Tuesday, July 10, 2007

Top 5 most influential stocks of the Hang Seng China AH Premium Index

The Hang Seng China AH Premium Index ("AH Premium Index") was officially started yesterday, real time indices are shown in the following table:

Real Time Index:

I’ve further analyzed the composition stocks and ranked the top 5 stocks with the biggest impact to the index. They are namely China Life, Sinopec, Bank of Comm, Ping An and Chalco. 5 of them already contributed around 20% premium, with the remaining 22 stocks altogether contribute another 10% giving a total premium of ~30%. (as of 9 July)

The full table is shown here.

A-share companies will begin reporting of their half year results this month, China Merchant Bank and ICBC had pre-announced their result last night with impressive 100% and 50% net profit growth respectively.

While H-share has gained very strong momentum over the past 2 weeks versus its A-share counterpart, whether it can keep the steam going will be very much dependent on the result announcements this month.

I would refine my Q3/Q4 strategy after seeing those results. In addition to catching the A-H convergence, I would start accumulating Olympics related stocks. I expect the heat will start in 2H till the event takes place in Aug 2008. In terms of sector I would look at media, hotel and sports related companies.