The performance of the Hang Seng Index has been rather disappointing in 2016. What started off on a low note failed to gain traction for any significant period of time and by April, the bears were back in full force. For the year to date, the Hang Seng index has shed 9.27% which is substantially better than the 25.91% decline that the index recorded over the past 1 year. The 52-week trading range for the index is 18,278.80 on the low end and an incredible 28,524.60 on the upper end. Right now, the Hang Seng index is barely hovering above the bottom of the 52-week trading range. Yesterday (Monday, 16 May), the 50-member index had 12 members down and 29 members up. This is evident in the reversal of the month-long trend which shows a slight uptick beginning to take place. The top 3 performing stocks include the following:

Other top performers included financial stocks and telecom stocks. The poorly performing sectors at the start of the week included construction, energy, real estate and banking. A report was recently released by Credit Suisse which detailed the future prospects for the premier Hong Kong index and they are not good according to this credit ratings agency. Investors have no clear indication about which way the Hong Kong index is moving. There have been a series of policies driving the market in all sorts of directions, including the following:

Based on the economic policies driving the Hong Kong market, Credit Suisse analysts have put their pennies in the plate and decided that the Hang Seng index will invariably trade in a range bound fashion through 2018, given the policy measures that are in place. The ruling Communist Party will determine what economic path it wishes to take by 2018, and then it will be easier to ascertain which way the Hang Seng index is going to move. Analysts at Credit Suisse have taken the position that the index will bottom out at the 19,000 mark, and have a resistance level at 23,000. The Hang Seng China Enterprises Index by contrast will bottom out at 8,000 and have a resistance level at 10,000. The index – like so many other indices – bottomed out in February 2016 when it hit 18,320.