[ET Net News Agency, 27 September 2024] Hong Kong stocks continued to rise in the
morning. David Tepper, a well-known American hedge fund tycoon, called for buying all
China-related assets. Chinese concept stocks surged overnight. In addition, the People's
Bank of China officially lowered reserve requirements and short-term policy interest
rates. The carnival of Hong Kong stocks continued. The Hang Seng Index regained 20,000
points in one fell swoop this morning, triggering a signal to enter the market. It rose
more and more during the session. The increase once expanded to 784 points, reaching a
high of 20,708.31 points. It closed at 20,603 points in the middle of the day, up 678
points or 3.4%.
Capital trading was active, with the main board transaction volume exceeding HKD 200
billion before the market closed in half a day, and a half-day record of HKD 244.3
billion.

"Kingston Lin: It is difficult to estimate the strength of Hong Kong stocks. If the
economic data is not good, foreign investors will leave"

The Mainland China's heavy stimulus policies have come one after another, and foreign
investors' enthusiasm for Hong Kong stocks has changed significantly. Yesterday's market
turnover surged to more than HKD 300 billion, setting a new high since 16 March 2022,
recreating the jubilation when the Mainland China rescued the market at that time. This
morning, the market benefited from the news that the Mainland China will issue two
trillion yuan of special government bonds, which stimulated further growth. The market
turnover in half a day exceeded HKD 200 billion. The Hang Seng Index opened above 20,000
and never looked back. It further rose above 20,500 on the futures settlement day.
Kingston Lin, a director of the The Hong Kong Institute of Financial Analysts and
Professional Commentators Limited, told ET Net News Agency that the current sentiment in
Hong Kong stocks is booming, and foreign investors and southbound funds have been forced
to re-enter Hong Kong stocks. It is expected that Hong Kong stocks will continue to rise
in the short term.
He believes that there are no unfavourable factors in the current news. The only
disadvantage is that the market has become seriously overbought technically, and the
southbound funds will be suspended during the National Day week. The transaction volume is
bound to fall back or there will be technical adjustments, and there may be a single-day
fall of hundreds of points. However, he believes that the market is currently in a super
strong state, with a surge of more than 2,000 points in four trading days. It is difficult
to determine the upper resistance and lower support for the time being, and further
judgment can only be made after financial sentiment stabilizes.
Kingston Lin further reminded that the current market atmosphere is extremely
optimistic. Investors must realize that everything at present is a policy market
performance. The market outlook must have results in order for the current optimistic
expectations to be realized and sustainable. Future economic data will be extremely
critical. It will fully reflect the effectiveness of this vigorous market support. He
emphasized that if future economic data is still not as expected, foreign capital that
returned today will decisively flow away. Investors should pay attention to this and
should not be overly ambitious at the moment.

"The start of the interest rate cut cycle is beneficial to the for New World Dev's debt
reduction"

After New World Dev (00017) announced its results yesterday, everything finally came to
light. Henry Cheng's eldest son, Adrian Cheng, who had been in charge of the group for
about four years, resigned as CEO and was replaced by Eric Ma. In terms of full-year
results, as in the previous profit warning, losses from continuing operations expanded to
HKD 11.807 billion, and the final dividend was suspended. A number of sales plans were
announced at the results meeting yesterday (26th), including the proposed sale of Kai Tak
Sports Park to Chow Tai Fook Enterprises, a private company of the Cheng family.
Kingston Lin's analysis pointed out that the performance and personnel changes have
developed in line with market expectations. The overall performance is roughly the same as
that mentioned in the earlier profit warning. The personnel changes are also as announced
by Chairman Henry Cheng last year. He said family members may not necessarily be in charge
of the CEO position. Lin pointed out that the future key goal of the New World Dev will be
debt reduction, and believed that the stock price has bottomed out, because the interest
rate reduction cycle has begun, and interest expenses will definitely decline in the
future.

"The sale of Kai Tak Sports Park is not a good thing, the Cheng family may intend to build
a Chow Tai Fook Kingdom"

He believes that the short-term market sentiment is optimistic about New World Dev. In
response to the CEO change and the expectation of debt reduction, it is expected that the
stock price will further rise to HKD 10.5 to 11 in the future, and there will also be
strong support at HKD 9.6 below. However, he admitted that he was a little unclear about
New World Dev's plan to sell the Kai Tak Sports Park, because the Kai Tak Sports Park was
about to be completed and the peak period of money consumption had passed. When the
payback period was about to begin, it was sold to Chow Tai Fook Enterprises. Although it
may be trying to reduce debt, it is not entirely positive.
He further mentioned the recent plan to change the name of NWS Holdings (00659) to "CTF
Services" and the earlier renaming of FTLife Insurance to "CTF Life", the Cheng family
seems to be interested in enhancing the status of the "Chow Tai Fook" brand. It is not yet
known what the family's follow-up intentions are, but it is expected that there will be
plans in the medium to long term. The "New World Series" will become the "Chow Tai Fook
Series". Kingston Lin speculates that the Cheng family may build the family business into
the "Chow Tai Fook Kingdom". If the family really integrates all the companies under Chow
Tai Fook Enterprises, the scale will become the largest in the country. It is a leading
integrated enterprise and has greater influence than its peers in Hong Kong and the
Mainland China. However, none of this will happen in an instant. If the prediction comes
true, it will shock the local capital market.