[ET Net News Agency, 07 April 2025] US President Trump has struck a strong note of
deglobalisation by imposing at least a 10% equivalent tariff on countries globally, aiming
to reshape the global trade order and encourage some industries to return to the US.
Notably, tariffs on China, the "world's factory," have been increased to 34%. The Chinese
government has responded defiantly, imposing a reciprocal 34% tariff on the US, triggering
panic in global markets. In response, President Trump stated that China's retaliation is a
mistake and will not alter his economic policy.
The panic in the Hong Kong stock market finally erupted on "Black Monday," with 27
blue-chip stocks recording double-digit declines. Sectors such as internet, finance,
manufacturing, and energy were all affected, with only utility stocks resisting the
downturn. The Hang Seng Index closed the half-day session near its lowest point, down
2,445.19 points or 10.7%, at 20,404.62 points. During the session, it had fallen by as
much as 2,446 points, marking the largest point drop in Hong Kong's history. However, in
percentage terms, the severity was still less than that of the 2008 financial crisis, when
the Hang Seng dropped 15.39% on 27 October 2008.
The half-day turnover for the Hong Kong market was HKD 322.02 billion. The Hang Seng
China Enterprises Index closed at 7,510, down 909 points or 10.81%. The Hang Seng Tech
Index finished at 4,571, down 741 points or 13.96%.

"Wong Wai Ho: Mainland China's countermeasures are stronger than expected; future outlook
depends on both countries' positions"

After last Friday's significant declines of over 5% in the three major US indices, Asian
markets continued to fall this morning. The Taiwanese, A-share, and Hong Kong markets were
closed last Friday for the Ching Ming Festival, resulting in a delayed adjustment to the
previous day's declines, leading to the Hang Seng Index recording its largest point drop
in history.
Wong Wai Ho, the First Vice President of the Yan Yun Family Office (HK) Limited, told ET
Net News Agency that Trump's tariffs on surrounding countries are slightly stronger than
expected, but the countermeasures taken by those countries against the US are even more
robust than anticipated, leading to a strong downturn in global markets. He noted that if
the US and other countries continue to struggle, and tariffs are further increased, it
will continuously weaken the stock market. He believes that for any positive news to
emerge for the market, one side must be willing to soften its stance, which could lead to
a brief rebound. However, he feels that the overall market sentiment has been weakened,
and even if there is a short-term rebound, it is unlikely to be substantial. He sets an
initial rebound target for the Hang Seng Index at 21,040, which corresponds to the 0.618
Fibonacci retracement level of this year's high and low (18,671 to 24,874). The index
needs to stabilise at this level for future support.

"Investors should reduce holdings to 60% and focus on domestic demand and dividend stocks"

With the Hong Kong stock market experiencing its largest point drop ever, investors
understandably may be caught off guard. Wong Wai Ho advises that whether to stay or leave
depends on individual holding situations. Given the current atmosphere, if one entered at
high levels and is fully invested, a reduction in holdings is necessary - at least to
decrease stock positions to 60% or below, freeing up 40% in cash for future opportunities
or to reduce risk. However, if one has been holding since before the start of the year and
still has a profit, Wong Wai Ho suggests that selling may not be necessary; instead, one
should observe how the situation develops.
Regarding sectors, Wong Wai Ho acknowledges that technology stocks, which were the main
drivers of the previous rally, are now experiencing the steepest declines. If one's
portfolio is heavily weighted in technology stocks, it would be prudent to reduce exposure
to mitigate risk. After reducing holdings, if investors wish to reposition, he recommends
focusing on domestic demand stocks that have seen smaller declines today. He points out
that, given the support for China's economy from multiple fronts and the significant
impact of tariffs on foreign trade, the Mainland China government is likely to focus more
on boosting domestic demand to sustain economic growth, making it a beneficial sector. He
suggests looking at Chow Tai Fook (01929), Li Ning (02331), and Mengniu (02319), but
emphasises that investment should be focused on medium to long-term strategies rather than
short-term speculation, as market direction remains uncertain.
Additionally, divdiend stocks such as those in the banking and telecommunications
sectors are options for medium-term repositioning. However, international bank stocks like
HSBC (00005) may face greater impacts from the tariff war, making them unsuitable for
short-term investment.