[ET Net News Agency, 06 August 2026] Markets continue to pin hopes on Middle East peace prospects, coupled with US employment data slowing significantly to hit hawk expectations, and the Dow Jones hitting another record high. However, weighed down by tech stock pullbacks and news of Mainland China levying taxes on cross-border policy returns, blue-chip stocks suffered precision bombing. The HSI directly pierced through the 250-day moving average (around 25,729), commonly known as the bull-bear line, and the 10-day moving average (around 25,627). The decline expanded to 500 points at times, closing down 452 points or 1.7% at midday to 25,463. The Hang Seng China Enterprises Index stood at 8,503, down 99 points or 1.2%. The Hang Seng Tech Index stood at 4,840, down 92 points or 1.9%. Main board turnover was nearly HKD 149.6 billion.
"Kwok Ka Yiu: Hong Kong stocks relatively undervalued, subsequent chance of sharp drop is slim"
Asian stocks performed mixed this morning. A-shares rose slightly for the time being, while Japanese and Korean stocks showed weakness. The HSI opened more than 200 points lower, with the trend continuing downwards and falling by over 500 points at most during the session. Kwok Ka Yiu, the Director of Business Development at Harbour Family Office, told ET Net News Agency that the HSI has continued to rebound since its June low of over 22,500 points, accumulating a significant gain. Earlier, AI concept stocks were heavily traded while HSI traditional technology and internet stocks came under pressure. Since the AI concept retraced, this sector took the opportunity to catch up, forming a pair trade. However, after heavyweight tech and internet stocks continued to rebound, the upward room is no longer large. Coupled with the approach of the interim results announcement period, the market has turned wait-and-see. As the external economy is full of challenges and Mainland China's economy in the first half of the year was also less than ideal, the market worries that the performance of e-commerce and gaming businesses may not be ideal, prompting some investors to take profits and exit before results announcements.
Kwok Ka Yiu further pointed out that the sharp drop in the HSI today is certainly closely related to rumours that Mainland China is expanding personal income tax to overseas policy returns. Previously, Mainland China successively cracked down on brokers such as Futu involving overseas non-compliant investments, followed by the introduction of offshore value-added taxes. Now expanding the scope to levying taxes on overseas policy returns is of a piece with the previous two. In addition to showing that the central and local governments are tight on fiscal resources, it will also reduce the outflow of funds from Mainland China, further affecting market investment sentiment. Kwok Ka Yiu expects that the upward momentum of the HSI is not large for the time being, with short-term trends remaining soft, and does not rule out the possibility of testing the 20-day moving average (around 25,182). However, the current price of Hong Kong stocks remains relatively undervalued compared to external markets, and the chance of further sharp adjustments is not high. It is expected that the index will consolidate within the range of 25,000 to 26,000 points.
"Mainland China policy return tax expected to continue fermenting, AIA share price expected to reveal true colours after results"
It is reported that Mainland China is expanding personal income tax, with the collection scope extended to levy a 20% tax on various types of income generated by overseas insurance policies. After the news broke, AIA (01299), which has a higher proportion of mainland clients among bank-insurance stocks, plunged by up to 9.2% during the session. Prudential (02378) fell by up to 6.5%, and Manulife (00945) fell by nearly 3%. Meanwhile, HSBC (00005) fell by nearly 3% at most, and Standard Chartered (02888) fell by up to 4%.
Kwok Ka Yiu stated that the magnitude of the drop in local insurance stocks today reflects to a certain extent the relevant groups' reliance on mainland clients. Taking AIA as an example, mainland clients account for over 50% of Hong Kong's new business value. Although Prudential's proportion is not that high, mainland clients are a key growth driver in new business growth, hence its share price drop ranked second only to AIA among insurers. AIA's share price hit a low of HKD 70.6 this morning, just a step away from its June low of HKD 69.05. However, Kwok Ka Yiu noted that although AIA's share price dropped significantly today, the taxation effect is expected to continue fermenting. Coupled with AIA's interim results to be announced shortly, he suggests investors wait until after results to make a decision for greater safety.
Compared to insurers, the insurance businesses of HSBC and Standard Chartered account for a lower proportion within the groups. However, overnight London share prices fell by nearly 7% collectively at most. Kwok Ka Yiu pointed out that some investors seized the news to lock in profits, given that both have accumulated large recent gains. Furthermore, HSBC had earlier announced its interim results, prompting investors to ship out. As for Manulife, due to its more diversified business, its reliance on mainland clients is far less than AIA and Prudential, hence its share price drop was smaller.
In addition, Manulife released its results today. Benefiting from strong growth in its Asian and US businesses in the second quarter, core earnings grew by 12% year-on-year at constant exchange rates to CAD 1.923 billion. Income attributable to shareholders was CAD 2.11 billion, an increase of 17% year-on-year. During the period, all three new insurance business indicators recorded double-digit growth. Annualized premium equivalent (APE) sales rose 21% year-on-year to CAD 2.698 billion, new business contractual service margin (CSM) rose 16% to HKD 1.024 billion, and new business value rose 10% to HKD 929 million.
"Rate hike expectations heat up, property price growth slows, property stocks face pressure"
Aside from insurance and financial stocks, local property stocks also showed significant declines today. SHK PPT (00016) and Wharf REIC (01997) dropped by nearly 6% at most, while Henderson Land (00012) and CK Asset (01113) fell by nearly 4%. Kwok Ka Yiu stated that Mainland China's taxation on overseas policy returns has the market somewhat worried about the impact on mainland capital outflows. However, since Mainland China has not issued clear policies, it is hard to say the impact on property is significant. Kwok Ka Yiu pointed out that the two more important factors affecting property stocks are: local residential property prices rose significantly in the first half of the year, partly due to market expectations that the US might cut interest rates, but currently not only have rate cut expectations fallen through, the pressure for interest rate hikes is even greater; secondly, after the significant rise in residential property prices through the first half of the year, recent Centaline Property Index figures show that price growth has slowed. Combining these two factors, there may be the possibility of some investors taking the opportunity to ship out.
