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Saturday, June 25, 2016

Weekly Wrap

As a result of Brexit won on Friday's referendum in UK, global equity and FX markets suffered immediate sell-off. Hard and furious. 
What to buy on Brexit:
1. Safe haven proxies like CHF, JPY, USD and gold will surge
2. Oil prices would come under pressure.
3. Stronger USD 
4. Stocks that benefit include Venture, Innovalues, ST Engineering, SIAEC, Riverstone, and UG Healthcare.
5. Stronger spot gold price
6. Beneficiaries include gold ETF (GLD US$), miners (CNMC Goldmine & Anchor Resources)
7. Lower oil prices
8. Negative for all oil-related counters including heavyweights Keppel Corp & Sembcorp Marine, service providers Ezion & Ezra, as well as upstream oil producers KrisEnergy, Rex, Ramba, etc.
9. UK votes to leave EU, impacts on HK listed companies:
HSBC (5) – approximately 25-30% revenue from UK/Europe
Standard Chartered (2888) – approximately 6% revenue from UK/Europe
Textile companies – 15-20% exports are to EU and sales dominated in Euro
Yashili (1230) – 50% of raw milk cost of sales in Euro
Brilliance China (1114) – Certain components are imported from EU
For major indexes under my radar, this week marks all indexes YTD return are under water. Weekly index performance as in below table:
STI weekly chart shows its down trend channel is well intacted. The index is under further downside pressure, if it can not hold above immediate support level at 2715.
HSI spiked below its short term uptrend channel intraday on Friday but rebounded and managed to close within the channel, a close below its bottom channel line indicate possible downside reversal, in coming week.
SSE index has been trading within its bottom consolidation range 3052-2663.
SPX dipped below its 2015 YEC level 2043 this week, Formed a double top which is bearish, if it can not rebound from this level in coming week.
Gold ETF GLD finally breakout to upside after multi months consolidation, plenty of room for upside.

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