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Will the market tank tomorrow?

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  1. #11

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    For anyone who doubts that China is not essentially shut down now they only have to look at pollution levels.
    https://waqi.info/#/c/26.377/114.596/6.7z

    Or you could have just looked out the window over the last few months and seen how clear the view was. Mind you today is a bit overcast with the rainy season.
    mrgoodkat and Fenix2 like this.

  2. #12

    Join Date
    Feb 2019
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    578

    Link REIT was down 10%!

    Or as optimists are saying, "Link REIT dividend yield is up 10%!"


  3. #13

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    Quote Originally Posted by GentleGeorge:
    Link REIT was down 10%!

    Or as optimists are saying, "Link REIT dividend yield is up 10%!"
    This one was very puzzling to me. I guess rising / falling tides?

    The big question in my mind is not the drop in price of the stock(s) but if people are willing to increase their exposure to HK stocks by buying the "dip".

    Covid was considered an issue that was solvable in the near future. But this time around?

  4. #14

    Join Date
    Feb 2019
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    578

    Also confused. I guess they are pricing in mall carnage this summer?

    Personally if it brings mainlanders back medium-term, I think it is net positive for link.

    I bought some.


  5. #15

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    Sep 2019
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    2,778
    Quote Originally Posted by GentleGeorge:
    Also confused. I guess they are pricing in mall carnage this summer?

    Personally if it brings mainlanders back medium-term, I think it is net positive for link.

    I bought some.
    Good luck. I’m not sure your time horizon, but you’re assuming people will have the capacity and be in the mood to spend, there won’t be some emigration, and the political and security situation will be stable enough for new colonists and tourists to want to come and have been coming a while to be reflected in stock prices at the point of your exit. To say nothing of whether the US-Sino situation escalates. Plus the not small assumption it was fairly priced to begin with. Could be a good buy, but I’m guessing not a gamble many people are willing to take.
    Gatts and DennisMilano like this.

  6. #16

    Join Date
    Nov 2010
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    HK
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    Defensive is the new position for HK-held assets.

    HSI will continue to decline as Trump uses HK as part of his anti-China strategy until November election and China responds by implementing the various national security apparatus (presumably converting HK-stationed PAP into visible roles on the streets) & cracking down on summer protests with impunity.

    If we see sanctions applied as planned by US against individuals and Banks doing business with related-parties we may see significant stress on HK-based banks and the banking system overall (which has been building for some time over last year).


  7. #17

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    We are still very high above the levels of 2017 Long way to fall. Long live Xi, who is making 2800 more affordable for poor gwailos


  8. #18

    Join Date
    Nov 2014
    Posts
    413
    Quote Originally Posted by shri:
    This one was very puzzling to me. I guess rising / falling tides?

    The big question in my mind is not the drop in price of the stock(s) but if people are willing to increase their exposure to HK stocks by buying the "dip".

    Covid was considered an issue that was solvable in the near future. But this time around?
    I think the drop in Link was pretty muted. Trading in the 60s is still a yield under 4.5%. I think the reason for purchasing Link is not so much for the cash flow it generates which is especially small compared to REITs elsewhere - in the US stock market similar market cap REITs like SPG (I am not invested in them) are yielding 15% (current share price about 1/3 of what it was previously).

    My guess on why Link wasn't hurt too much by covid is that Link's valuation trades on its asset value and not so much its cash flows. Fleecing Gaw Capital in 2017 was very smart and left them with a significant cash pile but unfortunately they bought assets in Australia in what might be peak valuation.

    More importantly, China reported a pretty big economic hit (which was expected 2 months ago but then was revised to a smaller hit when people thought pollution numbers looked good) and the revised high economic projections were marked down again. I think that's a big part in why Tencent, Baba, AIA, Meituan, HSBC, Xiaomi, etc dropped significantly. I think there was a small run up recently from the lows because investors thought economic activity in China had picked up after people started reporting macro data on pollution and stuff like that. Link dropped 10%, sure, but it only dropped 3% from the previous low of 62.

  9. #19

    Join Date
    May 2019
    Posts
    432

    I've got a long term horizon (well over 20 years) and am pretty bullish on the HSI. I bought some yesterday. Both Xiaomi and 2800. Would have bought more Baba if I'd been paid. I mean for the freedom of HK, the new laws are a disaster, but "the West" has turned it's back on much worse than this over the years, this will be no different IMO in time (although there will be a lot of sabre rattling over the short term).

    Half cut prediction time: this year or next the PRC will unilaterally announce the "extension" of 1C2S after the new national security law is up and running.

    GentleGeorge likes this.

  10. #20

    Join Date
    Nov 2014
    Posts
    413
    Original Post Deleted
    I think SPG is the largest traditional REIT (as in they're dealing with malls, commercial office, etc. but not telecomm/infrastructure stuff).

    Fair point on the yield comparison and agree on the balance sheet differences. I had written a bit on it earlier but thought I was getting too long winded so I removed it. I do want to emphasize that I'm not recommending SPG to anyone.

    I'm also not saying that Link's share price is going to crash and provide very high yields. I just think that the 10% drop was not really a big drop given the context surrounding China's economic slowing going forward, the previous/current quarter's business activity reductions due to covid, and all the other difficult news.
    jrkob likes this.

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