Thursday, April 26, 2018
Martin Hennecke

HSI could keep falling on Trump turmoil
Volatility has suddenly increased across global stock markets after turmoil around Trump's administration.

As many of the stock indexes were at a multi-year high level, short-term punters might be glad to see a pullback.

Softer US inflation and GDP data also weighed and lowered the chance of rate hikes. Although there is still a high chance for a rate increase in June, the next may happen as late as in November.

The Hang Seng index fell 157 points to 25,136. Losses were limited thanks to Tencent's (700) 1.6 percent gain to HK$264 after first quarter profit grew 58 percent year on year.

Further correction for the Hang Seng index is likely. The 10- and 20-day moving averages are at 25,037 and 25,708 points.

Meanwhile, you can consider diversifying by buying some newly issued perpetual bonds. Cheung Kong and SHK Properties have each issued one.

The coupons are 4.6 percent and 4.45 percent respectively.

Consult your bond seller to understand the risk of such bonds, which have no maturity date but a higher coupon.

Dr Check and/or The Standard bear no responsibility for any decision made based on this column.

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