We maintain a BUY on both Cheung Kong (1) and Henderson Land (12).
Market Trend Neutral
Support 19,000
Resistance 20,500
Analysis
Hong Kong: A sharp decline in A-share market will definitely put selling pressure on H-shares before the Chinese New Year. Our target of 9,000 for HSCEI remains unchanged. Upstream oil companies like PetroChina (857) will be more defensive on the back of a rebound in crude oil price and attractive dividend yield. Maintain a BUY on PetroChina with price target of $11.0. Stronger-than-expected fourth-quarter GDP growth in US implied a little chance of rate cut in the first half of 2007 that may not be good news to Hong Kong property developers given the currency peg system. However, we maintain a BUY on both Cheung Kong (1) and Henderson Land (12) due to their aggressive investments in China’s property market and larger share price discount to NAV compared to their peers.
Market Trend Neutral
Support 19,000
Resistance 20,500
Analysis
Hong Kong: A sharp decline in A-share market will definitely put selling pressure on H-shares before the Chinese New Year. Our target of 9,000 for HSCEI remains unchanged. Upstream oil companies like PetroChina (857) will be more defensive on the back of a rebound in crude oil price and attractive dividend yield. Maintain a BUY on PetroChina with price target of $11.0. Stronger-than-expected fourth-quarter GDP growth in US implied a little chance of rate cut in the first half of 2007 that may not be good news to Hong Kong property developers given the currency peg system. However, we maintain a BUY on both Cheung Kong (1) and Henderson Land (12) due to their aggressive investments in China’s property market and larger share price discount to NAV compared to their peers.