[ET Net News Agency, 05 January 2026] Over the weekend, a swift US military operation in
Venezuela ousted President Maduro. Geopolitical risk was eased and leaves market sentiment
largely unaffected. Asia-Pacific markets broadly rallied, with A-shares playing catch-up
as the Shanghai Composite climbed over 1 per cent to reclaim the 4,000 mark. Only Hong
Kong equities, after last week's sharp gains, appeared to need a breather. The Hang Seng
Index soared over 700 points last Friday (2nd), and opened a further 22 points higher this
morning, reaching 26,445 at its peak, its highest level in a month, before gradually
retreating. By midday, the HSI had slipped 21 points, or less than 0.1 per cent, to
26,316. The Hang Seng China Enterprises Index was down 17 points, or 0.2 per cent, at
9,151, while the Hang Seng Tech Index fell 10 points, or 0.2 per cent, to 5,726.
Stock Connect trading resumed, with southbound capital returning in earnest and net
inflows exceeding HKD 5.7 billion, pushing main board turnover above HKD 155.5 billion.

"Nip Chun Pong: Low probability HSI will fall below 26,000 in the short term"

Despite dramatic political developments in Venezuela, Hong Kong equities remained
steady, with the index trading narrowly in early dealings. Nip Chun Pong, the Chief
Strategist at Solo Securities, told ET Net News Agency that as Venezuela is a South
American country and not an economic powerhouse, market attention is limited and the
impact on the global economy is minor. He noted last Friday's sharp rally lifted
sentiment, and the near-term focus is on whether the HSI can hold above 26,500. If it
does, the next target is 26,800. On the downside, Nip said that recent active trading,
such as the strong debut of Biren Tech (06082) and news of Baidu's (09888) Kunlun chip
listing in Hong Kong, has buoyed chip, AI, and robotics stocks. He believes the chance of
the HSI falling back to the 26,000 support level is fairly low.

"Low Venezuela exposure for Chinese oil majors; losses expected to stabilise within days"

Venezuela holds the world's largest proven oil reserves. Sources familiar with US
government discussions revealed that Trump administration officials have recently told oil
company executives that if they wish to seek compensation for previously seized assets,
such as drilling platforms and pipelines, they must now return to Venezuela and invest
heavily to restore its battered oil infrastructure.
Following these events, oil prices did not collapse. Nip explained that although
Venezuela's reserves are vast, its ageing facilities have seen output fall from more than
two million barrels per day a decade ago to just over 900,000 now, greatly reducing its
global influence. Meanwhile, OPEC's decision to maintain production cuts in the first
quarter is providing short-term price support, resulting in a mild oil price response. Nip
added that even if the US pours capital into modernising Venezuela's oil sector and output
rises, orderly declines in oil prices are only likely to begin from 2027 onwards.
International oil prices have been steady, but Hong Kong-listed Chinese oil majors have
come under pressure, with PetroChina (00857) suffering significant early losses. Nip
stated that, in reality, Venezuelan operations make up a very small proportion of the oil
majors' overall business. CNOOC (00883) and PetroChina both derive over 60 per cent of
their revenue from Mainland China. He believes this drop is mainly due to headline risk,
and expects share prices to stabilise within the next two to three trading days.

"Gold expected to return to USD 4,600 high in one to two months"

With geopolitical tensions rising, funds have flowed into gold as a safe haven. Nip said
that after the Venezuela incident, the market is watching for similar developments in
other South American and African countries, which could continue to support gold prices.
He expects gold to climb back towards its previous high near USD 4,600 in the next one to
two months, with a target of USD 5,000 for this year. Nip suggested that investors looking
to follow gold's movement could consider SPDR Gold (02840), while SD Gold (01787) also
performed well today and is worth considering. For those interested in traditional miners,
Zijin Mining (02899) should be watched for support around the HKD 36 level in the next
couple of sessions; if this holds, the stock could challenge HKD 42 over the coming month.