标题: CICC English Daily-081110-How to Gauge the Flow of Funds in Hong Kong, A Mone [打印本页] 作者: Wynnel 时间: 2008-11-11 17:34 标题: CICC English Daily-081110-How to Gauge the Flow of Funds in Hong Kong, A Mone
Pls see attached the full PDF research report, below is a highlight:
Strategy & Macro How to Gauge the Flow of Funds in Hong Kong Page 2 A Monetary Aggregates Approach Flow of funds is an important factor influencing stock market movements in Hong Kong, as overseas investors are major players in local capital markets. We estimate that a net inflow of funds amounting to HK$90bn was seen in September, reversing the outflows totaling HK$581bn in the previous 10 months. The inflow of funds appears to have continued in October as reflected by a strengthening of the HKD and an easing of HIBORs. However, we do not see a consistent relationship between movements in the HKD exchange rate and the Hang Seng Index. Hong Kong Economy: HSBC Leads Prime Rate Cut Page 5 But No Help to the Housing Market With local interbank rates easing back to their normal levels, HSBC announced on November 7 it is cutting its prime lending rate by 25bp to 5%, the first reduction since March. We expect other banks will follow suit. Nevertheless, banks have recently tightened their mortgage loan policies, leading to further worsening of housing market prospects. We now look for another 25% decline in residential property prices from now until June 2010, representing a 37% fall from the last peak in March this year. Sector Updates 1~3Q08 Property Sector Review Page 9 The pace of decline in property sales picked up and prices fell for the first time; leading indicators still show downward pressure on property prices and property developers face an increasing burden. The property sector is expected to see slack performance and is unlikely to pick up in the short term. In the A-share market, range trading is advisable but long-term investors can accumulate undervalued stocks and hold for a longer term. In the HK market, investors should be patient and sell on highs. We still prefer industry bellwethers as they enjoy greater valuation premiums due to better liquidity and risk tolerance.
