Market Observations — The Impending Change of Leadership

Upside Technologies
2 min readDec 3, 2021


For many years, it was pretty much a one-way bet in Hong Kong to be overweight or outright long Internet names versus being underweight or short its Financials sector.

This can be best illustrated by the following chart, which shows the price of Tencent versus the H-FIN index (Hang Seng Financials index).

Source: Bloomberg

As one might easily conclude, the situation has changed this year, amidst all the clampdown against the Internet titans.

ATEC will make two points here:

  1. Whilst it might be easy to discard this trade as being ‘done, the question that it does raise is whether this is but the first, of several more years of future underperformance by the Internet sector overall. In the absence of ‘unchecked’ growth, one has to wonder where the next ‘blue sky’ scenario can come from (for sure, there will be some exceptions).
  2. Although it is true that ATEC, as of now, cannot yet confirm a bullish scenario for the Financials sector as a whole based on our technicals framework, there are potentially some positive fundamental drivers which might emerge as we enter into 2022, most notably that China had already gone through its monetary tightening phase, and that the sector has largely taken the crunch from the imploding Property sector in its stride. Other points can be found in our previous note titled Dare We Say Chinese Banks? dated 7th September 2021. Our timing was obviously wrong, but we do not think the potentially positive case is yet negated.

What do you think?

Good luck out there.



Upside Technologies

Investing research and thoughts from an Upside user and Portfolio Manager named ATEC, based in Singapore. learn more at