Today under the Hong Kong Main Cap names, we see that four out of the nine largest decreases in % of free float shares on loan have their next dividend dates either on today or coming up within a week. This shows that the market has some short covering, or recall of highly shorted large cap stocks before their upcoming dividend date.
Now let’s take a closer look into some of these names:
China Construction Bank (939HK)
The ex-dividend name today has its implied volatility gone up by 8.83% while its price was soared by 14.4% in just a month. The stock has been doing very well recently and general consensus is still a BUY, with positive EPS momentum over the next three months. Perhaps a stock to hold in a shorter term?
Industrial and Commercial Bank of China ‘H’ (1398 HK)
CCB (Price change +14.04%, EPS change -0.44%)
ICBC (Price change +10.85%, EPS change +0.64%)
Even though the recent price change of CCB has been weaker than its peers, its 12 months forward EPS momentum has been pulling strong. Perhaps a pair trade of long ICBC and short CCB would be applicable to some.
Link Real Estate Investment Trust (823 HK)
Not only that the EPS momentum is strong, Link REIT is also trading at 16 months high. Cash dividend is out, we may also expect to see some pull back on the stocks coming soon.