《Economic Information Daily 9th exclusive》U.S. bond yields softened, yet Middle East tensions persisted and oil prices rose, causing most overnight European and U.S. markets to fall. Asian markets weakened this morning, but Hong Kong stocks stood out. After falling below 24,000 yesterday, Hong Kong shares regained the 24,000 level today, driven by financial and technology-internet stocks. The Hang Seng Index closed the morning session at 24,045, up 259 points or 1.1%, with main board turnover nearing HK$111.7 billion. The Hang Seng China Enterprises Index stood at 8,085, up 75 points or 0.9%. The Hang Seng Tech Index reached 4,136, up 62 points or 1.5%.
*Li Ming-tak: 24,000 level expected to offer initial support; if broken, could test 23,500*
After plunging over 300 points yesterday to a low of 23,737, the HSI rebounded today, reclaiming the 24,000 level. Li Ming-tak, fund manager at Dashing Asset Management, told Economic Information Daily that he is not overly pessimistic about the HSI's short-term outlook, expecting initial support around 24,000. If the HSI can stabilize above 24,000 for several consecutive trading days, accompanied by market turnover of at least HK$200 billion, it would confirm that the index is unlikely to continue falling in the short term. He noted that Hong Kong's relatively weak performance in October was expected, mainly constrained by insufficient earnings growth momentum among mainland enterprises and pressure on RMB profit translation due to the HKD peg under a strong USD. Additionally, the lack of major catalysts from September to October led investors to adopt a cautious stance, awaiting macro events such as the APEC meeting in November and the U.S. midterm elections, resulting in relatively conservative capital movements. Recently, even strong performers such as Lenovo (00992) and Kingboard Laminate (01888) have corrected, reflecting weak buying interest. If the market weakens further, it may test the 23,500 level.
Regarding CIB International's downgrade of the HSI target range to between 21,500 and 27,000 yesterday, with the lower end even below this year's low of 22,518, Li Ming-tak frankly stated that the probability of the HSI falling to 21,500 this year is extremely low, and even a retest of this year's low is unlikely. He pointed out that brokerage target prices are mostly derived from valuation models. Currently, the HSI's P/E ratio is around 11x, sitting at a relatively reasonable midpoint valuation. A drop to 21,500 would imply a further market decline of over 10% and a P/E compression below 10x, which would only be possible under extreme conditions such as a major economic crisis in China or a sharp deterioration in global geopolitical situations. He believes market sentiment may improve as key macro events unfold in November.
*Consumer stocks: high yield but falling prices; utilities' dividend yields unattractive*
High yields on long-term U.S. bonds are beginning to attract investors. Recent auctions of 10-year and 30-year U.S. Treasuries performed well, driving yields lower. Li Ming-tak said it is premature to declare bond yields have peaked, but expects limited room for sharp increases in the short term, likely to remain elevated above 5%. He explained that supply-side factors such as oil prices have made U.S. inflation highly persistent. Although some recent employment data weakened, a single month's soft data is insufficient to reverse the current upward pressure on U.S. Treasury yields. Only consecutive periods of weakening high-frequency data could confirm the end of the rate-hiking cycle.
The 10-year U.S. Treasury, regarded as the most stable asset, yielding over 5%, has significantly reduced the appeal of other dividend-paying assets. On deploying high-dividend stocks, Li Ming-tak noted that selecting individual stocks or sectors directly involves high uncertainty. For example, some consumer stocks appear to have high dividend yields, but this is merely due to falling share prices, increasing stock selection risk. He recommends using high-dividend ETFs to better diversify industry and regional risks. Regarding entry strategies for specific products, Li Ming-tak believes most high-dividend ETFs are now attractive, with overall dividend yields generally above 5%. Among them, CSOP Hong Kong High Dividend (03590), a relatively new listing, targets a dividend yield potentially reaching 7%, and its recent share price has been stable. Conservative investors could consider positioning around the recent low near HK$9.9. The E Fund High Dividend (03483), which primarily invests in the Asia-Pacific region, may require investors to wait for a lower level around HK$18 given the relatively lagging performance of other Asia-Pacific markets. As for CSOP Asia High Dividend (03145), which has already seen some correction and offers monthly dividends, and Value Partners Hong Kong & U.S. Dividend Low Volatility (03488), which focuses on low volatility and more stable underlying asset prices, both are now attractive and suitable for immediate entry.
