Asia Morning Analytics: 190110 Asia Open

Morning,

Given US closed with Martin Luther King Holiday, lead will not be as strong, as Asia will take some cues over the developments from Europe. We may also takes some cue from the currency market, which shows a slight decline on the dollar against a broadbase of currencies.

Highlighting key development includes:

1. Europe gained over M&A buys with Cadbury up 1.3% and International Power Plc up 5.1%.
2. Crude and commodities poised for a small rebound, with UK's house index posing a stronger number and Pounds gained over risk appetite.
3. However, PIGS sovereign credit problems remains unresolved, and continue to be on the spotlight, posing downside risks on the market in the longer term.

On the Asia side of development,  NDRC's approval over continual support on strategic emerging industries seems to provide further guidelines over what the government wants to pursue over the near term.  Whilst according to PBOC, Shanghai's personal consumption loan has reached 481.39 billion, reaching a historical high.

In terms of day view ahead for HSI, would continue to see some technical buying support, despite ending with negative sentiments from previous session. May look into a further technical buying from the commodities sector from the crude recovery, whilst bank may continue to it's technical buying on valuation. ICBC (1398.hk) and CCB (939.hk) poised to continue its technical buying on dips. Look for purchase at around 5.80 and 6.00 respectively.

We remain to believe that consumer name plays for a CNY sales will continue its run. We like names such as lianhua (980.hk), NWDS (825.hk) at 7.38 , Golden Eagle (3308.hk) at 14.90. We also like Gome (493.hk), looking for a breakout play above 3.00, whilst Haier (1169.hk) at 4.40 as these industries remain to be supportive for CNY, looking for 15-20% upside.

We may look for a HSI rebound today, recovering lost grounds from yesterday, aiming for a 0.5% - 1% rebound, targeting the HSI range between 21500-21800.

ongy out.