NewBattered markets, a ‘blood on the streets’ mood, make this a great opportunity to buy HK companies, analysts say
Strategists advise picking up shares of industry leading Hong Kong companies with high-dividend payouts
Acute volatility in the stock and currency markets in China, not to mention slumping crude oil prices, since the start of the year is not necessarily the precursor of another imminent global financial crisis, some analysts say, acknowledging that their optimistic views are becoming increasing rare amidst growing bearishness.
While more downside to share prices as a result of the volatility is possible, especially since further devaluation of the yuan is widely expected, it is time for investors to seek opportunities to buy rather than sell Hong Kong-traded stocks, they argued.
“China is not on the verge of collapsing, the sell-off will soon appear as what it really is, a scare,” said AXA Investment Managers’ analysts in a note. “Growth is slowing, profits are squeezed and deleveraging is painful, yet this is neither new or unmanageable.”
Banny Lam, co-head of research at ABC International Securities, said recent economic indicators, while not bullish, do not point to a global crisis.
The nod to accumulate Hong Kong stocks runs counter to the views expressed recently by a number of renowned economists at leading investment banks, who urged investors to lower their exposure to equities, amid what they believe is a darkening period ahead for global asset prices.
Among them, Andrew Roberts, RBS’ research chief for European economics, warned of a “cataclysmic year” taking shape, as China could be the black swan to trigger the next global financial crisis. Roberts said in a note Tuesday investors should “sell everything except high quality bonds” as stock markets could plunge up to 20 per cent and oil could halve to around US$16 a barrel this year.