[ET Net News Agency, 25 September 2024] Expectations for the U.S. Reserve to cut
interest rates have become more stable. Hong Kong stocks have further surged after
recovering 19,000 points the previous day. The Hang Seng Index opened at 19,592,
challenging this year's high of 19,706 points set in May. Unfortunately, the stamina did
not continue, and it was the highest point for half a day. Although the performance of
A-shares continued to be strong, the gains of Chinese financial and domestic demand stocks
in Hong Kong stocks narrowed, and some blue chips fell. The Hang Seng Index's half-day
gain narrowed to 381 points or 2%, closing at 19,382. Fortunately, there was support from
large transactions. The main board transaction volume was nearly HKD 151.1 billion.
The Hang Seng China Enterprises Index was at 6,870, up 155 points or 2.3%. The Hang Seng
Tech Index reported at 4,008, up 92 points or 2.4%.

"Nip Chun Pong: The short-term resistance of the Hang Seng Index is 19700"

The People's Bank of China made a series of moves yesterday, triggering the pursuit of
foreign investors. The previous night, many ADRs soared by more than 10%. The Hang Seng
Index continued its strong momentum this morning, opening 591 points higher. However, it
reached its highest point in half a day at the opening, and then the index's gains
gradually narrowed. Nip Chun Pong, the Chief Strategist at Blackwell Global Securities,
told ET Net News Agency that although the People's Bank of China's multiple policies
yesterday were good for Hong Kong stocks, the Hang Seng Index's high this year was 19,700
points in May, and this level is expected to become short-term resistance. The Hang Seng
Index is currently only a few hundred points away from this level, and the gap is not
much.
As for whether there is a chance to hit 19700, it still depends on the transaction
volume today and tomorrow. Yesterday, the main board transaction volume reached HKD 240
billion. Even if the transaction volume falls, the average daily transaction volume must
be maintained at least HKD 150 billion to have enough motivation to continue to rise. If
the Hang Seng Index pulls back, let's first see if 19,000 points can be held. Although the
Hang Seng Index closed at 19,000 points yesterday, it only stands at this level and cannot
be regarded as an inevitable defensive line.
Nip Chun Pong pointed out that the People's Bank of China's policy yesterday was good
for domestic real estate and domestic banks. Although the existing mortgage interest rate
has been lowered, it may reduce bank interest margins. However, as long as the property
market is stabilized and transaction volume is increased, banks can offset the impact of
existing mortgage loans with more new mortgage loans. Therefore, bank stocks rose well
yesterday. In addition, the US dollar has fallen and the renminbi has strengthened. As
long as this trend is maintained, Hong Kong stocks will generally remain optimistic in the
next month. As for whether the Hang Seng Index has a chance to reach 20,000 points? Nip
Chun Pong said that if it reaches 20,000 points in recent days, it will only trigger a
larger downward adjustment. Taking the rising wave from April to May as a reference, it
was also consolidated first and then gradually increased, which would be healthier.
Therefore, it is safer for the Hang Seng Index to consolidate first and then reach 20,000
points.

"The potential scale of swap operations is RMB 1.5 trillion"

Pan Gongsheng, governor of the People's Bank of China, said yesterday (24th) that new
monetary policy tools will be created to support the development of the stock market. He
mentioned that he is studying the creation of stabilization funds, swap operations for
securities funds and insurance companies, and stock buybacks to increase holdings. The
scale of the first phase of the swap operations is RMB 500 billion. In the future, the
scale can be expanded depending on the situation, adding another RMB 500 billion, or a
third RMB 500 billion.
Insurance stocks continued to surge today, with Ping An (02318) rising by up to 6%.
China Taiping (00966) rose by more than 7% at most. Nip Chun Pong said that in addition to
the above-mentioned new policy benefits, Mainland China banks have lowered interest rates,
making the financial products of insurance companies more competitive. Since the
resumption of Stock Connect after the Mid-Autumn Festival on 19 September, many insurance
stocks have risen significantly. Take Ping An as an example, it has risen by 18%, China
Life (02628) has risen by 16%, and CPIC (02601) has risen by 20%, while China Taiping even
rose 21%. If investors focus on dividends, Ping An is a good choice because Ping An's
dividend rate is as high as 6%. If investors consider the potential for stock price
appreciation, China Taiping is more attractive because the stock's current
price-to-earnings ratio is only about 5 times. In addition, judging from the stock's trend
chart, the resistance level is approximately between HKD 13 to 14, which represents a
potential increase of more than 15% from the current price. The resistance level of Ping
An is between HKD 46 and 48, which is only about 10% potential increase from the current
price. Therefore, he is more optimistic about China Taiping. Aggressive investors can
consider buying at the current price, while stable investors can consider waiting for a
correction to around HKD 10.8 to 11 before buying.