[ET Net News Agency, 30 September 2024] Expectations of a U.S. interest rate cut
continued, and external stock markets remained stable. Coupled with expectations of easing
as Mainland China took heavy measures to rescue the economy, the Hang Seng Index broke
through 21,000 at the opening. However, there was resistance at this level. The Hang Seng
Index once returned to 20,789 points. Utilities and domestic banks stocks led the decline,
domestic demand and properties stocks continued to be strong, and online medical stocks
rose during the session. The Hang Seng Index made a strong push before closing at noon,
once reaching 21,331.44 points, setting a new high since February 2023. The Hang Seng
Index closed at 21,321 for half a day, up 689 points or 3.3%. Trading continued to be
booming, with the main board turnover exceeding HKD 256.5 billion.
The Hang Seng China Enterprises Index reported at 7,560, up 260 points or 3.6%. The Hang
Seng Tech Index reported at 4,770, up 317 points or 7.1%.

"Nip Chun Pong: expect another RRR cut as early as December"

The strength of the Hong Kong stock market before the National Day has not stopped.
Mainland China first-tier cities have further implemented measures to relax purchase
restrictions in the property market. The central government's support for the property
market has further stimulated market confidence. The Hang Seng Index opened more than 500
points higher this morning, further testing the 21,000 level, reaching a high of 21,293.
Nip Chun Pong, the Chief Strategist at Blackwell Global Asset Management, told ET Net News
Agency that southbound funds will be suspended on Wednesday, which will affect the
transaction volume and the upward trend in the short term. He believes that if the market
stabilizes at 21,000, it will be able to break through 21,500 in the short term. If the
price continues to hold at 20,500, the market outlook will not be destroyed.
The central government has been working hard to rescue the market in recent days, and
has successively lowered reserve requirements, interest rates, and down payment ratios.
Today, first-tier cities have taken the lead in vigorously relaxing purchase restrictions.
Nip Chun Pong believes that short-term measures will help release a certain amount of
purchasing power, and the economy will tend to show signs of improvement in the rest of
this year. The latest official manufacturing PMI for September was 49.8, slightly higher
than the expected 49.5, reflecting that market sentiment is improving. The increase in the
past week was driven by policies. He believes that in the future, the central government
will first observe whether economic data rebounds as expected. If improvement is
occurring, the central government is expected to intensify efforts to introduce easing
policies in accordance with the current direction. However, he also mentioned that the
policy intensity in the past week has been huge, and the magnitude of the RRR cut has not
been small. If the central government intends to lower the RRR again, it is not expected
that there will be another RRR cut until December at the earliest.

"Don't expect an explosion in China's housing purchasing power"

First-tier cities have taken the lead in relaxing purchase restrictions; Shanghai has
shortened the number of years that non-Shanghai residents need to pay social security or
personal income tax to purchase housing outside the outer ring; Shenzhen has relaxed the
limit on household registration households to purchase 2 houses, and adult singles are
limited to 1 house; Guangzhou has also cancelled the various local purchase limit for
households purchase restriction policies for housing purchase. The Chinese properties
sector surged again this morning. Kaisa (01638) and Hopson Development (00754) surged by
more than 50% at most, and blue chip Longfor (00960) also surged by about 20%. As
mentioned above, Nip Chun Pong believes that the measures will stimulate the release of a
certain amount of purchasing power, but it is not expected to explode all at once and will
be reflected gradually.
He believes that one of the data that can be referenced is the unemployment rate. If the
unemployment rate in the Mainland China falls further, it will provide greater support for
market entry confidence. At present, the rise of China's properties stocks has not
stopped. He thinks aggressive investors can chase and speculate at current prices, but
they should choose larger stocks, such as Longfor (00960) and China Vanke (02202). Both
stocks have also not risen to the level of the same period last year. ,Longfor is expected
to reach HKD 18, and Vanke is expected to challenge HKD 10.