[ET Net News Agency, 26 November 2024] The U.S. president-elect Trump has indicated a
plan to impose a 10% tariff on China, leading to a strengthening of the U.S. dollar. The
offshore renminbi has fallen to a four-month low. The Hang Seng Index suffered a setback,
opening 96 points lower at 19,054, but this level marks the intraday low. Chinese concept
stocks and some domestic-demand stocks rose during trading, while car stocks dipped
slightly but remained stable. By midday, Hong Kong stocks rebounded by 93 points or 0.5%
to 19,244, with a turnover of nearly 72.4 billion. The Hang Seng China Enterprises Index
reported 6,890, up by 28 points or 0.4%. The Hang Seng Tech Index reported 4,253, up by 18
points or 0.4%.

"Yip Sheung Chi: policy bottom must not be lost, HSI needs to regain the 10-day SMA"

Trump's tariff announcement impacted the renminbi exchange rates this morning. However,
domestic media reported that Mainland China had recently distributed consumer vouchers in
various regions over the weekend, boosting the performance of domestic-demand stocks this
morning. The Hang Seng Index turned from a decline to an increase in the morning, rising
by about a hundred points by midday. Yip Sheung Chi, the Chief Strategist of First
Shanghai Securities, told ET Net News Agency that since 24 September, the Hang Seng Index
has maintained a policy market trend. He considers the closing price on 23 September of
18247 as the 'policy bottom', emphasizing that the Hang Seng Index should not breach this
level under any circumstances during future adjustments.
He mentioned that the economic data for October, released mid-November, has been
relatively positive. Initial effects are seen in the property market, but consumer
spending still needs a boost. The recent distribution of consumer vouchers also reflects
the central government's attention to the need for ongoing efforts to stimulate consumer
demand. He believes that in the short term, market conditions will continue to assess the
effectiveness of policies. Faced with external shocks, economic data will play a crucial
role in determining future market trends, potentially enabling the Hang Seng Index to
break through the short-term resistance of the 10-day SMA (around 19,485 points).

"Industry ships early to avoid tariff impact; actual short-term impact on business is
expected to lighten"

There is no official announcement yet, but Trump's tariff threat shook the renminbi
exchange rates, resulting in overall weak performance among shipping stocks this morning.
Yip Sheung Chi's analysis suggests that Trump's government could have a significant
short-term impact on shipping stocks. It is expected that the market had already
preemptively prepared before today, guarding against the tariff increase by Trump.
Shipping companies may have already shipped goods early to avoid the tariff hikes,
potentially affecting the overall sector performance in the next two months. However, he
believes that the tariff impact could gradually diminish in the medium term. Currently,
market concerns about uncertain factors have significantly intensified, causing strong
short-term impacts on the sector. Yet, he anticipates that the industry can gradually
adapt to the impact from sources and production lines, mitigating the actual impact to be
less severe than currently anticipated.
Taking OOIL (00316) as an example, the stock price has fluctuated within the range of
HKD 80 to 140 in the past two years. Yip Sheung Chi suggests observing the market
performance below HKD 90 and considering the extent of selling pressure on stock prices
due to higher tariffs before making medium to long-term investment decisions in the range
of HKD 80 to 90.