Yesterday, the Hong Kong market retreated sharply again after one-day rally. Overseas markets were sharply lower. Germany banned naked short selling of ten major financials, and sales of CDS. The move was interpreted as lacking confidence. American markets crashed. The Hang Seng index opened 392 points lower as banks, exporters and resources fell sharply. Chalco lost 5.9% and Cosco Pacific lost 5% to pace the fall. The market rebounded by 200 points at the morning close. Unfortunately, the fall accelerated again at the day’s close. Futures lost 300 points in after market trading session. At the close, the Hang Seng index lost 365 points and H share index lost 301 points. Turnover was light at $59.6 billion. Over night, European markets continued to fall sharply by more than 2%. FTSE lost 149 points and DAX lost 167 points. The Euro rebounded from its four-year low against the US dollar. US markets were hurt by decline of industrial stocks. Dow Jones lost 66 points. Hong Kong shares mostly traded higher in New York. We expect the market to rise today.

Stock Picks

HSBC (005) The share has fallen from a high of $82.00 to $71. The share is trading at 1.2 times book value. The share is cheap.

Buy $72.00 Target $80.00 Cut loss $70.00

Oasis (01162) The Group raised $78 million by issue of convertible bond and share subscription to Darby Asia Mezzanine Fund II. The injection will enable the Group to expand its business.

Buy $1.46 Target $2.00, Cut loss $1.20