[ET Net News Agency, 06 December 2024] The market is looking forward to good news from
the Central Economic Work Conference scheduled for next week. Both A-shares in Shanghai
and Shenzhen rose together, driving the Hang Seng Index to surge by over 300 points at one
point. The Hang Seng Index closed at 19,834 at midday, up by 274 points or 1.4%, with a
turnover of nearly HKD 86.2 billion. The Hang Seng China Enterprises Index reported 7,125,
up by 110 points or 1.6%. The Hang Seng Tech Index reported 4,445, up by 75 points or
1.7%.

"Nip Chun Pong: Hang Seng Index faces passive risk of breaking below the 20-day moving
average"

The Hang Seng Index opened high today by tens of points, once again breaking through the
20-day moving average (around 19,591 points). It remained stable after a slight tending
towards stability and continued to rise, reaching a high of 19,888 points during the
session. Nip Chun Pong, the Chief Strategist at Blackwell Global Securities, told ET Net
News Agency that although the Hang Seng Index has been performing well recently, trading
volume has not been in line. Yesterday's turnover did not reach HKD 110 billion, and
today's expected maximum is only around HKD 120 billion, reflecting cautious market entry
by funds. Furthermore, the Hang Seng Index's 20-day moving average has been continuously
moving downwards, indicating the possibility of a passive break below that level. He
emphasized that for the market situation to be considered optimistic, the Hang Seng Index
must stay above 19,800 points for two consecutive trading days (the position of the 20-day
moving average over the past three trading days). If the Hang Seng Index holds above
19,800 points, it could aim for the 20,000 mark. He further pointed out that rumours
suggest the Central Economic Work Conference will be held next Wednesday, but due to
previous Mainland China policies repeatedly failing to meet market expectations, the
current market is more in a wait-and-see mode.

"HSBC is less affected by geopolitical factors compared to Mainland China stocks"

HSBC (00005) has maintained a strong stock price since announcing third-quarter results
at the end of October, breaking through the HKD 72 resistance level recently and trending
upwards in a slow bull market for nine consecutive trading days. The latest high reached
HKD 74.45, setting a new high since December 2007 after excluding ex-dividend adjustments.
In addition, HSBC announced the completion of the next phase of restructuring and
disclosed a series of personnel appointments, with related changes set to take effect on 1
January next year, with further updates expected during the annual performance
announcement in February. HSBC's simplified business structure includes Hong Kong
operations, UK operations, "Corporate and Institutional Banking," and "International
Wealth Management and Premier Banking."
Nip Chun Pong stated that with HSBC's streamlined business structure and staff
reductions, the market anticipates significant cost control improvements, leading to a
brighter performance in the fourth quarter. Additionally, as a multinational bank, HSBC is
less affected by geopolitical factors compared to Mainland China stocks, hence the market
is optimistic about HSBC's future development. However, Nip Chun Pong advised investors
without positions not to chase high, as he expects HSBC to rise to HKD 78-80 in the short
term. Buying at the current price of around HKD 74 leaves less than a ten percent profit
margin; he suggests waiting for a pullback to HKD 70-72 before buying.
Furthermore, the Federal Reserve has been continuing its monetary easing in recent
months, with Hong Kong banks following suit in reducing interest rates. Nip Chun Pong
mentioned that although lowering interest rates will weaken banks' interest rate spreads,
it will attract more mortgage business, offsetting the losses from interest rate spreads,
which still has a positive impact on HSBC.