The Economic Times News Agency reported on the 30th: bond prices in the U.S. Treasury market continued to fall, and U.S. Treasury yields kept hitting new highs, with the 10-year Treasury yield reaching a 19-year high and the 30-year Treasury yield hitting a 24-year high. However, New York Fed President Williams stated that the Fed does not need to rush after its September rate hike, easing market fears of another rate hike in October. Rate futures also indicate that market expectations for a rate hike in October have dropped to around 45%. Today is the last trading day for Hong Kong stocks before the National Day holiday with northbound flow participation, recording a net inflow of about HK$6.8 billion. However, trading volume in Hong Kong stocks did not significantly improve ahead of the holiday, with turnover close to HK$187.2 billion. The Hang Seng Index closed at 24,613, up 89 points or 0.4%. The Hang Seng China Enterprises Index stood at 8,220, up 41 points or 0.5%. The Hang Seng Tech Index closed at 4,253, up 4 points or 0.1%.
Hong Kong stocks will lack northbound inflows from October 2 to 7. Referring to last Friday's (25th) Mid-Autumn Festival market, which lacked northbound flow participation, and given that trading volumes in recent trading days have not significantly improved, it is expected that trading volumes in Hong Kong stocks over the next few trading days will remain at around the billion level, and net capital inflows will further decrease. With relatively weak buying support, the market may be more volatile and susceptible to external influences, especially Wednesday's U.S. PCE data, Micron's earnings release, and Friday's U.S. non-farm employment data. However, funds have recently been concentrated in specific sectors such as pharmaceuticals, while higher-weighted sectors like tech-internet and financials have seen little fund deployment. It is expected that the Hang Seng Index may not experience significant fluctuations in the coming days. Despite the continued rise in U.S. bond yields, which will exert selling pressure on Hong Kong stocks, there may not be a significant breakdown risk in the near term, only a daily slight decline, known as a "slow downtrend".
*Property stocks move individually; biotech stocks dominate blue chips*
China will implement mortgage interest subsidies for first-time homebuyers nationwide starting October 1. Property stocks moved individually: China Overseas (00688) fell 1.6%, closing at HK$13.16; Runte (01109) rose 0.3%, closing at HK$30.56; Longfor (00960) fell 1.3%, closing at HK$5.695; Country Garden (02007) rose 3.7%, closing at HK$0.197; Vanke Enterprises (02202) fell 0.7%, closing at HK$2.79.
Funds deployed into biotech stocks before the holiday, with multiple biotech stocks topping the blue chips. CSPC Pharmaceutical Group (01093) rose 6.3%, closing at HK$10.07, the biggest gainer among blue chips; Hansoh Pharmaceutical (03692) rose 5.3%, closing at HK$35.3; WuXi Biologics (02269) rose 4.8%, closing at HK$56.05; WuXi AppTec (02359) rose 3.6%, closing at HK$215.2.
*Optimism over Hengrui Medicine's earnings improvement*
Recently, multiple biotech stocks have outperformed the broader market, with their share prices generally accumulating significant gains, making deployment costly and riskier in a weak market. Although Hengrui Medicine (01276) closed up 9% today, its share price remains relatively close to its bottom level compared to previous levels, suggesting limited downside risk. Additionally, recent positive news provides support, making it worthwhile to buy at lower levels for a potential rebound.
Hengrui recently secured a major overseas deal, reaching an agreement with Novo Nordisk to license its two drugs—HRS-1596, a dual agonist of glucagon-like peptide-1 (GLP-1) and glucose-dependent insulinotropic polypeptide (GIP) receptors—to Novo Nordisk on a paid basis. Novo Nordisk will obtain exclusive rights to develop, manufacture, and commercialize the drug globally outside Greater China, while Hengrui will receive a $300 million upfront payment and additional milestone payments upon achieving development, registration, and commercialization targets. The upfront payment is expected to be received in the fourth quarter of 2026, with the potential total transaction value reaching up to $2.6 billion.