Regarding individual stocks or sectors, Li Ming-tak used consumer stocks as an example, pointing out that the current consumer market is undergoing two structural changes: 'downgrading consumption' and a shift in demand toward virtual consumption, such as gaming items and model services. Combined with generally disappointing mid-term results, investors should avoid blindly catching falling knives. As for defensive Hong Kong utility stocks, their dividend yields are currently relatively unattractive, with only HKT (06823) worth slight attention. In contrast, mainland banks and insurers offer better long-term income potential. However, taking ICBC (01398) as an example, its current yield barely reaches the 5% threshold, which is still insufficiently attractive. Investors are advised to place it on a watchlist and consider entry only after the share price drops another 5% to 10% for a more ideal opportunity. (nw)
*Li Ming-tak: 24,000 level expected to offer initial support; if broken, could test 23,500*
After plunging over 300 points yesterday to a low of 23,737, the HSI rebounded today, reclaiming the 24,000 level. Li Ming-tak, fund manager at Dashing Asset Management, told Economic Information Daily that he is not overly pessimistic about the HSI's short-term outlook, expecting initial support around 24,000. If the HSI can stabilize above 24,000 for several consecutive trading days, accompanied by market turnover of at least HK$200 billion, it would confirm that the index is unlikely to continue falling in the short term. He noted that Hong Kong's relatively weak performance in October was expected, mainly constrained by insufficient earnings growth momentum among mainland enterprises and pressure on RMB profit translation due to the HKD peg under a strong USD. Additionally, the lack of major catalysts from September to October led investors to adopt a cautious stance, awaiting macro events such as the APEC meeting in November and the U.S. midterm elections, resulting in relatively conservative capital movements. Recently, even strong performers such as Lenovo (00992) and Kingboard Laminate (01888) have corrected, reflecting weak buying interest. If the market weakens further, it may test the 23,500 level.
Regarding CIB International's downgrade of the HSI target range to between 21,500 and 27,000 yesterday, with the lower end even below this year's low of 22,518, Li Ming-tak frankly stated that the probability of the HSI falling to 21,500 this year is extremely low, and even a retest of this year's low is unlikely. He pointed out that brokerage target prices are mostly derived from valuation models. Currently, the HSI's P/E ratio is around 11x, sitting at a relatively reasonable midpoint valuation. A drop to 21,500 would imply a further market decline of over 10% and a P/E compression below 10x, which would only be possible under extreme conditions such as a major economic crisis in China or a sharp deterioration in global geopolitical situations. He believes market sentiment may improve as key macro events unfold in November.
*Consumer stocks: high yield but falling prices; utilities' dividend yields unattractive*
High yields on long-term U.S. bonds are beginning to attract investors. Recent auctions of 10-year and 30-year U.S. Treasuries performed well, driving yields lower. Li Ming-tak said it is premature to declare bond yields have peaked, but expects limited room for sharp increases in the short term, likely to remain elevated above 5%. He explained that supply-side factors such as oil prices have made U.S. inflation highly persistent. Although some recent employment data weakened, a single month's soft data is insufficient to reverse the current upward pressure on U.S. Treasury yields. Only consecutive periods of weakening high-frequency data could confirm the end of the rate-hiking cycle.
The 10-year U.S. Treasury, regarded as the most stable asset, yielding over 5%, has significantly reduced the appeal of other dividend-paying assets. On deploying high-dividend stocks, Li Ming-tak noted that selecting individual stocks or sectors directly involves high uncertainty. For example, some consumer stocks appear to have high dividend yields, but this is merely due to falling share prices, increasing stock selection risk. He recommends using high-dividend ETFs to better diversify industry and regional risks. Regarding entry strategies for specific products, Li Ming-tak believes most high-dividend ETFs are now attractive, with overall dividend yields generally above 5%. Among them, CSOP Hong Kong High Dividend (03590), a relatively new listing, targets a dividend yield potentially reaching 7%, and its recent share price has been stable. Conservative investors could consider positioning around the recent low near HK$9.9. The E Fund High Dividend (03483), which primarily invests in the Asia-Pacific region, may require investors to wait for a lower level around HK$18 given the relatively lagging performance of other Asia-Pacific markets. As for CSOP Asia High Dividend (03145), which has already seen some correction and offers monthly dividends, and Value Partners Hong Kong & U.S. Dividend Low Volatility (03488), which focuses on low volatility and more stable underlying asset prices, both are now attractive and suitable for immediate entry.
Regarding individual stocks or sectors, Li Ming-tak used consumer stocks as an example, pointing out that the current consumer market is undergoing two structural changes: 'downgrading consumption' and a shift in demand toward virtual consumption, such as gaming items and model services. Combined with generally disappointing mid-term results, investors should avoid blindly catching falling knives. As for defensive Hong Kong utility stocks, their dividend yields are currently relatively unattractive, with only HKT (06823) worth slight attention. In contrast, mainland banks and insurers offer better long-term income potential. However, taking ICBC (01398) as an example, its current yield barely reaches the 5% threshold, which is still insufficiently attractive. Investors are advised to place it on a watchlist and consider entry only after the share price drops another 5% to 10% for a more ideal opportunity. (nw)
