Daily Investment Strategy
Recommended Stock：Link REIT（823）
For the six months ending September 30, 2024, revenue and net property income increased by 6.4% and 5.8% yoy to HKD 7.153 billion and HKD 5.359 billion, respectively. Total distributable amount increased by 4.3% to HKD 3.476 billion in the 1H FY2024/2025. The distribution per fund unit rose by 3.7% yoy to HKD 134.89 cents. In the first half of the year, Hong Kong's overall retail sales fell by 8.8% yoy, with April experiencing the most significant double-digit decline; however, sales gradually stabilized in the following months with a slight narrowing of the decline. Retail sales of essential goods demonstrated relative resilience, showing only a single-digit decrease. The current dividend yield is quite attractive, and the potential inclusion in the Stock Connect program could serve as a catalyst in the short to medium term. Hong Kong's REITs do not impose strict location requirements on assets, making it appealing for mainland investors to hold high-quality global assets through Hong Kong's REITs. The U.S. interest rate cuts have widened the spread between dividend returns and U.S. Treasury yields, while reduced financing costs can support more acquisitions. Target price: $43; Stop- Loss price: $35.
Trump wins White House
The Associated Press and other major news networks have declared Trump the winner of the 2024 presidential election, confirming that he will return to the White House. Meanwhile, Republican control of Congress appears likely. The so-called "red wave" provides an easier path for Trump to enact major policy changes that some expect will continue to support the current bull market. Meanwhile, investors are awaiting the Federal Reserve's November interest rate decision, which is set to be released on Thursday. The market generally expects the Fed to cut interest rates by 25 basis points.
Hong Kong Stock Connect had a net inflow of HK21.4bn on Wednesday of which Tracker Fund(2800) had the largest net inflow, reaching HK$8.9bn; followed by HSCEI ETF (2828). SMIC (981) recorded the largest net outflow at HK$26.7mn, followed by Sunac (1918).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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