[ET Net News Agency, 02 May 2025] The spokesperson for the Chinese Ministry of Commerce
stated that the US has recently conveyed messages to China through various channels,
expressing a desire to engage in dialogue. In response, China is currently assessing the
situation. With hopes of resolving the US-China tariff issues, the Hang Seng Index
reported 22,493, up 374 points or 1.7%, with turnover exceeding HKD 78.3 billion. The Hang
Seng China Enterprises Index was at 8,224, up 148 points or 1.8%. The Hang Seng Tech Index
stood at 5,254, up 166 points or 3.3%.

"Ryan Chan: Short-term rebound does not confirm capital inflow, Hang Seng Index struggles
to break the 50-day moving average"

During the Labour Day holiday, southbound capital was inactive, but the recovery of US
stocks and strong delivery data from new energy vehicles boosted Hong Kong stocks, leading
to a rise of over 300 points, breaking the 22,200 resistance. Ryan Chan, an executive
director of Eddid Financial, told ET Net News Agency that while the Hang Seng Index has
surpassed previous resistance levels, the "tariff gap" near the 50-day moving average
around 22,800 remains the largest resistance. He anticipates that significant news will be
needed to push the market beyond this key level. He believes that a clear resolution
direction regarding the tariff war is essential for genuine market recovery; even if any
stimulating measures are introduced after Labour Day, the lack of clarity on the tariff
issue will hinder market momentum.
Ryan Chan noted that while the negative factors from the tariff war have somewhat
diminished, they have not been fully resolved. In the US stock market, despite some
easing, leading stocks have shown mixed performance, and there has been no substantial
inflow of capital, limiting support for the recovery of US stocks, which in turn
constrains the upward potential of Hong Kong stocks. He expects the Hang Seng Index to
fluctuate between 21,500 and 22,800 until a resolution on the tariff war emerges.

"Gold prices have a high chance of breaking new highs; Chifeng Gold offers a speculative
opportunity"

With the recovery of US stocks, gold prices have seen profit-taking, with New York
futures dipping below USD 3,300 to a low of USD 3,209 before showing slight rebound
momentum this morning. The SPDR Gold ETF (02840) dropped over 2% at one point but narrowed
its losses to about 1% as gold prices rebounded. Ryan Chan believes there is a significant
chance for gold prices to break new highs; unless the tariff war unexpectedly concludes,
it is nearly impossible for gold to fall below USD 3,000. He suggests that investors
consider deploying when gold prices retreat, as there is support near USD 3,200. A rise
back above USD 3,300 should not take too long. However, he emphasises that gold does not
generate interest; unless investing in leveraged products, holding substantial gold
positions is not practical from an investment perspective, and he does not recommend
investors go all-in on gold.
The pressure on gold prices has generally affected gold mining stocks this morning, but
blue-chip Zijin Mining (02899) recently announced its plan to spin off its overseas gold
mining business for a main board listing, driving its stock price up by over 3%. Ryan Chan
has consistently maintained that gold mining stocks exhibit more volatility than gold
ETFs, especially since Zijin also engages in substantial copper mining, which offsets gold
revenues, causing its stock price to behave differently from gold prices.
However, Ryan Chan pointed out that gold mining stocks have greater leverage compared to
gold ETFs, and the risk-return profile for short-term trading is more favourable than that
of ETFs, which has driven recent performance in gold mining stocks. Chifeng Gold (06693)
has shown strong performance recently, and Ryan Chan notes that its shares are not
expensive based on market capitalisation. As the stock has not been listed for six months
and is still in a lock-up period, he anticipates that a drop to the 20-day moving average
could present another trading opportunity, with potential short-term gains towards the
previous peak of HKD 36 being significant, making it worth considering at current prices.