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Monday, September 23, 2019, 19:39
Hong Kong stocks slip for sixth straight day
By Edith Lu
Monday, September 23, 2019, 19:39 By Edith Lu

Hong Kong stocks deepened losses on Monday after the benchmark Hang Seng Index was the worst market performer in the world last week.

At the end of the day, the HSI was down 213.27 points, or 0.81 percent, to 26,222.4, its sixth straight losing session. The Hang Seng China Enterprises lost 87.73 points, or 0.85 percent.

At the end of the day (Monday), the HSI was down 213.27 points, or 0.81 percent, to 26,222.4, its sixth straight losing session

Hong Kong’s stock market has underperformed other Asian markets this year as local unrest and the trade tensions between China and the United States have dragged shares lower.

However, it is expected that shares will not see further sharp declines unless the local situation worsens, said Tai Hui Cheung-tai, chief market strategist at JP Morgan Asset Management Asia.

“The current valuations of Hong Kong stocks are quite low and attractive, but many investors still hold a wait-and-see approach,” he added.

Hui suggested investors increase their shareholdings step by step, as once the situation improves, the stock market will respond rapidly.

But seeing a dim global investment market, Hui believed it will be a better idea to move away from stocks and turn to bonds and other fixed-income products in the fourth quarter of this year in order to beat economic uncertainties.

Though a global economic slump is not likely in the next 12 months, the US Federal Reserve and the market diverge significantly on their rate cut projections, which may cause uncertainty, Hui said.

The Fed cut interest rates by a quarter of a percentage point on Wednesday, its second cut since late July, which the market expected. But the Fed offered few indications that further reductions are ahead because board members are split on what to do next.

Hui forecast China could set a lower economic growth target of 5.7 to 6.5 percent in 2020 and the yuan will hover between 7 and 7.2 per US dollar, depending on the US dollar and the negotiations between the two economies over their ongoing trade disagreements.


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