[ET Net News Agency, 12 July 2024] The Hang Seng Index was at 18,185 in the morning
session, up 353 points or 2%, with main board turnover of nearly HKD 65.4 billion. The
Hang Seng China Enterprises Index was at 6494, up 122 points or 1.9%. The Hang Seng Tech
Index was at 3760, up 64 points or 1.7%.
The three largest traded stocks in the Hang Seng Index were Tencent (00700), Meituan
(03690) and Alibaba (09988); Tencent reported HKD 395.4, up HKD 10.6 or 2.8%, with a
turnover of HKD 6.195 billion; Meituan reported HKD 120.8, up HKD 4.7 or 4%, with a
transaction volume of HKD 2.738 billion; Alibaba's price was HKD 77.9, an increase of HKD
2.45, or 3.2%, with a transaction volume of HKD 2.268 billion. The three largest traded
stocks on the Hang Seng China Enterprises Index are Tencent, Meituan and Alibaba. The
three largest traded stocks on the Hang Seng Tech Index were Tencent, Meituan and Alibaba.

"Wong Wai Hong: The market is liquidating low assets, but the rise of Hong Kong stocks is
weak"

U.S. inflation slowed down and was lower than expected, driving Hong Kong stocks to
perform well. The Hang Seng Index rose by nearly 400 points at most in half a day. Senior
financial analyst Wong Wai Hong told the ET Net News Agency that U.S. CPI inflation in
June was lower than expected, and market expectations for an interest rate cut within this
year have risen, driving the stock market to rebound. However, his analysis emphasized
that this time the market has experienced a reversal of capital flows that is different
from the past, because the U.S. stock market experienced a sharp decline in technology
stocks overnight, and the Japanese yen had the largest reaction in the foreign exchange
performance overnight. It is expected that expectations of this interest rate cut will
rebound, causing the market to start liquidation activities for assets with larger
declines, causing low-valuation assets to rebound. On the contrary, U.S. technology stocks
fell back from their highs.
Wong Wai Hong mentioned that this situation is certainly beneficial to low-valuation
assets and drives the rise of Hong Kong stocks. However, he pointed out that although
there are positive factors in the Hong Kong stock market, it does not mean that it has
upward momentum. He explained that Mainland China economic data has failed to meet market
expectations and consumption power is still low. Even though the market is still waiting
to see the Third Plenary Session of the Central Committee of the Communist Party of China,
he estimates that there is not a high chance of launching vigorously stimulating economic
policies. In this context, he does not dare to be overly optimistic about Hong Kong
stocks. If the Hang Seng Index rises to 18,500 at most, there will be greater resistance.
However, he added that it is expected that the Hang Seng Index has reached a short-term
and medium-term low, and it is difficult to fall below the 15,000 level again. However,
given the weak upward trend, it is expected that it will be difficult to achieve a large
increase. There is a greater chance of maintaining the bullish performance, or even on an
annual basis, like 2004 to 2006. Unless the Mainland China launches economic stimulus
policies that far exceed market expectations, but the chance is very low, the larger range
of the Hang Seng Index will be about 16,000 to 19,000.

"The demand for Hong Kong properties is no longer what it used to be, and it is difficult
to really boost the property market sentiment by the cutting of interest rates"

Expectations of interest rate cuts in the United States have increased, and real estate
stocks in China and Hong Kong have surged across the board. However, Wong Wai Hong
admitted that interest rate cuts will have a stimulating effect, but it is difficult for
property prices and demand to rebound immediately. He analysed that the continued decline
in property prices in Hong Kong reflects that the so-called rigid demand may not be as
expected. In the past, local housing prices were at a premium because they were more
unique and had advantages. However, nowadays, Hong Kong properties are no longer
attractive. Compared with nearby cities such as Shenzhen, there is a large price
difference. Coupled with demographic changes, it is expected that demand may not be able
to support high property prices. .
He pointed out that regardless of the local or Mainland China property markets, the
immediate interest rate cut in the United States is favourable, but the factors that
dominate the property market are views on the economic prospects. If the market's views on
the prospects cannot be reversed, it will be difficult for the property market to truly
rebound. For example, the Mainland China has cut interest rates more than once, but the
recovery speed of the property market is still slower than expected. Therefore, he
believes that the interest rate cut may drive speculation in real estate stocks for a
week, but the fundamentals are still difficult to change. Even if developers maintain
verbal optimism, the price reduction of new properties cannot be ignored. It is expected
that local property prices will be difficult to rise again this year.