[ET Net News Agency, 20 January 2026] Following the People's Bank of China's announcement of a targeted rate cut, the latest loan prime rates (LPR) for January remained unchanged. The five-year-plus LPR stayed at 3.5% and the one-year LPR at 3%, marking eight consecutive months of stability and meeting market expectations. With a lack of fresh positive drivers, Hong Kong stocks have struggled to push beyond the 27,000 mark. At midday, the Hang Seng Index was at 26,552, down 11 points or less than 0.1%. The index briefly climbed to 26,638, breaking above the 10-day moving average (around 26,618), but quickly slipped back on renewed selling. The Hang Seng China Enterprises Index was at 9,123, down 11 points or 0.1%, while the Hang Seng Tech Index fell 38 points or 0.7% to 5,711. Total main board turnover exceeded HKD 129.8 billion for the morning session.
"Yuen Che Hay: A-Share top signals spell adjustment for HSI, but no urgent need to reduce holdings"
After the increase in A-share margin requirement ratios, both the Shanghai and Hong Kong markets have seen a clear drop in turnover. The HSI has found some support near 26,500 after failing to break 27,000, but weaker capital flows are weighing on the market. Yuen Che Hay, the Co-Director of Investment Strategy of Quam Asset Securities, told ET Net News Agency that after the margin requirement was restored to 100%, the A-share rally stalled, with the Shanghai Composite showing topping signals at 4,200. Historically, when A-shares top out, corrections tend to last longer than just a few days, and he expects both prices and volumes to fall in the short term, which will inevitably affect Hong Kong stocks.
Yuen said it is difficult to predict when the HSI will rebound, and the key now is to watch for signs of stabilisation rather than trying to catch the bottom. However, he is not overly pessimistic in the near term and does not think the index will immediately fall back to last year's Q4 low of 25,200. He suggests 26,000 as an initial correction target, with hope that positive earnings surprises during results season could provide support. In terms of market signals to watch for a rebound, he recommends paying attention to the average daily turnover of the Shanghai Composite, only when both price and turnover recover is there a real chance for Hong Kong stocks to bottom out and rebound.
As for positioning, Yuen advises investors to stay on the sidelines for now, as downside risk is not considered high. Apart from weak names like Meituan (03690), he believes there is no need to reduce holdings in popular tech stocks such as Alibaba (09988) and Kuaishou (01024). Resource stocks that are outperforming even in a down market can also be held with confidence.
"Pop Mart's share buyback offers support, but key level remains HKD 228"
After more than four months of heavy selling, Pop Mart (09992) finally succumbed to market pressure, launching its first buyback in nearly two years, spending HKD 251 million to repurchase 1.4 million shares at prices between HKD 177.7 and HKD 181.2 each. This rare move, after a long absence of buybacks, had a greater impact than any news flow, and the share price rebounded sharply this morning, surging over 8% to become the best performer among blue chips for the session.
Yuen acknowledges that the timing and scale of the buyback have a significant positive effect, as it signals management's belief that the current level represents long-term value. However, he points out that the key to sustained support is the continued execution of buybacks. While the HKD 251 million buyback is substantial, it will take more than just a few rounds of similar scale to drive a lasting recovery in the share price. Investors should also observe whether the market responds well to these actions. From a technical perspective, Yuen believes Pop Mart needs to recover the HKD 228 level, corresponding to the 0.5 retracement of the golden ratio, before any sustained rebound can be expected. Without this, the share price may lack upward momentum.
Beyond capital management, Yuen notes that the market's fundamental view on Pop Mart remains unchanged: the scarcity factor of Labubu has faded, and with interest cooling off, Pop Mart will need to discover a new blockbuster hit to replicate the previous surge in its share price.
"Yuen Che Hay: A-Share top signals spell adjustment for HSI, but no urgent need to reduce holdings"
After the increase in A-share margin requirement ratios, both the Shanghai and Hong Kong markets have seen a clear drop in turnover. The HSI has found some support near 26,500 after failing to break 27,000, but weaker capital flows are weighing on the market. Yuen Che Hay, the Co-Director of Investment Strategy of Quam Asset Securities, told ET Net News Agency that after the margin requirement was restored to 100%, the A-share rally stalled, with the Shanghai Composite showing topping signals at 4,200. Historically, when A-shares top out, corrections tend to last longer than just a few days, and he expects both prices and volumes to fall in the short term, which will inevitably affect Hong Kong stocks.
Yuen said it is difficult to predict when the HSI will rebound, and the key now is to watch for signs of stabilisation rather than trying to catch the bottom. However, he is not overly pessimistic in the near term and does not think the index will immediately fall back to last year's Q4 low of 25,200. He suggests 26,000 as an initial correction target, with hope that positive earnings surprises during results season could provide support. In terms of market signals to watch for a rebound, he recommends paying attention to the average daily turnover of the Shanghai Composite, only when both price and turnover recover is there a real chance for Hong Kong stocks to bottom out and rebound.
As for positioning, Yuen advises investors to stay on the sidelines for now, as downside risk is not considered high. Apart from weak names like Meituan (03690), he believes there is no need to reduce holdings in popular tech stocks such as Alibaba (09988) and Kuaishou (01024). Resource stocks that are outperforming even in a down market can also be held with confidence.
"Pop Mart's share buyback offers support, but key level remains HKD 228"
After more than four months of heavy selling, Pop Mart (09992) finally succumbed to market pressure, launching its first buyback in nearly two years, spending HKD 251 million to repurchase 1.4 million shares at prices between HKD 177.7 and HKD 181.2 each. This rare move, after a long absence of buybacks, had a greater impact than any news flow, and the share price rebounded sharply this morning, surging over 8% to become the best performer among blue chips for the session.
Yuen acknowledges that the timing and scale of the buyback have a significant positive effect, as it signals management's belief that the current level represents long-term value. However, he points out that the key to sustained support is the continued execution of buybacks. While the HKD 251 million buyback is substantial, it will take more than just a few rounds of similar scale to drive a lasting recovery in the share price. Investors should also observe whether the market responds well to these actions. From a technical perspective, Yuen believes Pop Mart needs to recover the HKD 228 level, corresponding to the 0.5 retracement of the golden ratio, before any sustained rebound can be expected. Without this, the share price may lack upward momentum.
Beyond capital management, Yuen notes that the market's fundamental view on Pop Mart remains unchanged: the scarcity factor of Labubu has faded, and with interest cooling off, Pop Mart will need to discover a new blockbuster hit to replicate the previous surge in its share price.