etc.

A-share Premium to H-share

• The A-share premium to H-share is generally high, with some stocks showing over 150% premium, indicating potential for growth or value investment opportunities.
• Examples include:
  • LuoYang Glass-H (1108.HK): 632.5%
  • ZTE-H (763.HK): 61.2%
  • Xinjiang Gold-H (2208.HK): 61.1%
  • China Vanke-H (2202.HK): 60.5%
  • China Shipping-H (2866.HK): 214.1%
  • Haitong Securities-H (6837.HK): 40.7%
  • Bank of China-H (3988.HK): 22.0%
  • China Southern-H (1055.HK): 84.7%

Summary of Key Information

• MSCI Decision: A major event on 15 June 2016 that could impact global indices.
• Brexit Impact: Caused increased risk aversion, affecting the HSI and HSCEI.
• RUSAL (486.HK): Strong fundamentals and potential for share price increase.
• Zijin Mining (2899) and Hengshi Mining (1370): Recommended for short-term investment.
• Sector Analysis: Highlighting the best and worst performing sectors and key stocks.
• Valuation Insights: HSI and HSCEI show relatively low valuations compared to historical averages.
• Market Volatility: High volume and short selling activity in certain stocks indicate market sentiment and potential opportunities.

This summary provides a structured overview of the current market conditions, stock performance, and investment opportunities, offering insights for strategic decision-making.