[ET Net News Agency, 17 September 2025] US stocks pulled back from highs ahead of the
Fed meeting, but the Golden Dragon Index hit a three and a half year high, lifting Hong
Kong shares at midday. The HSI's gains widened before the Hong Kong Policy Address and the
index touched a four year high. The HSI closed the morning near its intraday high at
26,812, up 373 points or 1.4%, with main board turnover near HKD 192.4 billion. The Hang
Seng China Enterprises Index was at 9,553, up 167 points or 1.8%. The Hang Seng Tech Index
was at 6,290, up 212 points or 3.5%.

"Lee Wai Kit: Hong Kong stocks are strong and do not need policy stimulus. Tech leaders
can drive the market towards 27,000"

With the Fed decision imminent and Hong Kong's new Policy Address released today, the
HSI broke higher after consolidation. It opened more than 100 points up and, as Chief
Executive John Lee read the Policy Address, extended gains to over 300 points, then
pierced 26,800. Momentum held into the lunch break. Lee Wai Kit, a financial commentator
of TF International, told ET Net News Agency that markets typically see some profit taking
after major events, but Hong Kong shares have been strong recently and A shares are also
supported, so he does not expect a policy address sell the news dip.
Based on prior signalling, today's Policy Address likely has limited direct equity
measures. Lee is not worried about disappointment. Turnover has improved markedly versus
one to two years ago, with average daily value around HKD 300 billion, and the market is
functioning well without intervention. The only area that may speed up is IPO approvals.
He is instead looking for more impetus on housing, which could spill over positively to
the economy and consumption.
Lee sees the Fed outcome as more pivotal for Hong Kong equities than the Policy Address.
The market broadly expects a 0.25 percentage point cut and will focus on Chair Powell's
remarks. With easing expectations rising, the HSI has been grinding higher. He notes the
20 day moving average is lifting support up to 25,700, while the topside targets are to be
tested stepwise. With major techs rallying today, a short term push to 27,000 to 27,200
can be envisaged.

"Baidu re-rated post results, attracting laggard catch-up buying. SMIC likely to keep
making new highs"

Major techs rose broadly. Baidu (09888) gapped up 7% and extended to about 15% higher by
midday. There were reports that Baidu and China Merchants Group signed a strategic
cooperation framework in Shenzhen to work on frontier AI such as foundation models and
cloud computing, which helped its ADS rally overnight. In recent days Baidu has also
ridden enthusiasm around Alibaba (09988)'s in house AI chips. Since Sep it has climbed
more than 45%. Lee says Baidu had faced doubts about AI execution, but after its interim
results, the market reassessed its valuation, prompting catch up buying from Aug onwards.
He is positive on the outlook, but the move is too steep. After this morning's gap and
run, the 14 day RSI reached 82, signalling overbought. He advises waiting for a pullback
towards HKD 120 before positioning.
Separately, the Financial Times reported that SMIC (00981) is testing a domestically
made advanced DUV lithography tool similar to ASML's approach. Chip names rose in the
morning, with SMIC up more than 5% to fresh highs. Lee says investors are betting on the
narrowing of the technology gap between domestic and foreign chips. Given concerns about
access to Nvidia chips, the domestic chip supply chain is drawing greater focus. He
believes the self-sufficiency theme still has room to run and suggests initial entries
around HKD 65 for SMIC while awaiting further breakouts.