H-Share Dynamic Valuation Approaches Financial Tsunami Low Point

Hong Kong stocks rebounded slightly yesterday, but did not make up for the previous day's gap, and the deal did not match.

According to the industry, Hong Kong stocks are now close to the low level of the financial tsunami. There may be a big rebound in the year. But in the near future, the adjustment situation is still unclear, and we need to pay close attention to the trend of the euro area.

The Hang Seng Index of Hongkong was in a narrow wave dynamic potential after it opened slightly yesterday.

Yesterday afternoon, the mainland stock market suddenly withdrew more than 1% of the closing market, plus the successful sale of a piece of land on the top of Hongkong's local peak, which stimulated the market to expand to nearly 300 points, and successfully broke through the twenty thousand pass, the highest ever seen 20013, and finally closed at 19944 points, up 229 points, or 1.22%, but the whole day turnover still dropped to HK $57 billion 670 million.

The index of state-owned enterprises (H-share index), reflecting the performance of Chinese enterprises, rose 193 points, an increase of 1.7%, closing at 11426 points.

The biggest support for HSI comes from the rebound of the euro.

Huang Wenshan, a Hong Kong equity strategist at the Bank of Hong Kong, told the first financial daily after the closing of the market that the dollar index was down, indicating that the market's risk aversion was slightly lower.

Faced with the performance of Hong Kong stocks in recent days, Zhang Chengliang, executive director of sagacious financial Asset Management Co, believes that the decline in H-share index has been exaggerated compared with other emerging markets, and there are indications that the Hongkong market may be close to the bottom of the adjustment.

He said that from the valuation point of view, the forecast price earnings ratio of the H-share index has dropped to about 11.76 times, which is not far from 10 times that of the financial tsunami.

"If we take into account the economic recovery since the financial tsunami and the improvement of the market environment, the current PE should be about 10 times higher."

He said.

From the point of view of capital flows, although the Hong Kong dollar has suddenly plummeted against the US dollar recently, according to the interbank deposit and market interest rate provided by the Hongkong monetary authority, Zhang Chengliang has not yet shifted the trend of mass pfer to Hongkong at present.

Another hedge fund manager told this newspaper that, in fact, the possibility of large scale capital leaving is relatively small.

"Because the Hong Kong dollar is linked to the US dollar, there is not much difference between buying the Hong Kong dollar and buying the US dollar, and in addition to the freedom of access to capital in Hongkong, investors can enter Hongkong at any time.

The hedge fund manager said, "the Hongkong market's collapse is more likely to be dragged down by A shares. If it is not for the A share market, Hang Seng is not what it is now."

Zhang Chengliang believes that even if the adjustment of the mainland market may continue, the negative impact on Hong Kong stocks may be further weakened in the future.

He said that he remained optimistic about the 17000 point of H-share index.

But he also said that investors need to look further in the European market to avoid a recurrence of the market.

Huang Wenshan remained pessimistic.

He believes that the EU can not solve the debt crisis alone.

He said that once speculators find weaknesses in financial markets, they will use them to the extreme.

While looking at the European market, Hong Kong equity investors also need to pay attention to the performance of the mainland market.

Just yesterday, after the media disclosed the news of Morgan Stanley's proposal to increase holdings of Chinese banks, mainland bank shares rebounded across the board, indicating that the strength of the mainland's economy is growing in the Hongkong market.