Is there a need to panic for HSI?I get several questions regarding HSI , 2800 tracker fund ETF, etc and it seems some are panicking why the market is down for the last week or so.
Firstly, the bearish trend has ended (hopefully) and we are up almost 33% from the low until the recent pull back of 8% which is quite normal for any stock market.
Already, we know that the CCP has ushered many initiatives to prop up the stock market and the property market, though some analysts feel it is not enough.
It takes time for these measures to see its effects so if you believe that this bull run is here to stay, then this drop of 8% presents a buying opportunity. If not, if you are one of the naysayers who feel that China/HK is uninvestable with its never ending bad news, please choose other markets that fits your investment horizon, risk appetite, etc.
It is possible for the price action to return back to the bearish trend line though I think it is not probable as that would defeat all the hard work the government has done thus far. From relaxing its visa regulations to many countries to lowering the mortgage tax from 20% to 15%, limiting short selling and many others, we can see that the CCP means business this time. Maybe their speed is not to the liking of what we want - a bazooka of sort.
My feel is the property sector will consolidate for a few years before we see a possible uptick as there are enormous surplus units that need to be settled. The property market remains sluggish and that is why I am not going in to pick up property investment stocks yet.
Yes, cheap valuation can remains cheap for a long time but we had already witnessed the rise of many tech stocks rallying in the past 6 months - JD.com, Tencent, Meituan, Xiaomi, etc. They will be the forerunners followed by the consumer cyclicals later on . Rising tide will lift all boats but not at the same level, imo.
I am vested so please DYODD
