Zhongjin: The Hang Seng Index may oscillate around the 18000 point level before more catalysts appear.

Jinshi data news on June 17th, CICC released a Hong Kong stock market strategy report, stating that the Hong Kong stock market fell again last week, with a pullback of nearly 10% from the high point. Since mid-April, the market’s upward trend has been mainly driven by the improvement of liquidity and risk preference. In the absence of significant changes in the fundamentals, this liquidity-driven and rebound-driven feature will put the market under certain profit-taking pressure after a short-term overbought condition. Therefore, the bank has been continuously reminding investors since early May that the market is approaching the first-stage target level, which is around 19,000 to 20,000 points of the Hang Seng Index, corresponding to the level of the risk premium falling back to the market high point in early 2023. The bank believes that unless there is a further downward adjustment in risk-free interest rates and a substantial improvement in profits to provide additional momentum, the market will face certain profit-taking pressure. Since mid-May, the market trend has also experienced a pullback as expected by the bank. However, CICC believes that unless extreme circumstances occur, the market is unlikely to give back all of its gains, as policy marginal changes, overseas fund inflows, and valuation repairs are all tangible improvements. The bank previously predicted that as the market gradually returns to reality and fundamentals, it may oscillate and consolidate around 18,000 points of the Hang Seng Index, waiting for more new catalysts, which has been validated by last week’s market performance.