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<Research>BOCOMI: H-shr Fundamentals Anticipated to be Backed by Ongoing Policy; Energy, Utilities, Telecoms Focus
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Hong Kong bourse charted a V-shaped rebound in the past week, with HSTECH leading the world's major stock indices, thanks to the valuation repair prompted by overseas positive factors, BOCOMI wrote in its report. Meanwhile, People's Bank of China (PBOC) Governor Pan Gongsheng recently said that the proportion of the country's foreign exchange reserves allocated to Hong Kong will be evidently raised, which is assumed to potentially enhance the liquidity of Hong Kong bourse and boost market sentiment. Looking ahead, overseas factors are expected to improve further, but the room for improvement is limited. The broker drew attention to the recovery of fundamentals. According to the broker, the grounding of the US President Donald Trump's policy uncertainty may improve sentiment. As Trump's policies gradually enter the verification period, the broker believed that the impact of further overshooting is likely to be limited. In the meantime, the removal of uncertainty after the implementation of some of the policies will also smooth sentiment. The fundamentals of Hong Kong stocks are anticipated to be underpinned by continued policy support, said BOCOMI. There is still room for corporate earnings recovery and domestic demand expansion policies to be further unleashed. The broker will pay active attention to the tilting of policies towards people's livelihoods, as well as the improvement of Chinese property developers, consumption and other chains, and observe the trend of price movement. Amid the persistently bumpy market, the broker recommended to take a defensive position in sectors with stable cash flow and high dividends, including the energy, utilities and telecoms. AAStocks Financial News |
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