[ET Net News Agency, 08 May 2026] Three US guided missile destroyers exchanged fire with Iran on Thursday while passing through the Strait of Hormuz towards the Gulf of Oman. Both sides gave conflicting accounts, accusing each other of provoking the conflict. However, US President Trump noted that the US-Iran ceasefire remains in effect, slightly cooling the situation. Asia-Pacific stock markets collectively retraced, with the HSI reporting 26,335 at the midday break, down 290 points or 1.1%, with main board turnover exceeding HKD 145.5 billion. The Hang Seng China Enterprises Index reported 8,863, down 56 points or 0.6%. The Hang Seng Tech Index reported 5,065, down 55 points or 1.1%.
"Yuen Che Hay: Retracement after breakout feels painful, but lack of lost confidence in capital allows for holding positions"
As Iran weighs agreeing to a memorandum of understanding, news of accidental fire between the US and Iran surfaced again, immediately raising market caution and pushing Brent crude oil back above 100 US dollars. US stocks retraced overnight, and Asia-Pacific markets were under pressure across the board. The Hong Kong market retraced nearly 300 points at midday immediately after breaking above 26,500 yesterday. Yuen Che Hay, the Co-Director of Investment Strategy of Quam Asset Securities, told ET Net News Agency that the sudden clash between the US and Iran was unpredictable for the market, especially as the HSI attracted significant capital to chase the market after breaking and holding the key level of 26,500 yesterday; today's 300 point retracement is inevitably a bit "painful". However, looking at the performance of individual shares, in the past, a shift to a downward trend would involve large declines accompanied by a sharp increase in turnover. Today has not seen a spike in turnover and many shares are outperforming the market. Falling markets without falling stocks suggest market confidence remains.
However, given the unpredictable situation in the Middle East and the uncertainty of the weekend, Yuen suggests those who heavily increased their positions yesterday could consider a slight reduction, but if the addition was modest, they might as well hold for a while longer. Regarding Iran's stance, he dared not say for certain what Iran would decide, but believed there is still significant room for agreeing to the memorandum. Ultimately, a memorandum differs in strength from an actual agreement. He expects Iran will first agree to the memorandum, while any subsequent agreement will require more time for negotiation. Therefore, in terms of deployment, there is still room for a calculated bet, though he personally would not go "all in".
"Mainland China property market sees reversal but not a return to high leverage growth; stable upward trend expected with a 'banker and legs' strategy"
Mainland China property stocks are becoming stronger. Leading Mainland China property stocks continued to rise against the market trend this morning despite the decline, with China Res Land (01109) hitting a new peak. Recently, a J.P. Morgan research report noted that the Mainland China property sector has consistently outperformed the market since April. After first tier cities shifted to a more proactive stance in mid-April, hedge funds were observed actively increasing their allocation to the sector, with long only funds showing increasing interest since this week. It is expected that the Mainland China property stocks being tracked still have 20% upside potential. Yuen agrees that a minor reversal has occurred in the property market recently, but it is by no means a return to the previous high growth model.
He explained that the market has gradually accepted a new growth model for the Mainland China property sector. Compared to the previous high leverage and high growth, the focus is now on leveraging rigid demand to balance market demand and corporate profit. He emphasised that most relaxations of purchase restrictions are concentrated in first tier cities, and instances of queuing to buy property are occurring in first tier cities because the supply and demand ratio there remains somewhat balanced. In contrast, next level second tier cities still face a larger oversupply, and relaxation measures are less likely compared to their peers.
Therefore, regarding deployment, Yuen noted that although economic data for the property market has not yet reflected the reality, China Res Land's trend of hitting a peak against the market is not without reason. Capital does not chase stocks for no reason; there must be strong confidence to be willing to pay a premium. However, chasing a peak is somewhat awkward. He suggests that for deployment, one could first use one or two leading Mainland China property stocks as the "banker", paired with laggard related sub sector stocks as the focus for speculation. For example, the platform stock BEKE (02423) has a better momentum for catching up from behind.
