[ET Net News Agency, 02 July 2025] After the market reopened following the 1 July
holiday, Hong Kong stocks traded in a volatile and directionless manner, though certain
sectors received a boost from positive news. At midday, the HSI was at 24,220, up 148
points or 0.6 percent, with main board turnover exceeding HKD 135.2 billion. The Hang Seng
China Enterprises Index was at 8,730, up 52 points or 0.6 percent. The Hang Seng Tech
Index was at 5,288, down 14 points or 0.3 percent.

"Nip Chun Pong: weaker HKD dampens blue chips, HSI is expected to trade between 23,800 and
24,500"

After three consecutive days of declines, Hong Kong stocks rebounded this morning. The
HSI opened more than 200 points higher and was up as much as 300 points in early trading.
However, the index quickly retreated from its highs, with gains narrowing to just 50
points at one stage. Nip Chun Pong, the Chief Strategist at Blackwell Global Securities,
told ET Net News Agency that although the Hong Kong market has corrected for three days,
the range was not large, just about 400 points. The HSI is still holding above 24,000,
remaining at a high level. Looking back at the market highs in March, there were only six
trading days where the HSI closed above 24,000, and the current level is comparable to the
highs of early 2022. At present, funds are favouring stock picking over broad-based index
investing, and blue chips are less attractive to capital compared to new consumer stocks.
The previously announced "New Energy Vehicle Consumption Season" across thousands of
counties and towns on the Mainland China has also provided only limited support to the
overall market. In addition, the Hong Kong dollar has weakened recently, with the HKMA's
latest intervention involving HKD 20 billion in purchases, suggesting signs of capital
outflow. This has somewhat capped the HSI's upside.
Nonetheless, with overall sentiment in global financial markets still positive, Nip Chun
Pong believes the downside for the HSI is limited. If the index falls to 23,800, filling
the gap from 23 and 24 June, there should be some support. Resistance is seen at the June
high of around 24,500. In other words, the HSI is expected to fluctuate in the
23,800-24,500 range in the short term.

"Macao gaming revenue surges 19 percent, Melco Int'l Dev outperforms"

The Macao Gaming Inspection and Coordination Bureau announced that gaming revenue in
June was MOP 21.064 billion, up 19 percent year-on-year and down 0.6 percent
month-on-month, beating market expectations of MOP 19.75 billion. In the first six months
of this year, gaming revenue totalled MOP 118.771 billion, up 4.4 percent year-on-year.
Driven by the strong data, several gaming stocks performed well, with Galaxy Ent (00027)
up as much as 9 percent, and Sands China (01928) up as much as 8 percent. Melco Int'l Dev
(00200) outshone its peers, surging as much as 25 percent to a one-year high in morning
trading. Nip Chun Pong noted that Macao's June gaming revenue was a positive surprise,
especially as June is traditionally a low season for gaming. However, Macao's
government-driven event economy, with concerts attracting visitors and boosting spending,
drove up gaming revenue. Nip expects that with more concerts scheduled in July and the
summer peak season underway, Macao's gaming revenue should continue to rise, attracting
further investment.
As for Melco Int'l Dev's standout share price performance, Nip pointed out that the
company's rights issue in mid-June was oversubscribed by 13 times, a much stronger
response than expected, explaining its recent strong performance. He compared the
situation to Laopu Gold (06181), which surged after its lock-up period ended as previously
cautious funds entered the market, pushing the share price higher. Nip expects Melco Int'l
Dev still has upside potential, but as the shares have rallied too sharply today, it would
be safer to wait for a pullback below HKD 4.50 to buy, with a target price of HKD
5.20-5.30. In addition, MGM China (02282) has shown significant growth in revenue and
profit in recent years and its fundamentals are sound. The stock is currently trading at
about 11 times earnings, and if the price pulls back to the HKD 13.00-13.50 range, it
would also be worth considering. Nip expects the share price could surpass last year's
post-adjustment high of HKD 14.60 in the coming months.