[ET Net News Agency, 05 November 2024] The CIIE opened today. Premier Li Qiang expressed
confidence in the achievement of this year's goals and the economic development in the
coming period. Coupled with good economic data, A shares rose sharply in half a day,
driving Hong Kong stocks to rise intraday, and the Hang Seng Index broke through in 20-day
SMA (approximately 20,605), but the market expects it will be difficult to break through
21,000 in the short term. The Hang Seng Index reported 20,823 in the half-day, up 255
points or 1.2%. The main board transaction was nearly HKD 83.2 billion, which was
significantly higher than the transaction at the same time yesterday.
The Hang Seng China Enterprises Index reported at 7,478, up 111 points or 1.5%. The Hang
Seng Tech Index reported at 4,622, up 90 points or 2%.

"Cheung Chi Wai: The shrinking trading volume of Hong Kong stocks is unfavourable to the
market"

Caixin announced that the service PMI in October was 52, remaining above the recession
line and hitting the highest level in three months, beating expectations of 50.5. Hong
Kong stocks were affected this morning by the retreat of U.S. stocks and opened 157 points
lower before rebounding. The domestic demand sector led the Hang Seng Index to
counterattack upward and HSI rose by more than 200 points at most in half a day. Cheung
Chi Wai, a joint managing director at Prudential Brokerage Ltd, told ET Net News Agency
that the Caixin PMI news was obviously positive for Hong Kong stocks. Hong Kong stocks
were soft before the news was announced, but the Hang Seng Index immediately started to
rise after the data was released, reflecting the PMI's optimism about the outlook is
reflected in the stock market. However, he made it clear that the current increase is not
too big. There is always a strong wait-and-see atmosphere before the results of the US
election. In addition, yesterday's Hong Kong stock trading volume shrank to HKD 110
billion, which is not good for the market trend. Investors should not be overly optimistic
now. It will be even more unfavourable if it shrinks to less than HKD 100 billion.
He also mentioned that the National People's Congress Standing Committee meeting will
conclude this Friday (8th). If there are no stimulus measures as expected by the market,
the trend of Hong Kong stocks will be tested. For the short-term, Hang Seng Index will
continue to range from 20,000 to 21,000. Foreign media previously reported that no matter
who wins the US presidential election, China will not launch a "bazooka-style" economic
stimulus plan at least this year.
Prime Minister Li Qiang mentioned that he is confident in achieving this year's economic
growth target. Cheung Chi Wai said that the current market is still confident in "5%
guarantee" for the whole year. The implementation of a package of policies has indeed laid
a solid foundation, and it is expected that there will still be a greater chance of
successful "5% guarantee" for the whole year.

"Domestic demand is too strong in the short term, and current price speculation is not a
good idea"

The PMI data released by the official and Caixin in October both showed a good
situation, and overall returned to the expansion range, driving the domestic demand sector
to be strong this morning. However, Cheung Chi Wai reminded that domestic demand stocks
were rising due to the good PMI in October, but the short-term market sentiment is
enthusiastic, which may lead to the risk of overbought. If the current price is high, be
careful of the risk of retreat.
He mentioned that the news in November and December is unlikely to be good for domestic
demand, but next year's Lunar New Year will begin as early as the end of January. Now we
can start to look forward to the recovery of the consumer market before the Lunar New
Year, and we can also start to deploy related stocks. However, he made it clear that after
today's speculation, the current price of many stocks will be relatively high. For
example, if Anta (02020) can fall below HKD 85, it will be more advantageous to buy near
HKD 81. In the short term, it may rise to HKD 90. In terms of food stocks, Nongfu Spring
(09633) was strong this morning, rising by more than 10% at most. He pointed out that the
stock has been stirred up in the past two trading days, and it is expected to challenge
the previous top of HKD 35.75 in the short term.