[ET Net News Agency, 27 February 2025] This morning, it was reported that the US
President plans to impose a 25% import tariff on allies in the EU, indirectly increasing
the competitiveness of Chinese imports. As a result, Hong Kong stocks rose further this
morning, breaking through the psychological barrier of 24,000, reaching a new high in over
three years. However, selling pressure soon emerged, with AI concepts leading to a rapid
retreat in Hong Kong stocks. The Hang Seng Index closed at 23,535, down 252 points or
1.1%, with a turnover of nearly HKD 235 billion. The Hang Seng China Enterprises Index
stood at 8,658, down 133 points or 1.5%. The Hang Seng Tech Index reported 5,805, down 148
points or 2.5%.

"Nip Chun Pong: The Hang Seng Index's future depends on whether it can close above 23,500
points today"

The Hang Seng Index briefly broke 24,000 points and reached a near three-year high, but
faced significant resistance at this level, leading to a decline from its peak. Nip Chun
Pong, the Chief Strategist at Blackwell Global Securities, told ET Net News Agency that
there is considerable selling pressure at the 24,000 mark. Historical data shows that
between November 2021 and February 2022, the Hang Seng Index hovered around 24,000, with
an average closing price of only about 23,900, indicating strong resistance at this level.
The increase in turnover also reflects the presence of many investors who bought at high
levels and have been holding for nearly three years, which is normal given the selling
pressure. He further pointed out that even if the Hang Seng Index closes above 24,000, it
needs to hold above 24,300 for two consecutive trading days to confirm a sustained upward
momentum.
In the short term, Nip Chun Pong believes that if the Hang Seng Index can close above
23,500 today, it would indicate only a slight consolidation, with further recovery
potential ahead.

"If the Hang Seng Index stabilises at 24,000, there could be gains in domestic property
and consumer sectors"

The Two Sessions will be held in Beijing from 4 to 5 March 2025. Ahead of the meetings,
the domestic demand and property sectors are playing catch-up. Yesterday, Longfor Group
(00960) led the blue chips at close, and this morning, Haidilao (06862) and Mengniu Dairy
(02319) have shown strong performance. Nip Chun Pong believes that the domestic demand and
property sectors have recently attracted capital attention, partly due to policy
expectations ahead of the meetings, and the wealth effect from the stock market has also
stimulated the consumption willingness of residents in Mainland China, leading to capital
inflows into these sectors. For investors who do not currently hold stocks, Nip Chun Pong
stated that prior capital flows went into technology stocks, particularly AI shares, while
the property and domestic demand sectors lagged behind, making them attractive for entry
now. If the Hang Seng Index stabilises at 24,000, these two sectors could potentially rise
by 12-15%. However, he cautioned that if market sentiment worsens and the Hang Seng Index
falls below 23,000, stop-loss measures may need to be implemented; if the index can
maintain above 23,500, investors can continue to hold their positions.
Previously, during important meetings in the Mainland China, there were instances of
sectors strengthening before the meetings, but stock prices plummeting afterwards. Nip
Chun Pong noted that while price movements prior to meetings are often driven by news,
this does not necessarily mean that prices will drop post-meeting. The future performance
of the property sector will depend on the monthly sales data of the real estate market in
Mainland China, while the domestic demand sector will mainly depend on the monthly CPI. If
the data continues to improve, capital will keep flowing into these sectors.