Final post of the month.
Today, should be another choppy day, being the last day of the month, and 1H09 for that matter. Yesterday night, the US and all of EU closed up in positive territory, reverting all the losses in Asia. Oil also closed above $71 a barrel in trading to start off the day.
Having said that, Asia should follow-suit today.
China for its consecutive fourth trading day closed up above its 1-year highs. Yesterday, head of the Central Bank, Zhou Xiaochuan, said that the economy was performing better as expected, and growth for China should reach 8% by the end of the year. A-shares should again perform well.
For the third time in less than a week, HKMA again injected funds into its reserve. Capital keeps flowing into Hong Kong, keeping everything afloat; boosting both equities and property prices. In such a liquidity-backed market, is there really going to be a correction to ~16,000 (15%) as most analysts and investors expect? Considering all factors, 1. capital inflow, 2. continued IPO activity, 3. thru-train with Guangdong, 4. HK banks with RMB-backed products and many others. I'm starting to rethink the situation. ~16,000 almost seems a bit too much, possibly ~17,500.
Today is the first of the three hyped IPOs, being sport apparel brand 361 Degrees International (1361.HK). In early trading, share priced to open at HK$3.68 already reached as high at HK$4.91, to fall back to HK$4.13. I would expect a surge of this one, and a positive drift afterwards of about ~40-50%. Following this, and the July 1st holiday (Hong Kong market will be closed), comes Chifu and BaWang on Thursday and Friday, respectively.
More to come as the day progresses.
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