[ET Net News Agency, 19 March 2024] The Hang Seng Index reported a decline of 186 points
or 1.1% at 16,550 in the morning session. The main board recorded a trading volume of over
HKD 49.7 billion. The Hang Seng China Enterprises Index dropped 60 points or 1% to 5,787,
while the Hang Seng Tech Index fell 63 points or 1.8% to 3,530.
The top three stocks in terms of trading volume on the HSI were Tencent (00700), AIA
(01299), and Li Auto (02015). Tencent closed at HKD 286.2, down HKD 3.6 or 1.2%, with a
turnover of HKD 2.534 billion. AIA closed at HKD 57.45, down HKD 1.6 or 2.7%, with a
turnover of HKD 1.881 billion. Li Auto closed at HKD 126.1, down HKD 12.9 or 9.3%, with a
turnover of HKD 1.56 billion. The top three stocks in terms of trading volume of the Hang
Seng China Enterprises Index were Tencent, Li Auto, and Alibaba (09988). Alibaba closed at
HKD 71.05, down HKD 0.95 or 1.3%, with a turnover of HKD 1.384 billion. The top three
stocks in terms of trading volume of the Hang Seng Tech Index were Tencent, Li Auto, and
Alibaba.

"Wan Kong Shing: if the Federal Reserve hints at fewer than three rate cuts, there will be
significant downward pressure on the Hong Kong stock market"

The Hang Seng Index showed volatility in the morning session, hovering around the
100-day moving average. After a drop of over 200 points, the decline narrowed, with a
midday decrease of over 100 points. Before the midday market break, the Bank of Japan
announced an increase in the benchmark interest rate from -0.1 basis points to 0 to 0.1
basis points, marking the end of an 8-year negative interest rate policy and the first
rate hike in 17 years. Wan Kong Shing, the Vice President of iFAST Global Markets, told ET
Net News Agency that the market closely watched the direction of the Bank of Japan's
monetary policy announcement. The rate hike by the Bank of Japan was in line with market
expectations, but the tightening was slightly stronger than anticipated, which is expected
to have a somewhat negative impact on the Hong Kong stock market.
In addition, market participants will need to continue to observe the hints from the US
Federal Reserve regarding the pace of rate cuts within this week. If the expectation is
for only two rate cuts, which is fewer than market expectations, it could trigger
significant market volatility, and the HSI could potentially test the 15,500 level, which
was the lower range reached in February. On the other hand, if the Federal Reserve hints
at three rate cuts, the HSI could find stronger support around 16,000.

"The electric vehicle industry is clearly losing momentum"

According to China media reports, the latest flagship model MEGA from Li Auto (02015)
has been on sale for half a month and has only received 4,000 orders, which is less than
the monthly production capacity of 5,000 units. This has raised concerns about
overcapacity risks. The news significantly dragged down its stock price, with a decline of
nearly 10% at the midday session, breaking below the 250-day moving average. Wan Kong
Shing stated that he has recently been cautious about electric vehicle stocks due to the
industry's obvious pressure. Tesla led the way in reducing prices, followed by Apple's
announcement of its exit, which raised doubts about the sustainability of the industry. Li
Auto experienced a significant drop today, and even if there is a rebound, it is expected
to face resistance around HKD 130. He predicts that the adjustment is not yet complete and
may test the initial support level around HKD 120.

"Xiaomi cannot offer a low price electric car, which could put pressure on its stock
price"

In addition, Xiaomi (01810) is expected to launch its first car in the near future, with
a market expectation of a selling price of no less than RMB 200,000. Selling new cars at a
high price, Wan Kong Shing also expressed scepticism about Xiaomi, stating that if the
Xiaomi SU7 is priced close to RMB 300,000, the market may not be willing to buy Xiaomi
cars at that price. Therefore, after the SU7 is launched, it will be important to observe
whether its performance surpasses competitors and justifies the price, which will have
implications for its future prospects. In terms of trends, it is expected that Xiaomi will
find initial support around HKD 13.8, which was the top range in the period of January to
February.