[ET Net News Agency, 17 December 2024] The retail data in the Mainland China has
weakened, leading to pressure on Chinese concept stocks in the US overnight (16th). The
Nasdaq Golden Dragon Index fell by 2.19%, dragging down Hong Kong stocks for the third
consecutive day as platform stocks were under pressure. The Hang Seng Index struggled near
the 20-day moving average (19,723 points) in the first half of the day, hitting a new low
of over a week at 19,620 points. The half-day close saw a decline of 76 points or 0.4%, at
19,718, with a total turnover of over HKD 66.8 billion.
The Hang Seng China Enterprises Index reported 7,110, down 21 points or 0.3%. The Hang
Seng Tech Index reported 4,392, down 21 points or 0.5%.

"Kung Wai Ting: The rapid rise in September weakened bears confidence, but the policy
measures falling short of expectations also made bulls hesitate"

Hong Kong stocks continued the trend from the previous day, with investors selling
strong stocks before the year-end and turning to high-yield stocks. The Hang Seng Index
fell by about 100 points in the first half of the day, with high-yield stocks generally
performing well. Kung Wai Ting, the Chief Investment Officer of China Asset Management
(Hong Kong), told ET Net News Agency that the recent decline in Hong Kong stocks is mainly
due to the impact of Mainland China policies falling short of expectations, especially in
terms of consumption and the property market, where significant policies have not been
seen. This has led the market to believe that there are not enough polices and the
positive impact are weaken. This causes investors to reevaluate their expectations.
Furthermore, Kung Wai Ting believes that as the date of Trump's inauguration approaches,
concerns about future market instability are growing, prompting investors to start parking
their funds in dividend-yielding stocks as a defensive measure. He expects the market to
continue its downward trend with no major drops, mainly because the USD to RMB exchange
rate has dropped to the 7.3 critical level, and he anticipates the central bank will try
to prevent the RMB from weakening further for the time being. With the Hang Seng Index
having retraced significantly from its highs and many bears becoming cautious following
the rapid increase from 17,000 to 23,000 in September, Kung believes that the market
intervention by the central government and the possibility of interest rate cuts have
deterred short sellers, indicating that the peak of short selling in Hong Kong stocks has
passed.
However, as bulls stay out of the market, and bears hesitate, Kung Wai Ting expects the
Hang Seng Index to face a prolonged period of declining prices, with daily trading volumes
potentially falling below HKD 100 billion as the holidays approach. He suggests that the
19,000 level, the 100-day moving average, could provide support initially, with the most
pessimistic scenario possibly testing 18,500.

"It is difficult to short sell Bitcoin now, Trump's support boosts the price and investors
can consider ETFs"

As the day of Trump's inauguration approaches and the market retraces, Bitcoin, under
the "Trump trade," has been gaining more attention. After breaking through the USD 100,000
historical barrier, Trump has shown interest in elevating Bitcoin to a strategic reserve,
further strengthening market expectations for Bitcoin. Kung Wai Ting's analysis indicates
that the preference for Bitcoin in the US stock market has significantly increased, with
the average daily net inflow into 11 US Bitcoin ETFs reaching USD 500 million, reflecting
an increased market demand. Bitcoin has managed to shake off the short sellers, as its
price has continued to rise without a clear peak, causing bears to lose a reference point
for short selling and stabilizing the price trend.
Breaking through one peak after another, Kung Wai Ting believes that the market
consensus expects Bitcoin to challenge historical highs of USD 120,000 to 125,000 by the
end of the year, with potential to reach USD 180,000 next year. Therefore, the current
price level warrants attention for relevant ETFs. Just like the Huaxia Bitcoin Spot ETF
(03042), he points out that spot Bitcoin ETFs have advantages over futures ETFs, as they
can be used for leverage and have smaller price spreads with relatively lower transaction
costs.