[ET Net News Agency, 09 March 2026] Mojtaba, the son of Iran's late Supreme Leader
Khamenei, has been named as successor, signalling that Iran is in no mood to capitulate,
and suggesting that US and Israeli military actions are likely to intensify. Last night,
airstrikes hit five oil facilities in Tehran and neighbouring regions, and military
operations will reportedly target Mojtaba in the future. During the session, the Hang Seng
Index plunged more than 850 points, hitting a low of 24,906, precisely within the
24,900-24,999 range, which was the key "bull contract" concentration area yesterday, with
a total of 1,740 contracts. This indicates that the vast majority of bull contracts in
this range have been knocked out. After the bears drove the index down and "slaughtered
the bulls," the HSI rebounded from its intraday low, and by midday had reclaimed the
25,000 mark to close at 25,101, still down 656 points or 2.5%. Main board turnover
exceeded HKD219.3 billion. Of particular note, however, was strong southbound inflow from
the Mainland China, with net purchases exceeding HKD17.5 billion for the morning. The Hang
Seng China Enterprises Index finished at 8,470, down 157 points or 1.8%. The Hang Seng
Tech Index fell 115 points or 2.3% to 4,832.

"Nip Chun Pong: HSI likely to find support near 24,700"

The Middle East situation continues to deteriorate, sending international oil prices
surging and US stock index futures sharply lower at the open. Asia-Pacific markets fell
across the board this morning, with the Nikkei plunging 7%, the KOSPI sinking 8%, and
Taiwanese equities sliding over 5%. The Hang Seng Index gapped down more than 600 points
at the open, breaching the 25,000 level and, at one stage, the 250-day moving average. Nip
Chun Pong, the Chief Strategist at Solo Securities, told ET Net News Agency that the
worsening external environment is pushing up risk aversion, evidenced by the marked falls
across Asia-Pacific markets today. Despite the HSI breaching 25,000, Nip does not expect
further escalation of the conflict, and thus sees limited downside risks. Currently, bull
contracts only account for about 55% to 56% of all outstanding derivative warrants, which
is not especially high, so there is not strong momentum for further downside. Should
tensions ease even slightly, there is scope for an HSI rebound.
Nip added that, following on from hopes surrounding last week's Two Sessions, certain
emerging sectors such as artificial intelligence, robotics and brain-computer interface
are likely to benefit, although large-cap companies may not see immediate gains. These
positive drivers have been overshadowed by external negativity, but stock-picking within
these high-growth segments is likely to attract speculative flows even if the wider market
remains under pressure. In his view, the HSI's downside is limited, with support likely at
24,700-24,800. Any rebound will depend on external developments; should the backdrop
improve, the index could rebound to around 25,500.

"Sinopec's valuation remains stretched"

There are growing concerns about oil supply disruptions over the coming months, sending
oil prices surging by more than 20% in early Asian trading on Monday, the highest since
the 2022 Russia-Ukraine conflict. Nip explained that while a short-term rapprochement
between the US and Iran appears unlikely, the experience of 2022 showed that an initial
spike in oil prices can quickly reverse if tensions do not worsen. If the situation
stabilises, market fear is likely to recede, allowing oil prices and risk assets to regain
their footing.
Today, CNOOC (00883) and PetroChina (00857) both rallied sharply against the wider
market, each surging more than 8% at one stage, with CNOOC hitting a record high. Nip
noted that although CNOOC and PetroChina sharply outperformed, their gains narrowed during
the early session as some investors opted to take profits on concerns about a possible oil
price pullback, coupled with broad-based market weakness. Nevertheless, sustained high oil
prices continue to attract incremental buyers. Nip believes the outlook for the two "oil
majors" is closely tied to future oil price movements: should prices keep rising, CNOOC
could reach HKD30 and PetroChina HKD12. However, he cautioned that, given the substantial
rallies already logged, a near-term correction is possible. Investors yet to establish
positions face elevated entry risk at current levels.
As for Sinopec (00386), shares underperformed today in line with the broader market. Nip
remarked that although Sinopec's share price has declined by about 10% since last
Tuesday's peak, its interim earnings have slipped and the prospective P/E has risen to 15
times, making current levels unattractive. The stock's December low was HKD4.27, and,
despite the recent correction, the shares are still up 17% from that trough, meaning the
pullback is not yet deep enough, and further downside remains possible. Additionally,
Premier Li Qiang's government work report to the Two Sessions set this year's GDP growth
target at 4.5%-5%, below the previous years' 5% target, and with an emphasis on "healthy
development" over aggressive infrastructure expansion, large-scale increases in energy
demand appear unlikely. As a downstream player, Sinopec's revenue growth is therefore
likely to be limited this year. Nip concluded that unless the shares pull back to the
HKD4.7-4.8 range, they offer little investment appeal even to those hoping to capitalise
on a fall in oil prices.