[ET Net News Agency, 08 December 2025] With investors awaiting both the US Federal
Reserve's policy decision and the upcoming Central Economic Work Conference in China, Hong
Kong stocks came under renewed pressure. Led by the "big four" state-owned banks and other
centrally-owned enterprises, the HSI extended losses through the morning session, closing
at 25,797, down 287 points or 1.1%. The index fell below all major moving averages during
intra-day trade, with main board turnover exceeding HKD 115.4 billion. The Hang Seng China
Enterprises Index lost 106 points or 1.2% to 9,091, while the Hang Seng Tech Index slipped
13 points or 0.2% to 5,649.

"Lee Wai Kit: Policy tailwinds suggest HSI still has upside potential"

This week marks a "super central bank week," with a heavy air of caution in the Hong
Kong market. Lee Wai Kit, a financial commentator of TF International, told ET Net News
Agency that both the Fed and the Bank of Japan will announce policy decisions this week
and next, respectively. He expects the HSI to remain rangebound between 25,800 and 26,300
ahead of the BOJ meeting, with investors likely to stay on the sidelines.
Lee noted that current market data shows over a 90% probability of a Fed rate cut this
month, making a cut effectively a foregone conclusion. More attention will be paid to the
post-meeting statement and its guidance for next year's rate policy. Regarding the BOJ,
Lee pointed out that while last August's rate hike triggered global volatility, this time
the market has had two weeks to digest the possibility thanks to early signals from the
BOJ. Thus, even if a rate hike materializes, the impact on Hong Kong stocks should be
milder than last year. The key, he added, will be whether the BOJ signals a "pause" in its
tightening cycle after the meeting, which would likely help calm market nerves.
For the rest of December, Lee remains optimistic. He believes that the recent low
trading volumes in Hong Kong could be building up momentum for a late-month rally. While
heavyweight tech names have posted decent results, their share prices have seen little
movement; should policy support materialize, Lee sees further upside for Hong Kong stocks.
Overall, he expects the HSI to trade within a 25,100 to 27,000 range for the month.

"Regulatory easing in Mainland China brokerage sector a long-term positive for A-shares,
indirect tailwind for HSI"

Wu Qing, chairman of the China Securities Regulatory Commission, announced at the 8th
General Meeting of the Securities Association of China plans to strengthen classified
supervision and support stronger institutions by appropriately relaxing curbs, further
optimizing risk control, moderately expanding capital space and leverage, and enhancing
capital efficiency. Chinese brokerage stocks rallied broadly in early trade, with GTHT
(02611) up 5.5% at HKD 16.44 and CITIC Sec (06030) gaining 4.1% at HKD 28.24.
Lee commented that these statements are a significant long-term positive for the sector.
High-quality brokerages will be able to improve capital utilization and expand leverage,
which should enhance financing convenience and boost net interest income. However, with no
concrete implementation details yet, the immediate impact on the sector remains limited,
especially as the share prices have already seen notable gains in the short term. He added
that leading brokerages, with greater capital efficiency and leverage, will be the core
beneficiaries of the new policy direction.
Looking further ahead, Lee believes the move will improve the capital-raising function
of China's markets and ease regulatory burdens for corporates, providing sustained
positive momentum for A-shares. Since Hong Kong stocks tend to follow A-share trends,
improved sentiment and inflows into A-shares should also lift the appeal of Hong Kong
equities, making this an indirect tailwind for the local market.