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<Research>UBS Adjusts Focus Stock Lists as Uncertainty for HK Stocks to Heighten Next Yr
UBS issued a research report expecting Hong Kong stocks to face heightened uncertainty in a challenging environment next year. The broker set its target for the HSI and MSCI HK at ...
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<Research>UBS Adjusts Focus Stock Lists as Uncertainty for HK Stocks to Heighten Next Yr
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74
 
 

UBS issued a research report expecting Hong Kong stocks to face heightened uncertainty in a challenging environment next year. The broker set its target for the HSI and MSCI HK at 20,000 and 8,400 at the end of next year, reflecting a largely flat index return. With rising geopolitical risks, the equity risk premium (ERP) may expand, posing multiple downward re-rating risks for Hong Kong stocks.

The broker maintains a defensive stance before more stimulus measures are introduced in China, favoring rate-cut beneficiaries, sectors with low correlation to the mainland economy, and certain real estate stocks benefiting from population inflow. Additionally, it remains cautious about Hong Kong retail landlords, mainly due to potential RMB depreciation leading to increased northbound consumption and reduced spending by visitors to Hong Kong.

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However, given that the Fed is expected to cut rates again by a total of 150 bps by the end of next year, the broker preferred rate-cut beneficiary stocks with larger floating-rate debt exposure. In addition, the continuous inflow of high-skilled talent and their families through the Top Talent Pass Scheme is anticipated to support housing demand, providing upside potential for certain real estate stocks.

The broker added CATHAY PAC AIR (00293.HK)  +0.100 (+1.082%)    Short selling $71.21M; Ratio 35.618%   and CKI HOLDINGS (01038.HK)  +0.600 (+1.125%)    Short selling $17.53M; Ratio 10.231%   to its focus stock lists, while removing GALAXY ENT (00027.HK)  -0.300 (-0.920%)    Short selling $68.92M; Ratio 18.327%   and AIA (01299.HK)  +0.200 (+0.354%)    Short selling $575.90M; Ratio 18.809%   . LINK REIT (00823.HK)  +0.400 (+1.214%)    Short selling $34.90M; Ratio 9.339%   and WHARF REIC (01997.HK)  +0.150 (+0.728%)    Short selling $65.64M; Ratio 31.754%   have also been added to the broker's least preferred stock list, alongside MTR CORPORATION (00066.HK)  -0.400 (-1.473%)    Short selling $25.74M; Ratio 5.212%   and CK ASSET (01113.HK)  -0.150 (-0.476%)    Short selling $17.24M; Ratio 6.331%   .

The updated focus stock lists for Hong Kong stocks by UBS are as follows:

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Stock | Investment Rating | Target Price

Most Preferred Stock List
HENDERSON LAND (00012.HK)  -0.050 (-0.204%)    Short selling $21.60M; Ratio 23.840%   | Buy | $30
SHK PPT (00016.HK)  -0.550 (-0.721%)    Short selling $19.76M; Ratio 5.805%   | Buy (Key Call Buy) | $102
PCCW (00008.HK)  -0.030 (-0.706%)    Short selling $4.57M; Ratio 18.636%   | Buy | $5
BOC AVIATION (02588.HK)  -0.250 (-0.417%)    Short selling $810.80K; Ratio 1.273%   | Buy | $77.9
*CKI HOLDINGS (01038.HK)  +0.600 (+1.125%)    Short selling $17.53M; Ratio 10.231%   | Buy | $73
*CATHAY PAC AIR (00293.HK)  +0.100 (+1.082%)    Short selling $71.21M; Ratio 35.618%   | Buy | $10.8
SANDS CHINA LTD (01928.HK)  -0.440 (-2.289%)    Short selling $211.59M; Ratio 35.024%   | Buy | $24.8

Least Preferred Stock List
MTR CORPORATION (00066.HK)  -0.400 (-1.473%)    Short selling $25.74M; Ratio 5.212%   | Sell | $21.6
*LINK REIT (00823.HK)  +0.400 (+1.214%)    Short selling $34.90M; Ratio 9.339%   | Neutral | $39.4
*WHARF REIC (01997.HK)  +0.150 (+0.728%)    Short selling $65.64M; Ratio 31.754%   | Neutral | $20
CK ASSET (01113.HK)  -0.150 (-0.476%)    Short selling $17.24M; Ratio 6.331%   | Neutral | $31
*Newly Added
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-11-25 16:25.)

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