16 September 2019

Eric Lui

Hong Kong Economic Journal chief economist and strategist
  • 'Dogs of the Dow' investing strategy has worked well in the US in 2018, helping limit the losses amid a broad market slide. Photo: Reuters

    Does the ‘Dogs of the Dow’ strategy work for HK equities?

    - Jan 4, 2019 12:20pm
    ‘Dogs of the Dow’ has been a rather popular strategy with US equity investors. Let’s see if the strategy, which calls for purchase of laggard blue-chips with the highest dividend yields, works when applied to Hong...
  • The Fed's tightening cycle and the US-China trade war have affected stock markets worldwide. Photo: Reuters

    2019 global equity market outlook

    - Dec 21, 2018 1:25pm
    The outlook for global equities next year will highly depend on two major developments.  First, whether the Federal Reserve will slow down the pace of its tightening cycle or even halt the rate hikes altogether.  Second,...
  • Continued rate-hikes by the Fed and the strong need for the US government to keep issuing more bonds could put further pressure on the US dollar bond market. Photo: Bloomberg

    Is the decade-long credit bubble ready to burst?

    - Nov 30, 2018 11:06am
    Over a 10-week period ending November 16, investors have withdrawn as much as US$24.8 billion from the credit markets, the highest such pullout since the beginning of 2016. Meanwhile, speculators are now holding nearly 1.26 million...
  • With several big name tech stocks getting beaten down, several observers are warning that Wall Street's multi-year bull market run may be ending. Photo: Reuters

    Why investors may be better off holding more cash in 2019

    - Nov 23, 2018 10:22am
    When US President Donald Trump said last Friday that he was optimistic about the prospects of reaching a trade deal with China, it offered some relief for emerging market equities. However, sentiment again turned negative as...
  • Hong Kong has seen a surge in corporate share buyback activity amid a view that many stocks got oversold in recent months. Photo: Reuters

    Share buyback surge points to bottoming of HK equities

    - Nov 16, 2018 10:57am
    The Hang Seng Index has trended downward since hitting an all-time high at 33,484 on January 29. The benchmark is now more than 7,500 points, or 22 percent, off its peak. While market sentiment remains lackluster,...
  • The Dow Jones Industrial Average posted gains one year after the polls in 22 of the 24 midterm elections under review. The average gain was 13.9 percent. Photo: Reuters

    US stock market outlook after the midterm elections

    - Nov 9, 2018 11:01am
    The Democrats won the House and the Republicans kept the Senate in the US midterm elections. The outcome was basically in line with expectations. But would partisan politics in the US Congress present challenges for President Donald...
  • Hong Kong, the world's most overvalued housing market, saw home prices post their first dip in 29 months in August. Photo: HKEJ

    How far will Hong Kong housing prices fall?

    - Oct 26, 2018 12:59pm
    Two months ago, I presented several indicators that Hong Kong’s housing market is weakening, and that the secondary housing market is heading toward a prolonged correction. Official data shows that the city’s private housing price index has ended a...
  • A weaker yuan bodes ill for earnings of many listed companies in Hong Kong. Photo: Reuters

    HK equities to see more downside as yuan weakens

    - Oct 12, 2018 10:53am
    The People’s Bank of China announced last Sunday that it was cutting the reserve requirement ratio (RRR) for banks, the fourth such move this year. It remains to be seen whether the easing move will help...
  • If things turn worse in the US-China trade row, the Hong Kong stock market could remain subdued for a longer period. Photo: Bloomberg

    HK equities: How long will the weakness last?

