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Hong Kong Stocks Closed on HK Establishment Day: HK50 Going to Open High on July 2nd

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Hong Kong Stocks Closed on HK Establishment Day: HK50 Going to Open High on July 2nd
Independent Analyst: Zhen QuanXi
Date: 30 June 2020


Yesterday was the last delivery day of the Hong Kong stock Hang Seng Index, and today the market will trade the July Hang Seng Index Futures Contract.

As we all know, June has passed. Start from today, Hong Kong Stock Exchange (HSE) -listed companies will announce the results of the first half of the year, and the HSE stipulates that all listed companies must show the financial health check report of the first half to the stockholders. So, investors can determine whether the listed companies are worth investing in, and this is a hard rule that is binding on all listed companies.

Many of the listed companies in HSE are Chinese companies or companies whose primary place of business is in China, such as Tencent. Although it is a company controlled by a South African consortium listed in Hong Kong, its headquarters is in Shenzhen, and its primary market target is also China. At the moment, globally, China is the country with the best control of the pandemic, and the economy has restarted since April, so it predicts that Tencent’s performance will do quite well, and Tencent is the stock with the most significant proportion of Hang Seng Index constituent stocks. Rising Tencent stock prices will inevitably drive the Hang Seng Index up.

Tencent is only one concept of China’s stocks. The constituent stocks of the HSI also include Alibaba, Ping An Insurance, JD.com, NetEase Inc, etc. As China’s blue-chip high-performance stocks. The performance of these companies in China in the first half of the year is also bright. A newly listed Chinese company “Meituan” has brought the myth of the market value of over one trillion Hong Kong dollars into reality. Even the old Hong Kong local construction industry-leading stock “Sun Hung Kai Properties” which has listed in HSE for decades, its market value is only 600 billion.

Another Hong Kong Stock Exchange market with the second-largest share of the Hang Seng Index has declared its astonishing performance in the first half of the year because Alibaba and NetEase/JD.com are secondary listings from the United States to Hong Kong. Also, Meituan, which just newly listed, has broken through the trillion-dollar market value. The astounding trading volume stimulated by these companies after the listing has also brought the significant performance to the Hong Kong Stock Exchange, which predicts that the upcoming second half closing performance will drive the Hang Seng Index up, and the probability of the HK50 to rise sharply in the next half month is high.

Trading Tactic:
Today is the last trading day of June before the holiday of Hong Kong Establishment Day, and it does not rule out Hong Kong stocks will have a callback under the pressure of holiday hedging factors. Patiently wait for the stable downward callback, it is the best opportunity to buy at a low position. If you miss the chance to buy, you can buy boldly before the HK50 closes tonight and hold the position. After the holiday, the HK50 will rise higher and open high, instantly earn profit, then close position.

Of course, mid-term investors can wait patiently for a callback and rediscover the ideal opportunity to open a mid-term position order.

Technical analysis:
In the mid-term, investors can look up for the first target at (25453), the second target at (25880), and the third target at (26133).



Disclaimer:
All the information mentioned above only represents the view of corresponding PT. Mentari Mulia Berjangka. The information, opinions and analysis contained herein are based on sources believed to be reliable but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. PT. Mentari Mulia Berjangka is not responsible for the content of any analysis, advice, comment, suggestion, research report or market data in this article and link to third-party resources.