Hang Seng Index surpassed its July high

As noted in my earlier post (go here), the Hang Seng Index (‘HSI’) might go higher due to the influx of funds from Mainland China after the Chinese authority has allowed locals to invest in the Hong Kong stock market. On August 31, the HSI has even surpassed its July high after its first attempt failed on August 28. I believe that there is a good chance that the HSI may go higher despite what looks like a near vertival climb since the index made its recent low of 19387 on August 17.

Chart: HSI's daily chart as at August 31 (courtesy of Yahoo Finance)

One way of gaining exposure to the HSI is to buy HSI-C1. From the table below, we can see that the HSI-C1 , which closed at RM0.335 on August 30 & did not trade on August 31 due to the public holiday, is now valued at a discount to the underlying index. As such, the HSI-C1 will likely to open today with a big jump.