Share prices closed at yet another record high as strong gains in China financials, coal stocks and oil firms helped the key index break the 29,000 points level. Liquidity inflows due to China's expanded qualified domestic institutional investor (QDII) program and a fresh high on the Shanghai bourse helped H-shares maintain their momentum. The Hang Seng index closed up 563.69 points or 1.97% at 29,133.02, off a low of 28,609.68 and just a tad off the new all-time-high of 29,133.76. Turnover was heavy at 178.71 billion HKD. The Hang Seng China Enterprises index closed up 932.13 points or 5.1% at 19,218.05, slightly off a new all-time-high of 19,219.44.
Coal stocks surged and hit new all-time-highs, with China Shenhua Energy outperforming after UBS raised its target price on the stock to HKD101.00 from HKD35.15 citing strong demand for coal. China Shenhua closed up 11.2 HKD or 24.01% at HKD57.85, off an all-time-high of HKD57.95.
Oil stocks were higher after crude prices rose overnight. PetroChina was up 86 cents or 5.9% at HKD15.44, with investors ignoring news that US Investor Warren Buffett's Berkshire Hathaway cut its stake further in China's largest oil producer to 3.1%. CNOOC was up 72 cents or 5.6 pct at 13.58 and Sinopec rose 1.16 HKD or 11. 39% to HKD11.34.
The market has gone crazy. Funds and even retail investors ignored all fundamentals and just kept on buying as if there is no tomorrow. I feel that a major correction is just around the corner and this is definitely not the time for new investments as nearly all stocks are already overbought. Anyone who has just joined the market now should play for the short term and should lock in profits quickly. "I expect the market to cool down a bit next week during (China's) 17th Communist Party Congress as the Chinese government may announce stronger austerity measures to cap growth in housing and stock markets," said Castor Pang, a strategist at Sun Hung Kai Financial group. The market correction is imminent, therefore please buy cautiously!
3 comments:
My name is Eric from Johor. just came across your blog and found it very useful especially China warrant. Would you mind advise me on whether is it time to buy China warrant and wat r the cunters. Thanks in advance.
The Chinese gomen is forcing it's not so wise citizens to hedge runaway inflation in the stock market that many of them know little of.
Thanks for your comments. The HSI has risen pretty fast since the last correction on 17 August. At the current level, many share prices are at the peak. The chances of going higher is definitely much lower now.
I reckon that it would be better to buy when the prices drop lower. Pls refer to my latest post for a rough idea.
You can probably start buying when HSI is below 28,000 points and average downwards later on.
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