Strategy Note /
China

CN : Strategy - Perfect storm: confluence of bear factors?

    Mark Po
    Mark Po

    Research Analyst

    CGS-CIMB
    25 March 2022
    Published by

    The recent correction in the HK market is due to various negative factors, such as increasing concerns about global liquidity risk (partly due to geopolitical issues), the recent COVID-19 situation (in China and HK), and potential US sanctions on Chinese companies. The HSI is a global underperformer on a YTD and MTD basis. The market is expected to remain volatile given geopolitical issues, concerns about global liquidity movement, and a potential downward revision in net profit forecasts. However, the easing of some global liquidity indictors may support a further rebound after today’s strong performance. Also, the pro-growth policy of the Chinese government is expected to provide support for Chinese companies and the HK market. The analysis in this report is based on industry and macro figures and may differ from the views of individual analysts, in some cases.