[ET Net News Agency, 27 November 2024] Continuing narrow fluctuations, the Hang Seng
Index opened slightly higher by 27 points, dropped nearly a hundred points to 19,061
during trading, then rose repeatedly, closing at 19,239 by midday, up 80 points or 0.4%.
The 10-day moving average (around 19,418 points) acted as resistance, with the main board
seeing a turnover of nearly HKD 61 billion. The Hang Seng China Enterprises Index reported
6876, up 25 points or 0.4%. The Hang Seng Tech Index reported 4,256, up 34 points or 0.8%.

"In the short term, the Hang Seng Index may experience a technical rebound, but
expectations should not be too high"

The Federal Reserve released minutes from the last interest rate meeting the previous
evening, showing Fed officials supporting rate cuts, yet uncertainty around neutral rates
necessitates a gradual easing of monetary policy. Additionally, US president Biden
announced that Israel and Lebanon had agreed to a permanent ceasefire, creating a positive
external environment. KK Lam, the Director of Fund Investment at Meta Securities, told ET
Net News Agency that these external factors have minimal impact on the Hong Kong stock
market, with the Hang Seng Index still in a bottoming process. In the short term, the Hang
Seng Index is hindered by a lack of economic momentum and market caution towards Trump's
stance on China, resulting in limited capital inflows. Due to market confidence in
Mainland China's economic growth being insufficient, the Hang Seng Index needs to await
positive measures expected from the Central Economic Work Conference in December to
rebound. The short-term support level remains at the 100-day moving average (around 18,794
points).
He stated that in the short term, the Hang Seng Index might see a technical rebound,
potentially reclaiming 19,400 points. However, standing firm and challenging higher
levels, especially the 50-day moving average (around 20,172 points), will be relatively
difficult for now, so expectations should not be too high.

"Great potential for speculation in weight loss drug concept stocks, caution needed as
there may be profit-taking"

On the 26th, the Biden administration proposed new regulations to include weight loss
drugs in the US healthcare system, sparking continued market speculation in weight loss
drug concepts. Since last week, Laekna (02105) announced a clinical cooperation agreement
with Lilly, accelerating global clinical development for obesity treatment, drawing
significant market attention to weight loss drug concepts. KK Lam noted that weight loss
drugs have consistently been high-margin and market-friendly products, with the market
still in an anticipatory phase, offering speculative opportunities for the next six months
to a year. However, he warned that the upward potential of stock prices depends on product
sales data. Currently, weight loss drug concept stocks have shown signs of being
overpriced. If the Hang Seng Index further declines, investors should be cautious of
profit-taking scenarios.

"Chow Tai Fook's growth slowdown persists, investors can sell during rebound"

Chow Tai Fook (01929) reported a HKD 25.3 billion net profit in the mid-term, a 44.4%
year-on-year drop; basic earnings per share were HKD 0.25, with a mid-term dividend of HKD
0.2, a 20% year-on-year decrease, with operating revenue at HKD 39.408 billion, down 20.4%
year-on-year. While Chow Tai Fook's performance is not satisfactory, the company
simultaneously proposed a 2 billion buyback plan to reassure shareholders, leading to a
more than 6% increase in share price by midday. KK Lam believes that although Chow Tai
Fook's performance was below expectations, it was better than the previously announced
profit warning. Compared to Luk Fook (00590) which reported a 53.9% year-on-year drop in
mid-term profit, Chow Tai Fook's performance was not too poor and may aid in its
subsequent recovery in stock price.
He advised investors that from a medium to long-term perspective, the jewellery industry
is constrained by weak economic conditions, limited consumer demand for non-essential
items, and an overall bleak outlook for the industry. Investors holding stocks should
consider selling during the current rebound. Furthermore, he pointed out that slow
economic recovery will drag down Chow Tai Fook's performance in the next quarter,
expecting that the slowdown in Chow Tai Fook's profit growth has yet to bottom out.