PWLLAI 10 Jan 2007 1 HONG KONG STOCKMARKET OUTLOOK 2007 By Peter W L LAI.
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Transcript of PWLLAI 10 Jan 2007 1 HONG KONG STOCKMARKET OUTLOOK 2007 By Peter W L LAI.
PWLLAI 10 Jan 2007
10
First 10 biggest world stock market capitalization and PE
Market Cap PEYTD
chanage
As of 13 Nov 2006 US$bn x %
United States 17,047 21.19 8.53
Japan 4,684 35.86 -5.37
United Kingdom 3,640 17.69 19.2
France 2,361 14.59 26.87
Hong Kong 1,763 13.91 52.82
Germany 1,634 13.94 27.07
Canada 1,432 16.17 12.34
Switzerland 1,153 18.11 44.58
Italy 1,017 13.99 25.2
Spain 908 13.72 35.67
PWLLAI 10 Jan 2007
11
First 10 biggest world stock market capitalization and growth
As of 30 Dec 2006 US$bn %
Market Cap
2006 performance
United States 17,417 10.9
Japan 4,873 (1.6)
United Kingdom 3,798 24.4
France 2,506 34.7
Hong Kong 2,132 84.8
Germany 1,755 36.5
Canada 1,472 15.4
Switzerland 1,199 50.4
Italy 1,070 31.7
Spain 950 41.8
PWLLAI 10 Jan 2007
12
Asian individual stock market capitalization and PE
Market Cap PEYTD
chanage
As of 13 Nov 2006 US$bn x %
Japan 4,684.1 35.86 -5.37
Hong Kong 1,762.7 13.91 52.82
South Korea 792.9 12.25 14.1
India 766.2 24.61 40.3
China 669.8 29.74 111.34
Taiwan 592.9 19.52 15.01
Singapore 328.5 13.41 33.7
Malaysia 215.5 17.16 20.43
Thailand 144.2 9.91 20.25
Indonesia 124.7 25.85 54.4
PWLLAI 10 Jan 2007
13
First 10 biggest Asian stock market capitalization and growth
As of 30 Dec US$bn %
Market Cap 2006 performance
Japan 4,873 (1.6)
Hong Kong 2,132 84.8
China 950 199.8
India 816 49.5
South Korea 815 17.3
Taiwan 650 26.1
Singapore 364 48.1
Malaysia 235 31.4
Thailand 138 14.9
PWLLAI 10 Jan 2007
14
Economy Outlook I
• INTERNAL:• Minimum intervention/maximum support from HKSAR
• Remain world’s most free city (for 15 years from 1991)
• Positive and Encouraging economic figures• --improving job market, income, birth rate…….
• Abundant inflow of fund• --more IPOs…..
• Positive impact from strong economic growth of China
ECONOMY WILL CONTINUE TO BOOM
PWLLAI 10 Jan 2007
15
Economy Outlook II• REGIONAL• China• Economic Policy Reform
• – money supply/RMB re-valuation
• Stock reforms
• Potential tax reforms
• Industrial reform – oil sector/telecom sector
• Policies to Hong Kong
• -more open and supportive
• S E Asian countries• -political stability
• -economic development (competitors?)
PWLLAI 10 Jan 2007
16
Economy Outlook III• GLOBAL:
• US Economy• -- interest rate drop (?)
• -- sustain healthy growth
• Oil price• – drop (?)
• Political stability • – US Vs Terrorists
• Relations among big countries• -- US, Russia, China, Euro, Middle East
(Iraq/Israel/Iran…….)
PWLLAI 10 Jan 2007
17
Risks
• Liquidity Flows• Outflow of fund• Large scale profit-taking
• Epidemic Diseases
• Natural Forces• Tsunami/Earthquake/Typhoon
• Terrorists Attacks
PWLLAI 10 Jan 2007
18
CONCLUSION• 1) INTERNAL
• GOOD
• 2) REGIONAL
• STABLE
• 3) GLOBAL
• UNCERTAIN
• UNDER NORMAL CIRCUMSTANCES
POSITIVE OUTLOOK IN HONG KONG ECONOMY
• Stock market forecast:
• --liquidity driven
• --news oriented
• --sentimentally driven
CHOPPY
PWLLAI 10 Jan 2007
19
RECOMMENDATIONS
• Property• Cheung Kong (1)• Sun Hung Kai (16)• New World (17)
• Telecommunications• China Tel (728)
• Conglomerates• Hutchison (13)
• Bank• China Construction Bank (939)• Bank of Communications (3328)