[ET Net News Agency, 19 July 2024] The Hang Seng Index closed at 17,401 in the morning
session, down 376 points or 2.1%, with main board turnover exceeding HKD 55.6 billion. The
Hang Seng China Enterprises Index reported at 6162, down 144 points or 2.3%. The Hang Seng
Tech Index reported at 3548, down 64 points or 1.8%.
The three largest traded stocks in the Hang Seng Index were Tencent (00700), CNOOC
(00883) and Meituan (03690); Tencent reported HKD 366, down HKD 3.2 or 0.9%, with a
turnover of HKD 3.746 billion; CNOOC reported HKD 20.55, down HKD 1 or 0.9%. 4.6%, with a
turnover of HKD 2.382 billion; Meituan reported HKD 118.3, down HKD 1.1 or 0.9%, with a
turnover of HKD 1.681 billion. The three largest traded stocks on the Hang Seng China
Enterprises Index are Tencent, CNOOC and Meituan. The three largest traded stocks on the
Hang Seng Tech Index were Tencent, Meituan and Alibaba (09988); Alibaba reported HKD 73.8,
down HKD 2 or 2.6%, with a turnover of HKD 1.59 billion.

"Yip Sheung Chi: after stocks pass the ex-dividend date, it may fall. The Hang Seng Index
should not lose 17,200."

The Third Plenary Session of the Central Committee of the Communist Party of China
concluded yesterday. As the market expected, no major economic policies were introduced.
Hong Kong stocks were under heavy pressure to retreat. The Hang Seng Index fell by more
than 400 points at most in half a day, falling below the 250-day moving average again. Yip
Sheung Chi, the Chief Strategist of First Shanghai Securities, told ET Net News Agency
that it had been expected that the Third Plenary Session of the Central Committee of the
Communist Party of China would not necessarily bring market news, because the meeting
mainly talked about long-term policy goals, but rarely proposed policies for short-term
economic performance. In the absence of major surprises, the trend of Hong Kong stocks
will continue to be soft.
Yip Sheung Chi pointed out that the main force supporting the market recently has been
high-dividend stocks, but generally dividend-paying stocks have been ex-divided and
distributed in June. The peak period of the next round of dividend payment will not be
until September, so the relevant stocks in the current vacuum period will have major
adjustments. He also mentioned that the Hang Seng Index climbed to the 19,700 level in
May. At that time, this group of stocks was also the main force. However, now the Hang
Seng Index has adjusted more than 2,000 points, but high-dividend stocks are still at a
high level. It is expected that they will fall in the short term.
Regarding the market, Yip Sheung Chi pointed out that Hong Kong stocks have been falling
repeatedly since June, and there will be a slight rebound during the period. However, the
overall trading volume has been significantly smaller than the big rises in May and June,
reflecting that the market situation has become more cautious. The average market turnover
of Hong Kong stocks in the first quarter was HKD 99.3 billion. He analysed that if the
recent market turnover continues to be lower than HKD 99.3 billion, it is a sign that the
support for the market will further weaken. For Hang Seng Index, investors should first
wait and see 17,200, which is the top of the range in the first quarter and is expected to
be the most important support for the Hang Seng Index at present.

"High-dividend stocks can be bought after returning to May highs"

High-dividend stocks such as China characteristics stocks have been pulling back in
recent days. Yip Sheung Chi pointed out that the current dividend payment vacuum period
has caused stocks to generally retreat significantly. He mentioned that in the past,
policies often benefited high-dividend stocks and China characteristics stocks. Coupled
with the unstable market conditions, funds continued to shift to high-dividend stocks,
resulting in crowded trading. The excessive rise has caused current taking pressure.
However, he believes that high-yield stocks are still the most promising sector of the
Hong Kong stock market. Taking into account various factors, high-yield stocks are still
the best choice. He believes that when the relevant stocks fall back to their May highs,
investors can prepare to buy them. However, it should be noted that this does not mean
that the level has bottomed out, but one can be prepared to buy them.

"Gold prices rise but gold mining stocks have not bottomed out"

In addition, gold mining stocks with a state-owned enterprise background have
experienced significant adjustments in recent days, but gold prices are still hovering at
historical highs. Yip Sheung Chi believes that a positive gold price outlook is
theoretically beneficial to gold mining stocks, but shares do not directly reflect gold
prices, and the performance of individual gold stocks will also affect valuations. It is
necessary to pay attention to whether the upward factors of gold prices can truly be
reflected in performance, which is expected to drive the rising of shares. He also pointed
out that gold mining stocks had accumulated large gains earlier, and have still increased
by about 50% since the correction. It is expected that there will still be room for a
larger correction in the future, and it is not recommended to buy gold mining stocks now.