[ET Net News Agency, 06 July 2026] Iran held a funeral for its former Supreme Leader Khamenei, sending a signal of unease, but the three major US stock index futures stabilised this morning. Semi-conductor and AI hardware concepts in Hong Kong stocks tumbled, while the core internet and biotech sectors performed well, driving a three-day rising streak for the HSI to start July. The HSI stood at 23,542 at the half-day break, up 192 points or 0.8%, having touched an intraday high of 23,686 points, a near two-week high since 23/06. The Hang Seng China Enterprises Index reported 7,784, up 84 points or 1.1%. The Hang Seng Tech Index reported 4,551, up 52 points or 1.2%. Turnover on the Main Board exceeded HKD 186.2 billion, and it is worth noting a southbound net inflow of around 10 billion.
"Mak Ka Ka: Weakening AI concepts spark anticipation of capital diversion"
The broader market warmed up again today, rebounding by about 200 points at the half-day break. Mak Ka Ka, Head of Financial Products Trading and Research Department of SinoPac Securities (Asia), told ET Net News Agency that the performance of Hong Kong stocks today was mainly benefited by the June RatingDog Mainland China Services Purchasing Managers' Index (PMI) recently released by S&P Global, which recorded 54.1, beating expectations and remaining within the expansion zone, reflecting a good recovery in corporate orders and bringing positive momentum to the broader market.
Earlier, Bank of America cited EPFR Global data showing that for the week ended 01/07, US equity funds recorded USD 17.2 billion in capital outflows, the largest scale in more than three months. Recently, the biotech sector has become the target of capital chasing, with the Hang Seng Biotech Index rising by about 2.3% at the half-day break today. Mak Ka Ka pointed out that the large capital outflows from US equity funds have clearly reflected the transfer of capital away from high-valuation sectors such as AI stocks, and Hong Kong stocks will also follow the trend of US stocks. She expects that the capital allocation of Hong Kong stocks may become more polarised recently, continuing to shift from the AI sector towards defensive sectors or sectors with attractive valuations. Taking the biotech sector as an example, its current valuation is at a low level, which has attracted capital inflows in recent days and driven the sector's good performance.
Mak Ka Ka expects that the Hong Kong stock market has now stabilised at 23,200 points, and with the optimistic performance of capital diversion, as long as the US Dollar Index does not become overly strong, the broader market is expected to challenge 23,800 points.
"Kuaishou lacks upside momentum, think twice about long-term holding"
Earlier, Kuaishou's (01024) Kling AI introduced financing from multiple investors, including Tencent (00700), Alibaba (09988), Baidu (09888), etc. After the completion of the capital increase, Kling's pre-transaction valuation increased to HKD 117 billion. In addition, Kuaishou reported that it spent approximately HKD 49.951 million to repurchase 1.165 million shares for the first time last Friday (03 Jul).
Mak Ka Ka expressed that Kuaishou's current share price only reflects its live-streaming and short-video businesses, while the AI business has not been fully reflected in the share price. However, she believes that Kuaishou's current share price is in a low-level consolidation phase, and the short-term fluctuation range is expected to maintain between HKD 40 and HKD 48, so investors can try range-bound operations to make a profit. Given that Kuaishou currently lacks significant upside momentum, she does not recommend making medium-to-long-term deployments for the time being; it is necessary to wait for the AI story to further take shape, profitability to turn positive, or the AI valuation to truly unlock before making other plans.
Earlier, Jefferies and Morgan Stanley also issued research reports regarding Kling AI's introduction of financing. Jefferies noted that the market has been anticipating Kling's financing since May, hence viewing this update as positive news, believing that this transaction unlocks part of Kuaishou's valuation potential, giving a target price of HKD 82 and reiterating a "Buy" rating. Morgan Stanley stated that after the completion of the transaction, Kling's valuation is approximately USD 18 billion, which is 10% lower than the USD 20 billion predicted by several media outlets, but still believes it is higher than Kuaishou's current share price, giving a target price of HKD 65 and an "overweight" rating.
"Mak Ka Ka: Weakening AI concepts spark anticipation of capital diversion"
The broader market warmed up again today, rebounding by about 200 points at the half-day break. Mak Ka Ka, Head of Financial Products Trading and Research Department of SinoPac Securities (Asia), told ET Net News Agency that the performance of Hong Kong stocks today was mainly benefited by the June RatingDog Mainland China Services Purchasing Managers' Index (PMI) recently released by S&P Global, which recorded 54.1, beating expectations and remaining within the expansion zone, reflecting a good recovery in corporate orders and bringing positive momentum to the broader market.
Earlier, Bank of America cited EPFR Global data showing that for the week ended 01/07, US equity funds recorded USD 17.2 billion in capital outflows, the largest scale in more than three months. Recently, the biotech sector has become the target of capital chasing, with the Hang Seng Biotech Index rising by about 2.3% at the half-day break today. Mak Ka Ka pointed out that the large capital outflows from US equity funds have clearly reflected the transfer of capital away from high-valuation sectors such as AI stocks, and Hong Kong stocks will also follow the trend of US stocks. She expects that the capital allocation of Hong Kong stocks may become more polarised recently, continuing to shift from the AI sector towards defensive sectors or sectors with attractive valuations. Taking the biotech sector as an example, its current valuation is at a low level, which has attracted capital inflows in recent days and driven the sector's good performance.
Mak Ka Ka expects that the Hong Kong stock market has now stabilised at 23,200 points, and with the optimistic performance of capital diversion, as long as the US Dollar Index does not become overly strong, the broader market is expected to challenge 23,800 points.
"Kuaishou lacks upside momentum, think twice about long-term holding"
Earlier, Kuaishou's (01024) Kling AI introduced financing from multiple investors, including Tencent (00700), Alibaba (09988), Baidu (09888), etc. After the completion of the capital increase, Kling's pre-transaction valuation increased to HKD 117 billion. In addition, Kuaishou reported that it spent approximately HKD 49.951 million to repurchase 1.165 million shares for the first time last Friday (03 Jul).
Mak Ka Ka expressed that Kuaishou's current share price only reflects its live-streaming and short-video businesses, while the AI business has not been fully reflected in the share price. However, she believes that Kuaishou's current share price is in a low-level consolidation phase, and the short-term fluctuation range is expected to maintain between HKD 40 and HKD 48, so investors can try range-bound operations to make a profit. Given that Kuaishou currently lacks significant upside momentum, she does not recommend making medium-to-long-term deployments for the time being; it is necessary to wait for the AI story to further take shape, profitability to turn positive, or the AI valuation to truly unlock before making other plans.
Earlier, Jefferies and Morgan Stanley also issued research reports regarding Kling AI's introduction of financing. Jefferies noted that the market has been anticipating Kling's financing since May, hence viewing this update as positive news, believing that this transaction unlocks part of Kuaishou's valuation potential, giving a target price of HKD 82 and reiterating a "Buy" rating. Morgan Stanley stated that after the completion of the transaction, Kling's valuation is approximately USD 18 billion, which is 10% lower than the USD 20 billion predicted by several media outlets, but still believes it is higher than Kuaishou's current share price, giving a target price of HKD 65 and an "overweight" rating.
