[ET Net News Agency, 05 September 2025] Overnight, US equities performed strongly, with
all three major indices closing higher, and the S&P 500 notching another record closing
high. The Hang Seng Index opened higher by several dozen points and continued to trend
upwards in choppy trading. With A-shares of the Mainland China rebounding after earlier
losses, the HSI gained further, ending the morning session at 25,212, up 154 points or
0.6%, with main board turnover exceeding HKD 124.6 billion. The Hang Seng China
Enterprises Index closed at 8,989, up 52 points or 0.6%. The Hang Seng Tech Index finished
at 5,624, up 45 points or 0.8%.

"Jaseper Tsang: A-share cooling measures may temporarily weigh on Hong Kong stocks, but
capital likely to return"

The HSI opened 77 points higher this morning and continued to climb in a volatile
session. Yesterday, there were reports that, in response to the recent surge in A-shares,
Mainland China financial regulators are considering measures to cool speculative activity.
Jaseper Tsang, Vice-Chairman of the Hong Kong Institute of Financial Analysts and
Professional Commentators Limited, told ET Net News Agency that if the authorities do
intervene to cool A-shares, this will likely weigh on Hong Kong stocks in the short term,
but expects the impact to be only temporary. On the contrary, if such cooling measures are
implemented, this could actually encourage funds to flow back from A-shares into Hong Kong
equities.
Referring to recent developments and capital flow data over the past two months, Tsang
noted that the previous strength and activity in A-shares have, to some extent, diverted
capital away from Hong Kong. Should the HSI find support around the 24,800 level, then
after any short-term drag, the index is likely to attract renewed inflows, and the uptrend
in Hong Kong stocks that began after Lunar New Year should remain intact.

"Central government consumption policies supportive, but lack of direct subsidies limits
sector upside"

The State Council has issued new guidelines on unlocking the potential of sports
consumption and further promoting high-quality development of the sports industry, with
the overall goal of cultivating globally influential sports companies and events by 2030.
The plan aims for a considerable leap in the industry's development, with total output
exceeding RMB 7 trillion, playing an important role in shaping a new economic development
pattern.
Tsang noted that central government policy clearly supports consumption and is designed
to stimulate public spending, previously focused mainly on cars and home appliances. These
sectors involve extensive supply chains and, in the case of automobiles, high individual
transaction values, so strong supportive measures can have a clear macroeconomic impact.
This time, the focus is on the sportswear sector, which covers a wide consumer base. If
the policies are effective, the number of beneficiaries will be large, and the boost to
retail consumption could be more pronounced.
However, Tsang believes that while the policy signals will provide short-term support
for related sectors, the boost to share prices will be limited, and large-scale
speculation is unlikely. For these sectors to see genuine growth, there needs to be a
direct increase in disposable incomes; without the introduction of substantial direct
subsidies such as consumption vouchers, it will be difficult for the sector to see a
meaningful uplift.

"Sportswear stocks are consumer discretionary and are constrained by the economic outlook"

Tsang noted that discretionary consumer stocks are constrained by the economic
environment. Ongoing China-US tariff tensions have created uncertainty for China's
economic outlook. He pointed out that although the authorities have not released official
unemployment data, youth unemployment is a particular concern, and the market worries that
the jobless rate may continue to rise, further eroding consumers' spending power. Over the
past two to three months, the Mainland China property market has also deteriorated,
directly impacting the wealth effect and creating sustained downward pressure on
sportswear stocks.
Tsang added that among the State Council's 20 recommendations on sports consumption, a
key policy direction is the "targeted issuance of consumption vouchers", aimed at directly
boosting public spending in areas such as sports apparel. Such "real money" policy
measures could positively impact both sector earnings and share prices. However, he
stressed that for sportswear companies to see a significant improvement in results, the
key remains whether disposable incomes can recover and return to a growth trajectory,
something that has not yet been clearly observed.