Securities: Seesawing amidst lowering turnover
The HSI retreated to as low as 24,600, mostly due to profit taking as there were no major new events. The subsequent bounce back to c.25,000 was on a lower turnover. During the past two weeks, sectors that outperformed include property management, home appliance, industrial, beer and e-commerce. Sectors that underperformed included Macau gaming, retail, brokerages and technology hardware. This is not surprising as the relatively riskier sectors are more vulnerable during a profit taking. We believe the market will continue to focus on the uncertainty brought on by the worsening relation between US and China. The resurgence in COVID in Hong Kong should be manageable as its impacts are more or less digested by the market. We continue to prefer domestic recovery, structural growth and A-share relate sectors. Sectors that we prefer include Food & Beverage, Dairy, Beer, e-Commerce, Internet, Education, Property Managment, Brokers and Insurance. Our 12 month HSI target is 28,600.
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