{Economic Intelligence Agency, November 20} The Philadelphia Semiconductor Index halted its eight-day losing streak, closing up 1.6% on Monday (19th). However, Hong Kong stocks rebounded late, with the semiconductor sector catching up on losses. Combined with declines in HSBC (00005), tech-internet, and mainland banking sectors, the Hang Seng Index broke below its 10-day moving average (approximately 25,263) at the open, losing the 24,000 level and maintaining a drop of around 200 points by midday, closing at 23,956, down 229 points or 1%. Turnover on the main board reached nearly HK$102.1 billion. The Hang Seng China Enterprises Index closed at 8,055, down 72 points or 0.9%. The Hang Seng Tech Index closed at 4,058, down 49 points or 1.2%.
*Wen Gangcheng: Hang Seng Index may test below 23,700 in the short term*
Hong Kong stocks failed to follow the U.S. market rebound after the holiday, dragged down by weak Asian markets, catching up with last Friday's AI-related declines in U.S. stocks. Hardware stocks broadly weakened, with the Hang Seng Index dropping nearly 300 points at one point during the session, breaking below the 24,000 level again. Wen Gangcheng, Investment Director at iFAST Global Markets, told the Economic Intelligence Agency that global markets have recently entered earnings season. If U.S. tech leaders such as SpaceX and Meta report strong results, it could positively influence expectations for Hong Kong's earnings season. However, ahead of earnings season, the APEC Finance Ministers' meeting has commenced, though he stated clearly that the meeting is unlikely to provide any significant market boost, as no major announcements are expected. Therefore, he expects that with consecutive lack of upward momentum, the Hong Kong market could slightly test its bottom, possibly dipping below 23,700 before November, hoping for a slight improvement in sentiment around the time of the U.S. mid-term elections. He also mentioned that due to traditional mainland funding tightening beginning in the fourth quarter, even if market sentiment improves, it would be difficult to expect trading volume to become significantly more active.
*Memory chip prices show no sign of decline; Xiaomi's new car sales remain insufficient to shift sentiment*
Xiaomi (01810) launched its new car series 'Pengcheng,' which saw strong initial sales and stable demand. Recently, capital has been betting that the new car could become a new growth driver for the company, leading to a rebound in its share price with rising volume. Wen Gangcheng acknowledged that Xiaomi has recently benefited from the 'Pengcheng' sales boom and associated market speculation. However, apart from the new car, the company's overall fundamentals have not changed. He does not believe that one 'Pengcheng' model alone is enough to turn Xiaomi's fortunes around. Judging from the current trend, it is still too early to conclude that the stock price has resumed an upward trajectory. Buying at current levels would be a bet on a genuine trend reversal, but resistance around HK$28 remains strong.
Wen Gangcheng noted that from a technical perspective, HK$28 is a key level. If Xiaomi can stabilize above HK$28, there remains potential for further short-term gains. He added that a confirmed decline in memory chip prices would directly benefit Xiaomi, but currently, there is no sign of price declines in the industry, making it difficult for Xiaomi to achieve a breakthrough. For those betting on a medium-to-long-term bottom, buying heavily at current levels appears unattractive. He would prefer to accumulate at a lower level, around HK$24.5, which would be more appealing. (hc)
*Wen Gangcheng: Hang Seng Index may test below 23,700 in the short term*
Hong Kong stocks failed to follow the U.S. market rebound after the holiday, dragged down by weak Asian markets, catching up with last Friday's AI-related declines in U.S. stocks. Hardware stocks broadly weakened, with the Hang Seng Index dropping nearly 300 points at one point during the session, breaking below the 24,000 level again. Wen Gangcheng, Investment Director at iFAST Global Markets, told the Economic Intelligence Agency that global markets have recently entered earnings season. If U.S. tech leaders such as SpaceX and Meta report strong results, it could positively influence expectations for Hong Kong's earnings season. However, ahead of earnings season, the APEC Finance Ministers' meeting has commenced, though he stated clearly that the meeting is unlikely to provide any significant market boost, as no major announcements are expected. Therefore, he expects that with consecutive lack of upward momentum, the Hong Kong market could slightly test its bottom, possibly dipping below 23,700 before November, hoping for a slight improvement in sentiment around the time of the U.S. mid-term elections. He also mentioned that due to traditional mainland funding tightening beginning in the fourth quarter, even if market sentiment improves, it would be difficult to expect trading volume to become significantly more active.
*Memory chip prices show no sign of decline; Xiaomi's new car sales remain insufficient to shift sentiment*
Xiaomi (01810) launched its new car series 'Pengcheng,' which saw strong initial sales and stable demand. Recently, capital has been betting that the new car could become a new growth driver for the company, leading to a rebound in its share price with rising volume. Wen Gangcheng acknowledged that Xiaomi has recently benefited from the 'Pengcheng' sales boom and associated market speculation. However, apart from the new car, the company's overall fundamentals have not changed. He does not believe that one 'Pengcheng' model alone is enough to turn Xiaomi's fortunes around. Judging from the current trend, it is still too early to conclude that the stock price has resumed an upward trajectory. Buying at current levels would be a bet on a genuine trend reversal, but resistance around HK$28 remains strong.
Wen Gangcheng noted that from a technical perspective, HK$28 is a key level. If Xiaomi can stabilize above HK$28, there remains potential for further short-term gains. He added that a confirmed decline in memory chip prices would directly benefit Xiaomi, but currently, there is no sign of price declines in the industry, making it difficult for Xiaomi to achieve a breakthrough. For those betting on a medium-to-long-term bottom, buying heavily at current levels appears unattractive. He would prefer to accumulate at a lower level, around HK$24.5, which would be more appealing. (hc)