Reviewing Hengrui's previously announced interim results, although the profit figures were not particularly outstanding, the current overseas deal, combined with the U.S. potentially easing restrictions on Chinese innovative drugs going overseas, is expected to help improve Hengrui's performance.
Given today's significant rise in Hengrui's share price, it may be advisable to wait for a pullback to around HK$47.6 before deploying funds. The support level is around the listing low of HK$43, and if it falls below HK$38, consider cutting losses. (am)
Hong Kong stocks will lack northbound inflows from October 2 to 7. Referring to last Friday's (25th) Mid-Autumn Festival market, which lacked northbound flow participation, and given that trading volumes in recent trading days have not significantly improved, it is expected that trading volumes in Hong Kong stocks over the next few trading days will remain at around the billion level, and net capital inflows will further decrease. With relatively weak buying support, the market may be more volatile and susceptible to external influences, especially Wednesday's U.S. PCE data, Micron's earnings release, and Friday's U.S. non-farm employment data. However, funds have recently been concentrated in specific sectors such as pharmaceuticals, while higher-weighted sectors like tech-internet and financials have seen little fund deployment. It is expected that the Hang Seng Index may not experience significant fluctuations in the coming days. Despite the continued rise in U.S. bond yields, which will exert selling pressure on Hong Kong stocks, there may not be a significant breakdown risk in the near term, only a daily slight decline, known as a "slow downtrend".
*Property stocks move individually; biotech stocks dominate blue chips*
China will implement mortgage interest subsidies for first-time homebuyers nationwide starting October 1. Property stocks moved individually: China Overseas (00688) fell 1.6%, closing at HK$13.16; Runte (01109) rose 0.3%, closing at HK$30.56; Longfor (00960) fell 1.3%, closing at HK$5.695; Country Garden (02007) rose 3.7%, closing at HK$0.197; Vanke Enterprises (02202) fell 0.7%, closing at HK$2.79.
Funds deployed into biotech stocks before the holiday, with multiple biotech stocks topping the blue chips. CSPC Pharmaceutical Group (01093) rose 6.3%, closing at HK$10.07, the biggest gainer among blue chips; Hansoh Pharmaceutical (03692) rose 5.3%, closing at HK$35.3; WuXi Biologics (02269) rose 4.8%, closing at HK$56.05; WuXi AppTec (02359) rose 3.6%, closing at HK$215.2.
*Optimism over Hengrui Medicine's earnings improvement*
Recently, multiple biotech stocks have outperformed the broader market, with their share prices generally accumulating significant gains, making deployment costly and riskier in a weak market. Although Hengrui Medicine (01276) closed up 9% today, its share price remains relatively close to its bottom level compared to previous levels, suggesting limited downside risk. Additionally, recent positive news provides support, making it worthwhile to buy at lower levels for a potential rebound.
Hengrui recently secured a major overseas deal, reaching an agreement with Novo Nordisk to license its two drugs—HRS-1596, a dual agonist of glucagon-like peptide-1 (GLP-1) and glucose-dependent insulinotropic polypeptide (GIP) receptors—to Novo Nordisk on a paid basis. Novo Nordisk will obtain exclusive rights to develop, manufacture, and commercialize the drug globally outside Greater China, while Hengrui will receive a $300 million upfront payment and additional milestone payments upon achieving development, registration, and commercialization targets. The upfront payment is expected to be received in the fourth quarter of 2026, with the potential total transaction value reaching up to $2.6 billion.
Reviewing Hengrui's previously announced interim results, although the profit figures were not particularly outstanding, the current overseas deal, combined with the U.S. potentially easing restrictions on Chinese innovative drugs going overseas, is expected to help improve Hengrui's performance.
Given today's significant rise in Hengrui's share price, it may be advisable to wait for a pullback to around HK$47.6 before deploying funds. The support level is around the listing low of HK$43, and if it falls below HK$38, consider cutting losses. (am)
