[ET Net News Agency, 06 November 2024] Former President Trump from the Republican Party
is very likely to re-enter the White House. The U.S. exchange rate index rebounded
sharply, dragging down the offshore RMB to fall more than 600 points to 7.17. The Hang
Seng Index barely recovered 21,000 yesterday (5th). This morning everything was taken
back. As Trump's chances of winning gradually increased during the session, the selling
pressure on Hong Kong stocks increased at 11 o'clock. Mainland China consumer stocks and
the domestic banks and insurance sectors led the decline. The Hang Seng Index fell by as
much as 636 points and as low as 20,370 for half a day. It reported at 20,459, down 547
points or 2.6%, crossing the 10-day moving average (about 20,561) and the 20-day moving
average (about 20,591), and the main board turnover exceeded HKD 112 billion.
The Hang Seng China Enterprises Index reported at 7,341, down 214 points or 2.8%. The
Hang Seng Tech Index reported at 4,551, down 142 points or 3%.

"Nip Chun Pong: Yesterday's transaction did not coordinate, the Hang Seng Index makes a
normal correction today"

The U.S. presidential election is in full swing. Although the counting of votes is still
in progress, Trump is clearly ahead for the time being. Hong Kong stocks responded with a
decline. Nip Chun Pong, the Chief Strategist at Blackwell Global Securities, told the ET
Net News Agency that Hong Kong stocks were speculating on national policies yesterday,
looking forward to the central government launching RMB 10 trillion in economic stimulus
measures. The Hang Seng Index closed up more than 400 points yesterday, with Chinese
stocks rising more. Although the Hang Seng Index closed at 21,000 points yesterday, due to
lack of coordination, only more than HKD 160 billion was traded, not even HKD 170 billion.
To confirm the trend of the Hang Seng Index, at least HKD 200 billion was needed.
Therefore, today's correction of the Hang Seng Index is indeed a normal adjustment. The
market is expected to remain within the range, with the resistance level remaining at
21,000 points.

"Cryptocurrencies, traditional energy, and Chinese property stocks all benefited"

If Trump finally wins again, Nip Chun Pong believes that it will have little impact on
the market, but it will have a profound impact on some sectors. The first is
cryptocurrency. Trump has always embraced the cryptocurrency industry and it will
undoubtedly benefit. Currently, three asset management companies in the Hong Kong stock
market, including China Asset, Harvest Fund, and Bosera Funds, are allowed to issue
Bitcoin and Ether spot ETF products. Among them, ChinaAMC Bitcoin ETF (03042) and ChinaAMC
Ether ETF (03046) issued by China Asset are more attractive.
In addition, Trump has always supported traditional energy, which is good for
oil-related sectors. The three barrels of oil in Hong Kong stocks can be optimistic. Among
them, PetroChina (00857) lagged behind in stock price and was the top choice for three
barrels of oil.
Nip Chun Pong continued that Trump has always supported low-interest policies to promote
economic development during his previous term. If he comes to power again, he is expected
to continue to cut interest rates. Interest rate cuts are good for technology stocks, and
Xiaomi (01810) and JD.com (09618) are expected to benefit. Among them, JD.com's
price-to-earnings ratio is low (the forecast price-to-earnings ratio is less than 10
times), which makes it very attractive.
However, David Kelly, chief global strategist at JPMorgan Chase, previously said that if
Trump wins the U.S. election, the Federal Reserve may suspend its interest rate cut cycle
as early as December because its expansionary fiscal policy will push up U.S. inflation.

"If Trump wins again, the Mainland China may increase its economic stimulus measures"

There are rumours in the market that if Trump takes office again, the central government
will increase its efforts to stimulate the economy. Nip Chun Pong pointed out that if the
major economic stimulus measures come true, Chinese insurance stocks, Chinese bank stocks,
and Chinese real estate companies will all have the potential to rise. Among them,
property stocks have been hardest hit by the debt crisis in recent years, and their stock
prices have fallen sharply since 2021. Therefore, the stock price is attractive at this
stage.
Among them, Nip Chun Pong is optimistic about Longfor Group (00960), China Vanke (02202)
and Sunac (01918), which have greater upside potential. As for "state-owned" real estate
companies such as China Overseas (00688) and China Res Land (01109), they have been
greatly affected by the debt crisis and have seen relatively small declines in their stock
prices in recent years. Therefore, their upside potential is not as good as that of the
aforementioned private real estate companies.
Trump's policies are said to be beneficial to the development of the U.S. biotech
industry. WuXi bucked the market trend and rose early today. Is it also happy to see Trump
come on stage? Nip Chun Pong thinks it is difficult to draw a conclusion, but if Trump
imposes import tariffs across the board in the future, the profits of export companies
will inevitably have pressure.
As for whether the price of gold will benefit from rising because of the uncertainty
brought about by Trump's coming to power and the financial market? Nip Chun Pong believes
that this aspect may not have much relevance. On the contrary, Trump has never been keen
on war, and advocates that the Russia-Ukraine war should be resolved quickly. On a certain
level, it is to eliminate the uncertainty of the political situation. He does not expect
gold prices to have long-term rising potential.