Less than two months ago, UBS released a report discussing the overbought nature of the Hang Seng Index (HSI). Now that the index has fallen by 17 percent, UBS analyst Spencer Leung released a new report this week that includes a list of 9 stocks that Hong Kong investors should consider buying on the dip.

Mean Reversion

According to Leung, the volatile HSI has now entered oversold territory. While the index’s forward PE had climbed to more than three standard deviations above its three-year average back in April, the recent pullback has now brought it down to 10.4, in line with its average level.

Bearish Economic Outlook Unchanged

Even though HSI stocks are much cheaper than they were two months ago, UBS maintains…

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