STOCK MARKET OVERVIEW: Benefited from the US rebound, Hong Kong stock market rebounded sharply with improved liquidity. HSI closed the session 1627 pts higher at 14329. Overall turnover rose to $75.1B. In the early session, HSI opened 578 pts higher following overseas markets and remained positive throughout the day. In the afternoon session, HSI further extended its gains and closed at the day high, thanks to Japanese markets strong gains. Moreover, heavyweight HSBC (5) rose 10.7% at $95.4, contributing 235 pts of gains for HSI. Sentiment improved and H-shares marked strong gains after PBOC cut rate. Technically, HSI recovered the 10-day MA (13621) with higher turnover, suggesting trend improved. It is likely to further uptest 20-day MA (14973) in short term.

Today spot: Bocom (3328) (hold) reported its net profit for Q3 was up 21.66% to 7.21B yuan, slow from 81.21% up in 1H. For the first 3Q, its profit up 56.84% to 22.72B. As Bocom is smaller than its peers, it has limited room to chose clients and may face more pressure on loan quality. In fact, its loan to manufacturing sector accounts for 27% of in total loan, its risk of bad loans is higher during the economy slowdown. It set aside 5.94B yuan to cover bad loans, up from 4.87B yuan.

Technical Analysis:

1st Support: 13500

2nd Support: 12500

1st Resistance: 14700

2nd Resistance: 15200

Analysis: The HSI is expected to trade between 13700/14200.