"Kwok Ka Yiu: Hong Kong stocks relatively undervalued, subsequent chance of sharp drop is slim"
Asian stocks performed mixed this morning. A-shares rose slightly for the time being, while Japanese and Korean stocks showed weakness. The HSI opened more than 200 points lower, with the trend continuing downwards and falling by over 500 points at most during the session. Kwok Ka Yiu, the Director of Business Development at Harbour Family Office, told ET Net News Agency that the HSI has continued to rebound since its June low of over 22,500 points, accumulating a significant gain. Earlier, AI concept stocks were heavily traded while HSI traditional technology and internet stocks came under pressure. Since the AI concept retraced, this sector took the opportunity to catch up, forming a pair trade. However, after heavyweight tech and internet stocks continued to rebound, the upward room is no longer large. Coupled with the approach of the interim results announcement period, the market has turned wait-and-see. As the external economy is full of challenges and Mainland China's economy in the first half of the year was also less than ideal, the market worries that the performance of e-commerce and gaming businesses may not be ideal, prompting some investors to take profits and exit before results announcements.
Kwok Ka Yiu further pointed out that the sharp drop in the HSI today is certainly closely related to rumours that Mainland China is expanding personal income tax to overseas policy returns. Previously, Mainland China successively cracked down on brokers such as Futu involving overseas non-compliant investments, followed by the introduction of offshore value-added taxes. Now expanding the scope to levying taxes on overseas policy returns is of a piece with the previous two. In addition to showing that the central and local governments are tight on fiscal resources, it will also reduce the outflow of funds from Mainland China, further affecting market investment sentiment. Kwok Ka Yiu expects that the upward momentum of the HSI is not large for the time being, with short-term trends remaining soft, and does not rule out the possibility of testing the 20-day moving average (around 25,182). However, the current price of Hong Kong stocks remains relatively undervalued compared to external markets, and the chance of further sharp adjustments is not high. It is expected that the index will consolidate within the range of 25,000 to 26,000 points.
"Mainland China policy return tax expected to continue fermenting, AIA share price expected to reveal true colours after results"
It is reported that Mainland China is expanding personal income tax, with the collection scope extended to levy a 20% tax on various types of income generated by overseas insurance policies. After the news broke, AIA (01299), which has a higher proportion of mainland clients among bank-insurance stocks, plunged by up to 9.2% during the session. Prudential (02378) fell by up to 6.5%, and Manulife (00945) fell by nearly 3%. Meanwhile, HSBC (00005) fell by nearly 3% at most, and Standard Chartered (02888) fell by up to 4%.
Kwok Ka Yiu stated that the magnitude of the drop in local insurance stocks today reflects to a certain extent the relevant groups' reliance on mainland clients. Taking AIA as an example, mainland clients account for over 50% of Hong Kong's new business value. Although Prudential's proportion is not that high, mainland clients are a key growth driver in new business growth, hence its share price drop ranked second only to AIA among insurers. AIA's share price hit a low of HKD 70.6 this morning, just a step away from its June low of HKD 69.05. However, Kwok Ka Yiu noted that although AIA's share price dropped significantly today, the taxation effect is expected to continue fermenting. Coupled with AIA's interim results to be announced shortly, he suggests investors wait until after results to make a decision for greater safety.
Compared to insurers, the insurance businesses of HSBC and Standard Chartered account for a lower proportion within the groups. However, overnight London share prices fell by nearly 7% collectively at most. Kwok Ka Yiu pointed out that some investors seized the news to lock in profits, given that both have accumulated large recent gains. Furthermore, HSBC had earlier announced its interim results, prompting investors to ship out. As for Manulife, due to its more diversified business, its reliance on mainland clients is far less than AIA and Prudential, hence its share price drop was smaller.
In addition, Manulife released its results today. Benefiting from strong growth in its Asian and US businesses in the second quarter, core earnings grew by 12% year-on-year at constant exchange rates to CAD 1.923 billion. Income attributable to shareholders was CAD 2.11 billion, an increase of 17% year-on-year. During the period, all three new insurance business indicators recorded double-digit growth. Annualized premium equivalent (APE) sales rose 21% year-on-year to CAD 2.698 billion, new business contractual service margin (CSM) rose 16% to HKD 1.024 billion, and new business value rose 10% to HKD 929 million.
"Rate hike expectations heat up, property price growth slows, property stocks face pressure"
Aside from insurance and financial stocks, local property stocks also showed significant declines today. SHK PPT (00016) and Wharf REIC (01997) dropped by nearly 6% at most, while Henderson Land (00012) and CK Asset (01113) fell by nearly 4%. Kwok Ka Yiu stated that Mainland China's taxation on overseas policy returns has the market somewhat worried about the impact on mainland capital outflows. However, since Mainland China has not issued clear policies, it is hard to say the impact on property is significant. Kwok Ka Yiu pointed out that the two more important factors affecting property stocks are: local residential property prices rose significantly in the first half of the year, partly due to market expectations that the US might cut interest rates, but currently not only have rate cut expectations fallen through, the pressure for interest rate hikes is even greater; secondly, after the significant rise in residential property prices through the first half of the year, recent Centaline Property Index figures show that price growth has slowed. Combining these two factors, there may be the possibility of some investors taking the opportunity to ship out.
