[ET Net News Agency, 13 September 2024] The increase in U.S. producer prices (PPI)
accelerated slightly in August, but it did not hinder market expectations that the Federal
Reserve will cut interest rates next week. The United States continued its gains on
Thursday (12th). In addition, Chinese President Xi Jinping told China to focus on the
economic work of the third quarter end and the fourth quarter and try the best to achieve
the economic and social development goals for the whole year. Hong Kong stocks first
pulled up in the early stage and then retreated. The Hang Seng Index once reached a high
of 17,540 points and recovered the 10-day moving average (about 17,442 points), the 20-day
moving average (about 17,536 points) and the 50-day moving average (about 17,416 points)
in one go. Unfortunately, resistance still exists, and HSI was 17,408 in the morning
session, up 167 points or 1%. The three moving averages gained and lost, and the main
board turnover was nearly HKD 52 billion.
The Hang Seng China Enterprises Index was at 6,080, up 62 points or 1%. The Hang Seng
Tech Index was at 3,501, up 25 points or 0.7%.

"Wong Wai Ho: the Hang Seng Index is likely to challenge 18,000, but the transaction
volume is not high and it is difficult to break through"

The Hong Kong stock market has strengthened. Xi gave a speech demanding that "economic
work should be done well at the end of the third quarter and the fourth quarter." At the
same time, there are rumours that a reduction in existing housing loan interest rates may
be announced as early as this month. The Hang Seng Index rose by up to 300 points in half
a day. The increase narrowed after touching the 20-day moving average. Independent stock
commentator Wong Wai Ho told ET Net News Agency that Hong Kong stocks have rebounded
strongly after testing below 17,000 a few days ago, benefiting from the fact that U.S.
inflation is in line with market expectations, eliminating expectations of a one-time
interest rate cut of 0.5% by the Federal Reserve, driving U.S. stocks to stabilize, and
Hong Kong stocks have also followed suit.
He pointed out that the trend of China characteristics stocks has stabilized in the past
two days, coupled with the strengthening trend of technology stocks, it is expected that
Hong Kong stocks are expected to rebound further in the short term. In the short term, if
the 50-day moving average (about 17,400) is successfully stabilized, the market outlook is
expected to further challenge 18,000. However, he emphasized that the rise in Hong Kong
stocks must be matched by transactions. The recent daily turnover of Hong Kong stocks is
considered high if it exceeds HKD 100 billion. The Hang Seng Index can still have the
upward trend if it does not exceed HKD 100 billion. However, if it wants to exceed 18,000,
the daily average can only be supported by transactions of HKD 110 billion to 120 billion.
There are rumours today that a reduction in existing housing loan interest rates may be
announced this month. However, Wong Wai Ho believes that the overall stimulus effect on
the Mainland China property market may not be great. He believes that the meeting will be
beneficial to those who are currently paying for housing. However, the current intention
to buy a property is conservative and it is expected to be more difficult to stimulate
related potential consumption power.

"Interest rate cuts will help pharmaceutical stocks reduce R&D expenditures, but the
sector is highly volatile"

Pharmaceutical stocks turned strong after digesting the negative news that the U.S.
House of Representatives passed the "Biosecure Act". Akeso (09926) soared more than 8% in
half a day, with turnover exceeding HKD 980 million. Wong Wai Ho believes that
pharmaceutical stocks should be subdivided into various sub-sectors.
Recently, biotech stocks such as antibody drug conjugates have been doing well. However,
he believes that the overall pharmaceutical sector is highly volatile. In the recent
period, it is affected by favourable interest rate cuts and the market expects that the
pressure on R&D expenditures will decrease, which will drive the sector to perform well.
The subsequent profit prospects of related stocks are still not stable, and the stock
price may not be able to remain stable in the future, so it is not recommended to invest
in pharmaceutical stocks. He expects that the strength of pharmaceutical stocks is likely
to remain until the middle of next week, and there will be opportunities for profit-taking
after an interest rate cut is officially announced.