Big caps stole the limelight in 2017, although the Heng Seng Index was mainly pushed up by a few giants, the connect mechanism was the key driving force. Accumulated capital inflow from Shanghai and Shenzhen jumped by 70% and 20x in 2017 to RMB751 billion and RMB147 billion, respectively.
Following the stellar run in January 2018, the equities market suffered a fierce sell-off in February 2018 due to re-pricing for expectations of rising inflation and the interest rate outlook in the United States. Despite high volatility, the Group sticks with high- conviction calls with solid earnings growth outlooks and strong fundamentals. Rather than well-covered stocks, there are some hidden gems offering strong earnings growth at undemanding valuations.