    - Sep 21, 2018 11:22am
    The Hang Seng Index hit a record high of 33,484 points on January 29, and then tumbled 20 percent from its peak for the first time on September 7. Technically speaking it has already entered the...
  • Corporate earnings slowdown, amid an escalating US-China trade row, could provide a trigger for the next downturn in the Hong Kong stock market, some observers say. Photo: Reuters

    HK equities earnings outlook turns negative

    - Sep 14, 2018 11:19am
    A majority of the listed entities in Hong Kong have completed their interim results announcements as of now. The results show that the firms’ sales revenue was up 8.87 percent on average in the first six...
  • Various indicators suggest that the secondary home market is moving into a consolidation period. Photo: Reuters

    Hong Kong housing market shows signs of weakening

    - Aug 31, 2018 12:25pm
    The Hang Seng Index has been heading south since hitting a peak of 33,484 points on Jan. 29. It tumbled to a low of 26,871 points on Aug. 16, down 19.7 percent from the peak. However, secondary...
  • A strong dollar increases the debt burden of emerging markets and leads to capital outflow from these markets. Photo: Reuters

    Emerging markets face mounting pressure amid rising rates

    - Aug 17, 2018 10:34am
    The Turkish lira has slumped in recent days, sending ripples across other emerging market currencies and stoking fears of another financial crisis. To gauge whether the recent turmoil could develop into a full-blown crisis, let’s take...
  • A weaker renminbi will affect the bottom line of many Hong Kong-listed companies, which generate most of their revenue from mainland China. Photo: Xinhua

    Dollar trend, US-China trade talks key to HK equity outlook

    - Jun 29, 2018 12:03pm
    The Hang Seng Index has tumbled below the 250-day moving average and hit a year’s low of 28,342 points. The index has lost over 15 percent from its peak level so far. Currently, the Hong Kong market...
  • A strong dollar plus rising US rates would put a heavy burden on emerging economies and threaten their financial safety. Photo: Bloomberg

    A stronger dollar could trigger the next financial crisis

    - May 18, 2018 1:49pm
    Let’s revisit how the Hong Kong market collapsed in the second quarter of 2015. The Hang Seng Index slumped as much as 36 percent to 18,278 points on Feb. 12, 2016, from a high of 28,588...
  • Investors are supposed to do well by owning stocks from the beginning November to the end of April, then parking the money in money market funds, and repeating the pattern in the following year. Photo: Reuters

    Does ‘sell in May and go away’ work?

    - May 11, 2018 10:41am
    At around this time of the year, a lot of space in financial news pages is typically devoted to the seasonal pattern of sluggish performance in May and June and a rebound that follows in July....
  • Stock market investors will watch closely the pace and scale of US bond yield rebound. Photo: Reuters

    Will rising US Treasury yield hurt the equity market?

    - Apr 27, 2018 9:44am
    The 10-year US treasury yield hit the key psychological level of 3 percent on Tuesday for the first time in four years. Billionaire bond investor Jeffrey Gundlach once said that if the 10-year yield does crack...
  • Hong Kong has seen enhanced market volatility this year. Photo: Reuters

    Hong Kong equities: earnings gauges point to more upside

    - Apr 20, 2018 3:09pm
    Global stock markets have been extremely volatile this year. The looming trade war between the United States and China, the Syria geopolitical crisis and other events all have contributed to enhanced market volatility. A measure of...
  • A strategy that combines market momentum and fundamental value in stock selection may work better in a volatile market. Photo: Reuters

    A strategy that combines momentum and value investing

    - Apr 13, 2018 11:42am
    My two momentum-based mock portfolios have underperformed the Tracker Fund of Hong Kong (02800.HK) in the first quarter due to an extremely volatile market. Amid the market turbulence, many stocks in the two momentum-investing portfolios triggered...
  • Hong Kong stocks are expected to stabilize following the recent steep market correction, say some observers. Photo: Reuters

    Where is the Hong Kong market heading?

    - Feb 20, 2018 1:27pm
    The Hang Seng Index fell back sharply after hitting a peak of 33,484 points on January 29. In this pullback, the benchmark slumped up to 4,355 points or 13 percent in two weeks. During the setback,...
  • Rate hikes are unlikely to pose too much threat to the stock market, given that the current rates remain extremely low. Photo: Reuters

    Is the equity bull market over?

    - Feb 9, 2018 2:01pm
    The US stock market has suffered a sudden crash over the last few days. The biggest question now is whether the bull market cycle has already come to an end. The Dow Jones Industrial Average has...