[ET Net News Agency, 02 October 2024] The market is once again worried about the
geopolitical situation and U.S. stocks are under pressure. However, Hong Kong stocks still
performed strongly without southbound funds. The Hang Seng Index rose strongly to over 800
points during the session, regaining 22,000 points, further enhancing the stock market
sentiment. The Hang Seng Index gradually attacked and rose to 22,640 points and finally
found a breather. The current resistance level is expected to be the high of 22,700 points
in January last year.
The Hang Seng Index closed at 22,401 for half a day, up 1,268 points or 6%. If this
upward trend is maintained until the full day close, it is expected to record the largest
increase since March 2022. Transactions were still unexpected, with half-day main board
transaction volume reaching nearly RMB 235.4 billion.
The Hang Seng China Enterprises Index reported at 8,051, up 541 points or 7.2%. The Hang
Seng Tech Index reported at 5,166, up 414 points or 8.7%.

"Cheung Chi Wai: foreign capital continues to inflow, further pushing up Hong Kong stocks"

Although the situation in the Middle East has become tense, after Iran launched about
200 missiles at Israel yesterday (1 October), Israel has threatened to retaliate. The
three major U.S. stock indexes fell overnight, and the Japanese and Korean stock markets
also fell this morning. However, the Hang Seng Index was not affected by geopolitical
tensions. After opening over 100 points higher this morning, the index continued to rise.
Cheung Chi Wai, a joint managing director at Prudential Brokerage Ltd, told ET Net News
Agency that the main board transaction volume of the Hang Seng Index on Monday (30
September) exceeded HKD 500 billion, a record high, showing the strength of Hong Kong
stocks. Even if the Asia-Pacific stock market falls, it will not damage the rise of Hong
Kong stocks. Since Hong Kong stocks lagged behind in the past and the index has soared
recently, foreign funds hold a low proportion of Chinese and Hong Kong stocks. Now that
Hong Kong stocks have rebounded strongly, funds can only follow up and buy. Asia-Pacific
stock markets have fallen, and funds have flowed into Hong Kong stocks, accelerating the
rise of Hong Kong stocks. As for, how much room does the Hang Seng Index have to rise?
Cheung Chi Wai believes that the market should not be overestimated when the market rises.
Since Hong Kong stocks have recently reached new highs this year, it is difficult to say
how much room for upside there will be. It is expected to encounter resistance in the
range of 22,500 points to 25,000 points.

"Postal Savings Bank of China lowers agency fee rate by up to 33.8 basis points"

Postal Savings Bank of China (01658) announced that it plans to pay an interim dividend
of RMB 1.477 per 10 shares. At the same time, a supplementary agreement was entered into
with the Postal Group to adjust the savings agency fee rate for the agency's business of
absorbing RMB personal deposits. The reduction rate varies according to different deposit
period levels, ranging from a reduction of at least 8 basis points for two-year to a
reduction of up to 33.8 basis points for current, subject to shareholder approval.
According to brokerage analysis, since the average net interest spread of the four major
banks has dropped to a low of 1.44% last year, which is lower than the passive adjustment
bottom line of 1.64%, this has triggered a passive adjustment of the Postal Savings Bank's
savings agency fee.
This time, the Postal Savings Bank of China lowered its deposit interest rate by a large
margin, with the average agency fee rate falling sharply by 16 basis points. However, it
is "small in the middle and large in the first and last", with current, three-month,
half-year, one-year, two-year, and three-year terms deposit rates have dropped
significantly by 33.8, 16.5, 14.9, 10.1, 20.1, and 8 basis points respectively, and the
total agency fees can be reduced by RMB 15.058 billion.

"What is agency fee?"

The agency rate is a fee unique to the Postal Savings Bank. It is the deposit interest
rate generated by the Postal Savings Bank entrusting its controlling shareholder, Postal
Group, to handle some commercial banking services through agent outlets. Since the payment
is settled through the postal group's agent outlets, which is different from the depositor
directly settling with the bank, the deposit interest rate is called the agency rate,
which is the same as the deposit interest rate given by ordinary banks to depositors.
Savings agency fees account for a large proportion of the bank's business and management
fees, and this cost is much higher than employee costs.

"Supporting the property market will sacrifice the interests of banks to some extent."

Postal Savings Bank's share price surged as much as 13% this morning, sharply
outperforming the gains of the four major banks. Cheung Chi Wai pointed out that the
Postal Savings Bank's increase today has the effect of not only paying dividends, but also
reducing agency fees. The People's Bank of China earlier lowered existing mortgage
interest rates and significantly lowered the down payment ratio for second homes. Mainland
China banks generally have to face the impact of falling net interest margins. The Postal
Savings Bank's reduction in agency fees will help improve the net interest margin, which
is beneficial to the Postal Savings Bank. However, the Mainland China's series of measures
to support the property market and stimulate the economy have more or less sacrificed the
interests of Mainland China banks. This is also the reason why Mainland China bank stocks
have underperformed the market during this wave of market gains. Therefore, even if the
Postal Savings Bank of China's stock price rises sharply today, he still does not
recommend buying bank stocks.