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Stanley Chik: BABA-W May Become Darling of Southbound Funds
Recommend 43 Positive 67 Negative 33 |
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Stanley Chik, a research head at Bright Smart, commented that the Hong Kong bourse ran dismally. The HSI opened 182 pts lower yesterday without turning north, and then slid more than 376 pts at one time, hitting the lowest at 17,067. The benchmark index rested at 17,196, a slump of 247 pts or 1.4%, while the HSTECH fell by 1.46%, closing at 3,436, with active market turnover, amounting to $133.665 billion. Resource stocks hampered the local market, with PETROCHINA (00857.HK) plunging almost 6.2% to be the worst performer, and SINOPEC CORP (00386.HK) and CNOOC (00883.HK) also cratering 5.6% and 3.8% respectively. Pharmaceutical HANSOH PHARMA (03692.HK) also tumbled more than 6%, but WUXI BIO (02269.HK) and WUXI APPTEC (02359.HK) were the better performers, up 2.5% and 3.9% respectively. For individual stocks, Chik said BABA-W (09988.HK) is worth noting in the short term. Although competition in the industry is expected to escalate and the business outlook remains to be seen, the short-term positives come from the Southbound Stock Connect, which added BABA-W, meaning that mainland investors will be able to trade BABA-W through the Southbound Stock Connect. Besides, there was good news that BABA-W has its Taobao officially tapped into WeChat Pay, which bodes well to the long-term development of the business. Chik recommended to buy BABA-W shares at the current price for short-term speculative deployment. If the stock is favored by the Southbound funds, the stock price is expected to challenge the top of the sideways zone around $85. (The author is a SFC licensee) AAStocks Financial News |
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