HK Market Strategy Bi-weekly:Downside risks heightened.Sell on rallyafter results

Recommendations

    As the US-HK interest rate spread widened, CMS HK Liquidity Indicator continued to fall, and HK equities can hardly surge further, in our view.Sector rotations and laggards chasingwill continuein the markets. Investors should focus on forecast-beating earnings and high dividend stories. For the energy and raw materials sectors, momentum could weaken as earnings growth decelerates.Moreover, stockswith moderate A/H premium and good fundamentals also deserve attention.