◆ ‘Unlimited Bond-Buying Programme’ reverse market downtrend

◆ Heavily-shorted stocks recover

“Investors should

prepare bullets for

the next big move”

By Joseph Lau

MARKET RECAP

Attribute to the weakness of

Mainland A-share market,

Hong Kong equity market kept

diving for the current two

weeks. Hang Seng Index break

20000 points on the downside

but start finding support on

19000 level. The majority of the

top constituents loser came

f rom ind iv idua l s tock .

CHALCO(02600) losed over

10% due to poor earnings.

CITIC Pacific (00267) showed

huge selling pressure and no

sign of rebound due to under-

weighting of former major

shareholder.

Although the major index

showed an downtrend during

most of the time, market is

again stimulated by the news

from Europe. The ‘Unlimited

Bond-buying programme’ is an-

nounced at the end of the week,

immediately booted the US and

Europe stock market, causing a

big gain of HK market in a sin-

gle day.

What’s now?

Our market timing model

for both HSI and HSCEI shows

a ‘NEUTRAL’ signal. Investors

should keep searching strong

industry group and individual

stocks. An uptrend of market

might be confirmed within this

week. Index may surge over 3%

with huge increasing volume in

a single day. Convert weak per-

former into cash. Keep enough

bullets for the next big move.

HSCEI broke new low due to A-share

Heng Sang Index start turning up

4

What is a convertible note?

In finance, a convertible note

(or, if it has a maturity of

greater than 10 years, a con-

vertible debenture) is a type

of bond that the holder can

convert into shares of com-

mon stock in the issuing com-

pany or cash of equal value,

at an agreed-upon price.

Borizon

Market Update

5

Issue 8 Sept 2012

INDUSTRY COMPARE

Hong Kong rental sector

performed far better than other

industries due to the crazy move

of Winsor properties(01036).

The expect of capital injection

from major shareholder thrust

the stock price to new high.

Apart from this special event,

other companies in local prop-

erty sector perform well. Attrib-

uted to rise in property value

and rental income, WHARF

(00004) and Hysan Develop-

ment(00014) is immune from

market downtrend.

This week, the heavily-shorted

individuals can eventually bene-

fited from the good news from

Europe. Yanzhou Coal (01171)

start rebounding due to the

cover of short position. Such

move occur in other popular

short target such as Zoomlion

(01157), CNBM(03323) and

Weichai Power(02338).

What now?

Focus on strong movers and

wait for proper breakout.

Winsor properties (01036) doubled in two days

Yanzhou Coal (01171) slides

REITs— Winners of this week

Strongest 5 industries

1) i-phone related

2) Local property

3) REITS

4) China property

5) Utilities

Weakest 5 industries 1) Marine 2) Resources 3) Charcoal 4) Automobiles 5) Highway

Market Update