Additionally, he suggested starting to pay attention to even more laggard property management stocks. Their asset light nature combined with dividend elements is conducive to attracting capital for bottom fishing. Examples such as CG Services (06098), Yuexiu Services (06626), and China OVS PPT (02669) are all laggard choices. However, he emphasised that currently only a small amount of capital is paying attention. It is better to wait for an upward trend to begin and for more capital to flow in before following the speculation.
"Yuen Che Hay: Retracement after breakout feels painful, but lack of lost confidence in capital allows for holding positions"
As Iran weighs agreeing to a memorandum of understanding, news of accidental fire between the US and Iran surfaced again, immediately raising market caution and pushing Brent crude oil back above 100 US dollars. US stocks retraced overnight, and Asia-Pacific markets were under pressure across the board. The Hong Kong market retraced nearly 300 points at midday immediately after breaking above 26,500 yesterday. Yuen Che Hay, the Co-Director of Investment Strategy of Quam Asset Securities, told ET Net News Agency that the sudden clash between the US and Iran was unpredictable for the market, especially as the HSI attracted significant capital to chase the market after breaking and holding the key level of 26,500 yesterday; today's 300 point retracement is inevitably a bit "painful". However, looking at the performance of individual shares, in the past, a shift to a downward trend would involve large declines accompanied by a sharp increase in turnover. Today has not seen a spike in turnover and many shares are outperforming the market. Falling markets without falling stocks suggest market confidence remains.
However, given the unpredictable situation in the Middle East and the uncertainty of the weekend, Yuen suggests those who heavily increased their positions yesterday could consider a slight reduction, but if the addition was modest, they might as well hold for a while longer. Regarding Iran's stance, he dared not say for certain what Iran would decide, but believed there is still significant room for agreeing to the memorandum. Ultimately, a memorandum differs in strength from an actual agreement. He expects Iran will first agree to the memorandum, while any subsequent agreement will require more time for negotiation. Therefore, in terms of deployment, there is still room for a calculated bet, though he personally would not go "all in".
"Mainland China property market sees reversal but not a return to high leverage growth; stable upward trend expected with a 'banker and legs' strategy"
Mainland China property stocks are becoming stronger. Leading Mainland China property stocks continued to rise against the market trend this morning despite the decline, with China Res Land (01109) hitting a new peak. Recently, a J.P. Morgan research report noted that the Mainland China property sector has consistently outperformed the market since April. After first tier cities shifted to a more proactive stance in mid-April, hedge funds were observed actively increasing their allocation to the sector, with long only funds showing increasing interest since this week. It is expected that the Mainland China property stocks being tracked still have 20% upside potential. Yuen agrees that a minor reversal has occurred in the property market recently, but it is by no means a return to the previous high growth model.
He explained that the market has gradually accepted a new growth model for the Mainland China property sector. Compared to the previous high leverage and high growth, the focus is now on leveraging rigid demand to balance market demand and corporate profit. He emphasised that most relaxations of purchase restrictions are concentrated in first tier cities, and instances of queuing to buy property are occurring in first tier cities because the supply and demand ratio there remains somewhat balanced. In contrast, next level second tier cities still face a larger oversupply, and relaxation measures are less likely compared to their peers.
Therefore, regarding deployment, Yuen noted that although economic data for the property market has not yet reflected the reality, China Res Land's trend of hitting a peak against the market is not without reason. Capital does not chase stocks for no reason; there must be strong confidence to be willing to pay a premium. However, chasing a peak is somewhat awkward. He suggests that for deployment, one could first use one or two leading Mainland China property stocks as the "banker", paired with laggard related sub sector stocks as the focus for speculation. For example, the platform stock BEKE (02423) has a better momentum for catching up from behind.
Additionally, he suggested starting to pay attention to even more laggard property management stocks. Their asset light nature combined with dividend elements is conducive to attracting capital for bottom fishing. Examples such as CG Services (06098), Yuexiu Services (06626), and China OVS PPT (02669) are all laggard choices. However, he emphasised that currently only a small amount of capital is paying attention. It is better to wait for an upward trend to begin and for more capital to flow in before following the speculation.
