Asia 290409 Mid Day Wrap

Afternoon!

First of all, my apologies for missing out the closing wrap for last night and morning wrap for this morning in Asia.

Coming towards midday for ASX and near opening for HSI, I would like to give a few brief comments over the marke today.

Some sense of optimism came by last night with the US giving suprising upside data over consumer sentiment that lifted the market up most of the time over the session. Furthermore, S&P/ Cash Shillers index has also indicated slowdown in the housing freefall, after dropping 20% from the peak, which points towards a possible bottoming in the housing prices. However, bank fears once again came in as a theme towards the end of the session over BoA and Citigroup's fear for the need of further capital raising to weather through this credit crisis. Swine flu may have continued to taking leads to drag the market lower despite the unexpected data.

Taking cue this morning, I'd have believe that financials would have followed lead and fall on worries over further raising of capital. This implies there are increasing cloudiness over the stress test result, as per discussed by us in earlier post. As in our previous post, we continue to maintain this bearish view over the current situation, and believe more bad debts will arise as a result of consumer credit problems.

Swine flu effect may probably continuing weighing on the market, with commodities, consumer cyclicals (airlines especially) and retails to further hit lower. We continue to favour defensive stocks, and especially healthcare names.

Taking leads from overnight, I believe the market will follow similar pattern, with all ending roughly 1% lower today. However, we may expect HSI to have a technical rebounce after 3 consecutive down session, we may expect it to finish flat or slightly up, within 1%.

Last comment, names we favour include Geely Auto (175.hk), Tsingtao (168.hk) and CLP Holdings (3.hk).

Thats it today. Happy trading!

ongy out.