[ET Net News Agency, 27 June 2024] The Hang Seng Index closed at 17,721 in the morning
session, down 368 points or 2%, with main board turnover of nearly HKD 52.8 billion. The
Hang Seng China Enterprises Index reported at 6334, down 142 points or 2.2%. The Hang Seng
Tech Index was at 3598, down 91 points or 2.5%.
The three largest traded stocks in the Hang Seng Index were Tencent (00700), Xiaomi
(01810) and Meituan (03690); Tencent reported HKD 376.4, down HKD 5.6 or 1.5%, with a
turnover of HKD 2.427 billion; Xiaomi reported HKD 16.46, down HKD 1.36 or 7.6%, with a
turnover of HKD 2.413 billion; Meituan was at HKD 113.6, down HKD 3.4 or 2.9%, with a
turnover of HKD 1.252 billion. The three largest traded stocks on the Hang Seng China
Enterprises Index are Tencent, Xiaomi and Meituan. The three largest traded stocks on the
Hang Seng Tech Index were Tencent, Xiaomi and Meituan.

"Yip Sheung Chi: take turns to speculate becomes take turns to avoid. There is no way to
avoid it but to fall"

Hong Kong stocks fell in early trading to more than 300 points, falling below the 17,800
level again. Yip Sheung Chi, the Chief Strategist of First Shanghai Securities, told ET
Net News Agency that based on the recent reduction in market transactions, the Hang Seng
Index has a slim chance of closing higher in June, and it will be difficult to close above
18,000. He explained that the earlier rise in the market was mainly supported by the
shares of "China characteristics stocks". However, if the Hong Kong Stock Connect dividend
tax reduction measure was not implemented, the speculation ended, so the market has been
consolidating since June.
In response to the drop in trading volume of Hong Kong stocks, Yip Sheung Chi said
frankly that because the policies announced earlier have not yet been implemented, Hong
Kong stocks have formed a strong wait-and-see atmosphere. The shrinking trading volume has
caused the market to take turns to speculate in sectors during the consolidation period,
and the speculation has turned into "avoidance". The trading volume has been low for a
long time, and funds have no choice but to leave the market, which will cause greater
selling pressure on Hong Kong stocks. He pointed out that at present, we can only hope
that measures such as the above-mentioned Hong Kong Stock Connect dividend tax reduction
and exemption may be implemented around 1 July, but there is not much time left and it may
not be implemented in time for 1 July. He added that after the market situation turns to
wait-and-see, it will be difficult to reactivate the upward trend like last month. In
addition, the recent strengthening of the US dollar is also detrimental to the performance
of Hong Kong stocks.

"Falling consumer confidence hits domestic demand stocks"

Mainland China food and beverage stocks have undergone significant adjustments in the
past two months. They rebounded yesterday but were sold off again today. Yip Sheung Chi
analysed that the decline in the domestic demand sector in recent months is mainly due to
the decline in consumer confidence. Mainland China economic data has also triggered
deflation concerns, and the demand for daily necessities has been bearish, dragging down
the performance of the domestic demand sector. He believes that the recent performance can
only be regarded as a rebound, and the overall sector performance is still weak.
The lack of trading volume in Hong Kong stocks has dragged down liquidity. Yip Sheung
Chi pointed out that the lack of liquidity in Hong Kong stocks will intensify the mutual
squeeze. Short-term weak stocks are not suitable for buying. Instead, a more ideal
arrangement is to take advantage of low prices and pay attention to China characteristics
stocks, which will be more stable in the mid-term.