New | Bulls expected to step back into HK stock market
All eyes on newcomer HTSC while investors wait for mutual fund and Shenzhen links to take off
With the debut today of HTSC, or Huatai Securities, closely watched, brokers and analysts expect the share market to resume its upward trajectory as key banking and insurance stocks steady after last month's choppy trading.
Market watchers say the liquidity-driven rally may get a fresh boost from the upcoming mutual fund recognition programme that will allow funds in Hong Kong and in mainland China to sell up to 300 billion yuan of products in each other's markets.
The market is also positive over an anticipated link-up with the technology-heavy Shenzhen exchange, similar to the stock connect scheme with Shanghai launched in November last year.
Investors would focus on quality names in the financial sector as Beijing was expected to roll out more easing measures that should boost sentiment and liquidity, said Grace Tam, a global market strategist at JP Morgan Asset Management.
Financial stocks finished mostly weaker last month, weighing down the Hang Seng Index. The blue-chip index dropped 2.5 per cent on the month, in a sharp reverse to April's 13 per cent advance.
Ben Kwong Man-bun, a director at brokerage KGI, said heavyweight financial stocks such as Ping An Insurance (Group) and China Construction Bank Corp remained the top picks of institutional investors as continuing reforms in mainland China's financial market created opportunities for big players.
"Demand for blue-chip financial companies remains intact, especially after a mild correction in May," Kwong said.