Asia Morning Analytic: 110210: Greece unfolding

Morning reader,


As per previously said, the market is tightly driven by policy and macro situation at the moment, and with Bernanke's speech countering Greece-related upheaval over sentiment, US took a dip yesterday, which was clearly shown through our currency leads last night.

However, if sentiment could be gauged by our currency leads right now, then one must consider looking into the near-term bullish side from the market, as we are seeing risky currencies up by 50bps in the last few hours, and continues to rise as I'm writing, and, thus, would consider to take this chance to sell into rally, or take a quick profit on these near term runs.

Would take this opportunity to look at hard beaten stocks, and consumer sector looks to be the best pick. Would reiterate buy on Golden Eagle (3308.HK) at 13.00, NWDS (825.HK) at 6.40, Gome (493.HK) at 2.20 and Haier at 3.60. Auto are also considered into the list, with Brilliance (1114.HK) being our top pick.

Would again, like to reiterate our caution on banking and property sector, but on valuation, chinese banks are increasing attractive at current levels. Would consider start accumulating on further dips. Top pick remains to be ICBC (1198.HK) and BOC (3988.HK).

Estimate HSI may take 20,000 today as sentiment improves, would consider HSI may up within 0.5%, with 20,000 being a significant psychological barrier. Near term, we may see HSI to range trade narrowly between 19,500-20,000 as macro situation plays out with its policies, as we remain to be in the mist of cloud of fundamental catch up.

Happy trading!

ongy out.